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BOARD OF GOVERNORS
OF" THE
FEDERAL RESERVE SYSTEM
WASHINGTON
.
R-871
ADDRESS OF"F"ICIAL CORRESPONDENCE
TO THE BOARD
A1:..gnst 22, 1941
Dear Sir:
There is enclo;wd fo:c
a table
e~nd
sho·Nin~;,
among
oth:.~r
Y'Jlli'
information
things, the number
aggregate of cierJofJi ts of St. ate
t'c-.Jlk~3
ad.rni tted
to mernbe:rship in the Federa]. Rese;:ve System dur1ng 1940 and the first seven wor,ths of 1S'41, to-
gether vli th n statcme?:}.t containinc
tho
b~1"!:"1.k
cxcm~pts
from
rol:::.:.t:i.ons reports submitted by th0 Fed-
eral Reserve Banks for the month of July.
Assistant
Enclosures
TO THE PHESIDl:t-:U'iS OF iJJ_, FEDEPJ.L It:E:SElWE
BANK~)
.§.'r.:.~TE
1
'RA.N1\S ADMITTED TO FEDEf'A~J RESEEVE l''cEMBEHSHIP
R--871--a.
(I)e-nosits .~·,re 1.~"- t~~z)us:-'TL.t: cf do11c.rs)
Number of n::.::c:::.ru;;.::n:..::Ie::.!.m'-b-e-l-~-c-.o--J-m_n_e_r_c_i_a-1 banks vdth sufficient
1
•
to me;_:}):crshin
C?a;::ital stock to meet the mi:rimwn strtcltory
mc:d:.•ers}-: L·_:, d•l1'i·E'-+
duc·~-~1.:_,
1940
recuirc;ments fer Federal heserve menib(Orshio·::·
+--------~------------------_Jan_!_==-~uJ__y__l:i;'rl_
___ _____
-···-------· ToU l i
Bv size of depo:-,;i ts
Number
Deposj ts
Nmaber
)eposi ts
Nt.u·;}•,;r
r <Wl !h - 10
~p.lO·;~,iiLic;r:s
On Par
Number
~~;t
I
rn.il}
ion
rrtillions
c.n1d
over
List
-----t--------r·--·---·-· ------- ----···-------· ·---------·--·
-----F-·~a'ror~~------··r·· B;::.:.;l\.s t;:,·rt~:_nitt~;d ---..--"- BC:tnks aduittecl
7::
~'
•:o
Reserve
D:Lstrid
Boston
New York
Philadelphia
Clevelr.nd
Richmond
Atlc:nta
Chicago
St. Louis
Minneapolis
Kansas City
Dallas
San Frr:ncisco
!
0
26
7
11
7
l
36
ll
l
l
3~,_:.~!,._\0:,.
1\1\1\
2
0
8
0
ll;J.
lt5
56,270
12, 026
T~
8,210
4
3,777
224
225
7,510
9,410
730
25
18
37,595
1,?5
21,868
.'/'+
:127
.30J
3
5,29a
484
1~15
139
86
65
62
74,lt83
12,412
10, 382
1,229
1,008
578
391
200
78
27
0
123,470
9,260
250
21
9
150
1,090
830
10
24
4
~~
~Ht-
-:HHH*-
101
':lQI
66~.
I
L~20 j
~:i~Z
5,125
~~z II
194
.
Total
I
r-u-,,dP. .
I
I
m
138
---------~--------·~--21~~;~~~,209 ~~~92
0
10 01~
.
-~--17 ' 1c~o
~
-~~-i(·~~~*"
188
87
126
108
~~
37
8
141
21
224
2?5
13
6
7
2
10
3
0
0
0
I
9
I
ar;-~ollnt of
1,079
434
78
402
174
182
__1__----------~------79
1,010
:These figures are as of Decernber 31, 1939, the lc~.t.3st date .for v{1.'1ich su.cll data l1ave been compiled.
These totals incl11de, -1.nd the distrib·utj_on by
for which deposit fipures .·;ere not available.
471.
232
52
de·!Josit.s excludc;s, 28 bo,nks v.d.th
~10
3,69?
deposits or
Excludes tv:o bc:mks or?aniz<''d to s~1ccced nationc>.l b:=tn;<s, onE: organi zc.::d to succeed a State memb.;;r c:s p?.rt of
a rehabilitation nro:-r'un, and on::; org;mized to succ~o;ed a State momber 1Nhose: charter had expired.
R-871-b
August 22, 1941
Not :t'or publication
EXCERPTS FF.OM BANK RELATIONS F..EPOR'I'S
FQJL UIE MONTH OF JULY 1941
Cape Cod, Massachusetts
Lending rates remained unchanged--few loa.11s beiflg L!lade at
less than 6 per cent. Bond accounts were inactive ••••
Several bankers called attention to increasing
their inabilit:l to employ more of' their fu..-,ds locally.
N:~W
reserv~s
and
YORK
South Central New York (six counties)
The investment portfolios of the 47 cor.1I!lercial banks in this
area e.ggregate about $1,.2,800,000 and continue to reflect an increasing
volume of United States Government issues, direct or fully guaranteed,
which nm• amount 'Go Z:29,075,000, or approximately 68 per cent of all
security investments.
In Cortland and Norwich the banks are seeking new business
in the surrounding agrieultural sections, one bank in each of these
cities having engaged the services of men experienced in agricultural
problems and financing to sot up a department to develop closer relations with farmer customers and to sock new business from that source.
Tho employees of &1dicott-Johnson Company are said to have
received two wage increases during the past yet?J.r. The next largest
industri::-.1 concern is the International Business Machines Corporation
at Endicott which has just completed and started operations in a large
addition to its plant.
The farms ill. much of this area have suffered from a long
drought lasting from early sprir.g to mid-SUilli"l.er.... This coudition
together with dissatisfaction about the price received for milk resulted in a milk strike the first week in July among the fu.rmers
identified with the Dairy Farmers Union, and it lasted about seven
days....
The Union is asking for a base price of $3.00 per hundredweight. whereas the C1lrrent price is slightly under ~~2 .00.
-2-
R-871-b
PHILADELPHIA
Central Penns-tlvania {4 counties)
In Sharnokin, which has been most seriously affected by reduced activity, the nu.mber employed in legitimate mining has been re-·
duced from 7,500 to 700 within a ton-year period. The majority of the
mon thrown out of work have resorted to bootleg Ol' illegal mining ••.•
'I'he United States Arrey is establishing a large storage depot in Shamokin
which, when in operation, will give employment to somo 1,000 persons
under civil serv:I.ce regulations at a. yearly salar:r ranging fror.1 $1,400
to ~U, 700.
The Bethlehem Steel Company, the largest employer of industrial labor, op'3rates a large plant a few miles south of Harrisburg.
This company is nngaged in thG manufacturing of steel and steel products such as propeller shafts for large vessels and railroad rails ••••
The r.umber emplo:{ed by the company is estimated to be approximately
6,500 or about twice that of a year ago.
The A.-nerican Car and Foundry Company plact at Berwick is
employing 2·0!:le 6, 000 men as compared with 3, 500 a year ago •
~he Mil'.dlotm".n Air Depot (just below Harrisburg) used by the
War Depc.rtH1ent, a;o a maintenance and supply base for the entire Atlantic
seaboard, has c civilian personnel exceeding 5,000 and it is rumored
that the force will be increased to 6,000 in the ncar future.
The Pe:-msylvania Turnpike from Harrisburg to Pittsburgh has
diV':n·ted m~ny tocu-ists to Harrisburg. 'I'his, with the increaf.:e in activities at the i..i:iddletown Air Depot and the Indiantown Gap I;!ilito.I'Y
Reservation, Psm1sylvania 1 s arnv trn.ining center for National Guardsmen and Seleetivr:. Se1·vice men, hr..s been an iElporta..."lt :factor in stimulating retail ~nd hotel business in Hru:risbu:::g. P:d.o:c to the adjournment
of the State :;-Jegisla.ture, about tho middle of July, i t was reported
that onu H.:trrisburg hotel was turniryg' av<a,y 75 to 100 prospective guests
daily.
·
CLEVZL.AliD
Ll.uru.l sectlu,'lS are comp:!.:.>cini:ng of 1c,sing farm lebor to defunse industries in th0 cities paying much high·:;r wages.
A bruik in r;.orthwcstern Ohio reported tha:t a new kind of wheat
recently introduced in that section of the State had yi8ldod over 60
bushels per acre. This compares with a Stc.te average of approximately
onE:-third that amount.
-3-
rt-371-b
RICHMOND
District of Columbia
Emplo;<,rment in the executive service of the Federal Government
in the District of Columbia at the end of May 1941 stood at 177,328 per-
sons, which was 2.6 per cent more than in April a~d 26.8 per cent above
the end of May a year ago. At the end of March 1933, executive service
employment in the District was given to 69,001 persons.
Marvland
Maryland tobacco plantin,g is 3 per cent higher than last year.
The indicated yield per acre is 850 pounds, the second highest' on record. Sales now under way are averaging around 30 cents a pound compared
with 21 cents a year ago.
Maryland is experiencing its worst crab season since 1926.
Virginia
This year:s peach crop hG.s produced the heaviest surplus in
some years in Virginia. It is more tha:1 100 per cent larger than the
crop of 1940.
Virginia's 19/tl ::'luo-cured tobacco yield is estiJnated at
65,450,000 pounds compared with 67,160,000 pounds last year. The 1941
crop at the pegged minimum price of 19.6 cents per pmmd will ;rield
Virginia flue-cured tobacco farmers ;t2,300,000 more than a year ago.
Miners in southwestern Virginia were estimated to have dravm
over $750,000 in their pay envelopes in the week ended July 26. 'l'his
is believed to be the largest single v1eekly pay roll in the history of
the Virginia coal industry.
North Carolina
Stocks of raw silk in the hands of hcsiery manufacturers
throughout the State are only sufficient for one to two weeks of operation. • • • The change-over for a :.rill from silk to rayon or cotton
would 1:1ean a great deal of trouble. The labor cost would be ver-;1 high ••••
Nylon is not available in sufficient qua..~tities to fill more than 15
per cent of the country's hosiery requirements;; and this will on1y be
augmented by an additional 10 per cent when the new nylon plant at
Martinsville, Virginia, h3gins operations sometime this fall.
The OPM has approved plans of the TVA for co:astructiun of a
$50,000,000 hydro-electric plaut in vmster:a North Carolina on the
Little Tennessee River.
-4-
R-8?1-b
Construction of a $20,000,000 gasoline pipe line from Baton
Rouge, Louisiana, to Greensboro, North Carolina, got under way during
July when several contracts amounting to $3,500,000 were awarded.
South Carolina
Growing conditions during the end of July were favorable to
cultivation in South Carolina •••• Boll weevil infestation has been
exceptionally heavy ••••
ATLANTA ..
Little bank relations work was done during July.
CHICAGO
Six State banks were ad.Jnitted to membe::-ship anci. one nonmember
State bank was authorized to commence busiaess as a national bank.
In the past few mor;.ths this Bank hc.s been di.stributing a
booklet descriptive of the c.·pe!'aLions of the ?ecL>ral Reserve BEL"1k of
Chicago similar to the one it C:istributed in 1937. In Februur,t 1941,
a letter was addressed. t.o 849 me:1b~r banks il:. t~o District, enclosing
a cop:r of the booklet and stn:tins t~1at a spcci:.':'ied m-unh::.r, from 100 to
500 ccpies dep:Jnding upon the deposits of the tanL, han beon allotted
to each bank for distribution to its customers. ~i1::: oanl< wa:J advised
that if it wished to participate in the progrDl!l ::;.nd would furnish a
list of its customers, an imprint would be plac.::d on the booklot~ showing that the bank was a member of the Federal Reserve System and the
booklets would be mailed direct from this office vd th n<~ ccst to the
bank. Addi:.im1al copieB over the original allotment were offe:rod to
the member :)anks at a cost of five cents each p.l·.:s cost of mc.iling or
tranGporta.tion charges. Tu date requests have h":on received from 6~~8
banks for 139,514 booklets ••••
Advance inqu~r~es for Trensu..-y Tax Notes indicate a probable
sale of $lOO,OOO,DOO during the month of August.
During the four weeks ending July 26, the total production
of passenger cars and trucks was 426,322 u.CJ.i
. ts. A y·ear ago the total
·was 204,993, and during tho same period of 1939 it wo.s 206,151.... The
metals industry in the District acidad approximately 370,000 employees
to its pey rolls during the year ended Ju11e 30, 191~-1, without drawing
down employm_ent in other industries.... Ttat agriculture has been contributing workers to i~ldustr-y is indicated b<J the steadH:y decreasing
ratio of supply to demand for farm labor.
60
R--871-b
-5-
F'or the first time in the histor-J of the Chicago Board. of
Trade, shippers were asked on July 18 not to send any more grain to
this market unless they had made previous arrangements for storage.
In Wisconsin cheese production increased about 13 per cent
over a year ago, and sales were up approximately /+5 per cent ••••
Farmers are hapgy over the size of their milk checks.
One competent observer reported that farm labor is commanding $4.50 a day, or about ~85,00 on a monthly basis. The farm wage
rates are, roughly, 35 per cent above a year ago.
Reports on corn crops were as follows:
Acres
Indiana
Iowa
Michigan
3 ;9377, 000
Yield ner Acre
47
52
over 9,000,000
1,511,000
38
Production
1135,039,000
474,290,000
5'7,418,000
ST. LOUIS
Agricultural Conditions
In northern Missouri the wheat crop was below no1·mal due
largely to frost damage last fall. In general, yields of other crops,
including other small grains and hey, appear to be good.
In Illinois the small grain crops already harvested have
made fair to good yields.
In Arkansas crops are generally satisfactory. The cotton
crop is not made, but there appears to be a good plant throughout most
of the State.... The corn crop appears to be good in 1:1ost sections.
The tobacco crop in Kentuclr.y has made favorablG progress.
Industry and Trade
Up to date there has been practieally no CUL'tailment of mc'..!lufacturing operations in consumers' goods .industries as a result of inability to obtain materials which are required for the defc:nse progrrnn ••••
Tht; inability to obtrdn cool cars from the railroads has resulted in a
temporary stoppage of mining operations only in a few isolated cases.
Banking Conditions
Banks generally report an increasing volume of inst.e.llment
loans from customers who are buying automobiles and other types of durable consumers' goods.
61.
-6-
R-871-b
As a result of this rapid expansion of deposits, a number of
banks are concerned about the reduction in their capital ratios and are
afraid that they will be requested by supervisory authorities to 5.ncrease their capital. As a result many of these institutions are keeping themselves in an abnormally liquid position ••••
One banker stated with some degree of satisfaction that he
could liquidate his bank within twent,y-four hours.
In mentioning that Government lending agencies were not in
competition with his bank, and did not take a..·w business awey from it,
the vice president of an Arkansas nonmember said his bank had made
1,150 loans to farmers duriJ1g l9.U, averaging around $100 each, at a
10 per cent rate of interest.
MINNEAPOLIS
East Central North Dakota
The crop conditions are almost too good to be true •••• North
Dakota will harvest one of the largest crops in over twent,y years.
The territory visited, particularly the Red River Valley,
has been known predominantly as the "bread basket of the world", and
it has lived up to its name until within the last five or six years.
Additions were being erected on elevators in almost every
town visited, while l~~ber companies are now building portable bins to
hold from 1,000 to 1,500 rn1shels of wheat, so constructed that they can
be skidded to farms by tractors. Inasmuch as farmers receive 7 cents
a bushel for farm-stored wheat, it is estimated that a bin can be fully
paid for through such storage within three years.
More tractors, combines, and other farm machinery, have been
sold this year to the farmers than for many years past.
One banker told our repre$entative definitely that if he
could retire his preferred stock without converting it into common
capital, his bunk would remain a national institution.
Western South Dru<ota
Up to the time of our visit, South Dakota had had more rainfall in 1941 than for several years. Small grain and runge conditions
were excellent.
Hundreds of small dams have been constructed in the draws
-7-
R-871-b
and low spots in the hills, and the landscape is dotted with small
watering places for cattle and sheep.
Most of the banks are paying two per cent on time mone;>r.
In many of the banks, reserves are lower than for many years. The
loan demand is ur1'1sua.lly good. Some of the banks in this region are
discounting with the Federal Reserve Bank. Others n~y do so or may
borrow from their correspondents.
There are almost no loans at a rate below 8 per cent ••••
In a few of the larger centers, competition forces the rates as low
as 6-l/2 or 7 per cent.
£~uthern
Minnesota.
In general, the crop will be better than fair, but no better than. good. This reg-lon is entirely devoted to diversified farming ....
Montana
In some parts of the State agricultural conditions are
reported to be better thEm they have been in the memory of some of
the older farmers and ranchers, and in other parts the.claim is made
that conditions are as good as they were in 1915 when bumper crops
were raised. Wool, livestock, and grain prices are good and it is
reported that considerable money will be made this year.
The copper mines at Butte are operating at capacity. The
price of copper has been fixed a.t 12 cents by the O.P.M. which it is
re!Jorted is too low to adjust the wages of the miners upward to meet
the present and expected higher cost of living. Mlncrs are now being
paid $5.00. The vmrking contract between the miners' urd.on and the
mining company vdll expire in October of tl1is ye·'3.r and the unl.on has
given notice that it expects upward adjustments in w·ages. In order
to meet this a."1d other dsing costs, the operating companies are attempting to get the price administration to increa.se the price of copper to somevmere around 14 cents.
KANSAS CITY
South Central Kansas
There was general disappointment wlth the vj'heat crop as in
many places yields were scarcely more than half what had been expected
a few weeks ea.rlier ••••
R--871-b
-8Oklahoma
In Oklahoma the selling of cotton has been/fictive follow- / a good deaJ_
ing the sharp increase in prices and this is re.lea~nng
of money throughout that State ....
Work has just starsed on the new $14,000,000 a.lrplanc
repair depot near Oklahoma City. The Army engineer :!.n charge of
the project stated that while the project was classed as only
$14,000,000, it was his opinion the ultimate expenditure would run
in the neighborhood of $25,000,000.
yYest Texas
Practically every bank v.isited reported
I}
good demand for
loans .•.•
Prospects for cotton and feed crops are very promising but
the crops are late.
Farmers in genoral are in much better financial condition
than they have been in years.
SAN F'RAi'JCT SCO
No report received.
-9-
PUBLIC
~ATIONS
ti4
R-871-b
ACTIVITIE::J OF FEDE.fh•,L HESERVE BANKS
July 1941
Federal
Reserve
Bank
l
I
Visits to Banks
Member Nonmembe:c Total
I
Boston
New York
Philadelphia
Cleveland
Ri crJnond
Atlanta
Chicago
St. Lotus
Minneapolis
Kansas City
Dallas
San Francisco
22
122
49
39
17
47
27
11
51
4
14
57
35
117
19
19
5
0
25
101
101
62
2
0
'
Meetings Attended
Number j At~.endance
1)
0
39
169
76
50
1)
0
0
2
500
86
4
39
15e
3
2
452'
0
218
1:31
21
5
-
Addresses Made
Number !Attendanc~
3
0
0
3
226
0
0
115
0
820
0
7
0
2
0
560
0
125Y
593
260
3
Lf.
1
0
11
0
l
150
25
300
472
6
5
4
0
y
1~62
1J
Not reported.
2) Not completely reported.
l
@FedFRASER