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FEDERAL RESERVE BANK
OF NEW YORK
45,N.Y.
April 22, 1949
NEWYORK
Honorable M. S. Eccles, Member,
Executive Committee of the
Federal Open Market Committee,
Board of Governors of the Federal
Reserve System,
Washington 25, D. C.
Dear Mr. Eccles:
c
We are enclosing for your information a Comparative
Schedule of Balance Sheet Data of United States Government
Securities Dealers.w This material has been compiled from
recent financial statements of each of the five dealers
(excluding the five dealer-banks) with which we transact
business for the System Open Market Account. The number of
qualified non-bank dealers was reduced to five during the
year 1948 a s Blair & Company, Inc. was dropped from the list.
Dealer operating results for 194-8 showed improvement
over 194-7 in some cases, due primarily to larger positions in
U. S. Government securities and rising prices during the last
two months of the year. First Boston Corporation submitted a
detailed earning report which included the results of their
general securities business and showed:
1948
Net income before dividends
Dividends
$1,413,000
1,851,000
1947
$1,636,000
2,413,000
The enclosed schedule shows an increase of $428,000
in the net worth of C. J. Devine and Company as compared with
a decrease of $448,000 in 1947. This gain was after the repayment of $250,000 of the company's outstanding debentures so
that the increase from other causes was actually $698,000.
Higher prices for bonds, particularly state and municipal issues,
at the year end undoubtedly accounted for part of this increase.
Discount Corporation reported net profits for the year
of $309,000 after taxes and paid dividends of $300,000, as
compared with a net loss of $324,000 for 1947 before dividends
of $300,000.
FEDERAL RESERVE BANK OF NEW YORK
2
HonorableM. S. Eccles
4/22/49
The decrease of $499,000 in the net worth of
Salomon Brothers and Eutzler represents primarily the
withdrawal of capital by one partner, an estate, at the year
end. We understand that, exclusive of this item, the net
worth showed a small decline for the year.
At the end of 194^ dealer holdings of U. S. Government bonds due or callable after one year were considerably
larger than at the previous year end when positions were
generally held to nominal amounts. However, the increased
risks thus assumed by the dealers appear adequately covered
in each case by the amount of capital held at the risk of the
business.
The dealers1 statements contained nothing else
relating to their U. S. Government securities business which
calls for comment.
Very truly\ yours,
c
Robert G. Rouse, Manager,
System Open Market Account.
Enclosure
BALANCE
Otadttcd and
COMPARATIYB
in
Hot Horth
dnritt£ loar
Balance
Sheet
The First Boston Corporation
DATA Of VHlfite
sise of
g» S« Oovera—Bt Securities
Ko or
Dtt« o r C a l l *
Tot*
Portfolio
to I* yoara
|105,600{b>
12/31A8
Other
Hot ^ r t h
Owned
# 7*600
5.8
17.3
Discount Corporation of Kewlork
12/33A8
128,100(d)
0» f« Child. * Coepany, Inc.
3L2/3VW
102,000(e)
MP
5,201
1st
Also
Also
Does
Boos
Collateral
Loans Payable
8,566(.)
C. J. Devine ft Coopuny, Inc.
(a)
STATES
WlMM^V
J L M § 4 JAiW^V^^#
31,600
75,863(b)
23^723
96^72
la sjffSBt of $3,750,000.
$1,600,000 oarninss appropriated for retironent of
worth figure shown in onr sahsiSile for BnuswJbsi 31, Ifk7 eawlnded ft stwfUr i t e » of 1800,000.
general dealers i s aoomltlos other than 0* S»
dealers tM HHHISIIMIT bondba.
not imfarto 15,022,000 bought oader resale igreoaeBti
not include $5,029,000 l i a b i l i t y in connection with (d) purchase under resale agreement.
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