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... Unfinished manuscript on the history of the Federal Reserve Bank of Kansas City Jess Worley ) Clan A. GORDON JOllES 1 Denver , Colo. (_l YEAR) Suooeeclec1 l:;i 1916 b7 . , . J. o. Ull'CHELL,hDm ver, Oolo. BB-ele cted er:f'ea tin Jan. ~ -1919-. f2&. w. J. BAII.Et, J.t~sc m. »ms. (2 TUBS) la-ele o'" ettect tn 19t1-2 JJD. • o. :&. BrrmmAU. Jlottollc e Jlobr. (3 Y:&tBS) lilt-ele oted •~•at i~ ,:1,9lf" ~l:. Be signed. e!teot1 Ta 1921. Suooee de4 b¥ E. E. .l!1Ll.A1raf I R1ll 01 cy I Kana. · · .- . . _. {> • • -~• ~ - ·:·: "': .• 0 c•. :mmx, ~ , · Jiebr• ( l YEAR) Bl-ele otet ettNtl yt 11J.6. .li~l9U . .11. I.. JloOLU.R!, Jta.naaa C1~ 1 lt>.(2 nABS )~l.ot e4 ef:t,otfi~ ·1tl'(-tl 92~t= :: ')~ · ~-· . ... ,'~. : . . . 1. .A.. n.tscs , .. Xl..Beno, OJaa. (3 ~ )ll:wed· tram _Di~;ri~_( . . _.;'b -::SY..) j ( ' ~~>:, :-.~.. . Deoembc-• lg 16, Saooeedod by - • . • . :· ., . -~ _ _ ., . . .. . , ~~ H. w. Gl!SO?l, l!ask:Dgee, Okla., Be-ele cted e!t"')OtiTa 1918-19 21. ., ... ~ - • ~ • t. Ola.as c. .,_ •. R. H. UA.IDm:, J:lenver, Colo. ( 1 Y.E:'.:a) :ne-ayp ai:lt&d 1n 191.5-19189 Sa.ooee4e4 in 1921 by ' .:. ~ .:: . : :;• .•. . ~ ... . , •) ·. • 1 i.- ., ,":\- · .:. ~ ROBD, (JEqtra l City, liebr. . A.SAE. &.:&Y , ~ e , Okle..(2 m.:as) Vio&-Oha11'Dml· 8114 Deputy Agent ~t1l resigne d. 1n Octobe r l9l5r 8ao1Medf4 'b:, - . FBED W. l'IElllm , Kansas City, z., lie--8.~pointed 1n lll7 and 1920. •.. . J. z. 14I.LI.EB, .ra., Kansas 01ty, ~. (3 YEABSJ Cho.1 ~ rm4 •. .. . . .. Fadara l Beeerva . !gmlt until ha b&oa1:1e Govs-nar- 1.n _191.6 : : r ., . Buoceeded 1n 1916 by • • ·-ASA ~ .... \..,...-~ •·. BAiiSAY. Kansas City, ~-· .Appoin ted. a!!oo ~. J.~l.8-1:.~!1. •. · ·;:. .. ·-~,.·-~t~;.:'.. :-: ''~'._;,: . ,. . . . -: GOVEmTOBS t I . ·.• :··· .. .:.-...~, .. _ : -·;. ~ ·2 · .• .. ••• ! .- • ·· ·• ... . ·r ~:. = : • -:. _.....,, ,._ . or l Beaene Act 01 ty. :rs.naa■ • • • • • • 1893 .' ·. -.. ..... ,,. ..~ : -.:1;1::. ; ,., ·•--·· .... .. .... DiDD.etroua pa:aic miah began to ~lwmoe timmo1al legiala t1 an ..._";t•3. ; .:-• "\'· . 1n Uaited States. Paee 10. •· ·- ··' 180'1 . • . ,·: .. ·,. ~ ~... :i· ·; ::i..cS ~. ~:.:2-~~ .·.:t-.+ t~ __:,.·:.P~t~- : . Panio duri.Dg sanrnor an4 •:ta11: 41ar.~ :llt;l.1ah- timif'.' bi;¥i,11t1U'i una)il . , to pq P:,. caah and had tQ iRs,m cl'8ri.Dg ~ howso:.: Offt1_~~oa~•~··:·~~ ; ~'le.__to . •• ~ ., -~-· • ·, • ,, .. assist DBteria~ on aooomt of hav'il:Jg 't'a:n41 :·.,clepoa1·.te4.,1,n·-t1gb.t pl&oiat :· Jiottff8l-• ~..;·· ·1 t transf81'red bonds f'rOm depoai t aoocnmt~. to oinnila-t icm acaomta an4· ·anib•t1 ~tea ._>:,.: .::,-ncm-aatlcm al bonds behi:nd public deposits. •• ,.~ ·., .: >=:: :·:~~~~~:_\ ~:.:~~Zi Sept.. 25 an4 26 Americm,. :Bnnlmrs .A..aso011at1cm -heri-r a logiale.tion oomitt~e. . • • -L'~ report. C()llgN ss met . a.Jld ,, "~-- d.1aauaaed:·~ . . : ._ "'. J"~ ' Page -.ieg1"81&.t1'.c:m. .:.a;~··· • 4. .Beoresentat ive Fowl.or . and ·:&ei:a.~1!.-~'tah--tath erecr & ·1'14r1oh ,, •• b1il. Bepreeentat1 ve Vreeland ·- ISD.:lnl t ~ Jli•~bl'lil-• 1 !~ !heee bU:l~ . -:,were oomprcm1se4 int~ - the _ . ll4ridh-V l"e~:~u.-·- --tbiia .,...! ,:· •• called t bt "Clar.ing llauae CUrrencJ B111..• · . . •Pagel '2,S -mxl .,.... • . . . . 1908 ·~ ~--· Oo:cgrese appointed the_ Jht1oml Mme~ 00111D1em.on. Page 6 . • • ; . ;,.,,_,.....,t. /\. -~~ ~-~ ---~~)~ ·- ' - ~f 18 Jul:¥ 'I • J.1Jg. 18 - : ... . .: OHROBOU>Gr Even\1 re~ti:Dg to--~~ ~ ,:~. ~ And Federal Beserr:e .Bank ot ~.·- . Blll l"eported to ~o rat io House caum ~. ~t1 fled 'b7 oa.UD11& ·and f'or nalq repo rted to Bouse. >eba te began 1n House.• • • 'aas ed by tho Bouse e.nd r'l>o r,tod to Sen ate. ena.te hmr incs ended and bil l sen t to oolllllitt ee. tllZm1 t~ repo rted bil l to ~ t e and deb ate • • ,sun . Bent to Oonferenoe Deoember 19. • ,po rt~ out o! Con fera loe, Passed. ,by HO'Q S• (vot e 2~6 'to 60) 1aaed by Sen ate. (Vote. 43 to 25) ACT BIG DD BY P.RESID!lff 1914 !ebr aa17 Aug ust 3 .t..ugo.st 7 Sep t. 15 Oot. 16 oot. liOV• z1 Ulas 01ty beg ins f16' ht -tor a Fed eral Re~ erT• Bank. Pa« e• 11 an4. u. 'Lou ie C~ tte e trie s to 1.nflUSlloe Kmi saa OitJ" ·c i e ~ •• • ~ " to Join 1n urgi Dg ban k tor St;. Lou ii. • • Page 12•· • !!.tor Read oonvinoed ot just nes e 1n Kansas 1 ae snnoUllOes itin erar y of Fed eral- .Besorv.,e· 01ty a ola'im. .-P:-gmµZE1,~loli ··-:i• d -t te• not to incl ude KsnB&s City . -eta ry lJoAdoo and Sec reta ry Hou ston o:mm • .. , •:. . :'-· Pt4;e- :US~ :i.ot -~i ng in ::.. .. • - .: iae Olty . Com ptro ller W1ll1W18 not pres ent. ,. - ?oge : 13 . ial oomnitt~e 1nterv1ewe John Skelton Will ims ,: Oomptl"O llo t b.e Our rma y, Page a 16. ·,m4._ lJ ~s 01ty cles.r1Dg hous e ado pts stre nuo us reso luti ons· • : Ung its c1epos1 ta, . Pa.ge ·a S and 9 l "Ald r1ah Ou.rronay" reoe ived 1n Kansas Clt7 ·thro'Dgh ~ :· • . . ; . • 7_. ~t Jfat lona l Our rena y Assoo1at1on.. -:Page .8~~--·: · . 181'21 Okl.ahorm Ba.we pet itio n ~o. join .tho !mt h -l>h trlo t· Pip 19 .::_ :1cm gran ted. . . •. • ~ Olty dire ctor s bold flra t meet1JJe+ •Deo , ·: • . ~ 28 •· • ·as ·ear ly as pos sibl e a date :tor ope ru~ . 1a ~ -lfo 'da l~. • · . •• ~ - ·2 2. •-· d.n& sala ry of gov erno r and elec ted Ur, Stm yer 'tO · tba. t '• , . • Page 33 . ladv isor y oou nsel . 71.x sa.le.ry of Vio ~ir m:m . ~ M t dtre otor •s mee t!rg . Deoid.e on ~ -qtar tera . 1.ne ee.l arlo s of dire otor a nnd otf'i oer. a. tetcme Th.rawli Ca.s hier and Seo rets ry• . l6 1915 Apr il 26 liq~ - Sep t. 23 :Herr, Deo. l& <l.·Bmuliu .aalmo t1ra t •is tt ~ Xan sa, Oit7 ~ u a n by P'ed eral Beael"\!e Boa M.· _: .. • , 1t'i-nim Dam a~ resi gna . ,' .• •• r • •• • ·t mt1 on ot 'bank. lla i Fiao al Agent ot gove rnme ntll •. &f.rat rep ort. • • Decem nr 16. J.C. lfi tobell suocoecls Gordon Jones. ) Pa.gv 61. 191G. Janr,a, .rj 4. Chaira m, Xillsr beooim s Govex nor. Pae'o 61. Charle s ~ Sa.wJer Gloate d as 1ode?'31. &serv o ~ t . Col. Fred -a. Flenin e appoin ted Vice-O bainm m to ,irucoeed Ur. lamaa¥• FebruD.1'7 10. Mr. Thral ls rea1gn s. Sucoeo ded by Arab. ll. Julc'!.ei'.'80.U:. Pages 62-63. J.L. Cross· eleete d assist ruit to the Govern or. ?age 66-B. J~. l.5~. First divide nd ~thor .ized. .k'O.ee 55. Septem ber 28. Govern or Rardiz g Dakes f'irst visit. .?age 65·. Octob er ~. Direc tor 'ililson resien o. Pago 66. December 19.. Second divide nd autho rll8d. ?n£;e 66. December.. n.1;1. Gibson suooea ds Direota i.· w'ilson . .?age 66-B. 1917 ~us.1 7 u. Februa ry 21. April . June 1. J'IJM ;r4. J ~ 29·. Oot9b er 12. December 6. J.L. Cross e-Jt3cted Deputy Govem or. ~ 61. Bank adopts Grou:p In.sura me fo:t- employ es.. P&t• 68. First Libert y Loon lmmch .ed. Pase 69. ~sur y autho rizes Partic ipatio n Certif icai& s. l,age 70-A Cma.ha bankS reqm st 'branc h. ?af,"e 70. . :.tr. Worth iDgton modo ti.saist -a.:lt. cashie r. ?age -Z2. M.A. ThoapS.On electe d .Assis tant C3.sh1er" Page ·'14. Board. autho ru:es nrat extra canpemsation toz, . • empl<>'38es and JUD.ior ott1o en cm aooom t· ot high ll.TiDg ooata . Page ~ •. 1918 L ~ who bad. rea1g:ned aa clan "~.41.reotor in 1916• WU reapp ointed l,y P'ederal llasef fl Joa.1'd on Decsnbel" 6, 191'7, and attend ed hie firs~ JDN.tJDg after his rettlrll . to the bank ~ 'Pedar al Baaerve •.A.gm~ Suopeeded llr. Sawym-. First. mantio n zm4a ot mnr·· • ba#Jt balld.i Dg. Page ,5 . s.· A. w~u . Aotmg Andi tor, electe d Audito r to ~ocee d IL J. lilllel lla. . Paga 71 • !ae.rd determ1necl on 10th & Grand. Avmue tor ·•!t.e., _., bank bu1141 Dg. _.Page :·~ i · ·( · ••• X. P. ~ el.~~' 4 Ao~ -~ ~•-~ tJ~~~ er· - ~ . ~ ~ A• .~ m·n ·res1gn a.;_. H..~l~ ~ .n ,~. _ ~ ao ' · -3. W. llelJa.: ·J.. .H. ~har t.__p.ct ·Jolm,~ h1111 pa, Jr_-... ~- .• . appoizitecl ,J.ctin g .Assis tant· Ca~ rs. ' ?see 80 Death ~ .A.sa L .~ Y , ' il):•• during epldemio • o-t Intl.ne nffl. . • • Page_ Baaoln .tian .toerd . rednc.m g l:>ana. Plige ' 83 :: - . Asa .June z, .r~ 2.5 Sept.1 2 Oat. 25 Jrov. 14 ~:ei ,. '\ :r 1919 \ M. 13 •,. ,: . . Jrmploy:eea d1nner - :rmin bSDlt an.d brancb es. Baaigm ltlon ot J. L. Cro~, Deputy Govem or. C. A.. Worth 1ngtan design ated Assist ant 'to Govem or. Beaign at1on ot Arch w. Anderscm Sec. & Cashi er PRD"A• A . ~ J'ebe 27 rromot1cm ot the :tollow11:Jga J. w. Helm, o. x. - ~ John Phillipa, Jr., O. E. Ialiel, G. B. Barley 'a n4 G. H. Pipkin. . Page 86 J.pril 24, J ~ 24 X. w. E. Park mde Assistant Cashier Page 88 Board bears applioatione tor branch bank trom LinoolD, 1lebraalm. 1 Okla.ho.ma City, Oklahona, !al.Ba, Oklaho:m and i'iohita, B'mlaaa. Page 8S Board approves bonus :tor anployeea. Page 98 Federal Beaerve .Beard annaunoaa 1n :tavor ot Oklahoma 01 Q" tor .Branch bank. Page 90 ,. I \ \! -.} ! llov. 25 Dea. 17 1920 Jan. e .IIU'oh 25 April l3 ~ 2.7 A. G. J'ro at made Assistant Oaahier. PBge 94 o. T. Ba.atmen .resigns aa mazager ot the Cneha. Branch, and L. H. Pm-hart 1a appointed his spooeeaar. ·Page 93 •! 00JJ8l"OBS iassed legialatlon permitting progrea~1"1 discount rate. Paet 108 Chapter a:p. progressive rate Pages 96 to 10'1. o. E. nmiel elected ~ger of Okl.BhoI?a City bre.noh and G. H. Pipkin end fa -~ UoAdana appointed Assistant Cashiers - main bmk. l?e.ge 94 192.1 JBJ:lJJB.17 .Baslgmtion of Director Bnrnmm. BUOoeecled by I. Ee .111lltmq J.pr1116 .l'lml 7 ~ 9 Ju.q 14 ~ A.UgaSt 23 . 15 j Ootober25 Po.go 108 Direators decide to require betff1 borrowara to liquidate portion ot their ntdisoouhta. Page 110 Dea. th ot hl.ther Dralm, Direotar of Qnaha branch. Eleot1on ot •• J. Coa.4 as -his auooaaaor. Page 111 Oon,,er-stone ot new banlc builclixlg plaoed. Page lll L1veetook oontenm:oe at Washington • Page 116 11nat bonus to emplo,eea an~or1zed, Papll7 Aooidental 4ea. th 'b7 drowning ot lnlle.ut Pr.tee' 118 Bam~ • ~on ot hdezal ·• • ~ • Agent. D1Notor1 author1me ,purollaae Qt lote 1n Olclahc:.aa 01ty nnd Dec.var and oonstruot1on o:r perniemant homes for these bre.noh banks. PB69119 ,. Gordon Sanden elected Assistant Au41 tor. Wm. Phillipa elected Aaa1st.ant Oaahier of <baha Bmneh. Direct.ore autborlze · abeorption ot Fiaoal AgeDOJ' Depir~mt .after, J ~ lat. ~ 120 Direotars endorse. pend!ng _'Pcs1on Bill r~ hdem 1 81lployees • Page 121 011 men confer with D1reot.a r1 on req-aeat tor more libe:ral rediaaount privileges • Paees 122 to l.2~ Blml!:: B'Qllpmds prognaslve,rate • Page l.26 !gm t Jaiu,a7 te1t1tiea bet ere I • . Ot o. OZl grain rate hearlng. •. _ Page lZ6 Jlebraalta banker ■ l!-ppeal tor oanoo1a1om for . ta.rmara and atookgl'Owera. l the _Ji>Xelvie iiq.oident) Pagt 127-180 .. - ........ • ·::t~ .~;-·~ ., ... \ . Y J.,.,! v " (, ' ot-1007 • -- .., THE PANIC/AS iill "ILL wnm" /\ mu. le the hi story of the Federal Reserve Bank or Kansas City, like that of each of the other eleven banka., begins with the date of its opening November 16., 1914., so closely are the national a11d local event■ t ing fevr years related to this history that a brief ■ 'UIIIDB:ry or the preced- of these preceding events is not out or placo as an introductory of the ·actual history of the _ bank. It can be aaid in fact t.hat the history of Ula Federal Reaerva i:.. systsm ~ bad ita indirect beginning during the financial panio or 1907., for it waa that panic that caused 1:arikcrs· end legialatore t.o foresee the neoeaaity of a new banking system that would ba at onoe botJ1, oo-operat:ive and : pro• · tectlve. ~iontt syatsaa. ftl.ere had been previous attempts on the part of ' bank associations to eat.abliah emergency currency measures to tide over the crop-moving periods. · .. ..J1i. ia well rememberetitte banka or the oo~try during the summer and fall of 1907 were unable to males more thab meager payments of ea.ah and ati 11 ., maintain , their lawful reserves. They were forced to issue clearing house cert!- fioa.tesJand not a fn, 'tnnkera in Kansas City 1n the yeara that tallowed the criai a pondered frequently over the miraoulous escapee tram failure during that stressful poriod, to The mention· ot clearing house certu'icates recalls numerous business men and bmkers in tr.is district ·· the oau:ae of prematurely gray hairs over the financial 1r0rriea of the eventful year of 1907. 'fhe Treasury at that time was unable to help the banks ot the co,mtry b~o.uae i ta tunda bad been deposited. in tight plaoea. However-. the Treaaury 4id tranate; where poa- ai bl~ bonds from de?<)si t aooounts to circulation aooounta. non~na:t.ional bonds behind the: inibl"ic 'd epo ■ita . I •" ~U - • ' .' ) • ; ' •• , 0 • • - ,._ <• - • - ... .. substituted e.1 1 0 While tbesif~surei(w~~e:(~r - _ •~ • •• • It I • "" ·-.· .- -.-. ·.--. ..,.... . ·. ·.: ' . _;, . : : ,:;• , •• • • • , .• T • ~ _ '.,;' • I : • ~ :. • : • l : ,.: _£:_ /_ • some relief nationa lly, the Kansas ··City banking territo ry was forced to depend more apecifi cally upon the resource tulneaa ~f -the members of the Ianaa1 City Clearing House Associa tion. the "l'eteran bankers who were 10 It 1 a notewor thy therefor e that aome of instrum ental in preserv ing innumer able in- st1 tutiona trom financia l ahipwrao k d.Ul'.'in;s that memorable year were among the active mon ,rho asalat.ed in obtainin g for Kansas City one of the twelve Federal Reserve Banlca and alao in opening this bank to the public. concern ing aome of the ■e Interest ing !'acts men will be found elsewhe re in this volume. Inolaat lcity was the glaring fault of the banking system in vogue prior to 1914. The oondit.J.on may be here .roviswe d most brief~y. by ,ta.ting • combined capit~l. , surplus and deposits . a very few facts. The l~~-~ !?! :url\of' the banka of this country prior to 1914 was enormous when the figures were vined on paper as the followin g table will shaw: No, of 1 f'-.. ..-:r.f ' / Bank ■ Capital & Surpl~• Nati one.\_ 7,600 state and Trust Co. __ 20__ ,600 _ _ __ $2,000,0 00,000 Deposit s Total &;. l 1 8I p t1 ,ooo ,ooo .ooo $9 ,ooo ,ooo·,ooo _2..,,ooo _ _.,....000_....,fXX) _ _ _ 12 ,ooo ,oc,o .ooo 14 ,ooo ,ooo ,ooo 28 .ooo 84,000 .ooo .ooo tl9 .ooo ;OCXJ ,000 $23,000 .ooo .ooo r I • amount (?f .mon~y __eonbert'e d in ea.ch A• the11e figures show, the averageJ rC I p 6 2 a . ..._ J131;-;,•• bankt --- •!IMru waa approxim ately $821,42 2, which doubtlea ~ aeamed at tha.tUm e a Mee 11uff'ici ently large average . . But the ~ • ■tumbling block to tinanoE.AJCLdibalu11iwast • lay in the fact that banko,.,..eltll11e•··11ot co-oper ate except in aa.aea where stock ownersh ip in state bank• ordinate d. -!:f I 1, prc,-vJa relief for those lltate banks ao oo- fl-le 'b.uiks of' one l~oa.iity _mi_g ht . ■ave that commmity but they could. . .not· dra:. on their· r~~erve-■ '• ti, ·a sei2 at- n~igh'b~ ring- ~ • - · • ;.· - . • , r:,.. ; .. ::,11": ,. , _ ~ ~ r:. '·::· . • _· ..: . and ccmmmi 1 - • • • : • ~-e ■.~: ::./ .!'..~,•: ~; : '• :· ' r••• • , ;=: •· •. rese'rveii ,.of ·the 7,600 nationa l banka _.mi ght have been quite ~ -equate • ~:=- · ana· l~ ·:.~, :,;';;·· _: ~ :..> i.~,r• 11'·E,f'A-. .,:,;; many caaea 1t has been ainoe learned they ware much more than required by law-_ but these reserve a UDder the nationa l bank act were bottled up within the bank where they could not be or any aervioe to the cammni t7 or to the oountey, It. ha• been stated of'f'icia ll7 that during the latter part of the panio of 1901 somo banks whf ch were required by law to carry only l61o reserTa■ were actually /..I AJAU)v1L4-- oq_ . oarrying Abetqen ~ and 591 of thei• deposits while in 1914 the reeeM"81 of same banks amounted tp 79%• Lt,~~ In fact. 1 t la stated authent ically that d.uring the atringer icy of 1914.A. i!lduoed largely ·by inabilit y to mow crops. ,~ •.'.. , i., banka were carryin g 200 million rdollara in cash in their vault.a and with their re,.. serve agenta/\ in exceaa of their regular requirem ents. flle ~ct that. this 200 • million s of dollars might easily have averted the atrin.genay if' it had been usable, sh01'8 up the fallacy of the old banking ayatem. · The logical result of the panic of 1907 • and t.hia pan1o left it ■ mark ppon the Kanau City banking territo ry for aeveral auooaed ing months ·- was that t.ho opening or Congraa a on December 7 of that year found Currency the paramount subject tor legislat ion. Representative ■ Senator Aldrich and a member of the House ot fathered a currency bill afterwar d known aa the Aldrich bill. At the SBJne aeaaion Represe ntative Vreeland subnitte d a bill alao aimed at the correcti on of the 8ld. ■Ung be.nld.ng system. Later during the same ■eaaion theae two bills wara oom:i;rom\.sed into the Aldrich- Vreelan d b~ll, ac:netimea called the ' "Clearin g Houae + noy Btll.n In thia connect ion it may be well to publi ■h tor what ia believed to be the first time some "inside history" oonoarn ing the· formatio n ot the "le. Aldrich- Vreelan d Aot. which inf-o:rma.tion ma::, surpriH many read.era who lieUan4 ,.. . •- , "-• . .,. ..r .' ·• )... . __:,. ~ they knevr the first-hand faots concerning t.hia measure. The American Bankers Aasooiation at its 1907 meeting held. at Atlantic Cl ty on September 26 and 26 heard a report from t.he prniou1111" of the association. appointed Currency Camm1ssion/ It then appointed a Federal Legislative Committee of five representative banking men of the United State ■ with inst.ruct- ions for them to center in t'ashington with Senator Aldrich and the Hause member who -.s aasooie.tad with him in the formation of his currency bill. The ocn- mittee was made up ot the following mena Arthur Reynolds, Prosiden't.4f- De:sMoinee National Be.nk. Chairman. E. "i. Swin-l'ley, President4-F~rst National Bank, Kansa,i City, 18.1111ouri, Joseph A. McCord, Vic,~esidentJ-.Third National Bank, Atlanta, Georgia, ~. v. Cox, PreQidento-'~~eoond Natitnal Bank, Washington, D. c. John L. Hamilton, "Vicij-Praaiden~Bami.lto n~ &: Cunningham, Hoopeston, Ill. 1hese men pr~eedesl to '!°'8.mhin&t,on and)af'ter a ~onsultation nth Senator Aldriolf ~ hie associate,returned to their home~ feeling that their advice had been beaded and their counsel would be accepted. however than ~J•• •' • received No sooner had they arrived at their homes l, telegram6f'rom '\\'-a.shington atating that tne Bouse membor with wham they had conferred waa playing fal•e with the and with the cowit.ry at large in connection with the bill. return to Washington at. onae,. which they did, The telegr&llfiadvi■ ed t.ham to E. F, Swinney, 'President ot the First National Bank of Kansas City, one or the mambersof thlt committee,reaently told the remainder of the st.ory a.a follon: "On reaching Washington we ignored the House member referred to, held. a consultation and decided to appeal to Speaker Cannon . We, told Speaker Cannon our trouble■• or the House for advice • -5- present.a.ti ves who whersled i.n his chair and shoutCJd to a messenger• 'Boy. to get Vreeland and bring him ln hara. 1 'F.hon the messenger returned with Re-· preaentative Vreeland of ?lew Yofk, Uncle Joe enlightened the Representatin about. like this: "' )4f. Vreeland, these are my boye and the boy■ -..mo do the banking 'buaineea o.f this country anci the ones we ouyit. to listen t.o in making up our banking J.et 1slation. ;, I know every one o&· these fe).lcnra and th$)' knO'I' what I want you to get together 11d th them,tind out what they want and. "need, I then you and Senator Aldriah get this thing t.o working.'" ~\nd thia was the manner in 'Whi oh the £0roru11ner of the Federal Rap serve Act received its name, the Aldrich-Vre&lo.n li Bill. It waa "Uncle Joe" Cannon ,rho started Representative Vreelsuid ou hia work which was afterward. __ e_rged nth the result of Senator Aldrich 'a e.i'f'orta. 7h11 bi 11 was in e.t'fect only an omergenoy currency ~11 and as auch it furnished relier to the ba.nka of Kansas City as well e.s elsewhere during the str.aaa of' crop moving in 191:5 and lil4. Cuf'rency resulting frib this bill was commonly called "Aldrich ourrenoy" or •Aldrich-Vreela nd currency." In ?larch, 19Q8, Congress appointed the national m~netary c()Ill:lission of nine members from the House and nine from the Senat.Er ,, , -_ • ·,/whose duti ea were to inveatiga1',t the banking systems c·r va.ri oue countries and report to Congre ■ s with reoonnenciation s for a now banking law for this country. Financial even ta aubaequent to t.pat date were ~ot, or consider al>le importance. the re~ort propo sing t o ' incorporate the Natio~ab .~9serve· Associati on or_t ~e Uni t:ed States. 'lbia coz:mlasiorl-· made !.ta ~epor-t. 5Jan'hary ~• 1912_,,~ Dlo following A'.pr11 the su~om:nittee of the Howle banking and currency committoe, with Representative l .. . Carter Glas■ or Virginia it.a·"Chairmali, began the framing of the future bank• ,,, . . -, ,-. ,.:, - .. lng law~ •the result.· of l1b1 ah -1111 the present led~ Re serve Aot. The f raming -,,., •• a.11 .,. . ~ :_ . ': - , .' . ,., : • f~ <... ' ·-,. C-1 : .:, -sof ttwi Act constituted in effeot t.he re-framing of the Aldrich-Vre eland bill and the writing into it or financial idoas and plana gleaned from American and tbe meantime the "Puj·o Uomni ttee" of the house m.d investigate d the methods European sources by the mnnetary caimniasion ." of bankir:ig in the United States dur:i.~ 1911 and 1912 and also made a report. The aucceading evert'a perto.1.ning to the enactment of' a ne:r ti.nanoial > In law can be grasped from t.he following chronology in brief: 191S J,me 18. Comnittee lep:,rted the proposed bill to t.he Houae. July 7, The House began o,onsio.era:tJ. on or the bi 11. S"3pt;ember ( early}, Bill report.ed to the House Damooratio cauoua. Septe:nber 9, Bill ratified by the oaucua and r~rmally reported to the House. September lOt Deba'te bogun in the House. September 18. Bill passed by t.ha Rouse and reported to the Senate. Ootober 25, Senate hea.ringa enddd and bill sent to ccmrni.ttoe. December l, Committee reported bill to the Sen~te and debate 'IJIB.8 begun. December 19. Senate sent. bill to conference. Decamber 22. Reported out of conference. PaSBed by Rouae. vo••\·; - Teas 290,. !tllY3 , 60~ . Decomber 21, Passed in Sena.te. Vote - Yeaa 43. Naya 26. Act signed ~J President ~oodrO'llt ~ils0ri. As 1f paving the way for the acceptabili ty of the new financial act that was then 1n proce19 of formation., events looally in the Kansas City bank• ing territory during the two years prior to the enactment of' the banking law hra such as to thoroughly convince any be..nker of· the need for the Federal R~: serve Act. lioi 11 consider first the events of 1913. The late summer a.nd fall of t h a t ~ ~ ell.max of' the ewr increaal.ng 4iffioulty enoouitered in_moving the crops in tJ:1111 western territory. bank■ Funds ,rere not availabl1 from to start the crop moveme~t and this s1 tuati on automati oo.lly ti ghtene4 finance in bot.h the East and Weat. Times ~re he.rd and deposi ta reaultingly •I ~ : ~• ~:•.• ! : :--:~~ • ! ~.• M• ... . - .. . . 19\Y ~d rapidly shrinking • . ... 1 - - . -· . .. . • ~- ' ,. J' ;·. ·,:1~ • ' '~ ' j _ ;_·:, As •a temporary preventive _measure the Tr eo.suey 1 aaue4 on·::.Auguaf • • "'.; .. . / .18~"':. :,-:: '· • -1, .t• {lUthori,:ig2 :-f'L" ~ ► dit:dJii+is»+:1 y +eudc:rka-:••!• ■itl 1913. Id. department .circular No. 18 ,. of Government fund ■ in nationll banks located in auch of the principal cit!ea of the Tfiee.sury . of the country e.a the Seoi:e~;m ~t. designate • ..._111119 \lied,* 11gma.---,-. u -.a,Uiliu'rna b"iiii l1ael m&t,...,, t I mc:dtmnp eIP'iiX9lf'ldJ:rtoc:rnHl1!:xts>a ....,..,..~_ ,, -.y, 1 Since 1 t waa i.mpracti.co.b le tor the Go-vermpant to extend deposi ta to smaller towns and oi ti&s I the depori. ta.riee selected" ere expected to function as mediums of distributio n in _¢.urniahing funds to the locall tie a in need of them tor transportin g a4d. marketing the o rope • >-. seauri ty for such depos1 ta the deposi tariea placed ll'i th the Treasury United. 3tates Government bonds of any iesue, equal in amount to at least 10t of the Treasury deposit. 1he remaining 00~ or the depoai t was ■ ecured either by high claH state or municipal bonds approved by thi, Secretary and accept~. _af, 76,; bf their market value• or l,y prime commercial or businesa paper_ approved • ,, ! ~ ..- ~e bank offering it.._ and accepted at 76% or its face value. It rill be seen that u,e application· or the above temporary mes.sure. at least inao.f'e.r aa the offering o.f' commercial paper as collateral for Govern- -;n.s conegrned ment deposi tsJ was in reall ty putt~ng into pra.otioe the primary pha.H ot the rediscount privileges contained in tho newly signed. Federal Reserve Act. Thia tryout of the relief measure was hiffllly suocessf'ul e.nd saved tho country from what might have been a very severe stringency ciuring the erop-moring period. It ~s used locally during the winter or 1913 and. throughout the year of 1914 up ~til the opening of the Federal Reserve Bank of Kanaa.s City. It wa.11 at. first . timed to end when the Federal :Reserve banks should opon but later waa . 1915 ~rt.end.sci t.o · June 30~1n -order to pro"!ide ,for ,any possibl• f~lura ,~e :P,~~r~ ..,,. of • ' - Reserve Act to me1\~t -~ ~-~~ -:~ ~s• _, ; .- . ~- -- ' ' : .,,, .: - . I• • f I .,,_ ' , , . , ._ Th~s· ·re~.lef me~~~-was oarri~ ,on ~~, '·" -athe Kaneaa City Clearing House Associa tion and a seourlU es commit-tee or five local bankers wi~ a Government repreae ntatiTe. The members or the first committ ee wore as follows i :E. F. SWiilni,y , Preside nt or the 11.rst Nationa l l3ank. p. w. Goebel, Preside nt of the Commer cial Natl. Bank: 11 Kansas c1~.1Canaa11 and also Preside nt of the Kansas Ci ey Clearing Howse Aaaoc• ia:tion. F. P. Neal, Chairman or the Boerd, Southwe st Nationa l Bank of Commerce. Geo. s. Ho-ny, Preside nt of the Int.erst.at.a Nationa l !;a..--uc. 'Wm. T.. lamper, Preiide nt ot the Commerce Trust Company. Geo. stevenson~ ·Jr., Government Rspreae nta.tive. So auoceu tul wa.s the rolief work ·or the eoaurlt.1 es COirl:litt ee 1n 1918 that tlle !?reasur y varied tJ:d.a measure and enla.rgod 1 ta aoope in 1914. On August 4 of that :,ear was emended the Aot origina lly approv ed.~ 30, 1908 and ■ubaequently amended by an Act of Deoecbar 23, 191S, the outcome or these Acta and amandmonta ~eaolvin g into a sen.ea of what were ca.11"6. nationa l cur~ rency assooia tion1. The aaaocia. tion a.ffeotin g Kansas City was called "b Nationa l CUrrency Associa tion of Kansa.■ City and st. Joa~ph." The territor y covered by this associa tion embraced the then n&tural banking territor y of both Kansas Cit.y and st. Joseph. assoo1at1on ■ work was carried on by the cl&llrlng house 'l'hei of Kansas City &nQ st. Joaoi;h under the directio n of on Executive ·Committee composed of the followin g, J. F. Dollning, Pr8ffi~e nt of the icJW En~land National Bank,;.: c.s. Jobea, Presiden t: of the Security Nationa l Bank. Gao. s. Hovey, . Presicio nt ot t210 ~tars tats Nationa l Bs.nk. J. o. Sahneid.er, Preside nt of the' German-Amorioan (later .American Jl'ationa l) Bank or St. Joaeph. P. w. Goebel. Preside nt of· the Cammarclal Nationa l Bank. o. M. Smith, Pretiicie nt of the Com:nonvraalth Nationa l Bank. ,· An indicat 1,·n of the tensity of the financi al situatio n in Kansas . .. . 0 - • • • • a •• • - .,- • • • I a , • -0 • ,.,, _,, -·-., . ::.. : . : , : .1 City duri ng the latter pa.rt 0£ 1g14 ie lound in the minutos~ p-t ~~"-1?':~-~~,; 9~ti,. , ., ;· ' '· • •• r·, ·::, ... :-· ~..:;.-f""~Z~·~-~-- ~:r<.r.•~ :~.--. : · • •·-· -:·,.1~:·:-:~.-t .~: r.::::·.< ..t.:.:r_'G~~~-.z. On tha~.~.~ ~t~ ~~,-~~~ ,.~.~g·; , ,. • : Cle~~ .1:'g Bouse Aa~ocia tion unaer cio.to of' August ~,. l" "•Yrh~T:":' ( 0 House Aaaoc1a tion ad~pted. ,..?o not.a.bl:&-, reaoluti. -on•a •·, •: Jhe first of :t.heso ahthor• r . •_ - . . . ., ,_ . •, . . .· ._. .,. · - ... i . . . : ;'. ' ized the issuance of •c1earing House oertif'i0a tea 11 for the settling of ba.lancea each_day between the membera of the associati on. such oert.ifica tea to bo accept,• ed by all creditor bank■ and given by ail debtoi-, bank• at tho close or t.he o.q'• •. . t,uai:ieaa. The cert,U1.ca tea were issued only an aollaten l and a.t. 15% ot the value or th6 collatera l. They bore interest at 81 per annum and were redeem• 1.ble by tho bank to wtiom 1 asued whenever t.bat bank chose to red.emn them. It waa stipulate d that a clearing house conmd.tte" should pe.ss upon collatera l and. that any loas arising from the isaue ot c ertifioat ea ahould be borne by the signer ot the resolutio n. The other resolutio n that is now e. memorable one demanded. a restriction of the amo\fflt of cash to be paid out by ba.nke. So necessary was the con- eervation of cash that clearing house members signed an agreement that each bank: should restrict its payment 01' eurroncy over it.a ccnmtors to a me.x1..mum ot $100.• 00 a day to any one parson and. that the aggregate paymonts to any one person should not exceed $300.00 par weak exoept for payrolls and for the further exception that where a •ustomer deposited only currency a apecia.l account cover• 1.ng auoh deposit might be made anci if deemed aci'Viaa.ble a like amount of o urren07 might be pa.1~ to aaid ouatoiner. The clearing house banka further agreed to make 1hipnant11 or currency to tho country only in special or exoeption al oaaea and report daily the shi.pnents made. ibe state of the public mind during that trying time was ao inflammab le that tJ1e final clause or thi • resolutio n bound member■ the of the aHociati on to an agfeemen t that no informati on shoula be given to the public press except by the President . af the Clea.ring House Aasoa• ., iation, _ .' .,. . . ~- · .,.. • . 'befor~ • .....:.»·. \, : .--:. •-- •.•,.. . . • . - • •• . • - . l "-· . ' . , . ....,. :-. • .· . • ••• • Die ~or:egoing .r ,aoJ'.~tion a wer" _ae,oJ}tfi41'? .. ~.•,' .Au~t. i.·. .•_But • -: : •• • it -~ - . •• -· •• • • •• • • • • ' , -·~..: . , --:; - { •• ,: • •• • · · · . .:....•,i.-t..tl.\ camjif·neoe aaary to enatft."1.1\liiil the 11.rat ahipnent'; ot the "Aldr1Gh _:- '.~~;:-~,. ....,. the following Thurscay currency" was roceiveci/by Mr. Stevenson. the tiovernment Representative. and the day was saved. The resolutions ':Iara e.llowed to stand as emergency measures. Thus -th~ maxim "It is L"I ill wind that. 'blows no good" might haw been intended to apply to the origin of the ll'ed.ere..l Reserve Act. so applicable ie it to tha paido of' 1907 as a. f'actcr in establishing a Federal Reser'V'Q System and in6.ireot.l7 the Federal Raoerva Eani..-: of' Kanas.a City. No history or the redera.l Reserve A.at i■ cc:mplete or just without credit bo1ng gi. ven Senator Rdbert L. Owen or Cklahoma for hla untiring effort.a to bring a.bout most of the 1.lppo~tqnt foaturea embraced in the measure. efforts began soon after the panio of' 1893 when Mr. <Ren 11as These Prosident of' the __ First !iationa.l Bank of Kuskoget., which bank he established. in 1890. Having austainod enormous losses in doposits. this 1:nnk turn1.shed 14'.r. Owen with an object lesson in finance and through his political party h• began in 1896 an attempt to put into the na.tiona.l platform maa.suros designed to prevent panics. Ha failed in this but two years later went to Europe and subject in London, Pari ■ and Berlin. ■tudied the financial Subsequently as a member of Congres ■, Mr. Owen presented propoaal■ embracing what he believad to be the most pra.ctioabi{ • . points of European finance for the .American As •-, ■itua.tion, Chairnian of the Senate Ccmzd.ttee on banking and 0urr_451nc;y~ :senator .. . ' Onn untiringly fought tor the correctin financial principle■ in Which Jie be• - . . • 1 -~ . lieve<i, and 1 t is fitting to state here that muoh of the euooosa of the red~ .... .,,. ...,. Reserve Act la doubtleH due to thia :Sen~tor,····_,_':J'"~ was formerly a bank,r ln what later became the Tenth Fecieral Reserve .Di strict. ...:. ., - l . , 1' -~•1, I :- ••••• t r . '; (! "~ -·. ••., -.~:" " ... 1 / f "'U~V l , t~~..J..,, 1"(◄7,\IC'& 'C~LA_ ~-:--1 i • . ~..;-: ... H " ,. • • " -\ ~ . : _1. p1:iru:ru_~~ KA.~ SAS CI TY IN ro THB FI on T No sooner had Prssident 1:V!.laon signed th~ P'ed.eral Rea8"8 Act on Deaamber 23. l91S. than Clearing House Assoo1ationa in every city of import• ance in tha United Statos appointed the?!lselvos "auxiliary cmmni ttees" to assist in carrying out the provisions of Section 2 of the Act. Saction 2 pro• vided that - "As 100n u practicable the Secretary of the Treasury. t.ht Sectatary or ,~iculture !1Ilci the Comptroller of the Currency. acting as the reserve bulk organization comnittee', shall designate not less t.'li.&.n eight nor :::nore than 'twelve cities to be known o.s Federal Reserve oitias,. ond shall divide the continental Unitoa St.ates. excluding Alaska, into ciiatricts. each district to contain only one of' suoh Federal Reserve 01.tiiH• The determination 0£ said organization com::d.ttee shall not be subject t.o revin except by tha Federal Reserve Board when or- . ganized: Provided, Jio.t the dist.riots shall, be apportioned ri th due regard to the oonveni enaa and. customary course or buainesa and shall not necesseJnly be eo-terminous with ary at.a.ts or st.a,as, ate.• • Karly citioa were in tbe fight for the Fedoral Reserve ~-ank even be• fore the publi ea.ti on of the Act, for they had been tiell advised by their r•'.9 .. pi,eaentativea in Congress as to the approximate wording 01' the organization •eotu:,n of the Act. So early was the start of numerous eastern cities in the fight for re• cognition as roserve centara that there was prevalent early in Jaft31&%"Y a reel- • ing throughout tho,, country that Kansas City would not, get one of the banks. strong was this feeling as it was expressed in the East and repeated to the ear• or Kansas Ci tians that a spirit_ ~r. ~een de_t.~rmi.nati on took hold or the Kansas City 1 • ,-, ' .· .:) • • : - ,;,. ' - , , ~· ·:; ,,.,. • ! -· -·· , ~ · A· • .-;·· •·. · ' •.: • •4 1 ~,- \ :. ,r-; .:"lt: '.;:--..:,:. 1' .: . :.. • - - _,,1 ; •"'"' 1•f · y; _ : ;:: ' :1 ,.,,,.. . be.nkera and made their fight for · recognition a ,tranuou• and a sueaesafuLone. ,, . ,. 11 ~ ~ - ~~-• :- . -.~::,.~.~ ·i~ -'- :~;·· : . .- ? ·: 1 '. ··- :..:• • _ : -- '/_:.... ·~ =i:. ~ t,n:: ••"":" i• ; •• , _.· ,·:J-;1~1..1.::::T• ~~.:',:::::i' .'.':,';,~·,·;:..~~~-~ ''ffie central reserve o~mters at that t.ime were Bew~Yo.rk, ¢hic:ago~~ J ~Hi-:!",: ·,~ · -...·. ~.J....1.:UC<i-~ C,W-,!'fn ::::·;"' r;.•~_.;:.::.i.,:na: , :.:,>,,.-'...c· .v.-st.-,·.:Loui.11. It was ~.rtua.lly- certain that. tnos;· throe': cities would beeome "?e4- : ·, r-.:1•- ~- • -12/eral Roaerve oitiea. So olose to st. Louil was Kansas City that it was generally believed the latter oity should attempt to booome a branoh of one of the Federal Reserve &Lnks yi ich would undoubtedly be located at -St. Loui1, ~i'th this arrangm:nent in mind a com:nittee from the St, Louis Clearing llouse Aasociation came to Kansas City direotly aftor .the signing of the Federal Re• serve Act and held a session with a 11paoie.l o~ttee of the Kanaaa City Clear• ing House AHociation with a view to enlisting K~\Daas Ci tian• 1 aid in behalf ot st. Louis, tha latter city to compensate by assuring Kansas City of tJ,e location of a branch bank. The committee from tha Kansas City Clearing House Ta.a QI faller.rs: E, F. p; . 'N • J, .F. F. P. Swinney. President First National !anlc, Goebel. President Kansas City Clea.ring llouse. Downing, President New England National Bank.--._ 2:. Neal. Presidant Southwest National Bank:. ..,,,. -· ' rr. T, Kemper• President Comrnaroe Trust Company. ----The st. Loui• bankers made a strong plea but f·ailed to convince:, the Kansas City mon that Kansas City was not entitled to one of the twelve Federal Reserve Banks. The attitud_e of tho ccmm.ttee was, "le have nothing to lO,~:d and something to · gai.J:I." James A. Senatorl.(Reed we.■ al■ o prejudiiled again at the chances of Kansas City . . until he he°ld a co'1ference with the committee at their requeat. This conference lasted all one Sunday forenoon and at its close the junior Senator fran W.sao~ (_ Wa• himself convinced that City ns logica).ly 1uited for a bank aepa.rate hn ■aa from the one that might be located at st. Louis, 'fhe aenior Senator, Joe~ "E. Stone, was _1. 11 at his home in st. Louis and ·was unable to take an active pa.rt in t he "matter, but Senator Jw.~. -~J-t~~;d·:~ 'w;;htn.g.t-on a tirm , r ,... :.a~'-• • ~, . ,• 4 . _I , ,._ - . - . P'eder.•l Reaek~'-~ttt/ ., - - • • e:ba-a11 . ' . • • • . a r~~ui.t • ••••• , • - heUever in :'ii{i,i~~c.if!.t,. F2;/l,l"t!'.;: 1: -"'I iict!v!:ti~~ :be"gan'.:upon hi.a I!' ~,,.-..rt -: ;.~· ~,.;.y: :· •__ =!· l._ . . :::1• !" l'..· ,._~-: :-'~.:..:' r-·r-'t·•·~~-'l'\,il- ard~-l°':ln.,,.1.. ~' ;,~ . ::.,.:...l':":V?:t· ' .,r-r-.f..~i., ;t .• 4:,-.., ~· : :-_ '-• ::- .- I :t-{•"·l i:-. ~~ :".':.l. ~l' !·,:,;,.~; A&!& , fongresa. ·Karly 1n January the press announced an itinerary arranged 'bJ t.ha newly appointed Federal Reserve Organization Committee oomprieed of w. G. Me.ruioo, 3eorttary of the Treasury, D. F. Houston. Secretary of Agriculture,and John Skelton ~illiams, Compt.rollor of the CUrrenoy. moat of the important cities of the country except t'hia itinerary included Kan ■ a• City and the first eldrmieh in the tight for Kansas City waa to obt.ain a. promise from the Committee to make at least a day 1a atop in Kansas City in order to give an opportwiity for the Kansas City bankers to present their oaae. Principally through courtesy, Secretary McAdoo finally wired that the Committee would spend part of Jriday, January 23~ in Kanaaa City. On· that day he and Seoretary Houston arrived and gave the day over to a. hearing in the Federal court rooms. So well had the oaae of 11w1saa City bean prepared by tha ~ n g Bouse Aoaooiation tJ,at it has \ been ,said sin ca that the two members or the organization commi tteo who were in Ian ea.s c_~ty completely changed their mind.a before the hearing ended.. here prejudiced against ICansaa City a1 Arriving a reaerve bank canter, they . left tirtually convinced that a bank should be located here. 1he testimony introduced oomprieed a rather exhaustive treatment at the merits of greater Kansas City as a business and banking center, a compilation that grew in its impre11sivene11a even upon t.he mind.a or the local mn who prepared the ca••• Kembera of the special cmmnittee ofte1Lramarked afterward. that the more they- investigated Kanaa.■ City 1a morita over othor Gitt.es contending for banks the more thorough was their conviction that they wre right in their • .- r• ·.-.~-- . ~· ..: - . . . .... • • • • .• ... ,-.-. •' .· •.: c. ~ , , , .. . __ claim •.. . In fact, F. P. Nea-1.Cluu:rman ·-ot -the ■peaial committee_o'f Kansas Ci.Uaiii~' • mo.de the followi.ng prophecy on that da.y to the cabinet members l'lho conducted. t.he hearing: "I must say to you now, Mr. Ma.Adoo and iar. Houston. that the bank which you will esta.bliah in Kansas City will prove to be one of the moat importan t, useful and 11uoca111tul of the twolw ret-eral Reae"e Bank■•" • Among those who toat:U'ied at the hearing ware Mr. Neal who minutely subata.ntl ated hi ■ argument that the territory contl ~ou11 to ltanea1 City demand.- lld a p~ey bank instead of a branoh bankJ P. "I. Goebel, President of the clearing house":~~ ke 1n behalf' of that organi1a.t ion J M.L. McClure, of the Drumm Ccmmd.ssion Com.piny at the stook yards, on the live at.oak marketJ Leon • Smith, who of SmithWcC ord-To;ms end Dry Goods Company, /apoke tor the Kansas City wholesale trade territory ; Mr. g. L• Copeland, Treasurer of the Atchi ■ on, Topaka and Sant.a Fe Rail'.vay, who spoke on railroad facU.iU.e e and clearings in Kansas C!tyJ Mr, R. A. Long:. on tho l~be?' narketsJ Kr. Frank G. Crowell on tJie Board ot .!rade and grain markotsJ Mr, J. F. Martin, Presidont of the Kansas City Motor Car Deal• ers Associati on, on the moto~ t-ar industry; Mr, n. o. Moore on the implemen t, vehicle and hardware busineas; Messrs, Frank Phill~ps and R. L• Beattie, of Bartlesv ille - on the oil industry;Mr, J. B. Reynolds on insurance J Mr. Charles Koith on the coal industry; Mr. Ben r. the industria l and commercia l developem entJ Johnaon of Chickasha.., Oklahoma., on Mr. Louia H. lr.ulfekuh ler pf' Leavenwo rth. Kansas, on acoeasib illty of territory and Mr, E.E. Jacobs of Cartha@P, Kia ■ ouri, on shipments from tr1 butaey points. In addition to the testimony of these witnesses inquiries were frequentl y directed by membera of the com:zittee . ~- to Mr, Goebel, Governor ~ Secretary of tho t<;', J, Bailey of Atchison, E:anaas 11and 'I'), - w, Bowme.n~qf Topeka, I Kan ■ as ' Bankers ,Aeaocia,Uon, (. -;'•. ,,, -,.,.. . ' r: .... .Aa the Comptroller oft.he Currency did not accampany to Kansas City t.he otter two members of the organization committee, the next problem lay in presenting the oa■e to hi•• The Kanaas City committee the_refore printed a pma• );hlat containing their various argmenta backed up by maps, cha.rt■ and statiatica •,vhich they had uaed at the · hearing on January 2~. things figures on the Kan ■aa Tr.is volme gave among other City territory, the number of banks and their aap• ital,aurplus and deposits by 11'.e;t.aa and parts of st.a.tea, atatamr.ita of banks ot greater ■ inoa Kanaa■ City as of January 6, 1914, the bank clearings of Kanaaa City 1876 in five year periods and their comparison with olearjnga in other principal cities, also tho bank transactions of the clearing house banks and. many other busineaa i,eoords made in Kansas City and ita trade territory, The preface of this book was the following letter directed to the orga~ization committee: Kansas City, Mo., ~anuary 25, l9l4. Tot.ha Reserve Bank Organization Committee; Gentlnuma- We believe it ia the purpose of your honorable body, aa well aa the intent of the Fec5.eral Reserve Act., that the Federal ReaerTa banki1 provided tor under ■aid Aot 1 ahall be established at point.a Where they will bes( aarva . the conti guoua f.erri tory. Kansas City, with her splendid railroad facilities and excellent mail eervice, has become the natural market,. financial and diatrlwting center of. the richest arid most rapidly developing agricultura_l and. mineral district of America. A large number ot the National ~ St.at.a banks and. trust aompanie■ throughout t.hi ■ great territoey have 11gn1tled their intsntion of becoming member■ of a Federal Reaerve bank at the earliest po ■aible date~ and have expre■■their desire to help in every way to make ·the plan a ■uaoes1. On behalt of theie institutions. and the banks and trust. compo.niea of Great.er Kan ■aa -Ciey (Kansai City, Mi.eeouri, and 1Can1111.1 City, Kansaa), n respeotfully aubnit,, for your earneat. oorieideration,. •the appll.oation--c-f,.:thi.• ·city ·for the locatioq .ot. one ,of the 1'eciera1.. Reaerve banks. We bell•T• a .Mer.al lteaerve 'bank located bore ·c ould · aerve ·ffl0r"! ' advantageously than l~~ ;i.O:"\ed ~iii ~~ ,:Other.· o(t.:,J.:~ . d·i atrlct/ lncluii~{f~th•::..,:· ,., Stat.ea ,.ot: ,Kan ■aa., 1ielri:ikii., "Nn llexiao· anif Olclah*·,~the ·western part , ot· ·the ·Stat. : . • ,. 0 · •. - - - ,.. .,, ·•• 1,i• 1,• •t:·•~ ·:!~Z::-·t--:-\t_,•1• t.! •A ~ _ ___ ! t: '.· · •. : • LO. -16- or ftssouri. a smail part of the St.ate• r:6 Arkanaa■ and Iowa, the northern part ot the state of Tema • and that part of the St.ate ot . Colorad.o ea.at of the Rookie• We are aul:mitting .hermth data which provsa Ianaa.1 City' ■ ■upremacy in thi■ territory and which we hope·will enable your honorable bpdy to plaoe lt■ at.amp of approval upon thi ■ appl,iaation. ~.I'... • ' • • The P'edaral Re■ erve Bank of Kana~;-irtth the cH ■ trlct as above out• lined, would be a commanding institution, with ample capital and depod.ta to protect and properly care for the legitimate buaine ■ e nee41 or thi ■ 61st.rict. If any t-.arthor information is desired, we wS. 11 be glad to turnlsh 1 t at your commai\4. • • . Wi ■bing your honorable 4?0D1nlttae success in the important work of organizing this great ayatem· ot Federal Reserve 'bank ■ .,and usuri~~ you It our l!!O■ t hea~ty ~ r t at 'a ll time•• we are. ( Sincerely yours. ffle Aasocia ted Fa.nka ot Greater Kansas City. For the presentation of the case to Comptroller Williams the Kan ■ a1 City Clearing House Association appointed. a •~cial committee comprised of ·"• T. Kemper. Jerome Thralls manager of the clearin ~ e , and F. P, Neal, inatruot- ing them to go to Washington and interview Mr. 1~lllama and others who 70Uld be of service in obtaining the bonk. Wa1hi ngton. . This com:ni ttee 11pent an eventful nak 1n 'l'hey suooeeded ln obtaining tWD lnter~m with Co:nptroller Willia1111t Their f'irat reception 1D the Comptrol~r•s office wa.a ao cool that one or the cozmni ttee a.f'tanrard remarked that he knew just how 8ommandar Peary felt luring hia conquest in the N0 rt.h Pole. All the arg\Dl\9nt11 they were enabled to a6- vantp• appeared to have ll t.tle effect upon the Treasury official and they virtually . ' retired under fire from tho first aeasion. Di ■appointed but "not diaoouraged the comciitteo aou@;h.t •ut Senator Reed and Congressman r.. P. Eorland. Kanau Cit,y Repteaentativo in the Houae, for •• : · ••• - , - • ~ ~~~ - • .i .. -. •· ..... :,, !•r· :.~- . . :'.'."·.-: _, - ; •.- -:: . ';'---~•i! furl.her advice and a1&iatanoe. :Although Senator . Reed wu_ti~t. .. ltrictly·'. an ad~:::.~; ' ;~:?: <:_·, -.. :: , :.th£Lt ;~~~ L.. r _ .. ..: · -:' :: : ~-;·-~..: -~- : :)i:1 ..-..1;o,,~•.. , "' '. -• . • -,. "~ .•.... r • . ,. :: • • : -~~~;rat.ton 'Democrat. at. ~me·:he .llaii,aa a favor to Seoretary"MoAA~i~~r~ ~eci-::t ' .. C. :-: \. ~ ;f ·( :· ~ j: -~ .. . ' ~, ., -·. • .. • .s •• - ..r -. • • : ••• ~ . ·, '. !-::, 1._. ~;,' ;::1:1-"i .. ,..,."' in behal£ of Com~ll er Wi lllams when the Comptrol ler 1s first app:,i:ntment we.a , being held up in the senat.a. Thie gave him an inroad to the Treasury att1cia.la on the Kanaaa City queaUon. While Congreaaman Borland eould not do much on aooount ot the f'act that the matter n.s. chiafi;y a senatoria l one. he 11a.1 large• ly instrumen tal in ob'tain1ng f'or the oammttee a second interview with Comptroll er Summing up their forces for the final attack. this committee moved up its heavy artillery and backed it up with machine gun fire that wu ao rapid · • pwn it 41d not allow the Comptro~ ler time to assert and propound bi ,;theorie s. The result ot this session was the winning over of John Skelton Williama eo that the vote of the organizat ion commi.ttae was unanimous in favor of placing a Federal Reserve lank at Ka."laaa City. With the main point aettled the next question that arose in th_e location problem was the matter o!' territory . it was requested 0£ the Organizat ion committee . would have included the follow- ing territory , t'he western 14: 00W1tias o£Arkans as. the eastern 33 counties of Colorado. the southwest ern l 7 counties of Ia,na• all of Kansas,. the nstern 46 counties of Mi"'sourl; all of Nebraska., New Mexico and Oklahoma, and 112 counties of Texaa, comprisin g 622 counties in all. Colonel House, the noted Texas politicia n who was at that tim~ personal adviaor of' Presiden t Wilson, stepped into the location controver sy at thia point. Always loyal to hia ..ta.ta, the Col~l was ■ omewbat inoenaed at the attitude of the org;am.zation •eoimd.ttee tending to overloolc the atate of Te~ in the location . . ' of a primary bank• The portion of Texaa wdch waa sought by the Kansaa Cfty ~ . , committee • • _ • _ • • • r . Yall • actually a plrt pf, the. Kansaa -Clty trade and ~ing ,,t,,~ ,;-rttory,. r • • . • . t.hroug;h the intercoasi o:n ~ :: __1\ ~"7.- 1 1' " :-:• •. . : ,_,:·n,;.•n~;.:- ~,.,... ( :;' ,_ .. ..• _ ·or-colonel \ : •• .' ~- ... • _ _ • • • • ,. . . • __ . (""-. ' , ,.<; " i • ~- • • •. - > •-' •• ~..- • r 1v ,:: .• •::: . ,..: - . ,,,.!' c. Bouse the.-caimi d.t~a. ,deoided&•i o-·ptaae :.: 'P$?11C' ' ~~ r'.:•• ,::. -.) ,._ -- ,-•~--- ~-_:; ¥ V: t_\._:_ · '__ ;Jl.'t :.:-,'~' . : at ~~1a•• r.. .. .As means of_ gatting .. f.err!tory tor the Dallaa ~ ;::;.,::," ,:.,. :;.:~4~~~;;::.:~~'A~ CU.J. ' ~ ~_,,it.,~~~-f li~.P.::~ .,,-".. away from Kanaaa City the 112 Texas counties. allot New Hex1oo but the north lQ count!. ea and the S3 aouthern counties of Oklahom.. The bankers in that part of 'i'ezas claimed by Kanaaa City had requested that they be incorporate d in tie Kanae.a Cl ty dlatrict. ba."lkera association • had made this !•quoat. Aleo the Cklahoma But in the oomprcmiaa Kansu City lost, besidea th• Texas and. Arkansas count.iea. the south 33 counties of Okla• ~ . 17 trom Ntnr Mexico. 26 tram W.asourl • 17 from Iowa.. and gained the western half of Colorado and all of the atata of ~ n g whi~ naturally oontri but.ed to Nebraska and Colorado. , ~ instaad :•f: c~ Thl.o left the Kansas City.: ..41.at.rict. with 565 countie1 52_2'. ~. A readjustmen t wa• later mad~ in the otate ..,r Ka.naaa. Ci 'ty rer;ained from na.\ias 26 of the :53 Oklahoma cotmt.l.oa 8 aout.hea.stsr n counties of the at.ate in the DalW district. b:, which ~ only t he 1tda 'ta" expla.tned. ~~-~/ !.~-~-~~ -~g_9lli!.P.W: -T· The campaign waged by the associated bankers of greater Kana,i.s City for tho location of the Federal Roaorve funk rill always rm.in one of the mosi brilliant aocompliabm ente of bankera in the history of American banking • .,'l'he apparent miafortune of being aituated in the aame at.ate with St. Louie. a. city already destined to become a r~ere.l Reservv oenter by virtue of' former 1' acquisition , was overcome and &Ubsequent axparienaa fully proved the wisdomj in Mr. Nea.l I s prophecy to Seoretary MDAdoo and Sec rotary Houston. The ma.in a r ~ t of t.he campaign of f'e.cta vo.a that. the financial and trade advantage held by Kanaaa City in its trade territoty- was ao great that it demanded a primary bani: rather than a bra.nch bank. ...... . ': - ,•• ,. : .i....· - .. -.. . .. ,. . ,., f. ·~· ; :' ;_ ' -~· - The organization cammi ttee '• announcement of the bourdary of the Tenth Federal ReaerTe Di strict ,ra,s almost imme6.iatel7 the signal for a eerie ■ of objections. complaints and recOlll!l9Ddation• made by the banks of several ■ta.tea within the district. These objections were soon concerted into actions taken by two factions in the diatriot. Sela- First. numerou1 banks in southern hams. ' who were included in the Dallas diatrict by the first decision by the orga."lizat- ion committee began to peti ti.on for transfer from the Dallas district Kansas City district. ~ the Their reason a were mainly that the terri tor;y waa a part of the natural trade territory of Kansas City. Second, numerous banks in Neb- raska and Wyoming contended that they should be placed in the· Chicago district rather than in the Kansas City di strict. The Act pro'Vi.ded that "The districts shall be apportioned Yi th due regard. to the convenience and customary course of business and shall not neceuarily be coterminous nth any state or 1tau,a. districts thus created MAY BE .READJUSTED and nevr district■ The may from time to time be created b;y the Federal Reserve Board, not to exceed tirel'ft in all." Aa the organization committee had already decided upon and named the tllfelve dietricta, the contention ■ of the bankers in these two factions within the Tenth Dbtriot 'Were for rea.cljustment of districts. On September 16, 1914, two months before the opening of the bank at Kania■ City. a petition a.nd brief were filed with the organization committee 1n behalf or the bank a of southern Olclahoma who wi. shad, to be transferred trClll the Dallas district to the Kansas City district. , -,,. , t'·' I - ' • -. Oklahoma entered the •te,~_-, ori-,t h;·-~:~t,_ J~~ ~ -e, Canadian hl.ver tl'i~ ' t ~i.ng'i•,;::;;, ~ . ·;".;,,: ~'~.,::~~ ~igzag c~~i:~• V itlt, . • , •;.-. .:, .;:, i 1.- • •• • " - :: •• ,·. • i..-. • • ►v f:N- ·- -J....-: - -• ... ~ .':";.: ~~ :- • ;:· ,•.~!: ~ :: t~' r.- -:"'li•r· :-~~- ~ .,;.~ .toilowi~g\ti\e•ien:~a'i;llfrectimt'c(r=-the ft~i 'wbl~h ,~ri~;,ib.~=.::~,u 1 HC: O· t,,.·• \.>t . ~ " ::_; :., ~- ?:,,{~: ~~ - ~ ;.,::}r. ~ _t;_ ·1.. -t/ IJ- ~ : .L' "'! r~ :~:Jr{; .I J r' >" l'Y'""" • !:. ,: • cci:rt:-~-· l--:'.!r'1'!'Ta t. o • •~,~:)• l•~--- . ..-.'-! !',·:); { r;....:'tf.!:~:C, .!..l··:• D:OtlliSiil &t.J-A ,, '· bouddaey between diatriot ten and district elevan ·tor a majori.ty ot the dist.a.no• aero■■ the 1tate. Bank ■ 1ituated in the Dallas dist.riot followed up the petition to the organization committee by making act.ual demonstrations of the lnaooe ■a1bilit.y of Dallas for th9ir purpo1e1 a11 aoon aa the banks began operation, Wire trans- fer ■ were largely in1trumental in 1howing up an impraatioable di1tricting of thoee bank• most of which were on direot lines to KB.Ilsa.a City, 1outhern Oklahoaa bank ■ wa1 A o6nferenoe of the held in Oklahoma City, On October 27 the Fet1'ral Re•ene Bmk of Dallu was notified that the pri.iti on and brief had been f'i lad in behalf of the ■ outhern Oklahoma. banks and wa.11 requested to designate a repre1entative to appear in 1 ta behalf. On Deo- em.ber 16 the petition and brief were m.iled to Federal Reserft Agent Dalla• with the request that they be referred to the repre ■entatiff Teni. ■ on at Yben deaignat• . ; On December 26 permiaaion wa.a granted by the Federal Reserve Board to file . ..s. a reply brief as late aa January 27, 1918. The hearing wa1 ■et for February 10, ed. at irhioh time the Boan\ held that "All of the · Oklahoma. oountlaa lying with the Dalla■ district with the exoeption of theeight 1outhea1tern ccnmtl•• of Oklahoma, whioh oontri buted to aom• extent to the Dalla ■ di ■triot, •hould be ti-anaferred to the Kansas City di•tr1at." The follorlng are the twenty-.ti ve Oklahoma count.lea that beoame after February 10 a part oft.he Tent.h diatriot:• Beokhaa, Caddo, Ca.rt.er, C01111U10b•, Custer, Garvin, Grady, Greer• Harmon• Haskell, Bu?P••• Jackaon, Jefferson, Kicnra, Latimer, Le Fore, Love, lloCWn, Murray, Pittsburg, Pontotoc, Roger Mill ■, stephens, Tillman and !'iaahita, .., . :·.. Omaha, which had made·,11 ~:•t.rong 'ple& tor one of the lederal ,• ., ... .,,. , J.~\t~Ll"'I !::.t':;LJ~~i:- ,,_/:·.:• . • at the outset pf ..~ : .., : ..... .c<c;~:; ' • • t ' • .>~· •.... ._-:!:..:.:.:a'. .':1 ;.j.,:.:·~--~·-:~ ·,.::.~ ~-: ~t::-..i.. i---:.,1.-.. i·.~ •· -• •· • ~ ·J;.nk•-·· _.: ~r. . ~ ... Re ■ erTe • :- - - -· - .:• : · · , , - • • .fi'\r't!'-Ji:{).' ff!Jr , ~!'~-1~~~~ ~ ,.'!~~t~~ !~ _.~;le;-'~~ :t.M . working aenter ,. for a l;l H •.!...-,:,"' "" · "· ~.: · -- ~r?•: , !T ti:-•~ '\""'J.t't...t..i, ..... ·:auba...,~quent campaign intded t o plaoe-·lle'bruka and Wyom1.ng'. lit,,the'.':chdca""go··~:r.;:~~;.,:.,. ~- , :.•.:) rr~·, r r ;:r r:,r .rr r _f__.) ' , ;,.:) _,, \ triot. on the cont.ent ion that they were in a direct line with Chicago and preferre d to do their banking busines s with that metropoll■ rather •. '\ :_ tfuul rlth Kan ■as Citr• On Kay 4 the Federal Ieserve Foard pa.saed a resoluti on d~nying the petition of the Nebraska. and Wyoming banks. Thia 1'8.s the final arlion of the Boa.rd which determin ed the boundary or the Tenth diatrio t which remained in ·, \ operatio n during the first years of the bank's existenc e. ;'hen in June• 1916, the transfer of the southern Oklahoma countiea from the Dallas distric t to the Kansas City distric t was authoriz ed Governor Van7.and t of Dallas visit9d the Kansas City officers and conferre d on methods of ' transfeA ng the capital , reserve s and rediscou nta of those banks concerne d in the change or territor y. A committ ee of' Messrs. iawyer, Wilson and Ramsay was appoint • ad to vhi t Dalla.a. inspect the loans that had been made to the Oklahoma bank and settle upon a method of tra.~sfe rring the account s in such ~~er Rs to cause the Dallas bank: as little expense as possibl e. In effectin g the transfer the Kansas City bank paid the insuranc e and postage on gold certific ates from Dallas to the sub-trea sury at St, 1ouia covering 80% of the paid in capital and raaervea or the member ba.nke which were transfe rred. Of .the remainin g 20%,exch ange at par or at the least rate ~btaina bl8 was accepted and the Kansas City oank: also accepted a por~ion ot balancea held by tha Southwe st. Nationa l Bank of' Commerce in Kansas City ito the oredit of tha Federal Reserve Banlc of Dalla.a • . ; '-·· : ; .. ;- :· : ,. ◄ • : ..: I -22FIRST DIRECTORS MEETING The three Cla ■ s A and the fibr•e Class B directors having been elect- ed by the benlcs of these alaases and the thrH appointed by the Federal Clas ■ C diraetora having been Board at Washington, the first meeting of Re ■ erve these directors was held at the aall or Chairman J, z. Miller. Jr,• in the dir- ector ■ 1 rooma of the Comnerce rrust Com.pan~ on Friday, October 16, 1914, a.t 2130 o 1oloak. At this meeting all the director ■ e11eept C.E. lurnham of lorft>lk• Nebraska, were proaent. 'fha first matter or business was the discussion of a list of questions th·1.t had been submitted by the Federal Reserve Boan! concerning the opening of the bank, While these question■ and their answer■ need not be repeated here, the decisions were in brief as That the earliest data the Kansas City follow■, bank would be ready to open was November 16; that the personnel and size of the . ' bank's executive temporary Dommittee· ■hould quarter ■ be at least four instead of threeJ that were aw.ilable in the Commerce Building unt.11 permanent were definitely decided upon; that the at.arr or the mnk ■hould conaiat or the Chairman, Viae-Chairman, Governor, Cashier and one other officer to be that all function ■ quarter ■ ■ elected; of the bank contemplated by the Act. including the clearing of check ■• were to wgin an the opening dq$. that crop movement■ ln the Tenth • I' • • District should furniah 1ufficiant funds for liquidating all reserves ri~out being compelled to convert emergency currency into Jedaral Reserve Notes. r •- - ... · - .. . - ..•• It was decided, upon •th:• .. uiotion .,of:E:11:'eotor Gordon .J.09~■ .ancL.1~0.Qr:adod.. -~• ~ ..... -.-· ,,•-·· "~: :,;.; ~~-~'"',~ -~ - •• _ ..... . . - .,. - •• _. --;,-. \ - ~ : •-· ~•, f'" • •• I •-~• ~•...-•r .::., , _ _ ~ • • I. .. ...., - 1.,olb- • _. .:. d ...:· ... ,:;-- .... -.! ...::. . . ~ ·-11-.-, ot a oommi ttee eo ~ ... • attend an announced meeting in Washington beginning October 20. The ramo.inder of the session was devoted chietly t.o t.he a Governor and the determination of the amoW'lt of his aalarY,• ■election ot Thia discuaaion preaenta certain taota ao enU.ghtlning in their relation to the bank 1 a earl7 administration t.hat it 111 titting to quote occasional extract■ from it. It was explained by Cbainun W.ller that there could not be an election of a Governor but merely a aeleation by the direatora to be confirmed by the 7ederal Reaerva Board. But aa th~ Pederal Reserve :Board had requested that the "Governor and a committee or three" were invited to attend a meeting in Washington. ' it waa preferable to choo ■ e the Governor at thia meeting. At the opening ot .the question of Governor,. Director Byrne raised the question as to the amount or salary ". paid. Following are extraote from the discuaaiona that ensued: J1..,=..:,c~ ,,. rr 801~0"1: :;a,;::;,.s:mu: . a.""-="'VH,..""'(~.! ... .N,c..l:.;;:o1- ,:.:.: .·.,_- a, 1,\ ,i1....__• 4" : .....-.a·,.:.....,.;. ~J te"E. t··~ · ,, . _,-) µ, ;_ ; ·-. ~ • -•'" .! ~• ~r. <:'V. .. . -·- - ..-- 11'- :::", f::;,~"l-..._l !. <t1 .1..1,."Wll--A Jt..o 1:,:! . K.t'liNl't".Y: e.-i.t-~;-:.~:.r.--:•:r1""t: .c.a·a..--!lO ~ n· u· r H Q!::a\"1"1C?-;,4• ,r.;-v.-.:cq..n: -..c·..c .,·~c.o~ ;.. i.:. m -•· ~'- - ---~ "r •• • ,c·, J : :zo,).""'-!~~ ~ r J • - z- v;; rncv·~· ,:"~ cc.i -,.- ~"'~-t.G.u., : -t:Y,"Nt'rW a.u. ~ _:._. ,J ;."'4·;;~:~,.~;,t.,;f.~5<~,t.;:J~~~~,'\it: ~O'/IJ \f•:;~ •. ,i - -("'•::,y,;_>i'f,l,.l,. ~: ~ •·' 't. The Cbairme.na The Govermnent fixes the salary ot the Chairman; and the Vioe-Cbt.1:rme.n, the Governor and all other o:tfioe ra are fixed by us, subje ct, hOV'fever, to the approv al of the F ~. Reserv e Board . • Mr. Byrnes What Salary shall The Obairm azu That 11 to be decide d. 1a $'1,500.00 per ammrn. Yr. Jon8S1 The Salary of this Board? Branch ? The 0ha1rmana I think $15,00 0.00. Kr. Bailey s Al:ld. what 11 the aalary of the Governor there? Mr, Ramaa:,z $25,00 0.00. !he 0hairma.na Yes, Sir; llr. Strong quitl a $50,00 0.00 aalary , am it waa said that he made about $80,00 0 more. That is the situat ion of that bank. I did not knOi'I wba.t the aalary of 'Iq positi on was to be When I was 1n Washi ngton, - o~ learne d it when I got back and receiv ed the letter which they had mailed to me before I left there. In f'aot, I asked them two or three t1mea about the matte r, but could not get arq aatls:t aotion . Mr. Ba11e yi I thi?Jk this Board ought to ask ~the 1edera l Re ■ erT'e Board to pa:y the Chairman of this bank'°4{0,ooo.oo at least. Mr. McClu re: So do I. Vr. Ka.lone, So do I. Mr. Byrne , I think so too. '?he 0bairn an~. we fix? ~ 88l&17 :tixed for the Ohairma.D Wbat'a the salary o:t the H• York Gentlemen, I will j11.1t say this, I did mt ask for thla plaoe had no more idea o:t beillg appoin ted to this podtl on than ot ' ,·.: goitlg to China , . I waa on ri:v ~ h 1n !ems , and I reoa1v·acL ', : · :- • over .a 'phone wire 1treto hed !l!P~ ol4pol ea down there a message from Kr. Kemper. aayhig tha~ Mr, Slrinne y had receiv ed ~ • telegr_am from Washington ~king wheth er ar not I ,rould 'be a auitab le person to app9in t ~ Oballm an, am wheth er I wmld aooep t. l did not get the telegr am tor two or 'three d.qa~ Jlea.Drhile, Jib-. Kemper took the libert y or aq1J:Jg to Jlr, 91r1Jinv . that I 1r0t1ld aooep t. • ·1 went down to Wa■hiigton, that ~. l ·:·. starte d, within two or three hours after reoeip t or that ·.aeoont telegr am in aooorda.DCe with a oall aver anothe r wire, aDl Jlr~' •• Ramsq am. I at13¥ed there a pa.rt ot two ·da;ya, - ••t of one c1a;r and all of the other. We talked with ditter ent ·Reaen e Joan\.·· .••• members am. e¢eav :or~ :to get a genera l ·:outlin e am. just .:.~ i,f~• dutiea ot the cba1rDBnah1p wauld 'be, aDl the;y had a grea• .4-aa1.-·t · -~ to aq on that mb',e ot. I aa1tad ab011t ~ 1&1.al7 the oJ:labman .. • would get. Jlr. Delano gave me a typew ritten memo:ran4u111 he bad prepar ed ~or the parpoa e o~ selldin g out to oertai n people that ,,_ were under cona1dera.t1 on am about to be appointed, stating about wbat the d'1ties would be and about the sa.lary. I read that while in Washington , and it stated the salaries would be from $8,000 to $12,000. I thought they would mke it about $10,000.00 hare, but when I got home I .folllld they had nade it $7,500. ••••••••••• ••••••••••• •••••• ~•••••••••• .! :vr. Jon•s Jho. Chairman, I think ff'lery one appreciates the aacritioe 7ou have made, aJld I ofter the motion that the Jl'ederal Res8"'e Board be requested to agree to a salary 01' $10,000 for each of the Chairman and the GOTernor of this bam. I doubt it we can get a qualified man tor Governor without paying that mah. 'lhe Chairmans I would make the auggeation that 7ou do not pit this in the ahape ot a motion. I do not thilJlt 1t would aooompliah _the . purpose. I am telliDg you all thi ■ onl,y to ah.ow you that the Govermnent 1 ■ asld.ng the ■ en'ioea 01' people who will _e nter its aerYioe with the general understandi ng that theu are . . aotua-ted b7 patriotio motives and are willing to do somethi~ tor their 0012ntry. I do not believe it 11 the time to bri.ng the subjeot up at all. I want to go through with this ~ - I do not want to mar zey- inoumbenoy with arq suggestion at 'this · time. A little later on if' the thiDg comes out .rofJY' and we get ourselves on a good pqtng basis, it might be touohed. Mr• Joness You would accept it, would you notT The Chai~z I am not going to suggest it nwaelt, am I will not let zeyf'riems suggest it if I oan prevent. Mr. Joness I know we were all disappointe d in your se,lary • The Cha11'!11&1u As to the salary of the Governor, I told the Board,- .Mr. RarnBS¥ was present at the time,- I told the Board that regardless of the asJ.ary they fixed for the Cba.1rm&n that l would not f'eel ot th11 bank a to JI\V'Belf'. I take the plaoe :vr. Byrnes ( it wais quite the fair thing to pq the Gov~rnar larger. ■alary than that paid t _o ·~• 0bairlran~ 414 not mow o:t a.rq iaan. 1n t~•- town who. muld at all.•••••• ••••••••••• •••••••~••• •••••••• •• .. I am confident we all appreciate the sac:r1:tloe you ~e made, am there 1s not al\V' one here whO will not baolc you up ,i n the undertaldng 7ou ha.Te started. l'e mow :,our att1 tud.e am YOUZ' aelit1menta on the subject,-· and I mean jut What I say, we will all back you up. The Chairmans !?hat' s Ter-j nioe of you. Jlr • .Byrne a I do not think we should emba.raass you, attar y\ltl ha.Te aooepted the position regard].eaa· ot aala17, b7 ma.king reoonmemat iona to the Reserve Board at .thia time. I believe that thia bank' bj the harmmJ;y &lJ4 strength ot thu Boa.rd ia goillg to be very • . suocesstal. We ms:, not be able to keep it within the aim of the pe~le,- we mist keep 1t as a tru~ reserYe bank. I be- 118'f'a that 1s the 1ent1mant or ever,y man on the Board..••• 'l'he Chairman, ! Mr. l'l:11 son: ; I just made those remarks about the salary because ·l don't think I could teal just right with a~bo~ who might aooapt that plaoe drmvi11g a larger salary than I draw ■ It I am making a aaorif1oe he, too, ahould make a saorit~oe; otherwise, he would not quite measure up to the ·standard the Government 1 ■ demaDling. I think the Bederal Boa.rd is ma.king a serious mistake 1n handicapping this Board. I have bean and am favorable to the seleotion ot Mr. Goebel as Governori. but .he will not accept the position_ tor leas than $10,000~ 1 haTe known b1m for y-ears; I know. his ·a bility, and I know the bank WOllld be sate with him aa Governor. He will not take it at · $7,500 a year. He bas told me to say that to thia Board. I think thia Board should try to exeroise 1ts 1nfluenae to raiae the •salary of J4r. lliller to t10,ooo,· so we could secure a man of • high order as Governor. t•• ••••• •• •••• ••••••• .. ~•• .. •·•• .. •.. • ...... I appreciate all Mr. J4iller has said, am oomur · 1n what llr. Byrne has said relative to our working in harmoIG"; and no man will work harder for the suooess of the pank than will I. But it does seem to me that 1.t we will uss 0Ul" 1nU.uenoe with that Board at Washington we o~ ad.Just this thi,................... . ~• -• I agree with nearly all that has been said on this subJeot ■ . The first talk I had with Mr. Miller I said right off the reel that · I thought it was umriae.. On the other band, I do sympathize fu.lly with what Mr, l!iller bas said regarding the sacrifices he has ma.de, and I feel like res-peot1Dg his wishes relativ.e to the Governor's salary not being greater than his own, lfr. Malo11e1 .. \'·\ .. J!r. 1100 lure: ~·•, ,., • ... ,:;-.I__ / When I went before -the Board in Washington:;. I was there· in the room when these two gentlemen os.me through the room and ·were talkSng. 1 41d not know they· were members of the Xanaaa City Board, ao I w~t in with the Cleveland folks. The Board' aak:.. ed. them what was · about the pr1oe the presidents were gettillg in bSJlks_in Clevela.Dd, and I · thinlt they said from $12,000 to . $15,ooo,~ thought one waa ··get'ting more but did not .know. They asked them what they could get one tor, a?Jd. -they prelfllllled "So-am-So" would go for ·112~000. And t).e Board ._ said •they • ought to work tor us ~or leai; "We want -some one to work toJ" : patriotism and the honor and good of the GOTerment 1'3.ther.·:tba.il for fina.noial oompensation.n And those Cleveland menw~ • .. awq with the thought of getti!lg this iarty· for $8,000. They all seemed to be united and agreed tbat .some one man waa the man • .I think 1t was Mr ■ Warburg who said~- "After you have talked to hilil can you persuade him to oome down here and let us talk to· him■" And they went _away with tbat idea in mim. The impression left on·~ was honor rather than oompenaation . How would it do for us to go on reoord ·aa beillg in favor of Jtr. Goebel prov1d1Dg the salar y prop ositi on could be arran satis facto rily, and let the Board at Wash ingto n try ged to help us in the matte r? The Chairmans Mr. l'lcCl ure, I rathe r think that ques tion 1s not ·so wch be- tween Wash ingto n and the Board here as it would be )?etwean this Boa.rd and the Chair man. The Cba.i rnan' a salar y is tb:ed and they are not going to oba?Jge it. I am prese nting 't bat quel!ltion to you. You migh t, poss ibly, get by the WashiDgton Boar d, but I hard ly think it poss ible or at all likel y. I do not hardl y see how I could main tain and keep _rrq cnm aelfrespe ot am let Mr. Goeb el, or SJlYboccy- else in this right 1n and perto rm a leas servi ce at a grea ter ratetown, come ot compens ation . • Jlr. -ilo'Olures The Chair man: Jlr. . . J ~e~ I belie ve the Board at Wash ingto n would conce de tbat poin t to you. The ques tion has been thoro ugbly teste d out. That ques tion shoul d not be prese nted to the Board a.gain . It has been teateel out not by me alone , but Mr. J. w. Perry happe ned Wash ingto n the day we were there am he had a con.t to be in ereno e with two or three of the Boar d. Re told them he was surpr ised that I would accep t the place , and the qcies tion of salar y waa disouss& i with him and they 1·eite rated . just what they had that they were not bayin g anyb ody's time for its oonm as.id to me,that every body had. to sacr ifice some thing for the gooderoia l value ; of the coun try. Sem tor OWen was here yes t~ and dropp ed in to see me. I went over this same thing with him, and he the !'.!Btter had been prett y well discu ssed out and that told me he himself', long befo re he knew nw name would be prese nted as Chair man, bad infor med the FederE1l Rese:rv& Board the salae y here shoul d be at lea.s t $10,0 00. If Ur. Mill er feels that way I don' t see wey ,re shou ld allt him to stult ify hims elf•• ••••• ••• The Cbain m.n1 It is a matt er large ly of auste .ihing the dign ity of the ballk and its ot!1c ers. Mr. Jral.011es Mr. Sawyer has been sugg ested . Kr. Baile y1 Mr. G-oebel said to me that he would like to oome befo re the • :Soard a?ld. prese nt his idea. a. I don' t knOw whet her that W<Xlld be .prop er or not. Is Yr. Sawyer in town , The Chairmans I think not. Jfr. JloCluret Wll1' could Ile is a cand idate aJJtl I woul d sugg est that we talk 't o him and bring hi' befor e uel we not adjou rn u11ti l morn ing and have Mr. Goebel or Vr. Sawyer come 1nT Mr. Jonea1 O011ld we get Jlr. Saw,ye to come? !he Chairmans I don't know. Jlr. Baile;ys It thia Board agrees that not OTer $7,500 ii to be paid to the Governor, that el1mimtea Kr. Goebel,- that•• the qu.eation to settle right now. '?he Cha1rm&nJl Well, gentlemen, let'a get it before the house. think about it? Kr. Jonea1 I made a mot ion but it was not seconded. if I •~/tbat '1(.the expreaaion of thia _Board it. el1m1natea Kr. Gobel. Mr. :Malones I suggest that the secretary distribute the ballots and that we proceed to vote,- or I will make 1 t a motion it y011 prefer it. The Chairman: I think that's better. the GOT81"nOrT :Mr. Joneas I moved ■ome time ago that the ocmmlttee goillg to Washington requ.eat the Board •••••• 1fb.e Chair~ns Bo, no,- not that. Mr. Byrnes I move that the salary 11.mi t ot the Governor be limited. to $7,500 tor the preient. ~e Chai :rman1 All in favor .of the motion J011 have juat heard will aa:i' 8¥h• •• oontrar,v m. fhe motion ia carried. • (Kesan. BailEV, JfoCllll"a and Jone■ voted in ~he nept1Te.) • Jtr. Joneas . I The qu.eation 1s, What will you tJ8:3 I fqte 'no' · but I ~~t to ·qua1117 that. Toiie. I will not vote tor the Gare:z,ior. to ·.r',oeiTe a greater a.alar;y' tban :lll'. • .Ill.lier; and yet it 1 ■• not fair to us tor the :Pederal Board to sq that we ahall not . employ whom!• pleaae, withl~ reason. It's no retle~tion 1!4e Chairmaas What do you I'm into this ~cnr o~.Mr~_Jlille:r ;t h~~-I vo·ted~ up to: D\V' eyes 'au1·,•1•m .gol~ t~ugh "with.it." / ' • Jlr • Bailey I A.lid we Yill _support you all --~he time. •. The Chairmans Bow than~ r;ent'iemen, ■t:pe~ that el1m1Dates .Jrr •. Goebel,without retleo,tioJi _upo~ Kr.-· Goebel' &iid· ~'be ·to the 'detriment of' ·the _b&nlt,~· ~1noa ~~~t·,_1a ~•t~l~,a·,~date to ,~-....... _~: -~ . •. . · -·- am ~•itou suggeett· 'fe_haTe, one ·o.~ lier .oanl1clat~.- ':~ 700: 'l iave been _ad - -~---_: . :· :.'.:.· vised..· Jlr • •.Ball~,-.-40- 7~1-~ ~ ;• '5awt~t. :. ,· . • · - :· .,·,~::-·.. • . .. . .. \ m1as1oner of Xanaaa, ~ ha1 made a good Commissioner. The resolution ot thia Bc>ard has eliminated Jlr, Goebel. I thi:nk it 1a a mistake; but 1n vin ot the tact that he 1 ■ el1m1nated, I mare that Mr. Charle ■ B. Sawyer be elected. the Governor of this bmik. Mr. Malonea I second the motion. The Chai:nmns Yatl have limited the salary to $'1,600. I do not know irr. Sawyer,- know Jlr. Goebel better,- and I want Kr. Bams~ to bear me out that Kr. Goebel has had no one trom hare or as;y trom here who has given him a higher compliment &ild~omnandation than I have. That' ■ The Chail"JIBnz right. Ba.a Mr. Sawyer indioated that he would aooept the place at $7,500? Mr, Joneas What is ha gett 1ng now? Mr, Baileys Nothing,- $2,500. :Mr. MoClurez I will say that I have a telegram from parties at Wichita asking me to 1Upport Mr. Sawyer. The Chairmans Do you know Mr. sawyer, 11r. Jone1? Mr. Jonea1 By reputation, very wall,- but I do !eel that tor the larger ba:nks Mr. Goebel was the first ohoioe. I will say this: Kr. sawyer' ■ name had not been suggested, but I bawe a.nawered one or two telegrams in his behalf, have wired Washington, am have visited ever:, bank 1n Kansas City in his behalt. •• I Kr. Wllaons . .. ' I understand he has given Kansai a Tflr1 ettioient sarvioa. I ,rill •~ this t One ot the thi:a:igs the WaahiJJgton Board indicated was. that we,- ea.oh director and friary · ott1o1al in the bank,- ahould endeav·or to the beat ot h11 ab111iJ' to induce the state banks to oome in. llow aloDg thoae l1nea, l th1Jllc Jlr. Sawyer would serve us Tery well. •Bal.t the ba.&1;., nus this ba1lk will get 11 goii:ig to oome. from lramaa. The other 1tate1 will oontimie to do their businea11 with Omaha am Denver,- only the IU.l'plu1 will oome doma hara,• half ot the 1tate banlal, I mean. • I would like very moh to bave seen Jlr. Goebel the GOTernor of this bank. I regard him very highl.y and have ~ mc,h h'1endah1p tor him as a~· man 111. Xanaas City; but l .~n•,t . think· it would be do1Dg ~tioe to Jir. Milier to have··el.acted him a.t a higher salary than the' Chairman reoe1vea • .. »r. McClure• Mr.~· Kr. Goebel has praot1oally elimimted hlmselt by the position he assumed. I am ua.otly like Jlr. Wilson. Jlr. SB.WjTer will till a ditterent position than Jlr. Goebel would haTe filled. Jlr. Goebel 11 a natural axeaut1Te officer. llr. Malone: When be told ua this morning that tbat elimimted him, l do not aee that it was poaaible for ua to do mare than we In every aue where! bave talked, llr. Sawyer ha.ve dona. has bean the second choice. 1 The Chairmans J:q further remark•~ . Jlr. Wilsons What 1 ■. the question?_ ~e Chairmans Governor Baile, ha.a nominated Kr. SawJer. Jlr. ~ • We agree that his m.me be mbmitted to the Board. The Chairmans Ur. Sawyer is a good man. it known by saying "~e". All in favor of Car:ried. Mr. Sawyer make \ The vote ,rHch elected Mr. Sawyer as Oovernor closaci a discussion on that point and the directors immediately took up the matter or eleoting a member to represent Kansas City on the advisory council. The ff.rat name mentioned Ya.a that of l!r. E. F. Slfinney, President of the Fiaat National Bank, and a man who had gi Ten his time and influence toward obtaining the b~or Kanaaa City. Eis name was placed in nomination by Director J!cClure and he waa unanimously elected on the second ballot. The other candidates were J.c. Mitchell of Denver nomi.nat.e d by Director Jonea and Luther Drake of Omaha nominated by Director Byrne. It ya~ on motion by' D~r.ector BELiley and others that the election of' Mr. Swinney was made W1animous. After a disouaaion on the subject of salary of the Vioe-Chairm an (Director Ramsay) it wa.s mo·:ed by Director Jones that this aalary be fixed at $6,000.00. The motion, which waa aeconcied by Director l'Tilson, was p.1t\ ta a • .vote and carried. The first meeting of the Board of Dirootor■ was adjourned at 6:45 subject to the call of the Chairman. !* "I ... I•,_ .,_, I ' -:ssSECOND KSE:TING At the second meeting of' the directorJ held in the directors' rooms of the Commerce Tnist Company on Saturday. October 31, 1914. all the directors Governor Sawyer wa.s absent, were present. When the mee'Ung convened a.t 10 o'clock in the morning it was decided to immediately scijourn in order to p1rmit an inspection or buildings being considered as sites tor the new Federal Reserve Fank 1e permanent quarters. locations: !here were under oonsid era tion the following The Kanaas City Southern Rail~ay Building, northeast corner or Eleventh and l,','alnil* streetsJ the United States & Mexican ·Trust Company location · in the Bryant Bu-Llding. southwest corner Eleventh itreet and Grand. avenue; the Fidelity Trust Company, northeast corner Ninth street and Grand avenuaJ the Bew Y5rk Life Insure.nee Buiiding at Eighth and -Wyandotte streets and the ground floor -of the R. A. Long Building. northeast corner of Tenth street and Grand avenue. Prior to the masting of October 31 all the locations had been inspected except those of the Fidelity Trust Company and the R. A. Long Buildin~, and the directors inspected these buildings during their adjournment. After re-convening the first matter taken µp wa1 the election or a temporary secretary, Chsi rma.n Ki. ller·•s secretary• l!r, -Hitter, having kept the minutes of the ➔ pr:evious me,etihg •.. , • . On motion by Director Bailey, Director L.A. Wilson was made temporary secretary. A!'ter .full and exhaustive discussions involving the convenience of location, the opportunity of securing additional space when required, the annual rental, etc •• upon motion oi'Director Ma.lone, seconded by Director Burnham, the ,. Boa.rd !1.c~ep+.eci the proposal . .... . '1¥ T,;.. t.'. Jan~ !'or ..uee of the rooms on the ,ground noor ,... t ..: ••• .- - .. - . .:..· , \ of the R. A. Long Building for the new bank. lease 11'8.8 Sub:zeuantl7 a oontr~ot t \ {oe,00 ~ entered into with R. A. Long tor the &I"O floor!\.otf the T~ng Build- ing far a period of five year• at $7,600.00 per annum with the privilege of lea■e extending the fof five years longer at a rental of $12,000.00 per a1u1um. In the afternoon of this meeting a achedule of amounts for bonding employees or the bank waa adopted as follows : All officers of the bank••••••• ·25,000.00 Teller■•••••••••••••••••••••••• 26,000.00 Discount Tellers .•••••••••• •••• 5,000.00 ~oolckeeper■ •••••••••••••••••••• 6,000.00 :oth'1" help not enumerated not lass than•••••• ••• 2,000.•00 Power to modify and adjust this schedule was vested in the Bxeoutive Committee. The b7-laY1 of the bank having provided for an ·Exeoutiw Committee to be compoaed or the Govern•r, the Federal Reaene Agent and one or more directors Class•■ from A or B, upon motion of Director Bailey. seconded by Dierctor Burnham, ~ireotora Jones and Wilson ,rero aelected as the two members of that cOJ!Clittee to act with Chairman 111.ller and Governor Sawyer. The f' irst duty of the Executive Committee •• daciided ta be the cam.plating or udetail ■ for gettin ·•; the bank ready for operati~n, to ••play 1uoh help as neoes1ary, to fix the and all lea.sea and contracts • 11 ,r The oompenaatio n and to 1ign any aalary or the Cashier and Secretary. however, wa.s fixed by the Directors of tbla meeting. ■hould o f ~!hral~; •in that polliition ■ alaries It -.aa decided that the compensatio n be $6,000.00. ns director• ■ ettled upon as follcnra:- For attend.ing a full meeting of the Board $25.00 per day and actual• xpensea; • ~ •• 0 •' for aerving upon the E:xecuti'" Comr.ui. ttee wh,re the tull time__ ,~! D~~.e c~!'!' . l,■. r~~·-·· '• • -- . •••• • • ,a" • • • . • • • - .... .. • .:.r., • • • • ,_ • .. . . ' .... ~ • I ,,. .. ••y;-, ~'.•, •• • ' ' . , . - ."";,' • , · qutred t 20.oo per day and e::s:penaeaJ tor .attending. ~ • ~ eeting of the Executive ·· J.. ~: .•i "} , • . ~- . , ~--_ ·,.. _-• ":.. • • • . . •. ~ •;· ,f .. .. \ • •• .·a- 1 tt'ee· ·,,here an hour or two are.,.conaumed $5. oo. 'I ,.,·!·'!' t .,; ... ' • • tr .. : . ::L,:, After authoriiing ~ ~ a n d C a ~ b i ~ • u a representat ive ot thaE:cecutiv e Committee of the Boe.rd to go to Washington to attend a meet- ing tor the purpo ■ e of providing uniform supplies for bank ■, the ■ econd meet• ing of the direotors waa adjourned. So important has grown the work of the Exeauti ve Cammi ttee of the ba.nk that it is well to note the powers of thi11 mall group of men who represent the directors. The Eicecutin C·;mmittee a■ constituted at this early meeting was composed of theGovernor , the Federal Reserve Agent and "one or more directors." At the meeting of' August 12, 1916, an amendment changed thi11 ruling so that only one director was provided for and also made it possible in the absence of the Federal Reaerge Agent for the Deputy Agent to act in his place and for the Cashier to act in the place of the GovernonJ.n caae of his ab■ ence. !'he ruling was alao made that at no meeting of theExeoutiv e Committee should the Agent and the Deputy Agent act at the Bam3 time or· theGovernor or Cashier act at the same time. A subsequent amendment was made, howewr, on June 22,. 1916, by which the Federal Reserve Agent and the Deputy might ait in the Executive Cammittee at the same time. The powers of the Executive Committee were designated as follcnrs:• (f) (g) (h) To pe.sa upon all CODDlleroial pa.per subni tted ior discount. To initiate and conduct. open market transaction s. To reocmmend to the Boa.rd of Director ■ tram time to time change ■ in the disco1mt rate. To buy and ■ ell aeourltiea. To apply for and provide for the eecuri ty or such Federal Reserve Iota ■ as may, ln the judgment of the committee or of the Board., be neceHary for the general requirement s ot the bank. _ To employ or to delegate to officers of the bank authority to employ clerks and other subordinate s,. and to define their duties,. and to fix their compensatio ns. To approTe bonds· turnished by the officer ■ and employees of -, the bank and to provtde · rortheir -oustody. :.·;: ~- - __:_ • In general, t.o .oonduot the business "of tJ,e' bank, • ■ubjeat to the supervi ■ ion and control . of the Boe.rd. of' Directors • •- - ...: : At a meeting on January 14 of the following year parag~aph "6" wa1 amended to read "to fix t;ram time to time changes in the discount rate, and to put 1ame into operation on receipt at approval of the ll'ecleral Raaern Board." The importance of selecting able and experienced men for directors can readily be aeen in the faot that ea.oh director has an opportunity to . . hi ■ erve I share of time on the Emouti Te CCIIIIDittee whiah, in the light of the im• port.ant powers vested in it, forms the vital influence of the bank. At the out•et of the election or a Cashier it developed that the directors were divided between two menJ one ar them himaelt a director, the other, Kt. Je~~;-~~~ ,,.,,,..house. who was at that time · mamagor of the manias C11~• clearing ~• 'lbrall1 was fitted by experience for an •~cellent eeoretary but he desired the position of aashier ♦f then..., bank. The principal ■peach in 'h.• half' of ta. Thralls for Cashier was made by Director ~l!Y who said,· "I shall support Mr. ntralla for Cashier• and that for the reason th.at nearly every bank in town b aupporting him for that position and expsots him to have it. that this bank must court the favor of the banks of Kansu City. I feel They did not get their first choice for Governor and I believe it would. be a mistake to ignore their preference in the mat-t.er of Caahi er. I move that Mr. Thralls be made Secretary and Cashier." 'lhe Chairman at thi• point mentioned the ta.ct that Director WS.laon had been mentioned and cii scuased for the position of d',ashier. When his name wu brought up Director Wilson made a talk outlining his position witll relation to ·the obligations he felt due trcim "h!m tc, t he'banker a or Cklahoma who ~lected b1-m_-~., . .. . . . •"' . . . . : -~ ...-~ ": ! ; . : ; : ·.: . r----·~ Director ot the ban1c·. • ·Be declared hi• allsgiana• .-to -thll Oklahoma. banker■ an4n '• ' ' :--- . ' \,·• , :...: 1 - .,: 1r..: r,,·..__ J. ,,. ~• .. ... _ ., ~ .r.!' .! ~• i - ~-' ' ' ).!;.: . ,i't.~l..\. -39disclaimed his having sou,;ht the office, After requesting that if electing him Cashier would Interfere mth h11 obligation to the ~lahoma. bankers be wi ■hed to be eliminated -from the oonsideration, Mr. Tilson ratirec:i and the di•~ cuasion was continued. name was first propoaed Chairman Milbr explained that when Director W11aon '• Cashier he. the Chairman. requested the officials in a■ Washington 1£ there was anythin~ in the law to prevent a director from becoming an official or the bank. He added 't.hat to date he had received no advices. Finally Director Burnham asked if it were not possible to make llr. Wilson a tenative proposition. Director Jones said: "I doubt the ~sdom of ma'!d.ng Mr. ~ilson a tenative propositiont Ur. 'Th.ralls is the choioe of the bankers of Kansas CityJ they have asked that :ur. Thralls be made Cashier. can fill a place that Mr,Wilson cannot fill. Director Burllha:a:; "I was not making this with any idea of suggesting )u-. Wilson for Casldei or Secretary. I had in mind th9 position or Vice- Governor," Director Bailey: "I think Mr. Wilson, a.s the Cha.1.man has said, ia just the man to ,;o out· and educate the bankars • but I do moat earneatl;y move the selection of M r ~ as Secretary and Cashier." Dir ':letor Burnham: "I second tha~ motion." The Chairman cont.ended -hat t.he duties ot Cashier and Seoretary were not aimilar• that eaah position l-ad ita own f\mctiona, and that electing Mr. Thralls Cashier would be in affect putting an expert iecre~ry into the position of an executive instead of a secretary. After stating further that he 1:olieved th.e...... _, l _i_mnn. rte.nae ·;..· ~4· ,re~ ,o·t• •W/,A°T'1.- .. :.:":. po · -.··•·u·o-n·.' .•'. th·-8 ·cha .L lol4 ._,_,._. -r-- ai~litv U,L ,1 J. • i rmaJl •.put.·- ·.-~:.. ~,·. ·"·' •'t. -40 .. motion that, was before the Board. The vote re3ulted in the election of Kr. Thralls as Cashi 9r and Secretary. !he session which determined upon the R. A.Long ari.4ding as the site of the new bank also appointed Cha.inna.n Miller a committee or one on the orgaoization of a workin 6 force £or the new institution. The first off'ioia.l ali"t or Chair- :man Miller ro llowing this !!1'3eting was the selection of roam number The CQm!:11.eroe Building ae temporary quarters of the organization. indi reot organi satt on ,rork:. however, had alreaciy begun following the Chairman 1s appointment as director by t}-..e r or in the Chainan' ■ on Oo to ber 8, the ciay Federal Reserve Boa.rd. the Kansas City business men approanhsd him with the name of a young man who was, in the wordo of the business man, ''Worth $500.00 a month as a saoretary but would A few days later R. P.Ritter, the yomig man who had been re- work for $15().00. '' commended, was put to work by the Crud ?'!llB.n. Thus the first employs/ of the Fed- eral Reserve Pank e.nt&~ated the opening of the bank more than one month and help- ed to perfect the organization in the temporary quarters. Mr. Ritter served through the early erlatenoe of the bank until August 20, 1919 1 when illness oonArter sereral months of sickness he died on Januart 16 1 fined him to his bed. 1917. at hi1 h0l!le in Kansas City. A.s 1t 111 the purpose of this work to 'tJ~oat or coincidences as "'811 aa facts · it is proper at this time to relate the inoicient or the employing of Buchanan, Jr •• who wa.a the seoond employee of the institution. Jame ■ Mr. Buchanan, a sta.iwart 1 healthy youth of about eighteen years, was in Kans ,,s City seeking employment. •• He lea.rne,j or the cont8!1lplated opening of the Fede-ral Reserve Bank a.nd· • ■ought out Chairman Miller : -c ·,,..,- .~~~;•- - ;~~ Chairman ' .~• • .- wa.1 •, ,.;. IV- r:! ' "ll " t.'I : 1 , at hii 1orrice - -: :z:r:r ~;~ ·:? U in the Commerc~.J ~iµ ldirig; ·· :, . The ;,;:::/ "·,': . :-::.::~ ·_• . _: _ acouitamed ·:to prompt.l:y ' tonn"ng ':opini<ins :cit<young '·man . and }µid a'bo\it, ......,, r. . . ; . •' .• ' .• -41determined. to riak employing hbi. s total stranger in some clerical pod tlon. ''There is your home yomtg ma=i." he asked and was tole he had come from California., llia.s ouri. Charles Buchanan1" "Have you a re::,lati ve in that pa.rt of the "That 'a my Uncle Cr.arlie." wns Ur. Miller's immediate reply. man recounted how he "Young Mn ■ tate n~ed you have a job., 11 In expl~1nin~ the incident later the Chair- in St. Louis University some thirty years before and 'Ta.JI he and Charles Buchanan were rivals for the honor or high grades and that both finished with the same final grades and the sa:::ns nu:cber of honor merl ta. "The first dicl'f erence seamod to be," said ?Jr. Mill'3r in recounting the colleg;a days., ''that Charlie BilChanan never seemed to havo to study his les~ons while I used most of the recess pJriods, :~la.y hours and holicia.ys in 6etting mine and that I couldn't for t.he lii'e of me see wfr, I coulcin 't surpass him with the a.mount of work I was doin@:." James Buchanan after a. few years in tha 'lxl.."lk finally went to l'Ta,shington as a Federal Reaerva funk examinar and at the time this is wri+ ten, 1921, he 11 seoond to only on9 man in the examining dapart.ro.ont. Thar':) was al.moat imned~ate ne9d. for a atenog;rapher in the tmporary quarters in ad.chtion to the secretary and. the clerk and so Miss Jennie Burri• The ·fourth employee., R. Em!!lett Condon, waa was employed a day or two later. hir9d as a clerk. ~. Condon later was secretary to Colonel House. President 'Wilaon 's ao.vi>aor, and in 1921 entered the ~mplpy of the AmericaJl Telegraph I '1'he last helper employed in the temporary Telephone Company in Naw York. quart.era was Miss Katherine Dalton., a. stenographer who with the exception of . ! • \:--_,· • .-·•~ . ,_ .~~ ! ·; ' J '·:' ~ ••• • , nearly a year spent· at theD~?:V~rs National Bank: ~ere she r.• ,--· l118?1t •a■ ,,. •.-·., . ~ stenographel"·:;,,,, 1 ' ~"; -,;, ,. -~ -~- ~ ,!_ •. .• .. ' ,_ • t ;- ',.' v..~ -: '• ...... '••·• I ··• .; ;1 ~ ; or to Kr. Ramsay, haa been in the continuous employ The following is a 11 st of all the the bank. employee ■ of the bank on the date position ■ of its opening, Monday, November 16, 1914, together with their and the salaries paid them at that time: R. F. Hitter, Secretary to the Chairman and temporary $150.00 Secretary to the Board, 60 .oo James Buchanan .Jr., Clark 85.00 StenograJher Jennie Burris, 60.00 Clerk R. E. Condon, 65.00 Stehographer htherine Dalt.on, 166 .·67 Teller Chas. Ferguson, f-6.00 Stenographer Marguerite &lump, 100.00 E. D. McAllister, Teller Ruby Raine, stenographer ,/ Stenographer GeneralBookkeepJrj:...- ~ ~/ j / i f " ~ }i.--f Office Boy Porter \li'atcbman Cleo Unstead, E. P.Tjner, Charles King, 'V!m. Gamble, ·J. W. McBride, K. J. Mclelll1, 76.00 85.00 115.00 ,J--· 30.00 60,00 90.00 208.34 Auditor It is a aignif'ioant fact that, while thare Yere only eleven directors and officers and fifteen employees when the bank openad., six of' the former group are at this time, 1921, still connected rlt.h the instituUon whereas only four ~' of the original employees aow· remain on the roll. Miss Katherine They are: Dalton, Secretary to Fedaral~Reserve Agent Ramsay, E. P. Tyner, Assistant Cashier Charles King 7 who has advanced from office boy to bookkeeper, in charge of' the Transit Depart.ment ,and "lilliam Gamble, porter. Beginning on Kondtcy, November 2, theExecuti w Commi. tte" held continuous eeS11ions through.out each day effecting the organization YOrlc of the new in- etitutipn. Thia work comprised a variety of' o.uties incllaiing innumerable con• f'erenoes with busineH men, furniture salesmen. supply salesmen, bank officials and proapeeti ve .employees; al.so .trips of .inspection and inqui.l'.!, a great amount • ' . _ . _; • ;•.r.,.:- o r . •. · ", . . , . :.,. ; ·-· ·"!' , ~ - ; . ) - •••• - • - .. - • - • • · • · - • · ·. · •· ••- • · - .. •· • r · -• • l. • • H , .- . f'.'/, -- ; · . . • - • • ; • .L.. ; , ; .. ~ ! ..~ .-:; !; ;,~ ··: •1/ ' " ... '~;· ,•t·~•-··-:r~::.)f·. oorrespondenc e by l etter and wire with the· Federal Reaerve Boardand .an -encl-. . ~- . . - :-.=!:!,; ·~ -~ .. -"".....: •: •- ·~ -•• - . . --~ J ,-_~;_ · ::... ~ -: !'::.c>::i\:">~; i':~-;1_:_ ,:,:·,.:;r _. r, . ♦ 1,.,.- • .- ~- t·.:;_: ~E' (;<.1/J'.<t ' • ; .. '.-_; .:: · :::· t"~&::-;- .-,:-- v,-.:~1v'ff"''l'O~:u :: ,.. leu .amount of exhaustive di.acuaaiona.....oL-lettera-pertalning ,to the -.opening- of .....1./· Ct..- .•~!';~., • ? ~:,~~ -;;.1"~'\'1,..-1.';~;.:• t,[""J.,' t ·;; the ba.nk. emplcrye ■ 11 There ,re.a a great amount of urgent work to be done and temporary Form letters to were hired ta do this preliminary work. bank ■ ln aonneotion with the first paym13nt of oa.pita.l stook had to be formulated and also a general letter ot announcement to member banks, telephone equipn.ent an4 'l'hia ala.rm system waa electrical burglar ala.rm system had to be installed • . contracted for from the American Bank Protective Company o! Minnea.poli1 at a price ot $1,615.00/ The first invoice ot .t'urni"ture n. ■ purchased from the Keith Furniture Company,. 'l'heSdhooley Stationery Company and the Burnap Stationery and Printing Company, Thia f'urniiaure consisted of six flat top desks 66x38 inches with re- 1 volving chairs, a _diraotora 1 table 4--~14 feet and t :·renty-four d1rectora ohaira. In addition to this the :au-nett Company loaned a large amount of' general otfioe ~rni ture and aqui pment for temporary use • • • f"" -• • • ,,• 1 · • • • :,. .- .r. • - PR~ARATI OU FOR OPEN! NO ·The ground flo?r of the n. . A. Long Building at the time ,it was leased .• fA.Ping: the plevators by the directors had as a part or the publio lobby the marble rloorea ;erea n the center of which was a fount.a.in. Thia area extended about two-thirds ot the distance toward the rear of the building. One of the tirst acts of the dir- actors was to provide tor the enclosing of this lobby into the bank's working rooms. Thi~ was done aa a means of protection in the handling of the currency and eeourities of the bank. As fi.rst arrane;ed the space to· the narth of the main entrance to the building· was for the use of the directors and the apace to the south was used by on the left the officers in the following ordor : 'l'be first room,1Kas the Federal Reserve Agent's room. the next was tlmt of the Deputy Agent. the one next was the credit bureau 1a Still to the north were the Governor's room and that of the Secretary• passate way •• Across the . / ·:.. !'rom tluae was designated a correspondence room. Cash£er. A.a room. the ·11ork . of the. bank increased the ci irectors I roam lfB.s finally given up to the. oocilpancy of the bank proper and the director• were g1 ven a _meeting place on the floor of the Long Building. Draw Lots for Terma At a meeting of the directors held on November 9. it lfB.S unani.mou1l:, •a.greed that the Class A and Class B directors should draw lots for the term of 1ervica of each ..or the Class A directpra,. Mr. Jonea atated hi• anxiety to serve the three year term. aicplaining that he did not care to 11ene but one term but preferred to spend three years in the 1ervica of his cbbsti tuenta. poin~ad out by Director _l~(dley. however~ that ~t. TH not the It was duty'pr th• privilege of the ciirectol"a to d.etermine arbitrarily who should 1erw one year and . ·... who should serve three years. As a result of the drawing ot lots Mr. Jonea drew the one "'J8ar term, Jlr. Bailey tile, year ■ and Kr. Burnham tlufee years, It i1 inciden tal that Mr. Jones aervaci b;\lt one yea.r whereas Kr. Bailey and Kr, Burnham each succeede d themsal ves. t.b.e £orm1er having been twice elected a, own success or, hi ■ ,Mr, Burnham wao suoceede d in the 1920 election by Mr. E. E • . • . . 1 ,1--i'- Mullane y of) ~ ( lll ;' Kannas. In tho Class B drarlng JAr. Byrne drew the one year term, Mr. McClure two years ll?ld Mr. Wilson three years. Mr. Byrne and Kr. McClure who, at thie time are still director e of the bank, have each been three times elected aa dlr• actors, of these times twice as their own success ors. ~ year Mr, Wilson served hia torm and was succeode d in the 1917 election by" Mr, Harry W. Gibson or· Muskoge e, Oklaho:ne... at the meeting held The Class C directo rs determin ed their length of term.a/ At this meeting it was suggeste d by Di.recto r Malone that it was possible to tetermin e ar all three directo rs in this class the_ length of term¥ by the ingeniou s manipul ation of coins that required but one turn of these coins. Duties o:f' Of!'ioera While the officers and new employees or the bank were buat. ly engaged in prepari ng the permane nt quarter s and installi ng various systems during the first half of November the direct.o rs ,rare far from idle. At a directo rs' meet- ing held on Tuesday , NO"fember: .10,- •a. oammi ttee oamprise d ot .-Director ■ Byrbe • L .!. 7::: ·~~-; . ;;.__ - ~.- • : - -. : ' .., ·- • 1 1•" ,· •• • '."" : ; • :· . i, , , : , I' Killer anci Jone■ a~.~~-~ . ~~ - ~~ m~eting ~- ~• : PZ:•~~~ s Qay reporte c[a ebhedul~ • , .... .::- : i-··· · · . ' .. . , ' : ... . ··.-· -~. ·. · ·: .< .~ •• ~-- :·..• ;· -.'1'{: .. ~~•, ,:::';".: : ...... of ottioara' duti••• a oon4ansat1on of which follows, lll!!PO!t RDEBAL RESERVE A.Gm~ - To haTe of apeoial uaminationa of member bank&, arad.1 i bureau of the ba.nltt the atatiat ioal deparblent and, Jo1Dtl7 with the >-aderal Reserve .Agent, to emploJ minor offioiala, olarka and other employee ,in the off1oa · and. deianmemt of the .rederal Reaene Agent and to pirobaaa equipnent tor 1&14 department I and• w1 th the Governor and aey other exeoutiv• ott1oer■ aeleoted bJ the .Board, to purohaaa equipaent am. employ help throughout the operating department of the bank, subJaot to . the approval of the .· haoutive Committee. o h a r g e .QASHtm_- Aside trom the Oaahier•a duties a ■ .preaor1•4 in the b7•la• ha shall have personal auperviaion o'far the working f'oroa c,f l"tle operating dei:artment aubJeot to the supeniaion of the IJOTarnor. !rhe above were the only duties presoriood at i;bat time f'or lt oontemplated that additional rulings would have to begwi b e rm.de after the b a n k wa ■ h a d to opera.ta. lml.as ror Ope:ro. Ung. Daoia1ona nade at ibis meeting were to tha effect tba1i reserves received on the opening date should be either gold or lawful money and so far aa olea.ri?Jg house funot1ons or the bank were conoern9d it should undertake at the outset to oolleot only items of reserve cities within the Tenth District. • • al■o a unanimous dao1s1on that 7% was the lowest disaount rate the OUJ' ba.nk oould oons1stantl;v obarga at the present o. s. a n d It Xanaa■ 1t B0 7w1red Governor Hamlin or the P'ed.eral Beserve Board • .Baf'ora tha bank opened, however, the 41reotors belisved a lower rate sllould be charged and decided upon chargiJlg 6% for notes am. bills of a maturit7 not over thirty days uoeedi11g thirty dqa. and. 6-½% !or a maturity This vas the rate upon whioh the 'bmk began operation. but on Daoembar 7th a change was ma.de whereby the rate became 6% for all maturities. On Daoember .16, 191-'- the b a n k lowered its rate on billa or abort m&turit7, settling upon 6~ tor leas than thirty days and oTar thirt;v da;v• to sixty days, 1nolus1Te. 5½% tor maturitiea ot -47- At this meetin :", the bank ma.de application for membership in the Kansas Cit:, Clel!.rlng House Associa:t.1.on on the same basis a.a}Yilmbership of the United States Postoffice. Also during this meeting the Cashier -.,ao authorized to have made distinctive endorsing stamps for member banks and these were sentout subsequently and the cost charged to general expense. Friday and Saturday, :Meetings of the Boa.rd wer~ called for Thursci~_,/lovember 12., 13 :and ,14. There were., however, no quorums on the 12th and :.tfx:waJ: iii I K~ 14th and at the meeting on the 13th only a few general topics were discussed., for the officers and the directors who were in Kansas City were exceedingly bu■y with the preparation of the bank for its opening. OPE:?IT NG DAY \9 \ ~' The morning of Monday., November 16., .found the ground tloor of the R.A. Long Building in presentable appearance for the opening of what was de1ti.n ed to geoome one or the greatest of financial institutions~ mti. le 1 t is true there wero. mo vaults on that floor and the working force was both small anci equipped for only • a limited amount of operation, the offices and the diect.ora' room had the appearance ofnreal banking office ■•. The payments of re1erve11 and the subscriptions for stock had been received atttha temporary pf'i'ioaa on the second floor of the Ccrmmorce Building and had been counted there with the aasisianoe of employees of the CGl!llle.roe These payme?)ts and subscriptions were deoosited in the vaults of the Commerce Trust Trust Company. and for several ~eks a fter · the opening of t~e. tlEJII' ,bank the mone:, \Va■ • ~ >.. • ::.,.- .. . I .. . • : . - r.····, :-. .... • •' !,.., ~ • · • kept in the Comm~roe Trust Company s vault • . ._ •., . ..,- . ,,.-.1 .. ,. •• i,, . ' 4 • •. • • • • • - . • ; ' - .: - •• I '• •' ' I .•· , .1, ~ ' . , · t .. On the opening day a large portion of the reaerve:~; paid :i n were in · gold. Reserves _~ id in during the opening day were #67 f,{:,tflf-. ~2, Just prior to the opening of the bank doors the following telegrami! f wa ■ reo ai ved from Secretary MoAlioo z 11 '1".'a.shington, D.C., Nov., 16, 1914. tCharles M. Sa-.ryer, Gov. Federal P~aerve Bqnk:, Kansas City, Minouri. Please accept my cordial congratulations upon the opening of the FederalRoserve Bank of your district, and my sincere commendation upon the ef'feoti ve work you have done in preparing the bank for susiness in the short ti.me allowed for the opening. I am sure that the Federal Re}l servo funks will serve a great and beneficient purpose in the future of our country, and I am sure that this Department o.nd the Federal Res~rve Boa.rd count upon your loyal co-operation in the important work and duties which have b~en confided to you. My hearty good wishes for your success. (Signeci) W.G. Uc.Adoo. 11 Telegrams were also read from John Skelton Williama, ComptrQller of the Currency, and from Secretary McMoo advising that tile ohartar of the bank had bean executed but that 1 t would not reach the bank pntil . probably about the 18th. .....-- Many Visit.ore Present Secretary McAdoo 's telegram was authority for the mailing of announce- ments to member banks ,and the Federal Reserve Eank, upon receipt of the telegram, was in a position to begin operations at onoe.- 'lhe directors, upon receipt of these telegre.ma, authorized the b3.nk 1s secretary to send oongratulatory telegrams to each of the other eleven Federal Reserve Banks. The lobby on the opening day presented the appearanoe of a florist's -49- display room. by bank ■• Scores of vases of cut flowers an~ potted plants had been sent bankers. business men and professional men ,rho wished new inetitution, ■ucceas to the Many of theH tokens were sent by indi'Viduala and institutions outside ot Kansas City. From about 9;30 1D the morning until S o'clock in the a.ftermoon the lobby• reception room and the oftices of the bank ware filled w1 th viai tors who oalled to pay their respects and expre ■ s their well rlahea to the infant banking in1titution. The officers and dirao't.ors in their varlo\18 rooms were a receiving cammi ttee which oooupled e'Yery moment of the da.y in greeting_visitors unti 1 -the doorls ·- ware closed • .&nong the visitors on the opening day .rare ( 0-}'lA0'ik- ~ ,c ,,~_,,j-) Early Discounting Slow ,'here was a -wry modest amount of rediscounting done in the early days of the bank;1s e:xi'stence. In fact none of the Federal Resene Banks were call- ed upon to gi78 marked assistance to the country or to the government in any considerable degree for ■ ome time after the banks opened. and thia in spite of the .fact that Y&r was going on in Europe and a consicierable amount of financial operation• were going on betYeen 'the United States and the countries 1nvol'9'ed in the oonfliot, E1peoially wa.a the Tenth Federal Rese"8 District in ·a stable conditi,o n, prosperity. owing to its wealth and/ The stringency ciue to crop moving in the summer and fall or that year had b!:ten eliminated iry the natural course of market payments. It was in reality .not until April. 1917. when the United States had been drawn -sointo the world war, that the Federal Reserve Be.Ilka became or great a1111atance to the government. although the date of their opening bad been advanced beoauH of the belief that the world ,rar ,rould naoesaitate an immediate operation ot the Federal Reserve System tor tho benefit of the government. Two days after the opening of the bank the Board pa.saed a resolution that all pa.per would be discounted ta within five days of maturity and where notes were paid before J11B,turity the unearned discount ,rould ba rebated except. for a. period of fifteen. de.ya but such re'ba;tes ahould be at the prevailing rate at the time of ~ont of such note. The Executive COlll!llittee was also authori1, ed and directed to lower t:tie rate of discount to &~% on paper maturing within thirty days and 6% on paper ma.tur ing a.ft.er thirty daya. "if it is found that the Federal Reserve &.nka in adjoining districts have lowered their rate or dis.. count." Prior to December 10 the Executive Committee of the bank had apprond from day t~ day offerin ; s of thirteen member banks for rediscount aggregating 1•77,874.48 . aevanty•fin notes having been discounted. these. notes waa $2,295.04. 6,5½, and 6f.. On December 17 the redi ■ oount The groaa discount on rate was lowered to tip, to that date there had been t ra.nsterred to the Federal Reaern Agent notes aggregating t:sso,ooo. • secured the i-:i lieu ot ■ am• Federal Reserve bank 1 notea aggregating $530,000 ,· of which ther•J remained to dajre only $1,ooo. · The f'irst application tor redi.scount was made by Begin Ba.ndling Cash Items At the meetin~ of . December 10 it was agreed to extend the operation■ of the bank beginning Tuesday, December 15. to include the handling of caah items on all member banks in · the district, also to include cheeks and d ratt1 -51drawn on all Federal Reierve Banke. Up to ·:necember the bank bad counseled with the firm ot Robinson & Goodrich in- a t n matters in which legal acivioe wa.a need.~ and on DeasnbeJ' , th& directors moved to retain Robinson & Goodrich and I. F. Detheridge as attorn&ya for the bank on a basis of $50.00 per montJi. During the ,early years of the bank's existence Gudge Goodrich was the princlpa.l legal adviaor of the officers and direotora. eral Re ■ erve City check■ Puring early i>eoember some of ~•--Other Fed- oitiH declined to receive from the P'ede:ra.l Reaern l3B.nk: of ltanaaa and drafts drawn on member banks in Federal Reaene cities. Thia lad to the local bank notifying its members that it had diaoontinued receiving such itema. st. Louie Applies the La.ah One of" the early proelems which the Kansas City bank had to meet wa■ in connection with the practice of tl:e Eighth District bank at St. Low.a. The St, Louia bank had been making constant demands for a shipnent of gold to cover balance.a that had accumulated in the st. Louis bank • . The Executive Committee spent a con ■ iderable manda. ~ amount of time trying to protect this bank against theae 4~ the morning of Deoember 22 the camnittee discussed tYe matter with the Kansas City Clearing House Association as a re1ult of which the clearing house ai;reed to protec;,t this bank to the beat of its 11.billt;y. promiaed to instruct their St. Louis corre ■ pondenta The clearing house banks to depo1it with the Federal Reserve Bank of St. Louia for our credit actual oash to meet at least a portion of the demands made against Kansas City. Governor■ In the meantime a committee or ri w of Federal Reaerve . &i.nks had taken up the_matter of adjusting thia phase of the banking and woullr report January 22 on a general clearing plan be• ~•ab the Federal ReserTe Banke. BT December 18 there were thirty en1ployea1 ln the 1eMice of the bank and the montb.17 payroll.ex .ol111in of the officer■• wa■ $2.640,00 , In the first month of the bank'• ex11tence tlw or the twmity-fi w snployeea were dropped from the roll tor various rea1ona and naw employees aoon filled their placea. \ I _) -53The first authorizatio n of the purchase r;L United State ■ Boncia by the Kansas City Bllnk 7.:1.s ma.de on Deeember 18 when authority was given the of'fic".lr ■ to purchaae $250,000 of United State ■ 2%' Circulation Bonda at a rate not to ex- ceed 9si-. The first missionary work done by the Km sas City bank, outside of it1 continuous corresponde nce with member banks, was dona by Director Wilson, who,on the authorizati on or the Board and at the invitation of Seoret~ry Harrison of th• Oklahoma Bankers As10oiation , attended the bankors group meetings in Oklahoma in December. 1914, and delivered an address at each of the meetings and explained thew workings of the Federal· Reserve Bank. It 1s'51gnific ant faet that, while the pro• visions of th~ Federal Reserve Act ware widely published and bankers were supposed to be conversant ,ri th the operations of the system either through studying the A8t • or by verbally leaa-ning its powers and requirement& from other bankers, very few active bunkers in the district had obtained~ clear idea of the ba.~k's function, even after the first half dozen year ■ of the existence of the system. The natural result of this ia an unfortunate situation 'Which trequantly leads to misinterpre tation of the system and ita various phases. 1'ven member banks were so unfamiliar with the provisions of the ne,r Act aa i t affected them that. it was necessary for the officers of the Kansas City bank to wire varioua important instruction s to these member banks less tha.n a. month after Fecieral. •Reserve, . thejllhnk was opened. For instanoe, telegrams were :;-mt to banks having overdraft■ at the close of business to make same good at once; letters wer•; written~o all banke advising that the Federal Reserve Bank would accept and place to the credit of member banks only checks, cirafta and credi ta of a like nature where ·-..• • ··,; · . , ,. the banks on which these items were drawn "have with us sufficient funds to cover, and where -64- banks paying do not have sufficient !'unda to cover i tams received against them the items are to be cut out and sent for oollaction and returns, the endorsing bank to 'be notified that the amount repr9sented by such i tema wi 11 be placed to their credit upon receipt of return11J" member bank ■ were botified that a charge would ·be made at the current rate against the account of a bank dradng draft.a ' against the Federal Reserve Bank and sent in auch a way as to create eastern exchange J they were advi eed that the Federal Reserve Bank would not accept tor oredi t. items bearing endorsements outside ot district 10; me11a.ge11 were sent to Q:aaha, Denver, St. Joseph, and other reserve cities' banks advising them of the regulation ■ in regard to creating eastern exchange; By Christ.ma ■ of the opening year the situation between the various Federal Raaer'fe Banks had improved remarkably. the local bank );laving sent to other Federal Reaerva Banks in that time a total of $6,109,878.7 2 and received from them $5,923,283. 06 ,leaving the local bank a debtor of $813,404 9 34, which amount was being liquidated aa rapidly as practicable . During the fir ■ t two month ■ of operation the city and countcyolea rings had grown noticeably, · the total items in the city department amounting to 10,629 a~regating $28,888,260 .78 and the country department having a total ot 128,107 items aggregating $35,048,927 .93. The expen ■e of conducting those two departments had amounted to approximate ly $2,000 a ~onth. The bank began the 7ear 1916 Tith reaerve deposit, ot $10,S8l 1 36S.27 ~ and with paS.d in capital of $928,160.84 . The first member ba.'1k to apply for permi.Hion to act as trustee, ex• eoutor, administrat or and regist~ar of st.ocka and bond.a na the United State• lational Bank of Denver and this application wu aPProTed by the Federal Re ■ erTe - -65- Board in Ka.rch,1915. On Monday, April 26, 1915, Governor c. s. Hamlin of the Ped.eral Re- 1orve Board ma6e meeting or the hi ■ tiret director ■ vi ■ it to the Kansas City bank and wa.e present at a on that day. Be was introduced to the Board by Chair- man 18. ller and in the course or hie talk on the line11 of work and policies of the Federal Reserve Board he commended most hi i;hly the Xansae City director, for th• aplendld. pi.oneer work they had done in putting into operation the- clearing functions provided tor by the Aot. Governor Hamlin wae entertained a.t luncheon w1 th the Board at the Mid-Day Club and the discuaaione of the Boe.rd were continued until 2 o 1olock in the afternoon.· During the first three montha of 1916 Chairman Miller had been called upon to speak before various bankers' organization■ in Nebraska, Colorado and Kansas, and on April 8 the directors directed him to have publl1hed 5,000 aopiaa of hi ■ address on the subject "Federal Reserve Jyatam and the Operation or the Federal Reserve Bank of Kan1as City," and to send one cow to ea.oh bank in th• dl ■ triot. The result of this wu a. decided improvement in the underatandin& of the system on the part of many member ■ in the district. -56- ):__., C.. - THE FIRST E.Xlilrll5A1'I 01 On 'fhuredq. Mq 15. 1915. the directors held a oonterenoa with Kr. J. A. Broderick. Federal Reserve Bank examiner who. together with Keesr ■ • Gidney and Grayson, had made an examination of the af'fairs or the bank and an audit of the bank'• accounts and ca.sh. Mr. Broderick reported that his ex- amination ■hovred that the eipense ■ to d--.te wer~ $65,000 more than the bank'• It also showed that the gold reserve attar the first 11x .J.110ntha of earnings. the bank's existence stood at 98.!% after deducting $2,038,000 which waa due other Federal Reserve Bank a and e learin g houss banks on account of debit 1:alanc es. The earnings had averaged $128 a ~ and estimated expenses $126.,000 per annum. The par value of United State ■ Consols, 1930,was $941.750. of indebtedne ■ a . Bonda held at that time. all of which were 2% other investments such as warrant, and certificate ■ of cities totaled $65,000. Tb.us it was shown in the bank's first examination that its gold resarTe w~s exceedingly large due to a small amount of rediscounts. the estimated amount at that time Ming onl;y $5,150 1 000.\fbereas it ,ra,s estimated that the rediscounta in order to earn expenses and pay dividends should amount to approximately $7,360,000. Kr. Broderick's comm.ants regarding the operations per ■ onnel or the bank, the or the officer• and employaa, equipnent and location of the bank Yere highly gratifying to the directors. However, he suggested that the bank !natal~ a more up-to-date vault record. that the tellers' Ol\,sh '.be audited at least onoe each month. the re■ erve oaah onoe ea.oh quarter and the Federal Reserve Agent' ■ cash and aooount■ once each quarter. ■ ettlementa Be al■o augge ■ted th·1t the bank make dai 17 with the clearing house and that Kansas Cit;y members ■hould. be induced. e:· to maintain balances in the-Federal Reserve Bank ■ u.t'tioient to cover three daya 1 out or town clearings. Director Ram.lay Resigns At the meeting ot September 23 Director Ramsay tendered hi ■ realgn- ation as a Claaa C director in order to accept a more lucrative poaition, that of Vice-Pre ■ ident of the Drowra lational Bank. ation was aooepteci and a re ■ olution At the same meeting the resign- adopted appreciating hi ■ valued aerTices in the past and regretting the loas of hia counsel from the 'Board. was Thia resolution presented to Mr~ Ramsay at a later meeting on December 16 when he appeared before the Board With an application of the Drover, National :Bank for the privilege of acting as trustee, executor, adminiatrator and registrar of a tooka and bond ■• Bank Vault Completed Throughout the year of 1916 a aubatantial vault n.a being installed YU in the bank. Thia;completed early in October a.nd on its completion the gold which was formerly held in the vaults of the Southwest National Bank of Ccmmeroa a.nd the Fi.deli ty Safe Deposit Campany n.s 11oved to the bank: 'a own vault. SECOND EXAENATIOI I t-'-~ ' Farly in 11oftmber 'Messra. ·, serve Bank Re ■ erve month■ examiner ■ made the Bank af Xansaa City. preT1.ou1 shCJW'ed a 1011 J, A, Brod.erlok and J. L. - Cro11, Federa.l Re• ■ eoond examination ot the oondi tion of the Federal It rill be recalled that the f ir1t examination aiz in earnin~• under the amount of expense•. throughout the first year ot the bank's e:d ■ tenoe In fact, the••• condition was true, namely, tbatathe amount of redboounta in this dletriot Ta.a light and the expen ■ e ■ of the institution due to the coat of organizatio n and equipnant -.as unusually high. It 11 not 1urprising therefore that the examiner•, when they appeared be• fore the Board by invitation on lovember 2:5, ma.de aorta.in reccmmanda tiona cm .the system of operating and aooounting which would tend to impron the oondition if not to relieve the situation entirely. Mr. Broderiok expressed his highest regard for the a. bill ty and ef'f orts of both Governor Sawyer and \ ashier Thralls but stated a1 his opinion that both officers were undert~ing to do entirely t·oo much detail work. Be recommended that a third officer Who should be entirely familiar Yi th all the details ot banking be engaged wiW a Ti.n to relieving the two present officers of a great amount of detail. Mr. Broderick recommended that the df'fice of auditor be independent of the operating department of the bank and that the auditor be given a tree hanci in conducting the exsmination s or the bank, being required to report at l!ast once a month to the directors on the condition of all depattments or the bank. A complete re-opganizq .tion of the a\lllliting, accounting and tranait departments was recommended and also that all oaah in charge lea ■ t ~ any one officer or employe be audited at once each month and the cash under joint control ot the Governor and Cashier be audited at least every three mont.ha. made that aredit each day. be.lance ■ A further reoommandaticn YU resulting from our local clearings should be oollecte4 It was expre1sed at the sense .or the meeting that the above recomnand- ation■ be complied rit.h. With a view to ·gt-feating theae recommended change■ the directors. with the conaent .of the Federal Reserve Board. employed llr. Cross to remain with the bank temporarily, lending his exparience and bringing abouththe revi ■ ion hi ■ 1ervices toward of the system. :ur. _____ Cross remained in this caps.city for several montha unt.':-1• upon the - ·· .. ...... ____ _ _ , --. ____ .. _.. __ ___________ <(~1--;;-~ f' Mr. Jerome Thralls as Seoretary-Caa hier~_ Fabruary 10 followi~ .. ,.Mr :-cross ·w·as•·re•feotetf"teniporary··a:ssi-s"tant.~cfthe Governor at a salary of $400 par .._ __,, . . ~~ later, onC\ ~h ., llr. Cross became Deputy Governor and served in that ,,., ci ,1 ~ capacity fbroughout the greater part or our war period until his resignation on o., ;/2, . , ~•. -:. '', to become a Vice-President of the :t~tional City Bank of Bew York City. lfr. Croes was the aotin hea.d or the Liberty toan Comnittee of thi■ district being nry actite ~n the organization of the oomrnittea and serving as its executive manager until hie resignation. ~ reoignod to beoomo oonneotad With the American B~r• Aasooiat- ion in which position he assisted in an advisory caps.cit1 with t.be Government'• Yar financing program at Wa.ahington during the war period and later became deeply interested in the foreign trade program. The suggested change ■ in the bank '• working. ay■ te:n proved ■ a efficient that before the next examim.tion flattering degree. Ya.I made the bank'• ehcnring we.a improved to a Before this improvement qa ■hawn • hO'n"nr • it was neceaaary lo adopt a plaD of amortisat ion of expenses by means of whioh that pa.rt of the orga.nlsaU on upenaes which had not been ooverad by earning& up to the oloee of buainess Deoamber 31st waa pro-rated over a period ot 24 months, one twentyfourth to be oharged ott ea.oh month. In the same manner the oost ot Federal .Resena notes wae pro-rated over a period ot 30 months and the furniture and tutu.res acoount oharged ott 10",6 ea.ch year for a period ot ten years in order to equalize the expenses in proportio n to the earnings, Jlitchall Buooeeds Jonas At the expiratio n of Director Jones •a first year ot service with the bank. J. o. Mitchell, President ot the Denver National Bank or Denver. Colorado, was eleoted. to suooeed. him and at ,the meeting of Deoember 16th the direotora ad.opted raeoluUon .a of regret at the expiratio n of Mr. Jones •a term and appreciation of his able services and wise counsel during his time of service. Mr. Mitollall, who had been aot1va in obtaining a Federal Bsserve Bank tor Xansas City and who had been previousl y considere d tor a member of the Advisory Oouno11, began serving at the meeting of Janua27 4, 1916. In the Padaral Reserve Agent •s first report to the .Board in Washington which was tor the year 1915, including the latter tew weeks in 1914., Chairman Killer wrote that as the Jleder~l Reserve Aot was a compromise measure esveral of its teaturaa were meeting with meager support, if any, from various intere11t1 within the district, The first dittioult y seemed to be that the bankers, nan those who were mambera ot the Syatam, were not tully appreciat ive of the aoopa· ot the Aot and ot the fairness ot its measures to all the people ot the oountry. lt was to be expeoted, therefore • that the 88.l'ly days or the bank ware not all smooth tor the exeout1Te s who stood between the Act and the bankers of the d1atriot who could not or would not see the Justice or the Act. -60a- Tha iaUo Agent' ■ tirat report alao set out as the most atriking ohara.oter- ot the Xa.naaa 01ty ba.Dk the Tariety of interests it was 02.lled. upon to serve. WI.th a territory of approxlmtel;y 470 1 000 ■ quare miles centering not ta.r from the geographical center of the United States. pra.otioally every oereal. every staple oonmod.ity, eTery forage orop and mineral ccmmon to the United States was a part or the varied production of thla district .. Although muah of this production was covered 1n the pleas nade to the organization board in Washington by the Tenth District bankers tor the location ot a bank 1n .Kansas 01 ty, the Agent •s report again emphasised this variety of production as it had affected the workings of the new bank. fhe membership of the Xansas City bank at the close of its first year waa 949 be.nk8, including 3 state institutions. Discount H'.3.tes Du.ring the first year of the bank the rates ot discount varied materially• The first proposed rate was 7i, on all maturities. but on Bovamber 14th, two days before the bank opened, the .ISOard approved a rate of 6'1 on all maturities as the directors of' the Kansas City bank apoouraged a policy of discount rates that would hs.ve a tendency to lower and stabilize the rates of interest and prOYe attractive to member banks, mta gJ"adualq declined unUl August after whioh a maturities and 6% 4% The discount rat$ on 90-day maturities over 90 de.ya and under au months prevailed • . Daring the close ot 1915 1 the Federal .Besarva Boa.rd approved rates of 3l;% OD for 10-day pi.par, 3-t' OD tra.d., aooeptanoas and ~ on ooamodlty pg.per, Badiaoounting privileges W81"e ,017 poorl1 under1tood °b1' the maJorU7 of the 'banks during the first 78&1"• a !l'hi ■ caused a great deal of add1Uo~ detailed work an the pi.rt ot the Xansaa City bank otf1o1al■ 1n 8%pla1ning the rulings and the reasona tor au.oh ruliDga. l1i was an educational year but as the membership in the System oontinued to increaae. ezeoutivea ot the bank tpwm that virtually nery 1ear was one neoesaita- t1ng ·a great deal of eduoational work. It became apparent to ot:t'ioiala ot the bank -.rly• in the hiato17 I or the institution that aoaraely less important than the prinary tmiot1on ot creating elastic ourrenoy was the tunotion of' the ballk acting as a · clearing house among the member banks 1n the System. In his first annual report to the Federal .Beserve .i,oard, Cha.lrms.n •W.ller stated that it 1n full operation the clearing house :tunation would enable the oheok ot ~ solvent depositor to circulate at Jar not only in hla own district, but anywhere in the United States. '!'here were problems in the ha:n611ng of' olea.r1Dgs, however, prinoipal vv, of 11lh1oh was the disinclination ot ma.~ of' the member bank$ to a.gree with the 41reatora and ot1'1oers that the Federal Reserve .Bank should ma.as an 1.mmac:Uate 4ebi t to the aooountB ot member bankll tor ltel!ml sent them, although, at the same time, most of' these members were sending to thi~ bank tor immediate aredU items dl'a.wn on points throughout the distriot, generally a,uch Uema as would othel'Wiee have cost them e:mbaz:ige to colleot, The reserves paid in were BlIBll while the Tolume of clearings gradually increased to an extent whioh ocoasionally caused a debit balanoe or overdratt agai_n •t member banks. ~ese bank.I were inclined. to question the ler,al right ot the Fedenl Heserve .ISank to make immediate debit to their aooounta and ~or a Ume U :n,s 41ttioult to fully Juat1f11n the minds of the members.the rulings of the bank. P'iD&lly all member banks were notified tbat only •, . ·, • ,. • I -600- suoh oheOks as oould be oharged to their account without oreati11g an OYerdran would be handled. a.nd all oheokB 111 axoass of their balanoas would be returned to the selldlng bank. !his :plan proved satiafaotory. ln connection w1 th the subject of olearings, Chairman W.ller in hia tirat ammal repart d.ealt'. also w1 th a kindred subject, that of the handling ot ~ float 111 the· district, In Bovember 1915, the amount of tloat of the D1atr1ot was estimated at f25,000,000 and Uhai:nmn Miller pointed out that 1t all the olear1ngs ot the district floated through the l8deral Reserve Ba.ilk, this amount of float would be redilced approximately three-fourths, or to a::out f6,250,000, and the large volume of busimss that would be concentrated 1n the bands ot a single institution oould thereby be handled &t considerably less expense than by nmnerous independent orge.niza.tiona, Since the organization of the bank, tha questinn or the handling ot float has been one under almost constant dis0",1ssion among member bankers and is perhaps umerstood leas by most of those who discuss it than~s 8.Jl1' other division ot banking. 1'ha history ot the handling ot float in more recant years has borne out the original oontention expressed above by Chz:..irnali Jlill•r• fhe 0h.a1nan called the attmUon ot the P'aderal Beaerve .Board to the d1apar1t1 in the methods ot carrying tloat in the variou1 41atr1ct ■• po1nUng out that unUl a uniform ayatem was ad.opted 'by the Boa.rd, the regulations of the Act could not be administered w1 th equal Ju1t1oe and fairness. He emphas1z8d the pred.iotion that it a oomprehensiva olearing system nre esiablished 1 t would aa.ve millions ot dollars to the country and el1m1nata a ~rge on domestic exohange, thereby ha.ving a tendency to equalise interest :re.tea and mke available to -commerce millions of whioli would then be daposi tad in the banks ot the country. dollar■ -6ot- lollowing 1• a 1'841aaount; table of the atatea ot the Tenth .District with the number of member ba.nlcB and their FOB VEMM'Ji BA.OS t Bo. ot Janlm Colorado 18 Kansas 65 l4iesour1 23 Bebraska 71 Bew lle%1oo Oklahoma W,Voming re41 ■oounta during the year 19161 m l)!OEl,IBER 31 1 1916. .!11.§. 11,364.00 102,737.26 ' total 623,798.12 623,798.12 3,412,805.7 9 3,424,169.7 9 2,536,963.6 7 2,928,310.3 6 1,791,826.4 2 1,894,563.6 8 l 19,219,20 19,219,20 101 2, '148,649.22 2,?62,914.2.:! 5 32,362.93 32 1 !62.93 274 609,812.96 l l 1 065,525.S6 11,575,338. 30 ID lovember am Daoamber 191-', 89 notes were .redhoounted ., aDd ln 1915 1 6,946 notes were redisoounte d to December 31st, a total ot· ?,036 notes, average amount of each note il,600.00, l J• Z• 9 l 6 W:LLER 9 JR.• .BECOMES GOVERNOR ~e operation ot the lwlk throughout the tlrst year gradually demonstrated. to the dlreotors that the ot':tloa of Governor was by nature ot more importance UlaJl U was origimlq oonoeivad to bee While the GoTernor bad. lesa ot oontaot with the Fed41ral .Heserva .Board than had the Federal Beaene Agent, the responsibility that should be assumed by the Govorno:r ln carrying out the operating end of the bank waa auoh that 1t required sane one of both l~rge banking experience and of resouroefulness and axeoutiva ability, It was tor that reason. therefore, that the directors at the meeting ot Js.nuar~ 4th eleoted Oha1.rnan J, z. lliller, Jr.• as lknernor of the bank. '!l'he sala17 authorised tor the newly eleoted Govemor at the time of his eleoUon wa.a $15,000 per 7eu. However. at the following meeting held on February 24th, GoTernOr lliller ref'llaed to accept more than $10,000 a year until such time as the bank should enter a dividend paying period, Acting upon this objeoUon the Board at that meeting adopted a resolution that the salu7 to be paid the Go'Ye:nor be fixed at fl0,000 instead ot il6,000. b and the result January 4th was the reg-..ll.ar date for the election of otficera • -62of the election was immediat ely rlred to the Federal Reserve Boa.rd and the request made ot the Board to appoint Mr. Charles M, S&-.;yer aa Federal Reaern Agent to ■ucceed Kr. lliller. Thia ns 11ub19quent.ly don•~ At this same eleot- on February 10 as preTiousl y mentioned . The Board accept.ad the resignati on . . effective Uaroh land adopted a most complime ntary resolutio n of regret and appreciat ion. For the poa1tion or Seoreta.ry ..Cashier to thirteen applicant ■ ■ uooeed Kr. 'Jhra.lls there ware considere d at the meeting of March 14. These applicant s were as ·follows 1 Arch w. Anderson. Eugene P. Davia, Royal c. Stewart. E. E. :Montgomery, John ·P'. Hecox, A: ... R. Bradley, w.F. Laoa!'t, 'W. 3 • Shepard , ltyles Standish, w. H. Langford, E. E. Emmett, L. H. Tate, Eugene D. KcAlliate r. Vice-Pre s., Stock Yarde Nat'l• Bank, Kansas City, Missouri. Aa1 1t. Ca■b•, Southwest Nat'l. Bank of Commerce, K. c. Mo. Aea•t. Bank Commissi oner, 'Oklahoma City, Oklahoma. Pree. Citizens State Bank, Blue Springs, 14i~aoµri. City National Bank, Ck!laha, Nebraska. State J3ank: Examiner ( Ko.) Kanaaa City, Missouri. Cashier, Westport Avenue Bank, Kan•as City, Mi•souri. Caaha 'lati'onal 1-nk, Cat.ha, Nebruka. Asa •t. 'Cashier, First Wat '1. Bank, ()nab.a• Nebraska. Internal Revenue Offioe, -Kansas Oi ty, Mi1&ouri. Cash., Corn 3xcha.nge Nat•1. lank, Omaha, Nebraaka. Asa 1t. Cashier, Corn Exchange Nat 'l. Bank, Omaha, Nebraska. Federal Reserve Ea.nk, Kansas City, Miaaouri. The only one or thia list r.ho was connected with the Federal Reserve Bank When asked hi• preferenc e of the applicant s Governor Miller asserted that hia acquainta nce ,ri th the ot.hers of the list. we.a 10 limited that he could not oon11iste ntly .make a selection but if confinBd to the list he would :naturally ■elect Jlr. KcAlliate r tor he had had the opportun ity of observing l!r. &Alliste r'• work aa mam.ger ot the loans and discou nt depart ment or tba bank. Variou a applic ants had their staunc h su~r tera among the d1reot or1 but the t1rat in- formal be.llot taken showed a preter enoe tor _Arah w. Anderson. Governor Kille r sugge sted to the d.1rec tors that aa the a:ppl1 cants were not all tul~ mawn to himse lf and the direct ors, it might be desira ble to aleo\ .Ir, l'.0All 1a\er assist ant oal9h1ar aDd dater farthe r aation on electi ng & 8eorat ary-Ua .ah1er until a aubseqwmt meetin g, 1'ha direct ors, howeTer, telt that the is.me had' arri'fe d to eleot a Secret a:ry--u a.shier and~ they wished to elect some om who would be Bllitab le to the GoTeroor, fhe situat ion waa some- . what embar rassin g to the GoYernor owing to the fa.at that he was not eu~fic iently acqua inted with Mr, Anders on who appea red to be the choice of the na,jor ity of the dlreo tors, to enable him to pus an opinio n. Clearl 7• the Govern or 414 not wish to imke a mistak e in the select ion of' a Oaehi er a.nd tor tbat reaeon he was slow to aanoti on the choice of o:ny one until he ba.d had :turthe r oppor twut1 to inYes tigate . Ba stated , however, t:hat he bad no obJaot ion to llr, Ander son oth• than his own laolt ot e.oqua1ntrmoe with him. !he Governor wiahed to go on :reoord. as not assum ing aJJ1' respon lib111 ty tor the oonduo t ot a man ohoaen who ma tmlmown to him• but he would JBrt'orm the beat servic e possib le tor Ula bank w1 th the tools fllrn1shed. him by ·t he ·d irecto rs. 1'he vote waa I • taken and stood 6 io Sin fa'Yor of Mr. Ander son. !he Oha.1:rnan 4ecl.ar ed 111"• A.Dd.enan electe d and the sal.&17 fixed at $4,000 a 7ear, lank Jecomea Pisoa l Agent ~ Uie middl • of .Deo-,mber 1915, th• Govel"Dlll8nt ba4 asame d ao impor tan, a oomne rolal plaoe among zatlon a engage d til'.'.!the ai- and had ad.erta lcen auah a •hare of finano lal Nlp0!1 11b11 1t7 towarcl E\lZ'ope that the !Te&BU l'J' Depart ment mteded asdsta noa \hroug hotn tha aountr y 1n bandH ng 1ta relat1 ou with the • publio. OD Deaember 16th, Oha.1:rman Killer presented to the Board a letter from the Saoreta17 ot the Treasury designating the Federal Beserve l3e.J2k ot Xansas Cit7 as liecal Agent ot the GoverDD811t tor this dietriot and outlining the services a:pacted ot it. !he assuming or this additional responaibilit7 by the baDlc led to the opening up ot whe.t became the Flaoal Agency ·Department• destined to becana a most aativa department ot the bank during the ~ period. On Janlla1"1 2 1 1916, the bank began theJ_,b,andl1ng ot Govenment de- posits and the payment ot Govornment warranta. Although this was not a part O'f the presaribed duties ot the nn Fisoal Agenoy Department. it was related in a !ll6asure to that Department 1n that lt was due to the eama primary cause, not&blt;~ tl:le World War. ~e government was purahasing a great amount ot supplies tram industries ln thie district and it issued wa.rra.nta which were redeemable at the Federal Reserve &.mt. !rbis work was· handled largely b;y Mr. !Jner, Ch1et Clerk. The heavy work of the .Pisoal Agency De}Brtment did not begin, however, until about lb.7 23, 1917, and is desoribed 1n another oh.apter beg1:zm1ng on page 70. Governor's Report Governor lll.ller 1n his report to the directors on lfarch 14-th allowed. how tha Federal BeserTe .Bank of Kansas Cit1' bad began t;o f'orge ahead in \ 1ts earnings an4 '- recover it1 tinanoial balance aft.er the first year of rather unprofitable operation. Be made it clear to the di:li_Sct.ors that of the four poa ■ ible methods of a Federal Reserve Bank earning money. nomely; first. by redi'acounting bill1 for member bank1; aacond. by bankers I acceptance11 and open market tra.nsactions; third, by revenue income Ya.rr:ints and. fourth, purchase of United States Bonas. Th• 'l'.ent.h district found the fourth method the only one adapted to its use at that time. There was a very light call for rediscolmt a.nd the New York Federnl Reserve Bank was in position to materially assist in open market tranaactions or revenue income warrants. At the date of the Governor's statement a little over $8,000,000 in United States Bonds bearing circulation privilege had been purchaaed and the bank had received from the Cmnptroller of the Currency $2,000,000,000 in oiroula.tion notes with which it bad been daily purcha.dng eastern axohange. By tha purchase of the bonds Governor Killer sr.owed that the bank had increased l ts earnings to $777.46 per day while the expanses were &varaging $333.27 per day, leaving a net profit of $444.19 per day or approximately $160 1 000 per e.nnua, which was within $20"000 a year, _or 89% of a dividend p!lying ba.sia. Dyring the ~exioan border conflict in June, 1916, three of the l:.ank 1 ■ amployea who were members of Naticnul GU!ll"d unite were called to the service LU1.d upon a rep-;>rt of thia to the directors at the meeting of June 22 the Board • instru~tad the officera of the bank th~t emplo:,as of the bank who were member■ of the National Guard and had b'3an called to aervioe "shall be gra...,ted a leave of absence o~ full pg,y for a pariod cf aix Zl!9nths or such part thoremf as shall be apant in the miliu;ry service o~ the Unit.ad Ste;taa." The Fir1t Dividend By the middle a!' Jul:,,, 1916, there being accrued auttioient undiTi4ed profit■ to more than caver the dUidenda dU:e at.oak-holding banka to fun• SO,, 1915, the directors at a meeting on Jul:, 13 authorized the payment or the f'irat. dividend in the hiat.oey of the bank. This dividend was pdd for two period.ai number one,, the pariod from lonmber 2 to December Sl, 1914. inoluaive and,, number two,, the period from January l to June 30, 1916. The amount of number one was $8,495.47 and of number two $58,211.48 making a total of $66,706.95. GoverncrHarding '• Visit. At its meeting of September 28, 1916, the Board of Directors was vistted by Governor W.P.G.Harding of the Federal Reserve Board who, u one of the original member a of the Board I had succeeded Governor Hamlin at the firs~ of that year. Upon invitation of the Chairman, Governor Harding iJrie!'ly addreaaed the Board commending the directors and o!'.tioe.rs., ma.ldng suggestion ■ on mattera of interest and outlining the policy of the Federal Reserve Bank with r•~peat to the declaration of dividends and the disposition or organization expense prior thereto. At an informal meeting at the Board ghe follolrl.ng day Vice~oTernor Paul M. Warburg na preHnt ln Xan ■u City to deliver an addre ■ 1 of the American Bankers A1sociation held here on that day. at the meeting In the a.fternocm he mat informalq rith the director ■ of the bank and di1cuned with them principle ■ and matter• of policy -;vith reapeot. to t.he operation of' 1'ederal Reaarve bankl _.,,., particularl7 the concentration of gold, the vestment ■• earning■ and i ■ aue of Federal Re1erve note ■ , in- dividend. ■• At the meeting of October 12 the J"eaigna.tion of Director· Wil ■ on, effective December 31, wa1 accepted with regret b,y the directors. Mr. Wilson was hi■ soon to remove from the district and for that reason 4id not permit name to be included in the list of candidate ■ for the approaching election. On OOtober 26 Governor Miller's report showed a decreaae in discounts and ~ increase in banker ■' a0oeptanoe1 and Wlp"rant■ negotiated. ed an increased volume of clearings. It also Alao an important part of bi ■ ■how- report wu the subject of penalties for deficient reserves and, following the report, the Executive Cammi ttea was aut.h.ori zed by the director■ "t.o fix a rate as penalty tor deficient reserve balances of members, to determine the time from which ea.id penalties would. be made e.f'fective and to make auch changaa in the rate from time to time as it may deem advisable and necessary." • Second Dividend The second dividend paid the stock holders by the Fadera.l Reserve Bank of lansas City was a,-t.horized at the meeting of Deoember 19. at the rate of e% upon the atook of the bank from July l to December 51,. 1915. It amounted t~ $87.920/88. December Th.11 dividend resolution ■ At the fl.nal meeting or tha year or 1916 held on ot regret at the resignation of Director Wilson and ot appreciation or his 1J0rk and his abilit7 were adopt.ed by the directors and an engroued copy presented to Mr• Wilson with appropriate remark■ by GoTernor Bailey! .-::- ., •..••.:L/ {}~~5 f. •.. .... :! .• . ·.: ~..,. '}i:i;f~f!if\~}ti~t~' , : -- • • .• ""GG~~ ··:--'' ,.•. . , , .. -.' • •• ' ... ~ ~ i{-- " In aontra1t to the oondi tion • · ,__ • • .. ... - -. : ' -•... . or the T~th -~i--~·;t :d~;i~g·\;~~--f t~~~> _:- . ...'. ~~~'1 . •_. year of the bank was the ai tuation during 1916 at the 4loae · . • ./ . -_ -..: __ ~. . ~-·•-.:..'.; . ot which year th• ,· -.- -;r,~l ~ -· • ·• :- . . . •• - ·:!·: - ~ • ~~ i~i~l;, Federal Reserve Agent was enabled to make a more favorable ·report f.o_ the Fed•··:·~-:~ ;: • • ·. • - --- ··: ~ . ' - ·: -, :--:· _. .• jeral Reser-ye Boa.rd a■ to the earning ■ of the bank and the· genera.l lanking oon• ... ;-~. ·: >· • _ ,: . - dition of the district. Ai though a.grioulturaly the year wail . not an exoeptional .. one, yet commercially and. 1n a g~eral compa.ri ■ on of prod.uct16n by industrie1 .• . ; 1916 was materially more favorable than tha preceding rear in a ba,nldng way. The manufacturing facilities nre at capacity production. satisfactory with a general increase in wages • . Live 1took·markets re~ned high and many record:s -;,rere broken in receipts ·and in prices. : l ,. : . ·, •' The bank depoa~t• held up in an unusually strong manner although., owing to a oompara.tively' light demano. for money and the low level of interest rates. the banka perhaps ea.med · no more than in the preoading yea.r. While it haa been stated that the earnings of the bank during l9i6 increased over those of 1915 yet thia increase was nue not to an increased ,.. . .... -,~-.:· volume of redisoounts so much as to the open · market investments made by the bank, . . out of the year 'a earning• it was po ■ sible to pay di'rl.dend ■ to J.une 30. 1915, . •• •• . as well as to charge off ali organization expenses. Rediscounts -during -the y~ :. ·. ·- ., ,rill be found in tabulated form on page 60d. It wa1 during· 1916 that the Fadera.1 Reserve Act waa amended ao that !., •"";--·.,. -.......-t. .• • ,. ► ' their •Qll'n· ~romiaaory notea. . . i' ·-·~----· "- -..- l"'i ': - .... •. , ,.. ,I" the memberahip in the district during the year showed a slight decrease owing to several member ba.nb hn.Vi!J8 dana.tiona.li zed and having beccm1a State ba.nka. !his obange 1n membership was due to tl:le fact that the "new State Guaranty law" pl'O'Yed / J)Opalar at that time. In contrast to that year. there 11 the oaao ~ the Oklahoma guaranty fund becaning depleted in 1921. thua lmding :ma.ey Oklahoma st.~ta bulks to strive to bscome na.tionai" banks thereby axe.a.ping the unaertain 1ntluenoas ot State Guaranty laws. From the organizatio n of . tha bank to the oloae ot 1916. only one Trost COffll& uy and two State banks had applied for and 'been granted membership in the institution . i!he pers0I1Del of the bo.nk's management underwent moro ohangea during the rear 1916 than in a"ff3 year of the ban.k's history to date. J. c. l!itchell suooeeded Gordon Jcmes as Class A director. On January 1st• Colonel F. w. llemlJJg na appointad. jioe-Cha11'Dlll1 and Depaty P'edaral Reserve .t.gent to auoceed A. E. Bamsay• resigned and Obarles J.l. Sawyer waa;,: a.ppointed to succeed. J• 141ller• Jr., as Chail"lmn of the Boa.rd and ll'ederal Baserve Agent., 11 z. Cbairmm" Miller had beoome "Govarnor0 lliller with the beginnuig ot the yea.r, thereby changing places with Mr. Sawyer. On February 10th, Jerome Thralls resigned as SeoretaJ7•C aahier and J. L. Cross was elected assistant to the GaYernor. On .l'ebrua.17 1st, ll. A. 1'hompson was appointed assistant to the Federal Basene A.gent and on March 14th, arch !rhralls. r w. Anderson was eleoted. Seoreta.ry-Ca.ah18l" to suooeed J4r, In Ootober ot the same year Direotor Wilson. Olan .B director, resigned., to become e:t:teotive January 1, 1117, In Daoember, H. w. Gibson ot Muskogee was elected to fill Uie unexpired term ot Kr. i/ilso n while Directors !alley and JloClure were elected. to auooeed themselves. \ \ 1 9 1 7 At .the initial meeting of 1917 held on Je.nuary 11th. the ·Cha.irnan a Class C Director for a term of 3 yeara. re ■ igned. ,nu welcomed aa a new member of the Board. a.ncUfoCluro were congratulated upon thair re-•leot1on aa Class A ari4 Class B 8ireotora, respeoti~ely. • 'fhe organization·ias further perfected by the re• lection of J. z. Miller., Jr., as Governor, Arch 'Pf • .Anderson aa Seorot~ry-Cashier _. -. ~?= and E.F .Swinney as Federal Advisory Council. At this meeting J • Li Cro11. who he.d -· •:;i' OQ!'.118 'to the bank all a.ti examiner ;/:.:-=:ft· ; . . -_ : '":;,!""'-., /<,;. the Federal ~Herve Board and 'Who had been serving aeTOral month ■ . in the caP9-city ·.·;,~ _ . .•,,·• , . ~~ •··,· v4-~l:f. of assist ant to the Governor, waa elected ''Vice-Governor". However the by-1~■ }i~~t. ·~ ~--...... provided for a Depu;y Governor instead or a "Vioe-Oovernor" and the Chai~ I ~:•·<~~• • I., " instructed to preeent for action at the next ,meeting an amendment to provide foi- \ .-·:: ·- ..,J":. ,:-· ~:,·:.: a "Vice-Governor" instead ot a. Deputy Govemor. Thie fm!.end.ment was aaopted at , _:.,&.; . a stat.eel the following meet.1ng~'b ut• owing to ~ -. ..;. Jffil-· preference tor the term "Deputy ••. ·?,,,-4~... ,:;;:.:l Baa.rd, the action ot amendment was reeoind• _.::;;~ Owernor'' ma.de by the Federal .-:e■erve __! : . .:i"w.•,• - ed at the meeting of March 8th and ■inoe ri the ., . :.:- :f:'f, • of~·, • • Gcnem::■i4orillg Oampen■att.oa .. ~If.; that time the title ha.a remaintW Deputy ~ -·~ ".: . ~-=- ·~.;, •., _ ~ "" of otfioero at th■ ?;i~i mooting of January 11th . .•.• :-:.~~k: • a.1't.er Governor Killer retired tram the meeting. the direator■ 1.manimoualy voted . . :-;-.:,,~ t . ~. '· a ealary ot . $16.000 a year _to the Governor-• .. Later in the moating Governor M111 •• '" ":; .... ••; ,n_'-b~ w:~~ advi;ed._~f1f the inoz:e~e ,~- -~• · reque■te4 _, tbat the aatio~~ • / '?:•:, .•\·~ ..,~,~: -..:•. :_ . ;;· ... - . r ., I •• ·•<:., .. • . A, •• ;i:;~-,;:, /t{;.i;_~\~/--· •• :) a:~ •• :.,-,,::• ,>:.~• •, •• ~ • ••••• • , .. / :~:, L·Y '-· •• .. __ . ----- ~.,::.•_'._/tt~ .,\/>:. . . " ,• .}/ - ·; ••, ~ ~~~~j' ~:~( :'I~ ' ~~~=f,--~• ~1:~;;, - Wi· t- ._..,:~.:,\'?".. .,. .,~ -,; '!ll. 1: ... ,!! .:: !--::~-:---f.~-.;'.·~-~-i-• 4:.~ • ,-J,., · - - - : : : ' A . ) · · ~ :-.-:,. · ~-· ·' "-~~ ~:;"t:::.• · ~ ' , !'. ~ •-:~. t:-.~~~n)-}-/. ;;_==:· ... .. • -_ ;' ' .. .... - . ._. _ I' .... - • • • : 'l,,~ _,., • • - ~ • .. ' .J • .; . . ·- reeon ■idered and th~ • - • • aalaey .be 111i.erl.&1iy reduoed.- . • .. , . J - ... •• • .-:·· - ~#' At hia augge■tion . t.he · ;:'."· Board ~eoonaidered and voted t.he salary at $12,soq. flle ~~-;: t~ \~~~\{" . ...-... puty ~overnor w'aa fixed at 16.000 a yeu and the Searet.ary-ca■hier at ··•~•'°°•;'. ~ , • •• : • • • • ~ - • • •. Oa thl~ ume elate a r~e!on and adjustment • ' _. . • ..: ,t • . • :'. • ..... , • • _ •••• . .. • • . t-. ~ .'! ~~~- -~-~;- _ - { ~'.!:=< ~t ·employe■ ·•a.larle ■ · •~• ~• ~ .,·:<gwr.· 1 ., . which an aggregate ino1res.ae for the month wa.a awoxima.tely $300. :__ ~ Bank Inaure• Elpploye1 \ . ·. . : · ·~ : . ~ ~ ;.- ,. ,:: . -~1-~.· ::~J7-': · ~;·~ :,. : - ]~: ~;~f - ~ -' The very sati ■ faatory plan of the Federal Reserve Eank insuring lt.■ ,_ ,:·'~-. / employee had it,■ ~rlgin in i.he meeting of 1abruary 21, 1917, tor on that ~~~~-\.. ~ti Director &iley mowd that the bank enter into a contract for gDOup insurance covering all employe ■ . . ;. - =~ ~ of the bank, the amount of suoh ·1nauranoa to equal the annual salary or each to a maximum amount of $3,000. Before the date ot the next· meeting of direotors the bank oloaed a contract with the Aetna Lite In• ... . ,. ~- - -- - "?!t• aura.nee cami:iany of .Hart!'o_rd. Conneotiout, to cover thia contingency, • There wa.11 present at the meeting of March 21st. Mr. Delano of the Fed• : ~/'. .r-":ri~·- .\'. / •.:. I -69- '. 'i'ar P'inanca Begins Although the European wa.r had exerted an influence on .~erican finanee almost at tha outset of thl:l cont'liot in 1914. that influence did not become markod until the Unitea States itself became involved in the strife with the ainking of the Lusitania ,9t{ ities on April 14, 1917. and the subsequent declaration of hoatil- It became apparent immeailltely that if we were to euacesar'.llly wage a conflict a gainst the central poV1era in Europe we must finanoe the conflict promptly. Morao"/ar II the woeful la.ck of preparation of' thi ■ country for war ma,qa it urgent that the war fina.~cing be done with the greatest promptness 3l'ld on the largast scale possible to insure success. T}:a trea.eur.r, therefore• ,,i t.hout .rai ting for a public loan to ba launch·~ . ed, authorized in Ap~il 1917, the issuance of $200,000,000 in United State■ Treasury Certificates which were to provide available funds in contemplation of • • the subsequent war bond iasuo. The Tentl:r District~a first official 78.r :measure wu.s the motion by Director Byrne supported by Director Mi tohell at the me ating of April 26th. a.ciopt.ing the foilowing rosoluti on: the Treasury Department of the Uni tea. has offered far subscription an issue or $200,000,00 Treasury Certificates, as reported to the Executive Commit•ee meeting April 19th, and ll'!HEREAS banka in District No. 10 have filed their aub■cription11 with thi ■ Federal Reserve Bank, in the 11um of $7,625,000, THEREFORE BE IT R.:::SOLVED, That the of'fioers of this 1:ank are authorized and dir'eoted t6 purcha■ a such Certifi~a.tea in the amount of $577,000, or such portton thereof as may be neoeasary ~o bring the actual subscription to this issue, from Federal Roaerve District No. 10, up to ts.000,000." . 'tvffiEREAS S~ta■ It w~ll be noted that the Tenth Diatriot's. quota wa■ 4% of the national issue, 1 ihi, ratio remaining in foroe throughout most of the var loan P,rotJram • • The first official preliminary annomioement ~th respect to the1ir~t_ -70- Liberty loan oan:-e as a tele ·"Tam frol'.!I the .5acrotar~: uf the Tr }asu..7 and 'l.'E. S read at the m~tin 5 of 1/iay 10th. In the second issue of Tr&:J.Sul'y ·.Jertif'icate s, opened ou May 10th, the Tenth District's (!uota was subscribed promptl~,r on tr.. e forenoun of the opening day to the extant of $9,500,000. At the meatin~ ~ 19th, the directors were advised of a confidentia l relation having been entered into between t.'he .Fader..J.1 .Reserve funk of New York and the banks of England, Eranca and .A.r8"entine covering reciproJ.'31 relntio:.ie with a view C>o the control of ex.cJ:ian3'8s and or9di ts. ln t:,is arrangement tha diMotors ot the Tenth District bllllk voted to pirticip:ite to tho extent of 5%. While war fins.nae operations beoame a. matter or oornmon routine in. the meeti:::1gs uf th-3 directors for the s-..1cceodi:03 few years, it ws.s at those me9t:i.::.1gs or April and lliy. 1911, t1'iat the program of i'in."l.r1cing the .rar took 1 ts first shape. Flout First Loan The crunpaign of t..'l1e First Liberty loan -.,'B.S from J.l!.~ 23 to Ji.me 15. 191'7. Preliminary to the campiign in tJ-1 is district, howevor, J. 1. Cross v:ho had been borrowed by the bank January 4, 191G, from the ~'oderal ne serve .Boa d, was e 1ected Deputy Governor on Jam.12.r-J 11, 1~17. loan for the Tenth District. He wa.a put il1 active cr~rge of handling the The first prelim.inal""'J work wns dono at hie desk in the Governor's office in the Long building where tii.e proliminar.r corresponde nce wa.s aarried on. together with oorresponde nce relating to the Certificate s of Indebtednes s which had been iss".led in a.ntir:,iputio: :i of the First :Wan. l.a tbo c. of'!--1... A few days :prior to the beginning of' the ca.mp,.ign, Mr. Cross o:pened offices 1n rooms on the second noor of the Glendale building across Jrand .t..vanue from the Long building and fitted these room6 for the active work of handling subscriptio ns. j l4r. Cross called to his assistance in that cami:aign a re~resentat ive from each of the bond houses 1n Kansas City, which force united in handling the sub- -'10a.am-1pt10DI and the publ10U1 ot the campLign. Iha aubaoripUona were handled UDdar the d1reot1on ot John Phillipe, Jr., who redgned tram the ottioe ot .t.rthur Young & Oompe.Dl' on begin the aampdgn work tor the 'banlc. bank and began assisting Mr. ~ 22nd in order to On that day, alao, 0, 1l. Biggs Joined the Phillip■• On the following day, w. I, .Earley wa■ added to tha toroe. !he t1rat subaoription of the lirst Liberty IQan was '500.00, taken by J, z. Killer, Jr., GoTernor ot the be.nlc. 1ar1pt10:na amountlng to '3,7•"1 1 900, fhe total tor the day was ll? 1u'b- !'he final allotment tor the loan was 463,481,850. At the aloae of the Jirat Loan on June 15th, the tisaal pal't or the loan organisation automatically beaam.:.the E1acal Agenoy Dapu-tment, . ~1• deparxnt ~J....,'1(_ ct.~ e:t:,.;.,._ moved 1n the Imig building lobbJ on July lat of that yeal'A and on September st took up quarters in the Amarioan l3a.nk Building where it renained. as the Fiscal Agency Da:i;:artment aUl the new bank building was oooupied, 1'ha data1le4 h1BtoJ7 ot the Tenth Diatriat •• waf loan organisation will be fOUlld beginning page • PARl'IOIPATIOB CERTIPICa.TES One ot the war mea1urea which helped Ule Tenth distriot to raise ita quota■ of Libert1 .Bond eubsoriptiona and whiah ended praotioally with the oloae of 1921, was the "hrUo1paUon Cart1t1oate" which was authorized. by the federal Beaane Boal'd. and the !raaaury Department on June 1, 191?. !he Bew York bank was the tirat to adopt this oertificate whioh waa designed solely to help salaried people b1q Liberty .Bond.a and pq tor tham on tba installment plan with• out aotually being in debt tor bond• 1n aey ot the banlm. ma 1DChe• and bore the following ten a _-1.!;;;;t.. (!.tl,,.) t~;C ~ • !he oerUticate waa •?ObUllll~ S~TES GOVE. :-~ l:,IBERTY LOil B>Bl> Part1o1p at1on oert1t1o ate ~ . . . thla oert1t1o ate represe nt• a ~ t o t TEI .OOLIABS on a subaor1p t1on to the L1bert1 LOan ot 1917. Upon surrend er ot tbi ■ oertitio ate to U1e federal Blaene ll&nk ot Xanaas 01 ty aooompanied bJ tow- othen ot like amount• the holder her.eof will be enU tle4 tQ reoe1Te a '50• United 8\atea GoYernmant Liberty loan ~ Gold Bond with all ocrc1pona attaohe d. Counter signed E.P.i'Jn ar • Bagiatr ar nDE&L RF.SERVE &\BX B7 or ~ KI.N&.5 CITY J.Z.Kil ler, Jr. Qo-ra~ r. the Amer1oan Ba.Dk Bota Oompmy of Bnw York 0it1 181!1ued tor the fenth d1atr1o t 50 1 000 ot theaa ten-d.ol lar ciart1t1 oatea in a aeriea numbered X0-1 to X0-50 1 000. fhe sale of these oart1t1o a.tea thi'ough '98.rioua member banlm . . . to whom the1 were oona1gne4 began prior to tbe SaoondL lberty lDan r.n4 were sold both during and between the subsequ ent Loans until the oloae ot the Vioto17 Loan in 1919. Pllrahaa ars of these oartifio ates held them until the7 possesse d t1ve,or multipl es of f1Te 1 at llhioh time the7 exaba.nged them tor Llbert7 iomla at the rate of five certific ates for a fiftJ-d. ollar bond.. Ae fast as these oertific ates were surrende red for Liberty Bonda, they nre returned to the Bond Dapartm ent ot the :raderal Reserve .Bank and held there until they were destr07e d as tallows a llovember 22, 1918 40,000 ot the 1 loo,ooo 1saue4 were destroye d b)T burnings on December 31, 1920 1 9.970 of the ' remainin g l0,000 . were burned., At the close ot 1921, there were still outatan4 - 1ng 30 of these · certltio atea at which time U was doubtfu l ·it all the remaind er would ev.e:r be returned . fha prinaip le ot the Part1o1p a.t1on Certitio ate was a aouml one ot aapeaia l advantag e to persona on salaries or with small means. After the close of the war, t1nano1n g this same princip le with modifio ationa was adopted. 'b7 the !reaaU1 7 ~p.rtme nt to aid o1t1zena to save nx>ney. A.a a result of the w.. SaTing Sta.mp oampa1 ~,· the Govel"DDl9Dt Ba"Y1nga Organiz ation of the !r•IUJ7 Dei:,anment 'beau lseuing , througb lt• 41str1o t organha Uona, freaaury SaThag . I \ • • I -7oa, Oert1t 1oatea 1n 4enorn!na~1cma ot t100 amt. t1 1 000 am later t26 4enam 1nat1o ~. !hese differ ed tram the ParUo lpaUo n OerU tloat• •• hown er, in that the p 1ar· BaT1J:igs Btamp e.whia b oould 'be exahan ged tor o•rUt icatea ot highe r ·c1e- nomin ationa , drew intere st, where as, the Pania ipaUo n OerUf loatea d.i4 not~ liea"7 Badiaoounta in 191? Pravio ual7 U haa been atated . that the earnin gs ot the ~ 1916 were from open Dl!ll'ltet transa otiana rather than by rediaa ounta, _I ln !he hlator :, ot the baJlJc in 1917• hown ar, 1a 41rao tly opposed. to that ot 1916 ln I that the banlca ot lhe d1atr iot rediao oumed haavll J' eapeo lall7 during the latter p&.rt ot 1917 when Amerl oa'a part ln the world war began to ha.v411 Jt• et:teo t upon American tinana e 1 and when tha movement ot the oropa 1n th.a !Pall ot 1917 also requir ed additi onal ourren a7 in the weste rn aount1 7, In that year the bank was not oblige d to resort to open m&rkat tranaa otion• mr to outsid e invest ments of azq _mtur e. Omaha '-8lcs tor Brano.b A letter aig:ned by raprea antat1 Tea of all olaarl ng house bal2lca la ! the ··olty of OD&ha am requa st_bg that a brp.oh banlc be located. in_ that oity 1 waa read b7 GoTe:rnor Jlilla r to the Board ot Direo tora at the meetin g of June 14th. !he direct ors voted to acknowledge the oommnioa.Ucm and to g1Ta ·caref ul oonaid etiatio n tor the earlie st praoti oable data to th~ reques t tor a branoh . ID respon se to this ocnm1n41:)&t~on.,."'dJ6TBrnor:ll11 1er am Oh&~ n B01,9 r T1 ■ 1ta4 Omha on Juq 10th. 1ollow1Dg th1• TisU , Direaior ■ .llltah all and Jklone of l>mrrer stated to the other dirao t~n, in the JQeeting or· tiul.7 12th, tbat ~•Deirrv olear1 Dg bouaa ,aa oons1der1ng the propo sal for •~tabl 1ah1n g a braulb· banJc aD4 thal the7 wilhed ,he naUa r aona14 ered 'b.f the direat ore al~ with _ the establ 1ah1n g ot a branah bank at Omaha, The tlrat action on e1tabl 1ahing a branch , hown ar. was talcen at this f meeting in fe.vor of the Cbah.a resolutio n and it Yas moved by Mr. Fleming and seconded by Mr. Bailsy that the applioati on of the Om:lha. banks be approwd. Directo·ra Burnham and BJJrne then made various izing the branch bank at <ha.ha. suggestion ■ with respect to organ• This oonsidera tion led to a motion by Mr. Burnham seconded by Mr. Byrne that the following men be appointed directors of the branch barik at Onaha: Luther Drake, Omaha, with Mr. Hughe ■ as manager. i:::-1::1. B. Hughes and J. C.lfoNish, all ot Thia motion carried and was followed by the adoption of the tentative by-laws 1upplied by the Fed-9ral Roaerva .Banl-c tor branch bank•. At the time of tho f'ir3t Liberty Loan in June, 1!Jl7, came the first emergoncy in the ·bank's history requiring the appOintment of temporary officers. At th:J meeting of June 14th Governor l4iller announced that the Interim Certificate ■ and allotment notices for Liberty Loan Bonds must be signed in large volume on apaces designate d for Assistant Cashiers. The Boa.rd therefore deaign~te d the £oll~rlng nine employee of the bank as Assista.~t Cashiers for special purposes. such designati ons ta be considere d automatic ally canceled when the apeoial duties wero completed : • J. L. McCarthy Samual Stewart. Jr. E. P, Tyner E. D, McAlliste r c. A. "Vorthington ~. - lloore .,.,. ·• M. 13leJ,::ely ·• ,,: E. .• Kemner Alfred. 3. Bolt 1171th the handling ot this 1eoond loan also came a demand for more vault• ■ pa.ca and the Board obtained from the Fidelity Trust Company and. the Commeros Trust Ccx;pany additiona l apace in their vaults for Liberty Bonda and other 1ecuritie 1, At the ea.me meeting. June 29~, i, 1917, Governor Miller montioned the. responai bility assumed by Mr. c. A. r:orthingt on in an \Uloff'icia l capacity a.'1d the efficient work 1,a haci been doing in the bank anci in the Pond Department .- -~ ·"•~~ ·":' ;··-~ - -72and recommended that the Board conaider znaking Mr:' Worthington Cashier. an Assistant Thia was done and the salary fixed at $3.000. At the June 29th meeting a 6;1o dividend was declared. to the holders. Also the Federal Reaerve Boa.rd'• asseasment of ■ took eleven-hundredth■ of ona poroent ac;ainst the bank tor expenses was paid. Branch Eanks Sstablished The f'ffl' aubaequent montha produced considerab1e activity on the part of numerous cities in the di1trict toward the e sta.bliahing of branch ba.nka. Then there ware problem• to solve in branch in that city, Q:naha. follonng the establiahiient of a The directors appointed by the Board and those named by the Federal Reserve Board failed to perfect aatisfactory arrangements with Mr. Hughes vrho hao. bean selected as mana.gor. follo:,ed a."ld in his place Mr~ o. The roaignation of Mr. Hughes T. Eastman of Omaha ns elected manager. a.nci dtreotor of the Omaha branch, . CO!l1Illunicationa were read from clearing house associations in Muskogee. and'/ frcm Denver aha/member banks in Oklahoma City requesting the establishment of a branch bank at each of those points. of the Denver application ~a. ,\.fter considerable informat disc·u ssion • the assurance of Directors Ma.lone ana Mitchell that the member banks of that city would s~pport the bank with their patronage sufficient to cover any deficit in expense. it was una.~imously agreed to establi ■h a branch bank at Denveu and the following men were apppinted directois of that branch: F. F. Struby. c. c. Parka, A. wi. th Mr. Malone designated aa manager. c. Foster and R. H• •lla.lone. all of Denver, At the next subsequent meeting, how- ever• Director Malone resigned as director of th~ bra..'1ch bank owing to a ruling that a director of a prima.r;y Federal i?eserva Bank c,_,uld not ■ erve as a director - • of a branch. Due to the report that be.nka influl1a were preparing an application tot a .branch. consideration of the Eu.akogee and Oklahoma. City w application ■ - .. , -73- was deferred uhtil the next meeting anci the applicants were requested to furnish the Chairman a brief ·each baaed i ta ■ etting forth fact ■ and arguments on Yhioh reque■t. At the meeting of Juiy 26th~ on the reading of a communication from the Feder~l Reserve Boa.rd authorizing the reduction of the bonds or the Federal Reserve Agent and Assistant Agent , the Board reduced the bond• in the case of the Kansas · City Just before thi ■ officer■ ta $100,000 and $&1,000 respeotiwly. meeting acijourned Director Gibson presented the application of the Tulsa associated banks for a branch. At the August 9th meetin;:; a letter !'ram Mr. Delano of the Federal Roserve Boa.rd asking that the Denver branch proposal be held in abeyance for a week until he had visited Kansas ·-~city and Denver, was reaci. On account o! this decision also the three Oklahoma cities had been notified that consideration would not be taken of their application until the Denv:er matter had been settled. Manager "3a.atman was authorized on August 23rd to enter into a contract lea■ ing the promi1ea in the Farnum Building in Caiha for the Qnaha branch for three "ar• at an aJU1ual rent.al of $6,000. . On the above dat.e Direator Mitchell presented the resignation of Kr. Struby a■ a director of the Denver brano~ ln hh place Kr. c. A.Bilrkhardt 0 ~as appointed manager and director at a salary of $4,000. ' date Kr. E. D. lloAllister of the Kansas City bank wa ■ Also on the abo_ve. made Secretary-Cashier ~f the Qnaha branch. • On. October 12th K. A. 'lhomp■ on who had been Aasistant Federal Reserve· ·Agent wa■ elected Asd1tant Cashier at a salary of $3,000. '!'he fir1t reoorcied payment of penaltie ■ by the Kansas City Clear• ing House Association waa ordered at the meeting or Octobet 12th. fine ■ 'l'heae had accumulated since the orga.iiza.tion of the bank and amounted to $414.40 representing penalties for delinquency. At the same meeting it was vot•?d that the Executive Committee should meet daily at 11 o'clock and the aerv:ioe tee for the mG!!lbers of that oOim:nittae be fixed at $10 per day and an expanse a.lloi'ra.nce of a li'.:e amount for non-rasidont diractora. On No'V8lllber 8., 1917, Deputy Governor Cross read to the directors a report 0£ the Second Libarty Loan oampaig:ri ·.n-itten by Mr. !1"orthington, Assistant Cashier and manager of the Bond Dapa.rtment. On the recommendation of Mr. ~orthbgton., A. l~. 1:cAdEµnS of the Bond Department we.a designated e.asistnnt manager ~f that department at a salary of ~150 per month, Mr. Uo!l.dama to have charge of the oonversion of ~ into 4fo bonds. Aleo at thi ■ meeting the resignation of M. J. McNellia, auditor, was received and accepted and Mr. A. ~. Bolt, ieneral bookkeepor, was designated acting assistant auditor to serve during any interim. Then the Denver branch was first authorized the directors decided · upon the same by-lawa as those governing the Q:naha branch. • However, at the meeting of November 22, 1917, those by-lawa were rescinded and new ones adopted authorizing a few ch!lllges and outlining specifically the !\motions a.nd regulationi of the institution. A dividend or 6% was authorheci £or semi-annual periods ending December 31., 1916, and June 30, 1917, to be made p9¥9-ble .Dec~ber 31., 1917. Extra Compensation For the first time in the history or the bank the directors at their -75- st, the matte r ot meeti ng ot Deoem cer 6,_19 17, oonsi dered at the Gove rnor's reque of the extreme extra oompensation for Junio r offio era and amployes in view n ot every member high cost ot l1 v1ng and exoel lant aerv1 oes and loyal co-op eraUo to the Feder al ot the organ izatio n. The Governor had addre ssed a oonmunioation ·v oted to ~ an addit ional lleser va board on that topic and at tJ ;is meeti ng it was yes and a.11 offic ers compensation ot 10% of the curre nt year' s salar y to all emplo t. The plyment was w1 th e.xoep tion of the Gar ernor and .Federal .naser ve Agen ient to be notif ied autho rized to be m:i.da in War Sa~in gs Certi ficat es, the recip dent. that it was a wa.r measure and not intend ed to estab lish a prece l 9 l 8 Mr. 3amsa y Retur .is , the At the expir ation of Mr. Sawy er's term as Feder al Res~rve Agent y, who bad resign ed Feder.11 .Reserve .Board had appoi nted to succeed him Asa E. fu.msa as direc tor the year befor e. Milla r, Jr., At the elect ion of offic ers, held on Janua ry 10, 1918 1 J. z. sted.· to recommend was unanimously re-ele cted Governor and the Gbair mn was reque that of:f'iaa. Mr. to the Feder al Reserve Board an annua l salar y of $16,000 for waa reoo?DIJ1anded • Cross was re-ele cted Deputy 11overnor and a salar y or i9,00 0 :.ended salar y ot .A.rah w. Anderson was re-ele cted Secre tary-C ashie r with a reoor:r $8,00 0. y re-ale oted Mr. Worthington and Mr. IJ. A. 'l"nompson ware unanimousl ative ly. James E. Assis tant Cashi ers w1 th salar ies or $4,20 0 and ~.60 0, re,pe ey was again reGoodrich was desig nated coUI1Sel :t"or the bank and E. F. Swinn ng also, o. T. electe d member of the Federal ~viso ry Ooun ail. At this meeti the Oms.ha E. D• .I.lo.A llister , mana o~ and caohi er, respe ctive ly, of Eastm an alld otive ly, and c. A• Branch were re-el ected at salar ies of $6,00 0 and $3,60 0, res:pe salar y of ;4,00 0. .Burkhardt was re-el ected nnnager of the Denver Brano .hat a ) First Mention of New Buildin g At the January 10th !)1.rectors I meeting in 1918 Governor Miller ■ubjeot ln hia report to the directo rs brough t up for the first tL~e the ( of erectin g a naw buildin g for the ?edera l Reserve Bank. explain ing that the inati tution had alread y expand ed until it occupie d floors in t·.vo other builciin ga equal or ~reate r than the swce then oooupie d in the Long Build• ingma.king the a.cimini ■tration diff'io ult and the operati on more hazard ous. !) Ha pointed out al10 that the presen t vault 1pa.ce was inadeq uate and that it was imprat tioablo to lease additio nal office or vault space in the Long Buildin g or sui ta"ole apace in e:ny otl:er buildin g in the cl ty. As the presen t lease expired on November l, 1919, the G0 vernor urged that immodi:ate _ba.~k. 1teps be taken to provid~ for a future home for the 1 The directo rs GoYern or s unanimously adopted resolu tiona endors ing t.ha/re port a.nd recom."!113ndationa '!his meetin g 'WB.a the beginn ing of what later .became the 4 greate st bank buildin g in the West. At the follow ing meetin g on Januar y 24th a letter from Mr. O:llano of the Pecieral Reserve Board was ·re1.1.d offerin g suggas tions on the acquiri ng buildin g Immediately a committee composed of Dii,eot ors Gibson , Mo6lure and of'· a/sito . Ramsay .:iwa'S' appoin ted a■ a buildin g comm! ttee e : n ~ instruc ted to invest i- gate sites and report to the dire ctor s~ tensity in the conditi on nt live stock credits in the winter of 1917 and 1918 had become so appare ( the aireoto ra 6f the bank were .aa3ed for aaaiata noe by a committee of represan to.tive live stock bank and loan companies of the distri ct. At the l meetin g of Febnia ry 14. 1918, the regula r busine ss ~:..& a.:-cl s..u-.4:G@ ..... wa1 deferre d in order to give the nommit tee • hearing at the close of which the tee ~ard,. withou t oom:nitting itaelt affioia ll7, gave a ■ suranoe to the commit that it would co-operate by oalling immediate attention 9f the Federal Reserve Board and the Treasury Bopartment to the eituaU.on and would. recommend means of relief. '!he que1tion of the amount or "float" being carried by banks as a!'feot.ing the volume of loana po ■ sibla tor theae Kan ■ a■ City to make was bank ■ frequently discussed unofficially mn the banking circle• in the ~pring of 1918. It was first brou~ht officially to the attention of the dirootors of the Federal Reserve &.nk a.t the meeting or April 25th "':1hen J. "'• Perry of the Southwest Wational lnn< of Commerce appeared before the Board with a request that ·the be.nk reinstate - it11 practice of purchasing miscellaneous banks ciraft exchange in order to relieve the Kansa· City banks of ths burden of oarrying I the float and the~eby prevent the restriction of loans by Ka.nsas City banks. Mr. Perry also btought up for discussion the cost to indiviciual banks of the discount on Feder~l Reaer:ve citie1 exchange. taken by diacuo sed and the at.and / The matters ware thoroughly "the bank explained to Mr. Perry. Several months having elapsed ainoe the resignation of aa · auditor. the directors on May 9th elected as acting auditor 0£ M.J .:McNellia I ! the bank at I a salary of $S,SOO, Mr. S. A. Wardell who had been filling the position ainoe Mr. MoNellis ~ 1 . , ••PM•Ftu for One phase of the Treasury Department's plan/retiring silver certi~ ficates and reissuing . . ·outstanding notes as redeemed in the spring of A 1918, w~s the material increase in the amount of Federal Reserve Bank notes to be issued. 'lhe note ■ had previously been is sued in blank and signed by the Governor and tire Cashier of the bank. The continuation of this practice ' :For this reason the directors voted to request the Comptz:oll~ of ' the Currency to deliver the Federal Reserve :&nk notes to tho &lreau ;or :Em- ' --- would have moant the consuming of a groat amount of t_ime by the Governor a,nd-the Ca■hier, . ( ... - .,_ . ___,_ graving and Printing and hacre the tao ■ !mi le aignaturea of the Governor and •the Cashier engraved thereon by the Bureau. A _6% dividend tor the,aemi-annual period• ending with Deoemb~r 3J. 1917 and J\Ule 30th, 1918,.were declared by reaolution on J\Ule 13, 1918. On June 30th the ■tate!llent of earning• which the bank filed rith the Federal Reserve Board shovred net earnings ot $1,015,980.13 between January l, 1918 and ~\Ule 30th. A problem of more equitably advancing £und1 for productive purpos~s preaented itself to the bank at the opening of the agrioulturo._l sea.son in June. At the meeting of June 30th the directors voted to reaiscount eligible paper nth othar Fede:eal Reserve Banks in amounts doamed necessary. Thay further · voted that whapever, af'ter Au~t 15, 1918, the E.."t,cutive Cominittee of member banks of the bank approved pfferinga;for discount in excess of tho !!lamber ba.,,ks' l required reserve balances these offerings should be subject to an advanced differential and discount rato equal to~ for all classes or paper exoopt notoa secured by Certifioates of Indebtadn_e ss ana_ by Liberty Bonds, in which case the advanced differential wbuld be i,C. The Bank Site Settled After varioua meetings of the building committee at whioh ;it considered the aeveral sites proposed for a new· bank building, the. committee \ q \Q . • . finally presented to the directors on June l~t'h~wo reporta on a ~uilding site. The majority report signed by Chairman Ramsay and Director Gibson recommended the northeast corner or Tenth Street Bild Grand Avenue, a tract of 144xll5 feet. provided it oould be purchased for _$500,000. A m.ino:ri ty report signed by- Director McClure of the commit~e _gave reasons why he could not agroe with the other two members and rec~mmonded as the bank ■ ite the aouthwest · cor~er of Ninth Street and Baltimore Avonua, the tract being 272-~142 feet at a purchase price of $300,000. After Director Gibson moved the adoption or the majority report. and Director l4cClure movaci as a aubartitute the adoption of the minority report the motio~• were voted upon and the port director ■ adopted the majori. ty re- ..aet ermi ni ng:_, thu■ ·. · . fJie Tenth Street and Grand Avenue location where the bank building was flna.lly aonatruoted. Director ■ Those who voted against thie adoption were Eaileyl McClure and Burnh.aui. O"""Y\., ~ t..l 1' 4 / ) At a subsequent me~ing)11-rector Bailey we.a pen;itted to read into the ~ecorda a letter which he had addressed to the directors 1etting forth hi• reason, for favoring the Ninth Street ~nd Baltimore Awnue location u bank site. The rea■ on■ & stated in his letter were· that the larger dimensions of · that property would permit a park spac8 entirely around the building, thu1 affording additional ventilation and security. Director Bailey felt that the ~dditional $150,000 whioh would have to be pa.id for the Tenth and Grand site would be an unjustifiable expenditure of monoy. Further reasons for favoring the Pa.ltimore Avenue location were that it was close to •e,reral hotels thereby being more convenient to repreaentativaa of the various member banks outside of Kanaas City and th~t the absence of atreet oars at that location would prevent an.~oyanoe and unneoe ■ sary noise. After Chairman Ramsay had submitted to the Federal Reserve Board the majority and minority reports, togother ;rl. th Director Be.iley 'a letter, ha reported to the directors that the Federal Reserve Board had declined to reconsider the vote of the directors. At the July 11th session also the motion that Governor Miller be authorized to execute a. contract for a site at Tenth and Grand was voted upon, the 4'otea of recorded a1 "No." Director ■ Bailey and McClure being Governor Mi~ler showed at thi1 meeting that the difficulty • . • ··:~:~:/ of obtaining steel for the structural work would. doubtleaa defer the making of a oontraot. -80On June 27th E. P. Tyner who 119.d boen a bookkesper since the opening of the bank and part of which time he had been chief clerk, was elected acting Assistant Cashier of the bank at a salary of $2;700. On the same de.ta the salary of Manager Burkhardt of the Denver branch wa.11 in- creased from $4,000 to $5,000. On July 11th the following salaries were incraaaeds ca. .-r.-orthington, Assistant Cashier, fram $4,200 to $4,800; M■ A.Thompson, Assistant Ca.shier, from $3,600 to $4,200; Cashier McAllister of the Cmaha brn.noh, from $3,600 to $4,200. The resignation of !4, A. Thompson, Assistant Cashbr, ·who had accepted a position with the Midwest National Pank was roan and accepted at the me9ting or July 25th, the _resolution accepting it expressing the 'bank'• • at his resignation . regret/and its -8,ppreoiation of his efficient service. On this date the directors adopted a resolution of regret at the resignation of F. A■ Delano, member of the. Federal ·Reserve Board. At the suggestion or the Federal Reserve Board the Kansas City 1-nk voted on Au~st 22nd to absorb the expense of operation of the Capital Issues Committee of' the Tenth District. At the follo:nng session,, hmvever, on September 12th, lt ""Nas voted to expunge from the minutes of the meeting thi a resoll)tion. The latter action was taken in consiaera.tion of a letter from. the Capital Issues Committee at ~ashington suggesting that the ~i !t J ( i•/ftle ■ Committee keep within the 11.mt ts of the regularly appropriated f\md.~ e e ~ployes or the bank were appointed acting Assistant Cashiers at the masting of September 12th, J. t:;. Helm. L. A. Farhart and John Phillipa,, Jr.~ each of whom wa.s to continue to receive the same saiw::y until further oonsidora.tion. the The 1' inanc ial topic s that were upper most in the mind or es or the dirnatio n durin g the fnll or 1918 are refle cted in the minut At this meeti ng a.. repor t was made by ector s' meeti ng of Septem ber 30th. ory Council J.dvis ory Coun eiljor E. F. Swinney of the Feder al Reser~e Advis meeti ng at fJa1hi ngton from which he had just return ed. Forem ost in these ts. topio e was t _h at or the curta iling or non-e seent inl credi Thie subje ct ially in the was one which had become natio nally or grave impor tance e1pec taken by of fi.nanc1ere who saw the trend towar d economic ruin being minds been turne d by easy the short sighte d porti on of the publi c whose .heads had acula r rathe r thnn st&ge s of prosp erity E.Jld whose inves tment s wero of a spect . . ~~~ -tors direc other topic s discW!lsed by Mr. Swi.nney and the of e. &~ma s natur e. r use of banke rs' were the devel opnen t of the accep tance marke t and the prope issue s, accep tance s; the inves tment by bonka in publi c utili tiee' and trade butio n of Liber ty and the advan cing of credi t by banks there on; the distri gold embargo Bonds, and prefe renti al rates on loans secur ed there by; the by the Capit al ionJ the super visio n or bank loans for capit al purpo ses quest rve Banta , the Issue s Committ~eJ the ~er o~ disco unt rates of Feder al .Rese nment depos its tax on undis tribu ted earni ng aocou nte; the subl}eet or Gover inven tories ; with state bank members) the prope r basic price o in merca ntile ent to the absor ption by Feder al Reser ve Banks of expen ses incid ( ... transfer ■ of ve B&nka and members. curre ncy and valua ble doouments as bet.e en Feder al Reser Beasona Despi te the abnor mal condi tions of war finan ce, untim ely d busin ess and bankand labor short age, the yee.r 1918 prove.d t~e the r~ocr ~ y~ of histo ry. The bank clear ings J; the !'itte en clear ing house ximat ely lT bilcitie s of the distr ict showed trana e.otio ns aggre gating appro ., . -82- liona of dollar11 or about 4 billions more than the 191'7 tranaactioru s • . 'l'be Tenth District in that year eent to its eh market oitlee approximate ly- 26,288,000 meat anil!Jala ae againct 22,840 1 000 1n 1917, the 1ncreaee being 1,055,000 cattle, 2,104~000 hogs and 281,000-5he ep. As a result the packing plante m.de b,y hr their gres.teot record or ury ye3..r. Thim re- cord was mado despite the fact tha.t appro%1ms.tely a half million young men bad been called !'ram the district to the army., no.~, marines and to industrial pursuits supporting · these military branche o. The autumn or 1918, &part ~om any finanoial sign11'1c:uioe it may _ hold, will long be rem'!!j'.b'3red by ottiobla oi' other citizens or the bank) as well as by thouaand.s or the United state~ as an exoeed~ly trying time with the health and bhe bueinesa or this country. At the peak or the nation's aot- ivity in the war and in war ••finanoe, when the front lines or all the allied. nati_ona were being virtually fed, clothed and equipped by the industry and capital of the United States )there oame to our ahoreo an epidemic or infl_u enza . . ~ its most malignant .form 1Vh1ch took thouaande of lives in the army- and m"'IY oampa and industrial centers and lert an almost diaastrou■ errect upon . neas through shortage ot help oocaeioned by illn"as and death. bu■ i• The Federal Reserve Bank suffered tram the help ahorto.ge tor several ween and the seriou■nesa or the situation ,m.a brought even closer to the dir- ectors through the death on October Chairman Ramsay or the Boa.rd. z_S-of A1a E. Rammy, Jr., aeoond ■on~ The ep1dem1o ecoured during and following the Fourth Liberty Loan, but despite this tact which i:revented thoueanda ot publlo / meeting•· OTer the dietriot the loyalty- and eupport were neverthel•• • responsive to the nation's call. cd' this aoutlmurt oaintry With a quota ot f2a;,ooo,oo o for that · loan the Tenth DistrS.ot subscribed to. a total of (295 1 961,460. ~ . ~ ~6---\-J. U,-, ~ .,<A.,'-aJ"-- AL-,~ L1 &_,~~-e,-.l. ~ ~C..,, - . ·. --- 0-. The report of Governor Miller read to the directors at the meet~ ing of November 14, 1918, etreesed the impoi-tance of s~e activity which would relieve a situation in the Tenth District that required immediate attention. Thie aituation wa.11 in -effect that a limited number ot banka in the district had demanded unusually large lines or credit while some of the banks were rediecounting ecaroely any, a Qondition requiring sane sort or , remedy whioh should retard or at least discourage exceesive rediaoounting by any member bank. Although this matter was discussed by the director ■ on September 30th and October 31st, it was not until liovember 14th that a r _eaolution was adopt- ed bearing upon the subject. This was the beginning of the p:-ogressive dis- count rate which later became nation-wide in ita scope. For a more complete ·1; histo·r y or the .progressive rate see page_ At tho close of 1918 the reserve posit~on of the Tenth District, while considerably 1n·ex0ess of the legal requirements, v,as reduoed from the_ 191'1 record and it was very evident that the war financing program had a telling influence upon the poaiticri or oc:mneroial bank• aa,rell as the Federal Reserve Bank. War tinanoing narrowed the market · for oomma-cial paper in the dis,_ ': .... triot largely because of two things - firet, loans to custon_iera for purchasing ' government securities and, second, the lessening market for cattle paper out1 side' the district. Notwithstanding these cond~tione only about 68% of the member. b~s mac;e uee ot, t)le:ld.i_10ount ing Pfivilege during the year • • ~ ~ 1 1 , ~ ·~ \ q l ' ( " During 1918 thore a net increase of 33 ~ber b~k• in the dietrict.Jcloeing the yeu with a manberehip ot 994 ~ which 239 wez:e ~thin the Qnaha branch district and 139 in the Denver district. Seven •h':Dldred par banka were added to the list during the year_, lnor~asing the number to 3,200, leaving approximately 1,000 banks not represented on the par list. The clearing operations increased steadily during the year tmtil the daily itana averaged about 60,000 near the cloae of the year. A special compensation was voted to the employee including officers below the grade of cashier to the extent of 10% or the· salary each received during 1918. - 1 9 1 9 - The bank .began the year 1919 with the IEill8 directors aa the prev- 1oua year who, at the meeting ot January 9th, re-elected the same official • staff even to the directors of the branch banlca. Following is the person~ ~~ :l_( • th nel of .the dir eot orat e end fr □ NrA · family of e bade: /, D I R E C T OR S CLASS A CLASS B c. Mitchell J. Bailey C. E. Burnham J. w. CLASS C H. w. Gibson M. L. McClure T.·c. Byrne Aaa E. Ramaay Fred W. Fleming R. c. Malone Chairman - of the Boa.rd and Federal Reserve Agent, Asa E. Ramsay. Deputy Chairman, Fred W. Fleming. Assistant Federal Reserve Agent, c. K. Boardmn. C OF F I CE RS ~ J .z. Miller~;~Governcr J .L. Cross, · Deputy Governor Arch W. Andereon, Seorete.ry-Caah:ler E.F. Swinney, Member Federal Advisory Coun~il C.A. Worthington, Assistant Cashier John Phillipa, Jr., Assistant Cashier E. P. Tyner, Ass't.C~ahier w. Helm, Aas't. Cashier J. L. n. Farhart, Ass'tlCashier S. A. Wardell, Auditor A.E. Bolt, Asa't.Auditor. -86~ BRANCH -------- ~ Cmaha DIRECTOR ___ _, ________ S _ Denver (Elected by Directors) . Luther Dr alee c. A. c. c. O; T. Eastman J.C. McNish Denver (Appointed by F.R.Board) • John Evans Alva Adams Foater . Parka C. A. Burkhardt BRANCH OF F I C E R S Derrrer Qnaha 0. T. Eastman, Mannger C. A. Burlcho.rdt, Manager E. D. McAllister, Ce.shier c- I . • , P.R. Fredman, Acting Cashier ~h;· _ So/. large had &rcwn ~~fdy- ~-; ~i~ilo'i~~<-or. 1ank and its brs.nclu ~hat the .directors at i:;heir ti%.ld:. mee~in~ am i'ebrua.ry~ 1919, lhrl!h authorixed dinners to be given to the offic~ra and employ•s or the main b~.tk and also ot its branches. The date set waiJ Thur~tay evening , Fobru1.ry l:!-. ~ In Kansas Citr, the d_i:mer 7'"8.3 held s•m:e in t~ ball room or tl:e Meuhlebach Hotel , there being 438 otfic~rs a.nd employee. present. Mes::;ag~B or gre~tint; ....-ere e:;:cr.a.ng,d bet,•.-een_ the rr.e.in bank a::id. its branches. , At the Omaha branch ii Beventy-1'1-ve ot:f'ieers, employee and wifes were preaent. In Denver the number 7-iho enjoyed the dinner 11"&.8 fuirty-nin~ • • 'l'wo Officers Resign • At the meeting ae Deputy Gcrternor wa.11 or February 13th the resignation or J. L. Cross . read and . accepted effective A:EI" 11 let. The resignat- ion contained a sincere note ot regret that Mr. Croas' three years of ex. perience with the bank wer~ to terminate in order fer him to accept a position of Assistant Vice-President of the National .City Bank or New Y~rk. Upon the 8Uggestion of Governor Miller that the office or Deputy Governor be not immediately tilled _and that aome one acquainted with the operations or the Fiscal Agency Department and with the Liberty Loan Department to whioh Mr. Croll& had given special attention be retained in the ,,. -86- Governor' a oi'i'ioe, the Board designa~ed C. A. v:~rthington as Assistant to the Gowrnor with no increaae 1n aalary • . Following the resignation or Mr. CroH there was read a letter from .Arch w. Anderson, Secretary-Cashier, 1.n which he also tendered his reeignation to become errectibire Rt ,the earliest convenience of the dir.eotore. Mr. Anderson 11tated in his letter of Na,gaatt.wt that he had de- ferred the resignation tor two or three months at the suggestion or · oertain directors and that he navr proffered the resignation in order that the directors might with inore understanding consider the vnoancies in the official staff. Secretary Anderson stated that he desired time to consider two busines1 offers, one in Kansas City and the other in California.At the following meets.rig it was voted that Mr. Andere on' a resignation be effective Mar 16th with leave of' absence from April 16th. C) L 7,.l,.(. '-~- ', •1 ""2.. 7 At this meeting and the one following Athe r~olutions commending both Mr. Crose end Mr. Anderson fer. their splendid aervice with the bank and: regretting their resignations were offered and adopted. Upon the suggestion of Governor Miller the official start of the bank: was re-adjusted to fill-the two vet.canc1es in the following manner: J. W. Helm ·advanced from Assistant Cashbr to Acting Cashier J c. K. Boardman.designated as Secretary; Aasistant CaahiEI' John Phillips,. Jr., designated mane.~er or the Bond Department;. c. E. Daniel, manager ct the Discount Departmen~ and G. E. Barley , manager. or the Certificates of Indebtedness and Depositary Di-v:id.on1, elected Assistant Cashiers, and G. H. Pipkin appointed to succeed Ml-. Daniel in the Discount Department, all without clanges of ealary. u _.) ·- - -:.., -8?I i Aleo at the February 2_7th meeting it was voted "that the mov·e- ment to organiEe a hospital and health association among the employee, u recammended by Governor Miller,be endcrsed and the Executive CC1111J1ittee authorized to share in its support in an aggregate amount equal to the payments made by members of the association at such times and in auoh l!,Dlounts as may be then proper." Honor Roll At the meeting of .April 10, 1919• the directors voted that an Honor Roll be incorporated in the minutes giving a complete record or th~ young men who left the service of this bank to be.come aoldiers or aailore in the defense of the honor as follows: or this aountry and the protection of its policies 87 A XiUrSAS CITY ?OSITI'.)N S.·\U..R! taoo.oo Navy 105.00 110.00 Navy Audi ting Dept. 90.00 Arai:, " " Gon'l Utility 100.00 100.00 75.00 115.00 65.00 60.00 60.00 " J.·J. Fredm:m Diso. Clerk Frnnk :! ■ Turck Geo. Edwin Uora.n J • L. .!JcCarteyr:> r l ·,7. Kemner Lewis c. Winkler Wm. E • .];bison E.W. UJore " " .Accountant Thoe. Do:Jman '8.-"rl .Getz Em-ry Beeoro:f.'t Bobert Steel Glenn Eberhard .Andrew Lawson E.W•.:,,ddison D. ':i. Chondler c.-,7. Crowford v.c. Feemster -;-1o.rren C. Grcy- C. :E. Hinds P..A. Lamborne B. Le&ler A. ll. AfcAdo.ms J~s ?Joore ·.1. Boy Lbore Claude F. Roborts Gey- Wint erfair Fred ',7. Adams Geo. s. 1,,,b17r0 J.T. Byers Grove1- J, .Le.Vella Lloyd T. Gilmore BW~~CH OF Su'1VIC3. Disc. Dept. SULtisti~l Tro.ns. Lister " " " " " " Collections Disc. Clerk Clerk Stenocra.pher Bookkeeper Clerk Clerk Corrospondinc Clerlr Clerk Clerk Ass•t r~. Cle1•k·--_ - ::· Bo okkaepe1· Clerk Clerk Trnzi s • Clerk Trans. Clerk Gov'n Teller Traci:nc Clolit Trans. Clerk so.co Arm:, " " ,;,\..:rr:ry TrainiDG School " lb.rines G0.00 No.vy 85.00 65.00 100.00 115.00 100.00 60.00 125.00 }.rm;; " ti If -·~viation :~u.di tot __~- r:. :Jo:)t. U.S. Si~l Cor.1)S 125.00 85.00 166.66 ~-rDI3 100.00 !t>tor ~ Corps ~37th Encineers 12s.oo ao.oo 50.oo 95.00 55,00 60.00 90.00 70.00 Q. :.1. Co:-:ps --:.•M. Corps. Aviation Signal Battn.lion Tra~ Sobool Na.val Boserve .Artillery Ini'antry Artillery Q14YJl1. I Horace c. ~red.1th Transit ?.er• Trans. Clerk II Clifford Ee Boand " Ralph Ilenderson m,IiVER1 Phillip J • Clark Fred s. Smith Clerk Tr.:ms. Clerk " 115.00 75.00 9o.co 75.00 65.00 ll " Aviation Aviation -88- On April· 24th the directors voted to designate M. w. E. Par~ as Assistant Cashier. Hearing on New Branch ~h'Avi ng b~en gommuni eation~re ceived '6y the directors bearing on the applic!!iti ona ot Tulsa and Oklahana City tor a branch bank, the directors voted on June 19th "that the date of July 24th be set to hear applicat• ions for t-he' establish ment or a branch bank in the state ot Oklahoma and all cities which have requested a hearing be notified. n On the morning of July 24th the Board held. a brief seasion and ad- journed at 10 o'clock to the ~bite Roam of the B&.111:more Hotel to receive applicati ons of various cities in Kansas, Nebraska and Oklahoma for a branch bank. There were four applicant s and an hour was alloted to each applicant in alphabeti cal order. The applicatio nr and written brief or Lincoln, Nebraska was presented by H. s. Freeman, Vice-Pres ident or the F'irst National Banlc of Lincoln. Frank J. Wikoff, President or the Tradesme n, State Bank of Oklahoma C~ty, presented that city's applicati on and filed a printed brief with mpe and charts. Judge P. D. Brewer orally assisted· in the argument s. Following the arguments tor Oklahoma City the.. various delegates were given a luncheon after which the ·applicat ion or Tulia wae orally presented by H. H. Rogere who filed a printed brief. c. w. Q. Chandler, President or the Kansas Nationl!l Banlc or Wichita and B. Harrimn, Chairman ot the Board or the Union National Bank of Wichita presented t.hat city's applicati on and filed a p-inted brief. Following the applicati ons the Board invited and listene_d to ·the endorsem ents or the several contendin g cities who would be affected by the location of a branch bank. The next step 1n the establishing or the branch bank ,ras at the meeting of September 26th when Director Gibson, -~oonded by Director Fleming, Board at Washington to the Federal Reserve moved that the Board recommend . . that a branch of the li'ederal Reserve Bank of Kansas City be eatablished in the atate of Oklahoma. The motion was lost by the following vote: Directors Gibson, Fleming and Ramsay. Malone, Bailey, Nay - Aye- Directors Burnham, Mitchell, McClure and Byrne. Director Byrne then offered a resolution that no new branch bank be established at the present time for the reasons that the original Federal Reserve Banks were located not in reference to states but with a view to recognize the natural trend of busineBS and comneroial interests, also that the showing made by the Ta.rious contending cities was based largely upon their claimed superiority over other contending cities whereas the contentions should have been bnsed upon the commercial fitness to serve a territory not already fully served by the bank or existing branch bank. This resolution was adopted and ended the contest for a branch b~ temporarily, ttn the meantime the Federal Reserve Board set October 21. et as the date for reviewing evidence and arguments of the various cities and on October 9th the directors voted to be represented at this hearing by Director Bailey and Chairman Rameay. At this same meeting copies of w.rious telegrams to and frl?Jll the Oklahoma Clearing House Association and the Federal Reserve Board at ~-. ashington were read to the directors. Director Bailey reported on this hearing at the meeting of November 6th. On November let otficiale of the bank reaeived ~ following telegram from Governor Harding of the Federal Reserve Board which narrowed the ma City and comp etitio n for a branc h bank to two citie s, namely, Oklaho Tulsa : "The Feder al Reserve Boe.rd has consi dered the briet a andoforal the r arguments prese nted by the respe ctive petit ioner s in the matte n portio ern south the in Bank estab lishm ent of a branc h Feder al Reser ve of Bank ve Reser al Feder of the Tenth Feder al Reser ve Distr ic~ by the While the por-· s: Kaneas City, and has reach ed the follow ing concl usion serve d in well being is s tion of the distr i~ tribu tary to these citie of KanBank ve R9eer al the matte r·or redis count facil ities by the Feder with h branc a that ea• City, it h the opini on of the Board , however, which of ities activ limit ed power.a in the matte r of' redis coun ts, the of curre ncy and ebo'Uld be devot ed mainl y to the forwa rding and recei pt r banks and membe the to trane it ppera tions , would be a conve nienc e to incre ase would and to the publi o in the terri tory eerved by the brnna h, of' mity i:roxi tm In view or the effici ency of the trans it system . that at ed locat Wich ita to Kansas ~ity, it is manif est tho.t a brnnch 1n this repoint would not give any appre ciabl e addit ional -faci lities Board will, the spe·ct to the more remot e portio ns of the Distr iotJ and estab lish to there fore, direc t the Feder al Reserve Bank of Kansas City ical techn the In view of a branc h at eithe r Oklahoma City ar 'l'ulea. Fedthe from natur e of' trans it opera tions , the Boe.rd desir es a repor t the sourc e, . eral Reserve Bank of Kansas City, givin g e.n analy sis of e and direc tvolume, anq direc tion or outgo ing busin ess, and the volum of all ipail ion of incoming busin ess, toget her with a oompl ete ans.l~;bysiaa branc h sohed ules with refere nce to the terri tory to be aerved The Feder al Reserve locat ed in one or the other of these two citie s. Boattd, not Bank of Kansas City 1a there fore direo ted to trans mit to the in order that later than November 26 1 1919, the infon natio n calle d for, Thia ion of a branc h. a decis ion may be reach ed as to the prope r locat morning statem ent will be given to the P"ess for relea se to Monday paper s." aia As soon -e.a thia telegr am was recei ved the bank began an analy · reque eted of the mail sched ules and the prepa ration or other inform ation bank!.s-.own ohann(Jle in the teleg ram.t his inform ation obtai ned throu gh the City waaff orand also tbl!,ough the oo-op cratio n Qf both Tulsa llnd Oklahoma ·¼~r: .Arter consi derin g the • of November. month the g durin ington Wash warded to to and f'rom inform ation and analy zing the \ario ua sched ules or busin ess ed in favor of both the citie s in quest ion, the Feder al Reserve Board decid ng paper s ot Oklahoma City- and issue d the follow ing statem ent in the morni December 17, 1919: .... "The Federal Reserve Board has authorized and directed the Federal Reserve· Bank of ltansas City to este.bli ■h a branch o1'1'ice at Oklahoma· City in order., pe.rticulatly to expedite shipments of eurrency ·to am tran member banks in the State ot Oklahoma and to provide better faoilities for intr~state clearing of check■• "As set forth 1~ the Boa.rd I s preliminary statement or November 3d., the discount facilities which have been accorded by the Federal Reaerve Bank of Kansas City ea regarded as ample. • • "The branch will be operated in accordance with the provisions of section 3 or the Federal Reserve Act, under by-laws to be framed by the Directors or the Federal Reserve Bank or Kansas City and approved by the Federal Reserve Boa.rd. There will be five Directors; three flt 'Whom will be appointed by the Federal Reserve Bank or Kansas City and two by the Federal Rel5erve Board. "The Board has recommende~ to the Federal Reserve Be.nk of Kansas City that the by-laws assign as territory for the Oklahoma City Branch that portion of the State of Oklahoma which b not included in the Elef'enth Federal Reserve District. _An outline or the powers and functions to be exerci!led by the branch as recommended by the Board is as follows: • • "The branch bank will receive deposit" rt-om member banka but will carry no deposit account, . , 4\inounts receiv_ed on deposit will be transmitted daily, by telegra.ph or otherwise, to the Federal Reem-Te Bank or Kansas City for credit to the accounts of the depositing be.nka, and each member bank in the territory assigned to the branch, wherever located, may at its option,make remittancea of currency and oh~cks direot•.to the Federal Reserve Bank of Kansas City. The Branch will carry no Government deposit, but will redeem treaswy oertifioates, · pay goverrment oheoka, and will close out balances dally with the head office. The branch will carry no earning assets; applications for loans ar discounts from member bank& and offers tor sale of aail tre,nsfers, bankers aooeptanoes and blllB of exchange eligible fer purchase by Federal aeserTe Banks will be tranam.itted to the Federal Reserve Bank or KsnBB.s City for final action. Immediate credit, however, may be g1Ten in case ■ where· it beoome1 neoeBBaey for member banks to redisoount in order to meet clearing house debit balanoea_, unexpected _detioicmc1es in Reserves, and aey other case mere quick arrangements are necessary, all actual red1sccunt1ng ~peration•~ how.ever• to be made at the head office, inter en wing ohar1:,ed rrom. the . date the notes were received by the branch. In caseB -where Jicte1" are secured· by United States obligations, the branch may, by authority of the Federal Reserve Bank of Kansas/City, hold the collateral and forward the notes to the pa.rent bank with trust receipts showing the amount a.nd nature of collateral held . .Banks in the 'Branch bank territory may deal directly with the parent bank. The principal functions to be exeriised by the Branch will be the clearing and collection of checks and the handling or shipments of currency to and from member banke in its territory~ A privp.te wire will be installed between Kanau City and Oklahoma City in order that the branch may telegraph daily to the parent bank the amounts of all items received for immediate credit or immediate debit to members or other Federal Reserve Banks, also amounts or currency deposited and the details of other transactions. This plan ls the same case the one which governs the operations ot the branch banks at Cincinnati, Pittsburgh, Buffalo, and otoor cities. "The Board has made a thorough study of' the brieta and arguments submitted by ?"epresentatives of Oklahana City and Tulsa, and has taken a poll of' the member banks in the state of Oklahoma outside of two cities applying for the branch, the result -of' which shows a decided preference f'or Oklahoma City, both as to the number or banks and as to banking resources involved. It was proved, hovrever, beyond question that bank■ in ea.stern · Oklahoma have large volume of itanus which camot be collected through Oklahoma City without involving considerable lose of time, and awing to railroad schedules the mme condition applies to some be.nke in the western part of the Stnte. Under the plan adopted add1tional tatilitiea are given without affecting the business of an~~ member bank and without forcing collections into artificial channels. The Board reserves the right to authorize the discontinuance of the branch at any time if' its operation is found unsatisfactory. n On November 25th the Boord approved bonueas for emplo"'jas and cffieere except the Governor nnd the Federal Reserve Agent for 'the year of 1919 as follows: 20% on the first $1 1 600 per annum -salary, or less. l~ on the next $1,600 per annum aalary. 10% on all amounts in excess of $3 1 000 por anntim salary. t I l .. :, ' -93-192Q- filth the re-election or l"i. J. Bailey, M. L. McClure and Fred w. Fleming as directors respectively in ClaBBes A, B, and C, the reappointment of Asa E. Ramsay as Federal Reserve Agent and Chairman ot the Board, Director Fleming as Deputy Chairman and c. K. Boe.rdman as Assistant Federal Reserve Agent, and the re-election of all officers, the same official personnel of the bank that obtained in 1919 began the year 1920. In addition the following branch officers were .reappointed by the Federal Reserve Board: John Evans and Alv~ Adams, director II or· the Denvm- Branch and P. L. Hall and R. O. Marnell directors or the Cmaha Branch tor one year. For the new Oklahoma City Branch L. H. Earhart of the bank, Dorset Carter of Oklahoma City and P. C. Dings of Ardmore were elected directors with Mr. Earhart e.l!I llnno.ger or the Branch. Ralph o. Wunderlich of Oklahoma City was elected Cashier of the Branch. f,bile the bank was considering the opening of the Oklahoma City Branch with Mr. ~hart as Manager, o. T. Eastman, Manager of the Omaha Brancli~ tendered hi11 _resignation 'Which March 26th and in Mr• Eastman's place Manager of the Qnaha Branch. ,va.s accepted at the meeting of Mr. Earhart wns appointed Acting The Oklahana City managership wae later aoce~ed _by Mr. _c. E. ~iel, who had been one or the Assii!itant Cashiers of the main bank. A. G. Frost or the Bond Department was elected Assistant Cashier at the meeting or January 8th. At the eame meeting Luther Drake or Cknaha., Nebraska, George E. Abbott of Cheyenne, TJyoming -and O. T. F,astman .. ; .. . ·• of Qnaha,Nebraska, were re-elected directors of the Qnaha Branoh. officers for this branoh were elected as tollowa: E. D. McAllister, Cashier. Eastman Mr.- McAllister The O.T. Eastman, Manager, nowever, following the resignation of lfr. also resigned and in his place P. R. Fredtnan of the Denver Branch was appointed Cashier ot the Chaha Br1mch and W. D. Lower was ;J.ater appointed Assistant Ce.shim- for the Denver Branch, Joseph E. Olson we.a made Ca.shier in the place of Mr. Fredman ar.d Albert J. Conway . Mq 27th oooured of meeting this Aleo at was made Assistant Ce.shier. ,• the election or c. E. Daniel as Manager and ~rector of the Oklahoma City Branch and the promotion of George~- Pipkin and Arthur M. McAdams to be;'-' • oome Assistant Cashiers at the head ~; Following the excellent annual report · by Governor Miller read to the directors at ti,., meeting or January 8th, 1920, dealing ex- tensively with discount operations, Federal Reserve notes end bank notes, . r;apital stook, earnings and expense clearings, discount rates,. employes, ' bonuses, welfare work, choral club, new building, Oklahoma City Branch, amendments to the Federal Reserve Act e.nd the election ot officers, Director . . Bailey introduced the following resolution which was aeoonded ~ Director Mitchell and unanimously adopted: ( l "VIHEREAS• Thie Board has · just listened to the report of Governor Uiller reviewing the activities of the bank tor the paat year, and • v,EER~ • Governor Miller hae given due and proper aredit to the efficient work of the different departments and to the force in genel"al, all or which is v£ry gratifying to this Boe.rd, but we reoopibe that to Governor Miller's devotion to hie duties aa Governor ot this bank, is due the splendid organisation and the large measur_e or success attained. 11 THEREFORE, BE IT RESOLlZED:That this Board tender to •· --95- • Governor Miller this expression of our 1ino~re • appreciation ot hie valuable service and congratulate him upon the showing made." - Buyllii& a Branch Building Early in 1920 negotiations were entered into by the bank through Director Byrne· with the ownera of the Farnum Building in Qnaha, in vm ich was looated the branch bank, for the purchaee of the i;roperty tree and clear of all incumbrances except lease contracts expiring at var~ ious dates for Cl65,000 cash. The property fronted 66 feet on Farnum Street and extended 132 feet to the alley. A resolution was adopted by the Board April 29t~ authorizing negotiations which were afterward consummated and the lot and building purchased for fl65,000. On May 27th the directors acted upon the paying •or two in- surance policies which had been carried by the bank for two employee recently deceased. The bank had since ~4-_,-...,(At)µ_/ • ( l q~J.rried group insurance . on mnploye~ in the amount or approximately o~e year's salary. In may oocured the death of Miss Anna Eisenburg, employed 1n the Bond Department, and the directors moved to give the t .900 policy payment to the mother or the deceased. They took aimilar action 1n the death of A~ D. Fairley, an mploye ot the Auditing Department. Ur a • Nora B. Fairley, his widow. In that case t2 ,000 was paid to -.... In the surmner of 1920 the attention of the bank was called to a condition in Wyoming brought about by the inability of' wool grow- ers of that etate to finance the season's yi,ld of wool. At the request of Wyoming bankers Gove~nor Miller held a . bankers' conference in Wyoming at which the problem v,u; discu&Bed and temporary adjustment me.de in handl- ing pnp~r in that territory. Action intendod to remedy anergenoy conditions in the remote parte of the dietriot wae taken by the directa-11 on August 26th when they voted to a.mend the by-laws 0£ the Cmaha and D~nver branche• 10 that a re- ~ discount committee oompoeed of a. branch manager, a "eashia- and one director should be enabled to pane up~n emergency paper. The autumn of 1920 fou."ld tho off ioer ■ or the bank oontenplating the need for additior.al cradit to handle the ~Top mov001ent. to be in a poeition to obtain this credit i In order res~lutton was adopted on Nov- ember 23rd; authorizing the Governor, Deputy Governor and Cashier to re- dieoount with other Federal Reserve Ba.nkr; "r1otes, drd'te, bills of exchange, Subeequent to that action re- acceptances or other bills receivable." discount relationl!I were opened up between the bank and two or three eaistern districts that were temporarily high in reserves. THE PROGRESSIVE DISCOUNT RATE ( There ie no chapter in the story or -American banking that holdn a keaner interezt for IUl ambitious student or .fin&.noing than the chapter relating to the ~etcbliab:nent of t.~e progressive discount rate in the Federal Reserve System. Especially iuteirersting 1e this chapter to residents of the Tenth Federal Reserve District, for it l'IC.8 in thia district that the pro- 1 gressive rnte had its beginning and it '18.e the Governor ot the Tenth Dhtrict 11 bank whose bra.in gaTe birth to th1e plan of regulating the limit or loans and preventing the over-borrow ing_ o!' member banks from the Federal Reserve System. The greatest compliment that could be paid to Governor Miller and hie grasp on the l'inanoial aituation of the country was paid him by the entire financial rlruoture or the United States men hia ideas ~-ere advocated in turn by the Federal Reserve Boa.rd, the United states Congreu and thereafter by the directors of all of t.he other eleven Federal Reserve banks. The problem confront_1.ng the Federal Reserve banks or the country during thA days first succeeding the t1orld i,ar was one arising out of the over-confid ence and ex:oeaaive optimiam rel'!Ulting from the signing of the .A.""?llistice. The United States had ~ecn the farm, factory nnd storehouse for the allied ne.tions during the -.:m.r. There -wae no res.Eon apparent for believing other than that the United states would continue to furnish Europe l{ith its food. clothing and other neoe~eitiea , and at the prevailing high prioee, until that war-torn continent ehould regain its produL-tion. Consequentl y Amerioan .farmere planted larger aoreagea than ever before • .American manuf'a.otur ers aped up their production and ilJi.erioan banke reflected the fferywhere 1.ppa.rent attitude of .future proaperity. But such an optimistic pl'ogram in this country called for heavy loans 1n order to finance these bU6ineu venturee and ambitions. It wae not long until Federal Reserve Banks, especially th• one in Kansas City, lituated at ·t he gateway of an already prosperoue territory, began to feel the drain made upon their lOtUW.ble funds. On l.fq 18, 1918, Governor Miller wired to the Fedoral Reserve Board the.t the combined reserVe15 ot the Federal Reserve Bank of Kansas City at the oloee ot bueineH the previous night waa ~ , and that it waa the opinion or the bank'e otfioere that nat lea.at for the i:reaent our rate• or diecount should be materin.lly increased to discourage unneceaall.?""J borrowin~ throughout the dietrict. The rntes s.pproved for ue by the Boa.rd effective May 2oth a.re too low to e.ocanplieh the result desired and in our opinion should be increased "9'en in ex.fess of reoommendatione wired the BoN"d lagt S8 turday." The rates referred tc effective on Ma.y 20th were .trom 4~ and 4i% on 15 day paper to ~ on paper tram 90 days to 6 months. For a few months the exchange of letter• and telegrams be- tween the bank and the Federal Ileeerve Board referred to more er less sharp advRnoes in the db count r!'.tei, and frcm the start the Federal, Reeerve Board dieoourae;ed 'any auoh n.dvances and stated in effect that it believed the increase in demands for loane in this di&triot were growing out of the fears of country bankere that the n:te would be raised. The governor ard Exeoutive Committee of th(! bank realized, however, that the actual situation wae this; as long as there were available funds for borrowing many member banks found it com'enient and profitable to rediscount with the Federal Reserve Bai:ik at iTs prevailing low rates and continue to make loane at the prevailing high ratel!I in :the country. Thia we.a not true- of' all manb er banks, of course, but it was true or many of than and it wu evident thnt a number or theae heavy borrowing banks were ovor-stepping a reasonable limit. Near the clol!le or May,aleo in 1918,Governor Miller wired t~e Federal Reeerve B~ard· urging an increase or rates effective June lat.. l The Executive Commlttee dedred to advance rate11 to a achedule fran ~ to·~. His wire also !Stated tm.t it wu, noeossary tor the Tenth District to redis- count with other districts to the extent or $6,000;000• On M..y 28th Gov- . .. .. erncr Barding of the Boa.rd telegraphed Kansas City thlt the suggested in• crease was too drastic but that the Board 'Wile willing to authorbe a ■chedule of rate• f'ixing a minimum , for ba.nkll that were redhcountin g within reason and a maximum rate tor thoee who: had already e%ceeded their reserve ■ • 'l'he Boe.rd on that date alao arr11.1nged for Ka.nsaa City to rediscount $2,000,000 with Cleveland and $1,500,000 ee.ch with Chicago and Philadelphi a, all at a 4~ rate. On receiving the wire from the Board Governcr Miller replied by wire that the Exe~utive Camnittee believed the two standards of rate, would create confusion and dissatisfRo tion, "to l!Void which we prefer to continue the present rates." 'l'he following day Governor Harding wired that the Board did not "deh to insist "but does wbh to give the Kanaal!J City bank authority to charge higher rates to all banks alike where they have alrea~r discounted an amount equal to tho required resen-ea, letting you be judge or the advisabilit y of enforcing or rela%ing the rule.w . "" 'l'he double standard of rates was still urged by the Federal Reeen-e Boe.rd early in Junt!I and the firnt turn ton.rd the progreHive rate aa it was lnter adopted wae taken b? the directors of the Ke.l'l!!e.e ~ity bank at their meeting on June 13, 1918:, :when it 'Wile moved by Direot<r Bailey .nd seconded by Director Burnham that a resolution be e.dopted with provisions as followa: "lf'ter Auguet 16 1 1918, the F.xeoutiw Committee will aprove offerings 1n excea ■ ot the required reserve balances, su~h offerings au~Jeot to an advanced differentia l in discount rQtee equal to~ for all olaaaea of pap~r •114 &11 maturitiea, except notes aeoured ·1,y Certificate s ot Indebtednea a and Liberty Loan Bonda which ere subject to an advanced dif'f'erenti& l of 1%. • t • .,,t -100Washington Boa.rd Rescinds Move Thil!I re~olution was adopted as a reauH; or a. conference in l'laahington a few daya before bet,,,-een Miller. we1·0 mar,ber ■ _of the BOE,rd and Governor t . thh ocn.t"erenoe Governor Harding and Mr. Delano of the Board J'l.. convincod the progreBBive rate as outlined by Governor Miller would be utlefa.ctory and circular letterl!I r.ere prepared for member banks on June 13th authorizing •a.nd explaining the progressive rate. were being prepared for the mails when a telegram 'WB.S These letters received frw. Gov- ernor Harding reecinding the Board's approTI.l of the rate1. The neceHity of chocking excessive loans continued urgent At e: conference despite all efforts to regulate it by the means at hand. or governors held in Washington July -10th, 1918, the matter was thoroughly dif!c\ussed Md the Boord again decided not in die count rates. to authcrbe aey decisive raiee The Board still held to the opinion that. ca.u tion1ng the banks would i;rove the desired result. Tenth Di sbr iot Ine is ta YJhile moat ot the Federal Re ■ erve Banks acquiesoed in the de- cision or ~e Federal Reserve Boord l'.gainst a p-ogresalve rate, tho dir• ectors of the Kansas City bank remained/ that such a. rate waa the real' 1olut-=- '\ ion of the problem, at least 1n thie dl11trict. ( At the directors meot1nga on September 30th and October 31st the subjoct 'mis thoroughly· d1scuseed but • 1t ,m:s not until November 14, 1918, that a seoond formal -resolution w1u1 adopted. Thia resolution directed attention to Sooticm 4 or the Act author- • bing the . directors to administer the affairs of the bank 0 tairly and 1m- • 101partially and without dhcrimin ation 1n favor of or against any member bank or bPJ.nks and which *****"""* ****"'exte nded to each member bank iluch dhcounts ,: adv&nol!me ntt' and aooommodation11 a.a may be u.i'el.J' and rea■ on ably made nth dm> re~rd for alaime and demands of' other member banks.• It was reeolved that af'ter January l; 1919, the Executive Committee ehould 11ubj~ ■.pplications for rediaooun t to an _in~rea.eed am progree~i ve diecoum:; rate applicabl e to all claeaea and maturitie s of ... pa,.per it the rediscount 11 a.eked for were "in an amount greater than the sum or the member bank'• capital and aurplua. The progread ve rl!lte gug- ge.sted we.e be.eed upon a different ial or one-half of one per cent na rollowe: "One-half of one per cent above the normal rate or e. sum equal to firt;y -per cent of' the aggregate oapital and eurplua; one per cp above the normal rate on the next 11ubeequent aum equal to fifty per oent of the aggregate capital and aurplua, etcJ i.e., the normal rate shall apply on paper discounte d for a member bank in an a.mount equivalen t to the sum of itn capital and eurplue, but thereaf'te r the rate shall increase progressi Tely one-halt or one per cent on each ~Jbeequen t sum advimoed equal to tlfty per c~nt of the total capital and au-plus of the applyd.:rc member •." ., Although the above re1olutio na 1U'9re adopted ai'ter a villt to Kana&e City by Governor Harding am Mr. Delano of the Federal Reserve Board at which coni'ereno e both or these men verbally approved of the plan, the proposed sliding eo~le or rates in these resolutio n• into ef.feet. wa1 not then put . For, b111fore the bank could get it11 11.toratur e ready to nnd to member banl:a Governor Harding and Mr. Delano had returned to Wa■hlngton and telttgra.ph ed back almost immediate ly that the Board could not endorae the nn·N.tea a.f'ter having talked with th• Board's counsel ~nd obtained an opinion ·rran him. '!'his bpinion ·1nus tb111.t the propoaad change in rates a violation of the Act in that it provided two different ratee tar the wa ■ .... ,. -102aame class of paper. The counsel held that the proposed change waa, in effect, merely an ·evaaion of the stipulations of the Act. There seemed at that time no meana by whioh thi• deciaion could be set a.aide without a legislative change of the Act and as the activities of early ]\ 191\appeared to be more settled than late in 1918 the bank maintained a steady hold on the district'• finance,. Campaign ia Reopened However, by December of 1919 new conditions hnd arisen by which speculative loana had increased ao rapidly that there was immediate necessity or not only reserves. con■ erving _ the reeouroee of the bnnke but also their Aoenrdingly Governor M:illflr wrote to Governor Harding of the • Federal Reserve BoJU"d fl?ld eu~esteu that ae a means of applying a progressive di~count rate the Boe.rd considered theee progreaeive advances aa "penalties" upon banka that overborrowed instead or c~nsidering them ae two rates on the aame class or paper. In other words, it was Governor Miller 'a contention that a member bank's baaio line should. for its normal requirements. be established Then, if the bank overrrtepped its require- ments in demanding loarus a penalty in the form or "graduated excesa charges n ■hould be applied.. Governor Miller was over-ruled by Ur. Harrison, general counsel or the Federal Reserve Board, who forwarded an opinion to the effect that, . while Section 4 of the Aot gave the directors ot a Federal Reserve bank the power . to withhold loans from a bank which wa• rediecounted to its limit, nothing in the Act could be construed as giving the directors privilege of charging an m.oeas rate aa a penal19". On January 16, 1920, Governor Miller wrote t.o the Federal Re- serve Board stating that sooner or later "counsel for the Federal Reaerve -103- Board will find IJUf'ticient grounds on which to baae an opinion e:u.otl y opposi te to that now held by Counael Barriao n. An unprof itable rate ls the reasona ble and only logioa l remedy to apply to INOh banks a• are willing to borrow as long aa they can lend at a_ profit tor the purpose of increas d a way to . ing their earning s.**** ****** There muat be_toun . make it unprof itable for members to discoum; exaesai Ye linea with Federa l Thia letter had ao much weight with the Federa l Reserve Board and its oounae l that the Board aet about at once to find a mean• or provid ing author ity necess ary for the app}io ation of a progre ssive rate for suoh Federa l Reserv e b8llka as desired to adopt it. Thi• legisla tion we.a enacted April 13, 1920, being the followi ng r,unendment to the Act: BE rr ENACTED BY THE SENATE Al'ID HOUSE OF REmESENT• ATIVES OF THE UNITED STATES OF AMERICA in Congres• ·assemb led. That section 14 of the Federa l Reeerv e Aot a1 amended by the Aota approved September 7, 1916, and June 21, 1917, be further amended by etrikin g out the semicol on after the word 'buaine eaa a~ the end of eub-par agraph (d) and insert in lieu therea t the .t.ollcnring: '-'AND WHICH, subjec t to the approv al, review , and determ ination ot the Federa l Reserv e Board, may be gradua ted or Jrogrea eed on the baeia or the amount -o:r the advanc es and discou nt acoommodation1 extende d by the Federa l Reserv e bank to -the borrow ing 'tank.• Appro'Yed by the Prte'11~ident, April 13, 1920 • •. ·~.:··~: Four daye later the la.naa■ City banli: issued circul ar, to 0 member .bank• putting into etteat en April 18th the jrogrel feive ~ .. ,~~ '!'hie ciroul ar, which- wae genera l letter -#261, tollon ; -,_":. r ------- April 1?, 193> • PROGRESSIVE DISCOUNT RATES . .TO THE MEMBER BANKS CF DISTRICT Bo. lOz E.t'fect ive April 19, 1920, the provi■ iona of a recent amendment to the Federa l ReBerve Aot, provid i~t( tor gradua ted discou nt _,,.., , /',,.,, rates, will become operat ive in this distri ct, on the follow ing basis: 'rbe norma l bnaic amoun t of credi t accOlllllodationa which each member bank may receiv e !'ran the Federa l Reaerv e Bank will. be determined by the member bank's averag e reserv e balanc e and capita l stock paymentJ i.e., the overag e reserv e over a fixed period , lea• 36% gold eerve requir ed to be main~ ined by .the Federa l Reeerv e Bank• plus rethe membe r's pe.id-i n subso riptio n to the.ca pital stock or the Feder al Rewerve Bank} euoh eum to be nrulti plied by ~~, the result ing amount const itut_ing the be.aio line. Cr~di t advanc es extend ed up to and includ ing this basic omomit will take the norma l discou nt ra.te in effec t at the time paper 111 submi tted; ; \ibenev er advanc es to a member bank on rediec ounts or member bank notes shall be ar,prov ed in an amount greate r than i ta basic aip.ount , auoh advanc es shall be subjec t to an increa sing discou nt rate, applic able to paper or all matur ities, baaed upon e. differ ential of ½of 1%, as fol• laws: • ½·of 1% above norma l rate on accommodation11 ertend ing above the norma l . bn~io Rmount up to and inc l uding 25% of such bl.sic amount; 1% nbcve norma l ro.te for t..,e next subseq uent sum equal to 26% of the bnsic amoun t; 1-~ above the nonna l rate for the next subseq uent eum equal to 261o or the basic amo,m t; ~ And eo on, at an increa sing- r ate •of 21 or l~ for eaoh unit of 26% a.ddi tiona 1; 1. e. , the norma l rate sha 11 apply on paper discou nted for a ~ember ·bank in a n amount equiv alent to its basio line, but theree .:fter the rate aho.11 increa se progre ssively½ of 1% on each aubseq uent sum advanc ed equal to 25%, or fracti on thereo f, or the baelc amount of the applyi ng member bank; Provid ed, howev-er, that while the borrow ings of member bank• f'eoure d by Govern ment Viar obligo .tione ehall be oorusid ered as a part ot the INm const itutin g the norma l baeio amoun t or any mnounta in excel!ll!I thereo f, the progre e~lve rates ■hall not apply to member bank notes secure d by Treasury CertU 'icatea of Indebt ednee e, Liber ty Bonds or Victor y notes actua lly owned by the borrow ing member bank on April 1 1920. 1 Provid ed furthe r, that the progre sslve rate shall not attach to the pa.per now under discou nt, but nm, offeri ngs, (other than those secured 'by Libert y bonds , Victor y notes or 'l'rea.8 ury Certif ieates of Indebt ed.Dea s owned April 1, 19!9) shall be subjec t to the progre l'eive d:l.1100 unt rate, to be based upon the then liabil ity or the oti'eri nr; manber bank. ( Reepe ctfully • (Signe d) J ..z.Mille r ,Jr. GOV ER N OR. ) Ten eaye later thie ; letter waa modified in a few parttcrulnr •. For example there we.a taken tram /the credit ■tMJcture determining the buii.W, J line mE1Dber bank natea aeoured l1f Liberty Bonds, Victory notee or Certi- flcatee of Indebtednes s actual~_t' owned by the borrowing bimk on April 1, 1920. i! Also it allowed rediecbunts secured by I INCh gO"f'ernment 88curities !I ) acquired after April 1, 1920.: to be discounted a.t the preferentia .l·rate al: I . ' - / ready obtaining, but this paper would not be considered a• a i:art of the ' aggregate indebtednes s upon "thlch progressive rate ■ ~uld apply on eub- 1equent offerings of other eligible paper. As the legielation which made it possible to apply the progre1Ssive rates was enacted at the in21tit;_a tion or tho Governor and directors of the Kansas City bank, it was natural that this bunk would be quer1e~ upon the eucoeBB which attended thie new departure in banking. The· other Federal Reserve banks began writing and telegraphin g to Kenso.1 City ae ■ oon aa the re.tea were put into e!'feat and the governor I s office 'Mus giving account, ot the actual operations and the results. As er.pected kept buay there were objeotiona raised to the progressive rate by numeroue interest• 'Within the district, ahiefiy banks that were alrondy .hea~ borrowers ot the Federal ReaerTe bank and who eaw an end to their possibiliti es or greatly increasing their lines or CZ"edit. r,hethEll' by dee1gn or otherwise there we.a a pre'eieteilt mieundersta nding of the new operationa and it rAquired man,y months of •tf'crt to,.. counteract theee · influence ■ • ., It is therefore more to the credit o£ the Kansas City bank, . ' it1 d1rectore and otricera that the mee.sure which had been preeist-entl y . . opposed for two yeara •prici- to 1.ta enactment and, by some interests, for many month ■ nf'ter it bogan operntion, 'Wll ■ completely -vindicated and finally ... -106- adopted in turn by the Federal Reserve bnnks of Dallas, Atlanta and St. Louis. All of these districts had experienced difficulty with some member banks seeking to redisoount far in advance or their basic lines and each of these other banks found the progressive rnte expedient in correct~ the rediseounting evils in the district. Perhaps the most able vindication of the progressive discount rate was made by Senntor Glass of Virginia, formerly Seoretary of the Tr~.asury, in his speech on Monday and Tuesdny, January 16th and 17th, 1922, at the time the United States Senate had under consideration a bill to amend the Federal Reserve Act. Senator Glass recounted to the Senate numerous criticisms made by bankers, senators and politicians and exposed the ignorance and miorepresentati on that had been the cause of the adverse criticism. In regard to the rates of discount Senator Glasc said: 11 { A great clatter has b~en rahed about the alleged'extort1 onate' interest charges or the Federal Reserve banksJ but, as in other respects, a half truth only !.s told. The real fncte e.re conveniently suppressed. "The 'progreesive' interest charge l'nlB not a feature of the original reserve act; it was put in about three yeo.re ago by Congress. It was intended by Congreas as a penal provision. It was not designed to aid borrowing banks; it was intended to penalize any bank that should persist in borrowing more than its fair quota of the f\lnda or a reserve bank, thereby depriving some other member bank of its fair basic line. If Congreee did not want that done it should not have authorized it to be done. "But, :ur. President, thie •progressive' in• ter~st charge was put into effect by but 4 of the 12 reserve banks. By these it wao applied to c~1paratively tmr borrowing banks tn their districts. These banka were inaorrigible offenders against every requirement of oautioua and sa.f'e banking. They were perpetually .exceeding ·their allotted line or credi.,ts: they were incessantly appropriating I more than their i'air ah.are ot reserve bnnk funds. But the -assailants or the reserve eystem suppress these fa eta. THEY FAIL ALSO TO TELL THOSE nHOM . 'RHEY MISLEAD THAT THE AVERJ\GE REDISCOUNT RATE CHARGED BY '!'HF FEDER/'.L RESERVE BA?ncs AGAINST '!'HE GREAT BODY OF BORROWING BA!-IBS IN THE FOUR DISTRICTS 11HERE 1 PROGRESfIVE' RATES WERE VERY OCCASIONALLY APPLIED Wt.S MUCH BELOW THE RATE CHARGED BY THESE BORROi"iIHG BliNKS AGAINST THEIR OWN CU~TOMFRS. 11 On pcce tlx>re w111 be fOurrl a ta.bls of discount rates that lnve bow in offeot in tb3 Federru. Reserve .B!3nk or :iansas Cit--.r since tho Oll3n.i.i:e• \ • • 108- 1 9 2 1 So mo.ny financial problems were awaiting l!l(;>lution and so important. were these problems to the bankers of the district at the beginning of 1921 that; at the first meeting of the direotoro on January 13th, the d ireotors not only of the main bank but or the three branches were invited to be present. 'fbe session was held in the private dining roan of' the Mid-~y Club were t..~e directors listen. ed to the Governor' topics 110 a annual report for 1920 whioh treated or current imprittant in the bnnking world e.t that time. At the sug- gestio~ of the directors Gcwernor Miller' e report was later printed in pamphlet form, The only chenGe of directors at the outset or the year 1921 was caused by the resignation of' Director C.E.Burnham of Norfolk, Nebrnska, who had served since the opening of the 'bank but v.ho, because or an amendment to the Aot, was made inollgible aa o. Class "A" director. Ur. Burnham wus an officer in a. Group 2 bank and, therefore, not allow- ed to continue representin g Group 3 banks. A resolut_ion expressing the regret or the direotora at the rel!lignatior i of Mr. Burnham was adopted .and an engroased cow l date. we.11 presented to Mr. Burnham at a la~r He was auaceedcd by E~ E. !rullaney of . Hill City, Kanas, who .attended his initial meeting on J&l'lue.rr 13th_. Foll~ng are the dir- eotora ·and branch dire~rs lVho attended the Jenuaey 13th m,:,,eting: llAIN OFFICE Asa E. Ram11e:y, Chairman and Federal Reserve Jtgent. Fred W. Flmiing, Deputy Chairman, n. w. Gibeon, Ke.neaa . City, U:iseruri Oklahoma Kansas City, Uissouri Muskogee, M. L. McClure, ,,2:. Kansas City, Missouri J. Bailey, Exchange National Bank, Atohhon, Kansas J. C. Mitchell, Denver Ho.tione.l Bank · · E. E. Mullaney, Fnrmera & Yerchants Bank Denver, Colorado Thoe. C. Byrne, Hill City, Kansa11 • Caaha, Nebraska R.H. Malone, Denver, Colorado .. OMAHA BR.AUCl! L. H. Earhart, Manager and Director, George E. Abbott, First National Bank, P. L. fiall, • Central National Bank, R. o. Qna.~a, Nebraska Cheyenne; Wyoming Lincoln, ?Iebro.ska l'.arnell, Merchants Notional Bnnk, Nebraska City, Nebr. DENVER BRANCH c. c. A. Burkhalldt, Manager and Director, C. ~arks, First National Ba~, A. c. Foster, Bankers Trust·Company, John ETan1, International Trust Company, Alva B. /;dams, . Denver, Colorado Denver• Colorado Denver, Colorado Denver. Colorado Pueblo, Colorado OKLAHCMA· CITY BRJJJCH C. E. Daniel, Uanager and Director, Dor set Carter, Oklahc:ma City, Okla Oklahoma _City, Okla - 110O:<LAHaLA CI'!'Y BRANCH \'.'111 iam llee, Security National Bank, Oklahoma City, Okla. Oklahoma City, Okla. E. K. Thurmond, P. c. Dings, Guaranty Sto.te Bank, Ardmore, Okla. The directors at the.a.rternoon session re-elected the same officers of the main bank and added the following to the personnel or the branch officers: Cmaha- C.A~ Gregory, Ass't. Cashier, and T.Gordon Sanders, Branch Auditor Denver- R. w. Smith, Branch Auditcr Oklahoma City• R. L. Mathes, !:!ranch Auditor . Campaign to Decrease Loan~ A warning which had frequmtly .been .sounded by the •officers or the bank to member banka and the public in general to the effect that o-ver discrunting during prosperous times might result in financial diffioulties in more dii'ficult periods that were apt to follow was not ~iven proper heed by many of the banks 1n the district. As a result the beginning or 1921 found an un"Wbolesane· condition in the proportion of rediscounts to reser"Tes. As a measure of eafety the directors ot the bank agreed during the meeting of January 27th ~ t banks ·that had been continual borrowers with *e Federe.l Reserve bank be required to liquidate a portion of their redisoounta. It -.1l.s :f'Urther .greed that the Exe~utive C01m11itteo should disoourag~ 1;he practice of aorne honks to not continually maintain a borrowing line, so that the Federal Rese~e bank could take care of 1:ne district without redlscounting with other Federal ReaerTe banks. While there was more or leils _unwarrant- -111- ed critic ism or the bank from riany sources lnter developnent s 1.'uli7 vindicated the action of the· direotors and chowed that, indeed, the mee.sures should hnve been taken at an even earlier date. In Harch oocured the dooth of Luther Drake, one ot the directors of the Qnaha Branch. William J. qoad, Vice-Presid ent or the Packers lational Bank of Qnahu was elected his succe21sor. Corner · Stone ie Laid On . April 16, 1921, ocoured the la~ring or the_ oorner rstone , of the now Fnderal Reserve Bank building • . The ceremonies were preeeded by a meeting of the directors at 10:30 A.M. and Govornor Hiller were present. All the directors The morning l!'eeting wus brie!' and tho only matters acted upon were the appointing of T. Gordon So.nders, Branch Auditor at Omaha, as Acting Assistnnt Auditor for the head office while Assistant Auditor Bolt should be on a leave of absence granted hi.'TI to visit hie home in South .America, end the :s.ppointment of Judd W. Jones as Branch Auditor at Qna.hn · temporarily . A letter frm: Dire9t0r Malone nt Denver was read to the di.rectors urging the purchase of a lot in Denver on which to erect a permanent home {'.or the Denver Branch. Director Yo.lone stated that it n,u his intention to have this matter di21cuesed at the April 16th meeting but on account of the corner stone laying ho would defer it until the next meeting. 'While there hnd been much open wellther during the winter and spring which allowed constructio n work on the new' building to be -112- carried on e.nd some unusual ~ild ~eathor in ?Jarch and early April, April 16th was a cold, stormy day such as has seldom bean seen in • this climate later than Februar y or March. Hov,eTer, notable gueusts had been invited and detailed arra.ngements mo.de for the corner stone layir,g and these arrnngem en:ts were all carried out to the letter despite the storm. A canopy 'MI.S erected aver tho working platform on which the 1ervioe s ·.:ere held and canvas was spread over the top and aides of this to protecrj. the guests and the Federal Reserve Cliore.1 Club which sang several appropr iate numbers. For complet e program , list of guests and addresse s made at the ceremon ies, see page Foll~v ~ng tho corner stone laying the directo rs and senior officers with their wives, and Bishop Lillia and Birohop Partridg e, who had officiat ed at the corner stone ceremon ies, were entertai ned at a luncheon in the ten room or the Hotel Muehlebach at one o'clook . The directo rs reconvened at 3:30 in the afternoo n. At this meeting it was. voted to enroll upon t!,e minute book the addreaae a of Chairman Ra.mae.v • Gov er,-or t'.iller and Directo r Y;. J. Bailey that had been made at the ~orner stone laying. Th·e directo rs also at this meeting voted to present to Governo r Miller, , with the complim ents of the . directo rs• the gold trowel used by the Governor in laying the corner stone. Start Insuranc e F\J.nd As a means of fortifyi ng the bank against the paying or possible dee.th claims it was voted on April 28th to set aside tB,007.3 9 • ' .., _ as.an insurance !'1Jnd to be irrTested in Treasury Certificates of Indebtedness in the names of Governor Miller and Chainan RIIJ:Jlsay tor the purpose of paying death claima on employee who might die in the service or the bank. Out of this start grew the more complete system of group insurance which the bank later adopted and by menns of whioh the bank pays premiums on policies for each employ-a in the amount of' appr02:bintely one year I s salary of that employe. The bank - is made beneficiary and may direct the use ·to which the insurance payment may be put. It is the policy of' the rank to apply the in- surance p~yment in such a manner that relatives of the deceased shall be best served thereby. Governors and Agents tleet On May 23, 1921, oceured n group meeting of Governors and Federal Reserve /,gents of three Federal Reserve banks, together with Governor Harding !'ran Washington and the directors of the Kansas City bank. The fdinnee.polia bnnk was represented b;r Governor R.A. Young nnd Federal Reserve Agent John H. Rich. 'rhe Son Frnncisoo bank waa represented by Governor John U. Calkins and Federal Reserve .Agont John Perrin. Before the meeting opened in a discussion of matters per• taining to the "tO.rious Federal Reserve bnnks, a committee of Oklahoma City bankers presented an appeal !'or additional powers ·to be held by the Oklahoma City Branch enabling that branch to. pe.ss upon the dig- S.bility of pa.per for redi.110ount without having it referred to the Kan11as City bank. l!r. Frank J. Wikoff, President of the_ 'l'rademnene National Bank of Oklahoma City, was spokesman and urged that the above pc,ners be granted to the Branch wit> the understanding that all paper passed by the Branch would be subject to the final approval of the Executive Committee at the head office. The object waa immodie.te credit in emergencies. ( • / .At this meetillg were introduced a.lid adopted the by-laws of the Oklahcna. City Branch, w.o.ich with amendments will be foimd on page_. A considerable amunt of time "mlS devoted to a -talk fran Governor Hardiilg concorni.llg the controversy between the Federal P.eserve . . Board and Jolm Skelton Williams, retirine Comptroller of the Currency. Governor Il'a.rding outlined the fallacies 0£ llt-. Willlnm's argtlI!lents aria, in tho ostim.tion of" tho Governon 3lJd Agents and e.lao the Directors of the KimSM City bank. entirely vindicated the Board., endorsing the_ operations o-r the Federal Deserve System. Followil:JG a ltlllCheOn at the Hotel !behlebach. the Governors and .Agents made short talks introducing special :problema that ~d arisen in their v::i.rious districts and discussed solutions far these problems. It .va.n generally O.S'"Teed that ~oup !!180tin,:;s of Governoru and ~-"'elltB should be eontinued _parrnenen:tly at regular interv-al.a. -115- Stock Gr0111ers Coni"er. In tho s-..m.:er o~ 1921.• tlestcr n cattle man and sheep am hog crower o became deeply conoer ned over tho need for r1.ncnc 1Dg their stock rmtil ready for the fall m3rke t. ';Jitll a view to obt."'l-iu5ns what they termed " ::iore lenien cy " :rra::i the l<'odcrol Reserv e S~ta6 t~y mllod 9 a conf'er enoo or stock c;ro-.,ers, Foder tl ?.esarv o of'fici al& mld. other 'b.::l.nkErti with the Fadero.l Boserve .Bom-d mld the ,wicu lturol Bloc Of CollGl"ess at ',7aqhi.ngton on June 7tb. Gover nor lJiller and Direc tor .Bc.lloy. repres ented the Y..a.nsas City 'oo.nk, i"or it was tho Tonth Distr ict that was most vitallJ " ef'fec ted e.s a distri ct. riew York Feder-..J. fi:eserve Banl,: \'DS Gov-er.nor Strons of the also presen t and took o.n active part in tho con:forencu. It \'r.lS the expren sod conten tion of' Semto r Capper of K."nsas a.t this meotin.g. that tho stoclt: srowo rs a.nd i'ar..:iers in this distri ct were not able ta obtain redisc ount pr1vi1 Gt,~s, and ho openly denoun ced the a.tti~u de o-f t:he bank 1n "de:pr ivinc the ar.;ric ulturl sts of these _privil ec-eo." Senato r Cal?!)Or was astaan dod hooov er, wren Govern or Miller assure d him that of' the t10lnber banks of the ~euth Distr ict. only one-th ird had to that date discou ntod to o.n ££1ount ncywharo in the proxim ity of' their basic 11ne 9 , ·,a·~· anoth er one-th ird had redisoc nmted. to a small exten t only end the roonin illg ono-th ird lw.d borrow ed nothin g 1"ran the Feder al Iieserv e Bank. ™s assert ion from Govern or lli.llor baclrod by record s; chnllge d the attitu de of the o:>nference and la.id the burden of' respo nsibil ity upon the variou s banks in tile agricu ltural distri ct rather tlw.n UJ."')QD. tbe Fedel"8.l Resorv o System or ::my Feder al -ll'l- BaE.orve B.mk. I Ml nn indirect remtlt of t~u.s e=pose o-f tm Bank situation.. tho orgnnization later laio.m as the Stock Gro710rs Finance Corporation t1as f'omod out o:t th1 s mooting. ~ouch the a::isertion or Governor lliller that it '?JD.S the c_ity ronk and not the o::>untry bank that redlsc01.mtod to the farmer and stock!- men. tbere grew up also out o-r this meetil:16 the joint agricultm-e inquiry into the ef.feot of reducing loans of cl ty banJts and allowi.n€ a surplus of loan3 to be roleused to the coantry banks where the greateat aroormt of good could be done for tho agricult-..u-ist. Governor llillor mo.de his report on this conf'e.rence to the directors at thoir meeting of J.ma 9th and stated that the ~tock Grovers Finance Corpo.ration would doubtless soon relie"lre tho situation mich the Foderal Re3erve .Act would not e.llcm the bank to r -: .lieve. Also at the June 9th l'!IOOt~ was voted a final bOimS to era.pl~ for the relief o:r the hi.eh rent and high price situation grow- ing out of the recent \7",.r.. ,, This bonus nan paid on June 23rd as i"ollomn . l<>;o of one-b3.lf year's nala:ry to and including a yearly salar,J of' $1500.~_% on more than $1500 and including 03,ooo per year. £1/, on sala.ries mre than ~ .ooo and including ~5 11 000 a year .. -118- Uisfortone to ~~nt .P.amsay. Too meotir.c of June 9th res odjournod at 12:35 .?.~ and ?1h.ile Governor 1.!iller .'.lJld CJmL'"'l:Il8.n 3.'.ll:15uy ,iero a.t lune~ vmrd <:;as "' ! received c.t tho 'bc.nk that &l.lln.uf' rt"lr,r.e-y, \ I 'yoars old, eldest s ao. of Cr~i.r.ln.n Rr""'!sey, had been a victim o:r a. nishar, v:b.ile swim- minG' 1n Indian Creek r.i.t ::a.11as, W.ssour1. He ho.d ontored the str~ ';Tith so!:le Clas:J!llO.tes rrom Rocl'"..hurst College and his bo~ md disappeo.red in the current • .:mt! Chai:t"r.l,;'..n r~a:,, Govornor Miller Diroe·tor Gibson were rushed to the ,plc.ce, .joined a nen.rch for the body and ::;ucceeded in f'indinz it, although more tmn an hour after the dr::iimirlg. Tho :f'uneral seI"lices ,,,ere held on Sunday, June / J-",1s21. the body bei~ pL.'!.Ced beside that of the YO'llnoc-e?" brother -.,,;ho had previously been a victim of in.fl~. 1\0solutions of sympathy wel"e adopted by the Directors at a. moeti.DG of June 23rd ond an engrossed cvpy sent to I.Ii--. and l.:h:-s. Ramsay. -ll9.?ER";JAitEFl"l' ~~ ".::; r-Dl'~. On JUilO 23rd the director1s voted to negotiate :f'or the purchase of' lots in Ok.13.boma City and in Denver for the construction o:r buildinga to becO?:Je the per::nnent haoos of these branch banks. The motion carried a proviso tm t the purchaso price should not excoed ::75,000 in Oklahann Cit:,. noi- ~l.50,000 in Denver. Diroctors 1ll.tohell and lhlone of Denver wore Eq;>pointed n.s a 6!)8Cial COani tt&e to negotiate !or pro-.9erty in Denver. Director lb.lone, Chai:rmc.n of the C0:2lllttee. roported to the directors on A.ugu.61. llth, that a.n option to purohaoe for ~ .. ooo lots 13-14-15-16 of Block 175, .Eastern dlvir.ion of De~er, had been s i ~ by the own.or, ~ e t ?. Campbell. A :::C..::? nhowi:cg theoo lots and other available lots !n Donvor 'C:1s inspected by the directors o.fter "L"lhioh :Director Bailey moved tha.t tho Campbell offer bo aubcitted to the Fed.oral no-serve Board i'or a.]_Jilt"oval. This ::iotion was carried. A letter f'ror:i Governor F'.iurding mi.s rec.d to the directol"B on Septociber ~ in which ho stated tint the Bo::?rd v;ould DOt approve of this 1 ~ s e at thn.t price and the directors instructed Governor ?Jill.er and the committee to obtain an opticm at $100.000 for lots 17 to 24 inclusive, and one-third o:r lot 25, be~ 20* root frontin,6 on Curtis Stroet alld 125 i"eet fronting on 18th Street 1n Denver, and submit this option to the Federal F.eserve Board. by the .Board and the purchase This opt.ion m.s finally approved m.s mde. In t~ moon time tlJOre was purchased as a. si to for the Oklcllo:m. City branch b-;uldi.llg~ three 25 foot lots~ llllClbers, 17-18-19 in :Block 37, southeast corner of Third and Ea.rvey etroeta in Ok.lrulorna. City. ~ l_Jlll'Cl::.S.SO price ~ (:-65,000. The O\'mOrs were ':l."2,. Born and wi:fe • .Plans for both tho Denver and Okl!lhoon City bu.ilding"s oore dr::i.--n lllld build.ors selected soon after the purchase o"i" tho lots uas ~e. Pull details o-r these lots nin{; ~-e _ ono. buildings mll bo found begin- for Denver and po.ge ___ for <tuahoma. City. '.i'.. Gordon Sanders who had be.on nnde Branch Audi tor &.t ~ • m.s elected on June 23rd,- l.ssiatmit .Auditor at the hoad -of':rl.ce • ..mother c1w.nce a.f'fectine the Cmaha. Branch ~,as the promotion ()j; Tiill1am ::.)hilllps, Chia£ Clerk of the branch, to Assistant Co.shier of the same bl"nnch. A.ls o at the J1n10 23rd meeting tho Board of Directors ratified a recent r~solution ~ssed by the Gover.a.arts conference for the l:nnk to absorb the :'iocal i.gency Depa.rtriont ai'tor July lst, 1921. !i.1J',.is ~ve virtually me1'g'8d tho Govermnent's department of tm bar:I.c -:121 ApJ.)l"ove ?ens1on Bill The C\JD:ference of' tho .Fed.oral Rosene gover.iors held in the Slltlr,.er of 1921, bad appointed a oonmi ttee on pensions, tho chairman of mich was E.R. I{emal or the Rew York 1,.... n~~ On July 14th. Governor lil.ller road a letter :f'rcm ~. Kamel .ropo.rtl..Dg on the status of a pension bill for employG~ of goverzmie nt institutio ns. Pollo\'Ji:ag the read.ll:lg of" thi:: letter und a s:hm-t disc-..issio n by the directors , a resolutio n w.ia adol)ted a.vprovi:ng t:r..e pension bill than pandirl6 before CoDGrOss to establish a Pedera.l ?:oserve per..sion fimd in order to provide petlSions i'or e!!JlJloyes of the bo.nk-, members o:f the .Boo.rd Director:1 ., the .~"Gntz and their doponden.t::i. or Tha resolutio n also detemir.o d that tm ILusas City ba.llk muld operate llDder this ,. ,f. und i£ it became e:f'fcctivo a,3 it then atooo..- -122- OIL :ZJ CO:.I.?LAilT. :; City bank As a matte r of :fin:::.ncl.Dg, tho oi"i"ic ers of" the Kan'".a led r,rouu ctionn of bad co:us istent ly m1in taino i tl'l8 a.tti tude th.:'1.t "sett accom panied oil wells ~s not a reel secur ity for oil pa~ mien not le critic ism ~ & resul t of this oours o, conzid .ere.b by other secur ity. ':la.S raise d in the oil field s of Oi:J.a..i"loma ur~cl :m:i.nsas and C01!1 plaints t"rOI:'l at -:'"!:1sh1Dgtan, these local ities na.d bean ma.do to the Feder al .Reserve .Board ing- sgo.il lst statin g in ofi'ec t th:~t tho }~sa s City b~ rro.s discri minat the oil indus try. Tho :first actio n tn.ke:n. by the direc tors in relati on to this matte r 'i'JUB nco bot-:;oen on July 14th follow ing the readi ng of corros pondc Gover nor !Jille r or the lxl.J.""l!t and. Gover nor Hardi ng at ·,7a&h ~on. This on growi ng carres ponde noe .c.lso rolat od to pa.per secr-.u-ed by mortg ages A:f'ter a discu ssion o'f this corres ponde nce a. rosol .ition -wn.a crops . respo: :::isib ili ty adopt ed in ".'lh:1.ch the direc tors of the bnnk assum ed full for the bank:"s rulin g on these subje cts • rro. oi1 .!ppea l.s .:e_ontirm .ad :to..; come:: to: the ba.Dk £ra."!l the OkJabo .I £ield s and a speci al meeti ng of the board ) VlSS 01lle d on July 21st :f'or try for a July 23rd. to meet ·with repre senta tives of tho oil indus There wre confe rence on the subje ct o:r redisc ounti ng oil pa.per .. y, &iJ.le y, prese nt at this z:ioeti ng Go,er oor ill.lle r, Direc tors Bamsa Gibso n, lmllm ley and· .l!'ler.:u.ng. A--',J:;_1;;~-U~-,,M-~lL..(.. At A , ).,./ /4.,,.~ r .~-"k; . tc -Ji-J... d..c 1,.(....-t1-t';._,.._ t of a conf81 "mooti ng Gov,.ernor Lil.lla + r-c:ld~a. ro-oor • nora of tho Pede ral ence betue ezl the· l"eder a.l Reserve Board and the gover .s City and Dall.a.s Beser ve banks Of ru.cm iond, Atlan ta, St. Latls , Kn:nsa concern.inc p3rticularly the cotton situation. Be stc;,.ted tlnt the Federal Deserve Board -;,10-lll.d soon m..!Cl.ka rui a.mio-.mco.~nt on poosible cb.'.:!.Ices 1n the rulina relatiDG to cotton p:i.:per. The oormttee of oil 1:1Cn ~re met at the Hotel lllehleb~h. The followi.Dg men represented tho oil irulustry: ··:-1. 1lee Q'.:,JohQT:n. :.: . 1. Davidson :.. z. ?hilllps Geo. I.. .Brown.ins .1'"rod C. Carr L.A. Lbek 7:1.rt Franklin J. 'c7. ftioi::!P.rdson ;:;.? • Brewer J.L. Beattio City. Wichita Bartles-villo Oklcllama Ci ~J ?onca City L~re i':.r<lmore Tulsa Bartlesville Dohlman F.·J. :Bry-dllt G.l'.. MpOullcmgh ).rrlr:iore Tuloo. -;;•"· • .Brownlee Tulsa Okl.ahom City c..E. Ihn.iel :; . y. llurra.y Tu.lso. In openine the oon:f'erence, Cbail'!:IC.n Bn~ay of the directors, &11'.:lounced toot the Federal .Re.serve Bank o'f Kmwas C_ity md enden.vorod to deal impartially with tho business interests of the dlGtrict, nnd tlmt its ambition m:lS to assist f1'1cry vmrtey llld"<lotry and enterp-riso, guided only by the best business Judgment 1n how :f'ar it ~uld bo sa£e to prooeed with this hol:p,. The bOllk realized the importance of the oil industry but was bo1md by tho Fod.erol Bezorve Act to use ~.ution and restraint and to ~ too reserves or ~ institution, l!l.S.ki.Dg only such loans a.s woro ad'Visable and. had o'llf'1'1cient soeuri ty. The Chairman invited d1scuss1on o:r tbe consess1ons. desired by tha oil industry., There were so man_v suggestions made by members oi' the oil deler;ation and so m.ny classes of' oil paper presented 1l1 this discussion. that the directors and dBlee-a,tea ~lized it \7ou.ld be ext~ly di:N'icult to cane to any conclusion at that l:J8eti.ng. !i'he univern.'.l.1 request seemed to be that the lnnk s;1ould 001"'..Sider settled oil production o.nd oil well 6Up_;;1lios on hand as quick assets. The directors suggost_e d that o. cor:nittoe be .oolected among- the oil dolecates to reduce to writir.g tbt r arguments on those points and present them to tlle Boord at a later meeting. tho meoting ffllS As ~ s was done and adjourned. a result of the cont"erences with. representatives of the oil industry, the bank complied in part with tl1&ir roqueat as dlOtal by the follo,,..rirlg form letter .fror.1 tha bank to various banks applying for rediscoi:mt privileges for oil paper: "As the result of' conferences b e ~ au.r Executive COI?rrul:ttoe and a eocmittee representing banks moldnrra specialty Of oil loans. modified regulations in ros::_,eot to determining the liquidity of finnncicl cttl.tements wero adopted, at least :ror the present, as follcm-s: "PIRST: 7-'t1at, w118n COilSideri:i:lg the financial statsnent an oil producer VtbOso note is offered for discount. a roa.sonable val'uat ion of 90-days 0 sett-lod production" wW. in our ·analysis• be deducted from the fixed assets nnd ad.clod to the quick or liquid assets. It will be necessary, hO'.\'A:vert f'o1• e mornbor offering notes or a.n oil producer whose stateroont, to a9,p0ar liquid, requ.U-es hia settled production to be ta.ken into consideration., to corti!y i:n -:riting the value of such "settled production." 01: "S~OIID.: That, ~ of the retlSontlble value ot new m.lterial end su_pplies on hand, (excepting machinery') 1 will be considored qttlck or liquid assets. It \?ill be neoossary. however, that authenticated infol"!r.3.tion be furnished by the producer and transmitted by the !OOr.lber nnking the offori.DG' in respoct to tho qtl.3.D.tity, cliaroctar and value 0£ such new mtorlal and supplies. The r1dht to mll for. e:rnm1ne and verify the o:rlu---inal invontory, or to mske such further inquiry conoe~ ma.teria.l. and S1l1.)pl1es as :ray bo doom8d adviso.ble, is reservod. , •iPleaGe bear in mind tl:ID.t lnclividtmls , f'ims and corporations 1,roduoing oil nhoo.ld m::ilr.e no clla.n!;O 1n the method of prepari.ns f'in.!lleial statements, but should be ~ided by the provlslcms of General letter lb. 284 es hereto~ore... and the figuros shcmn should 'b8 _!ll"epm-ed 1n the mannor indicated therein. Such stateoonts should not i:mderto.Jm to shoo tbs value of "sottlod produotion, " nor any d1v1sion of the value of "material o.nd supplies." Information des ired in connection with "s-ottled production" and "material and Sill)pliea" shou.ld be given 1n the form o:f separate memo:'3lldo. as otated above; and !'rm suoh inf'or.nat1on tho adjustrionts referred to herein VAl1. be made by us on 011r credit a::a~-sis records." - . SusDend ?rogressivo P;o.te. Tho prof;1"8SSive discount rD.te uhich ba.cl ~u5ed so much discussion both be:f'o1se and after it on 1..ugust 1st, 1921. \"JaS adOl,)tod by the j,:::xiza.s City ban..-it, wns suspeDded 7'ne e.ction su.or,ending i t was t~en at a !:lectmg ~ the Board on July 23rd, when a. letter rr001 Governor liardiDG m.o read in ,-1hich tho Foderal Beso...-.-vo :Board sue;eested that si.noe fim:neial conditions had improved, the mr..:oas City br:>.nk micht well suspend the application o~ the rn.te until it should ~~in be needed as a.n emorgency moasuro. Grain .R:l to ile:irLTJ.G. The directors of' the bn.nk on August llthT np:9ointed Cb.a.i:rnnn Ramsay to rer,resent tho bmi.},; :it tho h~1.ri:q; of' the ·,'.'&stern Grr>..in Bo.to Case bofore the Interstate Co:rmorce Co!reission in 'Ja.s.½ington. This ~s done u t the inst.4',---a.tim:1 o:t Cl~1de Reed of To:pekn, Ka.s., cr_.a.L"'!!JC.n of' the E.ansas State .Railroo.d CQI:mission. Tho hos.ring was in the form of a complaint cc.used by th& current railroad ratos. complaint was rm.do by the V.n:isa::; This Tu:ulroad Connission, joined ·1n by 20 other st;1tes and their various grain y;roducers and associations. Ur. P.nmroy test1:fied August 15th, that b1.2Siness am financial c D:ld.i t ions in the Ten th District Wi;; re vi tally af:f'octed and oonsiderably harmed ~y the present high cost of' prodnction a.nd disposition of ngri- cult-.zral. products snd also tb9 pravailinf; lo-,., prices. Mr. r~•s testimor.y ms f'Urthor to the effect tln t tho ::i.ssets of ',7estern bmllm were trozen to a large extent am tila t interest burdens on tho farmers in this territory l:nd been incre.lSod ar:proximatel.y 11 per cent I due to the 1nab1lit9J to nnrket the old crop at anythi~ but a losa or to woo.ther the :f."ina.ncial condition until n oow crop oould be harvested. The mover!)8Ilt beginnlne in :Nebraska which had for its apparent rroson . the alteration o:f certain rules c;overn.ing tho o~r-.:.tion o-f' the Federal Reserve Bank of KD.nsas City, but \'7hiCh bare evidence of' bei.ng' in.spired as an attack upon the ~ n t of the baDk by certain b.:tz:1.kers md politicians, arose during -Jctober,1921. ~'hilo 1 t \VS.S followed aecressively by Hebraslmns for a. f£n1 weekS, the criticisms were mde sq_wrel::, llc"'ainst the o:f'f'1cers and directors of the b ~ and the .lliltter hZ-5 since been tanned " The .:.:0Kelv1e Incident" , the attack lnvi~ :f3.llm COl!{)letely after a meetizu was .held n.t Qmlla in '.'.hich the operation or the bank as pertainiz:e espechlly to agric-..ilturul aid live stock. peper, w~s :f'.illy exp.J..ained. 'Ju Oc,,ober .25th there wus received at the oonk a lengthy conr::nmication transmitted by C• .E. 3urnl'l2m, 1Jresident of the l{orfol.k: r-.atioml 1:lank and until a few months previously a director of the Federal Reserve Ban.k. 11r. J3urnh'3.m sent tbe coommication as c~:rmm oJ: a cO!II!littee appointed by Governor Samual R. ltKelvie o-f Nebraska at a conference of banlcors and £inru:icers reccn tly ileld \'11th the Goveznor. t This comrni ttee v.2.s directed to seek to obtains number of concessiODS tor ~:rmers and s to clc-€:,-rovers in Nebraska • ..\.mobg the accusations zm.de ago.imt the '2enth :District b:ank: were the following: That the Kansas City .Bank is the most " cUI!lbersome, inquisitorial and technical bank for rediscomit ,o'f aey or the Federal Beserve 3anks' ;" that the "financial stat~nts a.re also uselessly inquisitorial and objectionable.;• ~ ~hat the Kansas City :Bank O ms been a law unto itself in r0t,----ard to rules, regulations a.?Ji if too rules as to the di scOWlt~ of f'armin;: and live-stock 1)'.!per "md been adjusted to meet conditions, there would not lln've been any oecasi'on for the W:J.r Fim.nce Corporation to :fuootion in this r e ~ ". tmt ..he Kansas Cicy Bank 11 '.ia.couraged 1>3nkers to sell IJ.berty Bonds at a discomit and redlloe their obligations to the Federal Reserve Ballk, nit h the result t~ t the bor..ds of the gover.moont were thereby turtbcr depl'eCiD.ted in value, whioh resulted 1n ~'.Vlation ot •the credit sl tuation ; " tha. t '~ r mich the Kmisa.s City Bankcwas 1 ~eJ,ooting . . . . tor rea.so.ns al.one tm~· instruct •t.1ti.2nce pl.per' , , regardless f .or red.1sc0tmt ot the :tin:mcial. standing of. endorser :t.rom membor banks m and. muer,1a beillg reoelved !or rediscount other districts without sny objections mataver.n The coJ?Qlmic ~tion ended ,;.,;t th the following statc,nent: • "Under no ci.roumstanc eo do we advocate the cbeapenil:g of the security ~ the Fodera! Reserve Bank but we do tldDk that _ the rules and regalatiou governing agl"icultura l and stock raisi.~ districts shoul4 be di:f'terent tram ,t hose covering districts vmeroin the __pr inc.ipal industries m-e jobbing, . mamtra.cturi ng, ~hipping end export The trade." m.mer in whiah this' oommmieaticm was- dealtwith can best be rela tad by tI.¥:1 follow1.ng lette.r mich Chai rnrm ~ 88lt - ••. the follori,zg Ja:ma17 t.o Governor Hardizg: "You are ad.vised that Governor UeKelvie of llebras:k::l., f'Ollowing his. corresponde nce with you, 3l)po1nt.ed a comni t ~ composed or C.E. Burnham of Norfolk. NQbrasm,. fOl"JDe.rly a director o~ this lrank. ~ v. Stephens. Presiam~- o£ the Freizi>nt State .Bank, B.J.• Wilcox. V1ee Presidont of th& Qm.m Rational Dmk, J.E. Bart. Bank Comiasione r :tor ;1e~sl0l, a.nd .John u. J'lanDBgN:1, President of' the Citizens State lhnk of stem.rt. 1lebra.ska,.. to endoavor to obtain. fl"Om the Federal ResarTe Bank of -this district and 1 ts bran~s mora· liberal. rules aJld ,: regu.¥1,tioJis a& to rediscounti! lg 0£ sgricnltura l ::i.nd oo~roial paper,. etc. That co:nittee mot ~d passed resolutions addressed t~ tl» directors of this bank. a copy of which lfe are enclosing, . Ins tend o£ rep ly!Dg to these reso l.ut ions oa.r board deeidecl it muld bold Clle of lts regt1le.r meetings at Qmba. and invite tho f'ccmmittee to be presmt and f1lnllah speolfio com_plainta ins.t ead of a general criticism• . November 22nd. was the d~ set Cd .Governor lacXelvie•s· comnittee duly .imited.; A week or tan dcy'a be.fore the date set f'9l' the conference wa learned throtlgh news~r clippings aent to us trom --var1oa.s parts •er! Nebraska tha. t a movemen-t had ae~ 1n, originatiz:g at Fremont, the home of' one ot •the· committeeme n, Dan V. Stephana, for the comnerclal clubs throughout the state to s8Ild representatives to the Omaha meetiz:g above ref'-erred to~ -129- c. Byme. director of" this baruc. residizg at Ona.ha, suggested that, 1.nasma.ch as rerresentatives :fro.c various com:iercial bodies would likely attend our meeting~ 1 t .might be a good opportunity to have representatives from all tb8 melllJer banks of tm .zom served by the 0naha. l:Sranch also -att81ld. Ur. Thomo..s and invitations 19ere accordiilgly issued,. !Jut of a msnbership of 199 L"l Nebraska about l58 menbers had representatives present. Oien tha •oo:umittee• learned from our directors, upon their arrival at ~ , that a,Jpublic Eating was intec.ded, the •com?:littea' suggested to ·our directors .that !ns:>:fal" as the questions set out in tb3 resolutions adopted by 1 t were concerned. a r.::l8ot1ng 1r:. private would be prei'erable, ,which was entlrely .satisfactory to our directors am the meting m.s so held. radle the 'committee' .and our :.directors did. not reach a unanimous agre~ nt on Ju.st what the Federal reserve bank could and should do undar tbe provisions of too Act, the discussion brought out !D2IlY o:f' the di£:fioulties ot complying with all o£' the demands :or the • ocm:d ttee •. At the c-onc lusion of the conf'erec.ce we were • • under _t.he imprr;ssiao. that at least av~ mudl better understanding existed and th~t all parties to ·the oonterenoe were sati s:n·• No cri tici&J. of our !l:iaha :Bramh ba.s been brought to our attention since the meeting and we were ratber surprised at the contents 0£ COD{;TGSs:.nil l.vans' Je ttel" to y Otl.• At tbe close of' the priv~te conference requested by the 'cowit-tQe' .. those attend!~ it ropairod to the banquet lnll of' tho Fontenelle rrotol wbero a· ltlllcheon was served to appro::ic:Lmtely .roo ga.ests or the Cbaha. Branch. Governor Bailey addressed the representatives o:f our mwibe:i;,s present, goi.Ilg into sane detail as to Just what the Federal resorvo banks aw una. cannot do• and generally pleading for co-operation an tho pa.rt of m81!i>er banks to make the Systan a success." Yours ve17 tra.ly• (Signed} Asa E. ~ The letter tram OoncreSSllU l Bvans o-t llebraslm to Governor B'ardiJJg. referred to 1n tlle- above lettel", was virtual~ the las-t time DZJ:3 one 1n an Qf'f1~1a.l ca~city slx>wd 1nollnat1on to add ta.el to the tlame in Nebraall:a ,wh1c-h diod out :mth the close or this contersice by tlle camd ~tee in «-illa.· L1lm other instances whore cri t1oism ot the Pederal Reserve System ms 1ndl:J.l8ed in, the ease was et:t:eotively cured by a simple treo.tmaot of f'aots. The con41t1on of the be.nlt as to oe.p1ta.l. surplus a.Di prof1 ts at the close ~ tbe yee.r 1921 as read by Cbai.rmn lbma~ to the directors at the 1'ina.l. meeti:ng of tm J'e)ar. JJeo. 19th. was as tallows: Capital stock paid 1n Surplus Undivided profits Less dividend tor 6 monthS, en~ .vec.31, 1921- v4,593.aoo.oo 9,330,167.0 1 1,525,648.6 4 134-.831."19 Undivid&d profits not ~ 41rectors o. t th.is asa meeting authorised the otf'icer1, after tbe7 had paid the ,-emtannnal 41,ridend, to charge to profit aDl , l011s account the not rema~ undistribut ed and to credit sllCh emount as !ollowa1 Beaorv.ad tar losses Surplus Surplus t ezst1mate4J ~ a e 1'8:E(est1mate4J ( . ;200,000.00 . 292.300.00 . 81,0.52.29 . 729,4?0.58. . 130-a -l 9 2 2'!:' R.H. lJA.I.O?lE RESIGNS 'rhe Directorate of the bank char.gad 1n January, 1922 in only one instance. This was the appointing of' Heber Hord of' Central 01ty 1 .t;ebraaka, to succeed .l!.C. Ualone, who had been appointed a Class O director at the organization ot the bmk. meetiJJg on January 12th. ME-. Hord attended his f'irzt 'the greater pa.rt or the forenoon of' the meetiDg was occupied by the reading or t:ne annual report by Governor lfi.ller tor the year 1921. In the af'ternoon session the election of the Officers of the bank was. held in which the l,)?'esent officers were re-elected. L.B. Earhart was re-appointed manager a.:ai director of the Oma.ha branch at a salary of ~9,000 a ~ar. The other of'1'1oers of the Caa.ha ~anch and the offioers of tbe J)enver branch were reappointed at theil" farmer salaries • .rurther o:f'tiolal changes weru too increase of the salary ot .tt.o. Wanderlich• cashier or the Oklahoma. City branch 1n the amoant ot ~300 a 19ar, the 1n01'8Ue of the salary ot A.M. JJoA.dams, assiatant cashier ~ ~.ooo year salary to to '4 1 500 per annum and the paying ot vgoo u.x • .Bo,µ-dman for services as secretary to tm directors. Up to Janua.ey 26 1 1922 1 the b'ederal l'Ceserve .Bank t. per ot Kansas Ci fi1 could not entertain v1s1 ting bankers except at the personal expense ot various ot:t'1cers or directors. As commercial banks he.cl lozg einoe to~d the custom ot e~tertaining bankers at luncheon in o:der to mke thml more tam111ar with tlle izult1tut1ons, tm directors ot tl:Jia .recieral Hesene Bank at the January 26th meetil{;, decided their 130 b institution should tollaw this custom 1n order to give more direct attentioz,. to the banks and benkDrs served 1n this district by th$ Systan. :rhe d1l'eotors oonseq,uentl.y authorized the bBnlt to fundeh the noon meal to visiting guests ot directors and of!ioers, and also to the directors attending tlle regular board meetings and to th.a alternating meni>ers sot~ on the executive oommittee. )'ederal Reserve Bank Group Meeting. On February 23, 1922 1 there was held a group meeting o-r the :Besides the governor, Jrederal .Heserve Agent and direotors ot- the Ko.nsaa City bank, this meetil:lg was attended by Governor·Harding of tbe b'edoral .Heserve .Boa.rd and the f'ollo.viDg representatives o~ the other three benkaa D.C. Wills, .l!"edera.l Heaerve Agent and E.R. Fancher, uovernor, Cleveland; John B.. Bich, .redaral Beserve Agent and .ll• .A. Young, Governor, l.li.nneapol1a 821d w.1. ~ . Jrederal Beserv~ Agent and B.A. :UCX1nney, governor, lJallaa. Governo:r Harding opened the meetil:g w1 th a d1scuea1on of ro- cU.aoounting relations, emphasizing the importance ot redisoolmting banlcS ottering new paper endorsed bl tiret class bank1ng 1nat1 tutions. other topioa 41aouaaed wre building programs · ot various bankS as ef'feoted b7 pending legislature, the L"ederal .Reserve EwhAJlge, the bandlli,g of c~- tidential reports, exarn•nation or national banks. the tn>1ng Of exam.. \ 1.mtlon report•• the n4t1on between war finance md l'ederal .Reserve Bank-. penalties tar deticient reserves, issuanoe ot new and used currency and financial statements. At the m&etiilg o! larch 9th, Cha.irnlsn .P..amsay read a letter trOi'.ll R.H. lhlone ot Venver exiressing his thanks to the cllreotora m:i4 the G-overnor far the engrossed oo:py irig Of' or resolutions paseed at ~ meet- J 3l1'1.UU7' J2 th• - In tlJe met1:tig of Jhroh 23, the d1souss1ons by tbB directors leaned heavily tcmard the topic Denver and ~ branches. ~ prov1d.1Dg adeqaa.te buildings for tba It was at thla meeting that a letter tran Govermr Ha.rcil.Dg was re~ ex,presslzg a decision tm.t no objection would ' . . be raised to tho bank proceeding with plans tor a bl.ilding at .venver on the site which lu!.d rocontly been purchnsed. The directors, having been well so.tisf'ied with the excellent work of the :tirm of architocts, Ore.ham, Ailderson, ?robst & White 1n constructing the Kansas Ci -ey bui ldlng, voted to employ this f'i:rm aa archi tocte oi' the .llenver bran.oh, :provided the fin.. -..ou.ld empl01 at 1 ts ezpense as associate a.rchi toots. some Denver f'i:rm to be named bJ" the building otxnclittee • .I>llrillg the discussion o:f' bNi.noh bu1ld.1ngs 1 Director Gibson sul:mitted a report of the conditions ot the branch building at Cmlba, 1n ,mich he tavored the exahe.l\,e-e of the building and lot :tor a vacant lot at tho comer o! ~evonteenth and Dodge streets, on m1ch lot he sugge~tee the bank ahould ereot a new building. Howevel", on June 9th• nt a oonferenoe beld 1n Q:ioha between Chairman .lfamsay, Govemor Miller and l>ireotor W. tobell repreBenti:tt: the .Board, tbe matter was S{;ain taken tlp WJd the opinion was expressed by lJireotor lll.tohell tlmt t~ directors would not a.t that timo b-e in favor of thia e::ohange of property• ·· i30d Uncarer G-Overnors' Portra1ta. J.t the director's meetiJJg at April 13th, tm portrait• of Governor .1.z. W.ller am J!:l:-gov-e:rnor ~wyer irere unoovered betore the directors. the ceremonies be1:rg in .charge of .iJ1reotor llemiiJg -- chairmwl of the Gom:nittee on portraits. These pal"traits were done b~ Charles !ennell 1 a !'renoh artist who he.d been aeleoted tor this purpose and far whom %-governor ~ r had sat at lDa Angeles previous to the si tt1Dg b7 Governor Miller at tbe bank• l!cldorse G<JV'ernor iJardirg • •A. resolution offered~ lJir~ctor ;im1ley o.t the ~ 25th 1:1eeting, ~,as directed to the !:5ecrete.cy of t.ho Treasury V!ith the i-oqueat that 1 t be broUght to the attention of tho ?resident of the United States, endorsi:rJg Governor Harding Of the l'cdera.l ~.eeervo Board, am calling tor hie re-appointment as governor for the following reasons& Th.at he_ had ouried on a splendid w~k d.ur1~ the trying years through whioh the co~try had.. recently _passed, that he knew the law, _posse2Ssed !llle executive ab111~, ha.4 inspired oonf1denoe 1n tm i!'ederal system, and that h1a ·r..appo1ntment at tm l'l"esent ti.mi, would remove tm ~ten. ttom ti. auap1oion of poll -tic a and thereby lend to t-2:e sucoesatul a.clminlstra.Uon of the tiystem. this r~solution was seconded by lJireotor .::1 tchell an1 mum1mousq passed l!lnme three months be.fore Go"Vornor .Hardillg' a term branoh At tble meeting a build.mg oamnittee tar the 1'enver ' . build1Dg was authorized to axohange tba lots recently purchllaed at -130 -e .d.ghteent h and Curtis streots for fo'llt" lots on ~eventeen th and .Arapahoe streets. Whal in the Bll!!rner of 1922 the nomal rato of intorest at tbe ~·oderal .Reserve Bank of Kansas City was reduced from 6 per cent to 6 per cent, it was perhaps natural that a m.:ciber of ban£:J mo Yere redisooun ting quite heavily with the Systan e.t tho 6 !)Elr cent rate, were anxious to These banks applied to tba Federal obtaiu tho benof'i t of t.he reduction , .lieserve Bo.nk tar permissio n to pcy off these 6 per cent notes and on the same day ma.kc De\"I reclisooun ts on the sa:oo paper ~t the 5 per cent rate. The Federal .Hosorve Ibili-:, i7hen tho mtter was broueht to its attention , was inclined to allow . this to be done. The . governor of tho bank however,. 1n brlDging the mtter beforo the directors , pointed out that suoh procedure would be i!l a mnner un.:ra.ir to institutio ns whicil had paper that was virtually ready to be retired. IlO.'ft;Ver, on Jum 22nd this acute situation having been passed, the governor advocated the rebati~ of interest on paper paid before mtur1ty and ref'und the unao.med discount at the ~rent rate of ~he bank at tm time tho piper 1s rotired. rua action it was believed 'WOuld provide an equitable solution to slmilar problems 1n the tuture. -130f'- Governc~ lllller Resigns. When J.z. Miller, Jr. resigned his office in tbe National BaJJlt ot 00m'.il8.l'ce, and disposed ot numerous bank holdings 1n order to beco.:ne a Class C director and Fedora.l Agent of the l'edere.l Reserve :Bank of Xansaa City at ita organization, he did so at a financial loss in order to, aa he himself' _expressed it, give a greator service to the nation. It waa true numerous other bankors who aooepted sioilm· positions at the request of' the TreasurJ Department and the Federal Reserve Board did the same ae Governor 1!1.ller. He had hlDllY w:ibi tions f'or the now bank, one of th6%1 was the erection of the !!)lend.id b·:.iilding in which tm bank was housed 1'ovember 16, 1921. Opposition to the erection of tbe new building- onJ.r increased Governor Uillor' s embi tion to put it through to tls height wb1ah he and the :Board had decided w-as tha proper height. When the bank had beooma properly housed 1n tm new buildillg, and the various departments were working barmoniously am. m. th adequate room and w:irld.ng facilities, Governor W.ller•s greatest ambition was achieved, and he began lookins forward to a vaoat1on of which 1:Je had deprived himaelt during hls conneotion with the bank. m.s oloae trienda h a d ~ times urged him to taku an extended va.oe.tion, but he had defer- red this until such ti.:a8 as he could relieve his mind of the JllllD1' rospons- 1b111t1es ·oomiected with his position. With the beginning of 1922 however, he began gradually to paae on to others m~ ot the matters requiring official 4ecls1on am 1n t~ meantime planned a trip to Europe with his wife and daughter. -., -130g- At the direotors' meeting of June 22nd, Governor lliller reminded the directors that he bad served the institution f'or about eight years, the first two yea.rs o:t whichthe ~ysten was untried, and later was subjeoted 1t> a supreme tost by the v.orld war, that he now felt the need ot a rest and that he desired at tha.t time to sever his connection with the benlt. In ·handing Chairman .tUl!!lsay his resignation. ha thanked the Boa.rd tor the hearty coo:,eration and macy- courtesies whioh ho had received from every member. His resif;llation :tollowtH "JUNE '11':IENTY-SECOBD, - 1 9 2 2 "TO THE CBA.IPJJ!Jr and B:)ARD GF DIRECTJRS, o:f the FEDERAL 1IBSERVE ,l3ANX JF KANSAS CITY: Gentlemen: 11 1 hereby tender my resignation as Governor of this bmilt. "In doing so I wish to express the deepest gruti tude to each of you for your earnest co-operation and the Jl!Ul¥ courtesies and kindnesses shown me during our association• Siooerely, J.z. Jl1ller, Jr." It was moved b)· Director !'laming and seconded by Director Hord and carried by the directors tmt the resignation be aocepted with regret, to taite etf'eot July ls t,. 1922. Thereupon ·tm the to~lDW1Dg resolutions "WRERE!S, Governor J.z. Miller, Jr. oos th1I day tendered his resigJ:ls.tion as Governor. at the l.'ederal Reserve lbDk ot Jteneaa Oity, am the sane ma been eooepted, an:l "WHERE&..S, Governor Miller ha.a serve4 C..J.a 'bcnk tor the pa.at eight ,ears, d,r~ which time he has had no •acatian and dur~ T411oh time ho has baa:>. tirelssa 1D h11 etto.rta to br1Dg tm bank up to its present ettioient oona.ition, ' -130h- "THEREPJRE, BE IT RESOLVED, That in oonside rat1.on at the eminen t service Governor .W.ller bas ramere d this bfmk during the trying years of t:m past, be be allowed three montha ' salary attar his retirem ent as en e~reBB ion ot the apprec iation ot this Boo.rd for tbe great _-wom he ha.a aoaomp lished." W.J. Bailey becomes Govern or. At tbe sam :reeti~ at which Govern or Miller resigne d, Directo r tlemiDg moved that iV1llis J• :Bailey , rormer Governor of Kansas and a directo r ot the bank since its orga.ni za.tion, be appoin ted govern or for the unexpir ed. term of Governor Miller 's office , am subjec t to tbe approv al of the l'edera l Heserve l3oard. at the sa.ue salary of ;20,000 . ment to be effecti ve July 1st. fhis appoin t- The motion was aeoonded by l11rect or Byrne am unanim ously carried . In a.ocept122g the appoint ment Govern or Bailey S,i)Oke as follow ai "Gnetle men of' tm Board: "Lel:lgu age is inadeq uate tar me to e~rass to you the sincere apprec iation that I feel tar the great honor you bave Ju.at done im 1». mlildng na tba Govern or or this bm:ilc, am. having oome to ZZ8 unsoli cited. lntone if'ies tmt feeling . I now promis e you tlBt I will give to this groat positio n the beat tmt 111 in me, 1n order that l my prove wort~ o t your confide nce and respeot ·. - - - - - " "Gover nor Miller ,- I talte this oooas1 on. in the presenc e o t ""this !oard who are am haw beaa. yoUI' loyal friends ani aq,portet" e, to aolmo,.,ledge the =any courtee ie s and the oons14el"atlon I have receive d at your hand&. )(y olose aasoc1 at1on w1 th you as a directo r in this bank me been an inspira Uon and a great educat ion to me. "1 csnnot eXpect to measure up to c;he t\lll measure ot tbe record. you mva m:3.de; thia .ma.gnif'ioent build.u g oonstru oted 'lmder your guldlq ; hand am the record c4 aohieve rmnt 1n br1~ ~ the bank up to 1 ts presen t e:tf1t1ienoy ia your monume nt to last through tm years that a.re to cane. -1301- "For myself' aild for this Board, l ask f'or your friondly cooperation r..Dd n.dvice c.nd I wqnt to f'&el th3t I can go to you as you hn.ve cCJ:10 to zm, b-.it I expect to E;et I!lUCh more f'ra.i :,ou than you received f'r0:!l mo on account of your larger experience and the erea.t ability . ..-o nll lcr.cm is yours. "Gentlemen, I again thanlt your Subseq_uent to his resignation , Governcr Miller ·roce1ved trom uovernor ttardillg of the l!'oderal lteserve Board, tho follovrillg letter which was made a part of the m.1nutos of tho bank at its moetiDg of July 13th• .. Dear trovarnor !.U.ller: "l mve J"t:.:it returned from o. vi s1 t to .Boston a.m fi:m on my des~ your letter of the 22nd instant. I was ver,r r:iuoh surprised and disturbed a few days before I left for .Boston to loam of your contemplate d resic,-----nation• which I um.orstand was tendered am. bas been accepted, effective July 1st, at which tizoo Governor ri.J. Ealley will succeed you. f \ "I am glad to ~ow that at last :J;)U a.re going to taJm a rest am that you wil l :;pand a few months 1n Europe with :,our family. You l::nve done a monumEDJ.tal work for the .1"ederal Re:Jerve System and I mve af'tan wondered w.bat kiJJd of a constitutio n you had 1n order to kDep on the Job e.lmost fro::i d.o.w to da.r1c al 1 those years tbo.t you have. I shall bring your letter to the attention of the Soard tanorrow and wish to say now that I appreciate your firmness o.nd. strength of character, and that you hnve handled an ir:lmenae Job 1n a b 1g ~ • You have been unmoved by cJ..amour and ori tioisma and you have the satisfn.otio n of loaving the l"edera.l Ileserve Ba.nlt of Kansas City wall housed, well organized aDi in a strong posit i on. I shall alwa~ look back with pleasure to my aasoo1at1on w1 th you &:cd wiah to thank you tor tba unifor~ c ourtesy that you h.r:.ve almys shom me, and for your hearty co-operatio n duri~ the tryi~ tir.:.1es thrO• whic h we mve Just passed, "With warm regards, I am Sin:,erely yours, lS1gned) W• .?.G. Barding. " -l30j- ?.H.nor ohe.Dges in bank- Governor lta.iley wm had since his first election e.s governor ot Kansas in 1902 bem known throughout the middle west as "Governor" l3a.1lay, attended his first meeting as ~vernor of tho bank on July 13, 1922. Hla first report to the Board as governor, dealt rd th the usual topics o'f oondi tion of' the bank and tm distriot,and. in ad.di tion bro~ht u;p the subJeot of the rental ot floors in the bank bu.ildillg, which rental had. not progressed aa rapidly as the bank had antioipa.ted. 'l'he Board vo-ted to grant Ht.J&beB Bryant, the bank's a.cent, discretionary powers to grant concessions to ;prospective tenants, provided these concessions would not oonfl1ot with o:ny leases a l ~ ma.de • .At this meeti?f; the following resolutions ooncerning the co.. operative store in the bank was ad.opted: "WHEREAS, the grocery store known as the Glenda.lo l.tercantile Com.)<icy, now operated by and under the supervision of the .tederal .Reserve Bank, was organized at a t 109 when tood necessities \-vere at the very highest and rar the purpose of enabling the eiqployees ot this bank to purchase same at lower _prices than wero being offered by the regular •reta.11 a tore a, and, "WHEREAS, toad pr ices have reaun:ed a more normal level am the store is not boillg patronized to the extent of justifying the l!lllount of e::q:ense necessary to carry it on, "TBEREFOBE, BE IT RESOLVED, Tmt as quiokly as practicable the stock on hand be closed out am tbe store discontinued." At thi& meeting the salaries of five officials of t.be three branch banka were 1Dcreased aa tollowaa Cmaba Branch: Wm. Phillips, Aaa't. cashier from ~300 to $3600 per yeaz-; Denver Branch, Joseph E. Olson. Cashier. trom $4000 to ~800 per 19ar, A.J. Co~, Aea•.t. Cashier from ~300 to f.3720 per year; Oklabozxa City Branch: R.o. Wunderlich. cashier, mm ;3600 to '3900 " R.L. l.tl.thea, Aas•t. Qaahier, :from ~2700 to ~000 per year. -l30k- strike af~ects business. By mid-a'lmller or 1922 vman norcally the moving at the wheat crop, oontemporery rrith stimulation of other business in the South\1estJwould ba~e reciuired ad.di t1 onal capital resulting in rediscounts at the Federal Reserve Bank, the whole oountry \itl.B was about to m teriallze. re~ f -or a. business revival wnioh Eq?parentl.y However, during June there was smouldering in, this country a. dissatisfied i'eoling among- tbe ra.11ro£1.d shopmen whioh result- ed in a general sh0p[llell's strike on July lst, which continued ttroughout the month and into August to the detriment of business in general. strike was also still unsettlod until late SUJ.ml8r. '?be aoal ?artly as a result r:r£ these strikes and partly as ~. result of l2D.certa.1n conditions in :Europe, business alld. international commerce took on a not1oable slowness as well as a retarded mavemcnt 0£ mw i:r.ves tment s. These things \'lere reflected d.uring the stun:nel:' a. t th.a Federal .:ieserve Bank, whare redisco,mts oontinuod to 9lacken and the reserve to increase, Che of the mrks Of this condition was the loweri~ of the redia:- count rate 1n all of tht :tederal nouorve Banks of tha country, It Wcl.S at tlu• meeti.Dg ot .A~ust 10th that Cha.1.rmw. Rams~ read his letter of July 28th the .rederal Rosene Boa:'11 in regard to the bank's l'ediscount rate. am to also a letter from ~e:nor Harding o'f the P'edarel Reserve lJoard. dated AUi:,'""DSt 1st, • in w:hieh it waa stated tho bal.k WO!lld npprove a discmmt rate of 4} per cent for the Federal .Reserve Ba$ of Kanas.a City, am also called attention to tbe minimum rate ot thie bam:: of 5 per cent S.CG&ptanoea as oompa.rod w1 th mininlum rates for tM :puro:.ia.ae of banker'• or othel' be.n1m trona 2f to ~ • per cent. After a o.isci.1Ss1on Director Eord moved tmt tm rediscomJ.t rate bo reduced troo &¼ to 4½ por cent, ef'ftictive h.ugi.lSt 12th• a:cd tmi.t the bank authorize the mini:::mm rateo for the purchase of 'w.nker 1 a accept- auoea a.t 3 per oent. This moti9n was carried. Visouss llitohoock Bill• Sons.tor llitahooak of Uobrc.:.lrr.1., iuvi1.JC introduced in Cone;ress a bill authorizi?Jg the expenditure of e.n anoU!lt of mimoy equal to 3 per cent of the oombined cnpi ~rll aru.t surplu3 of tho Foo.eru.l Rea1;31-vo ~nk ot Xn:nsD..s 01 ty for the ereotion. of r.i. br''121Ch bu.:u~r e.t J~h::.i., the ba.nk' a cU.·aotora at their i:nesting of A~us t 24th discussed th.ls bill ~d .-rnre 7i~•tually 'llrl3.n- imous in too opinion that the 3 per cent cteutioned would not be a.dequate to build. e. suitable building for the 'branch, too s.mouut bein:; only ~26,348.95 at that time. Tb:, diroctors, thero!cro, pa3sed a resolution e.uthorizine Governor Bailey t:> comnr.mica to \':i th the Federal Reserve Board D.Dd. re11uest its co-operation in tb:J intel'est o:f' havi~ Co21grosa l)Grmit the GXJ.)8nd.1ture of ~o,ooo, f'or the branch bank at Cbana. .:'..t tho abovo ~etiDg the direotors voted to £ix the salary of Comiael Je.mcs E. Goodrich at per year 1n lieu of his present salary and feos. $5,ooo -130m.•' Far OJ.eariDg Ho'QSe Off ices. Governor .Beiley presented I ~ the diroctors on .!lJt;ust 24th• the F.()pOsal to rent floor apa.oe in the Federal &serve Jank building i to the Kansas City Clear1lJ6 House Association. It ms agreed by the directors tbat 1 t would be ot bonofit to the bank to lnve tm f. ... ' Clearing House inside 1ta building, am thare:foru a motlo~ was made and carried to the e:f'feot that .l"e.de.ral Reserve .t>.gGnt Ramsay ~ author- ized to cl.ose a contract wl t'h the Kansas City Cleari~ Bouse Aasoo1ation tor rental ot floor spaoe. TABULA.TIOB OP DATA: 'PEn!llAIE'lllG TO !rRE vPERATia?IB OP TBE BAmt • .'. I •• ': ! \ ImERES:UlID FACTS .?ER!:.'J..IlU!m TO TBE FEDERAL r~&v ~ B:.E{ .BUILDING, ITS SITE ETC. lilSTORY OF 'I lie BB.wCR.ES ~ /3 /- com.,.Al:lUIVX S'?ATEllE.UTS or Various CoMitions and Ope.raticma ot the Federal Besene Bank of Xansaa City at the Close ot :i:.och Year ~ance 1ts Organizaticm . -A.Na am Population ot ~enth D1str1ct- Etate Square la.lea . . - .• . 1920 939.876 J...690,M9 ?60.950 i. "169 .25'1 1,192.%14 1,295,502 139,610 J..516..662 153.ZM. 1.825.2Zfr 194.402 14,5.965 SlB.252 • • • • ~.zss ~tal • • • • • • • • • Gross Earnings 1916_! • • • • lt n 1916 • • •· n " 1917 • • • • " " 1918 • • • • " 1919 •. • • • n ~ 1920 • • • ti • 19%1 • • • •• from1Atiqn m.~ OOlorado • • • • •·, • • • • • • • • • • l.OS.658 KariMa • • • • • . ., • • • • • • • • • 81.m w.asonr1 • • • • • • • • • • • • • • • 10.509 (1) Ne"braska • • • • .• • • • 76,808 • • • • • • • 4?,!02 1r8'f1 J.J&neo •. •. • • • • • • • • • • • • OkJ a:Ucm:& • • • 62.784 • • • • • • • • • • Wy,om1.ng • • • • • • • • • • • • • • 97.-548 . . 1910 • • • • ••• • "' • • • • • • • • • • • • • • • • • • • • • • • • • • .• • • • • • • • • • • • • • • • i 103,Z60 ..29 3".966.• 6'1 • 958.301.68 • • 3,'51,936.J Z • • • • • • • • • • • • • • • • • • . .. . . . • • • • • • 4.961.'Sl.9 1 7,409,981.3 1 .s. '112. 858.33 ' 'lota.l Gross Earn1nga • .- • • • • • • • • • . . . . . .. • • ., • • •=•~~.892 -;Z2 (a) Operat111g Expenses • • • " " I • • " f " • • 1916* •• • ••• .• $ 126 ,8'0.SS 183,398.42 al.3,958.68 • 695.806.25 .. 1..185, 966.S& • 1.85"1.'l.26.5 • 1 • 2,"11,018.9 ' 1916 • . • • • . • 1917 •• • 1918. ~ ~ 1919 • • • 1920 • • • 1921 • • • ••• • • • • • • .• • • • .. • I ( *) - Includes November and December, 1914. -Dividends Paid- 7-J.Z-l.6 for ?eriod 11-16-1914 n 1-25-17 h 7-1- 1915 6-30-1'1 It l-1- 191& "n 12-51-1'1 " 7-1- 1916 6-30-18 • a n 12-31-18 " 6-30-19" (b) 12-31-19 " " q a 6-30-20" .• 12-31-20 ~ 6-30-21" 12-31-21 " If to 6-30-15. • • • • • to 13-31-15 • . . . . • to &,.,:50..l.6 • • • • • to 6--30-17 ••••• 7-l- 191? to 6-30-18 • • • • 7-1-1918 to 12-31-10 • • • • •" 1-1- 1919 to 6-50-19 • • • • • 7-1-1919 to l.2-31-19 • • l-1- 1920 to 6-:-30-20 • • • • • 7-1-1920 to 12.-31-20 • • • • • 1-1-1921 to 6-30-21 • • • • • 7-1-1921 to 12-31-21 • • • • • i 66.706.96 92.188.25 89.l.l.6.93 183,197.54201.795.a, 107,934.05 lll,811."TS 116.~'17 l25;088 •.86 . .. 122.583• .66 133.ffl..2() lM.832.58 Total 1iiv1dends ?aid • • • • • • • • • • • • • • • • • • ,. • • • 0 1.495,986.'1 4 Discou nt Operations State Colorado • • • • • • • • • Kansas • • • • • • • • • • Jll.ssouri • • • • • • • • • liebraalla • __.,' _;, ..• :. ., • • • • New J.lexioo • ~ •• ',; • • • • Olclahoa,a, Wyoming Total •• • • • • • • .•• ., • • • •· • • • 9! • * • ., • • • • • • .. • • 1914 1915 •124- 121 219 224- 53 208 193 filA 62 • • • • • • • • Zl8 lO • ,. • • • • • • • • • • • • • • 186 • • • • • • • 1916 ·1917 1918 1919 1920 122 54 9 9 S05 33 309 ZS 831 952 94,3 lZ1 132 145 243 · .253 211 55 SI 61 68 19.2 iOo . 20? 210 9 . 12 13 13 m 316 321 340 S9 45 ...........,. 36 50 lJ?.2 · ;?.ZS 19.21 146 2?5 56 20% l5 . . . . ___________ ___ 36 358 51 958 994 1032 108'1 1103 -lfa::mer 0£ Banks >.ncomnodatod- State 1914 Colorado • • •· • • • • • • ... • • • • • • • • • • • • • • • • • • • •• • • • (4) I.ebraska • • • • • • • • • Hmrlim.ico •• • • • • • • • Or:.lahozn • • • • • • • • • '3yamlng. , •• • • • • ·• 1u:tnsas • lli as O"Jl" 1 . . • • • • • • • • • • • 18 16 55 23 · 44 12 37 3 71 • • • • • • .. fotal • . • 1915a 1916 1 1917 39 83 31 44 6 1918 1919 76 79 124 35 173 100 30 105 114. 105 1'11 211 54 '5 ., 235 26 l2 13 2.57 329 35 39 g79 826 75 159 5 2 % 213 22 189 36" 554 z,4 · 1921 8 101 - 1920 - 192 169 - 920 • Includes Novecnber am December. 1914.. -Otfe.ringa Accepted1914 1915 1916 1917 1918 1919 1920 • 1921 State • . ·• • • • • .. ... • • • • .. • • • . ..• • .• • . • ., .... • .. • • • • Colorado. Kansas,. • lfisscnd • :e) • • • • • • • • • • • • .• • • • • • • • • • • , Nebraska. •new :uexico • Oklahoma. • Wyanlng. • • • • • • Total • • • 147 19 351 • • • • • 4 • • • • •• 862 • • • . • • • • • • • • • • • • • • • • • • • • • • • -. • • 44 223 74 • 65 1060 1590 1'12 1392 281!5 124 9?1 1883. 113 1649 3886 116 15 536 3832 21.4 9 894 168 5588 96 Z092 3615 4210 3939 250&1 2262 '1052 202 5169 81%1 338 7351 688 1137 9240 16024 2Z45l 26'163 - 1,. r--;)1' -0,pen lht-kBt T.rsnuactlcmaBanJrnrs' Accepta nces parcha sed 1n open znrmt and acquire d ~ other P.B. Banta. 1916 191'1 1920 19.21 1918 (f) 1916 1917 1918 None 1920 None 1021 756.ooo.oo .lt1n1 ted States Secari ties Ptlrchtlsed~ta.l - 1919 1916 1917 1920 . 1~21 $ 128.o,e.650.00 • t a.9'9.5 00.00 1919 None r ·-total Cleari!lgs- Total Jfamber ot ill Itera ' Bamle4 (1J 191-' (Deoember on.q) • • • • • • • • • • • • -. TS,683 1916· • • • • • •• • • • • • .• • • • • • • • • 1,983,986 s.214.ais 191' • • • • . •. • • • • . • . . . • • • . • • • 1917 & · • .• • -e, • • - • • • • • · • • .. • • • • • I • 191B . . . . . . . . . . . . ... . . . . .. ... . !oto.l Amaat ot All ltema Ifamle4 $ 38,642,?08.ff '110,190, 98'1.50 1,536.507,820.96 :s. 982.e:so 12,07&~ 3,215.,181,258.2 '7 ,.553.186,851.~75 1919- • • •• •. • • •· -t1t . . . . . . . • -. • • • • • • • 2a .no .ms,&. 1920 • • • • • • • .- • • • ,. •. • • • • • •· • •• • 63~881,G02 1921 • • • .• • • • • • • • ♦: • • • • • • • .• • 58-620.078 9,856·, '16'7~2~ is.011-582,140. 00 9,o90,~46~3ZS.oo ••••• ·' . • ', J)ISOOtDIT BA~ OP THE J'EDEBA.L .RE3ERVE BANK OF XABSAS C I'l'f, 1914-19 21. _.--. J ) ~ba.ract er or JS,per and sturitl ea. Dates on ltlicb.) _ _ _ _ _ _ _ _ _ _ _ _...,..._ _ _ _ _ _ _ _ _ _ _~ - - - - - - rates were put) ..: )Agricu l- l Com-into effeat. ) 0Oirmercsial, asrtcul tural, a.Di live-sto ck pi.per. )tural Blld )mod1ty J • live- )paper ) J I ) .. ) ) j stoClc )within )'171th1n )ll to 80)W1th1n ) 16 to 30 ) 31 to 60 ) 61 to 90 ) paper )90 ~ )10 days) daJ8 )15 dqa) days ) daya ) days ) over ) 1 1914-lia v• 16 JJGc. 4 Doc. 15 • 1916-Ja n. .a Jan. 28 l'eb, 17 Jmw 18 1 6 1 1 l , l9o ws ) 6 6 414, Aug. l3 Oat, 4 Dec, 2 4 3 1916-Ap r, 1.2 Juq 24 Sept 18 ,Ql'I-~ ., lb.y 28 llov. 5 Dea. 3 Dea. 21 1918-Ap r. 8 Aay 20 (3) ~ 6 Sept 20 Oat, l ~ 5 fir 19.19-.Apr. 26 Jmie a Sept, 3 Ncrr. 4 Nov• l2 Dec. 15 1920-Ja n. 3 Jan. 23 . Feb. 6 , Eeb. 26 Apr. l ( July 3 Sept.28 1921-Ju q 1 liov. 5 6 .e l ~B1117 no tea 6 tint . S.aaue4 u at J\1D8 5 15 5 15, 1921, 1oont1Jm0Cl . - 3 •.Bates m - with thoH epplloa. bla to ~~ i:aper at ocrreepon,,hig matm-1\ r. 4 1'he 4 per oent ;ra~ appl.1e4 only to paper aeom-ed 1G" tolU'th Llbert7 loan bcmda, '1bere ·the paper ree111oounted 1dlh • . •e4eral Reserve !Emlt was t ~ b;r tbe membe:r llank trom lta ouatane r at a ra~ not ezoee4i llg tbe coupon rate ot tba bon.4. • 5 Applies onl7 ~ member b8.llJQI' collater al. note•• / ~ '( -: , ·; DISOOOJIT .RAT~ OF TBZ FEDERAL RESERVE lWiX- OF .lWmA B OI!J'·, 19 ~~ . -u- ::· .. . .- . . ' -. - • • • c4 - • ' • ; • :- • '""' . . .. 1 .• ~ter 19-i!e r and mtv it10 1 ""'-i.tes on whio.h))_ _ _ _ _ _ _ _____ ____ it~ _ _ _ _•_oaz _ _ _ _ _ _ _ _ _ __ • ~es v.ere put) frade acce pt-) Bank- ) Paper ..a eoure 4. b~ )Authal-1ze4 retea .1.nto ef:t'e ot. ) anoe1 )era ao-) . , l cm aooeptano )• )oep t- )Trea.au17· 'ii.ota ■ l)L1b ert7 boma ) ~ 1n.ea ) )ance ■ )and oertf t1oa tea)a m V1cto17 ) open IZIEU"Jalt• - - - - - ~ - - - - - - ! ) w i t h i n )o( tndeb\t_dn eaa.) noteg, ) )W1th-J 16 to ) a )Within )16 to)W 1thin )16 io 90) 111n1- ) azs.)in US) 90 )mcmthe )15 4aya )90 )lJS _dap 1914-?iov. l6 Dec. OAU 1 om 1 ioan , 1 ~•> .) --. ) 111111. J > > " Deo. 15 1915-Ja.n. 8 Feb. 28 Feb. 17 2 J,me 18 Aug. US Oct. 4, Dec. 2 1916 -Apr .12 Jul.¥ 24 Sept. 18 1917-Me.y 7 4 3 ~ 28 Nov. 5 :oeo. 3 3 4 Dec. 21 :.......S-Ap r1l 8 4: .. (4)4- 4¼ t Jlme 19 Sept~ 8 Ii'ar• 4, 6 5 51- 6 5i 6 6 8 4¼i *,1°~} :t.. !i 6 a ~J 4 (6) Bept.28 'l•.Tu ly l !iov. 2 (5) ti 1''eb. 26 Apr. - 1. Juq ! \ 3 ' (2) (4l4- 4t 1919 -Apr. 26 Feb. -4¼ 4¼- lhy 20 Sept. 20 Oct. 1 lfov. 12 Deo. 15 19.2 0-J~ 8 Jan. 23 4 6 6 5 (6) 4i 4-¼ I -~ 5 it :ia . 66- 6 5-6 (6)5- 6 6 -6 ~ 5 6 a- 5 5 6 5 D1aoonnt rate ocrro spon da 111 Ul inter est rate barne bJ oerti t1oa wa r,t indeb ted.De11 ~ pledg ed as ooll atera l with in limit s. emwn. ••. . llote - :aa~e on pap~ ■eoure~ lr3 .We.r 11.name Oorpo ra.tlo n ~ ~ • oe~ bll~ Apr~ t-1,19 1$, at l per oent Sn ~ u ot. t,lio rate appl icabl e to aa:m ierolal ·pepe:r ot ·oorro spo?J11ng ma.w rit;, and were au~ozrai1oa1~ diecontitmed otfea t1v"' ··Aia-• ,l f ·1920 • 00.1n ol4ent with the izatu r1t7 ot all outs tan~ We.r J'1oame Ocrpai-atl on b -~ _-:~. ··: • THE BABK BUILDING Condensed history of the bu1ld.1D.£' s1 te am the structure erected thereon for the .tederal Ho servo .8ank of Kansas City. A dota.1.led history or the site of tm rederal !Wserve Bank bu1~- 1ng as a. part of early Kansas City as obtained. after exhaustiv e research through a period of several years and written tor the corner stone by the writer of this volma.e, is tound 1n manu.aorip t Bo. 10 in the corner stonef,, a oopy ot which is contained in the archives of the bank. ::5uff'1oe it to ., say here that the s1 te was scarcely more than an arro\7•s :flight f'rom the "Big Muddy" 1n the days men tho stalwart Red U'.m. hlmted on the hills that are now Kansas City. La.tor it formed the orest ~ a. moll that sloped n~rthward toward the river and westward to the ravine that became :first the Santa Fe Trail and la.tor Grnnd avenue, both notable avenues ot cozmneroe. Of early importanc e to the three lots on which the building was erected are the following dates; Louisiana .?urohaae John Jacob Astor f't1r trade opening ¥1rst t'ur warehouse bailt by Chouteau Ja.okSon county organized Independe nce fo\mded James H., ltoOee 320 acres \now J.ScGee's .Addition) bought :trom Gov. Shavm.ee l!is.a1on ¥ounded so. 14 Santa J!e 1'ra.il trade began at lndepende noe Westport founded "Town ot Kansas" (now Kansas City) founded John c. J'remont•a •:fl.rat expedit1o n lle%1can War proparatiQ n w1 th "Town of Kansas" as outfittin g station Kansas City given charter by the state A.a Slll"Ye;yed• ~ 1803 1810 1821 1826 1827 1828 1829 1831 1833 1839 1842 1845-46 1853 lots were or1g1:call .y a part of the old "Smart .Farm", later called the "SwoPo'I A.dd.1tion"• '1'he t1rst OWDers wore Oliver Caldwell end Henry Chiles who bought t:he tract t'rom the govermnen t 1n 1834. l- ,:ha next year Chiles. sold his interest to cald:well wo beoa.ma one or the original 1:noorpora.tors of Xansas City. caldwell sold :rorty aoroa including this traci to Thomae A. Smart tor ~400 on April 6, :857. Bmart aold the same :rorty acres on ltv 12, 1859 to ~homn.s H- Swope for $7,500. '.L'his was tho last transaction 'Wherein the three lota tnrming the bank site were sold 1n the s ~ tract until, on July 29, 1918, the _three lots . . alone wero bought by the ll'ederal 11eserve .mnk of Kansas City tor half a million dollars. • ,Jf the early homes a.nd buildings erected upon tho three lots, 3-room the first that 1s a.uthent1oally chronicled was tha/1 story brick home built probably by George A. Tarbet who plll"chased tho lot April 9, 1869 :tor ,rl60 an,i sold 1 t October 27th of tm sazm ;year to Tho!!las J. Ba.mes for ~l,300. ,:Ohis was on the middle one of the three lots on which the bank building stands and was the only buildiilg' at thnt time on the three lots, :the toll,J~i.Dg description ot this groimd wtiS written in 1921 by L. .B. Arbuokle, who ·then lived at 2509 JackSon Avenue, at the dictation of his mother, .urs. 1Jary r.:. Arbuckle, 'tmO was at tllat time in her eighty- fourth year but woo died early 1n 1922. "The 49½- teot ecbodied 1n the hd~ral iieserve .Banlt sito, next to the corner o:t "J:enth ::;treat am Grand ATenue, waa tm ho.me of the late Hiram Arbuckle and f'smily for savan years, --187'7 to 1884-. l!r. Arbuckle moved to the home • a 3-room briOk - at a rental of i15 per -month. later he bought the property trom a Mr. Carswell of' Ob1oago 1 for ;1.100, pay ing f200 down and $15 monthly. This transa.ot1on occurod a tfffl months before tba ai te of the .l!'ederal_· Post Otf'ioe, now tho home of tbe ¥1delity Trust Company, was aeleotad at Ninth and Walnut streets, "A little later a 3-story front was bu.1lt to the original home. Mr. Arbuckle a old the property 1n 1884 :tbr about QO , ~-'.~• $8.ooo m1oh was oonsidered a good prioe. His vision then '\18.B that in a tow ,ears the property s,uld have a great valua. tion. , "This property was on the hill, as we do scribed 1 t, a.bout thirty feet above Grand a.venue• and the :f'ron t y--.....rd :f'Urni sbed a tine view point eobraoing praoticall1 all of' the business section of Kansas City, and all the residence seotlon west of Grand avenue. 'i'he .W.ssouri river was visible at the mouth of tho Kaw. RThe survivors of the family are tm widow, .Mz-s. 1la.ry E. .Arbuckle Md two sons, L. :a. Arbuckle of' 2509 Jackson aven1 48 and M.P. Arbuckle of 214 N. El.r!I\v->od avenu. ":r.trs. Arbuckle is now 84 years old. A few years ago she painted the :picture of the home :from e. sketch ma.de in 1884. The mother and the sons have a profov.!ld interes.t_ in the fact that a structure towering 305 feet - twenty-- one stories - so beauti:f'ul in· design, so magnificent, so useful in our city and nation's welfare, stands on the ground that for a ti.mo was their :place of abode. "It was wi. thin a cluster of' 011urohes - at least ten in number - fro::n Eight~h street to Eleventh street - from Walnut street to l.!oGee ~treat. Th~ location of these follows: Southwest corner Ninth street and Grand avenue Ninth and lloGee streets, southvres-t corner Eight street and Grand avenue, soutlrsost corner Eighth and Walnut streets, southeaat corner Walnut street between Eighth and Ninth streets {about Scarritt Arcade) Walnut between Ninth run r:ienth (about Gloyd. Bldg.) Northeast corner .Eleventh street and Gra:cd a.venue Grand ave.nu.a ~st side about midway between Tenth and Eleventh streets Southwest oomer Tenth street and Grand avenue Northeast corner Ninth street ruJi Grand avenuelcolared) "The Grand .Avenue Methodist Church and the Germun Church at Ninth and MoGee streets were among the fir st in bilildi11g and a.re now the last remaining, and the Jdetbodist is in a new building. The writer bas attended all these churches, ev91 the colorod church, ono or more times." !rhe Arbuckle hoce was razed at .the time tho high clay bank was cut down and the Glendale building erected on the corner in -.- -- -- rus lli1141ng served as an offioo bu.ildillg until the bank began p r ~ > ation of the gx-ound !or the new J!'eclera.l iieserve Bank ·ouilding. '.the first work of razing the Glendale building was done by Chairman .Bamsay em. t./- I \ trovernor Uillar. i, j°"" ;"°'._:-:✓- :C / ,._. \ ·.,.Jc,-(~ _) Tho goneral contra.ct for the constr-11ction of the new building • was signed April 15, 192:>. was Oot. l, 1921. In that oontract the date aot tor completion It was later revised however, to Hov. 16, 1921. aotl.J.'.il wreckiz:ig ot the Glendale building began of 45 man. Mv The l.3, 19t0, w1 th a foroe The wrecking ms CCl!lpleted by midnight ot June 4th, and u- oa.vation :t'or the new building begun June 7th. The building oomn1ttee ot the Board of Directors of the bank encountered numeroue d.11":tioultiee and obstaolea 1n their campaign of planning for the construction of the now building. Objeotion to height. ?~inoipal amo21g tlle obistacles mt by the buildillg oozmu ttee we.a the obJeotion raised t.o the height of the proposed building by a number or ltanaas City business people. The objection was raised following the ad.option ot the report by the directors of the National b k of Oon:meroe ln lfaroh 1918. This resolution oondemned the decision of the bll.ildiJlg comm! ttee to erect the struot1.ll'8. to the height of tWSlty-one storlea o.Dd ' was based largoly on the fact that the new building would tower aliov-, the city's two tallost buildii:.gs at that time, the Co::merce Trust Company 1 e building and the R.A. Imig l:uilding, both of which w~re in a dir~ct line west from the L'ederal .Heserve .Bank building site. ion was based on the assumption th.a. t the oi ty' a fecm1ically the object• sq line 'lt'Ould appear · uneven and that other co~ies or corpora.tiona expecti.Dg to b'11.ld l>uild1ngs 1n tbe tuturo might again outstrip the now building and thDa 111 a • manner bell ttle the two ran~ business buildings who had tall building. The resolution passed by the :Sank ot Comnerce directors· . pioJleered the oalled tor a discuaslon with the Jfederal iteserve Bank bulldi:Dg oomnittM, on the matter ot the bank building' B height. The oontorence between the representatives ot the Be.nlc ot Com:ierce am the representatives of the l'ederal .Keserva .Banlc was held 1n the dirootors• roams ot the latter institution. There were presenta R.A. Long, Chairman ot the objecting camnittee, W.T. Kemper, Cha1rmm of the lSOa.rd of the Bank of' COl?meroe, and J.C. !Uohols. .liepresenting the .rederal .Heserve Bank were Chairman .Mamaa.y, Director lloClure, Highes . , .tsryant, a.;ent for the buildiog, and Governor Miller. J.C. Nichols was spok.eama.n for the obJecto~s. He outlined the obJect1ons and suggested tr.at the bank, in order to house itself' properly, should purchase more frontage and build wider rather thml higher than adjacent buildings. In answer it \'E.S pointed out to the objectors, tba.t men the long bu.ildi:cg was erected it far outstripped the S'Ull"rounding s)cy' Una and no objection was raised, also that the operations ot the bank required the maximum ot natural light and fresh air and tlnt the ho1ght of the building was intended to ta.lee oare of these requirements aa well as to utilize. the very high prioed ground to the best ot advantage. It wae a.lso pointed out that the emptying of the bulld.1~ at noon or eveniDg -rush hours would not congest the streets e.t this corner nearly so much ns the emptying ot ~seer buildings on other streets, such as lliin street. The obJeot1on: ra-ised, While 1 t was unsuocessf'ul, had the ef,teot ot' alowiJlg up the p:rogres_a ot the preparation for the building for s~eral • months, or until the directors of the Bank of Cam:ooroe assured the .redaral l(eaerve Bank directors thet t~ resolution of obJect1on had been expuDged tram tho records. The retarding of progress oame abo".2t beoa.use the. ~eder,al .Hesene Bank directors did not desire to mallB the re·q_uest of the .h,- .l!'ederal .keserve Board for the. 21- .::tory building .vhile there were extant ,my objections on the part ot any Kansas City business mn. Partition wall a thorn. Another mattor which retarded for a. short time the progress ot getting the building under hoadway and which was the means at an important chazlgo 1n 'bllilding plan, ·.vas the 1nab1l1 ty of the building oomni ttee to reach an agreement with Walter Jaccs.rd at the Jacoa.rd Jewelry Oompmiy over the north wall of the :proposed building~ which wn.11 wa.s to a.but upon the :property of Mr. Jaocard to tho north of tm ~ site,.. The archi tacts for the bank :proposed to llzy' the north cantilever base of the buildine nearly 100 f'eet below tbe street level am in such a men.nor as to fOl"lll a base for not only the bank buildi:rg but tor whatever building might be _constructed in tho tuturo on the property of !Ir. Jaccard. It was proposed to Ur. Jacoard therefore, that if he should erect a building adjacent to the bank ho could go to matever depth he desired, using the same cantilever supports and piy a · fr~iction only of whe.tever part of the bank.ts wall he might desire to use. Mr. Jacoard did not see flt: to agree to this and it was necessary far the architects to re-arrange their plans ani place tho cantilever eupports at the front and roru- of the building and build only up to Mr. Ja.coa.rd'e line, thus maintaining a. bu.1ld1Dg separate and apart from whatever bu1ld1Dg Mr. Jaccard or his lessees or heirs might decide to orect. • . . • 0 0 B If -~ B 5 'l O Jl E 8 E :a V I C E S. Supplementmg tlla report ot the oorner stone :tey1ng found on page 1n the precediDg narrative there are g1 van following the program, list ot guests BD.d addresses ot oermoonies ot April 16 1 1921• -PROOIWIFederal Reserve Choral Club Invocation Bishop Sidney c. Partridge Iha ter o t Oeremon.1.ea . .uiying Corner Stone Asa E• ~ . Obai:rman "America the J3eaut1:f'ul" Foderal .Heserve Choral Club Address- Federal Beserve Bank Director W.J. '.Bailey "The Stars and Stripes :rorever" Federal Beserve Choral Club ~ AasembJ.¥ J.z. Jl1ller, Jr. Govemor-Ot:f'io 1atiJJg Star-spangled Banner" .Benediction BiBb.op fhamaa F. Lilli$ John B. Jones, lmsical Direoto.r Bichari Ji. Canterbury, Accompanist -LIB! Governors Oliver L. ShOup Henry J • Allan • Arthur 11. Hyde 0, GUESfS- or se.,an states ot Tenth Federal lieeerve District. J.B.A. Robertson Robert D. Oa.rq Samuel R. JloXelvie 11.c. .Meahem Presldentp and Secretaries of' All 01ear1ng Houses in Tenth Diat;r1ct. J.A. Connell J.C. Barger lii.D• fhatoher w.J • .Bnile1 lat.~ lreidentbal G.W.~ D.F. Calla.ban J.R. Wiae G.I.I. fb!th 1.L. lord .B..L. Beattie D.R. Fink T.C. Jlloller G.L• :Dmm J.E. Ce.rm .u.w. Hogan W.L. Lowia H• .B. Henderson F.R. Davia u.w. Wn.tson 71.A.P. UoDone.ld c.:.v. Jmaaor ~.Ji. Grubba J.A. Bartan E.S. Irish x.J. L1tteer w.x. !eP• Parmer w.1. Dmm Wm. .B. BD{;hell Dwllq Chas. !J.nlq O.L. Wilson Direotore of the i'ederal Reeerve Jm-nk or JPm2a 01,-y. Obail'!mn Asa E. Ramsay and lfra. Ramsa7 Jred W. l!'larn1ng and da'CDl ters E.E. MullJmey a:nd lll-s. ll12llanq H.W. Gibson aDd Mrs Gibson J.C. l!itchell and Mrs. Mitchell M. L. l!cClure aDi Mrs. MoClm.-e T.c. Byrne am Mrs• .Byrne 1:-J.J. Bailey and Mrs. :Bailey R.H. Malone end Mrs. Ya.lone o.E. lbrnham am ~s. Burnham Directors o.ni lhnagers ot the Chaha, Denver ap4 OJsJahoma. 01tt »ra@hes togetmr with their m.vea. L.H. Earhart, t~ager and Director P. L. Be.11, Direo t er c.c. ?arks, Director H.O. lhrnell.Director Wm. J• Coad, Director Alva B. Adams, Director c.E. Dmlel, Yan.ager and Director Geo. E. Abbott, Director o .A.. Burlmardt, Uenager end Director A.O. Foster, Director Dorset Carter, Director Jahn Evans, Director 'lh:n. Uee, Director T.P. lllrtin, Jr., Dirootar L.L fl:mrnx>n4, Director BAEK OO@USSIONERS OP' THE SEVm STATES OP' THE 7:ENTH DISTRICT. J.E. Ha.rt J.B. Bead Fred G. Demis Gl'ELnt !.i)Feraon ¥.B. J1'oater J.G. liaghel .B..J. Hottman ;i;:,s1denta and secretaries Qf Jrulkers' Aasoo1at10no ot tm seven Ste.tea of the :tmth Federal BQserye D1str1oi. Colorado Bankers' .Aeum. Albert A. lleed, President ?aul Hardey, Secretary Kiasour1 !ankera' Assn. X. l!". MoNal. q. Preai dent W.F. Keyser, Secreta.?7 Ban ea.a Bankers• Aasn. H.W. Grass, Preaidmt w.w. Bo"11DBZ1, Secretary .Nebraslla Bankers' Assn, J • C• llannigan, President William .B. Bugbee, Secretary Oklahoua Banlc:er1 • A1an. D.1'. Fink, ?resident Eugene P, Gum, Secretary Now 1Jsxioo .Hankers• Assn. l'rank R. Ooon, President R.L. Orlubee, Secretary W'JC)ming .Bankers• A11sociation John w. Ha.y, President Barry B. Henderson, Secretary ••••••••••• Newape.per Rem:ese.~tat1vea • Dr. end Mrs, ~ i s Jmkina Cbaa, H. Sessions c,s, Jobes R.E• Stout D. Aust1 n Latchaw U.L, JloOall L, .B, 111.clr:e l V1 .it. .Butah1nson .:.rx-• . &-..Jfr.s.J.s. JaOkSon We .B. StODO Bmrael Soalan4 tll.e tollQY4pg Sµperv1eire .r-oroe of QJW¥YP, An¢erpon, lfl'Obst & rute, Arcbiteotp. 0,Vt, Dolle D,P• lrlleiolc H.G. OllOD !<>than :icOuiaton S.A., Wpl\ Lewl1 J)Qliler lf,A, !fennel~ ~,A, Ott Clarence Ott A.H, Br'eitag S,A, W&ldmn o.D,. Shaw. W,A, JBttq Graham, J.n4eraon 1 Probat & White John J4. Snead & Mrs, Snead Obas. A. W1lcle 1 Jr. J 7 Followire enb-oontrootors and mterial deal.era or t :lfir rppreaenta.tiyep. Vernon He Trueblood Edzmmda Mtg. Co. E.K. Adams Norton Bros. VlQ Jolm J. Sherin Oo. Badger Lbr. Co. Stewart oand Co. L.K. Comstoalt & Co. Xornbrodt Xornice Co. Robert w. H'tmt co. Pittsburg h Plate Glass Coe J .i>. Gil.men Medart llfg. Oo. Lmlbermen'a Supply co. l'fatioml x-~ Betleotor Ve2'm0nt lm-blo Co. Overland Const. co. The Lamaon Co• Coan .Bldg. Ua.terial. Co. Permanent Ironite Water-pro ofing Oo• The Humboldt Brick atg. Co. G.T. Barton l"red Otis Elevator Co. Knisely .Bros,, Inc. Obas. Jomson & Son Standard Asbestos lftg• & lnnla.Un g Co• Cecil de Groot Co. Paul .Patton Jolm £tJBeath ?resident s ot UniverBitiee gg seven States in Tenth District. ?res. George 1forllD Cbanoello r c.E. Lindley J.oti.Dg Prea1dan t of W.asour1 Univ~sit y Chancello r Sam' l. A.very u,s, Artlnlr 00.pper-Kansa.es Cbas. CUrtis, Kansas Ja.a. A. Reed, ?li asour1 Sol.den?. Spencer.M1BBour1 Gilbert l!• lll tohoock:, Nebe (}90 • W. Norris, Bebrallka J.ndrieus A. Jones, N.K. John w. senators - s. Hill ?res. Stratton D. Brooks .Pres. Aven Nelson Pres. IE.via Washingto n Address. Bobt • ::... Owen, Oklahoma Jolm B. F..endrick, Wyom!Dg Fran oi s ..!!.:._ Wa.rren, Wyom!Jlg Sa.ml. E. B1cholson , Colorado Lawrence u. Phippe, Ooloracto BBzoreld, Okla. Sixty-Seventh QongreAAl?t)n - Residmoo Address. Wm. N. Vaile, Colorado Cbaa. L. Faust, Chao, :B. T1niberlal ce,Oolo. G-ay u. ~ . uolorado Kiasoui-1 Edgar u. El.111. ll1810121'1 Edward T. Taylor,Colora.do Daniel R. Antho~, Jr.Kansas ::dward c. Little, Jransaa ?h111_p ?. Campbell, Xanaaa Homer Boch, Xmiaaa Jaa. G, StrODg, Xanaaa Btqs B. Wh1 te, Xansas J.N. Tlnaber, Xansaa BiobN-4 l!:. Bird, Xazusa.a Bem-y F. Iawrenoe w1111em '.>. Atkeson, W.aaom-1 c. Frank .Heavia. ~ebraslm. Albert il. Jetfrie11 1 .Nebraam .Hobert E. Evans, Neb.raalta :Llelvin O, Mola\lghli n, _lebraaka William E. A:ndren, ?fem"Uka lloaea P. Kiua.1n~ Jlebraam Nestor llontaya, Bew Jlazioo !hos. A. Chandler, Ok:labomFL il1ve l'I. Bobertaon, ~ab0Dl8 Chas • .u. Carter, OklaJ:>oma I '-Ii J.C. ?rillg9:,, Oklaba:::a i' • B. Swank• Oklahoma L.M. Genewm, Oklahoma Jas. v. !.lmue 1 llerr ick, Oklahoma Frank 71. Jlonde ll, \Vyom1%1g Mo011nt1o, Oklahoma Tb@ zo11omng Qttlgera am b:1en4B or the Denk, n4ara1 Md 01v10 · 0tt1c1a1s yith their wives; Governor a.nd lfl-5. J.z. Killer, Jr. Deputy Govarnor am. :as. a.A. Worthingtca. Seor&ta.I'.Y alld Mrs. C.K. Boardman !lr. am ?Jrs. J.W. Belnl Mr. and urs. J.M. Wo:rla7 1!r. and l.Irs. J.E. Goodrich Ur. and lira. Jo Zach W.ller 111 .Mr. and Mrs i H1tjlea Bryant Bishop Tl:l.omaa Jr. Lillis Bishop Sicmey c. i'3rtr1dge Bishop William A. ~ l e Biahop E.B. Bendri: .Bishop John Ward. .Judge & l.4-a. A..8. Van Valkenburg Judge Ximbreue}l Stone i.fr. and Jira. ~ i s Wilson ~Ir. and Jdrs. I.R. Kirkwood ~or Jame Cowgill .Matt A. Foster, ?ollce Comnisaio ner John E. Wilson, Invitations tos w.c. Scarritt J .a. :lichola W.T. Xemper .R.A. L0Dg ~ • .P. 11001. Snider Walter Jao08l'd o.o. Herman Renrioi 011nt ouve:- Sam q • .Pearson H.C. Schwitzgebel E.E. A.mes J.B. Burrow B/Jy r.. .Bomt • ... - " " Clulos Ed.wards, Chiet ot Police (For addressee aee printed copy 1n archives. ) <..• SUmmary of lJs.terial in Building. MM'Ji:RIA Ir :Brick - Face :BriCk - Part.ng BI.DlB&R CABS WEIGim>POt!NDS llEIGm.. roES Zf 2,038,320 1019 35'1.600 3 2os.200 ]pS u.ooo ; l3r1~ Camnon Oement - Car.Dey Cement~ .Pol:'tl&?ld. 4493 235 8,986,64~ 16 1,417,920 S,908 Ala 119 -7,633,928 20,303 ~la ,. ., 2,-8'15 Tela 31 ~erra. 10 581,.200 24 .. 2,148,100 'l'YI Ua 250 28,779,400 U~OG-9 Yu lia 8,500,000 4300 9 506,000 253 Wood Tr1m 14 · 284,SS0 Hsple noor~ a 560,200 Cotta 8and ·. Straotu.ral -steel Bein. Stee1 Floor Sl~.ers Crushed BoQ.k Lime a:ild .Plaat,r ,. 2~ :lo-llow file JJarble Fire .Escape -~ Cut Stone Imber 405,400 9,646 T4a 22;6-68, 100 . 875 30 3 Gia.as llS,000 __ 59 135 8,600,000 4300 1Z 6!$0,-000 325 2. 66.3:iQ. .ISO 4., 1'16, 000 2088 U/1 ,seo -!cl ~ S95.951 .Elevator Equip. ~8 ·,,r Lie;h\~ 11.xtur•• .. , Electr1c&l. wol1c Pneumatic Ta.bes 5 / ~8&4.4:50 Cinders ()ravel 1. ,~_) ~lll 224,000 112 68,227 M n W.TEBUL nurm:rm CJ.BS DI.GR'! PotmDS u.ooo 2 15 280 1-ltab!Dg 5Jst8!JS lieatblg Syatem11 VentllatiDg Syst11111B Yacetian Bllnda l3ardwe.re Grardw Metal Loclr8r8 l!etal Windon Sheet Metal Ki tcben Equip:Dent WRIGB!f •JOJB 1 4'1.864- QtWi'!I!f l of ,.... - . ..... :4, -::-- ..,..,. --~ -.BaI.tDDrG E m ' ~ ." ~ ~ Cm.rt ahadJlg mabc" oL woain g c1ap. zznm>er. 'ot IIODiha D4 mmber tJt am •pl.o;y ed par month 4m"izg t.1:11 21 ~~ oocmp1ed. 1D erecttn c th& Foan.l . BaMl'!l"e BmakGt ~t:r•• Cit;y. lllll ll1BmBn iY DB xm>.ImliiD rm (1' l'OIEIBG ~ 1920 1920 &IQ' Jtmt 1920 Juq 19.20 1920 193) Allc,""1Ul 1,942 Septem ber 14. 26 Z6 26 1.618 air - ... - 193') 192()' 19.21 Ootobw Ilovenb er - ·- .. Decenb v • Jfll1TJ111.7 Febru.a.r, March Ap:-11 liq J~ 1921 1921 1921 192l 1921 1921 1921 ' h.4 A.Dgmlt " l~ll 1921 SeptUl ber . 1921. November October 1921 1922" . - 1~22 1922 Totals 989 2.1.86 .2.02& 2.544 1,5:Sf. •1we 2.ma s.t52 9.&S 10~0'/6 9.415 10,895 9.5M e;DS a.518 s.6'1. 6.006 •. T8 7.t 66 %5 104 :: 26 ····---- - - -62 . - 76 -· 26 1J'I 26 26 :: 25 26 J~ Febl"W!!l:7 lia.rah 1.946 21 99& 898 25 .-:': . ....... ~ 303 - • - - 40 832 240 . 128 - - ·n·--..-.·- _,,,;,.:;.,,.•,, ..... •=: . .-~. .·. . .. .: · • . 39 :.. 19 19 &ff ~ .244 353 381 376 .4.19 2& z.aso . -- -·- - 91 .H De~ - - uo.'"9 • A.VERA.GB BO. llliSPE R'AU .. . ..... ..- -·· ... ._. GS 84 .. ,.-2§ ,c·. 2S ,:/ 25 2&· .r - ""· ~ ··• . -..... lff ,...i; .... ·-:- . . . ., ' - •J stmOOHTBAOTOBS KIIPI.ODIERT OOS!rS Supt. Foreman fl6,"3Se00 20,168.78 60. 7i 6,360, 00 Wa tollnen EDgineen Firemm:L 128.80 40,602.80 2,104,00 &.104.00 laborer• Teams i 'rUOka .P 1 tman Cranemen Plumbers llrillers Blaster Steamfitter " Helpers Bridgeman .?lumber loremm Labor n Steam:t1tter Clerk Electr1o1an Timekeeper Appr. Bridgemen Gen' 1, .roremen .b:reotion " .Hivet " Yard " .Painter Bridgeman Foremen finners Eleotrio Helpers Hitter Foreman Fitter Helpers Fitters Rigger• 33. 60 16,00 18,040.50 488,00 340.40 ee.oo l:?3.75 44,357.?2 4,229.25 2,154.80 165.00 13,84 8,168,00 302.27 1 1 592,90 1,046,00 1,267,20 1,684.80 Helpers Pluter Poremm Plasterers Sheet Metal J'orenBD " " Balper9' Wiremen . Boiler mer. :roremen Boller llaker• 644.90 32.00 5,062,.50 lather J.l'oremen Pipe Coverera 2 1 '132e00 " Setter " Belpva Setter Helpers lila3iers Rigger Foraman 331,20 Stone Belpera 4,067,80 Iron Workers 9,477.20 Carpenters 35,760,00 Stone Foremen 1,240.00 Stone Setter 2 1 322.00 Stone Cutter 824,00 Asbestos Worker 176.00 Elevator Oonatructor',292,00 Sheet Jletal worker 10,064.00 Oma., Iron Worker 9,206,30 l,260,00 l,056.00 2,62:3,50 Casters Appr. Plasterers Asbestos Work, RelpeN orna. Iron Joramen .?ainter l'Oromen 113.sons 8,60 li038.80 5,2-76~10 2,048.00 .l!'u:ture I!e~re ElffV, Co:ast. Belpers 2,101.20 528•00 3,196,50 5,087,50 12,130.8? 96Q,OO .l!"ixture llil,n 9,7ao.oo 40.oo 35, 753.oo . 2,412.00 ', 3?2.80 5,'88.00. 525.10 '182.20 " " Helpers Hod Carriers Lathers Rooters Appr. Roofer■ Cement Finisher 816,00 ;14,400.00 2,462.00 Carpente: Foremen Shade lfsn Iron Worker ApJr. Mosler foremen li:>aler . . " (llgt) .Kleotric l!'oi-eman ,Spl1aere lillson Foremen Glazier ,or,emc Sa:re Men Pavera Sign Painters U&ble 1tan Engravers 198,00 99P..OO 100.00 39.40 6~.oo . 1,215.00 1,590.40 198.40 1,192.00 2,648,80 456.40 1e.oo 25t.oo. 489,20 .432.00 38',.00 uo.oo 125.00 180.oo 53.~ 132.00 20.00. 528.00 16.00 ( Schedule of Changes in Discount Rates and Dates Effe~tive During the Years 1914-1921 ( • Rate ■ Member Bank Collateral Note• Fifteen Day ■ Secured by Secured by Commercial Pa1>er in Effect U.S.WarEllalbl■ Maturina- Within Oblia-ation ■ Nov. Dec. Jan. Sept. Dec. Apr. July Sept. Jan. May 16, 1914...... 3, 1914...... 28, 1915...... . 7, 1916...-. 3, 1915..... .12, 1916...... ...... . ,. 24, 1916...... 18, 1916...... 1, 1917...... 7, 1917...... 8% May 28, 1917... _ 8% 1917...... Dec. S½ ,Y. .Tan. 1, 1918...... 8½ % Apr. 8, 1918...... 4% May 20, 1918...... 4¾ % Sept. 23, 1918...... 4¼ % Jan. 1, 1919...... 4¼ % June 19, 1919...... 4% NoT. S, 1919 ......4¼ %&4½ % Nov. 12, 1919......4¼ %&4¾ % NoT. 29, 1919 ......4 ¼. %&4 ½ o/o Dec. 16, 1919...... 4¥.a % to 6% Jan. 8, 1920.....:4%. %&5½ % .Tan. 23, 1920...... 4 %. % &51Ai % Feb. 26, 19 20...... 5 o/'o &5 ½ "lo •Apr. 19, 1920...... July 3, 1920...... 5%to 6% tSept. 28, 1920...... 5"/o to6% lJune 22, 1921...... 6% Aug. 1, 1921...... Nov. 2, 1921...... 5,0 ------··-· a, \ Papar -- 4% 4% ,.,. . 4,Y. 4% 4'1. 4¾.,. 4¾% 4 ¥.a o/'o 4½% 4¾ % 4 %. o/o 4%.% 5% 6½% 6% 6o/. Iii Day ■ 7% 6% 4% 4% 3½% 4% 4½% 4½% 4% 4% 4% 4% 4% 4% 4¥.a % 4¥.a % 4¥.a % 4½% 6% 6,Y. 6% 6% 5½% 6% 6% 60 D1y1 7% 6% 4% 4% 4% 4½% 4½% 4½% 4½% 4 ¥.a "lo 4½% 4½% 4¥.a "lo 4%.% 5¼% • 6% 6% 5% 6% 6% 6% 6o/'o 6½% 6% 6% Redi■count■ Commercial Pa1>er Secured CombJ' U.S. War Oblia-ation■ modiiJ' Aa-rl80 DaJ'■ lli Da11 16 to 90 Daya Paper cultiual 7% 6% 4½% 4% 4% •4½% 4¥.a % 4½% 4¥.a % 4¥.a % 3% 4¥.a % 3% 3% % 4½% · 3½% 4% 4¥.a % 8½% 4% 4%.% 4¼% 6¼% 4¼% 4¼% 4¼% 6% 4¼'1o 6% 4¼% 4¼% 6% 4¼% 4¼% 4¥.a ,,. 5% 4½% 5.,. 4¼,4¾ & 4%.% 4¼, 41Ai & 4%. % 5% 4¥.i "lo & 6% 6% 5½% 4%.% & 6¥.a.,. 6% 4%. "/o to 6½% 6% 6% to 6% '?'o 4% Progressive rates effective--See foot-note. 6% 6% 6% 6% 5% to 6% 6'10 6% 6% 6% 6"/o to 6% 6% 5% 3% 3% 4% 4% 4% ·····-·· 5½% 6% 6% 6% 6% 5% 5% 5% 6% 5% 6% 6% 6½% 6 ¥.a '10 . 6½% 6 ¥.a% 6½% 6½% 5½% 5 ¥.a "lo 6% 6% 6"/. 5% 5% 5 "/• 5% 6 ¥.a % 6% 6% 6% 6"/o 6% 5% 5% 6% 5% . · 6% 6% 6½% 5½% 6¥.a.,. 6½% 5½% 6½% 5½% 6½ o/'• 6% 6% 6o/o Tnd• Acc@'l)tanen Maiurina- Within UDaJ' ■ 80 DaJ'I 3¥.a % 3¾% 4% 4% 4% 4% 4% 4% 4% 4% 4% 4% 4.% 4.,. 4% 4o/o 4% 4,Y. 4% 4¼% . 4%.% 4¼ "lo 4 %. ,,. 4¥.a % 4 %. .,. 4½% 4 %. .,. 5,Y. 6% fi.,. 6% 6% - 6% 6% 5"/o 5½% 6½% 6,Y. 6% 6·,r; 6%. ,er. 6% 6% 6% 6 "/o 6"/o 6% 6"/o 6% Market Rate 5% . Market Rate 6%. • 6o/,, 6o/,, 6o/,, 6o/,, 6"/o , The application of the progressive rate was discontinued 5% Liv■ Stock 5% 6,Y. _ •Tb■ baaic lli,_1 of a member bauk la determined bJ' deductlnr from th ■ amount avera,:e Te■""'• foT tbe 1>recedin1r mouth. the 16~ Neer•• on depoaita which federal rucrve banka are required by the A.ct to maintain;oftoltathe ~tnainder la added tbe amount of capital ■ tock ' paid In by tbe member■; and thla ■ um Is multiplied by 2 ',!, . Offerlna-• ag1,?rel1'atin,: tbc amount,. ,. member bank'■ baeic line are dlacounted at t.he nonnal rate of 6 %. The rate 11 PrOll'rn ■ ed ',!, ot 1 % for eacb bncket of 26 % ID exceu of lta ba■ lc line. Notee ■ ecured by Trea ■ DrJ' Certificates of lnd.ebtedne■■, Liberty Bonda or Victory Note ■ actU&llJ' owued bJ' the borrowinli member bank on .April 1, 11120, ar■ dlacounted at tbe uormal rat■. • • tAdvance■ to member bank■ on their 'l)romlnory notu ■■ cured b7 U. S. Governm■nt War Obllratio11.1, or 011 r■dl■~ounta 10 ■ecurec!, will be made on the bui ■ of the approltimat■ market value thereof. . •. , ·: . :The 'l)rg~eulve rate wa1 modified II follow■: Au addition&! ebar,:e of 1 ~ above th■ uormal ba■lc nte will apply ou advauce■ In <0:ree11 of t.he ba■ ic amount up to and lncludin6 200'!1, thl'reof. Sub ■ equeut additional advance■ equ■J to l00'J, of the baalc amount will b,o 1ubject to a rate of 2 % I.II excen of the normal rate. Advance■ to n,."embu bank ■ on loaua iecured by U. S. GqY ■.rnment War Ob l~ation■ will b■ made on th• ba■ II of th■ approxiJDat■ markd ~&Jue of 1ucb, ■ -c~ti-■• • • TERTH DISTRICT l¥AR LOAN RECORD Ililltory of Finana1al .A.chiffemente of the Federal ReeerTe Bank ot Kan.._. Ci'ty with Peraonnel ot District Worker•. • • • The history ot the ach1nemente of the Tenth Federal Re- · eerTe Diatriot in railing pletely written 'b,- mr 1110T1ey in the World War rill nner be one man nor 'b,- an;r one hundred. aen. hietory would. of neoeHi'ty 1nolude the personal and1 ot aen and WlllN1I 1aoritioe ■ Such a ot thoue- in the great aouthweat who plaoed their oountry ahead of their oomtort and "bought bonds till it hurt. 11 hi ■tory OCD• Suah a would include a detailed chronology of the aocompliehmenta of eaoh team ot eolicitora in each oity and inner, one or the 380 oountiea that •de up thia District during the nr. _It ■ball be the purpoee of this reoord, howeTer, to chroniole merel~ the organisation of the District••• tinanoial unit for th~ aid ot the nr against the Dietrict and. noh ot it ■ Pru■ 1ianiem, and the acaompli■hmenta state• during the war period. The lleginning ot the World War, u it oonoerned European ·belligerante, wu ln effect oontemponry with the eltabli ■hllent of the Federal Reaene oank1 1n the United states. The World War be- gai. in 1914. while the Federal Reaene .Aot•a paaaage by '. • Deoeuer 23, 191Z.. Congrea■ waa The Federal R•••rT• Sy~ wa■ not in aotual operation until llNl'ly the dl.te ot the great war' ■ outbreak, and the European conflict had 'begun to ehow its reneotian in .Ameriaa I . tinanolal operatiou by tb8 time the twelTe Fed..-al Re1erTe 1'e.nk8 o~ : ... -. -2- were fairly establish ed and in working Ol"der. eatablt'ahment ot the Fed~l Re■ern So tillely • • the Sy.tem that the wv tinano- ine 1n AaerS.oa tell natval~ into the clutS.n • • - ' b,- the Feel• eral Reeen-e J.nd, ta.kine the oountry )11.nka. a■ • whol• er by Dia- trlate, there can be found no m.n today 'Who can •J' what tlmnolal oalaaitl• • might haTe htallen the nation under woh atP••• •• it under • labored dur Ing the war• had it not been • < ... the Federal Re ■ arre tor the organised etteot ot &yltem, 1t1 bank• and it ■ LU,e... Lou Orpn- i1ationa. In oold 'benla of dollar ■ an4 oent ■ there are g1Yen here- with, tor the aake ot permanent reoord, the aotual of the nation and of the Tenth Fede"l the 11 Re■ene aooamplla!aent ■ Di1triot in n.ilil!g 1 inewB Of -al' • II Su'b■ ariptiou raiaed in all the tin loane 1n the United States totaled t23,9TZ,1 11,.a0. ·Of' th.le aao\1llt the TNaaurr aooept- ri t:2il,-''1'1 ,336,850.Y et ~ e d with the approximate total• tlic\l rai■ ed. by thi ■ wonderful reoord,he re are oth.- oountr1•• engaged 1n the oon• Great Brl1¥,.n 120 ,ooo ,000 ,000 J France 120 ,ooo ,000 .ooo J Ital.7 .. . te.000,000,oooJ camda $1,2so,ooo,ooo. The number ot lndiYidu l war loan eub■oriptlon■ in the United states dlU"ing the war i■ ut!aated 'by the !reaa1r7 J)epai1aa ~ • - . at 66,289,90 0, or between one-fourt h Uld one-thirc l of the nt1re .:_ populatic m of the nationnat the oloee of the war. the ll\lllher ot 1Ubaorlpt ion1 oame troa the The •jorltf' pm-obuer ■ ot 'bo~ o~ ~ ..:_: ; ot . / I the smaller dencadnation•, turther attesting the patriotia of the people who made up the Uni tecl states• and ab.owing ho.- broad educ..tion wh1ah the Treasury Department and the 7edera1 !&nlcs gave to the people on the eubjeot or Government wa.■ the Re■ff"ft ■ecuritiea. One year before ttie iaaue ot the bonds ot the First Liberty Loan there were outetanding tl,378,124,69i in United state, Cwernment bond■ in■titutiou ■ore and the ■• or wealth:, had 'been added to nre held alaost entirely by tinano:1.111 lndivlchaal ■• bond■ On June lfi, 1817, tWQ blllien outatand.lng, that aaount being all that the Treaeury accepted. ~·the $3,035,226,860 nb11cribed 1n Firrl Liberty Loan. Talue or the Federal tm F.aoh sucoeeding loan prc,yed the ineetimable Re ■erTe B&nka a.a a oog in the -cbinery that helped win the war• Following ue the quotu, aubacr 1ptlon8 and &llcrbaenta-, ot the t1n loan• by States ln. 'I.he Tenth Federal Reeen-e Distriatt FIRS!' LIBERTY I.Oil QUota; Colorado Ian•• Klaaow-1 lobraalca Btllf-Kenco OlckhGIM 1fyad.ng !otal . 112,&90,8~ 10,818,760 1,,1&2,860 11 1 98S,500 ,z,,aoo Subaor12tion Allotamt J18,284,T50 13,99?,2GO t1z,eo2,060 11,108,T60 19,820,~60 19,036,600 11,996,ZOO 1,,:ns,900 '29,060 ll,M'f,600 1 1667 1650 S00,250 1'1,966 1 T60 2!0611900 ll,'61,000 1 1668 19q0 t62,86'7.600 $91,?68 1 860 $SS,'8l,860 SECOND LIBERTY LOA! Quota Bubaori~ion Allotment •, Colorado $1'1,616,000 Ian•• · ZT,N0,000 Kl•~url 18,9M,OOO t23,042,860 ao,10'-,~ 28 1?01,160 f20a9'6,100 2, ,895,200 -· 2s,~2e,2m ; .,: ' . •' Quota $29,840,000 996,000 20,988,000 3 19M 1000 ti.20 ,000 ,000 lebruka 1..- Kuioo 0lclahe11& w.roawac SubaoriE!:ion $33,517,200 1,420,200 2'7,84?,160 s,e92 1200 fl60,ll5,'100 Alloi.Mnt f-Sl,18-C: 1 900 1,360,400 26,629,-&00 / 61132i660 $158,47,,900 !HIRD LIBER'l'Y LOAN Quot.a $31,296,'160 4?,181,200 2g,ess,100 ~1,888,'100 60,624,,&00 60,624,400 1,o,e,000 26,50?,900 2,228,TEO 36,06?,600 61?3?1000 $204,092,800 2,228,'160 ~,06'7,600 61?311000 $204 ,092;, 800 30,289,aoc> 18,983#900 Xanaa Mbaouri lebraab. In Jlexioo Qlclahaaa Wyoming 6,:02S,:900 Total Allotment $31,295,'150 ,1,381,200 29,868,100 $8:>,833,900 Colorado Subscri~ion $134,107,600 FOURTH LIBERTY LOAN Quota ,.,.3'1,4'49 ,600 67,060,200 Colorado Ka.naae JJ!.aa CNJ:i '°•"'',,oo 89,046,460 1,220,000 38,500,400 IU!br;alilal llew YexiDO OlclahOlia l'fycainc , ,. vrr 15_00 Total t2s1,11,,T60 SubaoriEioa .lllotaell't $42,007,660 T3 ,914-,660 46 ;4-33, '160 U2,007,660 '1'3,914-,660 46,433,,60 76,683,200 2,144,200 46,686,060 10!1831160 $295,961,41i0 '16,683,200 VICTORY LIBERTY L0AI guota Colorado Xo.naa■ l1b1ouri 428,3?5,S!iO 49,'42,760 31,695,160 51,901,900 -Subeori~lon t:50,068,1150 61,9~,160 ~2,108,100 2,1'4,200 -16,686,0SO 10il8S 1160 $296,961,4e0 .• . : · •; ..: --~ ·-:. - =· ··. Allotment : ,- •• t28,681,160 61,208,260 · ~l,"68,860 • 44,211 1 T&O . ?00,000 1·,130,860 48,086;100 l,0'2,400 Oklahaaa 28,382,660 Wyoming 614141660 ~1.811,'100 '112191'700 30,186,300 8!8621200 $198,918,260 $198,41-l,800 tl92,429,100 llebra.alca liew Muioo . .~--: ,-. • ~~ Too much oredlt oannot be given the -ott:lo•• and dil"eotar~.. . . ...;.. :• .. ~ ~ ' ,.:::- . ot the Federal Reaern Bank of thi1 Diatriot tor ahouldwing the reaponsibiH.ty or raising the Distriat'a quota ot eapeoi,all7 the There wae no organisation at that tbte tor 1'irist Liberty Loan. rahing the loan and the work na done under the direction ot .oo,,. ernor !filler and through the aaabtanoe of the directors and ott!.eera or the bank in written appeals to member banke to ralee the quota assigned the Distriot. For the Beoond Liberty Loan a tentat1Te orpniaatiOQ ~ etteoted in the Dietriot at the instigation or the Federal Re1ene Bank. Of'tioera of the bank, ldth the aeaiiltanee of Mr. A. E. Hutchings in charge or publicity, distributed loan literature pl"epe.r- ed by the PubHoi'ty Bureau in Washington and earried on a Clllllpaign largely by correspondence, eutficient, however, to put the Di.trict over its quota. The permanent organisation ot 1ihe Dietrlot wae 'be- gtn in January 1918. •ere made. B~tween -t·oana 1ome changes in the per aonnel • Follcnrl.ng are the names of thoise who eerTed: Roetn ot Liberty Lean Offio1al• Tenth Federal Reserve Diatr1at .J.Z.Mlller, Jr., Governor Feclel"al Beeerve Bank and Chair.man Ccadttee · ·· , Aea E, Rpeay, Cbalnaan Federal Reaarn B~ and Vioe Chairman Cmmittee J.L,Oro~i, Deputy, GoTemor Federal Reserve Bank end IDo. Mgr. Gamnlttff C.A.Worthington, Manager Liberii7 Loan Department, P'.R.B. C.A.Burkhardt, Deputy ExeetitiTe Manager Committee, Dem-er o.1'.Enatmn, Deputy Ezeouti-.e Mnnager Ccmnittee, Omaha heoutiw Ccamitteei John F. Downing, K.C. Mo. W. T. Grant, K. C. Mo. C. G. Hutcheeon, K. c. Mo. w. B. Motuoaa, K. c. Mo. J.C. •1ehola, K.C. Mo. Geo. 'f. Trimble, K. C. Mo. B. P. llrlght, K. C. Mo. Central Liberty Loan Camnittee: Hon. Hoh. Hon. Hon. Hon. F. D. G&rdner, Je~feraon City, Mo. Arthur Capper, Topeka, Eanaa. Julius z. Gunter, Dennr, Colo. E. c. Du'baoh, Santa Fe, I. ir. Frank L. Houx, Cheyenne, Jtyaming. Bon. X. Im lle, Linooln, leln-aua. Hon. R. L. Willitlllle, Olclahc:aa Cit,,, Okla. Bon. J. W. Bailey, Atchiaon, Ian••. c. E. Burnham, Nc,rtolk, Rebraaka. R.H. Llal.one, Denver, Colorado. M. L. McClure, Kansas City, Ko. F. w. Fltming, lanau City, Ko. ?i. Aydelotte, Oklahcaa Olt7, Okla. Geo. w.• Barne•, Kuakogee, atla. Ward M. Burgees, Clu.ha, Nebraska. 'l'. C. Byrne, C-ha, lebraeb.. J. c. L. Da.vidaon, Wichita, Kanae. Reed Holleman, Santa Fe, N. 14. Robt. D. Ce.ray, · Cheyenne, Okla. Geo. R. Collett, Kan•s City, Mo. J. w. Perry. Kansas City, Mo. B. w. Gibson, Muskogee, Okla. John hvana, Derrrer, Colorado. P. i7. Goebel, Kansas City, lane•• J. H. Gordon, MoAleater, Okla. • Ford. Harvey, Kanaaa City, Ko. Mrs. Helen Ring Robin eon, DenTer, Cc,lo. Mrs. T. s. Taliaferro, Rook Spr1nga, Wyaming. ~o. s. Hovey, Kanaaa City, Miaeouri, William c. Irrlne, Ch. .nne, Wyam!ng. Robt. M. Jarce, Lincoln, Nebr, W. T. Kemper, Kane•• Oi'ty, Mo. Harold Kountze, Denver, Colorado. J. D. Lankford, OJclahcma Cii;y, Okla. J.C. Mitchell, Denver, Colorado :P~ c. Mitchell, laneas City, Mo. J. K. Mullen, l>em'era Colorado F. B. M..1mtord, Columbia, lfo. Grant MeFereon, r>eiwer, Colors.do. •' F. P. Neal, la.nu.a City, Mo. J. C. Newlin, Cheyenne, lty'caiDg. J. A,. ?reacott, Kaneu City, llo. Hallett Raynolds, E. Laa Vegas,•• M. Patrick Sullivan, Casper, Wy-cai11g. Gi M. Smith, Kansas City, Ko. E. F. Swinney, Kansas City', Jlo. J. J. Tooler, Lincoln, Bebraeka. Geo. H. Van Stone, Santa Fe,•••• Henry J. Water ■, Kansas City, lfo. . • • "I # , ' • •~ "'• • • ..,• • • I -.. Walter E. Wilson. Topeka, Seoundia Romero, L&e Xanaa■ • Vega■, I.». Mrs. Henry Ware Allen, l'ilchita, Xanaae. Dr. Leila E •.Andrewa, OJclahmll City, Okla. Mrs. A. D. Flintom, Ianaaa · Cii-7, Jlo. Mrs. Howard Huey, Santa Fe, I. M. Mrs. A. G. Petereon, Aurora, iebraaka. Director w. .a. Rowe Director Speakere Bureau - Dr. E. E. Violette John T. Wayland E. Butoh1ngs A. Publicity or Director Jess -,i. Worley P. W. llallahon Secretary Geo. w. Fuller Mrs. Rom.en Chairman or STATE ORG.AlfIZA!IOffS Colorado: State Chairman - narold Kountse State Seoreter,.1- Suiuel D. Nioholaon H. L. Morgan District Chairmm: F. P. f\'ood Nell McLean :l,,f. H. B. Means D. Thatcher J. H. Roediger E. P. Shove s. Richard Broad, Jr. Geo. Mc Carroll J 6. s • p. Burne,c. N. Jackson Har17 Caaeady J.C. l!cWUllau ··, D. 1' . · Stone Geo. Jrgall D. Nicholson R. L. Snodgra.H I<. L. Schu;ylC" Veob.el Rtgaby Luther M. Beck E. A. Schlic~ter C. J. Moynihan W. E. Duggan eiaer Wm. W J ; F. MoDcma14 D.R. Grant .. . • :, lf&s Buehwnn lauaa: State ChairJ1181l - c. L. Dav1daon State Secretary- L. L. Jla.xeyDiatrict Chairmen: F . : W. Free11&11 vt~ J. Breidenthal J ~ Ii!. Lamon Wm;; Ti.,yml. D -C. !. Kirtland A. E • .Asher A. D. Jelli ■on- C. G. Cochran R. s. Hendricb P. SulliT&n R. Moae ■ . C., Caner .·, . H. Yomg _ Geo . 'I'. Oaeru.,- J. E. T. P. c. L. Da'f'14aon lli ■■ Cllll"i: State Cba1r-.n • F. C. Mitohell District Chairment I. A. Vant J. W. hJT7 G. K. Hargett r. L. ror• E. E. Montgomery B. A. Malin E. A. IS.ng Jlebraskai state Chairman - 1'. C. Byrne State Seoretary• .E. F. folcla • Di ■trict Chairmnt r. Cordeal • Mart 8panog1.- J• F. L. Moon-, F. A. J. w. Elmer MarTel O.a E. R. OurJle1 c. A. JfoCloacl · E. L. HeTelone Paul Je ■■en Geo. w. Sbreok W1111aa■ Ge<:> • N. Seymour C • E. Burnham P. Walsh . ' .- llew Mexico: i . State Chain.-• Ballet't Raynolds Reed Holleman · Okl!thoma: State Chairmen • A. E. Ra.aa7 J. H. Gordon L. E. Pllilllp1 _ N. R. Orahaa Cheater Weettall District Chairmen• R. )f. lloParl in H. H. Ogden Fred T. Miller c. H. Martin E. D. Foster w. B. Johneon Lee Le'Yering I. D. Sandlin A.. E.Stephen1on W. H. DonabDe State Cha.inn.en • J. w. Lacy Belli ■ Patrick SulliT&n In addition,. to the war ganization ot the D1.tr1ot . the loan ■ E. Corthell r a iHCI by the oentral _.. Oc,rel"Dlll•t Lou and Barlnge Organ!• \ I J 1atio n or the Diat rict condu cted a grea t camp aign tor aaTing ■ and nen earri ed 0\.-t Govsra::nezrt Sav i•• Seeu ritiea throu ghou t 1918 and engag ed at the the work oonti nuou aly thl'ou gh 192G, and are -stil l .A wond erful 1'0rk in educ ating adul t• •• well aa preae nt date . ion• and the ohild ren in habi t• of thri ft was done by the orga nisat ailli one desp ite tunda rai1e d t.hrOllgh thia work mounted up :lnto the the nall dnom inati ona of the seou rltie a. Follo wing were the sales durin g the !lo. Viar Savin g Stamp a 'FhJ' i.f.'t st·ampe Piece ■ ?,287,94! 3,107 ,Z6l Sold , Amt. ot l'FU' p.rio d: Sale ■ lfairu rity Value ~29.972,314.,6 $36,439,1iS ?76 18~7~~6 '176,837.16 $30,7 49,16 2.60 ta?,2 16,66 2.76 Cert ifica tes of Indebtedneaa The sale• at Cert1 t!ont .ea or Indeb tedne H leaue d in gh tbia insti tutio n E1nti eiptrb '8n or the Tario ua War Loans and iude throu were t,563,816,600.00 BRIEF msTORY OF THE OUAHA. ,BRA..T-roH,FEDER.l.L REBE..'-NE BANK OF K.."Jl'SAS CI ff ,PREPARED m OOENECTIOJ' t1I'!R U.:I;":'G QF CJ.E:5:ll J'!'J!E GF TRE NEJ HJ1tE OF THE FED~L ID:S~ BAmt OF TIU: TwTH D!STRICT OR APRIL sv;TE::ilf2R, 1-,n,, NIN'ATEEN HQNDR.t.7? ,s,l:;Jn•x om;. The amendmont to the .redera.l .Meserve Aot pe:nnitti11g the eotabliahment or branch bank.8 ,,;as passod 1n June, 1917, am on July 18th :f'ollowl:ng tl:Je l!'edoral .Reserve Boa.rd authorized the- establishment of a branch ot tha .rederal Beserve Bazlk of Kansas 01ty e.t Om.ha, Nebraska. The branch tl:ms authorbod OO?:l!!lenced businees on Septed>er 4 1 1917, with reserve deposits of ~13,654,953.10, aDt\ vne the seoond bran.Oh to be established 1n the United States. !he territory of the Tenth ~ederal Heserve Dietrict ass4,-ned .to the Cr.alla Bra.noh f'tt>.a the bog1nn1?Jg oompr1sed the etatea of .Nebraska 8Z1d \Vyomillg, w1 th areas 1n aqua.re ::iilen of 76,808 and 97,548 and populations a.coording to 1910 oeneus of 1,192,214 and 145,965, respeotively. 11h8 • 1920 oensus gives the population 0£ Iifob.?-aeka l,295,502 e.nd 'i'Tyoming,194,402. The Ounba Branch Zone is distinctively an egrioultural am stoek-raising section. Tho agriculture.l aotivi ty of the State o-r Ilabraaka includes tri..e :proctucing of corn, sIJBll grainG, ~a.r beets, and alta.J.f'a hay, ?tb.Ue the range seotione of' the western portion or .Nebraalm and the State of Wyoming af:f."ord e:,:cellent facilities for the raising of cattle am sheep. Also, Wyom.ng., is tm leadme vrool-growing state in t:00 Union and as a producer o:! crudo oil ranks third Dmong the states of the 1'enth District. In the territory served by the .Brunch on tm opening date there were 1,.224 banks, or which 227 were natio:oal; the remainder operating under "the laws of their respective states. Of the state banks q-ualified to become momoers o:f' the Systot:i, one, too .Benk of Lewellen, 11ebrasm, had been adm1 tted to membership when the Branch opened. 'ro do.ta the membership of tho State of Nebraska ls comprised at 188 national banks and 22 state ba..-riks 1 out of a total ot 1,196 banka f'or the state as a while, while tlJe membership far the State ot Wyom.1Dg is oomprised of 47 national. banks and 4 state banks, out ot a tote.l. a£. 158 'bmlks f'or that state. The original ci1reotorate was oanpoeed of the following: Luther .vralce, Cmaha, .Nebraska, .President,- Merchants !la.tlona.l Bank; J.C. ltclfish, Oma.ha, .Nebraska, Owner or th.a MclUsh cattle u,an Company, o.T. Fa.stmBil., Cbaba, .Nebr::i.ska, designated .!!rul9ger and <.,'bairman of the .Board ot Vireators; J.Jr • .P.L. Hall, Lineolli, :Nebraslal. 11 .President, central BationaJ. .!!Bnk and H.0. lm.rnell, Nebraska C1ty, NebraSka, cashier, lferohants National :Ba:lk• At the opening ot tb.e .Branch ,1'1". E.D. McAllister ot Kansas c1ir, was des1.gna.ted caahler, the number of employees a.t that time being 17. At the present time the number or employees 1s 144. enjoyeLi full po-:rers fiscal agenoy oertain a.nu , iaauas stook l with the 8%Cept ion of capita market open in engag-c to ted permit ttmotio na. Also• the Branch 1 s t be plrent of t aoooun the ior and operati ons on l.J s·.wjec t to tl::e ord.erli .l"edera l other with eees _privil imtine bank, the same beiJ:le true of reuisoo .Heserve .Bc.nkB. .rrom tba begiJm1.?lG the Clmlla Bl-en.oh bas In JUllO, l9l9, the. .Hra.noh ex>mmonoed settlin f; direct m th othor parent .l!'edera l lieserv e Banks and »ranch es through the gold fund of tho bank. :rho volu:ne of tr~si t operati ons ha.6 incroa. sed from a. dnily t averag e of 2. 768 1 tams lnndle d at the 0!)8ning ot the Branch t'J the presen daily averag e of 31,000 . Cu."'Tenc7 t~aac tians aleo show an increas ed volm:le ~nd have reachod tbe propor tion of ;2,000, 000 receive d mxl. deliver ed monthl y. The de~tm ent o-£ the Qnaba Branch relativ e to fisoal agency f'lmotio ns ~a 11:rawis o :.hown a mr}::ed g:-owth , the Govern ment's f'isoa.l operati ons being respon sible tor the large vo l ume of' Liberty !Dan coupons and .Uividend. ChookD, ~ertif1 ciates of lndebte d.ness, -;fo.r :Savings StCJI!l?s, and Deposi ts for Genera l aooount of the United ~tates naaau rer, handle d. ~e ma.x.1mum and minil:lum of branoh loons i"rom too opening ot the braneh are liere sho'\'111: Minimum 9 2,165.0 00 1917 1918 1919 1920 2,365,0 00 7,4:>7,0 00 28,243 ,000 1921 (To :Jarch 31st) 23,000 ,000 1Iz.u:imµm ~12,sza ,000 28,107 ,000 41,902 ,000 42,26r/ ,000 31,900 ,000 figuree :reflec t demands growin g out of war financi ng and tre strain 1no1dont to economio ree.d.Ju straent period therea fter. ~ more availeu tlw:.sa! .ves of tm f!-e& 1 service af':tordod 'tw the Branch , auoh aa trana: ferr~ timds l1J telCb"'Ta.J?h tion conneo in ms telegra of cost hg inalud coats n ortatio abaorbiD,g transp w1 th O1.UTency t!"tmaa ations and tba perf'onnat10e ot the :tunoU ons at a es clearin g houso for its tlOd>er banlas.. The service last rot"erre d to embra.c the oollao tion at _p:,,r ot cash items on all banlcSTJ& institu tions or the Branch Zone in accord ance w1 th tl:Je provisi on.a ot ~eotion 13 of tho ~odere l !Utserve Act. ltetlber bmiks have more ( am. Deoer.:Jber 31st, 1920, totD.l gt'OBB earn1.nt:,"'S of the Branch since opening ware ;3. 773,40 7.40 as agains t t.o tnl expens es ror tbe S6JD8 period of ~9,14 1.87, re1ult1Zlg 1nnat earn1nge ot ~,114.2 55,.5:5 . Cm.ha Branah is an honora ry :nember or the <baha. 0learil' .€ House in .Aasoo1at1on 8lld effect s da.11y oles.rin gs with nine nation al ban.ks located ~ Gre&h r Omaha• ., Increased 'WOlume of busine ■ s in all departments ot tbe .Branoh has made add1 ti ons necessary to the alerioal toroe of tbe .Audi ting JJepartment. This department nnkes an audit of each other department ot the BraDah at lea.st onoe a month, end al110 lmepe a Clll'r&nt or perpetaal aud.1 t ot all tra.nsaotions ot the Diaoount Department alld maintains a daiq control on all cash and collateral held. On ~ 24t.h, 1920, the Federal lfeserve .Bank of Kansas City purchased as a :permanent home tor the Oma.ha Bran.oh, the premises known a11 the ¥arDam Buildi~ oon taining 40,421 square :teet at available floor space at a cost ot ;166,000. Some remodeling ot the quarters which the Branch oaoupiea has been oade am turther important chru:gas are contemplated, which m._an completed will result in the .Branch utilizing 15,300 aq_uare feat of the buildillg purchased. ca.Shier, On January, 1920, Mr. Geo. A. Gregory was designated AHistant On 1.hrch 1st, l':i20 1 Mr. L.H • .Barba.rt formerly .Assistant uaahier or tm pa.rent bank succeeded Mr. J.T. Eastman as Manager and Uhairman ot the .Board oE Directors of the Bra.nob.. On /lay 1st, .Mr. ? • .H. Fredmen, formerly Cashier ot the JJenver Branch succeeded Mr. E• .ll. llcAllister aa Cashier ot the (Ana.ha Branch. In July, 1920, Mr. w.D. IDwer f'ormerly Chief' Clerk was designated Assistant Cashier and placed in ott1oial supervision ot Transit Operations, at which time Mr. William Phillips was designated Chief Clerk. The present directors aDi officers of the .Branch are, as followa1 Directors o. lhrnell Mr • .H. Dr • .?.L. Ball !Jr. Geo.~. Abbott ur. W. J. Coad l.lr • L.B. Farhart ort10ero J.Ir. t.H. E.arhart, Jfanager. Mr. ?.R. Fre&an, uas:bier Yr. G.A. Gregory, Asaiatant Cashier ur. w.D. Lower, Asaiatant O&ahier llr. f. Gordon 1:Jandera, Asaietant .M'ederal lteserve Agent and Branch Auditor. Early in 1920 :ur. uao. ~. Abbott, ?resident of the .rirst liational Bank, Obeyenne, W;yoming, was elected a director of the Branch to fill the vaaanoy oaused by the resignation of Mr. J.C. ~il!lb. llr. w.J. Coad, Cmal:la, .Nebraska, Vioe ?resident ot the Packers National bank, was elected dlreotor ot the Bre.noh on lhroh 24-, 1921, to till the vacancy created by the death o t Ur. Luther l.lrake. A Disoount Committee aons1st1ng of the r.tmager, the cashier. and one Direotor, any two of whom oonatitute a quorum, are elected by the Board of Directoi-s to serve tar a period at om month. The foregoing narrative history evidences a marked growth 1n the »ranch itself as well as a mter1al development in the territory which 1, ■aM"oa and 1a believed to be ooncluaive ot the beneti ts ot tm !'ederal .Heserve tlystem to the Itation'a industry am commerce. Jtaspeotf'ully sul:mitted, lSignedJ L. Ji. b:arbart. .uaneger Binoe the history of the Cmiha !ranch was oompiled on the occasion ot the laying of tbe oorner-ston a for the new bank buildi.Dg in Xansas Cit7 the tollmJJg m..tt.crs of interest have transpired1 1'he loans o t the Branch, by tllB en:l or tho "$8BZ 1921 bad dropped to fl? ,636,599.84 whlch was the lo.vest figuz-e touched sime 191~. The highest point reached dur~ 1921 was ~5,4.21,386 .50 and the lowest was ~14,325,614 .55. 208 banks received aocom:ood.ationa durbJg the year. These figures reflect tbe economic readJustme:n t :,p0riod through which tho mtion has been pe.saing. ~tEUBERB.ANKS~R:;sERVE Tl::le average daily reserve imintained by mE!:!l.bers in the <m.ha llranoh zone during the year 1921 ~s ~U4,646,339 .00 against a. daily average ot ,is,_702,309 .00 for the previous 19ar. Improvement was DBD.ifasted in the actual reserves :.aa1ntained by members oon:i:e,red with tbelr requirement s mld. ..s.s reflected in a decrea~ed number of def~oienoie s am. a smaller amom:rt collacted on account of penalties for deficient reserves. ~24,187.27 "mlS collected from ~~1s cource in 1921 co~red with a total of ~60,765.58 for tbe year 1920. _DUE TO -HEAD OFFICE The aocommod.a ti on:i granted im3mbers 1.l:. the Q.aahz zone dtlriig 19~1 oontinu.ed in excess of the rei.erve deposits maintained, oon.seq_uently the Brsnch books showed an indebtednes s to too paront brulk which f'luotuated throughout the :tear from a mini.m'am of ~l,066,934.0 0 and $19,242,566 .00, a maximum. HEMBERSBlPS The close of tbe year 1921 :finds a net decrease in "1le total membership of the pravi oua year of 13 .members and. a gaia1.0:titwo . flle deorease of' lZ members 1s aocOllJlted far by seven suspensions , 4- -1the:-:.. ,_ .:..;;; drawala and 2 mergers. The two gains comi:rise 1be J'1rst liatione.l Bank of South Sio\1% City, a new bank whioh was organized bµt Tihioh went into 11qu1dat1on early 1n the yeo.r 1922 and the bank of Van 'r-assel, Wyoming, · which was added to the list ot Sta.te .Bank members 1n tbe ;vear 1921 .. TRANSI1 DE?AliTmlif In June of 1921 the names of 172 non-member banks located Sn Ne bra.ska 87.ld ten non-member banlca located 1n Wyo-:ni~ appeared on the ~on-par list iss~d by tho Federal · .Reserve Board. These .mmes oonstituted the banks w b:> refused t,o remit at par tor i tema drawn upon tbtJla am whOse tranBit relations with the Branch were not satisfactor 7. The daily average number o-r transit items handled by the .-.ba .Dl'allCh tor tbe yeaz 1921 was 27,297 whioh shows a daU~ aTerage 1mrea.ae 1n the nmnber of 1 tems mndled ot 2.195 notwi thstand.1:ag the ad.di U.ona to the non-par 11st since June of the pa.at year. '1'he daily analysis record of outstanding member and. non-member collection a.coounta tor the zone 1nd1oates that Siloh collections e.ra be11Jg made well within the published time ached:ules. TEi,F-GRA.PIIIC TRA.."wll'rul SERVICE 'rha extent ot Ue ~ree senioa rendered tD me:iber banks in the matter o 'f telegraphic trsnater ~ tunds is shown in the report ~ 1921. fhe to-tal number ot transfers between the Qzaha. Branch and other .federal l"eserve .Ba.nl!Cs and .Branches, including those wi ti.'lin District 1'10. 10 was 17 1 281 1nvolv1Dg an aggregate a:io\lllt ot _;:536,961,179.94. C'tJ:aR:1-t(.;t 1 1 . J ~ The operations of the c1ll"re1'10J departimnt for 1921 shows an inoroaso over previous years. A total 01" 140 nember ,;·8ll.ka 01" 56% ot . the total mamborship received acocmcodat1ons direc..t, al ther thrOUlr,h shii'• ments ot ourrenay to the Branch or the shipcent ot currency to tbe meniber. DuriJ::e tl:a ;year currency to the a!II.Ount of ';20, 710,000 ma sup- plied to banks in the Br-unoh .zone.. Slh·er aud. subc;idiar.r aoin was supplied. to banks in '. the amo:.:nt <Jf ~371,000. October 29th, the Branch '<11:l.S a:cithorized by the Tree.sury Department to · perfar-m sub-tree.suey functions and received the neoossary equipment 1n the wsy of currency ca.ucallil~ r.mchinee.. Uni tad St .. tes notf.ia and otb.er Government lssu8:, are novr redeemed and cance:lec1.. b",i the Cbaha .Branch before being- :for·•.'laJ:•deC to the Treasury Depart.moat. FISCAL AG~CY Tbe yJ:Jar 1g21 the volUJD:; of' trense.otions haildled by the l'iscal !gflnoy Department ct th, Branch exceeded that or previous years. In add1 tlon tho Branch, aotiilg as Fiscal Agents tr:,r the War J'inance Corporation, disbursed · a total to applicants in Rebrasm ot ;3,804,550.15 to the oiose or the year. fhe net ir.lcone tor 1921 was '969,621.28 retleoting a deoreaee ot f?66,04l.42 over the net 1.Doons tor tbe prev101W year. This .falling oft is almost. wholely accounted tar by the decrease 1n th:! volllti:18 ot earning assets held throughout the year. The expenses do not show much variation trom the previous year, WlfOH DlREOTCli5 Bo change ha.a talcm place in the Branch D1reotorate e1nce tba history tor tbs 1~1.Dg ot the oorner-stone was written. OHFIOEBS A1lD EliPWYEBS ID J\me ot 1921 .ur. T. Gordon Bandera , Asaiata nt lederal .Heserve A.gent and Branch auditor was trana:te rred to l'ml-.. 01t7 am was aiaoaecled at tha Branch b7 Mr. Judd w• .Toms. In June also, Mr. William Phillip s, previou sq Chief Olen:, was elected. • Assista nt Calhier ot the .8:nmch. The number ot employe e• at the cloae ot 1921 waa 123 oon,,pared w1 th 1.29 at the close ot the previou s year. 00liOID5I<m ~e aonolusi on drawn :t.rom the detaile d report p-e'fiou al, ' aubmi tted. at the close of the ,ear 1921 wa■ that the banks · ae"e4 'b7 the Qmha. zone an gradua l~ worki.Dg them.selves into a aUOng tillanc1. al position and tmt a. greater appreci ation ot the aervic& rendered b7 the .rederaJ. Heaerve :Bank 1a beoomillg mni:l'es t 1 du, to a be\ter 1mders:tan41ng ot its _purposes,,-, This stat~ t has been corrobo rateu by events d.urlxlg the early months of tm Je&r ·1922. I DENVER, C')LO.BADO APB I ·L l.6 l 9 2 1 A BEOOBD Ol' THE DENV.r.ll .BRAifCH 'JF THE FEDE.BAL RES:EnVE BANK 01 JWJSA!l OITY TO BE DEP'JS ITED IN TEE 'fBEA.StlRE :SPX PI.ACED IN TJre CORRER ST')!JE 9F TBE W 1UM BUIIJ>ING. The Denve r Branc h ,vas opene d ~or buain eaa on Janua ry 14, 1918, pursu ant to autho rizati on of the Board or Direc tors of the Feder al Rese!4V'e Bank ot Xansaa City. Tbe terrh ory assig ned the Branc h ,;as the State of Color ado am the ten count ies 1n New llexic o which are imlud ed 1n the Tenth Feder al Reser ve Distr icti tm member banks in th.et zone havin g the optio n ot trans actin g their busin ess w1 t.h ei thar the ma.in otfio e or the Branc h. The Branc h began busin ess 1n tbe Conti nenta l Trust Compa ny Build ing, now as the Inter state Trust Build ing, at the coroe r of Sixte enth and In.wrence Stree ts 1n Denve r, Color ado, end at tba time of t h is writi ng 18 still in that build iJlG • The ~ua.rt ers at first taken consi sted or 8i)pro x1mate ly one-hal.1' of the secon d tloor being 2784 squar e teet of floor space . On July 1st of the saoe year the remai nder of tbe floor was taken mald.ng the total floor space 5853 squar o feet. The growt h o'! tm Branc h continue d and on li!arch l, 1921, addit ional rooms on the third floor consi sting ot 792 s quure feet were added to the world.I{; space . knO\'l'l The Branc h at :first opera ted on a modif ied plan, the membe r banka * account s beillg carri ed at the bead o'!:t1ce in Kansa s City am repor ts of tro.ns action a bei~ repor ted daily fbr entry 1n thOse accou nts. Expe rience _ soon demo nstrat ed that the plan "68 impra cticab le owing to the distan ce :from tho ma.in cttio e and that it requi red t710 days for mail to pass frOlll one to the other . There fore on April 1, 1918, tlle accou nts ot tie members 1n tl:le territ ory were trans ferre d to the Branc h and those members began trana aotin g all of their bU.91:o.eaa with it. Tbe Direc tors of tho Branc h a.t 1 ts opening- were HOlf. ALVA A.Dil!S ot Puebl o, Color ado; MESSRS. JOHN EVA.BS, A.LEX.IS c. FO .' TER, CLIP'r'O RD C. PARKS and OHAlUZS A. :BURXHA.RDT, ot Denve r, Color adO. Mr. Burlch a.rdt was appoi nted Jlanag er and holds that posit ion at this time. I The .Board remai ned uncha nged untl 1 .Tanua.%'7 1, 1921, woon ALVA B. ADAl!S • . of ?uebl o was appoi nted by the .feder al .He serve Boa.rd to suooe ed Alva .Adams; the other f'OUE' named above be~ s.ga.1n app(?inted. tar tm yoar 1921, and with Alva B. Adams const itute the Board at this tima. lm. PRlIJ..IP R. JEEDWJf, mo was in tb3 om.ploy o£ the paren t bank, on.me to th.:: .Branch at 1 ts openi ng and waa appoi nted Actin g cashi er. He held that posit ion until Janm. ry 1920 when he was made Cashi er. On 15, 1920, he was trans terre d to the Omaha Branc h as 1 ts Cashi er. On llay' 27 •· 1920, MR. JOSE?H E. OLSOJI', who had been 1n the employ ot tb& .Branch since Ila¥ 15, 1918, was appointed Cashier and !!B. A ~ J. Oor.''7AY. who be08Zl8 a.asooiated w1 th the .llranch on April 9, 1918, was appointed. Assistant cashier. In January l9ID UR. BEU!EN w. SM~H was appointed .Bnmch Audi tor. At t.he Opening ot tbs Branch there were eleven aployeea. By the close ot the yeu these had increased to thirty-eight; on .lieoember 31 1 1919, there were f1tty- ■1x employees a.nd one year later eighty-two. On .!pr11 l, 1921, these bad increased to one hundred six. The number of member banks in the zone at the beginn1Dg of business waa one hundred thirty-tour; on .JJeoember 31, 1918. there were one hundred forty, tbe number 1noreas1Ilg' to one hundred f'orty-six by tbe close ot 1919 and one hundred f'Uty-nine by the end of 1920. At thill writiJJg there are one h1mdred sixty-one manbers, being composed ot one mmdred torty-toUl" national banks 1n 00lorado, twelve national banks 1n New • ?Jexico, and three state banks in Colorado, and two state banks 1n Bew Mex.too. :t.'he volume or busineBS transacted by tho .Branch has shoVD a gradual and constant increase. At the close of 1918 the dally average nuer of items handled was approximately 9 1 000. Tbe daily average for the month of .vecember 1919 was 18.457 aDd :for the same month in 1920, ;·,-as 21,598. During the year l9a:> the Branch discounted 15,351 notes :tnving a value of 1262,615,992.40. One hllDdred nnd. twenty-six of the bankS assigned to the .Branch availed the?selves of tre radiscount :privilege during the year. The Branch has supplied the members 1n 1 ts zone ·.rt th their currency requirements and has received trom them deposits of cUITency, tm tormer amounting to ;25,781,000.00 and the latter ::,32,696,000.00 dur~ the year 1920. A Govel'DDent Department 1s :na.1nta1md and duri~ tbe ~ar it paid tor the account ot the Government_ 198,318 United States Treasury 'Narre.nts amounting to 129,166,512.14. It also pa.id far GoverDment account 870,047 coupons tram Liberty I.osn lSonds and Victory Notes and 497,425 w~ Savings Sta.ops. It received the deposits est tm Collector ot Internal .ttevenue amounting to ~7,273,3:37.17 for the year 1920. 1'he Collection .Departl!lent bas sho'Ml. a oontinued inorense indicating that member banks are availi~ themselves more and more of tbs collection facilities provided by tho establishment of the ¥ederal Heserve Banks • .During tbe year 1920 8,244 oolleotion items amounting to 122,403,891.05 were received Of which '1 ,564- smounting to fl9 1 843,6M.05 were co llsote~. The relations with our member banks lnve been pleasant and no controversies of serious nature m.ve arisen. 'the sa.rm can be said ot our rela tio.na w1 th the non-ment>er banlm in the zone, this tact be~ oorroborated by the f'aot tbat the Branch is oollectil::lg at par checks drawn on all banlta in its terr1tocy. OoDl)lete harmolJ1' prenila a:nong the ott1oers and empl07ee111 ara4 all show a desire to perto= their duties 1n a .canner that will retleot cred1t upon the .Branch. !rhe young men in our 8JZl)loy have a club loold.lg to the wlfe.re end pleasure of all. A base ball team repZ"esen ts the Brrmoh 1n the lo.cal Bankers League and it held third plaoe out ot eight contestan ts at the olose ot tbe 192> season. A ba.altetba ll team alao repreaen ts the :Branch 1n a leaglle oompoaed of teams re_presen ting various bo.nks and this team won tirst plaoe in the winter &ea.son Ju.at Cloaed. The 70,mg la.dies of our toroe also lave a olu.b known aa the "Beta Bb') Phi" of which Mrs. C.A. Burkhard t is the .Patrones s. !be purpose of this olub is p1"1nc1i;a lly social but 1t also loolcs to the welfare Of its meaibera. lSigned) c.A. Burkhardt !t3.n3gor. A. BRI.EJ' HISTORY OF THE OXLUIO!.IA. CITY BBAmH OP fflE 1ED.EBAL RESERVE B.mX OF KAESAS CITY, 1ROJI 'l!HE DATZ OF ITS OP:FZING TO &'lUL 16th, 1921 1 '?m: n!Tl:: OF mE LAY ING or THE CORNER STCIUZ Qi' THE . ? ~ HOME OF mE FEDW.L ~ERVE RANK OF IWlSAS CIT?. Acting under authority of the Federal ReserTe .Bos.rd, the Federal Reserve Bank of Kansas Clty .on August 2nd 1920, opened a bramh in the Contiliental Bw.ldi:ng, at the corner ot Second Street am !road,.ay, Okla• homa City Oklahoma, the branch bei.Dg off'ioialq dosigna.ted aa the Ok:Ja.hom City .Branoh ot tihe Federal Beserve Bank of Kansas City, Governor J.z. lliller, Jr., Federal Beserve Agent ASD. E. Bamsn:y, Director B.W. Gibson, am Assiatan t Cashier E.l?. Tyner, ot the Hea.d ot!1ce were in attendance at tm f'irst regular meeting ot the Board o~ Directors of the -D&wly organized branch held on the open~ dey. the branch, all of -mom were 'i.1:lie Directors of in attendance at the aboTe mentioned meeting, were1 c.E. Dam.el, Cha.innan of tm Board, Dorset Carter, Willi.am J.lae, an4 E.K. Thurmoild, all o£ Oklahoma City, and ,l).C. Dings, of Ardmore. Oklahoma; lJesers Dings, Carter am l.eniel being appointees of the Board of Directors of tbe .i?aren t Bank and lfesara Mee and Thurmond appointees ot the Fed.oral Resel"\te Board. On January 1st, ?.C. Dings, mo had removed his residence from Ardmore to ChiCSg'O I was su.oaeeded on the Boa.l"d by T.?. Jhrtin,Jr• ot Oklahoma C1 ~ • .A.a evidence ot tm weloo-m extended to tm :new branch and as t o ~ of tbe appreciatio n ot the ettorta of those responaible tor 1te eat&bliabm ent, the ottioea. were protusely decorated w1 th cut fiow8l"8 presented bJ' the banlta am. bua1neea houses ot Oklahoma Cit7. I The aot1Te mamgement of the bank \VZla vested in u.E. Dani~l• . ·._ ._;; , ·-.-~ \ as Jlanager, R.o. Wtmderliah, as cashier, both of -.t>.om had 'been tor e. ') ·" \ '• , considerable period prior to the opening of the Branch, 1n tm employ'·. ..... : \ '\,. R.L. JILtbes, also previoUS,r' ,• l\., • -.. '!: :~ .-,· ly w1 th the Parent Bank, was 1n oba.rge ot Audi UDg, t ; The ierri toey allotted to the branch wa.a e.11 ot the Ste.te of ·' •. ,_ ot the .rederal Reserve Bank ot Kansas Cit;y. f \:'· Oklahoma_. w1 th the e.xoeption of eight oormtios in the southea.atern pnrt \ ., ••, f ·; ·, '\:,. of the State, which were in tlle Eleventh District,.. Bllll th!, operative i powers 8lld tunctiona of 1he Branch were at tm direot!.on of the Bo?-rd, ; I 1!o receive deposits from banks w1 thin its zone aJ:ld ta .:nallD pa31J1ents of money tor and 1n behalf' o~ the !"ederal Reserve llmlk ot Eanaa..- • - To .r.m.intain and operate departments for the clearing and colleotiDg or checks, drafts am maturing notes and bills; To receive from mecber banks within its territory a.pplioationa tor discount of eligible notes, and afters tar sale of cable transfers, .. ' bankers' aooeptanoes and bills of e:xcmnge, and to transmit such app11- ~t1ons end offerings with reco!!C8Jlda.t1ons to the Federal lleaerve Bank i, '; at Xansae City ~r final act1 on; and !o ;pertorm au.ch other duties end services as might be re- quested of it by the Federal H.eserve l!allk o t Jransas City• and by the hderal .Heaerve Agent of the !fenth D1str1ct. It was anticipated that ~be fransi t DepartmEllt of the brm:lch would probably be called upon dB¥, and with thls voltme w mndle alx>ut Twenty lfhou5and c~cks per ot 'business 1n mind, ti:fV people 18d 'bNll em- ployed tor the Tarioua posi tiona. It waa soon demon~trated, ho1'9Tal", , . .. .. ·• that ~ volume ot business to be tra.nsaote d lnd been undel-eat1 nated 1 aa ' in aotual pre.ctioe the bran.ah was from the start aa.lled ori to hsndle clle~ ot an average n~er of Forty 'rhOusaJJd ea.ch a.q. -~ 'fl~ •• •. . • . It vaa therefore found•.·. ,., ' • '; ~ " ' neceaaary to ma.Jee a considera ble ad.di tion to the opening toroe~ IJ.'lm. l.argv.\ -· 1, , ._ \'I..-,. _ • u L , . •, ens~ numbel" ot items band.led during tho tirst six months ot the Branch's , ~ ·~'-4. . - .. i \ viii.1 States, r . . ence .as ezceeded by only one other Branch Bank 1n tbe United ¥ ~ • Pi ttsb-.n"g Branch of the Federal Reserve Ba.nk a f Clnelmld . . \ ;,. !hara bei~ no vault 1n the buildil:rg oooup1e4 by the' ~a.it .. : ' • , .. ~ Dopa.rtment, suitable spice was acquired by lea~e 1n the va.ulta of tb4) • l v. l S~ee~•• ' ,.,. _ : Amari om Xa.tional .BDnJt. situated at the oormr ot i.hin and Bo'biuflm . ',: • and due to the deleg 1n delivery of the necessacy ' vault equip:nen t• t~ o~-~illg . _., ot a currency departmen t was de~ed until December lat 1920• but tba . '• vol,-e o-t business transacte d b:y that departmen t after opnliDg, was. like that in the tra:asi t departme nt, groater than anticipat ed, A private wire was m.1nta1ne d between tbe Branch Off'ice end ~~ the Head Of':f'ice from the date of the Opening of the bran oh, by . D)CllallB /- • l Ci'Q', which tho ?&rent Bank was enabled to enter on its book:S 1n Kansas . . ,..t . ' on the date received o.nd. disbursed , all receipts and disbursem ents of ~e bra.noh 'i'.i1. tbout • 1~ On the 31st d~ ot Karch 1921, tm branch banlt bad ill " -7 it• anplOJ", a very efficient force o~ Eighty Five people. While the Federal :Reserve Bank of' Kezisas City, was prior to •; : ~•r ,' ! . - I ' e\1 ,,. reeul tant oonf'Usion , I•, ~ j .,:· . I tba Opening of the Oklahoma. City Branch expeditio usly handling all / ; • ___ . 1tema handled:. 4&1q by tba Pa.rem .Brmk •re apparentl.7 -~ th~" ~ • • i ,.. . ,. I •• • : waa conoluaive proof tmt tlB branah was 1n a large meaimra .~ # . .l ll.Dg •• \ -~ , . ' .; : the purpose fo~ whioh 1t was esta.bl1ahed, that ot ron4erhlfr_.to -~~ ;' suppori.lng mmi>ar banu, the groatoat. •omt· ot aenice poeai:l'blo•: . ·,,. •• .' !Ceapeot:tul~ submitted., l51gned.) c.E. Daniel .·.· llanageJ:' ,. 'Okla.homa...Di ty Arand,l . : . . . \ •.~ . ~,~ -· ; ~ ·:.~· ' . ~:. . :-.. : :. . ,·' , •. .,. . \ _. ' • I' ,. BIOGRA PHICAL SE0TI0 . !'ACTS OO!WERNIBO THE MEN WO HAVE BEEN' COINEC!En fflH TBE J.PEDEBA.L limERVl! BANK OF KA.liSAS CITY A1fD I!S OBGAIUZ.A..TI~ ......-- . ..: . •. .... Mr. E_. P. Bron. - Claaa C direotor - (Jlay- 29 1 1931). Mr. Brown comae b-0111. an old Lincoln tmnily, his :rather haT1:ng been GQ- Browa, S\ate Librarian i:a. the eerl.7 daJ'B. Mr. E. P. Brown graduated trail the State Uni"t'8ra1 t;r 1n IJ.ncoln, rl th high honors, and tor a number of years wu a aucceaatul practicing -:- at'\orney in this city, (L1ncoln) with Tery bright prospects. Bia heal th :tailed, and aboa:t twenty y-ea.ra ago he discontinue d Healt.h tul..ly- recover- . \ Does a great deal. o:t read- 1;: . ... his legal buaineaa and wei:1:t on his tai,a. ed. but eont1nea :tarm.11g operations. f1 i.-:r- ing and smite writing. Be served :tor .same time as a regent at the State UniTeraity-. J.lao aerYed :tor a period aa atate ••nator. Owna l.60 aere tum. .,_ . ,.t J . . .. ,. !~~.: : clear _or ~ranee and keepa Bate well stock- ·f~• 1::· r ,..... . . ... I ,-r~ • ,. I r-FI ·-•.u ~ I ed. Ia conaiderecl a ll18Jl o:t mm.sual. 1ntelligeDC 9, well read. BD4 :: t-,.:-~ '- i ot broad education - pertecU,7 sOU.Dd in hia Tieu. A88 - about 57. ' (J.bOTe 1n:tormat1on t1"Qm P. R. Eu'\erda;r, V. President, Yint liational. Bank ot Uncoln. ) Address g1Ten as .Arbor, Ne'bruk:a., e.bout 10 miles north ot Lincoln. . ..:. BAILE?, TILLIS J. , i1a.s bom. e.t Ut Ce.rmel, Ills., October 12, 1854. and received hi a education 1n the aahoola a f Wabash County Bild at the Illinois State Un1vers1 ty. At the age of twenty-five he came to Kc.nsaa and on JuJ.y 14, 1879 settled on a :ta.nn 1n ller::eba Couuty. J:ad, although he has been at various times einoe then a politician, banker and legislator, he has remained at all times primarily, a progressive agr1oultur1at. In 1888 lb:-, .Bailey ms elected. on· tm Bepublloan tioket ae state representative am. in the lecrisla.ture proved the champion ot the farmer~ and stoek growers ot his state, . His popular! ty among ~ business men and farmers of Xanso.a, am especially a.in<mg tho Bepubliocans, was instrumental in his eleotion for governor in 1902• when ha auooeastully defeated Wm. B. Craddock, Democratic nayor of Kansas 01ty• Kansas, also a vecy popular man in the state. He was iJJAugurated governor Jan. 12, 19CX;. One of his first acts was to reoommend to the state legislature an additional ;100,000 appropriation tor tba Kansas display at the Louisiana .?urahD.se Expos1 tion ill St. I.ouis in 1904, a display which gained w0rld f'ruoo ft>r Kansas industry, agrioulture am education. Ag11.in in 1903 and 1904 it was the business ability of the governor which guided tha flood striokan cl ties of that ata.te toward a soJution of their problems of refinanoing and rebiildi:ng the striaken areas in town and o11u alo.tJg tbe rivers. His adminizstra.tion throughout wa.s one notod far eoonom_v and g:>od business ju.dgclent. i1hile lfr, Bailey was a bachelor a.t th& time be was elected E,-overnor, his marriage w1 th .Mrs. Ida. Alberta Weed• occured on June 10, 1903, six months after his eleotion. Tlle reception held tor the governor and bis bride at tm _Kansas capitol was one of tm notable social events in the State's hiatory. .Anoth9r notable reception hel4 in the honor of himsel.1" and wi:te was on Sept. 00 9 1904, a.t the Kansas day celebration during the Louisiana ?urchase Exposition. In politi'O&, aa in buaineaa, Governor Be.lley bears the reputation in Jtansa.a ot being a fair tighter, a oham,p1on of wortl\v am. honorable principles atld a believer in a conservative people wbo do conservative thillgs. H1a policy was also a oonstruotive policy and he did not adhere to the fads of rofarmrs unlessthe reformers had a feaaible plan ot bettering conditions. Governor .Bailey was championed by a host of :friends and a.dmi.rers f'or the posi t1 on or· Class A director when the organization work for the new Federal Reserve l3e.nk began. Be had atro~ opposi ticm but won over his opponents by reaocm of hifl c,;m ability end f'itneu. • -Bia rep11tat1on in tbe state bad pointed him out as ab~ fitted :tor tbl pos1t1cm. 1 . and bis record 1n tmt position has aima :Cul~ Juat1:l"1ed the amb1 t1ona 1fhich hia friends had :f'Or him. Be 'i\8.s elected in l914r md by lot aa chosen tor tha 2-year tel'm. He was re-elected, etfeotiTe Jen, l, 1917 and again Jan. 1, 1920. On J,me 22, 1922 be ve.s eleate4 governor· ot the 'bank to succeed J.Z. Miller, Jr. wbO resigned •. Ohe.raoteria tio of Governor Bailey was his Bl)irit ot f'airneea. 'ilhile he held out stroz.gly for his ideals, whm he lost he ms a good It a vote placed him 1n the m1.nor1ty, he was the first to loser. W1 th the auooeas:t-.J.l ones and promise his support 1n their llB.nds Join behalt. BAB.LEY, GEORGE EDW.ABD,- .Born July 20, 1872 at \11aah.1Dgton, Xas,, where he resided almost oontinuousl y until 1917. • He t.1lliahed high eohool at Washington am. attended school at .Atchison~ xas., since which time the greater :pa.rt ot his life was devoted to dif'f'eront lines of banldng, f'itteen years ot which be was cashier ot the f"irat Bational Bonk ot Bo came to the J.Pederal Beserve BaIJk in 1917 • enterWa.shington, K&s. Here he organized the War Savings ing the . P1soal. Agency Der:artment, Division ot that Depa.rtr.::ent and later became ns.nuger or the Certif'ice.te of lndebte4nes s Division. He was JIBd.e assistant ca.shier Feb. 27, 1919, and in January 19a> was placed in charge of the .A.acounti?Jg De:IE,rtment 1920_. be has Since nnd. the Analysis Md Member !3:a.k Beserves. been supervising officer of the Disoount Department. :BO.-iRDMAN, OHA1UE3 KNIGHT;- .Born Janyary 28, 1882 at Odebolt, Ia. When h6 -.vas ten years old his parents removed to .l)Os lt>ines mere be attended tbo pub lie schools. inoludlna the Horth Des Moin· _:: High School, after vb.1ch ho was mployed with tbe United States WSD.tber bureau in 1898 mid 1899. He oon:rJ;1leted his education in the Iomi. State ec::..~ege at AI11as am the Un1vers1 ty ot Wisconson at Ma.di.son, talti~ an agricultura l course 1n the tormsr 1nst1 tu.ti on and s.tudylng law in the latter. In 1903 be r81'!10V'ed to Okecme, Okla., where be was oo:oneoted wl ~ the First Jlat1onal l3a.nk tor alx>ut ton years. In 1913 ho beoame seoretary of the State Thie Bankers Assoo1at1on of Oklahoma w1 th of'f'ices in Oklahoma City. active beoama position ba beld until November 1. 1917, at miah tim:, he w1. th. the Federal Beserve Bank as assistant ~ederal Reserve Agent. Later, he was us.de secretary to the direators of tlle ba.nlt. • Mr, .Boardon man was married October 25, 1905 m mas !hbel .Bowen ot Carroll, Iowa. :S.Jm.Altt>, WILLI"!! PATTERSONa- .Born a.t Leavenworth , Kansas, Jct. 14, 1867. Came to Kansas City in 1880. Graduated in 1892 .trom the law Bepartmf.11t of the Un1Ters1iy Of Michigan. Helped orsari1ze the Kansas City School ot Law 1n 1895 and was 1 ts Dean tor 15 years until he resigned tQ f!!J to Congress in 1910. Was married in 1904 to OWne i71.na.nts, daughter of W.R. Wina.nts, a ltansa.s City banker. He is author of a text book on the ·Law of Wills and Administra tions, also joint editor of Xelley•s Treatise. on .Px-obate law. Died vtiile abroad ln 192 • ,. ( .. . !Jo. He was in »tJIUCBABM, Cll.ill!BS A.,- Born Janua ry 2, 1869, at Calif orniaJanua ry 1, 1890. to tbe morc ant!le busin ess at the S3m8 town :froo June 1886 & Trade rs Bank ot • ars .l.!"arm the in e9IJGr bookk a e On the latte r date he boomn Cashi er, and 1n his nativ e town. On Januar,y l, 1893 he was t!lB.de Assis tant latte r poeit 1on Ho ~ld. tho November 1896, was Jmde Cashi er or tbllt bank. an appoi ntmen t as State t aooep to ned resig until Augus t l, 1905, whm be Be held the posit ion aB ~1.n er until Augus t .Bank Ex.aminer 1n msao uri. He as Cashi er. l, 1907, ~n he return ed to the .tame rs & Tre.dera Bank er ot tbe ?rodU ea resig ned that pooi tion on Septe mber l, 1908 to becol33 Ca.shi .Assis tant Cashe Emhwlg.e BWlk ot Kansas Ci t°IJ, JJo. In March 1910, he becam posit ion he mioh lt>., City, s ier of' "the Natio nal Reser ve Bank of Xansa Dae.var .Branch of the resig ned on Jan. l, 1914 to move to lJonve r. When the the r a.ll or 1917, ha in rized l"ed.e ral Heser ve !ank of Kansa s Cit:, was autho e aaaoo iate4 with be08m and h .ora.na we.a· elect ed e. Direc tor and !Janag or of th.'.l.t and on Janua ry 1917, l, li>er .lleco? the b'ederaJ. .Meserve Bank of Xa.nsas 01 ty, on latte r The er. Manag as him 14, 1918, the .l>enver Br'nnch was opene d with posit ion still 'bei~ held. -l .,,.. i .,I ·I starte d to wark as a BY:RNE, THOMAS c. :-!orn ill St. Josep h , Mo •• and first in, Ovelman & Co. messe Dger boy in the whole sale dry goods house of britta ng in the traini in 1874, ~en 1::.o ~ s 14 years old. Bis exper ience and sucoe ssive ly ied whole sale dry goods busin ess ~m.s very gener al and he occup in tbe clerk stock pos1t 1ona of offic e boy, shipp ing and recei ving clerk , and an, salesm .illg merohand.1so elld o't ·the busin ess, house salesm an, travel e activ 1890, hems later as b~6r and depar tment mmiag er. On Janua ry 1, rdltioba f o busin ess _ in pl'Oln oting and estab lishin g the whOl esale dry goods where to~ son-~ obert s-Byr ne JJry Gooda Co. ~en yea.rs la.tar be moved city. t~.a.t of co. Goods ✓ l1r' er Hamm he became ?resi dent of Byrne & Reser ve Bank al ~·edor the of Board the on tor :.tr. Byrne became Claas •! Direc Ur. Byrne at that of Kansa s City when the bank wan estab liamd in 1914. was also elect ed he and 2, Group of time was elect ed by tbe .:iomber banks nt tenn, which prose his for 2 Group to eucoe ed himse lf by the bankB' of commencad Janua ry first of this ;;ear. DOWXIY.G, JOHH P'.1- Born 1n the ban ~ busin esa 1n bis nativ e payin g telle r at Armours from 1882 estat e and loan busin ess trom 1885 lew Engla nd Natio nal Ballk in 1898. Ill1n o1s. Illin ois, in 1854, He enter ed state but came to Kansa s City a.a He· e:ngaged in the real to 1885. to 1889. He became presi dent of the He marri ed Miss Jessi e Burnhern of OIDSS ,Joml .Born at Pelban, Ala., 1,broh 16 1 1886, son Of Be 1116B eduoated in dist.riot school• Of his native t0\111, and his advanced educa1,.i.on waa received at Howard College, B1:rm1ngbem, A~ ma early buinesa comieotlona nre 1n JS1rro1ngham with tm Southern .Bai~, and finally with tbe First Ba.tlona.l :Bank, with wb.1oh latter institution , i7.? .. G. Harding was oomieoted until he became Governor ot the J.Pederal Beserve Board. When xr. Harding went to Washington to take up hia pos 1t1on tar the governmmt, Ur. Cross also became aonneoted with the Board at ';lash!Jlgton as Federal Reserve bank emminer. • LEI.Am) 1- I.fr. and Mrs. William Shelby Croaa. It was 1n connection with hia e-ai-mioa.tion or tm Kansas Oity bank • with J,.A. Broderiok in Nov. 1915, that ur. Cross became e.oquaint-4. with the _ot:f'loers and directors of the bank. At the aomplet1on ot this examination .ur. Cross was loaned to the bank by tbe Federal :Reserve .Boel.".d to establish eome new methods in connection w1 th the bcnk operations. later, on Jan, 11, 1917 1 .ur. Cross becmne deputy governo:::- and served in that capa.oity until hio :resignation Feb. 19, 1919, at which tim3 he wont to the Jratlonal City :Bank ot lfew York as vice-presid ent. llr. Cross vas married Oct. 12. 1911 to m.ss Rose Atherton Jones of Anniston, Ala. EAlmABT, LLO!D H. a- Born on a. farm nea.r Hiawatha , Kan3as, :December 6 1 1888, vtlere he lived until 1909. 'IVhm 21 years of age he entered the employ of the rtrat Mtate .8Bnk ot .!'allia, Okla. He r81!JB.ine4 in tl:8 employ of that institution and in tba lumber 1nteresta of its president ,· until .April, l9ll. n-om that date imtil July, 1917, he was with tbs Drovers Rational Bank and the StoOlcyards Jatione.l Bank of Xansas C1t1, Mo. Be mtered the anploy of the B'ederal Reserve Bank ot Ko.nsas Ciq Aug. 8, 1917, as general utility clerk, suoceodi~ to the position ot Assistant Cashier on Jen. l, 1919. In March~ 1920, he was designated. aa ~ e r of the ()-oo.ha .m-anoh of the Kansas City Federal Reserve .Bank• .. ' . · EiU3T14Ali ,OSGOOD TILTON, s- Born Janua.ry 18, 1865, at South .Braintree, Maes. He started a business career in ~ha with the Union Pac1tio Railroad. Ai'ter four years of service he was transferred to Kansas City as chief cle~ to tbe Assistant Genei-al Freight Agent. From 1891 to 1906 he was w1 th Sea.rle & Hereth Company, m.:-i.nufacturine chemists, in ChicagQ; from 1905 to 190'8 , credit manager of D:>rrison-Pl umner & CC>m!,Jally, wholesale druggists, uhicago; :from 1908 to 1917, Ass1stnnt Cashier of the 11rst National Bank, Omaha, 1n obarge o-£ oountry bank accounts; frCJ!l 1917 to 1920, msnager ot the Om.ha Branch, Fedoral Reserve .Bank of Kansas City. In 1920 Mr. ~stman resigned to become Vioe President Hat ional l3a.nk• tballa. ., I ~ the i.farobonts FLE!nNG, COL. FRED W. :- Born AUt,~st 8, 1866; Educated in the publio schools . of Aroostook. Colmty, !.l!.ine; attended Houlton Academy !Di. graduated tram Ricker Classloal lnstituto, Houlton, lhine, ill 1885. He oai:oo to Xnnss.a C1ty 1n the apri~ of 1885, had has lived here ever sinoe. His :first emplo~ant was as boolckeeper 1n a life insurance oompany. Later he worked tor .Bradstreet 's .lleroantile Agency as city solicitor. Re then sitored the real estate ml4 mortgage business on his om account. In 1904 he bought the Xan,sas City Lif'e Insnranoe Company, and wa.8 its chief executive ot:tioer, aervine as Chairman ot the Board <:If Direotor:J until 1918, when on aooo'mlt of impaired health be resigned ·his position with that company. Colonel lleming gained. his m111 ta.ry title through service in the SpanishAmer1aa.n War 1n 1898,. He enlisted 1n the lw.tional Gllard of ?41.ssouri 1n 1886, am. filled every position in the Third Regiment, !lational Uuard ot lfiesour1, from enlisted man to oomuanding of't1cer. His administrat ion or Lhe af'fe.irs of the Kaneaa City Life Insurance Compa:zy during his fourteen years' oonnection with that institution was brilliantly successful. Colonel !'le.min€ was Chairmml of the f1rst War Drive Oampa.1gn tor the .Amerioa:i Red Croaa 1n Kansas City durug tbe 8UIIID8r of 1917• Itanaaa City's quota was f300 1 000, md the amo-mit ot mone1 realized was approximat e~ iu,aoo,ooo. In the ra.11 Of 1917, he was app91nte d by Secreta ry ot tbe Treasury , WillJ.am G. ;.~oo, Ol:le ot the .roderal Directo rs of the Wa:r Savings ldovemant helpill{;' put his distric t first 1n per oap1ta sales o! Wa.r Savings eecuriti aa 1n the Uai ted States. Wh.fle engaged in this work, Colonel J').emi.ng suttered .a :peyslca l break-do wn a.nd. 9 on t.he advloe or his physicia ns, retired f'rOm active busines s tor three yea.rs, whiah tine was largely spent 1n toreign travel, 1.noludin g a. trip to Al.s.sls:n and a six months visit mth hb tamily 1n Europe, Upon his rot uni to X-:msas Ci~ 1n the !all of 19a:J, he we.a appointe d oue ot tlle receive rs of the insolve nt Kansas Cit1 Bs.ilway s Compmi;r. In oolljuna tion with Francis lit. 1i/1lson. his co-rece iver, he caused tm railways co.m;;i.my to make rapid. progres s in a tinancia l -.q. OolO?J.el Flemillg is a member ot the Christia n Chu:roh, ond Chairman ot the Joint Bo~ of Christia n Churche s 1n Greater Kansas City; also a t~te• of the Cllr1stia n Church Hosp1 taJ. 1 e.lld o:r Christia n College , of Columbi a• Mo. as .~ ll as ChaJ.:nnan of the Oi'tio1a l Board of the Independ ence Bou1eTard Christia n Church. • For ~ yesrs he took an active :nrt in tho aff airs o:r the Translfiesisa1 pp1 OoDgress and the Interna.t iona.l-Ir r1go.t1o n Congres s, serv1~ as preside nt of both bodies. .A.s chainm n of the Conmitt ee on State and Nationa l Legisla tion; he took an active !)(lrt in the ena.ctment by Congress o:r the Nationa l P..eclama.tloo. Act. Colonel Flsr:11:ng 1 s a momber of' tm Kansas Ci cy Club; the Rlllcrea t 0Quntr1 Club; Blue Hills Golf' Club; Mid-Day Club; Automobile Club; Kansas Ci~ Athleti c Club; Broadmo or Golf Club, Colorado ~'lprines; the Xe.nsas CicySymphoey Orohest ra asoa1at 1on; and the .Priests of .Pallas. He is also a member of tb:l Nationa l Geograp hic Society ; Art & Arclw.ao logical Institut e o£ J.merioa ; Amer1oan Aoa.demy o:r Politica l Science and the Na.tiona l Mxmicip al League. Be was G{)pointe d Class "C" Directo r ot the Federal .Reserve mnk e:t!ect1T e JanWJ:ry 1 1 1916 to :till the unexpire d term of Directo r .Hnml!B.y who resigned October 1. 1915 to go with the Drovers lla.tiona l Bank as Vice Preside nt• 1n 1917 and again m 1920. Ee was always a fa.1 tbf'ul and 1nteres ted member of the boa.rd end fulf'llle d his bbl1gat1 ons to tho govermn ent, the bank mJd to the people ot hia distric t 1n a thoroughly oonsc1e nt1ous mw:mer. ur. Fleming was ro-appo inted FROST, A.:.F.3]ID GOLD, a- Born 1n Galesburg, Ills •. , July 1. 1874. In 1881 .ur. Prost' s tam1J.y r81I¥>ved to Tope kn, :Kansas, where bis :te.tmr was 1n the lend .De:;,Lrtoent ot the Santa .Fe Rail way Com~ tx-o:n 1872 unt1 l 189~. ' n-om tho public sabool aZJd high school of Topeka., Ali"red l"'rO..it attond.ed 7/aabhurn University and later cmtered Xnox College at Galesburg, en inst! tutio.11 of which his great grandfather, John Frost, bad been one o~ the orga.ni~tlrs. J.f'ter leav~ th.ls college, lfr• .rrost entered the Univeroi ty or Kansas mere he graduated in the ola.es of 1895. The follo~ iil{;' year h& went t.o Uexioo whal"o ha ::1_9ont sixteen yea.rs. nine yea.rs of which h.a was w1. th the ~x.1oan Cenkal Railway in various oa.i:e,o1 ties at ~e::> City. While in JJexioo .Mr. Frost was cashier or the Uenoo Oity B-'lDk1ng Company which did a large foreign buainese. Returning to ltanaaa in 1912 he Jm.de tam loans tor five ~ars with the Farm i.Iortgage ·Company of Topeka, a.nd si.mi lar work tor one year with the Oomme roe Trust Oompaeyoi Kansas City. Be came to the ~•ederal .Heaerve 3ank January 18 .. 1918, in oonneotion W1 th the Liberty Loon W1Jrk in tl:e J'itsoa.l Agency Department a.oo. was el'3oted assistant ca.shier Janm.ry 8, 1920. He assumed charge of the Department • GOEBEL 1 .PET.ER w. :- Dom in liassau, Germny llilrch 18, 1869; finished public sollool course at 14 years alld w1 th con.sent ot pa.rents oame to ).J:oel'lce.. Worked tor a flU"ll8r near Chicago until coming to Kansas 1n • While learning the El:lglish l~~ be clerked in a drug store and took care of his employer's horses. When 19 yee.rs old be had saved. enough to purchaa-. a drug store o~ his own. In 1882 he became cashier ·or the l'io.nkSrc finzl al M. Beed &: Co., touisburg, Kanso.s • Organized tm Com::ieroial National Bank of Kansas City, Knnsa.a in 1897 and became its president. Organised the Citizens State Bank in the same city 1n 1905 and 1907 organized the Xansaa Trust Compmy of v1hiah he 1 s be head. He :mrr1ed Mary Sha.w of GOODRICH, JAUES E. i - Born Cameron, Clinton Couii.ty., Sept. 20 1 1871 • . .ul\1t7er. ?arents live at Cameron. Graduated from Righ School 1888 as valedicto?'io.n 1 entered tmiversi 1;.'9' o-t W.ssour1 and took A.B. in 1892. cum le.ude. Took .Be.obelor of Law degree here. 1=-re.ct1ced law lirst in Cemeron, was cashier, First Nn.tional Bank, eameron for two yea.re. Practiced le.w again wit.h Thanas E. Turney. City attorney five rears. In 1898 he was Bepubl1can oandi tate tor Congress and 1n 1900 d.elagate to Republican Kational Convention. Caz.ie to Kansas City 1n 1901. Be was a member of the Bepubl1oan Central com. i"our years• In Nov. 1907 was elected Judgo, Div, llo, 5 of 6th Judicia.l di strict. Married in 1894 to Miss Harper Higgins. Belongs to Oentral ~'rosbyteritm church. l': HEU!, JAIJE5 WILSOll, i- aorn in C~algn, Ills •• J,1nunry 21, 1882. He spmit his youth in Danville where he a ttonded public school and high school. He was a student in the University of Illinois 1n 1898-1899. Hie tirst bank1ng experience was with tba Comptroller ot t:be Curreney in Washington ffll.ere he vms a clerk 1n the division of re~JOrts end examinations trom 1903 to 1912 under Comptroller W1llia1:l .Barrett Ri~~ly and Lo.wrsioa o. J.tarro.y. For three years t'olbwing this he ,:ro.s ~~g-ed in the real estate and investment business a.t Pi ttsbu.rgh. rroc thero bo v~ to the Federal Reserve .Bank ot Kansas City .Novernber:.l, 1917, ns olerlc 1n tbs Bond Department. He became assistont cashie:- _ v-mi. l, 1919, actiz:g cashier in J.hrch 1919 and was el£:: cted ca.shier n1; the meeting of January 1, 1919. Mr. Helm was married on September 24, 1917 to Ann Leu.is Smart, a da.uehter of' n.o. Smart, a pioneer realtor of Kansas City. / ROW, HEBER 1- Born June 1, /f 71 in Crawford County, Ohio, son ot !home.a ~. Hord am. Se.rnh M. Hill. DuriDg his youth the family removed to Cheyenne, Wyo. vhere he received his first schooliJJg and later to Jlerr1ok County,lfeb. While . livi.Ilg 1n this county he attended the rural school and later Central City High School 1n Central City, Nebr. l!'ollowing his high sobool eduoation he took a business 00-.rse at Overlan~ Ohio, · returning home to !febraslta where he l'em!linad with his father until tm latter's dee.th 1n 1910. At this tima he took charge Qf the stock business whiah he bad helped build up until tbs name becane one of the beat laxnm names among the e tock breeders end mippera of' the West. Bo was mrri ed April 12, to .l!:ff"1e ~ o:t .Ceu tre.l Ci~• !febre He was BiJpointed Class "C" director by the Federal Beservo .Banltof'fect1ve Jl!.Zi. l, 1922. Ria Judgment end experieuoe in a,eriaulture and in stock raising and mrket~ mve made his services as a director very val,mble to the bank. JONES, GORI>Oll ,- .Born December 20 1 1864 at J:dcbmond, Ky. He studied at v' William Jewell College, Liberty, Mo. In 188'1 he became interested in a hanking institution at la.tbrop, a:>. with an older brother, and. later with the bank o! Odessa., where he becarm Vice President 1n 1889. While in that off'ioe he was influential in securing the enactment of legislation 1n Missouri• oreatiDg the office ot State Banlt t:xam1nor, and providing for regular examinations of banks organized under the state laws. He was Bank Examine\" tor yea.rs. His next banld.Dg ~erienoe was organizi~ a. 5took lards :Bank n:~ St. Joseph, 11:>. tor the Swift Interests. * In 1901 Mr. Jones removed to ~ountain, Colo. and became interested in baruting there. llext year be went to Colorado Springs in the banlci~ end trust business. Later he organized tm _.t:lbert County bank and 1n 1903 became .?resident of the Union Stock Yards Bank of Denver. He was e.lso later aaaoolated w1 th the u.:::i. Bat1onal iimk of Denver and became its President. In 1908 he was Presidant of the Colorado Bankers Association; 1n 1910. he was a member ot the Exeoa.tive Council of the American Banlmrs Aasociation; in 1913 he was a member of the .American Comnission on Agriou.lti:rral Credit ■, 11bich oomniasion traveled in Europe, studying foreign credit methods; 1n 1914 he became a Class "A" direot·or at the ¥oderal Heserve lBDk o! Xansaa City. lie died at ::it. Joseph Hospital, Denver. Colo. April 14 1 1917, following a sa.rgw al operation. ~ . WILLI.All T. 1- Bom in , Ko. 1n 1866,, Atter reoeivil'lg a high sohool eduoation he became a shoe olerit end later a traval.1:r:g ea.leemen. He acme to Kansas City troz:J. Valley Falls, Kas. in 1893. Helped organize th9 Cazmneroe Trust Oompeny and tar .ueny ~ars -...as Chairmen of the Board of the E'ational :Bank ot Coi:neroe and the Commerce Trust Co. Was President tor a number ot years ot the Jtsnper W.ll & Elevator Oo., Xs:nper .Investment Co. of Kanse.~ City, B'ansas City, llenao & Orimt Rs'• Co., Commero1al .Bu.ildiig Co. and other oorporations. Has operated extensive farms, was a trtistee of 'ii'illiam Woods Coll~ tram • McADAMS, AlflHUR WBIOJI a- .Born a.t Salim, Ka.s. Deceni,er 7, 1887. He attended public sc-bool and high school of Ssl.ina and upon hia gradu.ation entered the University ot Xansaa :t'rcm whio'h he graduated in 1911. .l!'rCID 1911 to 1917 he was in the ballld.ng business in Kansas. In September 1917 he oame to the P'iacal Agenoy Depa.r1mai t of the Federal Reserve Bank as a. clerk. From January 1918 to the s~griing of the armistice of the world war, Mr. McAdam~ spent 1n the United States military service in France, returning in July 1919 to Kansas City. On September l, 1919 he re-entered the seI?Vices of tbe bank i:c the P'isce.1 Ageney Department a.n:l on 1lay 27, 1920 he was elected assistant cashier. MoCLUBE, l!EADE L. :- .lk>m on a :ram in ?ennsylva.nia. He came to Kansas in 1882 \'ti.an he was 19 ~ars olu. In 1883 .he entered the banking business in Harper County, Kansas, in which b.usiness he remained mit11 1899 when. he removed to Kansas City and became Vice-President al:ld General J..J anager o:t the ::T~.::_'..::-"1 Drumm Live Stock Comnission Oo. Has been prosid8llt of the Xansas City Live Stock E:ltoha.~e and the Batioml Live Stock Exclnl'.lge, was an origiJJal class ":B" director ot the lederal Reserve Bank of Kansas City. 1- Born Jll.rcil. 23 1 1857 at Ia Grange, Tenn. Early entered the mercantile business to beoome 1n turn book'.keeper, grocer DBnutaoturer, rancher, real estate dealer and investment broker. In 1913 end 1914 ··he was named by t~ goverment as director of the Crop Moving li"lmd whi ah had been f'ina.noed during the strenuous imrketi.ng' periods of those two years just prior to tbe o:paning ot the Federal Reserve Banks. The success w1 th which he administered and directed these tumls in the various Western localities, won tor him the well earned thanks ot the Treasury Depe.r'2:lant. It was natural theref'Ol"e, that when there should be appointed three Class "C" direotors tor the Federal Reserve Bank of Kansas City, Mr. &13.l.one should be named one o'f than. He served as director trom 1914 to Dec. 31st, 1921, when he resig'lled at the o lose o'E his term. The oon:f'idence in which ME-. lalone hasbeen held by business men in his o.vn. state is attested by the fa.ct tmt be was ?resid.ell t of the Manutaoturers Exoha.:z:ge of Denver in 1895 and .President ot the Chamber ot 00m:Jeroe in 1902. 1!AWNE, RIOBARD H. llILLER, JO Z.A.01! Jlb- .Horn on a f'arm in Be.strop County, ·.rems on April 16, 1863. He is a son of William Addison Miller and Amanda Priscilla ~lliott, who were :married in Xentucey and csoe to ~ems only a ff1W months bef'ore the brealdDg out of the Civi 1 war. The elder Mr. tiller was an invalid \ihen he onme west, and atter farming for two years he removed to Belton. Texas in Dec. 1865, llhere he was a school !sa.cher and county Blll"Y&yor until his death at the age ot 33 years. ll'or a short t1me betore his death however, he -was engaged in a msraantile business w1 th a private bank 1n oonneotion. wh1 dl be organized under the DaDE ot !Jiller .Bros. Lef't fatherlesa at l2 yes.rs or age. Jo Zaoh ?diller, - he was named tor his Uncle Col. Joseph Ze.ohery Miller, Sr., - sp;int his boyhood dqa largely in tbe s taa:-e and bank which were conducted by his mother aDi the uncle tar whom he was named. The Jliller Brothers bank and store formed one ot the well known Tama frontier oonmeraial houses 1n the early CUW• The subject of this sketch attended the fi'ee schools ot Belton and later. 1n 1880 and 1881, finished his education at St. Louis University. Returning f'ret.1 college. Mr. lf1ller, at the age ot 21, organized the Balton NatioDB.l Bank and liflllD.ged it, although associated. w1 th his unole who remained presidec.t of the institution until his death at tho age of SO :,years, in July, 1920. On July 27, 1910, Mr. Miller sold his intereat in tm Belton National Bank and cazm to Kansas City as vice-president of the CO!:ll:!lerce Trust Company, v411ch l,)OSition he held for four yea.rs until the organization of the Jrederal Reserve System in 1914. He was a,P.Pointed Chairman and l'ederal Beserve .Agent of the Federal Reserve Bank of Xansa.s City on Oct.~ 7, 1914. On JaiJ.. 4, 1916. he was elected governor of tbJ bs.nk: 1 bei_ng ~~ succeeded as cl:nirmmi by Director Asa E. Bamsa.y. He remiilned governor ~ until June 22, 1922, whm he r e s i ~ d severed his connection with ""1 ~ '- ~ 1 the ban~ 1.m!!lediately thereafter ~1.ng a trip to Europe with his family/. ~ v r- <.:-' the first o.cwal vacation he had ta.km since his oonneotion with the ' Federal Reserve Ba.Dk. • He was married Jan. 2, 1883 to lbry Elizabeth Mellor of Galveston, Tams. • To comment upon Governor 1:!iller's ambitiono, his business ideals aZld, his methods ot o.ooomplishinrr suooess, would be to elaborate upon the :preoedi?lg pages which write the history of tm J'edernl Hesorve Bank !or its tirst eight years of ezj.stanoe. Determine.ti on am pe?-eeverance mark his life. He :ande no claim to brilliancy but from youth his habit of 8%ha.ust1ve tb1nk1ng and plann1na in business matters spelled his nentual financial suaaess. Throughout all his life Mr. W.ller was interested in ta.rmi.ng and sons of his greatest efforts -were in connection w1 th ranch lands 'Which he owned 1n Texas and on which he proved the fact that business Judgment and sc1enoe of farming can be successfully coIIll'iined on tbe ran.oh. lilTCHELL, JOHN c. a- .Born l'eb. 29, 1860 at Freeport, Ille. He "II0.8 1n turn :president azid director of the Denver National .Bank; director of the Ba.omrs Trust COCipa.lly, Colorado luel 8:. Iron Coe~, Denver Gas &: Electrlo Company, Grea.t Western Bugni- Oompa:ly, Compressed Gae Corporation, and Agnes Uemor1al 3a.n1 tor 1"DIDe 1n 1880 he became bookkeeper tor F1e1d. & Bill .:.ferca.ntile Company of Alamosa, Colo., end was later assistant cash1.er ·sm. bookkeeper. of the .Bank of 3s.n Jur.21, :n-om mere he wont to Durango w1 th Denials Brown & Company as a.se1etan t cashier am. then cashier. Thia bam: was later lmOim as the Bank at Durallgo. In 1883 be was one of the organizers Qf the Carbonate National Bank of Leadville, Colo. whel'(; he held the positions o! Assistant Cashier and Cashier. Ur. l!1 tchell went to Denver in 1890 as C!l.shier of the l.,eo:ples Ilatioml .Ba.11.4 A few months later ba left this positon to become assoo1ate4with tbe Bollin8 lnvestma:i t C~~ whore he remained until 1892, at which time be beoemit cashier ot the Denver Rational J:lGnk. In 1912 he succeeded to the :presideno,v of this institution. Re became a CJ.ass "A" direotor of the ~odoral Ro3erve .Ha:ik ot Xanaas Ci1;.v' .in 1915. HEAL, .FERN.ANDO :• 2-Born in Knoxville, Iowa, lq' 12, 1855. A:f'tor c_ornpleting his com.:on school course he attemed \71111.am Jewell at Libcrcy, Mo. l!arried Ida D.. Adk:l.n8 Jan., 27, 1880. Ce.me to Kansas Cicy in 1888 and the following year was irade President ot the Union Na.tion&l Bank which office he held until the bB.Ilk ceased wstance in 1908 in which yen:r the Southwest Mc.tioDaJ. BalJ.k mi..s organized with Yr. Heal e.s its head. OWEB, RORERl! LA.THAJl:,s- .Born February 2, 1856, at ~hburg, Va. ot Scotch Irish and. Indian 't Uicastoey. Educated in Iqnchburg, Baltimore, WnshiDgton and Lee University at Lexington, Va. !.hrried Daisey Deane Hester Dec. Zl, 1889. Has been teacher, ed1 tor, lawyer, banker and b~s1neBl!I man, served in various national ottioes of the Deciocratic par1;,v'. rirst elected as . United States Sena.tor December 11• 1907, established the First :ls.tional J3snk at lfusJtogee 1n 1890, attempted to write a platfoim to prevent panlos under the Rational Democratic Platform in 1896. Studied mt1onal finance in London, Paris and Burlin. \Vas Chairman of the Senate Co.n:nittee on banking and curremqv in which he in:f'luenoed the adoption of the Federal Reserve Act. PABK. JJ. w.E. 1- !orn in Kansas City, Mo • .A~t 19 1888. He was 1 educate d in ward sohool s and Centra l High School . llr. Park first entered banki.z e in 1903 whtn he wee emplo:1ed, by the .werioa n Kati on.al ~ in Kansas City I tto • This bank was mo rged with tba Nationa.l Bank of the Republ io, which institu tion later became the Nation al Eeserv e .lnnk. With these three institu tions Mr. Park ma associa ted from 1903 to April 15, 1916, at which time he entered the employ of tbe Fecieru.l Reserv e .BD.nk. Eis f'.trst work Ml.S 1n the Ca.sh Oepartm ait whichr :.t tmt time, was compos ed of one person . He r~lle d in charge of this departm ent which grew until 1t number ed a.t one time 39 person s. Re was ma.de assista nt cashie r on April 24 1 1919. He wac; married on to !li.ss Leona D. Bonham at Che tops., Ka.s. . PHILLIPS, JOEN JR. a- Bom at Leavem .10rth, Ka.a., JuJ.y 2, 1886. He attende d the publ1a schools 0£ Sba:wnee County , after which he we.s enrolle d £or f'our and one~ha l.f years at llaker Ulliver si ty, Baldwin , K.:i.s. He le£t this ins ti tutiou on Chrlstc a.s of 1905, to begin work with the .First Nation al ~ of Xan!ias City on Januac y 7, 1906. Be entered the omploy of the Bew England NatioDAl Bank in August , . 1907, end remain ed there two and one-ha lf' yea.rs. ~Vil:€ .l!'obrua.ry 1 1910 1 1 he became associ ated with the .t'irst :ria.tion al .Bank at Holton , Xas. Where he recaina d three years, then going with Arthur Young & Company, certitl ed public accoun tants in Kansas City a.e an examin er under Stanley Young. It was While 1n this positio n that he was loaned to the Federa l Be serve .Ba.n.tc to assist in the .Libert y Loan. On 1.tey' 23• 1917, a. few weeks a..fter this work began, he associ ated hLnsel t entirely w1 th the Federa l .Heserve :Bank in the .nscal Jcency .Jepartm ent, soon beoom1ng assista nt manage r. He was ma.de acting assista nt caShie r in Septem ber 12, 1918. He became manage r ot tm Fisoal Agency Departm ent on Februa ry 27, 1919, .and becal!E assista nt cashier Jan. 1, 1919. He was marrie d Boptem ber 22, 1909 to J.ilss Atha ~ Dennis ot K.Ew.saa City, J&J. PIPKIN, GE BGE HO?,.l'F.R• 1- Born April 9 1 1886 on a far.n near Spring field. where be lived lDltil he entere d Drucy-;· College a.t Spring fie,ld• There he studied until 1906, at m.ich t be be took a course 1n a busine ss oollege at Spr1ng:t"1old and then entered the employ of the State Saving s Bank at Spring field. He was in this positio n a yea.r and a half, leaving it to enter tbe Farm lOa.n busine ss in SpriDg: Cield. In 1916 he came to leanso.s City 1n tbe employ ot tbG Federa l Trust 0ompml ¥'S Fann loan Depa.rt ment. Later ha was plaoed in olnrge of the Farm !!ortge ge Departm ent ot the Liberty Trust Camp~ . Yr. P1pJd.n cam to the Federa l He serve Bank in June ot 1918. on Febrm. J7 27, 1919 be was ma.de nnnage r ot t.be Discou nt Depart ment. Be became assista nt cashie r on lby 27, 1920, rSDBin lng in charge of the diaoou nt aot1vit 1ee of .the bank. He wo.s marrie d Octobe r 4, 1911 to :W.ss Mio Gertrud e Vein ot Spring tleld., ll>. uo., REED, J.Al!ES A. a- Born near Jla:l.afield. Ohio, Nove;nber 9, 1861. Became s lawyer and was a"2ni tted to tbo b&r in 1805. ~ to Kansas City in 1687, elected to the t1n.1ted Statea Senate 1.t!.rch 4, 1911 to succeed. LfB.jor William Wa.rner, Republicmn. SillTH, G.~. :- :Born Adams Coun.ty, Ohio, .Deo. 10, 1860. After a COl!!:!IOn schC1ol eduO!l.tion attended Cornell College, 1!t Veruo.:i, Iowa. Bntered the bl'..nk:1:cg business and located in Kansas City in 1890 • ·,vas wi t.'i tm National .Heserve Bank ani the Central National. In 1911 be helped organize the Cozxoonwealth National Bank and be03m8 1 ts prosidont • .113rr1ed .Anna .B. Pinnell in 1885. · S'NnrnEY, E.F. i- .Born at !hrysville, Va., August 1, 1857. Attendod • :1111 tary College at .Blackburg, Va, Ca.me to .l.4'ayetto, Uo ., in 1876 81i4 was engoged as grcoory clar'J; 1 Entered the b'ayetto Bnnk 1n 18'78. I.a.tar went. with th() Richhill, lt>,, 'bonk. &oama ca.shier of a. 7Ji3w bank 1n Colorado City, ·.te:ma, where he rena1Iled until 1887, -.,,hen he came to ltansn.s City as Cashier o:f too .rirst ?rational .Bank. .A.fter thirteen years he 11i8S elected president. At one time he ~s director of the Chicago & Alton ey. co., also of tho .r1del1ty Tru.st Co., and of tm, Missouri Savings Bank. He sorved severc;.l ;vea.rs ns T:i:·eas'tll"er or the Kan~s City School Boe.rd. In 1905 ha became Pl•esident of tl:la .Ame.rica.n Bankers Association. He became advisory oouncillor of the Federal !teservG Bank of Kansas City at 1 ts organization a.lXl has continued in 1 ts service since then. He married Uiss Ida !Aite orHoward County, Joo. , in 1882. TYNER, ED'IAHD PRICE, a-Born 1n .Beloit, Kansas, May' 30, 1882, later living a mnnber of ;years 1n Conoordia. where he attenled the schools.- •• Ho w~s graduated :from t:00 Un1verd ty of Nebraska in 19()4., coming soon ai"ter to Kanoos City where he becwm exc~e teller and bookkeeper £or the A::ieri can National Bank. Wl.Jen that ins ti tut ion was taken over by the National Bank at the Republic ha continued w1 th -the orge.nize.t1on until 1907. He went to the Interstate National nank as a general e:.Jploye 1n the book1taepiie and teller d.epartmnts until 1914. Mr. '.L'YJler's servioes with tbs .federal Reserve Bank began two days before the bank Ol)Oll8d when be was general bookkeeper and _paying teller, !Ater he f'illad the f'Ollowing :po:11 tions, acting chief' cle?it, acting assistant cashier am. was m.de assistant cashier in • \ \ ' "8.A.RDELL. S.A.l!UEL A.:- :Born April 17, 1884 &t Derby, Bas., v.here be was educate d 1n the :public schools and hi~ school, graduat ing 1n 1898. In 1899 he attended Lewis Academy at 7iich1 ta. aoo. the f::>llo·,d.ng yez-,,;r att6nde d the 'Nicb1 ta Commer cial College . In lb.y 1901, be t,I1.tered UlB employ of the Fourth Notiona l Bank of Wichi.P ,···in ·which institut ion he gaiood a general banking kno,~l e ~, do:riilg ten years until J.my ot 1911 e.t which time he was nppo-inte a. -state bank e:ami1ne r. In lobrua.ry of the followin g year he \"CS appointe d assistan t b~k oo.n:missioner w1 th ,T.N. Dolley. ··Un't 11 July of 1913, .urr. ·,,ardell was associ~ ted with the benki~ business of Kansas but on the latter ciate he bousht i n to the .&Ink of hcelsio r Sj_)ri.Dgs of E:.tcelsio r SprinG"S, Uo., wh&i-e he rema.1.n.ed tor four yee.rs. He began his services w1 th the Federal Baserve Bank .cm July 16, 1917, 1n tho Liberty .Bond Departm ent. In October of the sane_ year he organize d the Deposita .17 and Uertitio ate of Indebted 1 ness Divisio n. From this w:>rk he arose to tba office of act1~ and a.ud1 tar am f'inal]J an 1E.y 9, 1918, was elected auditor of the bank. :.rr. Wardell was .IIIB.rl"i eci Jlme 17 1 1906 to Miss !.13.ude J. Elliott- of Derby, Kas. j • ,~- I ilORrHillGTON, CAR.'l!J LL J.LFRED:- Born at Grine ;i. Ia. , Ap: il 25, 1801. In ,)I ) 1883 his pal"t)nts , Mr. am ltrs. Theodore -11 • ~ removed to •.raoomg., 7lash., where the subject of 4.his sketch attende d the :publio schooJs until ✓ 1898, \7h.,~ be movou~ - C}y.»9- ~ r e tul':ai~ again to 'J:U.CO::Ja ~illt e he .. -./' ' cnter! ,d~w~ ~1~'e gt,~it "e"ye nrs of l~OOy- 1901~ 190? ..,,,,J./fo"3 ~ :nt" vors i :;-tf Chicago . The su.ccet3d lllg fiv e years were spent in several lines of c~roi al 8Clterpr ise includin g advertis ing anc'l. the wholesa le cool busines s. In 1906 he oame to the Nationa l Bank O'f Comm.eroe in Kan ss.s City es-priv ate secreta ry to t he _presidou t, "N.13. f i l . d g e l y , ~~ In November Of t~ some yoar he was made assista nt nationa l bank examino r ~~ _ tor the Kansas City distric t. :Early 1n 1911 he was called Ea.st to '"'°2 e::cunine several bo.nks am la tel' in the year he became assistan t to the preside nt ot the First nationa l Ba.Dk Qi' __Pi-ttsbu rgh, Pa. Be left this institut ion . in 1913 and returned to Chicago as secretar y 8.Dd assista nt treasur er of o. trust company, leaving this in iiby 1915 to return to l~ 1/ Kansas City, this ti.me as assistan t olea.r·in g house examine r. Soon a.tter .h is return here he became office ~ f'or the }rovers Nation.a l lla.nk: where he reaw.ined until January 1917. Hef811te ~lilt;t·~ J i ~ Bank at t.he beginni ng of 1917 M<~; •~st:z :::;;.u.... e ~ ~ · i 1? vct!lmI::7 rW t'E cf 1'iliii Pi soe a ig?ll. ~ ,...~ 1f He was made manager of ~Dep art.m ent in June 1917, B.Dd ~Mst ant cashier the followin (; month.- •.At the resigna tion of Deputy Governo r Cross he beorune assista nt to the Governo r. February 13, 1919. In January 1920,- ha wa.s made deputy governo r., ·Ho v.ns married on 11V 13, 1903 to Miss Jane A~£><US.ta; Wilkes of Ohlcago , Illa. FINAL COPY-DRAFT FRBNY/pjf 6/24/86 #0730F APPENDIX History of Central Banking in the United States The concept of central banking in the United States originated with Alexander Hamilton, the first Secretary of the Treasury of the United States. As one historian put it: Hamilton's ideas of the functions of the proposed national bank coincide with the objectives of the present Federal Reserve System as given by the Board of Governors . [citing Federal Reserve System, Its Purposes and Functions, p.115] Truly Hamilton was a man far ahead of his time in his concepts of money and banking,!/ Hamilton felt strongly that a national bank, patterned on the Bank of England, was crucial to the economic development and the -~ monetary stability of the new country. ,. His plan provided for the private ownership and operation of such a national bank. On December 14, 1790, Hamilton submitted a report to the House of Representatives, later forwarded to the Senate, which contained a plan for the institution of a national bank. With respect to the direction of the proposed _bank, Hamilton stated: " . . To attach full confidence to an institution of this nature, it appears to be an essential ingredient in its structure, that it shall be under a .private,l/ not a public direction, under the guidance of individual interest, not a public policy which would be supposed to be, and, in certain emergencies, under a feeble or too sanguine administration, would really be, liable to being too much influenced by public necessity. The suspicion of this would:most l/ E. Taus, Central Banking Functions of the United States Treasury, 1789--1941 18 (1943). II Double underscoring indicates italicized words. . - - -·~ - . ' - 2 - probably be a canker that would continually corrode the vital~ of the credit of the ''bank, and would be most likely to prove fatal in those situations in which the public good would require that they should be most sound and vigorous. It would, indeed, be little less than a miracle, should the credit of the bank be at the disposal of the Government, if, in a long series of time, there was not experienced a calamitous abuse of it. It is true, that it would be the real interest of the Government not to abuse it; its genuine policy to husband and cherish it with the most guarded circumspection, as an inestimable treasure. But what government ever uniformly consulted its true interests in opposition to the temptations of momentary exigencies? What nation was ever blessed with a constant succession of upright and wise adminiitrators? "The keen, steady, and, as it were, magnetic sense of their own interest as proprietors, in the directors of a bank, pointing invariably to its true pole, the prosperity of the institution is the only security that can always be relied upon for a careful and prudent administration. It is, therefore, the only basis on which an enlightened, unqualified, and permanent confidence can be expected to be erected and maintained. * * * * "As far as may concern the aid of the bank, within the proper limits, a good government has nothing more to wish for than it will always possess, though the management be in the hands of private individuals. As the institution, if rightly constituted, must depend for its renovation, from time to time, on the pleasure of the Government, it will not be likely to feel a disposition to render itself, by its conduct, unworthy of public patronage. The Government, too, in the administration of its finances, has it in its power to reciprocate benefits to the bank, of not less importance than those which the bank affords to the government, and which, besides, are never unattended with an immediate and adequate compensation. Independent of these more particular considerations, the natural weight and influence of a good government will always go far towards procuring a compliance with its desires; - 3 - and, as the directors will usually be composed of some of tne most discreet, res pe-ctable, and wel 1 informed ~itizens, it can hardly ever be difficult to make them sensible of the force of the inducements which ought to stimulate their exertions. It will not follow, from what has been said, that the State may not be the holder of a part of the stock of a bank, and, consequently, a sharer in the profits of it. It will only follow that it ought not to desire any participation in the direc tion of it, and, therefore, ought not to own the whole, or a principal part of the stock; for, if the mass of the property should belong to the public, and if the direction of it should be in private hands, this would be to commit the interests of the State to persons not interested, or not enough . interested in their proper management. 11 "There is one thing, however, which the Government owes to itself and to the community--at least to all that part of it who are not stockholders--which is, to reserve to itself a right of ascertaining, as often as may be necessary, the state of the bank; excluding, however, all pretension to control. This right forms an article in the primitive constitution of the Bank of North America; and its propriety stands upon the clearest reasons . If the paper of a bank is to be permitted to insinuate itself into all the revenues and receipts of a country; if it .is even to be tolerated as the substitute for gold and silver in all the transactions of business, it becomes, in either view, a national concern of the first magnitude. As such, the ordinary rules of prudence require that the Government should possess the means-of ascertaining, whenever it thinks fit, that so delicate a trust i s executed with fidelity and care. A right of this' nature is not only desirable~ as it respects the Government, but it ought to be equally so to all those concerned in the institution, as an additional title to public and private confidence, and as a thing which can only be formidable to practices that • imply mismanagement. . . . " . (Emphasis added)1/ 3/ 1 Reports of the Secretary of the Treasury 54, 70-72 (1837). - 4 - Congress authorized the First Bank of the United States ("First Bank") by the Act of February 25, 1791, giving it an e~clusive char't!-er for 20 years. - The ' Bank was incorporated with a capital of $10 million, of which $2 million was subscribed by,the United States. About three-quartrs of the stock was held abroad, but non-United States residents were prohibited, by the Bank's charter, from voting. The voting stockholders annually elected twenty-five directors .!/ The First Bank could issue debt obligations without regard to deposits, subject only to the limitation of its authoriz~d capital. These bank notes were circulated in lieu of gold or silver and represented a debt which the First Bank was obligated to redeem in gold or silver upon presentment . The Act of February 25, ~1791 further authorized loans to be made to the •~ Government of the United States or to any State, again subject only to a specific dollar limitation unless otherwise authorized by statute. Directors of the First Bank were authorized to establish branches a power that was exercised in the principal commercial cities. The Bank was not empowered to purchase any public debt although it was permitted t~ sell any part of the Government obligations that were used to purchase its capital stock. !/ Federal Banking Laws and Reports: A compi lation of major Federal banking documents, 1780- 19 12, Sen. Comm: on Banking and Currency, 88th Cong., 1st Sess . 74 (1963) (bereinafter "Federal Bank Laws and Reports") - s - ·rhe First Bank was formed ~ursuant to Hamilton's original plan, i nclcrding his desire that the Bank remain independent of the ope 1·ation of the Government. The charter required that the First Bank submit reports of its condition to the Secretary of the Treasury from time to time. It is unclear how frequently such reports were made, although two reports were made to Secretary Gallatin when he unsuccessfully attempted to have the charter renewed in 1811 . Although not required by charter, much of the Go~ernment's funds were deposited in the First Bank. There was no formal monetary policy at the time; however, it is clear the the First Bank implemented informal monetary policy for the -~ country . ii Like all of the local banks then in existence, it was both a debtor and creditor bank . As the main Government depository, the Bank would receiv~ large volumes of state bank notes which represented the predominant form of Government receipts . By requiring payment of such notes in specie or by failing to press state banks for such pa~ment, the First Bank was . able intentionally to control the economy. Where state banks were required to make payments in specie for their bank notes, the first Bank exercised a restraint upon the banking system, just as open market sales would today . If a state bank issued large volumes of notes, they were subject to greater. pressure. ii F. Redlich, The Molding of American Bankin9--Men and Ideas, pt.1 96-98 (2d Imprint 1951). - 6 - If large amounts of specie were demanded, a state bank would be forced to becoffl'E! less active for fear of depleting its specie. In periods when th~ flow of currency was tight, the First Bank could and did refrain from demanding payment in specie.~/ a While there appear to be records of several instances in which the Secretary of State interceded for state banks requesting the 6/ F. Redlich discussed the role of the First Bank in controlling the money market, id. at 99-100. In an age which had hardly begun to understand the question of specie reserves, the board of the Bank not only guarded its own reserves by restricting its note issues in times of stress; but, working hand in hand with the mint, even tried to protect those of the American banking system as a whole. Consequently the specie holdings of the First Bank of the United States, like those of late nineteenth-century central banks, came to reflect the economic activities of the country and especially those in foreign trade. . Discount policy was not yet devised at the time under investigation, and one can only regret that the proposal to discount below the legal interest rate, . . . was turned down by the board of the First Bank of the United States. Otherwise regardless of the limitations due to the existence of a legal interest rate it might have discovered before the directors of the Bank of England did that a money market can be controlled by raising and lowering· the discount rate. Failing to make this discovery the directors of the Bank of the United States could exert that control only by deliberate and carefully dosed expansion and contraction of their note issues and by presenting promptly for redemption such notes of other banks as came into their possession . Controlling the money m~rket, of course, implied gaining influence over the activities of other banks. The Bank was able to exert such influence because of its (for the time) large capital and its very cautious policy which - 7 - First Bank to refrain from demanding payment in specie, the (:, . primary respon~ibility for regulating the money markets remained with the First Bank.1/ As Hammond notes, the restraint exercised by the First Bank on other bank lending later became known as central bank control of credit.~/ He goes on to compare the systems in the United States and Great Britain at the time: The Bank of England was performing a similar function in Britain, but it operated on the demand for credit, whereas the Bank of the United States operated on the supply. That is, in the States, §_I made the other banks its debtors, as a matter of (When the board of the First Bank of the course. United States believed that the other banks had overexpanded their loans and issues, heavy specie demands were made on them.) In order to appreciate this achievement, one should keep in mind that the First Bank of the United States was in many respects less fitted to act as a central bank than its successor, the Second Bank of the United States. It had no monopoly on the public deposits and did not receive currently from the Collectors the notes of other banks, two facts which gave the Second Bank of the United States much of its power of control." (Emphasis added) 11 In B. Hammond, Banks and Poli tics· in· America from the Revolution to the Civil War 200 (1957), it is stated that: Neither Hamil ton, nor Wolcott, nor Gallatin • • • refrained in the Treasury from assuming major responsibility for central bank assistance in special cases, though the routine performance of the function, as effected through current collection of balances due 11 from the local banks, was left to the federal Bank. (Emphasis added) 11 8/ Id. at 199. - 8 - with the private banking system engaged in furnishing credit-..P-xpansively and liberally, the task of the centrw-1 bank was performed by pressing the private banks for redemption of their notes and checks and thereby restraining their extension of credit. . . . Typically, the Bank was creditor of the private banks, on balance; to-day it would be debtor, holding their reserves as the Federal Reserve Banks now do,2/ Despite the strong economic condition of the country and the efforts of the Secretary of the Treasury Gallatin, the charter of the first Bank was not renewed. Many reasons have been cited for the failure to continue the charter. The primary reasons were pressure from the state banks and the antipathy of the Jeffersonians on the basis of constitutional grounds . regard to the former, Redlich stated: Years later Albert Gallatin, looking at • • • another aspect of its activities, correctly stated that the first Bank of the United States if not dissolved would have kept the state banks within proper bounds. As a matter of fact, its ability to do so, as mentio~ed before, was an important reason for its downfall. Its enemies claimed that if the first Bank of the United States were rechartered 'all the state banks [would] become subservient to its views and as thoroughly subject to its influence, 1 and one writer doubted 'whether [in this case] any state bank from Georgia to Maine wo~ld for beneficial purposes exist another day.' ('Beneficial' meant, of course, for the purpose of increasing the available loanable funds.) Another argument against the Bank was that through its agency the government was gaining power over 'the metallic medium of the whole country. 1 All these statements imply an intuitive, although inarticulate, understanding of the fact that the first Bank of the United States had risen from being one out of many money banks to being what is called today a central bank. The only argument which 11 '1/ With - 9 - a defender like Matthew Carey could put up was the assertion !hat the ~tate banks fn fact were not dependent-.on the Bar.k of the United States and could not be so because together they had more capital. If it is taken for granted that Carey was honest in his statement, one sees how little even sue, a good economist knew abou t the mechanism of monetary (central bank) control which the board of the Bank had put into operation. 11 10/ (Emphasis added) With regard to the .latter reason for the discontinuance of the First Bank, the issue of the constitutjonality of a separate corporation functioning as a central bank had been a question debated from the initial proposal put forth by Alexander Hamilton. During the period between the end of the First Bank in 1811 and the chartering of the second Bank of the United States ("Second Bank") in 1816, state banks rapidly increased ' .;> in number as did the volume of bank notes .1.1/ The expansion of •• credit which naturally accompanied the increase in the number of banks was further fueled when in 1814 the banks generally suspended payments in specie. Until then, specie payments had worked as a check against the banks' ability to lend, as the availability of specie was limited. The suspension, however, - ' allowed the banks to lend without regard· to their abil~ty to ~ redeem in specie. Although justified during the war years . when there was extreme demand for credit, the general suspension, .!.Q/ F. Redlich, supra n.4, at 100 . .!.!./ B. Hammond states that by 1816, 246 banks were.in operation. B. Hammond, supra n.6, at 146. - 10 - which continued even after the war ended, helped produce, by 1816, tredmendous depreciation in the value of the currency.l1_/ Not only were g.pecie payments sus:,>ended, but state banks refused to accept each other's notes at par, thus leaving the country_ without any common medium of exchange._!]_/ Under these circum- stances, not only was trade impaired, but the Treasury suffered loss in revenue, as well, when it accepted as payment state bank notes._!~_/ It was generally believed that a stable and uniform currency could be brought about when state banks resumed making payments in specie. To enable resumption of specie payments, it wai estimated that state banks would need to withdraw a sizable portion of their notes'in circulation.15/ ... It was, however, doubtful that the state banks would voluntarily withdraw their .... notes and curtail their profitable lending practice. Without a national bank, and while the general suspension continued, Congress' power to regulate the value of the currency was limited. It was even said by many that that power was in effect exercised by state banks, institutions not 11./ 29 Annals of Cong. 1062-1063 (1816f. ll/ R. Catterall, The Second Bank of the United States (1903). 14/ 29 ]21 Id. at 1064. Annals of' Cong. 1083 ( 1816). 4-s' - 11 - responsible for the correctness with ,~hich they managed it, to the detriment of the whole economy,.!.§/ It was under this framework that in 1815 President Madison asked the Congress to consider creating a national bank, and many in the Congress suppdrted the chartering of the Second Bank. In March of 1816, Congress considered the bill that was passed the following month in the form of the Act of April 10, 1816 creating the Second Bank. There were differing views as to the advisability of Government involvement in the ban_k. "Mr. Ross advocated the moti~n to amend the bill. He did not believe, as had been argued, that a participation in the bank would strengthen the arm of the Government, or be very profitable. If, however, the arm of Government was to be strengthened by weakening that of the citizens, and uniting with a privileged aristocracy, he was decidedly oppos~d to it. He did not wish Government to become partners in such a privileged order. If the reasons for retaining the principle in the bill were correct, he thought the proportion allowed too small. If Government was to derive this great profit from the participation, its share was not great enough. It had been said that the influence of one bank (the Manhattan) could have prevented the election of Mr . Jefferson to the Presidency; if that bank had been uhder Executive control, he believed its power would have been exerted. This was a proof of the danger of giving Government a great influence in such institutions . He was opposed to the plan chiefly from his objections to joining a moneyed aristocracy, and his fears that it might operate injuriously to the liberties of the country, &-c."!1/ (Emphasis added) Id. at 1961. Id. at 1119. - 12 - Mr. Wright, on the other hand: . wished to see the bank possessed in part by " the Government, and partly by the citizens, because the stock of it would be extremely profitable. The Government-o ught to have an interest in the bank, as they would thereby be informed of all the plans which might be at any time entertained by the directors of so powerful an institution. He was not afraid, however, , to trust our citizens, nor ought they to be suspicious of the Government; and the participation of the Government could not, he conceived, be productive of injury or mischief. "l!V There was, however, a strong view that banking should be something apart from Government. The Congress thus rejected several proposals as too oriented toward the Government.ll _/ One proposal called for a bank with capital of $50 million, $20 million of which was to be subscribed by the United States. - In addition, the bank would be obligated to loan the United States $30 million as soon as it went into operation, and the President ·~ of the United States would have the power to suspend specie payments . Another proposal that the Congress rejected called for limiting the choice of the president of the Second Bank to one of the directors appointed by the President with the advice and consent of the Senate. This proposal was rejected by a vote of 80-46. "Mr. Ross could see no reason why the President of the bank should not be selected from the whole twenty-five directors, if it was the .ll/ Id. at 1118. ]1I B. Hammond, supra n.5, at 232. - 13 - object to get the best man. If the President and Senate app.oint a director the mo·st proper for the office, h~ would doubtless be elected, but if not, why ex elude the fittest character? . . . He condemned the policy of giving so much additional strength to the Executive arm. Alexander Hamilton himself, in the zenith of his influence, would not have dared to propose such a grant of power to the President, as the control and regulation of a great moneyed ins ti tut ion.· Mr. R. concluded by saying he thought it would be much safer to adopt the amendment [to remove the restriction limiting the choice of president of the Bank to one of the five directors appointed by the President with the consent of the Senate] and withhold from the Executive so important a power, &c. 11 20/ (Emphasis added) Because the Second Bank was to be funded by the Gov~rnment as well as by private stockholders , there was concern that its conduct would affect the credit and resources . of the Government. As a means to help ensure that the Second ... Bank would not, like state banks, act in a manner contrary to the interests of the nation, Secretary of the Treasury Dallas proposed that the Congress require that 5 of 25 board members be appointed by the President with the advice and consent of the Senate. The Congress, also recognizing the need to protect the public interest, incorporated Dallas 1 proposal in the charter of the Second Bank. As it was said at the time: the true policy in the creation of a bank, then, is to give it a double character--to combine in it the elements of public and private interest--bu t to secure to the former a control over the latter; for the Government which creates this institution is 11 20/ 29 Annals of Cong. 1151-52 (1816). - 14 - responsible ·for its fulfillment of the great objects of its creation . . . . "~.1/ The structure and function of the Second Bank were same as that of the first Bank. fundamentally tne - · Several The Second Bank's changes, however, are important to note. capital was set at $35 million and its total liabilities restricted to that amount. The Government was still to subscribe to 1/S of the outstanding capital. The Bank was specifically designated as a depository of Government funds, and specific provision was made for the establishment of branch offices of . the Bank, each of which was to have between 7 and 13 directors •I appointed by the directors of the Second Bank. Under the new charter, S of the 2S directors were to be nominated by the President with the consent of Congress, and the remaining 20 directors were to be selected by the non-Government-af filiated ·~ stockholders . furthermore, a bonus in the sum of $1,500,000 was to be paid to the United States in consideration of the 20-year exclusive charter . 22/ The Second Bank had some degree of difficulty in the early years of its existence. However, in 1823 when Nicholas . Biddle was elected President of the Bank., it came into its own as the nation's central bank . terized as "perhaps . Indeed, Biddle has been charac- . the world's first conscious central ll_/ Id. at 1144-45. 22/ B. Hammond, supra n . 6, at 244-45. - 15 - banker," because he was fully aware of the central bank character of the Second Bank.23/ Redlich states categorically that none of t~ central banking func'tions performed by the Second Bank was more important than providing a sound currency.24/ Biddle took a strong, active role in developing the policies of the Bank and extended its activities in promoting a sound currency into such new areas as dealing in domestic bills of exchange and foreign exchange . Biddle attempted and suc- ceeded to a large extent in securing a larger and more evenly circulating currency and in diminishing the note issues of state ban·ks. He saw himself as a regulator of state bank note issues . It must be remembered that Biddle's goal to achieve a sound currency had to be achieved without having a note-issue ,;monopoly such _as that granted modern central banks.~/ concentrated on two primary interim goals: Thus , he keeping the state- bank issues sound and putting into circulation a currency of uniform value nationwide, i.e . , the Second Bank's notes.26/ He expanded the Second Bank's activity in the domestic exchange market and, by fine-tuning the mechanism · for providing .currency .U,I F. Redlich, supra n.4, at 128. 24/ Id. 25/ F. Redlich, supra n. 26/ Id. _ . _, at 128 . - 16 - ,~here needed in the country, through use of - the Bank's branch !:. system, he achi'eued a virtual monopoly for the Bank's no·tes .27/ Biddle believed that dealing in domestic exchange was not enough to create a sound national currency, but that, in addition, dealing in foreign exchange was essential, and, under his control , the Bank actively entered the foreign exchange market . The large outflow of coin from the United States, as a result of commerce between this country and Europe, caused serious repercussions on occasion. . Therefore the 'conservative power' of " the Bank over the currency necessitated its ability to interfere on such occasions in order to break the shock of a sudden demand and to give time to the state institutions to adopt protective measures for their own security. This ability could be acquired only by large scale participation in foreign exchange operations so that in any emergency the Bank could ~upply the most urgent needs of commerce out of its own accumulations and credits abroad. Thereby, at the same time, fluctuations of the exchange market could be prevented. Two reasons stand out clearly : Biddle entered the field of foreign exchanges in order to protect the currency from foreign influence and to counteract possible disturbances of business. The former goal finds its explanation in the Bank's obligation to 'preserve' the currency, the latter in the fact the Biddle took upon himself the function of keeping the country's business activities on an . 11 28/ even keel, Redlich provides a good summary of the operations of the Second Bank under Nicholas Biddle : 27/ Id. at 130. 28/ Id . at 131. - 17 - "Domestic and foreign exchange transactions grew originally_ from the Bank I s oblig'a tions as transfer agent of 4!:-he government and as the responsible regulator of the country's paper currency. They soon gained importance independently therefrom. The Bank as d 'national establishment, 1 a central bank as one would say today, was expected to 'equalize the domestic exchanges, 1 a somewhat sloppy expression, ·the meaning of which was not without ambiguities. As a matter of fact, the Bank's business in domestic exchange pertained not only to buying (discounting) and collecting transactions wh ich would have been sufficient to back the Bank's issues and to provide for their uniform value; it also included the selling of domestic exchange whenever there was a legitimate demand . In consequence thereof, and i n conjunction with actions previously described, the great mass of the American currency became more uniform than ever before and than it was to be for many years after the destruction of the Bank; * * * * "As Biddle 'equalized' the domestic exchanges, he stabilized the foreign ones. Such stabilization resulted partly from his policy of buying foreign exchange during the season when it came into the market and selling it whenever it was needed. The Bank 'as a large and constant purchaser of bills prevent[ed] fluctuations in the demand, and as seller of them, in the supply. 1 But more important was Biddle's bridg i ng temporary diseguilibria between supply of and demand for foreign exchange by shortterm l oan transactions of the type normally concluded by modern central banks all over the world . As Biddle himself expressed it, he · prevented mischief in the foreign exchange market by the temporary use of . 29/ foreign credit. . Biddle also considered it part of his responsibility to counteract cyclical as well as seasonal fluctuations and other disturbances affecting business . 29/ Id. at 132-134. However, as Redlich - 18 - notes, although Biddle saw himself in the role of 11 managing 11 the currency: Since neither discount policy, <>pen-mark et policy, nor the m~dern policy of varying reserve ratios had yet been devised, a statement which should be taken cum grano sa . is, Biddle did not possess a tool to stimulate business in dull times.30/ In normal times, he adopted a policy of issuing only short-term loans and making only those investmen ts which could readily be converted into funds, so that when the business community agvain needed reviving, he could use those funds where they were most needed. In addition, the SecoMd Barrk received large amounts of ~tate bank notes in payments of taxes to the Treasury. As the First Bank did, the Second Bank used its discretion to either redeem these notes for specie or refrain from demanding ...... redemption and thereby extend credit to the bank of issue. If the notes were redeemed, specie would be withdrawn from the state banks, forcing a contractio n of credit in the banking system, just as open market sales would today. However, as Hammond notes, Biddle's tendency was to be liberal with the state banks and hold their notes, instead of demanding instant payment-- 11 a procedure followed, like present day open mark~t purchases , at the Bank's initiative ."11/ 30/ Id. at 135. ll_/ B. Hammond, supra n.6, at 308. (Emphasis added) - 19 - In times of crisis or of bQom as in 1825, 1828, and 1832, Biddle ae-ted decisiyely to ready the Bank to deal with the coming sysf·e mic problems. For example, in 1825 Biddle sensed that a problem was deueloping and began to prepare for it.32/ He realized that the Bank had parted with too much of its specie in connection with the China trade, and he began to distribute the remainder so that it would be auailable at strategic points, especially New York. He also took steps to strengthen the Bank and improve its liquidity, so that when the crisis came the Bank was: in a position to provide needed funds to state banks. In addition, the Bank took actions, such as presenting claims for specie against the state banks, "to induce them to adopt a more .,.. prudent course. "ll/ This action, of course, harks back to a method used by the First Bank to effect monetary policy. When the crisis did occur in 1825, centering in New York, Biddle intervened in two ways. There was a demand for specie both from Canada and from a private individual who wanted to set up a bank in New Orleans. Biddle convinced the latter to take bills of exchange of New Orleans rather than withdrawing • specie from New York. He also ~ttracted metallic money into the parent bank in Philadelphia by paying interest, a novel approach at that time, on a large specie deposit made by a leading lll R. Catterall, supra n.12, at 106-107. ll/ f. Redlich, supra n.4, at 138. - 20 - brokerage firm which held funds in trust for a foreign government. Once the danger of a specie drain in New York passed, Biddle sold the branch to expand its loans, and the Bank acted as~ lender of last resort, finally breaking the crisis.34/ Hammond summarized the Second Bank's performance, under Biddle, of a function; 11 11 rounded and complete central banking in the words of a friend of Biddle's : It regulated the supply of money; restrained the , expansion of bank credit; governed the exchanges; safeguarded the investment market; protected the money market from the disturbing force of Treasury operations and of payents on balance, interregiona l and internatonal ; and facilitated Treasury operation (sic) vis-a-vis the rest of the economy . . . Moreover, the Bank performed these functions deliberately and avowedly--wi th a consciousness of quasi-governm ental responsibili ty and of the need to subordinate profit and private interest to that responsibili t y. In view of these two things--the central banking performance of the Bank of the United States and Nicholas Biddle's lucid running commentary thereon-it is remarkable how Americans have abstained from considering any experience of their own in central banking prior to establishmen t of the Federal Reserve Banks . . . . 35/ (Emphasis added) - ' Indeed, it is clear from Treasury Secretary Dallas• report to the Congress on the need for tTie Second Bank that the Bank's monetary policy role, .!L:..9....:., in controlling credit, and 34/ F. Redlich, supra, n . 4, at 136-138. ll/ B. Hammond, supra, n . 6, at 323-25. - 21 - assuring a sound currency was one of the key reasons for its establishment. He beli~ved that the state banks could not accomplish thos.e. goals on their own: 1 It is a fact, however, incontestibly proved, that those institutions [the State banks] cannot, at this time, be successfully employed to furnish a uniform national currency. . . . The establishment of a national bank is regarded as the best, and perhaps the only adequate resource, to relieve the country and the Government from the present embarrassments . . . . Eminent in its resources and in its example, the national bank will conciliate, aid, and lead, the State banks, in all that is necessary for the restoration of credit, public and private.36/ In 1830, when the Senate was considering a bill to establish a uniform currency, the Congress was made well aware of the actions taken by the Second Bank to control state bank credit and smooth the wild fluctuations in the value of the currency. -~ This is shown in the following two questons submitted to Mr . Biddle by the Senate Committee on Finance and National Currency and his responses: When a State bank becomes indebted to Q.4. the bank to an improper extent, what course do you pursue? Do you let them go beyond a certain amount, and what is that amount? A. The great object is to keep the State banks within proper limits, to make them shape their bu~iness according to their means. for this purpose they are called upon to settle, never forced to pay 1§./ M. Clark and D. Hall, Legislative and Documentary History of the Bank·of the United States 613 (1967) quoting a letter f~om Dallas to the House of-Representatives da~ed Dec. 7, 1815. - 22 - specie, if it can be avoided, but payment is t~ken in their bills of exchange or suffered to lie occasionally until the bank can turn around; no amount of debt is fixed because the principle we wish to establish is that every ,~ank shall always be ready to ~ovide for its notes. Q.9. Since you commenced the purchase and sale of bills of exchange, has the rate varied; if £0, to what extent? A. _ The operations of the bank in exchanges has had the effect of preventing the great fluctuations to which they were previously liable,11_/ Political reasons again led to the downfall of the central banking system in this country. President Jackson, an extremely popular figure, was against the renewal of the charter and . indeed vetoed the bill. In considering whether the Second Bank should be rechartered, President Jackson had suggested that the benefits provided by the Second Bank might be obtainable if its powers were reduced and its structure was changed to a purely ·~ governmental body: It is thought practicable to organize such a bank with the necessary officers as a branch of the Treasury Department, based on the public and individual deposits, without power to make loans or purchase property, which shall remit the funds of the Government, and the expense of which may be paid, if thought advisable, by allowing its officers to sell bills of exchange to private individuals at a moderate premium. Not being a corporate body, having no stockholders , debtors, or property, and but few officers, it would not be obnoxious to the constitution al objections which are urged against the present bank; and having no means to operate on ll/ S. Rep. No. 104, 21st Cong . , 1st Sess. 152-53 (1830). - 23 - the hopes, fears, or interests of large masses of the community, it would be shorn of the influence which makes that bank formidable. The States would be strengthened by having in their hands the means . of furnisti;ing the local paper currency through their own banks_ while the Bank of the United States, though issuing no paper, would check the issues of the State banks by taking their notes in deposit and for exchange only so long as they continue to be redeemed with specie. In times of public emergency the capacities of such an institution might be enlarged by legislative propositions.]J!/ (Emphasis added) However, President Jackson made it clear that he was not actually proposing another bank in that form; he was simply calling attention to the elements in the Second Bank's charter that had to change if it were to be viable at all. Indeed two years later President Jackson vetoed the bill rechartering the Second Bank in essentially the same form as it had had, i.e., a mixed government-private corporation,12/ ' ,>< ' "' His ueto helped to arouse popular feelings against the Bank. Senator Benton defended Jackson's veto in the Senate by saying: "You may continue to be for a bank and for Jackson, but you cannot be for this bank and for Jackson. The bank is now the open, as it has long been the secret, enemy of Jackson . The war is now upon Jackson; and if he is defeated all the rest will fall an easy prey . What individual could stand in the States against the power of that bank, and that ll/ Federal Banking Laws and Reports, supra n. _, at H37 (quoting Jackson's Second Annual Message, Dec. 6, 1830). 12_/ National Monetary Commission: The First and Second Banks of the United States , Sen . Doc. No. 571, 61st Cong., 2d Sess. 296-98 (1910). - 24 - bank flushed with a victory over the conqueror of the conquerors_ of Bonaparte. The whole Government would fall into-the hands of the moneyed power. An oligarchy would be immediately established, and that oligarchy in a few generations would - ripen into a monarchy. 11 40/ The veto was not overridden, and the election of 1832, which returned Jackson to the presidency, marked the end of a central banking system in the United States until 1913. from 1836 until the passage of the National Bank Act in 1863 the Federal Government did not exercise responsibility over currency and banking. commonly referred to as 11 Jackson relied upon state banks, pet banks" for the performance ..of The fiscal services, a system that did not prove effective . Government suffered large losses during this period and an . ..'"'effort began to establish a public depository, other than a Bank of the United States, where Government funds would be secure. The independent Treasury was established by the Act of August 6, 1846, which provided for the establishment of "places of deposit of the public money" in Washington, Philadelphia, New Orleans, New York, Boston, Charleston, and St. Louis. It also required that payments to and from the government be made only in gold or silver coin or Treasury notes,!l/ Thus, the Act made the Treasury its own banker and in effect a bank of issue. As one historian states: 40/ J. Knox, A History of Banking in the United States 69 (1903) . 41/ E. Taus, supra n.l, at 49-SO. . -- -. .. .. .,. . - 2S - The unique monetary-fiscal footing enjoyed by the independenj: treasury practically'• ordained that it would becQITle an agent of monetary policy, especially when fiscal deficits were financed by treasury notes.42/ During this period, an uneven standard of banking existed throughout the country. The older states in New · England and the Middle Atlantic regions had developed sound banking structures, but the newer states in the South and West had not. Consequently, the sound banking systems were affected by the unreliable currency that filtered into their states. There was no control on the issuance of state bank notes, and as a result they were often worthless . 43/ With the advent of the Civil War, a need arose to raise ,,,, money to finance the war. Secretary of the Treasury Chase con- ceived the idea of a uniform national currency backed by the Federal Government and issued on the basis of United States bonds. 42/ R. Timberlake, The Origins of Central Banking in the United States 73 (1978) . Timberlake quotes Robert J . Walker, the first secretary of the independent treasury, who stated that, under the independent treasury, specie would: neither expand nor contract beyond the legitimate business of the country; [while if left to the capriciousness of the banking system, specie would be] made the basis, as often heretofore, of bank paper expansions, and if so, ruinous revulsions would not fail to ensue. Id. at 77. 43/ See F. Redlich, supra n.4, at pt.2, 13; R. Timberlake, supra n.27, at 84 . - 26 - The National Currency Act was passed ,February 25, 1863 but was replaced by the- Act of June 3, 1864 ("The National Bank Act"). The National Bank Act provided for the creation of private banks to be called national banks. would be managed by at least five directors. Each corporation All national banks were put under the supervision of the Comptroller of the Each national Currency, an officer of the Treasury Department . bank had to have the necessary amount of capital, de~ending upon the population of the town where it would be located . Each national bank had to deposit with the Secretary of the Treasury United States registered bonds equal to 1/3 of the bank's capital stock. This amount would be increased or decreased with the -~ amount of bank's paid-in capital stock. Each bank was entitled to receive circulating notes equal to the par value of the notes deposited, but not exceeding the market value of the stock nor the bank's paid-in capital stock. In addition, each bank in "central reserve cities'' (with a population of 500,000 or more) . was required to keep a cash reserve of 25. per cent of its deposits and notes in circulation4 4/. o·ther banks, in "reserve cities" were required to maintain a cash reserve of 15 per cent. The powers of the national banks were limited to discounting notes, drafts, bills and so forth; receiving 44/ - The requirement to maintain reserves against the notes in circulation was eliminated in the Act of June 20, 1874. - 27 - deposits; trading in ex change, coin, ,,a nd bullion; loaning money on personal se~urity; and the exclusive issue of circulating notes. The circulation was to be limited to $300 million and the notes were to be receivable for all purposes. Provision was made for the conversion of state banks into national banks. The growth of national banks was slow thus frustrating a major purpose of the Act, which was to stimulate the large scale purchase of Government obligations by the banks45/ and the creation of a stable currency. In the Act of March 3, 1865, a IP per cent tax on state bank circulations was enacted . Only then did national bank notes become the predominant medium of exchange.46/ However, without a central bank, there was no regulation of the money supply, as such. Thus, seasonal fluctuations in supply and demand, plus periods of Treasury surplus revenues followed by periods of depression caused serious disturbances to businesses and banks alike.47/ The Secretary of the Treasury 45/ The primary purpose of creating th~ National Ban~ing System was to provide a new market for Government bonds. ~' The law was .an effort to force the banks to sustain the public credit, since under the system ownership of bonds of the Government would be required for certain banking purposes. This in turn would establish a ready market for the bonds and greatly facilitate their negotiation." Taus, supra, n.l, at 61-2. 46/ See R. Timberlake, supra n.35, at 87. 47/ E. Taus, supra n.l, at ch. 4. 11 - 28 - did attempt with some success to take up the slack created by the lack of a e-entral bank regulating the money supply. During the first 30 years following the passage of the National Bank Act: " . . secretaries of the Treasury consistently ~ent well beyond the confines of a mere fiscal department. They dev i sed methods of meeting the monetary problems which a central bank would normally have faced . The techniques employed varied and revealed the legal limitations imposed upon the Treasury and the ingenuity of the secretaries. These men were making the Treasury, in some instances unintentionally, function as a central banking organization. of the men knew that the influ• But most • • ence of their activities paralleled those of a central bank, and they tried to change or interpret the laws under which the Treasury functioned to protect and support also the banks and the business community. Others . . . felt the Secretary of the Treasury should be guided mainly by the needs of the Treasury Department. This view may be sound in times of prosperity relatively free from disturbances, but in times of emergency intervention by the Treasury is not only desirable but necessary. The Treasury was often in a position to help the banks, and no other agency existed that could render assistance. The banks and the business community in turn were becoming accustomed to regard the Treasury as a superior financial authority which could and would render assistance in time of difficulty. 11 48/ (Emphasis added) 11 An interesting episode occurred in 1884 when the Treasury did not act to fill the void created by the absence of a central bank, but a . private association did act to alleviate the strain of a monetary crisis. 48/ Id. at 84. The action, as described in - 29 - more detail below, was taken by the Clearing House Association, in a manner si~ilar to previous actions taken in the l8S0 1 s. In the paric of 1857, for example, the Clearing House Associations in New York and Boston realized that, if the banks did not act together, each would have been forced to make itself impregnable by calling its loans . The problem with that, of course, was that it would cause further contraction, which, in turn, would have resulte~ in more failures of intrinsically sound enterprises and thus made the crisis all the worse. Cooperation had to aim at cou_nteracting retrenchment, and that could be done only .by making available new media of exchange to replace what had disappeared through hoarding.49/ But any new media of exchange had to be -~ created on the basis of undoubted security, in order to permit the banks to go on lending and even increasing their loans to strong borrowers. The solution was the "clearing house loan certificate," which was issued by committees of clearing houses on the basis of collateral security other than coin.SO/ 49/ Note 1 Redlich, supra n.4, at 158. SO/ There were, at that time, "coin certificates, 11 issued by clearing house depositories based on coin deposits . They were used in normal times, whereas the clearing house certificates were issued only in emergencies and were withdrawn and replaced by coin or coin certificates as soon as the crisis had passed which had given rise to their issue. Id. - 30 - The crisis of 1884 demonstrates the use of clearing house certific~tes in time of crisis. As Timberlake describes the occurrence: A seuere crisis, a sort of capstone to the mild recession of the time, occurred in the New York money market in the spring of 1884. The. Trea~ury Department did nothing unusual to alleuiate the situation; the budget continued in surplus and the Treasury's cash balance burgeoned. Howeuer, the New York Clearing House Association issued $20 million in clearinghouse certificates in $5,000 and $10,000 denominations to member banks on presentation of suitable collateral, that is, good commercial loans. The certificates were almost redeemed by July 1, 1884. This action by the Clearing House Associationwas an institutional response to an internal liquidity drain. It was, as Redlich states, "the specifically American solution to a problem with which central banks in the other great commercial nations of the world were faced at every crisis throughout the second half of the nineteenth century." It demonstrated that limited central banking functions could be assumed by a private institution and that the actions taken would be beneficial. [footnotes omitted].~..!./ By the early 1890's, the banks looked to the Treasury as a source of help in time of need but felt that the Treasury should only perform functions of a central bank in such periods . This dependence on the Treasury in periods of stringency was itself a problem . Rather than attempting to prepare themselves for the increased drain on their funds which occured every fall, as they had previously done, they now expected the Treasury to counteract the seasonal stringency . .al/ R. Timberlake, supra n.35, at 138. - 31 - After 1900, and the Gold S~andard Act of March 14, 1900, the Trea~ury incre . :1,sed its banking activities and performed such 11 central banking 11 f irnctions as: 1. Issue and redemption of paper money--United States notes and United States Treasury notes of 1890; 2. Preparation and supervision of the issue and redemption of national bank notes; 3. Exchange of the various kinds of money for gold or for each other; 4. Regional transfer of funds to move crops; S. Supervision of the division of the money into proper denominations so as to furnish the proper supplies of large and small notes as needed; 6. Acting as an influence on the rate of discount by contracting and expanding the currency through a shifting of its funds between the commercial banks and its own vaults; and 7. Keeping the gold reserve of the country . 52/ ... 52/ E. Taus, supra n.1, at 100-101. Taus states that, although after 1900 the Treasury performed many more central banking functions than before that time: If the Treasury had been a true central bank, it could have issued notes by discounting eligible assets. The volume of such banK notes issued would then have depended on the amount of paper presented for discount. No arrangement of this type existed in the United States until the Federal Reserve banks started to operate on Nov. 16, 1914-. Id. at 101. E. Taus also notes that in other countries gov~rnment treasuries do not usually perform banking functions. They do not hold specie and issue notes against it, nor do they exchange paper money for specie. In other - 32 - During this time , national ,~ank notes were rigid in amount, based i.pon the bonded debt of the United States, rather than flexible in amount, contracting and expanding directly with the needs of business. United States notes were no longer newly issued, and, if they were redeemed for gold, they could only be reissued for gold. If the Treasury had obtained them in payment of revenue or in any other way except for gold, the Treasury was free to use them for any Treasury purpose.gt Therefore, during periods of Treasury surplus , the surplus revenue was held in Tre~sury vaults causing the withdrawal of large amounts of money from circulation and from the banks. If bank deposits and reserves declined, thereby causing a contraction of loans by the -~ banks , the Secretary of the Treasury would prepay the interest and principal of Government bonds and would increase Treasury deposits with the national banks . By prepaying the interest on bonds , the banks had the use of funds for the period until the interest was due the bondholder.5 4/ 52/ (Cont 1 d) countries, central banks are obliged to perform these banking services, at their own expense. In the United States, after 1900, the Treasury assumed these burdens, whereas before 1900 they had not been exercised by any central body . Id . at 99-100 . ill Id. at 99. 54/ Id. at 103-112 . -;: - . - 33 - Under Secretaries Shaw and ,~ortelyou, the Treasury saw - itself as the e-entral banking unit and copcerned itself with the general banking situatio~ at all times, not only in times of panic. Secretary Shaw in many ways made his own rules ~nd regulations in an effort to make the currency more elastic. For example, he interpreted the security requirement for the deposit of Government funds, 11 11 United States bonds and otherwise, United States bonds or otherwise, 11 11 to mean thereby allowing State, municipal and railroad bonds as security.~/ Although attempts were made to change the law clearly to legalize the acceptance of other collateral, no change was made until the last day of Shaw's term, March 4, 1907. By permitting certain types of bonds other than Government bonds as adequate collateral for Government deposits in national banks, the Secretary of the Treasury helped to relieve a stringent money market. However, the prices of all bonds required by the Treasury as adequate collateral were sure to rise, since a new demand had been created for them. In this way the Treasury exerted an unintentional but definite influence on the bond market.56/ Serious objections existed regarding the Treasury's involvement in the nation's banking system. It was fe~red that political pressures on the Secretary of the Treasury would result ~/ Id. at 105. 56/ Id. . .,, ...) · ,. · - 34 - in abuses, especially in light of the power that the Secretary had over the banking system.57 / Weakri_esses in the banking system had long been recognized in banking circles, but it took the panic of 1907, with its restrictio n of specie payments, to make s~me measure of reform politicall y imperative .fil!_/ The first step was the Aldrich-V reeland Act of 1908,59/ which provided for the issuance of "emergency currency 11 by groups of banks and appointed a National Monetary Commissio n of nine Senators and nine Represent atives.60/ After extensive hearings, a report was submitted to Congress in 1912,§.1/ resulting in a proposal for a National Reserve Associatio n ( 11 NRA 11 ) , which, despite arguments to the contrary, would have been essential ly a central bank.62/ ·~ El_/ Id. at 119. E. Taus cites the United States Treasury Department Annual Report of the Secretary 46 (1906) regarding the of abolition The system: the proposals to change Independe nt Treasury would be, of course, involved in such a plan. Governmen t money would be then regularly deposited in this central bank, from which disbursem ents would be made, and the Governmen t's supervisio n of and interferen ce with the money operation s and the financial conditions of the country would be effectual ly eliminated . 58/ M. Friedman & A. Schwartz, A Monetary History a t the United Sta t es, 1867 - 1960, 168 (1963). 59/ Act of May 30, 1908, 35 Stat. 546. 60/ M. Friedmand & A. Schwartz, supra n._, at 170-171. §.1/ R. Timberlak e, supra n._, at 189. 62/ Id. 190. (1913). See, also, H. Rep . No. 69, 63d Cong.~ 1st Sess. 46 - 35 - The 1912 elections gave the Pr·esidency to a democrat, Woodrow Wilson, and the impetus for ban~ing reform to Representar, tive Carter Gla,,ss, who labored long on what was to become the Federal Reserve Act (the "Act").g/ Glass worked against the republican-sp onsored NRA, and against bankers who "would not desist in their demand for . . . some kind of Central Bank to be owned and operated for bankers."64/ Act avoided 11 ••• Glass made it clear that the a central banking institution which [the bankers] may control and use for their own convenience, but to which the American people may .not resort for any business purpose wha~soever . . ; 11 it avoided a "central bank for banks. "65/ The alternative offered by the Act . differed from the NRA in two essential respects. First, the pyramid structure of the Reserve Banks allowed a regionally based system with all ,..,. "the benefits of combined use of banking resources,"6 6/ without resorting to a single bank unresponsive to 11 ••• the United States, with its immense area, numerous natural divisions, still g/ For a detailed history of the birth of the Act, See R. Smith & N. Beasley, Carter Glass) 83-136 (1939). 64/ R. Smith & N. Beasley, supra n._, ~t 98. See, also, J. Jones, Carter Glass, Unreconstruc ted Rebel 228 (1938). 11 It had been decisively determined in 1913 that this country ( did not want a central bank"). 65/ 50 Cong. Rec. 4644 (1913). 66/ H. Rep. No. 69, 63d Cong., 1st Sess. 12 (1913). - 36 - more numerous competing divisions, and abundant outlets to foreign countries. . . . 11 67 / Second , substantial powers were conferred on the government controlled body, the Board of Governors {the "Bo~rd''). In response to bankers' objections that too much power had been concentrated in the Board, Glass responded: there is scarcely a power enumerated in section 12 of this bill which has not been exercised by the Government for 50 years or, indeed, which has not been confided to one or two public functionairie s . Nearly every power conferred by this bill on the Federal reserve board, composed of seven members, has been for half a century vested by the nationalbank act in the Secretary of the Treasury and the Comptroller of the Currency, to be exercised in the conduct and control of the national banking system.68/ As summarized by the Secretary of the Treasury, the ... new system was to provide: for a central agency, to represent and act for the organized and cooperative banks-this agency to be securely free from political or trust control but with the Government having adequ-te and intimate supervision of it.69/ When the Act became law,70/ the country was divided into 12 Reserve districts, each with a Reserve Bank, to be supervised largely by the Board. 67/ Id. 68/ 50 Cong. Rec . 4644 (1913) . 69/ E. Taus, supra n.1, at 136, n.9, ·quoting from United States Treasry, Annual Repot of the Secretary 3 (1913). 70/ Act of Dec . 23, 1913, 38 Stat. 251. - 37 - The original Board, which was to exer.cise supervisory functions over the Reseri::re Banks, was composed of the Secretary of the Treasury, the Comptroller of the Currency and five members appointed by the President with the consent of the Senate ,11./ All national banks were compelled to become members of the Reserve System. State banks were also permitted to become members. The stock of the Reserve Banks was to be owned by the member banks, which were required to subscribe to the stock of the_.Reserve Bank of their district in an amount equal to 6 percent of the member bank's capital and surplus . The Act provided for Government subscription to the stock of the Reserve Banks -~ only in the event that total subscription s by banks and the public should prove to be insufficient . It was therefore intended that the Reserve Banks be private corporations imbued with a public purpose. The Act provided that the member banks elect six of the nine directors of each Reserve Bank, and the Federal Reserve Board was to appoint the other three. The officers were to be selected by the respective boards of directors. The Act of August 23, 1935 provided that the president and first vice president should be selected in such 11./ The Act of Aug. 23, 1935, 49 Stat. 684, amended Section 10 of the federal Reserve Act to provide for the Board of Governors, composed of seven members appointed by the President with the consent of the Senate. - 38 - manner for S year terms, subject to the approval of the Board of Governors. Section 14 of the original Act gave any Reserve Bank the power, under rules and regulations prescribed by the Federal Reserve Board: ( 1) to deal in gold at home or abroad: (2) to purchase from member banks and to sell bills of exchange arising out of commercial transactions : (3) to buy and sell, at home or abroad, bonds and notes of the United States and State and local bills, notes, revenue bonds, and warrants with a maturity not exceeding six months; (4) "To establish from time to time, subject to review and determination of the Federal Reserve Board, rates of discount to be charged by the Federal Reserve Bank for each class of paper, which shall be fixed with a view of accommodatin g commerce and business;" [The discount rate was thereby uniform throughout each district but could vary in different districts] (Emphasis added) and (5) " . . . purchase and sell in the open market, at home or abroad, either from or to domestic or foreign banks, firms, corporations , or individuals, cable transfers and Bankers' acceptances and bills of exchange of the kinds and maturities by this Act made eligible for rediscount, wi t h or without the indorsement of a member bank." (Emphasis added) The creation of the Feder.al Reserve System brought about a new kind of currency and a new mechanism for supplying currency.72/ 72/ The federal Reserve note was designed to provide W. Burgess, The Reserve Banks and the Money Market 71 (1936). - . ,,..- ( - 39 - currency expansion in response to business and banking - requireme nts.?~/ The original Act introduced a new princip~e into our currency system by providing that, apart from a minimum gold reserve, Federal Res~rve notes might be secured by certain specified assets of the Federal Reserve Banks.74/ The paper used as security under the terms of the original Act represente d agricultu ral products or other goods in the process of productio n, or in movement from producer to retailer, in process of export or import, or on the shelves of retailer or wholesale r awaiting sale. It thus specified a security which is sound and at the same time increases and decreases with the business and agricultu ral need of the country.7 5/ There have -~been some changes since the original Act in the permissib le collatera l for Federal Reserve notes, but the essential importanc e of keeping the currency elastic and providing the Federal Reserve System with the means to cope with crises have remained intact.76 / It was believed, when the original Act was passed, that Federal Reserve participa tion in the bill market would ) 1]_/ Id. 74/ Id. at 73. 75/ Id. 76/ Id. at 74-6. - 40 - provide a mechanism for drawing Fede~al Reserve money into use when needed.77 ~ It was also thought that the discount rate would have a great effect on the money market, as perhaps the most important means of credit control. As stated above, the power to set the discount rate was given the Reserve Banks, subject to the review and determina tion of the Federal Reserve Board. In the early years of the Federal Reserve System each Federal Reserve Bank individua lly bought Governmen t securities without apparent concern for the influence of their purchases on the money market. Because the only major securities market was in New York, the Reserve Banks would often bid against each ,..,. other when they entered this market at the same time . [T]he course of these operation s, entered upon independe ntly by each of the 12 banks, made evident the need for a better coordinat ion of the openmarket operation s of the several banks, and in 1922 led to the creation of a committee of officers of the reserve banks [the 11 Governors Committee "] for the purpose of coordinati ng reserve bank dealings in Governmen t securitie s, so as to prevent possible conflict between their own transactio ns and those which as fiscal agents of the Governmen t they were • conducting for the Treasury,1 J!/ 77/ W.R. Burgess, "Reflectio ns on the Early Developme nt of Open Market Policy," Essays in Domestic and Internatio nal Finance 7 (1967). li/ 10 Annual Report of the Federal Reserve Board 13 (1923). Note that the official title of the Governors 9ommittee was the "Committe e of Governors of Centralize d Execution of Purchases and Sales of Governmen t Securitie s." - 41 - As originally conceived, the function . of the Governors Committee was to be only-that of executing orders received from the various Reserve Banks; it was not to determine policy.79/ It was, however, mandated to execute orders in such a manner as to safeguard the interests of the security market, the Reserve Banks and Treasury . SO/ During the next few months of coordinated purchasing, the Res~rve System generally began to recognize the significance of open market operations as an instrument of monetary policy.,ll/ The . character and scale of the open-market operations engaged in by the Federal Reserve Banks during the year 1922 and the early part of 1923 showed the need to bring these operations more -~ definitely into line with the general credit policy of the System.82/ Increased attention was paid by the System to the effect of the investment operations of the Federal Reserve Banks on the money market .JU_/ Governor Strong of New York then took 79/ L. Chandler, Benjamin Strong, Central Banker 21S (19S8). 80/ 1 S. Harris, Twenty Years of federal Reserve Policy lSO (1933). ill W. Burgess, "Reflections on the Early Development of Open Market Policy," Essays in Domestic and Internationa l Finance 11 (1967). 82/ 10 Annual Report of the Federal Reserve Board i3 (1923). 83/ L.Chandler, supra n.46, at 217 . I . - 42 - the initiati ve and proposed in October 1922 that investm ent i ... policy be dire -1,,.ted "with a conside ration particu l ar l y- ex clusive l y had been in the origina l draft--o f the conditio ns in the money market, the state of credit, and the operatio ns of the Treasury . 11 84/ By April 1923, the new-foun d importan ce of open market operatio ns and the resultin g policy making nature of the Governo rs Committ ee was recogniz ed by the Federal Reserve Board. The Board dissolve d the Governo rs Committ ee and sub- stituted a committe e composed in fact of the same officers but named by the Board.~ / The Committ ee was renamed the Open. Market Investm ent Committ ee,!§_/ and the followin g general •.,:, operatin g principl es were laid down: That the time, manner, characte r, and volume of open-ma rket investm ents purchase d by Federal Reserve banks be governed with primary regard to the accommo dation of commerce and business and to the effect of such purchase s or sales on the general credit situatio n.87/ This stateme nt of princip le--sub stantial ly identica l to the standard set forth in present law88/- -represe nted a decision 84/ S. Harris, supra n.47, at 151. !§_/ J. Hurst, A Legal History of Money in the United States, 1774- 1970 208-9 (1973). 86/ W. Burgess, supraP n.53, at 240 . ]]_/ 10 Annual Report of the Federal Reserve Board 88/ See, 12 U.S.C. § 263(c) (West 1945). 16 (1923). f I - 43 - that profit should no longer influenc e the purchase s and sales of securit ies.- Conduct ing open market operatio ns was to be done solely with the id~a of correcti ng market tendenc ies. The Committe e was supplem ented by a •isystem open market account ,'' formed in Decembe r 1923, through whic~ the securiti es purchase d were prorated by formula among the Reserve Banks. The individu al Banks themselv es then decided by vote of their directors whether to particip ate in the particu lar ope~atio ns. Although , from the beginnin g, there was a struggle between the Board and the Reserve Banks over control of open market operatio ns, it is well-rec ognized that: almost from the start the initiati ve in the determination of open market policy lay with the Reserve Banks.J!.,2./ -~ Governo r Strong of the New York Reserve Bank had particu lar influenc e and was a longstan ding Chairman of the Open Market Investme nt Committ ee. A clear example of the Reserve Banks' independ ence is given by the stock market crash of 1929. Rather than restric t itself to the confines of an Open Market· Investm ent Committ ee weekly limit of $2S million of purchas es, and rather than going through the laboriou s process of getting that limit removed, the 89/ The Federal Reserve System After Fifty Years: Hearings on H.R. 3783, 9631, 9685, 9686, 9687, 9749 Before the Subcomm . on Domestic Fin. of the House Comm. on Banking and Currency , 88th Cong., 2d Sess. vol . 3, 1986 (1964) (herein~ fter "The Federal Reserve System After Fifty Years"). : - 44 - New York Res~rve Bank purchased $160 million of Government securities in the week ending October 30, 1929.90/ / ;, In 19.30, the Open Market Investment Committee was superseded by a new committee called the Open Market Policy Conference, which was enlarged to ~Mclude representativ es of each of the 12 Reserve Banks._2J_/ The group of five who had controlled the old Open Market Investment Committee constituted its first Executive Committee.92 / The implementatio n of policy was complicated by the independent attitude of the various Reserve Banks,93/ who retained the right to decide whether or not to participate in open market operations.9 4/ Against the background of a national banking crisis the Banking Act of 1933 ( 11 1933 Act 11 )95/ was enacted, and its recovery scheme included the strengthening . of the federal Reserve System . '"' In order to better define the powers of the Board,96/ the 1933 ',>a 90/ M. Friedman and A. Schwartz, supra n._, at 363, 364, n.77. lll Id. at 368-9 . 92/ Id. 93/ Id. at 368. 94/ Id. at 369, n.89 . Act of June 16, 1933, 48 Stat. 162. See the Senate Committee Report on the 1933 Act which recommends strengthening the Federal Reserve System, and specifically recommends: · - 45 - Act recognized the Federal Open Mark~~ Committee (''FOMC"), comprised of one !ll-epresen tative from each Reserve Bank. The authority of the FOMC was defined with substanti ally the same statement of purpose that had previously governed open market operation s. No Reserve Bank could engage in open market operations except in accordanc e with regulation s of the Board. However, any Reserve Bank could still decide not to participa te in open market operation s. The Senate Report on the 1933 Act makes it clear that the legislatur e was legalizing and giving official recognitio n to the then existing open-mark et . committee .97/ This structure of the FOMC was found to be defective .,.. because FOMC initiative s could not be effectuate d without direct 96/ (Cont'd) "Better definition of the powers of the Board with respect to speculativ e transactio ns, particula rly as to authority over open market dealings, by establishi ng a so-called "Open Market Committee " with designated authority ." S. Rep. No. 77, 73d Cong., 1st Sess, 12 (1933). " .":' 97/ The Senate Committee Report recommend ing the enaclment states that the bill: " . . Adds a new section 12A to the Federal Reserve Act providing for the creation of a Federal openmarket committee of twelve members to supervise the open-mark et operation s of the Federal Reserve Banks and the relations of the Federal Reserve System with foreign banks. This in effect legalizes and gives official recognitio n to the present open-mark et committee ." S. Rep. No. 77, 73d Cong., 1st Sess. 14 (1933). .. •- - 46 - could be frustrated by Board approval, and, even when approved, ,. the refusal of-Reserv e Banks to implement them. A bill that later became the Banking Act of 1935, H.R. 7617, as originally introduced , proposed to remedy the problem by reconstitu ting the FOMC to consist of three Board members and two Reserve Bank represent atives and by requiring Reserve Bank participa tion in operations decided upon by the FOMC. The Board opposed the first aspect of the bill on the ground that, while it would centralize authority , it could potentiall y give the Reserve Banks control of monetary policy.98 / As an alternativ e, the Board proposed that regulation of open-mark et operation s be vested in the Board, with a provision for an . advisory committee of five Reserve Bank president s.99/ As reported by the House Banking Committee and ',>. ,.,.. passed by the House, the bill followed the Board's proposal.1 00/ 21!/ Heari ngs before the House Comm . on Banking and Currency on Sess. 181-82 (1935) Banking Act of 1935, 74th Cong., 1st 11 11 . ) Hearings House 1935 ter (hereinaf 99/ Chairman Eccles testified (1935 House Hearings, supra n.58, at 183): Such an arrangeme nt would resul~ in the power to initiate open-mark et operation s by either a committee of the [Reserve Bank president s] or by the Board, but would place the ultimate responsib ility upon the Federal Reserve Board, which is created for that purpose. 100/ The Committee Report stated: The federal Reserve Board is appointed by ~he President and confirmed by the Senate. It has a national viewpoint and has long been accustomed . . . . -· .. - - 47 - The Senate rejected the Board's proposal, however. i The Senate Ban~ing Committee proposed a twelve-mem ber Committee consisting of the seven Board members and five Reserve Bank represent atives - - four to be elected by four groups of three Reserve Banks and one to be chosen as a represent ative-atlarge. Chairman Glass of the Senate Committee , an advocate of the position that the Reserve Banks alone should determine open-mark et operation s and thus no change in the F0MC was necessary , characteri zed the Senate proposal as a compromise bet~een those who favored complete control of open-mark et policy 100/ (Cont'd) to considerin g matters as they affect the country as a whole, without regard to the special interests of any particula r group or locality. It was created for the purpose of supervisin g and coordinat ing the activities of the 12 ' federal reserve Banks "in order that they may pursue a banking policy which shall be uniform and harmoniou s for the country as a whole" (report of the Banking and Currency Committee of the House of Represent atives on the original Federal Reserve Act, Rept. No. 69, 63d Cong., 1st Sess., p. 16). It is for this reason that the original Federal Reserve Act gave the Federal Reserve Board final authority over discount rates. Since open-mark et operation s have in more recent years come to be recognized as a much g~eater factor in credit policy than discount rates, it is entirely consisten t with the philosophy of the original Federal Reserve Act to vest in the Federal Reserve Board final authority with respect to the open-mark et policies of the Federal Reserve System. H. Rep. No. 742, 74th Cong . , 1st Sess. 10 (1935) .- .... - 48 - by the Board and those who favored total Reserve Bank control . - ,' ; His statement Ml debate on the Senate Floor clearly delineate s the conflict between his view and that of the Board and the House Committee : Some of us thought it was perfect folly to undertake to interfere with the existing arrangeme nt . We are amazed to have it proposed that the Federal Reserve Board alone should constitute the openmarket committee of the system . Let us consider that for a moment. Here is a board originally establishe d and now operating as the central supervisin g power. The Governmen t of the United States has never contributed a dollar to one of the Reserve banks; yet it is proposed to have the Federal Reserve Board, having • not a dollar of pecuniary interest in the Reserve funds or the deposits of the Federal reserve banks or of the member banks, to constitute the openmarket committee and to make such dispositio n of the reserve funds of the country, and in large measure the deposits of the members banks of the country, as they may please, and without one whit of expert knowledge of the transactio ns which it was proposed to commit to them. As I have said, in order to produce a bill, in order to harmonize radical differenc e, concessio ns, even yielding of convictio ns, had to be made; so it was finally determined to constitute the open-mark et committee of the 7 members of the Federal Reserve Board and S represent atives of the Federal Reserve Banks . the Federal Reserve banks, which are the trustees of the reserve funds of all the member banks of the country, are graciously given this minority represent ation upon the open-mark et committee . Some of us were opposed to any alteration s of the existing arrangeme nt. Others ·thought that the represent atives of the banks, whose money is t~ be used, whose credit is to be put in jeopardy, should have control of the committee and should have the - 49 - majority representatio n. But in order to reconcile bitter difference there was yielding, and we have now propo~ed an open-market committee composed of all 7 members of the federal Reserve Board and 5 Representativ es of the regional reserve banks.101/ The Senate-House Conference Committee followed the Senate proposal in virtually · all respects. While the House Banking Committee had favored complete control by the Board of open-market operations, Chairman Steagall of the House Committee supported the Conference Committee Report. Recognizing that this formulation of shared responsibili ty would theoretically have permitted the Reserve Banks to ally with a minority of Board members to control the Committee, Representativ e Steagall pointed out that the Board had control over the appointment of Reserve Bank presidents: It will be remembered that the presidents of the federal Reserve banks under the bill passed by the House and under the bill reported by the committee are to be approved by the federal Reserve Board. five members representing the banks will be added to the Federal Reserve Board to constitute the open-market committee. This means that we have fought out in this House, in the Senate, and the Confer.ence the question of Government control of open-market operations, the rediscount rates, and the reserve requirements of the federal Reserve banks, and as a result of this controversy we have a bill which writes into the law a safeguard that insures the investment of these powers in a Governmentcontrolled board. 101/ 79 Cong. Rec . 11778 (1935). - 50 - The uote would be 7 to 5 if we assume that the 5 members representing the bank~ would go contrary to the 7 members representing all the people of the country the public at large. The Senate bill had in it a provision requiring the appointment of 2 members of the 7 constituting the Federal Reserve Board to be experienced bankers. This provision was stricken out in conference. So we have written into this law the principle that the Government, the sovereign people of the United States, shall have control of the Board that dictates the uast powers of the Federal Reserve System. Something has been said about what was done in conference being a departure from the wishes of the House as expressed in the vote of the House on the bill. Let me say to the Members of the House that . the open-market committee provided in the bill reported by the conference committee goes further in insuring Government control of the operations of the Federal Reserve System than the original bill that was submitted to the committees of the House and Senate by the present Governor of the Federal Reserve Board and by the administratio n.102/ In addition to changing the composition of the FOMC in this manner, under the Banking Act of 1935, Reserve Banks could neither engage nor decline to engage in open-market operations except in accordance with "the direction of and regulations adopted by the Committee." Thus for the.first time, a single body was given authority to determine open market policy and direct all open market operations. The statutory structure of the FOMC has remained virtually unchanged since 1935, with one important exception. In 1942, Section 12A of the Federal Reserve Act was am~nded to 102/ 79 Cong. Rec. 13705-06 (1935). - 51 - provide that the Reserve Bank repres~ ntatives on the FOMC must be either the presiden t or first vice presiden t of a Reserve Bank.103 / Congress did not anticipa te that Reserve Banks would attempt to elect outsider s to the FOMC, and when attempts were made to elect officers of commerc ial banks as represen tatives of the Reserve Banks on the FOMC,101/ a statutor y amendme nt was immedia tely adopted precludi ng such practice , thereby effectiv ely ensuring that only persons selected with the approva l of the Board could serve on the FOMC. Thus, since 1942 the FOMC has consiste d solely of persons who hold their offices either by virtue of Preside ntial appointm ent confirme d by the Senate the Board members -- or by virtue of the approva l of, and -~ subject to removal by, the Board acting in its statutor y capacity as the head of the Federal Reserve System. The issues of 11 public 11 and 11 priuate" influenc e on the FOMC -- debated vigorou sly during Congres sional conside ration of the 1935 legislat ion creating the FOMC substan tially in its present form -- have been pursued legislat ively by individu al members of Congress over _the 50 years o~ the FOMC's exfstenc e. For example, the late Congress man Wright Patman argued in 1938 263(a) (West 1945). 103/ 12 U.S.C. 104/ Hearings before the House Comm. on Banking and Currency on H.R. 758, 77th Cong., 2d Sess. 3 (1942) § - 52 - that the Reserve Bank members did not; , represent· the 11 peoples interest." 105/- Congressman Reuss complained in 1964 that the Reserve Bank members were "five essentially private persons who are not publicly appointed," and he pointed to the possibility, recognized in 1935, that the judgment and decision of the majority of the Board members "might be overruled by essentially private people. 11 106/ Repeatedly, and particularly in four of the last five Congresses, bills have been introduced to alter the FOMC by rem~ving the Reserve Bank representativ es, adding the Secretary Hearings before the House Bank i ng and Currency Comm. on H.R. 7230, 75th Cong., 3d Sess. 56 (1938) . The Federal Reserve System After Fifty Years, supra n.56, at 37. In response to Mr. Reuss'commen t, Federal Reserve Chairman Martin stated: Let me say, Mr. Reuss, that I don't concede that the presidents of the 12 federal Reserve Banks are private individuals. The initiative on the appointment comes from the board of directors of the individual Reserve bank . But the Congress has given the Federal Reserve Board the authority on the president and first vice president. Id. at 38. It should also be pointed out that the public records of the FOMC reveal that a majority of the Board has never been outvoted by the Reserve bank representativ es. - S3 - of the Treasury, or both.107/ - present Congre~s.108/ Two such bills are before the ,•:., Only one of these recent bills has been taker seriously enough to prompt hearings,109/ and none has mustered enough support to be reported out of Committee. Clearly, Congress has been ever mindful of the composition of the FOMC and has cons~stently refused to upset the balance it created in 1935. • 107/ S e e , ~ . H.R. 4497, 99th Cong., id Sess. (1986); H.R. 1469, 99th Cong., 1st Sess. (1985); H.R. 5459, 98th Cong. 2d Sess. (1984); H.R. 5066, 97th Cong. 1st Sess. (1981); H.R. 7001, 96th Cong. 2d Sess. (1980); S. 2540, 94th Cong. 1st Sess. (1975); S. 2577, -87th Cong. 1st Sess. (1961). 108/ H.R. 4497, 99th Cong. 2d Sess. (1986); H.R. 1469, 99th Cong. 1st Sess. (1985). 109/ To Modernize the federal Reserve System: Hearings on H. R. 7001 before the Subcomm . on Domestic Monetary Policy of the Comm. on Banking, Finance and Urban Affairs, 96th Cong. 2d Se s s . ( 19 8 0) .