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Hamlin, Charles S., Scrap Book — Volume 186, FRBoard Members
205.001 - Hamlin Charles S
Scrap Book - Volume 186
FRBoard Members
41
BOARD OF GOVERNORS
OF THE
FEDERAL RESERVE SYSTEM
Office Correspondence
To
The Files
From
Mr. Coe
Dee July 25, 1941
Subject:
trit°
After correspondence with Mr. Hamlin (see letters of May
25 and June 4, 1941) the items attached hereto and listed below,
because of their possible confidential character, were taken from
Volume 186 of Mr. Hamlin's scrap book and placed in the Board's
files:
VOLUME 186
Page 3
Memo re Federal Reserve Credit. Open market operations as
cause of inflation or deflation.
Page 4
Amounts of Discounted Paper with Collateral and Without Collateral, also Marginal Collateral Held, by each Federal Reserve Bank on March 14, 1928.
Page 5
Memo to Mr. Smead from Mr. Hamlin re Federal Reserve Credit.
Page 9
Memo to Yr. Hamlin from Mr. Smead re Reserve Bank credit in use.
Page 12
Telegram from Richmond to New York re bonds.
Page 27
Memo to Board from Mr. Smead attaching table of Classification of
Loans, Investments, Deposits, etc., of all Member Banks as of
October 3, 1928.
Page 31
Memo to Gov. Young from Mr. Wyatt re Reserves against deposits in
foreign branches of American banks.
Page 37
Memo to Mr. Hamlin from Mr. McClelland attaching proposed letter
to all Federal Reserve Agents re compensation to officers and
employees who die while in the service of the Banks.
Page 59
Statement by Mr. Goldenweiser to Advisory Council.
Page 69
Memo to Board from Mr. Smead re branches of member and nonmember
banks.
Page 99
Memo to Mr. Hamlin from Ir. Goldenweiser attaching a table showing
Comparison of Resources & Liabilities of Three Largest Member
Banks in New York City with those of the F.R. Bank of N. Y.
Page 115
Earnings & Expenses of F.R. Banks.
May 14.28.
•
PIMA;)115'"1-3vr TorgZ.
The table hereto annexed shows that open market purchase, of
Government securities incrased only in two neriods:
1. October
1923 to
October 1924
2. October 1928 to October 1927.;
that said purchases decreased durine three periods:
1. October 1924 to October 1925
2. October 1925 to October 1926
3. October 1927 to October 1928.
In comparing the figures in the tnble for the periode during which the
purchases of (lovernment securities increased, we find:
1. October 1923 to October 1924:
The increate in member bank reserve balances upon which
all expansion mmt necessarily be madf, in the
cage of member banks, Was :143 millions. This 243
millions the figures show could have been met by
the increase in eold. stock,.342 mi/lion e leavin,T 101 millions to spare.
io table nlso shows that *hile the .7urchase of loverrnent
securities increased 500 mfilions, the barks .ctually
paId of discounts to the mount of 620 millions,
wing the 500 millions paid ?or Government securities
and the 100 millilne excess e gold ntock referred to
above.
2. October 1926 to October 1927:
Th4 )urchazo of Government securities increased during
this period by 211 millions, nd the banks paid off
278 iillions of their discounts.
VOLUME 186
PAGE 3
2. October 1926 to October 1927 (Continued)
The member bank reserve balances on which 41
expansion must have been based, incren401
101 millions. On the other hand, the monetary
oold stock increaned 68 millions, (.. nd the
money in (lirculation declined 75 millions, making
a totR1 incroano of 143 millions.
The following tc.ble comaren the average of the yearn 1924, 1925,
and 1926 with the year ending Octdher, 19271
Averaee
1924, 192Z and 1026.
October, 1927.
Increase
Decrease
412
......-
111
Discounts
523
.Loce';tances
290
Govt. soeurities
404
522
118
401.0.00
Meaber *Wolk reserVe
deposits
2191
2324
133
OM OMNI
Monetary gold stook
4463
4641
78
Money in circulation
4977
4945
....
31
This table Shows that while the average of the firnt three years
thowsd an increase in Government security Turchases of 118 millions, -
the member banks reduced their discounts by 211taillionsi that the increase
of Federal Reserve Wander (133 mAlliors) coula have been obtained
throu41 the increase in the cold ?took (78 millions) :lid the decline in
the monetary circulation (31 millionn) making a total of 109 million
dollars. The 'balance,.24 milli4ns.could have been mot out of the
inernane npurchase of aceeptemces.
1
These tables, to my mind, brine out clearly that open wAket operations
in Government securities, mean simply, in the case of a sale and exchange
for discounts, and in the case of purchase and reduction in similar 3nount
of the member bank discounts, and that, in the long run, these opertions
bring about neither inflation nor defle,tion.
This does not mean, in my opinion, that open market operations are
useless.
On the contrary, they are to me of very greA importance. lithout
them the :Federal Reserve System would be practically an emergency System.
it their means the Federal Resf,Irve banks can take the initiative in bringing
about rediscounts by the banks, or In bringing about the paying off of
discounts by them.
Open market oper-tions also seam to act a little more
quickly than discount operations.
shall not discuss here the question of the inflation through
artificially lo'N di count rates. I simply point out th'A open market
operations, in the long run, aause neither inflation nor deflation.
:144.(.444
•
i71111 COLLATThitia AND 'IT i4CAYP COLLATI:RAL, ALSO
()IP DI SCOrM TIM P!1
Aft17ZAL 7.7.1D, BY rP.M PDtAL RES1M732 BAIT ON PARCH 114, 1928
(in thrmeands of dollars)
Federal
Reservn
_7ank
-fith
Custou,P
7iithout
co11aterA1lool1Rtem1l
50
14
25,249
6,341
7,131
14,47o
25,299
6,355
7,133
14,626
22,83
104,681
44,229
36,562
4s,182
69
111,036
51,362
51,188
46g
9.339
13,921
9,781
6,353
9,445
17,108
13,490
6,582
18,400
5,706
37,568
19,187
27,8145
22,814
51,05g
25,769
954
1,507
3,059
7
707
592
2,748
957
1,995
1,342
5,807
1,5014
2,702
526
5,255
2,250
63,656
1,868
11,062
3,754
GtS,356
46o
852
278
12,516
9s.g77
111,393
360,905
472,296
7,4i3/
395,649
1°0
243,64o
639,289 .83,236
#2g2,073 *1,167,931 1,45o,co4
194
!
750,7gS
• Boston
Felt Yee4
Philadelnh4s
Clovelaed
Ri(Almond
Atlants
Cilicozo
St. Louis
2
106
3,1o7
3,709
229
Uinnsaroolis
Ktulsas City
Dallas
San Francisco
TOTAL
750
fii
1, 1i21
33g,384
86%
57,26
1/C
Rnti - of ..Irginal collateral held. to.
liediscolulted
collateral
nanor
VOLUME 186
PAGE 4
108
2,200,792 *15,
*Revised figurse
#Partly estimated
Jarci, 14, 1928
arch 29,1922
Arril 1, 1921
2,100
243
l00%
115
'.Tnrch 2?, 1922
'rota].
:tor b.unk
Total
Marginal
colla-terel
bills
'collateral
no et
di9collintedl .held
Total
bills
discounted
7%
21%
13/
6;
le-44*
—
•
ffice Correspontence
11r. Smead
FEDERAL RESERVE
BOARD
•
Date_ _11ay_14.4 192_8,
Subject:
_iarrain
Fron
"--gt
L.)
Dear
Smead:
I enclose a short me:aorandum based on the table t'lat you Eave
me and also on a ta'ole of my own showing avera.Les for 1924, 1925, :.nd
1926, ac compared with the year endinP: October, 1927.
chedk the2e over carefully, and let me know whether,
the fisures are correct.
Sincerely yours,
.11• WO,
rerty4 111111..
aS
a matter of fz.ct,
Of course I realize that we miEht differ on
the general conclusions to be drawn from them.
VOLUME 186
PAGE 5
Will you 1:-.indly
Form
May 140928.
To
FEDARAL RESERVE CREDIT.
The table hereto annexed shows that open market .)urchases of
Government securities increased only in two. periods:
1. October 1923 to October 1924
2.
October 1926 to October 1927.;
that said purchases decreased during three neriods:
1.
October 1924 to October 1925
2.
October 1925 to October 1926
(
October 1927 to-Gettbn- 1928.
3.
In caaoaring the figures in the table for the oeriods during which the
nurchases of Government securities increased, we find:
1.
October 1923 to October 1924:
The increase in member bank reserve balances u)on which
all expansion must necesscrily be made in the
case of member banks, was 243 millions. This 243
4.44444w f-14.444
millions the figures show could have been met by
pLat4444 '444"
the increase in cold stock, - 342 millions, lePving
100 millions to spare.
7.---aurit
The table also Shows that while the nurchase of Government
securities increased 500 millions, the banks :ctually
paid off discounts to the amount of 620 millions,
using the 500 millions naid for qovernment securities
and the 100 millions excess of gold stock referred to
above.
2.
October 1926 to October 1927:
The _.2xchase of Government securities increased during
#1444,
7,44,t 10404
this period by 221 millions, nd the banks paid off
278 iillions of their discounts.
1 4,44AA:41A /170.:
644°If LL0
-r-
14
asa'i
•
2.
2.
October 1926 to October 1927 (Continued)
The member bank reserve balances on which all
expansion must have 1-)een based, increased
101 millions. On the other hand, the monetary
zold stock increased 68 millions, and the
money in circulation declined 75 millions, making
a total increase of 143 millions.
The following table conpares the averare of the :rears 1924, 1925,
anf: 1923 with the year endinp. Octoler, 1927:
-/
October, 1927.
A.verar-re
c/f7
1924, 1925 and 1926.
Increase
Decrease
Discounts
523
412
-__
111
Acceptances
290
342
52
--
Govt. securities
404
522
118
---
Llember bank reserve
de:)osits
2191
2324
133
ilonetar;" --old stock
4463
4541
78
I.!oney in circulation
1:41,440. 4..4414.10 S4402.
4977
A946
;162.1
31
prr
This table Shows that while the avera;re of the first three years
showed an increase in Gmernment security purchases of 118 millions, the member banks reduced their discounts by 111 millions; that the increase
of Feaoral Reserve balances (133 millions) could have been obtained
throw:h V-e increase in the
stock (7E, millions) -,1-1.(fL the decline in
the monetary circal,_tion (a millions) niaking
dolleTs.
The balance, - 24 milli)ns - coidd have been met out of the
increase in purchase of acceotances.
total of 109 million
These tables, to my mind, brins out clearly that open market opertions
in Government securities, mean simply, in the case of a sale, an exchange
for discounts, and in the case of purchase, a
reduction in similar :',[nount
of the member bank discounts, and that, in the long run, these oper tions
brin6 about neither inflation nor deflation.
This does not mean, in my oninton, t at onen market operations are
useless.
On the contrary, they are to me of very gred tmportance.
Without
them the Federal Reserve System would be practically an emergency System.
By their means the Federal Resnwe banks can take the initiative in bringing
al-,out rediscounts by the banks, or in brim-ing about the payin,?; off of
discounts by them.
en market °per' tions also seen to act a little more
ouickly than dif„count operations.
I snail not discuss here the question of tne infL,tion tilrouph .
artificially low dii,count r.:,tes.
I simply point out
open market
operwtions, in the long run, cause neither inflation nor deflation.
_v
Form No. 131.
Office Corresponlence
To
Y..r
Hamlin
MaRRALRESERVE
WIARD
•
Degott_ May 9,
Subject
1923.
Reserve bank credit in use
S4t16
GPO
With regard to your request for a statement bearing on changes
in the credit situation by yearly periods since the System's credit
policy has been reflected in part in the purchase and sale of securities
through the Onen Market Investment Ccmmittee, I may say that, as I told
you, to nrepare
comprehensive memorandum covering the factors responsible
fI r such changes and the effect of the changes would require a great deal
of research ane, would take several weeks time. However, I am stating
briefly below the more important Phases of the situation in which I understand you are rarticularly interested.
The Open Market Investment Committe began to function et the
beginning of 1924, but the credit situation is so affected by the holiday
trade around the end of the year thnt it is thought better to use October
31, 1923, as the -lost satisfactory starting noint. At that time the
System's total holdings of U. S. securities (there was then no special investment account) were $92,000,000, having declined almost steadily from
the end of May 1922.
Year ended October 1924. Between October 31, 1923, and October
31, 1924, the System acquired $500,000,000 of securities for the special
investI- nt account and during the same period the monetary gold stock of
the Country increased by $342,000,000, thereby making an addition of
$842,000,000 to the amount of reserve bank credit available to member
banks. This brought about a decided easing in the credit situation and
the
onen-market acceptance rates ctopned from 4-1/8 to 2-1/4 ner cent,
while the discount rate of the Federal Reserve 2an:c of New York declined
from 4-1/2 to 3 per cent. The decline in wholesale prices, which had
begun in the spring of 1923, was checked in the summer of 1924, after which
nnd until the early part of 1925 prices increased. Member banks expanded
their operations very rapidly (their deposits increased $3,000,000,000)
and in doing so used $243,000,000 of the above-mentioned $842,000,000 to
build un their reserve balances with the Federal reserve banks. Notrithstanding this 'aro increase in reserve balances, the member banks were
also able to reduce their borrowings at the Federal reserve banks by
$620,000,000 to $264,000,000, the lowest level since the beginning of the
World War being reached about this time. Of the above-mentioned increase
in deposits, $1,860,00C,000 was in demand denosits and $1,150,000,000 in
time denosits, the percentage gain in demand deposits being about the same
as in time deposits.
Year ended October 1925. In the five months following October
1924, the System liquidated about one-half of its onen market investment account
to around $250,000,000, and it remained within $50,000,000 of that amount
until the summer of 1927. In the early fall months of 1925, however, there
VOLUME 186
PAGE 9
considerable purchases of
was a very marked expansion in discounts and
t thnt total reserve bank
acceptances in the open market, with the resul
October 1925 stood at $1,296,000,000,
credit went up rapidly and at the end of
year earlier. Of this $250,000,000,
or $250,000,000 in excess of the amount a
the reserve balances of member banks
$76,000,000 was used to further increase
rements, $102,000,000 (net)
to take care of their increased reserve requi
00,000 to obtain additional
to purchase gold for export purposes, and $27,0
year the rate on acce2tances inmoney for circulation purposes, During this
ner cent while the Nei,- York bank
creased from about 2-1/4 per cent to 3-1/2
per cent. Wholesale rices, which
discount rate increased from 3 to 3-1/2
ase until 7/arch 1925,
began to increase in the fall of 1924 continued to incre
ased to the previous
reacted rather sharply for a month or two, and then incre
credit during this period
level. As already noted, additional reserve bank
of member banks, rather than
vas obtained through borrowings on the initiative
ases by the Federal reserve
through gold imports or additional security purch
ase in deposits during this
banks as was the case the year before. The incre
and $950,000,000 in time deperiod was $670,000,000 in net demand deposits
much more marked in
posits, the increase in time deposits being reletively
ing member banks to get
this year than in the previous year, thereby enabl
have been required had the inalong with lower reserve balances than would
en demand and time deposits.
crease in deposits been more evenly divided betwe
t account during
Year ended October 1926. The System's open-marke
d the end of 1925, an increase of
this year showed a temporary increase aroun
decline of approximately the same
about $75,000,000 from March to May, and a
the end of October 1926 being
amount from Yay to October, the holdings at
The member bank reserve de-eosits
$10,000,000 less than a year earlier.
ely the same at the end of October
remained fairly stable, and were approximat
This was apparently due to the fact
1926 as at the end of October 1925.
net demand deposits of member
that there was a decline of $150,000,000 in
its, on Which a reserve of only
banks during the year, although time depos
00. Total bill and security
3 per cent is required, increased by $770,000,0$20,0
00,000 in excess of the
only
holdings at the end of October 1926 were
er, an increase in the gold
amount held at the end of the rrevious Octob
aoproximately of'set by an instock of $6b,000,000 during this year being
$52,000,000. Open-market accentance
crease in money in circulation of about
to around 3-1/8 per cent, and
rates declined during the early summer of 1926
d 3-7/g per cent, while the
then increased during the fall months to aroun
was increased from 3-1/2 to 4
New York Federal reserve bank discount rate
3-1/2 per cent in April, and again
per cent in January 1926, was reduced to
prices declined throughout the
increased to 4 percent in August. Wholesale
of 104 in October 1925 to 99
whole Period, the decline being from an index
in October 1.96. (based on 1926 = 100)
t change in the
Year ended October 1927. There was only a sligh
the end of October 1926 to the
System's open market security holdings from
end of the year there was quite
end of May 1927, but from that time on to the
keeping with the easy credit policy
a ranid increase in security holdings in
g the fnll months of 1927
followed by the L'oard during that period. Durin
holdings, while discounts
tance
acce7
in
ase
there was also a substantial incre
from the middle of January to
fluctuated within comparatively narrow limits,
required from July to
the end of October 1927. The increase in credit
S
-z
•
October was therefore sup_lied entirely by purchases of U. S. securities by the
Open Market Investment Committee and by purchases of bankers i acceptances.
of
During this year there was an increase of $6g,0co,0o0 in the monetary stock
These
n,
circulatio
in
money
of
amount
the
in
gold and a decline of $75000,000
factors taken together with security nurchases and reductions in discount rates,
created a decided easing of the credit situation and member banks again began
to expand their operations quite materially, the reserve balances of the member banks increasing from $2,223,000,000 at the end of October 1926 to
$2,324,000,000 at the end of October 1927. During this period the demand deposits of the member banks expanded by $68o,coo,000, while time deposits increased $1,125,000,000, the expansion in time denosits again much more than keenyear it was the
ing pace with the expansion in demand depOsits. During this
by the .zederal
of
securities
purchases
relatively large growth in time deposits,
of
in
money
amott
the
in
reduction
reserve banks, net gold imports, and a
and
funds
reserve
additional
l
circulation which gave member banks substantia
3-1/4
to
-7/8
from
declined
rates
encouraged an exnansion policy, Acceptance
-ork bank discount rate was reduced from 4 to 3-1/2 ner cent,
ner cent and the New'
while wholesale prices continued to decline until m4.summer, when there was a
gradual increase until around the end of October,
6-months ending April 30, The System continued to Purchase securities
during November and December 1927, but beginning with 1928 began to sell them
rather heavily and the amount held in the snecial investment account on April
30, $160,000,000, was $239,000,000 less than held'at the end of October 1927.
During the same time the monetary stock of gold declined $275,000,000 and the
reserVe_deposits of member banks increased $118,000,000, making a total of.
$632,000,000 to be nrovided by member banks during the six-month period. Of
this total, $197,000,000 was obtained through a reduction in the amount of
money in circulation, $422,000,000 through an increase in borrowings from the
Federal reserve banks, $14,000,000 through the Purchase of acceptances by
Federal reserve banks and $12,000,000 through purchases of securities by the
reserve banks other than through the special investment account. It is clear,
therefore, that during this period the member banks continued to expand their
operations despite the substantial liquidation in the open-market portfolio,
substantial gold exports, and an increase in discount and open market rates.
The increase in time deposits of member banks as in the two previous years
was much more Pronounced than the increase in demand deposits, the increase
in time deposits between October 1927 and April 1928, being $728,000,000 as
compered with $428,000,000 in net demand deposits. Open-market acceptance
rates went uo from 3-1/4 per cent in October 1927 to 3-7/8 per cent in April
1923 and tne New York bank discount rate was increased from 3-1/2 to 4 per
cent in February 1928, while wholesale Prices went down slightly.
The pamphlet of "Charts on Rank Credit, Money Rates, and Business
Activity," which the Board recently had nrinted for distribution, covers
most of the items mentioned inthis memorandum, and you may find the charts
,involved.
helpful, particularly Nos. 1 and 3, in reviewing the various f
COrY FOR MR. HL.ILIN
J
FEDERAL RESERVE BANK OF
August 18, 1926
Matteson, Secretary, .-1-Jew York
Treasury is welcome to our proportion of bonds if it vAnts them.
e do not need the investment but I find it impossible to approve
the policy of buying system bonds if it results in taking such a
large amount of credit from the market in the face of rising
interest rates at a time when financing crops and preparation for
tax payments is going on. It can hardly fail to further increase
interest rates at least temporarily, and coming on top of increase
in the New York Bank rate cast a chill over business which has
mnnaged to survive splendidly notwithstanding the work of the oracles
and sign readers who predicted decline and depression. Business
does not need a chill but encouragement when commodity prices and
construction work are showing hesitancy and declining tendencies.
Furthersore rising interest rates should have an unfavorable influence on Treasury September financing. Please express this
opinion to the Board vnd other F. R. Banks.
Seay
VOLUN 186
PAGE 12
4IIVNFIDENTIAL
1.14
November 26, 1928
Federal Reserve Board
Srsead
In addition to the statement showing the cnndition of all member
banks as of October 3 enclosed herewith, we have prepared the attached
statement for the use of the Board showing a claslificntion of loans and
investments and certain other information which in the main were called
for in the October 3 call report for the first time.
It will be noted that loans to brokers and dealers in New York
City were reported by all member banks as $1,899.000.000. Of this total
$999,000,000 was reported by member banks in Central reserve cities,
$522,000.000 by member banks in other reserve cities, and $378,000,000 by
country banks. On the same date the reporting member banks in New York
City that submit weekly figures reported a total of $2,612,000.000 loans made
to brokers and dealers in New York City for own account and for account of
out-of-town banks, of which $930,000,000 was for own account and $1,682,000,000
for account of out-of-town member and non-member banks.
Available data shows that from June 30 to October 3, the amount
of balances due to banks in foreign countries declined from $560.000,000
to $480,000,000,while investments in foreign securities declined from
$726,000.000 to $696,000,000. The decline in balances due to banks in
foreign countries and in investments in foreign securities was $110.000,000.
During the same period balances due from banks in foreign countries declined
from $205,000.000 to $170,000,000 or by $35.000,000.
The condition report also called for the amount due to depositors
other than banks domiciled in foreign countries. A number of the banks,
however, have not yet reported this information, and while available figures
show that State bank members held about $100,000.000 of such deposits, cor
ponding figures are not yet available for National banks. The report form
also required the banks to report,for the first time, the amount of their
time deposits which were due to other banks and tryst companies. The amount
of such deposits reported aggregated $134,165.000.
The data for National banks incorporated in the figures submitted
herewith have been furnished by the Comptroller of the Currency for the confidential use of the Board and have not been published.
VOLUME 186
PAGE 27
,
C ONFIDENTIAL
For use of Federal
Reserve Board only
St. 5991
CLASSIFICAWION OF LOANS, INVESTMTTS, DEPOSITS, ETC.
OF ALL17..-E233ER BANKS AS OF OCTOBER 3, 1928
LOANS LTD DISCOUNTS
Acceptances of other banks, payable in United States . . . • •
$79,718,000
Notes, bills, acceptances, and otor instruments evidencin4
i .
loans, payable in foreign countries
101,259,000
Commercial paper bought in open market
456,635,000
.
Loans to banks and trust companies
547,795,000
Loans secured by U.S.Government and other securities (exclusive
of loans to banks):
(a) To brokers and dealers in securities in Now York City
1,8 9,143,000
(b) To brokers and dealers in securities outside New York City
849,509,000
' (c) To others
5,796,004,000
Real estate loans, mortgages, deeds of trust, and other liens
,
on real estate:
(a) On farm land
420,587,000
(b) On other real estate
2,667,502,000
All other loans, including banks own acceptances purchased or
discounted
11,480,963,000
Total loans and discounts
*24,299,215,000
MEMORANDUM
Loans secured by U. S. Government obligations (included above)
Total loans eligible for rediscount with Federal reserve bank
(included above)
• • • •
166,352,000
4,529,844,000
ENVESMENTS
U. S. Government securities
Other domestic securities
Foreign securities
• • •
.
Total
10,603,975,000
BILLS PAYABLE LTD REDISCOUNTS
With Federal reserve bank ..
With other banks, trust comnanics, etc. . . . .
CASH AND DUE FROM BANKS
U. S. gold coin
Gold certificates
All other cash in vault
Due from banks and trust companies . .
(a) In New York City
(b) In Chicago .
(c) Elsewhere in United States
(d) In foreign countries
DUE TO BANKS
IN
4,385,830,000
5,522,470,000
695,675,000
FOREIGN COUNTRIES
Tra DEPOSITS DUE TO OTHER BANKS AND TRUST COMPANIES
1,019,789,000
134,127,000
21,176,000
54,4s4,000
443,466,000
488,738,000
. 193,426,000
1,344,095,000
169,863,000
480,054,000,
134,165,000
*Excluding acceptances of other banks and bills of exchange or drafts
rrsold with endorsement, amounting to $433,uo
,000.
FEDERAL RESERVE BOARD
DIVISION OF BANK OPERATIONS
NOVEMBER 26, 1928.
C.
FEDERIkL RESERVE BOARD
WASHINGTON
ADDRESS OFFICIAL CORRESPONDENCE TO
THE FEDERAL RESERVE BOARD
November 26, 1928
St. 59gg
SUBJECT:
Condition of Member Banks
as of October 3, 192g.
Dear Sir:
For your information there is enclosed
herewith a preliminary statement regarding the
condition of all member banks combined as of October
3,
1928.
The Board;s Member Bank Call Report
(No. 41) dhowing detailed figures for all member
banks and for State bank members rill be ready for
distribution in the near future.
Very truly yours,
E. L. Smead, Chief,
Division of Bank Operations.
Enclosure.
TO ALL FEDERAL REbtAVE ATITTS*
For immediate release
STATE=TT FOP THE PRESS
CONDITION
or
MEMBER 3AnS
m
OCTOBER
Fejeral Reserve Board
November 26, 1928,
St. 5988a
3, 192g.
Loans and investments of all member banks on October 3 aggregated
$35,363,030,000, or $135,000,000 less than on June 30, the preceding call date,and
$1,912,000,000 more than on October 10 of last year. !ember banks in central reserve cities reported a reduction since June 30 of $247,000,000 in loans and investments, all in New York City, this reduction being partly offset by increases
of $23,000,000 and $89,000,000, res-)ectively, re2orted by banks in other reserve
cities and by country banks.
Total loans were $24,759,000,000 on October 3, an increase of $20,000,000
since June 30 and of $1,267,000,000 for the year. The principal changes in loans
since June 30 by Federal reserve districts were decreases of $174,000,000 in the
New York district and $47,000,000 in the Boston district, and increases of
$74,000,000 in the 9,1icago district, of $35,000,000 each in the Philadelphia and
Dallas districtsdo , 31,000,000 each in the San Francisco and St. Louis districts.
Investments in U, S. Government securities were $161,000,000 larger on October
than on Juno 30, and $530,000,000 larger than a year ago, while investments in
other securities declined $316,000,000 as compared with June 30, but increased
$115,000,000 over last year. Of the total increase in Government security holdings since June 30, $7,000,000 was reported by member banks in central reserve
cities, $104,000,000 by other reserve city banks, and $50,000,000 by country banks.
Holdings of other securities declined $118,000,000 at c90,ral reserve city banks,
$110,000,000 at other reserve city banks, and $88,000/de6untry banks.
3
Net demand deposits were $196,000,000 less on October 3 than on June 30, and
$175,000,000 less than a year ago. A decline of $406,000,oco in net demand deposits at central reserve city banks between June 30 and October 3, 1928 was partly
offset by increases of $23,000,000 at member banks in other reserve cities and of
$182,000,000 at country banks. Time deposits show a decline of $29,000,000 since
June 30, and an increase of $950,000,000 for the year.
Bills payable and rediscounts declined from '1,209,000,000 on June 30 to
$1,154,000,000 on October 3. The principal changes in borrowings since June 30
were decreases of $90,000,000 in the 'Jew York district, T:41,000,000 in the Boston
district, $33,000,000 in the Cleveland district and $32,000,000 in the Chicago district, and increases of $58,000,000 in the San Francisco district, $57,000,000 in
the Atlanta district and $19,000,000 in the Dallas district.
In the attached tables are figures by Federal reserve districts for all member banks and System figures for state bank members and for national banks.
Changes in the principal resources and liabilities as compared with figures
for June 30, 1928, and October 10, 1927, were as follows:
Oct.
3,
Increase (+) or decrease (-)
since
1928
Juno 30,1928 Oct. 10,1927
Loans & discounts (incl. overdrafts) $24,758,678,000
United States securities
4,385,830,000
Other bonds, stocks and securities
6,218,145,000
Total loans and investments
35,362,653,000
Net demand deposits
• . • . •
18,995,084,000
Time deposits
13,409,608,000
U. S. deposits
158,761,000
Due to banks
• • .• .
4,007,810,000
Bills payable and rediscounts
1,153,916,000
Acceptances outstanding
759,348,000
•
C.
•
+$19,405,000 +$1,267,158,000
+161,100,000 4529,681,000
-315,511,000 +
115,026,000
-135,006,000 + 1,911,865,000
-195,870,000 175,212,000
- 28,977,000 +
950,360,000
97,920,000 276,714,000
+ 90,545,000 194,365,000
- 55,521,000 • 625,701,000
+ 14,843,000 • 157,637,000
AIL MEMBER BANvS'- CONDITION ON OCTOBER 3 AND JUNE 30, 1928
1
St. 5988b
644,so8,600
1,005,860,000
268,713,000
472,754,00o
155,860,000
880,483,000
13,125,704,000
$9,632,'494,000
1,375,742,000
2,117,458,000
16,598,945,000
584,346,000
1,090,182,000
232,310,000
460,923,000
135,178,000
888,662,000
13,207,344,000
$9,590,355,000
1,336,058,000
2,280,931,000
11,065,5s0,000
8,308,216,000
2,891,749,000
110,990,000
28,909,515,000
989,861,000
1,729,023,000
567,942,000
1,554,119,000
363,266,000
1,467,535,000
22,236,949,000
$15,126 ,1&4,000
3,010,088,000
4,100,677,000
432,750,000
10,997,288,000
8,294,248,000
2,736,364,000
184,005,000
28,492,904,000
862,873,000
1,687,823,000
448,182,000
1,436,308,000
14,020,000
, 53,383,000
22,290,315,000
$15,148,918,000
2,888,672,000
4,252,725,000
Yational
Banks
June 30
3
16,574,182,000
6,609,276,000
5,144,337,000
1,180,801,000
72,676,000
614,600,000
22,644,655,000
October
6,434,850,000
5,101,392,000
1,116,o6i,000
47,771,00o
398,197,000
22,992,135,000
801,185,000
430,936,000
1,592,981,000
1,418,710,000
1,637,000
State Banks
October )
June 30
1.
453,652,00o
13,405,287,000
707,581,000
446,887,000
1,614,869,000
1,4/i9,509,000
1,698,534,000
RESOURCES
Loans and discounts (including overdrafts)
U. S. securities
Other bonds, stocks and securities
13,153,926,000
408,252,000
313,569,000
822,395,000
866,826,000
782,616,000
Total deposits
Demand deposits
Time deposits
banks
.
to deposits
Certified and cashiers' checks and cash letters
of credit and travelers checks
LIABILITIES
Total resources
Cash in vault
Reserve with F. R. Banks
Items with Federal reserve banks in
process of collection
Due from banks
Exchanges for clearing house, and checks
on other banks in same place
All other resources
Total loans and investments
410
446,335,000
312,461,000
838,990,000
932,384,000
889,566,000
Bills payable, and rediscounts
Acceptances outstanding
Ca7)ital stock
Surplus
ll other liabilities
w
)
ALL }BANKS (7,670 NATITIUL BANKS AND 1,226 STATE BAITKS) - CONDITION ON OCTOBER 3, 1928, BY FEDEIRAL RESERVE DISTRICTS
(In thousands of dollars)
Federal
Tctal
Boston
New ' 1 PhilaYork
delphia
Cleveland
Reserve
Richmond
Atlanta
St.5986c
District
Chicago I
St.
Louis
I MinnleaDolis
Kansas 1
City
San
11-11as Francisco
RESOURCES
Loans and discounts*
U. S.Government securities
Other bonds, stocks and
curities
1 loans and investments
Customers' liability on
account of acceptances
Banking house, furniture
and fixtures
Other real estate owned
Cash in vault
Reserve with F. R. Banks
Items with F. R. banks in
process of collection
Due from banks and trust
companies
Exchanes for clearing house,
and checks on other banks
in same place
e checks and other cash
Ins
Redemption fund and due from
U. S. Treasurer
Securities borr6wed
Other assets
A
Olgr
TOTAL
24,758,678 1,842,848 7,946,060 1,732,284 2,282,425
4,385,830
269,057 1,359,667 249,598 447,786
902,657
131,460
134,003
3,775,498
559,239
973,693
149,654
6,218,145
511,604 1,636,733 713,919 704,727 184,384 152,370 805,939 278,135
35,362,653 2,623,509 11,182,480 2,695,801 3,434,938 1,340,625 1,189,040 5,140,736 1,401,482
557,642
146,729
806,155
206,458
223,735 229,o94
928,106 1,241,707
727,518
2,187,107
156,541
535,558
78,028 499,477
962,067 3,222,142
727,258
75,543
531,117
17,730
10,652
5,210
11,456
29,487
1,458
2,998
427
1,105,558
178,443
319,126
2,348,018
70,734
6,948
42,144
157,605
249,009
17,300
109,298
891,999
93,096
14,368
41,129
142,438
139,548
22,010
57,107
191,919
61,619
15,458
26,961
70,995
61,504
13,238
24,564
64,351
167,305
27,080
81,460
344,680
43,224
9,573
22,031
81,855
24,358
10,511
16,341
55,323
45,045
10,875
25,373
94,286
43,902 106,214
11,669 19,413
25,703 44,415
68,974 163,393
856,655
. 73,965
300,753
62,681
78,950
43,219
28,867
92,322
45,112
10,574
43,940
33,807
2,026,873
92,218
191,928
119,703
182,543
104,668
127,258
335,262
116,803
121,438
220,264
1,634,689
49,149 1,198,028
63,762
36,523
18,546
17,162
106,725
19,389
12,791
20,687
14,951
76,976
5,826
35,354
)42,465
161,291 253,477
163,527
7,034
45,578
3,073
10,775
3,559
9,815
38,440
4,229
11,513
7,120
4,322
18,069
33,001
36,626
491,270
2,215
361
46,001
4,373
695
301,140
2,786
5,057
18,545
3,976
9,239
18,544
2,761
2,122
5,267
2,126
2,961
4,437
7,10o
37,787
2,031
6,244
5,918
1,433
103
7,298
1,666
542
5,416
2,333
480
3,1117
2,864
1,662
36,547
45,483,597 3,247,426
*Including
V
1,024,781
15,023,698 3,260,169
overdrafts.
5,660
4,196,724 1,701,010 1,558,002 6,413,101 1,759,949 1,204,787 1,717,348 1,338,4924,042,991
ALL 'EMBER BAMCS (7,b70 NATIONAL BANKS AND 1,226 STATE BANKS) - CONDITION'70N-QUOBER'3,..1928, BY ,TEDERAL RESERVE DISTRICTS(Amounts in thousands of dollars)
Federal
Reserve
Dist4ct
Total
New
Phila- Cleveland Richmond Atlanta 1 Chicago
MinnKansas
Boston 1
York
delphia
eapolis 1 City
Louis
I
St. •88d
Dallas 1San
Francisco
LIABILITIES
Capitl stock paid in
747,570 173,206 220,1405 113,640 102,185 335,530 113,527
2,453,859 172,482
93,208
95,122 223,479
53,505
2,382,393 163,223
Sur-olus
891,060 313,983 257,550
87,822
69,614 276,152
64,521
43,156
34,30E)
45,305 135,701
Undivided profits - net
886,025
81,253
327,809
84,231
76,796
32,463
22,911
31,488
17,702
26,506 104,984
24,762
55,120
Reserves for dividends, contingencies, etc.
7,249
120,020
38,649
10,639
3,572
2,072
15,111
31,400
1,771
3,306
1,079
1,373
3,799
erves for interest, taxes, an-i
ler e=enses accrued and
150,438
unpaid
11,566
44,729
9,534
4,798
5,551
2,999
4,938
17,607
26,960
2,896
13,321
5,539
21,4148
Due to F. R. banks
8,911
477
7,514
322
4,470
6,092
2,137
7,779
u5,379
1,694
1,?68
3,267
Duo to other banks and trust
3,942,431 186,036 1,465,982 204,247 270,605 127,375 135,835 571,444 179,272 119,213 260,080 160,288 259,051
companies
Certified and cashiers' or treas1,041,114
urers' cilocks outstandinis
21,955
755,226
22,093
24,250
12,634
8,334
56,948
10,888
13,843
17,660
14,348
49,925
Letters of credit & tray, checks
382
sole_ for cash and outstanding*
15,019
176
63
58
82
2,650
27,338
4,702
82
123
965
36
17,501,430 1,384,864 6,011,441 1,118,187 1,450,933 569,412 539,773 2,443,007 653,994 430,633 828,412 680,799 1,359,975
Demand de-osits
13,409,608 973,494 3,069,337 1,106,901
Ti= deDosits
599,678 466,823 2,256,640 544,774 468,509 374,313 214,665 1,688,837
158,761
14,936
United States deposits
34,636
16,454
73
i,,(
10,798
12,186
5,517
21,183
8,499
4,579
7,737
9,463
35,146,061 2,590,588 11,412,089 2,467,617 3,413,370 1,326,052 1,165,149 5,350,410 1,394,849 1,037,290 1,496,063 1,081,380 3,411,204
Total del)osits
Agreements to re-2urchase U.S.
95,161
250
Govt. or other securities sold
3,499
72,380
5,054 1 3,454
5,667
1,312
25
705
678
1,700
437
1,153,916
51,850
Bills payable and rediscounts
391,150 113,808
132,964
63,165
110,903
70,135
13,951
20,613
75,365
29,910
77,099
Allrp tances of other banks and
ills of exchange or drafts
433,665
sold with endorsement
2,340
1,644
7,960
1,527
36,353
120
355,563
3,355
2,033
970
21,767
Acectancc,s exwited for customers 717,931
522,116
12,919
10,583
16,165
5,172
29,099
1,458
2,928
73,937
425
5,526
37,303
Acceptances executed b- other banks
4,417
for account of reporting banks
5,682
626
2
2,515
2,649
3,479
71
SO
25,599
2
712
648,046
43,363
85,475
National-bank notes outstanding
54,620
53,823
39,629
75,505
41,971
27,370
32,913
45,955
37,557
56,562
36,436
-Securities borrowed
361
2,127
6,244
2,961
542
103
5,057
695
9,239
480
1,662
6,965
218,329
11,472
Other liabilities
108,814
21,1479
7,147
21,244
4,381
29,551
3,716
1,390
2,057
1,750
5,318
45,483,697 3,247,426 15,023,698 3,250,169 4,196,724 1,701,010 1,558,002 6,413,101 1,759,949 1,204,787 1,717,34s 1,338,492 4 042,991
TOTAL
172,1mber of banks
8,895
408
934
784
554
818
454
1,260
722
941
644
590
757
*Not incl-aded in deposits in statements issued prior to October 3, 1-:25.
Pdili
•
Nov. 3, 1928.
Res- rves against deposits
in foreign brandhen of American
banks.
Governor Younc
Mr. 'liyatt-General Opunsel
In connection with Topic IV, 0, f the program for the forthcoming Governors' Conference "Deduction of Foreign Balances in Computing
Member Bank Reserves", you. have ,clked me to advise you Whether the Board
has ever ruled that member banks need not maintain the res,q-ves required
by Se -!tion 19 of the Federal Reserve Act against deposits in their foreign
br =hes and, if so, whether in my opinion that ruling is correct.
TS" Nr_p.1
On sage 1123 of the 1918 Bulletin there was published a legal
opinion of Mr. Milton C. Mlliott. then Genlral Counsel of the Federal
Resc:rve Board, to the effect that scction 19 of the Federal Reserve Act,
which prescribes reerves to be crried by member b_nks, does not apTAy
to foreign branches of national banks; but, under the snecial power vesAd
in the Federal Renerve Board by section 25 to prescribe conditions and
regulations under which foreign branches my he estrblisl'ef3, it is
aathorized to prescribe the amount, ohz,rPcter and location Of reserve to
be maintained against deposits rPceived in sdh branches. By approving
this opinion and publishing it in the Federal Reserve Bulletin, the Board
gave it official sanction and thereby pr:cticLlly gave it the force and
effect of a riling of the Federal Reserve Board.
In response to an informal inquiry from the Treasurer of the
People's Bank and Trust Company of Westfield. Ne Jersey, the Board, under
date of November 8, 1921, informally stated in a letter that, while it
had never issued any ruling or regulation on this narticular question, it
was of the opinion that a Stitte member bank is not required, undlr the
terms of Section 19 of the Federal Reserve Act, to /Maude deposits
received and payable only at its foreign branches mong the deposits against
which it must maintain a renerve balance with ts Federal ResPrve bank.
That informal ruling, ho-aver, was never publishsed and, so t" r as I have
been able to a certain, has never been oommumuc ted to anybody exce,t the
People's Bank ,nd Trust Con any of Nest'ield, -ew Jersei, Which has no
foreign branches.
OPINION.
In my opinion, all memb.lr banks, both State and national, are
required by the terms of Section 19 of the Federal Reserve Xct to m irtainek
the reserves prescribed by that Section against ,l1 of their deposits
regardless of whether they are received in this country or whether they are
received in and payable at foreign branches.
VOLUME 186
PAGE 31
lasqqsgpx.
Section 19 of the Federal Reserve Act provides, in part, that:
"every bank, banking association, or trust company
which is or which becomes a member of any Federal Reserve
Bank shall establish and maintain reFlerve balances with its
Pederal reserve bank as follows:
"*** it shall hold and maintain with the Federal
reserve bank of its district an actual net balance equal
to not less than * * * psr centum of the agereeate tpount
of its demand deposits and three per centum of its time
deposits."
There is no ambiguity about this laneuage. If it means anything,
it clearly means that every member bank is required by law to maintAn a
re eve balance with the Federal reserve bank equal to not less than 7, 10,
or 13 per cent of 4121 of its demand deposits and three per cent of its time
deposits. Funk and Vagealls New Standrd Dictionary defines the adjective
aggregate" as meaning "collected into a sum, mass, or total; gathered
into a whole; formed. by collection; collective." The words "the aggregate
amount", therefore, are all incleetive and mean the sum total of all the
de-;)osits "gathered together in a Whole." They apply as well to deposits
received in and payable at foreign branches as to deponits teoeived in .and
payable at the head office in this country.
The branches aDS not eepardte institutions, but mare merely parts
of the parent organization; and the deposit liabilities arising out of the
receipt of Ueposite - at the branches are afejoeit lieibilities of the parent
corporation just as much as if such deposits had been received at the how
office. As regards domestic branches, this principle was recognized by the
Federal Reserve Boari as early as July 1915, when it ruled that "the res-rve
to be maintained should be based upon the ageregate deposits of the parent
bank a d its branches." 1915 Bulletin, page 125. This ruline was based
upon an opinion of Attorney General vldkerahase rendered under date of
September 15, 1909, to the effect that, where a state bank having branches
converts into a national bank, the Comptroller of the Currency can legally
permit the mother ban and branches to ma.:c loans at either place, based on
the total amount of oaitalisation and surplus of the corporation and that
the only restriction in the law with respeCt thereto is that the aggregate
loans made by the mother bank and all branches shall not at any one time
exceed the limitations expreseed in section 5200 of the Revised Statutes.
27 p. Atty. Gen. 601.
On a plain reaiing of the st_tute, therefore, it would seem clear
that number banks hi.ving foreign branches must maintain the game reserve
against deposits received at its foreign branches as they wou1d have to
maintain against such deposits if they were received at their home office.'.
-3-
The law contemplates that a member bank will add up nil of its demand
deposits and maintain reserves against "the aggregate amount" thereof.
:o express exception is made as to deposits received at foreign branches snd,
in my opinion,there is no justification for implying any such exception.
In the opinion published in the 1918 Bulletin, Judge Elliott recognized
tnat a foreign branch is merely a part of the parent corporation; that a
deposit liability of the branch is therefore a liability of the parent bank;
and that, if the abo-e quoted provision of section 19 is interpreted literally,
the language is undoubtedly broad enough to cover deposits received in foreign
countries through branches. He advanced two arguments, however, to avoid the
conclusion that the law means what it says.
His first argent is based upon the provision of Section 25 of the
Federal Reserve Act to the effect that national banks may establish foreign
branches "upon such conditions and under such regulations ms may be prescribed"
by the Federal Reserve Board. He argues that it is obvious that Congress
recognized the fact that no rigid rule could be enforced governing the operations
of foreign branches if these branches are to accomplish the purpose for which
they were created, viz., to further the foreign commerce of the Uhited States;
that such branches are necessarily subject in their local operations to the
laws of various sovereignties and it was, therefore, necessary to vest in the
Federal Reserve Board some discretion as to the restrictions to be imposed
upon tne operations of foreign branches:in order that the interests of the
parent bank might be safeguarded and tne creditors in this country might be
protected; that Congress recognized the fact that laws governing the local
operations of national banks could not consistentl , be strictly applied to the
operations of foreign branches;and that, therefore, Congress intended for the
Board to prescribe special regulations governing the operations of foreign
branches and that the power to do so included the power to prescribe the amount,
character, and location of reserve to be maintained against deposits receited
in such foreign branches.
In my opinion, this argument is utterly unsound; because any administrative
body authorized by Congress to prescribe regulations is authorized to prescribe
only such regulations as are necescar:, to carry out the policy of Congress as
expressed in the lass Pnacted by Congress; and any regulation which is in
conflict with an express provision of law is invalid and of no effect. The
FPderal Reserve Act plainly says that member banks must maintain reserves against
"the aggregate amount" of their deposits; and any regulation promulgated by
the Board which says that they need not maintain reserves against deposits
received in foreign branches would be in conflict with this plain provision of
law and would, tnerefore, be invalid. (So far as I have been able to ascertain,
the Board never promulgated any regulations prescribing reserves to be maintained
by national banks against deposits received at their foreign branches.)
The second argupent advanced by Judge Elliott is that the reserve
requirements of Section 19 were clearly intended to protect primarily the
domestic creditors of member banks; that Federal reserve banks are enabled to
su:2:,1y the currency needs of member banks with little delay and reserve carried
-4-
with the Federal reserve bank may perform one of its prinsipal functions,
viz„ to meet the abnormal withdrawals of domestic depositors; that it is
manifest that reserve carried with the Federal reserve bank cannot adequa
tely
perform this function in so far as foreign creditors of a national bank
are concerned; and that it must be assumed, therefore, that Congress did
not intend to provide that reserve shotld be carried against foreign deposi
ts
in a place where such reserve colkid pot perform the function it is
intended
to perform.
This argument is fallacious for several reasons.
In the first place, it is a fundamental rule of statutory constriction
that where the language of a statute is plain and unambiguous
the statute
must be construed to mean what it says and there is no justif
ication for
giving any consideration to extraneous matters in attempting
to ascertain the
legislative intent.
Says:
On this subject, Black on Interpretetion of Laws, 2nd ed., page 45,
"If the language of the statute is plain and free from
ambiguity,
and expresses a single, definite, and sensible meanin
g,that
meaning is conclusively ;resumed to be the meaning which the
legislature intended to convey. In other words, the statut
e
must be interpreted literally. Even though the
court should
be convinced that some other meaning was really
intendssi by
the law-making power, and even though the litera
l interpretation
should defeat the very purposes of the enactment,
still the
explicit declaration of the legislature is the law,
and the
courts must not depart from it."
Here the language of the statute is plain and unambi
guo-is and there
is no justification for advancing arguments of
expediency to sipport tie
conclusion that the law does not mean what it
says. The language of the
statute must be given its ordinary meaning and
must be applied literally.
Even if there were any oscasion to give any weight
to these practical
considerations in determining the proper interp
retation of thie provision
of the Federal Reserve Act, the practical argurgt
ents advanced by Judge Elliott
are not sound.
He says that the reserves are primarily to protect
the
domestic creditors of member banks and that
reserves on foreign deposits are
not leaded to protect domestic depositors
and cannot be used to protect
foreign depositors. Deposit liabilities
of a member bank received in foreign
branches,however, give rise to potential calls
Upon the credit resources of
the parent bank in this country; and when
these calls come,the parent bank
may be compelled to call upon the credit
resources of the Federal Reserve System.
If the member bank ssnnot meet these calls,
it must fail, and domestic
depositors must share the resulting losses equall
y with foreign depositors.
The existence of a reserve, therefore, agains
t foreign deposits is just as
necessary for the protection of the domest
ic depositor as the reserve against
domestic deposits.
-5-
Nor is it certain that a reserve balance with the Federal Reserve
Bank would be useless in assisting a member ba-,k to meet withdrawals at
a foreign branch where it has received deposits. Through its foreign
correspondents with which it maintains reciprocal balances, the Federal
reserve bank may be able to extend prompt and very helpful financial
assistance to a member bank which is exneriencing heavy withdrawals at a
foreign branch. Thus, if a member bank has a branch in London and there
is a run on that branch, it could, through the Federal Reserve Bank of New
York, obtain credit which could be made available almost immediately in
London through the relations which the Federal Reserve Bank of New York has
with the Bank of England. The Federal Reserve Bank of New York could
draw on its balance with the Bank of England or cable the Bank of England
to sell sterling bills which it holds for the account of the Federal Reserve
Bank of New York and pay the proceeds over to the London branch of the
American member bank.
The best answer, however, to Jlige Elliott's arguments of expediency
are to he found in what actually happened in the Spring of 1926, when there
was a financial dist-Irbance in Cuba and a run upon the branches of American
banks located there. Between Friday night and Monday morning approximately
$43,000,000 of actual currency was shipped to Havana and paid over by the
Havana Agency of the Federal Reserve Bank of Atlanta to the Havana branches
of the American banks,and the run was etonped. The run resulted in an
immediate call upon the credit resources of the home offices of these American
banks, which was translated into a call upon the Federal Reserve Bank of New
York and which resulted in the imnediate exportation of equivalent of gold
in large amounts. The heavy withdrawal of deposits received at foreign
branches resulted in the aell upon our gold and in the actual depletion of the
credit resources of both the member banks and the Federal reserve banks
involved. If the runa had not been stopped and the alarm had spread, it is
conceivable that it might have resulted in a run on the parent banks in this
country and even in the insolvency of the parent banks with attendant loss
to domestic depositors as well as to foreign depositors. In view of these
facts, it seems clear that the reason for requiring reserves against denosits
epplies as well to deposits received at foreign branches of member banks as
to deposits received in the United Statea at their head offices.
There is just one argument of expediency which can be offered with some
force against what I have said above. In fixing the reserve requirements,
Congress took into consideration thelhet thatcountry banks, being located at
a distance from Federal reserve banks and having less ready. access to the
currency reserve of the Federal reserve banks, would have to carry larger
percentages of vault cash than would banks situated near Federal reserve
banks.
Partly as a compensation for this disadvantage, Congress fixed lower reserve
requirements for country banks than for banks situated in reserve and central
reserve cities. In the absence of foreign currency agencies of the Federal
reserve banks, such as the one established in Havana, Cuba, member banks
obviously would be required to carry much larger amounts of vault cash in t eir
foreign branches than the head offices in the United States; and it may be
argued with some force that to require them to carry on deposit with the
Federal
Reserve bank the reserves prescribed by Section 19 of the Federal
Reserve Act
would be unjust and would impose an intolerable burden on their foreign
business. Thus, in the caw of the National City Bank, I am advised that
before the establishment of the Havana agencies, it was forced to maintain
vault cash in an amount enual to 25 per cent of the deposit liabilities
of its Cuban agencies. If there should be added to this the necessity
of carrying on Aeposit with the Federal Reserve bank reserves of 13 per cent
of the deposits received in Havana, the National City Bank would be
maintaining as idle funds a sum equal to 38 per cent of its Cuban deposits.
This, however, is simply one of the disadvantages of doing the banking
biaminess abroad, through branches of American banks and is a problem which
the banks must solve for themselves. It is no justification for construing
13-1(' Pyierpl Reserve Act to mean something which it does not say. Moreover,
the high rates of interest charged by American banks in their foreign
transactions largely offset the increased vault cash which they have to cariy.
at their foreign branches.
Thc informal ruling regarding reserves against deposits received at
foreign branches of State member banks was based upon even weaker grouhds
than the published ruling regarding foreign branches of national banks. Since
the Federal Reserve Ixt contains no provision authorizing the Board to
prescribe regulations governing the operations of foreign brarches of State
racy* r banks, there was no provision of the Federal Reserve Act which cold
be relied upon in construing Section 19 as not applying to denosits in such
foreign branches. The ruling, therefore, was based entirely upon the
practical considerations outlined in Judge Elliott's opinion regarding national
banks which I have shown to be so fallaceous.
CONCLUSION.
In my opinion the Board should reverse both of these old rulings and
should rule that in computing their reserves all member banks, both State
and national, must treat deposits received in foreign branches on exactly
the same basis as deposits received at their home offices in the Untz-d States,
and must maintain reserves against them.
ResectfuIly,
Walter Wyatt.
General Counsel
W V-sad
11*
Form No. 131.
Office Correspondence
To
Mr. Hamlin
Flom
Mr. McClelland.
FE.DERAL RESERVE
BOARD
Ewe_ November 27, 1928.
Subject:
426
GPO
411
There is attached hereto a copy of the proposed letter to all
Federal Iteserve ,‘gents submitted by the Ltxecutive Committee at the meeting
this morning on the subject of payment of compensation to officers and
employees who die while in the service of the banks.
A/44 Li.voitb,
VOLUME 186
PAGE 37
November 27, 1928.
Dear eir:
The Federal reserve Board has been advised by its counsel that
a Federal reserve bank is not specifically authorized to make a payment
of salary to the estate of an employee covering any period subsequent to his death, in the absence of an agreement with the employee
specifically so providing. In other words, the employee's salary in
such cases legally should cease on the day of his death. Likewise the
Federal Reserve Board is not legally authorized to approve a payment of
this kind which may have been made.
The boards of directors of some of the Federal reserve banks in
ranking payments of this kind in the past have probably essumed responsibilities which they did not intend to assume and which they
should
not be asked to assume. However, the practice by corporations and others
of paying a salary for a reasonable time after the demise of an employee
is quite general and the Federal eserve Board therefore suggests, but
does not require, that the procedure be changed so that directors of
the Federal reserve banks will not assume legal responsibilities which
they should not be required to assume. lAth this end in view the
Board
suggests that a resolution similar to the following be passed at your
next directors' meeting:
"Voted to instruct the officers of the bank to advise
each employee now working for the institution, as well as each
new employee, that in consideration of his or her continuing
in the bank's employment or accepting a position with the
bank, in the event of his or her demise while in the employ
of the bank, the employee's estate, or such person as he or
she may have designated, will be paid one month's salary after
his or'her death."
As stated above, this should not be interpreted as' a requirement
of the Federal eeserve Board, but is simply a suggestion. If your
directors elect to act favorably upon the resolution, it will have
the
approval of the Federal deserve Board. .If they do not, the Board,
of
course, will have to refuse to approve any payments of salary
made
after an employee's death.
By Order of the Federal eeserve Board.
Xalter L. Eddy,
Secretary.
To all Federal aeserve egents.
•
•
S-44- 441
November 22, 1928
CONFIDavITIAL
REAARKS ..[ADE TO FEDERAL ADVISORY COUliCIL
By
E. A. Goldenweiser
Factors in demand for reserve bank credit
Credit devel4pments during the year are familiar in the main outlines.
The experience of 1928 can perhaps best be discussed with reference to a
chart that shows the course of reserve bank credit and of the principal factors in the demand for this credit.
There are other minor elebents, but these
three: gold stock, money in circulation, and member bank reserve balances,
usually account for 90 to 95 per cent of changes in reserve bank credit. They
are the channels through which changes in the economic and banking conditions
in the TAted States reach the Federal reserve banks.
The growth in reserve bank credit during the past year was largely due tc
the decrease in gold stock.
As member banks had to meet the foreign demand for
gold they depleted their reserve balances and borrowed from the reserve banks
to make up for the gold exports.
These gold exports were to a certain extent
encouraged by the low money rates that prevailed in the United States in 1927,
but they did not stop until about June, 1928, notwithstanding the firmer money
conditions.
This was due to the fact that the principal taker of gold was
France, which was building up its reserves in anticipation of the stabilization
and required the gold without reference to the position of the exchanges or the
relative level of money rates.
I think it may be said generally that gold move-
ments from now on will not be on the large scale that has characterized the postwar period and that in the immediate future they will be.a relatively minor
factor in credit conditions in the United States.
VOLUME 186
PAGE 59
•
2
The nther most important influence on reserve bank credit is money in
circulation.
Short tine fluctuations in reserve bank credit follow changes
in money in circulation very closely, as is apparent from this chart.
If
one eliminated all the Other lines; it would appear that the two went to6:ether
to a surprising extent.
Under our system of banking, however; money in
culation is ntt directly crrntrolled by credit policy.
It represents only a
small part of t6tal payments, consisting chiefly of such items as payrclls, till
money fir change purpOses in retail stores, and pocket money for small personal
expenditures.
This amount does not vary much, except seasonally, and is not
directly affected by credit policy except in a round-about way.
It rises with
a rise of retail prices a,Icl with the volume of industrial activity, but over
relatively short periods, it is chiefly under the influence of seasonal developments, such as, summer travel, Christmas shopping, etc.
The one et the. three factors which influence the demand for reserve bank
credit that is definitely related to and influenced by credit policy is member
bank reserve balances.
1,7.ember banic reserve requirements depend on the volume
of their deposits and the volume of their deposits reflects the volume of their
loans and investments.
These in turn are influenced by money rates.
When the
Federal reserve system puts member banks in debt by selling securities, or
raises the discount rate, this action may tend to influence member banks to
reduce the volume of their operations, either by curtailing their loans or by
selling a part of their investments.
In either case the result is a decrease
in deposits and, therefore, in member bank reserve requirements.
The chart
shows that, while over long periods of time member bank reserve balances are
a very importaAt factor in reserve bank credit, they are generally not so
•
•
- 3 -
important over short periods.
Since 1922 member bank reserve balances have
been a greater factor in reserve requirements than gold, if the period is
considered as a whole, and a very much greater factor than money in circulation.
But over short periods of time reserve balances usually remain fairly
constant, and yet it is thrnugh its effects on member bank reserves that reserve bank policy becomes effective.
Relation of reserves to bank credit
I have here another chart which shows member bank reserve balances in relation to member bank and to total bank credit.
The principal point brought
out by this chart is the relatively small amount of member bank balances on
which the entire credit structure is built.
This line crawlinF along the
bottom represents member bank balances, which constitute about 7 1/2 per cent
•
of member bank deposits.
The middle line represents member bank credit and
the top line credit of all banks in the United States.
The Federal reserve
system in influencing crudit conditions has to do so through its control of
In view of the smallness of tho hold that the Federal re0„i -}1-;
reserve bank policy depends
of
volume
total
the
el.:id-pit,
on
serve system has
this bottom line.
for its effectiveness,#not only on its control of the cost of reserves to
and vigorous
member ban'.cs, but also on the psychological effect of timely
action.
requirements multiplied
The dotted line on the chart represents reserve
reserves.
by 13, that is, by the average ratio of deposits to
A raserve
approximately the amount of
dollar multiplied by this amount ought to give
member bank credit.
Following these two lines, you sea that the spread in-
years, and this indicates
creases between them, particularly in the last few
S
4
the extent to which our system of member bank reserves is unsatisfactory.
If the purpose of reserves is to set an upper limit to credit expansion,
as I think it is, then a system under which this very rapid growth of loans
and investments is possible with only a much smaller growth in reserves,
needs to be reconsidered.
As you well know, this is due primarily to the
fact that on the liability side the growth has been chiefly in time deposits
which require only a 3 per cent reserve.
The picture that this chart brings out is that the Federal reserve system
can control credit only by a slender thread, and that even this thread does
not work uniformly owing to imperfections in our system of reserves.
And yet,
over a long period of time, member bank credit cannot increase without increasing reserve balances and it is on its effect on reserve balances that
credit policy must primarily rely.
Banking policy and credit policy
Much of the discussion in connection with credit developments deals with
the particular use to which reserve bank credit is being put and to the particular behavior of individual banks which may borrow from the reserve bunks
and lend on the stock ma.rket or in other ways that are not satisfactory to the
reserve authori.ties.
A number of plans have been proposed for regulating
that, and some plans may be dosirable; particularly it would seem desirable to
adopt some plan by which a preferential rate would be charged on eligible
paper, so as to encourage member banks to keep a portfolio of such paper, and
not to depend on their security holdings for obtaining reserve bank accommodation.
But a sharp line of distinction must be drawn between policy dealing
with individual banks, which is in the nature of banking supervision and
might be aalled banking policy, and the policy of the system towards banking
-5 -
developments as a whole in relation to the country's credit needs, which may
be called credit policy.
Banking policy is important in promoting soundness
of banking conditions and a considerable part of the work of the Federal reserve system is bound to be occupied with problems of this sort.
It should be
realized, however, that banking policy does not generally have much effect on
credit conditions as a whole.
If one bank is prevented from borrowing in
order to lend on the stock market, some other bank takes on the loan and the
volume of stock market transactions does not diminish.
The principal way in
which the Federal reserve system can influence general credit conditions is
through its policy in relation to the volume and cost of bank credit.
arms of the policy are well known:
The two
discount rates and open-market operations.
That is perhaps not always realized is that credit policy as distinguished
from banking policy must of necessity be impersonal.
It must hit the just and
the unjust alike, and in determining upon credit policy the Federal reserve
system is obliged carefully to balance the benefits and the detriments that
are likely to follow its course.
Easy money rates may encourage gold exeorts
and give a fillip to business which may be safferinz a recession.
At the same
time it may stimulate stock market activity to an undesirable extent.
High
money rates may exert.a moderating influence on speculation, but at the same
time they may result in higher cost of credit to men engaged in all lines of
business.
They may also incidentally bring about a large amount of lending
through other channels than banks, as is witnessed by the growth of the stock
exchange account of corporations and individuals.
of others
This growth in the "account
is an illustration of the limitations of credit policy.
As an in-
cident to easy money, which ?revailed in this country for five years, corporations greatly improved their cash position by floating bonds and stocks in a
•
•
6
favorable market.
At the same time efficient railroad transportation and a.
fairly steady price level have been influences towards a large reduction in
inventories which reduced the need of corporations for bank credit.
As a
consequence, the corporations are now in a strong cash position and high rates
have brought this money into the stock market.
The various effects of a
credit policy are sometimes hard to anticipate and the F.:acral reserve system
must steer its course with reference to broader and longer developments than
changes from day to day or even from week to week.
Reserve bank policy cannot
be guided by a favor chart but must be based on smoother lines and directed
towards longer time objectives.
Among these objectives is a proper conserva-
tion of our gold reserves with a view to the future development of trade and
iadustry and the maintenance of an adequate amount of credit for all logiti
mate needs of business.
RESERVE BANK CREDIT OUTSTANDING
410
KA I WOKS OF DOLLARS
2600
AND
PRINCIPAL FACTORS IN CHANGES
MONTHLY BASIS: DAILY AVERAGES )
MILLIONS OF DOLLARS
Member Bank
Reserve Balances
2400
2200
2000
1800
co
52
.1
1600
Money in Circulation •
5000
-
4800
4600
1800
L
_
I
.1
4400
Reserve Bank Credit
1600
1400
1200 1000
22
I.
-
800
. 1
.
4800
4600
Gold Stock
4400
4200
4000
1
I
1923
I
1
1924
.
1925
.
1. . .
19126
1927
3800
1928 1
1929
•
BILLIONS OF DOLLARS
BILLIONS OF DOLLARS
60 —
160
1
50
40
40
Member Bank Credit
30
30
N.,
2.0
ZO
10
10
Member Bank
Reserve Balances
so.
0
1919 1920 1921
1922. 1923 1924 1925 1926 192.7 192.8 1922
•
‘9
December 1, 1923.
TO:
Federal Reserve Board
FROM:
Mr. Smead
SUBJECT:
Branches of member and nonmember banks, June 30, 192S.
st. 59s7.
Branch banking since passage of McFadden Act. In the 16-month -period
between February 23-, 1927, the date on which the McFadden Act became effective,
and June 30 of the present year, the number of branches of member and nonmember
banks in operation in the United States increased from 2,900 to 3,230, or by
330, and the number of banks oper:lting branches increased from 779 to s35, or
by 56. While the net increase in the number of banks operating branches was
5S, there were really 109 banks operating branches on June 30, 1928, that had
no branches whatever when the McFadden bill became a law. The difference between this figure and the net increase of 56 in the number of banks operating
branches is accounted for by the fact that 39 banks which on February 25, 1927,
were operating branches went out of existenCe through merger with other banks,
10 banks abolished their branches, and 4 banks suspended operations on accaunt
of financial difficulties. Of the 2,900 branches that were in oi)oration on
II
February 25, 1927, 72 were no longer in operation on June 30, 1928, 64 having
been abolished or merged with other branches or with the head office, and 3 going outof existence as a result of the suspension of the parent bank. There
were 402 branches in operation on June 30, 1928, that were not in existence
the
Fadden Act became effective, including 258 established de novo and
144 that succeeded independent banks. These changes in branch banking are summarized below:
V
Number of Banks Operating Branches
Banks operating branches on February 25, 1927
Banks not operating branches on February 25, 1927,
which opened branches since then*
Banks (operating branches) that went out
of existence through -Mergers
Suspensions
Banks which discontinued operation of branches
between February 25, 1927, and June 30, 1928
779
+ 109
-
39
4
- 10
Banks operating branches on June 30, 1928
s35
Number of Branches in Operation
Branches in operation on February 25, 1927
Changes between February 25, 1927 and June 30, 1928:
De Novo branches established
Independent banks purchased and converted into branches
Branches abolished or merged with other branches
or with head office
Branches that went out of existence through suspension
of parent bank
Branches in operation June
3o, 192s
2,900
+ 258
+ 144
-64
3,21oJ
sTxclusive of banks which merely took over other banks that had branches.
VOLUME 186
PAGE 69
404
•
- 2Type and location of branches established. Of the net increase of 330
in the number of branches in operation, 214 were de novo branches, i.e., banking offices which were established in the first instance as branches, as
tinguished from indenendent banks purchased and converted into branches. The
total number of de novo branches in operation on June 30, 192S, was 2,206 - approximately 70 per cent of all branches, and the number which succeeded independent banks 847. In the case of 177 branches the original method of establishment has not been reported.
The greator number of the branches that have come into existence since
the passage of.the ilcFad:_en Act are located in the same towns or cities as the
parent banks, the net increase in the number of suchnlocal" branches being 285
and in the number of branches locatod outside the head-office cities only 45.
This relatively larger increase in tho number of local branches was, of course,
to be expected, since member banks may not, under the YlcFadden Act, add to the
number of outside branches that they had in operation on February 25, 1927. As
a matter of fact, the number of outside branches of member banks declined from 536
to 439_
Branches located in smaller cities. It is interesting to note in this
connection that of the 1,C16 branches in operation on June 30, 1928, outside the
head office cities, 572 were located in places having a population (in 1920) of
2,500 or less, 14 in places with a population of 2,500 to 5,000, and 79 in places
with a population of 5,000 to 10,000. quite a number of the outside branches
are located in large cities, but this is due almost entirely to the fact that in
California some of the banks that have their head offices in San Francisco or in
Los Angeles have branches located in the other ono of those cities or in so=
other of the larger cities in the state.
Branches of national, state, and nonmember banks. There was a net increase of 24 in the number ofnational banks operating bra,nches, the total number increasing from 145 on February 25, 1927, to 169 on June 30, 1928. The number of branches of national banks more than daUbled, there being 941 such
'
branches in operation on June 30, 1928, as compared with 390 sixteen months earlier, but the greater part of this increase is due to the conversion into national banks of state banks that were operating a large number of branches. There
were, however, 81 ae novo branches established by national banks during this 16month -period.
In the case of state bank members, the number of banks cp9rating
branches declined slightly durinc the 16-month period - from 189 to 186 - and the
number of their branches declined substantially - from 1,560 to 1,220, this large
reduction in the n, -1)er of branches reflecting the conversion of state bank members intu or their .erger with national banks. The number of nonmember banks
(including mutual savings and private banks) operating branches increased from
445 to 4so and the number of their branches from 950 to 1,069.
The following table shows, by classes of banks, tho number of banks operating branches and the number of branches in operation on February 25, 1927, on
Juno 30, 1928, and on the three earlier dates for which figures are available:
•
3Nugber of banks operating branches
Total
National banks
State bank mel.lbers
State bank nonmembers
Mutual savings banks
Private banks
June 30, Feb. 25, Dec.31 De.31, Juno 30
1926
1927
1(23
-4....9?.5
1924
,)35
779
796
785
714
163
185
415
Rs
./
145
189
387
50
8
146
194
132
196
108
191
398
410
367
50
8
47
*
28
*
3,230
2,900 2,781
2,642
2,293
941
1,220
4o6
390
1,560 1,366
332
7
Number of branches
Total
National Banks
State bank memb.Jrs
State bank nonmembers
Mutual savings banks
*Privatu baliks
973
863
So
10
76
11
1,277
923
75
1,033
*
11
*
248 •
1,137
908
*
*
*-Tot tabulated se)arately - included 7;ith state bank nonmembers.
Size of cities in which banks operating branches are located. Of the
total of 835 banks that were operating branches on June 30, 1928, 372 were located
in cities that (in 1920) had a population of 100,000 or more and 51 of these
banks had more than 10 branches in operation on that date; 81 were located in
cities with a population of 50,000 to 100,000; 56 in places with a population of
to 50,000; and 316 in cities or towns with a population of less than
25,000
25,000.. The following stateLlent classifies the banks that were operating branches
on June 30, 1928, according to population and according to size of branch bank
systems:
Number operating
Total number of
Over 10
6-10
banks operating
1
1
2
J 3-5
branch branchesThranches branches branches
branches
Po-pulation (in 1920)
of cities in which
marent banks are
located;
Over 100,000
50,000-100,000
25,000-50,000
Less than 25,000
Total
372
81
151
68
77
56
12
17
53
150
10
12
66
34
316
228
835
469
27
126
25
3
51
_
2
1
5
35
3
55
-)4
4.21.
Large-size branch bank systems. SomN; of the banks that have been
operating a considerable number of branches have merge, thereby increasing
the size of individual branch bank systems. The largest individual system
is, of course, the Bank of Italy National Trust and Savings Association,
which on June 30, 1923, had 269 branches, of which 40 were located in San
Francisco, 44 in Los Angeles, and the remainder in other cities in California. There were 3 other banks that had nearly 100 branches in operation
on June 30, 1923, 5 with over 50 branches, and 5 with over 30 branches, the
the total number of branches operated by these 14 banks on that date being
1,026, or nearly one-third of the 3,230 branches in operation. In California, where state-wide branch banking is practiced on the most extensive
scale, the resources of the banks that are operating branches constitute a
large percentage of the resaurcus of all banks in the state, the 7 largest
systems with 674 branches reporting total deposits on June 30, 1923, of
$1,336,000,000,iqr somewhat more than 50 per cent of the total for the
state. Below/a list of the banks that had 30 or more branches in operation
on June 30, 1928.
Number of
branches
269
97
53
97
53
51
34
93
31
30
66
47
52
Location and name of parent bank
San Francisco
n
If
Los Angeles
li
II
n
Detroit
n
n
New York
n
Cleveland
Buffalo
Bank of Italy National Trust & Say. Assn.
American Trust Sp,p2ny
United Securitytrn.ust Company(nonmember)
Los Angeles-First Nat. Trust & Say. Bank
Security Trust and Savillgs Bank
California Bank (nonmember)
Merchants National Trust & Savings Bank
Pooplos-Wayne County Bank
First National Bank
Peninsular State Bank
Corn Exchange Bank
Bank of Manhattan Company
Cleveland Trust Company
Marine Trust Company
iToii
Interstate branch banking. Thus far branch-banking has been confined
almost entirely to the states in which the parent banks arc located, interstate branches being generally prohibited by law either specifically or by
implication. There are, however, 3 banks that operate branches in other
states as follows:
Bank of California, N.A., San Francisco, Calif.
1 branch in Portland, Ore., 1 in Seattle, Wash., and 1 in Tacoma,Wash.
Hamilton Trust and Savings Bank, Chattanooga, Tenn.,
1 branch in Rossville, Ga.
First Camden National Bank and Trust Company, Camden, N. J.
2 branches in Philadelphia, Pa.
-5Total number of bAnl:in offices. At the end of June 1523 there were
in operation in the United States 25,950 banks, exclusive of private banks
not under state supervision.
ddin to this fiLure the 3,230 branches gives
a total of 29,180 banking offices. The number of branches in operation at
the end of June 1928 constituted, therefore, about 11 per cent of the total
number of banking offices. On June 30, 1924, the earliest date for which
branch banking statistics are available, the number of banks in operation
Tas 26,995 and the number of branches 2,293, a total of 31,269. The branches
on that date represented about 7 per cent of the total number of banking
offices. The number of banks has, of course, been declinin,; stea_lily, not
only because of the purchase of independent banks and their conversion into
branches, but to a greater extent because of the susoension of banks on
accolint of financial difficulties and the numerous mergers that have been
taking place in recent years.
Developments in the princinal states. Some of the states have shown
a relatively large increase in the number of branches in o-)eration since
the passage of the McFadden bill, notably 'Tew Jersey, California, 1:e7r York,
and Michigan, but on the whole the increase (330 branches) reported for the
sixteen months following the enactment of the branch-banking legislation in
February 1927 has not been very much larger than in the 14 months immediately
preceding, When there as a net increase of 258 branches.
In New Jersey, the total number of banks operatin branches increased
from 14 to 50 between 7ebruary 25, 1927, and June 30, 1926, and the number
of branches in o-ocration from 21 to 82, while the number of national banks
operating branches in New Jersey increased from 3 banks operating 4 branches
to 17 banks operating 25 branches. The extension of branch banking in this
state was made possible by the amendment to the state laws authorizing the
establishment of branches under the same restrictions as prescribed for
national banks by the McFadden Act. In California, which has the largest
number of branches in operation, more than half of them located outside the
parent-bank cities, the total number of branches increased from 752 on February
2, 1927, to 825 on June 30, 1928, the number of local branches from 297 to
340, and the number of outside' branches from 465 to 486. In New York, where
branch-banking is restricted by law to the head-office city, the number of
branches increased from 517 to 507.
In 12 states out of the 29 in which branches were in operation on February
25, 1927, the number of branches Showed no increase, but in 8 of these states
the further extension of branch banking is prohibited by law, and in the four
other states branch-banking is carried on only on a small scale. The following
table shows separate figures as of February 25, 1927, and June 30, 1928, for
each of the principal states in which branches are in operation.
4
•
6
Number of banks
operating branches
Feb. 25,1927 June 30, 1928
72
196
Gs
53
63
•
Number of branches
Feb. 25, 1927 June 30, 1928
826
607
422
250
145
141
California
New York
Michigan
Ohio
Pennsylvania
Massachusetts
Maryland
Louisiana
New Jersey
North Carolina
Virginia
Tennessee
17 other states
79
35
41
14
4o
37
64
59
s4
81
32
43
,50
43
39
22
130
27
138
))
296
79
63
61
. 323
Total
779
835
2,900
3,230
82
112
762
517
401
231
131
133
113
106
21
74
6o
120
111
82
Changes in state laws. Except in the case of New Jersey, such branchbanking legislation as has been enacted by the state legislatures since the passage of the McFadden bill has been of a restrictive character, as may be
seen
from the summary of such legislation given below. In Kentucky, however, the
Attorney General in the spring of 1927 rendered an opinion and the State Court
of Appeals has also decided that a state bank may establish branches in the
head-office city. Following is a summary of the branch-banking legislation
enacted by the states since the passage of the McFadden bill, based an such data
as have been received at the Counsells office or have appeared in current publications:
New Jersey - In March 1927 the law was amended to permit the establishment of
branches by state banks, subject to the same population restrictions as are contained in the McFadden Act with reference to national banks.
Montana - An Act approved on March 8, 1927, prohibits the establishment of
branches.
Nebraska - An Act approved on April 1, 1927, prohibits the establishment of
branches.
Iowa - An Act approved on April 18, 1927, prohibits the establishment of branches.
Pennsylvania - On April 27, 1927, an Act was approved permitting the operation of
branches established prior to March 1, 1927, but prohibiting the establishment of
new branches except in those cities in which national banks were operating
branches prior to March 1, 1927.
Georgia - On August 25, 1927, an Act was approved permitting the operation of
existing branches but prohibiting the establishment of new branches.
Massachusetts - An Act approved May 4, 1928, limits the number of branches that
may be established in a torn of 50,000 or less population to 1, and in a town of
50,000 - 100,000 population to 2. In larger towns the number is not limited,
though subject to approval of the state banking department.
st
Legal statas of branch banidnz. At the present time national banks, if
located in states in which state banl:s aro permitted by law to establish branches,
may with the approval of the Comptroller of the Garroncy establish new 'branches
within the corporate limits of tho head office city, subject to the followincspopul2tion restrictions, based on the last decennial census; Under 25,000 - no
branches; 25,000 to 30,000 - 1 brnnchl 50,000 to 100,000 - 2 branches; 100,000
anI over - indefinite number of branches subject to determination of Comptroller
of the Currency. In a,Ldition, When a state bank converts into or merges with a
national bank, such of its branches as were in lawful operation on February 25,
1927, may be retained regardless of location. As to state bank miembers, thoy may
under the Boardts ruling establish branches within tho corporate limits of the
city or town in which the parent bank is located without Obtaining tho apnroval
of the Federal Reserve Board, provided the establishment of such branches is in
accSW.ance with state law.
There :Ire at nrcsent 11 states (including the District of Columbia) in
which state-wide branch banking is permitted by state law or by implication, in
two of hich no branches are in operation; 12 states in which branch banking is
restricted to tho cities or counties in which tho parent banks aro located and
in some cases, to contiguous territory; 20 states in which the establishment of
branches is prohibited by law including S states in which branches, previously
established, are in operation; and 6 states in which there is no provision in
tho law with respect to the establishment of branches, in none of which aro there
any branches in operation. The provisions of State laws relating to branch
bank
n so far -Is information on this subject is available, i
arc summarized
on the following page.
The following tables on branch banking are submitted herewith:
1. I summary for the Unitod States as a' whole.
2. Number of banks in each state which wore operating branches and
the number of branches in operation as of June 30, 192S, February
25, 1927, December 31, 1926 and 1925, and June 30, 1924.
3. Number of banks, by classes and by states, operating branches on
February 25, 1927, and the number of branches in operation.
4. Number of banks, by classes and by states, operating branches on
June 30, 1928, and the number of branches in operation.
Sil...11ARY OF STATE LAWS RELATLI
TO BRLICH BLAMING 2. JUNE
q.3_2s
st. 5,9z;7
State-Wide Branch Bankinc Permitted by Law or Imnlication
Arizona
California
Delaware
District of Columbia
Maryland
North Carolina
Rhode Island
South Carolina
larginia
*West Virginia
*Wyoming
*Zo. branches in operation.
Branches Restricted as to location.
Kentucky - City in which parent bank is located
Louisiana - Parish (county) in which parent bank is located
Maine - Caunty in which parent bank is located or adjoining counties
Massachusetts - Town in which parent bank is located, but not nore
than 1 branch in towns of 50,000 or less population
and not more than 2 branches in towns of 50,000100,000 7opulation. :lutual savings banks may have
brancLes in towns not more than 15 miles from the
parent bank.
Idchigan - City in which parent 'oink is located
Mississippi - City in which parent bank is located if 10,000 or
more population, but a branch may be removed from
Ine municipality to another.
New Jersey - Same restrictions as provided by McFadden Act for
national banks
New York - City in which parent bank is located if over 50,000
population
Ohio - City in which parent bank is located and territory contiguous
thereto
Orecon- Laws of 1921 prohibit the establishment of branches until
such time as national banks are authorized to establish
branches, when tae superintendent of banks may authorize
state banks to establish branches under similar terms.
Pennsylvania - Cities in which national banks .- 7ere operatinc,
branches prior to March 1, 1927.
Tennessee - County in 7;hich parent bank is located
Branch Banking Prohibited by Law
iAlabama
vAr_mnsas
Colorado
Connecticut
Florida
#Georia
.
Idaho
Illinois
,
vIndiana
Iowa
1Minnesota
Missouri
Montana
P.Yebraska
Nevada
New Mexico
Texas
Utah
#Washington
OWisconsin
',ABranc:les in operation, established prior to prohibitory
legislation.
No Provision in State Law Regardin(4 Branch Banking
(no branches in operation)
Kansas
New Hampshire
Vermont
North Dakota
Sauth Dakoto,
Oklahoma
•
•
TABLE 1. - SMEARY OF BRANCH 73.ANI:INCTI IN TIE UNITED STITES
st. 5967
June 30
1928
Feb. 25
1()27
JI7june 30 1225 1 1924 .
Dec. 31i Dec.
'926
a
:TU1MER OF BAYKS
25,95o
s35
Total
Operatin,, branches
By classes of banks:
National banks
State bank members
State bank nonnembers • • • •
Hutual savings banks • • • •
Private bani-s
•
By location of branches:
Only in head office city
Only outside " "
Both in and outside head
office city
•
*26,973
779
27,377 2s,257
73'S
785
169
166
415
58
7
52r,
2s,996
714
(a)
476
481
465
2€2
261
270
264
By population (in 1920) of cities
in which parent banks are located:
100,000 or more ......
50,000 to 100,000
25,00Oiuiflh.iuiUTIiuIlPiOiI
Less than 25,J00
372
61
S6
3i6
353
S5
61
3oo
By size of braach systems:
1 branch . .
2 branches . . • • • • • • •
3-5 branches
6-10 branches
Over 10
•giti
469
15o
126
35
55
446
127
456
129
446
'35
124
12'3.
117
35
)..7
38
5o
39
46
2,781
1,94o
341
2,642
1,no
s32
2,293
1,506
785
973
86
lI
390
1,560
863
76
11
4o E
1,3L4;
923
75
11
332
1,277
1,033
(a)
(a)
248
1,137
90g
(a)
(a)
I.
1,992
1,96:2
732
176
64-.5
177
• •
•
ZWEER OF BRAZCHLS
•
In head office city
Outside head office city . • • •
By classes of banks:
National banks
State bank members
State bank nonmembers
Mutual savings banIrs
Private banks
391
2g3
3,230
2,214
1,016
941
1,220
• • •
Method of establishment:
De Novo (as branches) . . .
Independent banks ITarchased
I4 d converted into branches
Not reported
•
*March 1927.
(a) Not separately tabulated, included with "state b.link nonmembers."
NOTE: Figures prior to 1925 have been slightly revised, due to the fact that the
establishment or discontinuance of some branches Drier to 192g was not re-oorted until recently.
- 2TABLE 2 - NUN:3ER OF BANKS OPD2.A.T.ING BrIALTCT-IES A1TD NUIABER OF BRANCEEIS
TN OPY2,ATION , JUNE 1924 - JUN: 1928, BY STATES
Nunbor of banks cyporatin.-,
. branchos
Juno
Fob.
Doc.
Doc.
Juno
25
30
31
31
30
1928
1927
1926
1.925
1924
UNITED STATES
Total
June
30
1928
st. 5987
Nurbor of branchos
Fob. Dec: Pec. 'Juno
25
31
31 1 30
1926 1925 11924
1 27
779
145
189
3S7
5o
796
785
714
3,230 2,900
14.6
194
393
5o
132
196
410
47
lag
191
387
28
941
390
24g
406 332
1,220 1,560 1,36G 1,277 1,137
923 1,03
9os
973
363
*
.
s6
76
75
5
5
5
2
63
2
72
2
s9
5
7
2
loo
5
6
2
99
19
23
3
826
19
23
3
762
19
23
3
6E8
19
21
3
61:o
19
20
3
538
Delaware
5
Dist. of ColuniJia 12
5
10
5
10
5
10
5
11
13
22
14
20
14
20
15
20
18
19
Georgia
19
21
22
23
21
37
59
39
56
53
Indiana
Kentucky
Louisiana
Maine
4
8
43
22
4
5
41
24
4
4
5
4o
24
4
35
24
4
4
34
23
25
ill
54
13
lo6
54
13
lo3
54
0
II
12
95
50
sI
12
4793
Maryland
Massachusetts
Michi,:;an
Minnesota
32
81
35
79
36
72
34
27
51
63
120
141
422
7
J
r
0
113
131
39:
;
3
113
133
4ol
r
o
b
109
117
384
10
gg
98
332
11
s55
National
169
State member
186
State nonme.:2Der 415
Mutual savincs
5s
Alabama
Arizona
Arkansas
California
2,781 2,642 2,293
64
68
2
2
35
73
Gs
2
11
2
50
112
11
2
14
106
11
2
14
107
11
2
14
3S
11
2
14
77
25
2
g2
6o7
25
2
21
517
25
2
21
5os
25
2
21
459
25
2
21
362
North Caroliaa
Ohio
Oregon
Pennsylvania
43
59
1
g4
40
53
1
82
41
53
1
83
39
52
1
s5
40
51
1
67
79
25o
1
145
74
231
1
131
75
229
1
126
',;9
213
1
122
66
203
1
98
Rhode Island
Sauth Carolina
Tennessee
Virginia
11
15
27
39
11
8
22
37
10
7
22
10
24
9
9
21
33
36
61
37
33
31
29
25
55
63
6o
28
24
56
59
27
19
58
5o
21
20
53
45
4
7
4
7
6
7
5
7
6
9
6
9
6
9
7
9
7
9
MississipIA
Nebraska
New Jersey
New York
Washington
Wisconsin
4.
7
8
•
*Not separately tabulated.
NOTE: Ficures prior to 1928 have been slightly
revised, aue' to the fact
that the establishment or discontinuance of som branches
prior
tS 1928 was not reported until recently.
C.
•
•
TABLE
3
- BANKS CFERATENG DOEESTIC 32INCIES ON .r71-). 25, 1927, BY STATES
(Date on 7thich branch-b.1n_r_nc arendmunt t "ation?,1 Dank
and Federal eserve Acts becai:.e a 1a7:
(Revised Nov. 1928)
States
UNITED STATES
Alabama
Arizona
Arkansas
California
775
145
6
2
72
13
Kentuclv
Loui siana
Maine
Maryland
5
41
24
35
3
Massachusetts
Michigan
Minnesota
Mississippi
79
68
17
12
2
Nebraska
New Jersey
New York
North Carolina
2
14
106
77isconsin
5
2
11
53
1
189
1
5
10
21
South Carolim
Tennessee
Virginia
Washinaton
NI,Lfoer of branches
Location
Ope.'73ted b 7
-r State
OutIn
side
banl: Non- 4.0.
YaTobal
H.O.
tional IT:em- I mem. City
city
lbanLs
445 -1 2,900 390
1,550 950 1,929 '371
Nunber of banks o)oratinc
branches
-rState
TaNonTotal
memtional bers members
Delaware
Dist. of Col.
GeorGia
Indiana
Ohio
Oregon
Pennsylvania
Rhode Island
L
St. 5987
5
3
19
23
3
752
13
1
L.
5
5
13
3
29
113
16
46
23
133
401
6
25
.2
28
3
82
11
1
20
2
22
2
G
7
1
1
52
)4-2
58
13
46
12
19
28
325
56
55
117
21
1
12
12
C.
4
133
4
8
292
9
7
231
46
5
1
131
29
1
27
2
25
7
2
1
7
1
L.
2
9
3
297 465
3
25
1
3
156
27
22
L.
5)4)4
13
74
2
19
23
1
33
1
11
20
12
39
16
12
6C
o
91
^
13
11
1.(S
2
21
517
5
LC
1
6
39
4
4
15
26
2
37
13
106
-12
2
9
62
1
39
0
4
33
^
14
20
32
20
1
3
r
5
159
- .
29
92
61
22
68
75
5
2
2
16
44
54
5
398
6
1
2
10
516
,s
200
52
49
55
16
3
2)4
11
1
66
123
12
3-1
1
8
17
19
32
31
15
2
39
23
29
2
2
3
3
2
5
2
s
1
NOTE: Of the 1,329 branches located in head-office cities, 352 were operated
by national banks, 1,052 by state bank members, and 515 by nonmember banks.
Of the 971 branches located outside head-office cities, 28 were operated by national banks 50E5 by state bank members, and 435 by nonmember banks.
C.
•
TIOLE 4 - BANKS OPERATING 1:01.':IIMIC B.R...krilIES ON JUNE 30, 192, BY ST.A.TES
St. 5987
Number of brariches
Operated. by
Location
•
State I
OutIn
Total
side
Nabank NonH.O.
tional morn- mom.
city
H.O.
bers banksi
banks
city
Number of banks operating
branches
States
Total
169
UNITED STATES
Alabama
A_ri zona
Arkansas
California
Delaware
Dist. of Col.
Georgia
Indiana
Kentucky
Louisiana
Maine
Maryland
44
Na- State
tional MOMbc.)rs
186
480
1
4
19
2
2
53
14
5
-
12
19
7
42
1
4
13
-
16
0
2
25
15
7
3
351
20
27
50
Nebraska
New Jersey
New York
iTorth Carolina
2
50
112
2
-
23
10
12
12
12
4
5
17
1
22
12
0
1
57
149
56
2
47
141
422
52
ILS
27
62
122
19
315
59
25
6
1
214-
418
S
1
4
_
24
41
3)4
607
79
7
23
29
250
1
145
33
2
7
3
42
Si
25
179
33
331
2)-1-
2
71
97
606
o
10
63
11
-
7
168
75
1
29
2
31
25
65
a
3
7
10
19
Si
19
2
2
26
1
2
1
28
2
63
6
15
3
1
2
2
41
2
1
14
2
2
5
2
56
7
29
35
31
3
NOTE: Of the 2,214 brmches located in head-office cities, 603 were operated
by national banks, 1,059 by state bank members, and. 55,2 by nonmember banks.
Of the 1,0 ibbranches located outside head-office cities, 33$ 'were
operated by national banks 161 by state bank members, and
517 by nonmember
banks.
L
11
1
Our,
17
-V
25
1
92
36
5
2
1
7
35
4
49
5
340
21
15
16
4
185
7
2
82
2
163
24
5)4
5
64
18
19
23
3
486
111
54
120
2
17
1
7
10
37
15
32
15
27
3
22
12
2
16
9
Ohio
Oregon
Pennsylvania
Rhode Island.
478
3
81
64
18
11
3
1
I
1,220 1,069 12,214 1,016
1
12
14
Massachusetts
Michigan
Minnesota
Mississippi
143
r
J
941
1
3
2
11 1
3,2301
23
3
826
2
2
Wisconsin
I
2
8
43
22
32
South Carolina
Tennessee
Virginia
Washington
Nonmciab er s
32
3
1
1.'qrni No.43
Office CorresporSence
To
Hamlin
FEDERAL RESERVE
BOARD
•
Date_ December 1!„_ 1926
Subject:
From__ Er. Goldenweise
6
127 9
Zhe attached table, requested in your recent memorandum, presents a
comparison between the rosources and liabilities of the three largest banks in
Nsw York City and the Federal Reserve Bank of New York as on October 3, 1926.
The three banks are the National City Bank, the Chase National Bank and the
Guaranty Trust Company.
You will note that the two largest banks, the National City and the Chase
National, each have resources of tte1,146,000,000, almost as much as the New York
reserve bank's resources. Of the 022,000,000 of deposits of the New York
reserve pank nearly one fourth (4203,000,000) were the reserve balances of these
three banks which in turn had deposit liabilities of 42,215,000,000 and loans
and investments of ,,i1,645,000,000.
The capital funds of the three member banks
,
were ie416,000,000 and of the reserve bank 4112,000,300.
VOLUME 186
PAGE 99
r•mmoir....menl
7
17
•
COMPARISON OF RESOURCES AND LIABILITIES
THREE LARGEST /EMBER BANKS IN NEW YORK CITY WITH THOSE OF
THE FEDERAL RESERVE BANK 02 NEV.' YORK
(In millions of dollars)
Three largest member banks in N.Y.C.
,
National Chase
Guaranty
Total
City
National Trust
Bank
Bank
Company
Loans & investments
Reserves & cash, total
Total reserves
Nonreserve cash
Banking premises
All other resources
Total resources
669
82
77
5
25
350
1,146
%;
,
,
705
79
75
4
15
347
,
451
52
51
1
10
221
4 507
815
799
16
17
218
734
0,026
1,557
190
226
2,215
31
21
10
2
362
49
63
922
_
340
183
3,026
1,557
90
82
612
_
60
81
676
23
At F.R. bank
Elsewhere
Circulation
Other liabilities
_
162
14
9
2
104
40
63
527
8
7
1
96
1,146
1,146
734
1,845
213 4
203
10
50
918
Reserve
Bank
1,146
Capital stock
Surplus & undivided profits
Total deposits
,
w„,...
Borrowings, total
Total liabilities
y
New York
Federal
Mr. Hamlin
•
EAR=S 2211 7APENS7S OF Haan RESERVE BLYKS
NOVEMBER 1325. Total earnings of the Federal reservle
banks in November were $170,000 less than in October,
a decrease of $492,000 in earring from discounted bills
and of $23,000 in miscellaneous earnings being larg,.ly
offset by an increase of $345,000 in earnings from ?urchased bills while earnings from U. S. securities remained nractically unchanged.
Current erpenses (exclusive of cost of Federal
reserve currency) aggregated $2,131,000, as compared
with $2,193,000 in the month °receding and $2,116,000
in November of last year.
ELEVEN MONTHS ENDING NOVE= 30. During the eleven
months ending November 30 earnings totaled $56,704,000
as compared with $33,499,000 last year and $42,307,000
for the corresond.ing period in 1926.
Current expenses (exclusive of cost of Federal
reserve currency) amounted to $23,332,000, an increase
of $330,000 over the corresponding neriod of last year.
After providing for all current expense and
dividend requirements, the Federal reserve banks on
November 30 had a balance of $22,394,000 available for
losses, depreciation allowances, surplus and franchise
tax, as compared with a balance of $13,136,000 at the
end of October and of $5,713,000 at the end of November
1927.
VOLUME 186
PAGE 115
St. 6013a
St. 6013
C ONFIDENTIAL
Not for publication
Banl:
.of
:onth
Earnings from
Federal
Reserve
EARNINGS AND EXPENSES OF FEDER1L RESERVE BANKS, NOVIMER 1928.
Discounted
bills
Purchased
bills
I
U. S.
securities
Otner
sources
Nevember
Current expenses
Total
$202,242
966,252
329,626
355,090
)172,643
521,275
82,742
187,435
$24,4)1)1 $3,485 $402,814
210,493 19,375 1,717,395
64,402 1,661
478,651
653,463
100,920 10,018
Richmond
Xtlanta
Chicago
St. Louis
174,557
263,792
56'9,465
179,567
95,394
107,019
139,5'66
39,167
10,093 4,984
16,517 6,893
116,558 33,483
70,159 2,295
lanneapolis
Kansas City
Dallas
San Francisco
59,186
158,707
75,195
257,805
77,969
86,223
90,219
'60,046
36,000 4,488
39,535 23,561
51,185 16,162
53,4s4 4,911
Boston
New York
Philadelphia
Cleveland
--IL. 1928
Oct. 1928
Joy. 1927
Jan.-Nov. 1923
1927
Total
Current net
earnings
Ratio to
Amount paid-in
capital
Per cent
$241,813 29.1
1,168,598 28.7
316,870 26.5
)0!2,670 37.5
- November 1928
Available for
Current Dividends
reserves,
surplus
and
net
accrued
earnings
franchise
tax*
$2,255,228 *540,045 $1,572,443
10,347,955 2,493,286 7,451,447
3,026,817
771,096 2,130,349
3,074,312
784,738 2,159,555
$159,492
526,389
158,436
208,279
161,0n
548,797
161,781
210,793
285,028
414,221
859,174
291,188
119,138
101,6-45
275,787
106,891
121,093
102,566
279,605
107,617
163,935
311,633
579,569
183,571
32.8
72.6
36.3
41.4 I
1,274,124
340,116
2,044,761
266,102
4,431,179 1,007,371
1,389,654
294,827
841,474
1,705,983
3,159,522
687,897
177,643
308,026
236,761
476,246
85,863
146,099
103,964
189,365
86,354
147,348
104,664
191,223
91,269
160,678
132,097
265,023
37.0
622,725
826,574
744,873
2,039,896
409,721
500,607
420,769
1,353,81s
3,615,684 1,759,800
793,790 131,336 6,300,610 2,181,348 2,222,864 4,077,746
4,107,486 1,414,389
793,701 154,686 6,470,262 2,192,783 2,217,906 4,252,356
1,193,957 862,292 1,556,2771714,187 3,806,723 2,116,157 2,271,348 1,537,375
314,076,314011,150,107 9,923,4851551,731 56,703,63 23,682,230 24,625,565 32,076,098
15,440,864 8,180,266 12,519,549358,037 38,498,736 23,552,296 25,250,476 13,248,260
FEDERAL RESERVE BO\RD
DIVISION OF BANK OPERATIGNS
DECE13ER 18, 1928.
Exclusive
of cost of
F.R.currency
January
1928
46.6
37.3
32.0
166,160
232,169
236,912
571,409
34.0
34.4
14.2
25.0 32,078,098 7,724,233 22,393,585
11.2 13,248,260 7,094,095 5,717,802
*After adjustment for current
profit and loss entries, purchases cf furniture and
equipment, etc.
ode
.
st. 4854
NOT FOR PUBLICATION
1".cderal
Reserve
Bank
SUllaRY OF CONDITION OF FEDERAL RESERVE BANKS ON WEDUESDAY, DECELIER 19, 1923
COMPARED WITH PRECEDING DAY 2ND DIILY AVERAGE OF PUCEDING 'MTH
D:nourts in millions of dollars)
DISCOUNT7D BILY:4 -7- .PURCHASED 13.1LL
131AL BILLS & SII;URITIES*
U. S. SECURITIES
Chanc;e from '
Cnaa,- fron.
ChanGp from
Chanr:e from
Dec. Preced- Average Dec. Preced- 2verage Dec. PrecedlAverage
Average
Dec.
for
ing
ing
19
for
19
for
for
ini;
19
19
dazi ; :Qv.
clay
7Tov.
Nov.
dny I Nov.
r
o5
Boston
+ 14
+ 14
+16
New YorlPhiladelphia
RESIRVE PM.CLUTAGES
Change from
Preced- Average
Dec.
for
ing
19
day
Nov.
+34
98
+
2
+ 19
0.0
CievQ1and
3
Richmond
ltlanta
5
Chicago
Louis
•itssiiJt
Tr-ansas City
San Francisco
SYSTE::
Dec. 19, 1927
11
••••
7
44
••••
5
-
2
-17
+
7
- 2
1.7
65
+14
947
+139
+50
453
+12
5s2
+6g
+167
362
-
-lg
'*291
-101
41
+53
-2
1.701
+5o
1 c22
+22
+191
68.5
*Including Federal Intermediate Credit bank debbntures and municipal narrants.
**Includes special one-day Treasury certificates of indebtedness held by the Federal reserve banIcs as follows:
St. Louis $1,500,000, Minneapolis $3,000,000, Total $77,500,000. December 19, 1927 $10,000,000.
-
3.9
New York $73,000,000,
Ar
CONFIDENTIAL
St. 4854a
OF CONDITION OF FEDERAL RESERVE BANKS ON NEDNESDAY, DECEMBER 19, 1928
COMPARED WITH PRECEDING DAY AND DAILY AVERAGE OF PRECEDING MONTH
summARr
NOT FOR PUBLICATION
Federal
Reserve
•
Bank
GOVERNMENT DEPOSITS
Change from
Averat e
PrecedDec.
for
ing
19
Nov.
day
166
+ 1
+ 14
145
_ 7
(a)
-
- 1
203
-
Do ston
359
+ 2
+ 18
_913
+16
(a)
-
_ 3
878
+34
New York
156
-
+ 20 i
132
-
(a)
_
- 1
181
-2
Philadelphia
-2
-24
223
+ 2
+ 16
172
(a)
-
-1
231
-13
Cleveland
96
-1
+
9
86
-
+
8
68
-
-1
1
-
-1
Richmond
-6
+12
137
+ 1
+
6
65
-- 1
(a)
-
- 2
115
-
Atlanta
443
- 34
318
+2
+21
349
+6
-5
1
+1
-
_9
-3
3
65
+ 1
+
4
go
- 2
(a)
_
83
-1
-1
St. Louis
- 1
+1
65
+
3
53
-1
-3
_
-1
79
(a)
Minneapolis
104
4
+20
70
-
+
6 1
91
+1
-2
(a)
-
,1
Kansas City
+ 3
49
-
+
1
71
+ 1
(e)
-
-1
-
+
5
181
+123
+ 88
2,326
2,338
"
•
Dallas
_
Dec.
19
CASH RES:RVES
Change from
Average
Precedfor
ing
Nov,
day
(Amounts in millions of dollars)
IfEKBER BANK RESERVE DEPOSITS
F. R. NOTE CIRCUlaTION
Change from
Change from
Average
ced_Pre
Dec.,
Average
PrecedDec.
for
ing
19
for
ing
19
Nov.
day
Nov.
day
67
SE1Z1 Francisco
245
-8
-
6
172
SYSTEM
-Dec. 19, 1927
2,724
2,871
_ 3
-7
-44
1,869
11,817
-140
+12
+10
(a) Less than $500.000.
,
_
5
4
-6
1
+ 37
- 22
-26
5
g
+
_35
+ 2
+3
-13
_ 5
CONFI-DENTI-A
Not for publical0.
st. 6olg
inSERVE PERCHITTAGES OF MOWER 19, AND DECE:3ER 12, 1923.
.41
Feeral
Reserve
Ban17.
Ratio oftotal rese170
to'dapogIt and F.R.not.)
es combined
- Dec. 12
Dec. 19
F.R.notes
resc-1-ves ia vault Ratio of gold with F.R.Agent and Ratio of Grold reserves to
after
settin'g
circulation
actual
SettlemeAt Fund 1 in -Gold redemption fund to F.R. in
deposits
against
reserve
35,f.
aside a
notes in actual circulation
deposits
_ Dec. 12
Dec. 19
12
Dec.
54.4
64.6
74.6
91.6
63.g
65.5
79.6
154.0
66.3
47.7
6o.4
75.2
g6.1
. Cleveland
55.1
6o.g
52.7
56.3
76.4
aichmond
6o.7
6o.8
55.7
6o.7
64.9
81.0
59.2
4o.7
43.2
64.1
67.8
rr
00.o
Chicago
67.6
61.9
62.4
70.6
73.s
St. Louis
61.2
59.2
59.7
53.6
63.2
nncapolis
69.1
53.5
57.9
77.5
79.3
Kansas City
r0.[
62.9
69.0
65.8
61.1
57.2
53.3
• 65.2
IllOston
69.9
New York
Philadelphia
Atlanta
,
O
Dallas
55.3
56.8
54.1
59.0
San Francisco
67.6
71.5
41.o
436
TOIAL
64.5
64.2
5g.5
60.7
iT.JERiL RES-.12VE BOARD
DIVISION OF BA1TK OPMATIOUS
DECE:2372 20, 1928.
C.
6
72.o
10.4
5;.9
loi.6
103.g
@FedFRASER