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August 3, 1936.
Memorandum to Mr> Eccles:
A few days ago you asked me to get you some information regarding the replacement prior to June 50, 1936, of United
States bonds held in individual investment accounts of the Federal reserve banks by short term United States Government securities* The Division of Bank Operations has prepared for me some
tabulations and memoranda which are attached on this subject*
On January 1, 1934, the total holdings in the individual investment accounts of both long and short maturities
aggregated, in round figures, $212,000,000, which was reduced
slightly to an aggregate of $207,000,000 on June 30, 1936*
Of the holdings on January 1, 1934, approximately onehalf, or $105,500,000, were in bonds of nhich $72,813,050 were
Liberties which were called for redemption. The total holdings
of bonds in the individual accounts were reduced through replacements by short term securities to $21,000,000 on June 30,
1956. All the shifts £rom bonds to short term securities took
place at various times in 1934 and 1935.
There were eight banks that held bonds in some amount
on January 1, 1934, the ones not holding any bonds being Cleveland, Richmond, Atlanta and San Francisco.
On January 1, 1954, New York held $62,887,950 of bonds,
which were reduced to $1,695,050 through replacements by short
term securities to the extent of $8,000,000 in April, 1934;
$8,000,000 in September, 1934j $10,750,000 in April, 1955;
$5,000,000 in May, 1955; $7,765,000 in September, 1935, $19,000,000
in November, 1935, and $4,800,000 in December, 1955.
Philadelphia on January 1, 1954, held $3,352,100 of bonds,
which were reduced by one-half to $1,652,000 on June 30, 1936, the
reduction being accomplished through substitution of short term securities in April and September, 1934.
On January 1, 1954, Chicago held $20,400,000 of bonds,
all of which were replaced by short term securities in April and
September, 1954, March, 1935, and Septeiber, 1935.




- 2 -

Minneapolis held $7,511,650 of bonds on January 1, 1954,
and substituted shorter term securities to the extent of only
$511,000, which was done in September, 1934, so that on June 30,
1936, Minneapolis still had #7,000,650 in bonds.
St. Louis on January 1, 1934, had $500,000 of bonds,
which were replaced by short term securities in April, 1955*
Boston, Kansas City and Dallas did not replace any of
their bonds by short term securities.
In view of the fact that all these shifts took place before this year and at varying times, a large part involving the
replacement of called Liberties, it would seem that the prospect
of transfer of individual holdings to the system account did not
influence the action.

r,
Secretary,

Attachments.

CM yd




Vorni F. R. 131
BOARD OF GOVERNORS
OF THE
FEDERAL RESERVE SYSTEM

Office Correspondence
To

Mr, Morrill

From

Date jj*iy-^u i9i$_
Subject:

Mr. Van Fossen
(PO

In accordance with your request we have prepared the attached table
showing the amount of United States Government bonds held by the Federal
Reserve banks in their own investment accounts which were replaced by
short term securities by months from January 1934 to June 1936, inclusive*
It will be noted that the amount of United States Government bonds so replaced during this period by each of the various banks was as follows:
Boston
none
New York
$61,321,050
Philadelphia 1,700,000
Cleveland
none
Richmond
none
Atlanta
none

Chicago
$20,400,000
St.Louis
500,000
Minneapolis
511,000
Kansas City
none
Dallas
none
San Francisco
none
TOTAL

84,432,050

Of the total amount of United States bonds so replaced, $53,626,850
were called Liberty Bonds, of which #23,003,000 were exchanged for new
short term issues and $30,623,850 were sold in the open market and replaced
by short term securities purchased in the open market. Attached is a tabulation showing the amount of Liberty Bond holdings of the Federal Reserve
banks in their own investment accounts on January 1, 1934, and the securities with which they were replaced.

Attachments.




16—852

Form V. B. 131
BOARD OF GOVERNORS
OF THE

FEDERAL RESERVE SYSTEM

Office Correspondence
To

Mr» Morrill

From

Date August 1^1936
Subject:

Mr» Van Fossen
c ro

16—852

In accordance with your telephone request we have prepared the attached
table showing the amount of United States Government bonds and all other
United States Government securities held by each Federal Reserve bank in its
own investment account on January 1, 1934 and on June 30, 1936, prior to the
transfer of all Government securities to the System Open Market Account*

Attachment.




U. S. GOVERNMENT SECURITIES HELD BY FEDERAL RESERVE BANKS IN OWN INVESTMENT ACCOUNT
ON JANUARY 1, 1934, AND ON JUNE 30, 1936*
(EXCLUSIVE OF SECURITIES HELD UNDER RESALE AGREEMENT OR PURCHASED FOR ACCOUNT OF MEMBER BANKS)
Federal

xte serve
Bank
Boston
New York
Philadelphia

On January 1, 1934
Bonds

All other

$689,000
62,887,950
3,352,100

$64,049,500
33,400

On June 30, 1936
Total
#689,000
126,937,450
3,385,500

Bonds
$689,000
1,695,050
1,652,000

All other

$120,370,550
1,733,400

1689,000
122,065,600
3,385,400

—

—

—

62,741,700
500,000
7,511,650

7,000,650

62,741,000
500,000
511,000

62,741,000
500,000
7,511,650

——

Cleveland
Richmond
Atlanta

—

Chicago
StJLouis
Minneapolis

20,400,000
500,000
7,511,650

Kansas City
Dallas
San Francisco

182,200
10,000,000

—

182,200
10,000,000

185,200
10,000,000

105,522,900

106,424,600

211,947,500

21,221,900

Total




Total

42,341,700

185,200
10,000,000

185,855,950

*Prior to transfer of securities to the System Open
Market Account•

207,077,850

LIBERTY BONDS*BELD IN OWN INVESTMENT ACCOUNT OF THE FEDERAL RESERVE B A M S ON JANUARY 1» 1934,
AND SECURITIES BY WHECH THEY WERE REPLACED.
New York
Held January 1, 1934

Phila.

Chicago

St.Louis

Minn.

Dallas

#47,292,050 #2,800,000 $20,400,000 #500,000 #1,696,000 #125,000

Total
#72,813,050

Replacements
Exchanged for new short
term issues

14,792,000

Replaced by short term
issues bought in open
market

15,723,850

1,700,000

Exchanged for new bond
issues

16,776,000

600,000

1,145,000

200

500,000

40,000

125,000

665,200

47,292,050

2,800,000

1,696,000

125,000

72,813,050

Replaced by bonds
bought in open market
Total sales and
exchanges of called
Liberties to September 1935

7,200,000

500,000

511,000

23,003,000

13,200,000

20,400,000

30,623,850

500,000

18,521,000

*A11 Liberty bonds outstanding on January 1, 1934* were called for redemption by October 15, 1935.




REPMCEBIENTS OF UNITED STATES BONDS HELD IN INDIVIDUAL INVESTMENT ACCOUNTS OF THE FEDERAL RESERVE B A M S
WITH SHORT-TERM UNITED STATES GOVERNMENT SECURITIES. JANUARY. 193A. TO JUNE. 1936

New York
April - 1934
Sold or exchanged
Replaced by Treasury notes
Replaced by Treasury bills
September - 1934
Sold or exchanged
Replaced by Treasury notes
March - 1935
Sold or exchanged
Replaced by Treasury notes
Replaced by Treasury bills

$7,958,800*
6,958,800
1,000,000
8,042,000**
8,042,000

Philadelphia
$1,000,000*
1,000,000

700,000*
700,000
—

6,750,000**
6,750,000
4,000,000
4,000,000

May - 1935
Treasury bonds sold
Replaced by Treasury bills

7,765,050*
7,765,050

November Treasury
Replaced
Replaced

1935
bonds sold
by Treasury notes
by Treasury bills




18,984,000
16,664,000
2,320,000

Minneapolis

7,100,000*
3,500,000
3,600,000

—

—

—

—

$500,000**
500,000

Total
$15,058,800
7,958,800
7,100,000

—

4,6oo,ooo**

4,600,000

3,000,000(a)
3,000,000

September - 1935
Sold or exchanged
Replaced by Treasury notes

$6,100,000*

St#Louis

6,100,000

—

April - 1935
Liberty bonds sold or exchanged
Replaced by Treasury notes
Treasury bonds sold
Replaced by Treasury bills

Chicago

$511,000**
511,000

13,853,000
13,853,000
7,100,000
3,500,000
3,600,000
7,250,000
7,250,000
4,000,000
4,000,000
3,000,000
3,000,000

2,600,000**
2,600,000

10,365,000
10,365,000
18,984,000
16,664,000
2,320,000

- 2 REPLACEMENTS OF UNITED STATES BONDS HELD IN INDIVIDUAL INVESTMENT ACCOUNTS OF THE FEDERAL RESERVE B A M S
WITH SB3RT-TERM UNITED STATES GOVERNMENT SECURITIES. JANUARY. 1934. TO JUNE. 1936 (CONT'D.I

New York
December - 1935
Treasury bonds sold
Replaced by Treasury notes

14,792,000
15,723,850
U , 723,850
1,000,000

Chicago

St. £ouis

Minneapolis

U , 821, 200
4,821,200

Totals:
Called Liberty
for Treasury
Called Liberty
Replaced by
Replaced by

Philadelphia

bonds exchanged
notes
bonds sold
Treasury notes
Treasury bills

Treasury bonds sold
Replaced by Treasury notes
Replaced by Treasury bills

61,321,050

$4,821,200
4,821,200

$1,700,000
1,700,000

#7,200,000
13,200,000
3,500,000
9,700,000

$500,000

1511,000

30,805,200
21,^85,200
9,320,000

Total bonds sold or exchanged




23,003,000
30,623,850
19,923,850
10,700,000
30,805,200
21,485,200
9,320,000

1,700,000

*Called Liberty bonds
#*Treasury exchange of called Liberty bonds
(a)Sold to Postal Savings System

Total

20,400,000

500,000

511,000

84,432,050