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BOARD OF GOVERNORS
CF' THE
FEDERAL RESERVE SYSTEM
WASHINGTON
R-849
ADDAEBB DF"F"ICIAL CDAAEBPDNDENCE
TD THE BDAAD
June 19, 1941
Dear Sir:
There is enclosed for your information
•
a table ahow:LTlg, among other things, the number
•
and aggregate of deposits of State bru1ks admitted
tu membership in the Federal Reserve System during 1940 and the first five months of 1941, to-
\
g0ther with a statement containing excerpts from
the ·bank relations reports submitted by tb.e Fed-
a
eral Reserve Banks for the month of Ma;v.
Very truly yours,
~~
L. P. Bethea,
Assistant Secretar,v •
•
Enclosures
TO THE
•
PRESIDl;.~TS
OF ALL
FJ.<~DEP..AL
RESERVE BANKS
R-849-a
STATE BANKS ADlviiTTED TO FEDERAL RESERVE ivill>l:BERSHIP
thQusand~i__Qf_gpllarsl_
____
~ber of nor.m~mber commercial banks >vi th sufficient
capital stock to meet the minimum statutory
Federal
__ _reoui_remepts for Federal Reserve membf:rship>< _
Reserve
District
Totc:.lJBy size of del?osi ts
Number
$1 - 10 l$10 millions
on Par
Number j Under $1
Number
Deposits
-~~------ ·_IriJjiOI:t. __ , mi1Jions
and over
List
---------+---t-------------+----+-------(Deoosits
-----.-----'-""--"'=
Ba.11ks adnli t ted
to
membershi;> during
Jan. -- May 1941
Number! Deposits
Boston
New York
Philadelphia
Clevela.11d
Richmond
Atlanta.
Chicago
St. Louis
Minneapolis
0
24
-r.~H(·
~H~-jt4 HH~-~f-
0
24
8
0
1·
327
301
415
139
86
65
6
7
2
I
1,219
664
420
1,008
200
78
27
10
3
I
28
29
37
0
9
_.___1_,o_1_o
79
3
62
21
9
74,483
12,412
10,382
I
578
391
14,197
21,154
5,125
~HHH~J..88
21
13
475
394
484
37,595
21,868
5,298
183,909
1
87
126
108
25
18
1,100
800
a
45
76
101
8
4
200
I
141
224
225
110,272
6,070
0
1
I
12,026
3,777
4,390
2,184
700
7
5
80
I
I
!
51,515
6,678
5
I
J
' 1
0
0 I
Kansas City
Dallas
San Fra.ncisco
Total
are in
Banks admitted
to membership
during 1940
l2H~,317 __ j 5,2~~-4,09~ _
0
0
141
224
225
l
1
-1
1
474
232
52
1,079
434
78
402
i~~
3,697
I
These figures are as of December 31, 1939, the latest da.te for which such data h;we been compiled.
These totals include, and the distribution by amount of deposits excludes, 28 banks vvith no deposits or
for vrhich deposit figures were not availe.b1e.
Includes one newly organized bank V\_;·ith no deposits.
Excludes tvro bar1ks org~J.,niz ed to succeed nationc~.l b311ks, one organiz0d to succeed a State rnerabF:r as part
of e. reh.:<.bilitation program, and one organized to succeed a State member whose charter had expired •
•
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•
..,
•
~5U
R-81"9-b
<Tu.ne 19, 19!~1
Not for pub1ic<:ttion
EXCERPTS F]3QM BANK ::tSLATIONS rtEPOP.TS
,EQ.:"t TrE: MONTH 0? M.f.Y. ).9~1
BOSTON
OnLy m~,e community in Vermont is directly affected Ly industrial activity incident to the defense p:cogre"m.
"
Outside of a few of the larger communities, bankers reported
little or no activity in the sale of defense brmds. Bankers believe,
howevc:r, that folloveing the semiannual intt>rest date savings bank depositors will increase th0;ir bond pt.rrchases.
NEW YOEK
•
So:nerset and Union Cour.ties. North Cer:.trc..l New Jersey
All banldng inrotitut.ion;3 in these counties are cooperating
• • •
L1 the program of sellin::; Uni tc;d States Defense Sr::.vings Donds.
Many of the banks in this krri tory have instalL>d r>. photo..:.
graphic system of handling checks r,nd several have" been forwarding their
out-of-tovm it;';;JmS to their city corr:aspondent vdtb.out the description
we require. Ti1o officers of some of t.bose banJ:.:s indicn.te tr~::tt their institutions w:l.ll return to their p:;.·Gvious pru.cticc of f::ll'Yiarding checks
to us &s soon ae we aro in posi tLm to accept thern without description.
.
)
•
One large trust company (dor-<:-sits ~~15,\JOO,OOO) has filed an
application for mor:;bership witnin the lr,st rwnt.h •
The Charnber of Co:'!morce in PlainfiGld ~ontinues to receive
inquiries from ccncorns which v;ould lilw to loca to in the Plaicfields,
but industrial space is not available ••••
PlllLADELPHIA
..
.
The 8..nthraci te mines, while at present experiencing seasonal
in!l.ctivity, have ~;een busier than for sever2.l years r~nd are expected
to resume operations on a lc.;.rger scale than at present when tLe su1n1:cer
price schedule is fixed. However, or'e ba;1ker stated t{m t th~:>. minerr3
have worked only an averv.ge of 150 de;ys a ~"er.:.r since 1931, 1Hhicll is
insufficient for prosperous tiwes in the; mining district •
•
25i
-2-
CLEVELMD
Series E defense bonds are not being sold in the volwne that
had been hoped for. In many corilmunities the reason has been stated to
be "lack of confidr::mce"; in others, "lack of negotiability".
In two Ohio River cotmtias, just outside Cincinnati, not a single nonmember ba.TJ.k llas qualified.
ln several other instances where
bcmlcs ho..ve qualified, they r;:;port no salr::s, fe..,.r or nD inquirias .•••
In a section (northern K0ntucky) from which many reports of
CoEpctition of Government lending agencies h<W~) been racuivud, it is
report0d that the bm;.ks in the principal city have an agreement to
charge borrowel'S a flat 6 per cent rate. While loan totals have been
holding fa:i.rly well, opportunities to make good loans are being lost,
and the more desiro:ole borrowers are going elsevrhare •
•
RICHMOND
Maryland
•
Seu foods have been in abundence this year. The oyster season just closed has been the most profitable in the past trrenty years
The timber indust:r;,r on the Eastern Shore has begun an intense
revival, after a decade of dormancy, under the influence of the national defense program and a resulting tripling of prices. Local timber is
used principally for piling •
•
.
I
Virginia
Timely rains last weelc, which were distributed fairly evenly
over the whole of Virginia, caine just in time to save the crops of the
State from being a total loss.
West Virginia
•
Frosts in tho second week of Ma,y, and subfreezing temperatures caused a great deal of dar.1c.ge to West Virginia gFl.l'den crops ••••
Tom::ctoes v;ere reported to be ruined, while corn ancl potatoes suffered
heavily. Grt:.pes were 11 wilted" by tho killing frosts.
The recommendation of the National Defense Nlediation Bo~:;rd
that the 40-cent wage differential be eliminated between northern and
southern mines Ed'fects only t1wse workers paid b"J the day who ha...'ldle
timber, lay tracks, and handle hoist~, <:~nd those who work on the
•
-3surface outside, while the bulk of the men -.vho are paid r.JY the ton are
not affected since tmmage differential of 15 cents is to remain in
effect.
Horth Carolina
Crops that will bring farmers ;.1illions of dollars in the
fall were saved b<J the rainfall at t'ho turn of June. Tobacco and
corn plants i'lere on the verge of wilting when ths rain set in.
The NortJ1 Caroltna pee.ch crop, indicated at 2,L,JO,OOO
bushels, will be the largest in ten yean; and ~n per cent higher than
last year.
Mach:inGry· compa.nic)S selling equipr,mnt for textile mills aro
in man.y cases sold ahead into noxt year. Textile mJchiner;;r concer·ns
;.:;a;y SO!M:.., Lc;xtile mill<> are complc-;ting modernizatic·n progra~as. In the
first fear ir.tonths of the cu:crent year there have been nine new textile pl.antE e~;tablished fu'1d thirty additions to those already existing. New hosiery nillo conr3ti tuted a larg·~ i tern in each.
•
'
•
I
•
8outh Carolina
The Pee Dee Experiment Station reports z.:.n extrao:cdinarily
heavy boll weevil iYJ.f'estation in the making; the winter war.; mild-just the kind of' winter boll vmevil like.
Production this yec:.r of J ,315, 000 bushels of pec.ches makei3
South Carolina the third ranking peach State in tlw riatio:·1. Thif~ is
by far Ute largest crop of peachos ov8r' produced in the State.
Twenty-three banks in Southern Alabama were visited during
May. iVlost of these banks are lo:::ated in strictly agricv.l tural ar·e3.~;
in whieh cotton is the principal money crop. Diversification of agricultural crops has been e'1courc.gecl qy- bG.nkers in this :5ection during
receD.t years m1d there hu.s alsc been considerable dtwelopment of the
livestock :indust~J. Peanuts, st!·awberries, corn, Irisn potatces, and
hay are now produced c ui te extero.s:ively ••••
1
CHICAGO
•
.~
Se.les of' dei'8nse savin:;s bonds to dc::te (Jrule l) approximate
divided:
~65,000,000J
252
-4Series
Series
Series
Of the ~10,000,000 of E bonds,
were m.arl.e by issuing agents of
trict.
R-849-b
G - ~44,000,000
F - ll,OOO;JOO
E - 10,000,000
approximately $7,250,000 of these sales
which there are about 1700 in this dis-
In response to the Treasury's telegram asking for comrnents
proposea tax anticipation certificates, investigation indicates on:y
~ mild degree of interest at this time.
The smaller taxpayers are not
yet aware of the hea'JY increase that will be made in taxes i.ind there
vrould probc<.bly be only a Umi ted demand for the certificates from this
group without a publicity campaign. This might de"trr.wt public a.ttention from Savings bonds and tend to confuse the general public by adding one more type of Government security; furtherrnore, that this type
of taxpayer would probably not be interested in the certificates emless they brm1ght a yield comparable to savings account interest which
in this district runs from one to two per cent. With reference to the
large taxpayers, it was suggested the amount of t:1e certificates be
increased to $10,000 maximum with a rate of l/2 per cent interest.
0n
..
•
.
I
•
.
'
•.
Increases in prices for agricultural products, substu.ntial
gains in the building materials industry, restoration of steel production to capacity levels, resumption of coal mbing, record sales of
autrm1obiles, continued advane es in trade, both wholesale C:Lnd ret3.il,
and a sustained demand for cor.unercial loans featured <:1cti vi ty in the
Seventh Federal Reserve district during tJJ.ay.
Prices for most
agricultural products moved up durinr, M.:w. Grain producLs were particularly strong, out this was onl;:v a natural reaction to the anticipc:.ted passage of the parity bill. By mid-May, corn prices were the
highest they have been since 1937. • . • Cheese prices were at the
best, levels since 1930. • • • Production of American cheese in Wisconsin was up 6 per cent over last yee.r. Hog prices, which were being
supported at $;9.00 a hundred, have forged a.head of that price :-,nd on
several d:tys the average reached $·9.40. . . . Beef prices hflve been
we3.k, although prices .::,re much better than they were a year &go.
Production of passenger cars A-nd trucks thus far this year
h<>.s exceeded production of any similar period ir. the past eleven years •
Dealers' stocks, hm,:ever, are estimated to b~:: belovr what thay were a
year ago. Probably the most significa.nt development in the l;}:oor situation was the gaining of i::;a.rgaining rights by thE: CIO union at the election held in the Fore t;lotor plants. . •• Att10mdance r1.t the American
Furniture llii:lrt vV"-S more than 25 per cent c:chet:.d of any previous midseason event. • . • For the four weeks ending May 24, department store
sales for the district were up 16 per cent over the comp.:irable period a
year ago.
-5-
R-849-b
ST. LOUIS
In southern Indiana prospects for wheat and barley are from
good to excellent, in fact much better than in the more northern counties. Outlook for fruit is the best in more than a decade. • •• Condition of pastures is reported well above the ten-year average.
Carryover of hay is large. Egg and milk production this spring was
unusually large. • • •
The cashier of an Indiana national bank comrrtented upon the
fact that nonmember State banks in Indiana have in recent years published fewer call reports than have the nation<'.l banks. He strongly
feels that when the Comptroller's office issues a call, other supervising agencies should do likewise.
A Kentucky bank officer commented to the effect that people
in his county were not ye:;t awake to the dangers of the present si tuation in Europe and that it will take an i.ntensi ve sales campaign or a
declaration of war to increase boncl sales.
MINNEAPOLIS
•
North and South Dakota and West Central Minnesota
Crop conditions throughout the territory visited are perhaps
the best in a great number of y-ears. Subsoil moi&-ture of from three to
four feet abounds throughout the entire area with virtually all the
crcps planted.
"f
•
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'
This territory, principally the North Dakota section, up to
1920 was priuarily a wher::.t country, but therea,fter begnn diversifying
its crops. . • Bc;,nkers in the territory have advocated the placing of
small tands of sheep on each farm, as well as brood sows and poultry,
,;md in mostly every case the results have been exceptionally good.
Many of the banks now have a surr'lus of funds through liquidation of their v•rheat lorms. In some cr~,ses, how0ver, because of a good
deJn&nd for lccal loans bc:.nks vn::ro un:~bL: to h-~ndlc wheat loans.
A great n-w-ribcr of tro.ctors have been so.:.d in chis terri tory. In no
case was it reported that a barck sc::t'fered a lo2s. • • • Be.nks' exp0ricnce i!1 handling automobile paper is equ'tlly as good. One banker
sto.ted that he h":.d notified all outomobtle de:clers in his corrununity
that he would not :'.cccpt from them any automobile instalhnent paper
which ran for a period lcnger tlnn twelve months,
'There is littJ.e iem'lnd for defense s~..vings bonds.
M<my peop1e in th~s terl'itory c&n not forget ti:e severe losses suffered
-6-
Et-849-b
during the drouth :years of 1':)3/+-1936 v:hen their crops v;erE:, destroyed
u.nd a good portion of tbe cattle had to be disposed of. It is on1y
with:i.n the last few years that many of them have been able to l)Urchase
additional livestoclq conseq11ently they hc.ve no surplus funds with
which to pnrchase defense bo:1d.s even if they 1Hished to.
Two banke:cs said they did not wish to que.lify for the sale
of these bonds because of the adverse effr-~ct of withdravvals UiJOn their
deposits ·,vhich they llacl built up at great pains over a long period. of
tirne.
Gnder certain concli tions, the laws of South Dakota perrni t
State banks to operate exchanges. ApproximatEJly tFenty-fiv•) banLs in
South Dakota opurate one or more exchanges.
Vary few of these
stations controlled deposits in any great amount and ma!1Y stations are
operr,ted solely to olir2inata the possibility of new banks being che.rtered.
Northern 'i'-Tis_::onsin a,nd the Upper Peninsula of l';iichigan
Editors of twenty-six newspapers were called upon •••• The
trips rnr.>.de durin,c; 1940 tugether with a short study made during the
wint0r of 19//J-L~:.L, which indicated that the large W0<0kly pa;JorfJ arc
not being dis}Jl'l.ced by tho dailios and t11e rc.dio, l'c;~nlted in tho::;
r1re:>ent policies: that editors of all dal.ly pa1;or~> [nd weekly papers
oi' over 2,000 circulatioa will be called upon at l0ast onco during a
year; that short ne·~rs releo.sf~S coveri:1.g business cundi tions in localities throughout the Hinth .Gistrict would bo mailed to these papers
rugula.rly t.nd th£.t the serviees o.f' our statistic&l d.opartraent would
be open to editors in this district.
&
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I
In addition to calling on the twenty-six editors, nine banks,
twenty department sto:res, and. eleven city clerY.:;:; were called ou iu an
effort to .secure adr:!.i tional clat.1 for certain l0cslities. l!• northern
Wisconsin 1mcl Miebigan there were six citien vi t:h newspapers large
enough to be called upon whi.cll '.vere not reporting bE.ntc dcbi ts. The
nine banks in these citles were all very willing to report debits to
us so th£J.t their· local editorG vro'J.:Lo. h<.:.ve the information to use •
•
[,PJ:SAS CITY
•
.
Almost without oxcepti.on ::;mall banks reportocl that t:1.er;:;
no intGre3t in the neN defense 1Jonds in ti1eir com'1mnh.ies.
defer~sc bonds wor:t on C£-..le !vloy 1 e.r.d at the clot_;e of bvsine:~~~ J11.ne
1941, a total of' ta3,9;:~:,.L50 had b3en solei in. th8 'Tonti: Di::;trict.
this amount \3,601,950 vve:ce of Ser.ir::s E, :;'·3,:~65,7-:JO \'len:; of Series
and 011,554,0UO wore of 80ries G.
•
was
The
7,
Of
F,
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R-849-b
There is very little money in rnost of these rural communities and mru~r people are in debt. Nearly all parts of this district
have been drought stricken for years and any new income that is currently accruing because of better farm cond1.tions is sorely needed
for paint, harness, clothing, farm machinery, and many other things.
There appears also to be a widespread feeling that before long compulsion will be resorted to in selling Government securiti.es and there
is a disposition to wait until that time come~. • • • Almost everywhere there is outspoken criticism of the failure of the Government
to reduce sharply nondefense spending.
The demand for money in the cattle country is good, the
loans of many banks in those communities being larger than their deposits. A good many cou..'1try banks are borrowL.~g from their correspondents and others expect to rediscount soon, this being especially
true of small banks that have many livestock customers. • ••
DALLAS
Northwest Texas
This entire section has received the heaviest rainfall in
years, consequently prospects for crops were never mor~ promising.
The wheat crop is one of the best in years.
The Irish potato
crop in one county has been developed during the past three years to
where it is one of the most important sources of income. Approximately 7.?000 acres have been planted this year and it is estimated
that the crop, at present price, will sell for $2,800,000.
The rangvs are fairly well stocked &'1d cattle are in excellent condition.
A recent increase in the price of oil llas stimulated activity and will bring about considerable drilling operations.
C'
Considerable complaint was registered qy the banks visited
against the competitive activities of the Production Credit Associations. A few banks have reduced their rates to meet this competition
and are doing a lot of missionar:r work among their customers.
SAN FRA!TCISCO
•
•
Umpqua R.iver Valley, Oregon
\
The number of sheep has increased in last few years.
Outlook for profitable year to livestock operators. Lumber mills are
all operating.
-8-
PUBLIC
HELJ~T:CONS
ACTIVITIES OF FEDEHAL HESEHVE BANKS
May 1241
Federal
Reserve
Bank
Boston
New York
Philadelphia
Cleveland
Visit$ to Banks
Member Nonmember J Total
l
:.
38
127
.
-;,.
16
24
19
30
99
50
57
16
1/
12
12
13
4,020
3,54'/Y
3,180
41
M.
6
22
13
3,595
1,629
6,360
5,360
7
66
135
40
10
Not completely reported.
·~
87
54.
194
25
19
59
Minneapolis
Kansas City
Dallas
San Francisco
11
17
28
16
67
38
Richmond
Atlanta
Chicago
St. Louis
Meetings Attended
Numberj Attendance
3
55
43
26
96
234
70
67
19
.2
4
9
6
25
Addr0sses Made
·Number! Attendanc e
6
1
12
7
4
"·
_,
10
5
975
7
4,960
2,125
3,700
2
1
5
570
150
3,54711
496
269
818
2,002
1,500
1,030
350
700
885
@FedFRASER