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Lesley Mace

Abstract

In the early years of the Federal Reserve System, two crises-one in Cuba, the other in Florida-and their resolution tactics provided a potential blueprint for dealing with the national banking crisis that developed after the 1929 stock market crash. The story of that lost opportunity begins with the organization of the Federal Reserve System and the Reserve Banks in the South. After President Woodrow Wilson signed the new Federal Reserve Act into law at the end of 1913, the first task for the-Reserve Bank Organization Committee was to choose the locations of what were known as the "Federal Reserve cities" for each of the designated Federal Reserve Banks. The Reserve Bank Organization Committee was composed of the Secretary of the Treasury William G. McAdoo, Secretary of Agriculture David F. Houston, and the Comptroller of the Currency John Skelton Williams. The committee traveled the country to scout locations, with consideration given to geography, business needs, and the ability to raise the capital necessary ($4 million) to establish a bank in the District. Thirty-seven cities asked to be considered, and public hearings were held in eighteen. Formal letters of interest were submitted by the following southern cities: Chattanooga, Louisville, Memphis, New Orleans, Richmond, and Savannah. No Florida cities were on the list.1 Nearly 7,500 national polled on their opinion by the Office of the Comptroller of the Currency, with the option to vote for their first, second, and third choices of Federal Reserve Bank location. In the Southeast, the cities vying for the honor included Atlanta, Savannah, Charleston, New Orleans, and Birmingham.2 Once the host cities were selected, districts would be drawn around them.3

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