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https://fraser.stlouisfed.org Federal Reserve Bank of St. Louis on branc Group & Che.in ( u - Dec 19;0) or . . • tf7 END KIND OF MATERIAL OR NUMBER NAME OR SUBJECT SHEET 421.11 Committee on Branch Group & Chain Banking DATES (Inclusive) Aug - Dec 1930 PART HUMBER 5 https://fraser.stlouisfed.org Federal Reserve Bank of St. Louis J • t • J•""EDERAL RESERVE I3ANK OF SAN FRAT December ISCO 31 , 1930. Dr • • • Goldenweiser , C~airman, Co. ittee on Branch , Group and Chain Banking , Clohrederal ~eserve Board, ,as 1ngton, D. c. Dear r. Golden eiser: The follo ing is copy of a notice recently appearing in a San Francisco paper: "The Canadian Bank of Co erce of California received a permit yesterday from the State Banking Department to open a branch office in Los Angeles, A. c. Stevens, president, reported last night . Last year the Canadian Bank of Connnerce of California was formed to operate under the State laws, with headquarters in San Francisco. This is the first expansion step of the bank, which is a wholly owned subsidiary of the Toronto institution, and may possibly be follo ed at a later day by opening of branches in ot~er California cities. Prior to the creation of the State bank in California, the Canadian Bank of Commerce operated for many years a branch office in San Francisco. In fact it was one of the first bankin institutions in the city. President Stevens reports that while the bank is considerin several locations in the metropolitan district of Los Angeles no branch office site has as yet been selected and no decision has been reached as to the office's personnel." This brings into our study a ne phase of ~roup banking, that is, an instance herein a forei bank o ns el 1 the stock, except directors' qual1fyin shares, of a bank or anized under the las of one of the states oft e United States,and enga es in branch bankin ith1n the United States . ~o hat extent the Canadian Bank of Connnerce (California), the holly-owned subsidiary of the Canadian Bank of Commerce of Toronto , ill extend itself in the field of branch banking in California remains to be seen. Hoiever , the subject is interestin and its possibilities should be given some thought by our Committee. Having discussed t e possibility of this development ~ith ~. Hammond on t e occasion of y last visit to ashington, he ill be interested in receiving this notice. https://fraser.stlouisfed.org Federal Reserve Bank of St. Louis Yours very t r u l ~ ./ Deputy~~ ~ r 1 https://fraser.stlouisfed.org Federal Reserve Bank of St. Louis ?• 1 I • i 1 r t 1 • • https://fraser.stlouisfed.org Federal Reserve Bank of St. Louis • • I • • ])g,r.10llilt>er • I • https://fraser.stlouisfed.org Federal Reserve Bank of St. Louis • r t • • Dr. l". https://fraser.stlouisfed.org Federal Reserve Bank of St. Louis f https://fraser.stlouisfed.org Federal Reserve Bank of St. Louis • • • • I https://fraser.stlouisfed.org Federal Reserve Bank of St. Louis • • https://fraser.stlouisfed.org Federal Reserve Bank of St. Louis for .r. -- ead. B • 1 • O f'ra 11s F1ie https://fraser.stlouisfed.org Federal Reserve Bank of St. Louis l , l • • • https://fraser.stlouisfed.org Federal Reserve Bank of St. Louis Dec r. ric H. Curtiss, r 1 R s r gent, d a b r 18, 1930. erv Bank of Boston, ssachu tt • l R r. Curti tion of b n· tee B th sioners of bankin for co~pilin ta or for ot the Co itt e's or ula ncur d by th variit th investi and Chain Banking Co itt Co to or indi rvi s in connect ion :vi th by th co itt e. - re ent b nk it el h it ntail :felt 1t shoul dditional the ban • onn cti t d t I n it miz d t C , if any, nd c rcy th th t at ount no of your th t Co Ve r ur trul:v 0 • A. ,,olden h i:n an, Co roup and Chain 0 • r nch, https://fraser.stlouisfed.org Federal Reserve Bank of St. Louis • • • https://fraser.stlouisfed.org Federal Reserve Bank of St. Louis • • I onn 0 To From o 131 • e IC • Date • iddle r. bt=tr 17. 1930 u ject: ProblPrn of exa,nin in orb tt tin thP. oth r day of the Committee on ranch, Group and Chain Banki , r. Clerk sug sted that ref r to lP.tter th the s r. John l?. (it cb 11, th n a 'l!lernbPr of the ederal Pserv Board, nt in 1923 to outlin ing nlan of making a non-si multan ous xamin· tion of largo ize br ch ste a. I got this l tt r, dated Januar y 11, 1923, and suoke to you bot it. The lPtter is t elv f-PS long and th rp is oth r pertin ent corr nond nc on the s e subj ct in the ame file. I under st nd tlIBt you or ~r. o d 11 ant to go into th s tt r at t e ti ~ tbat t e cha~te r on br 1s boi tt"3n. 0 0 0 I a~ now rPturn ing all of th corrP~ po ence to the B r 1 s gener al files but it can be ithdra n t any tim by refpr in to fil No. 241.22 . Ti memor ndu ·s inte ded rely to bear inder ad a fPrenc e so th t th fil~ ma,y e r~a~ ~V obt d later ~ d sir d. https://fraser.stlouisfed.org Federal Reserve Bank of St. Louis tee I Q.Lolnmhia ~htitwr itr in thtQlitp of J l rm l)ork \, v-, SCHOOL OF BUSINESS December 16 , 1930 . r . J . H . Riddle Secretary , Co::mnittee on Branch, Group and Chain Banking ederal Reserve Bo rd ashin,ton , District of Columbia Dear ..Ir . Riddle : glad to acknowledge receipt of your letter of 13 nd to say that I shall be glad to .eet • r . P.ermnond Dece.ci) when he co,es to !ew York . I shall e intereste d to lmow what pro ,ress you are making in t e study of branch ban''"in • I am I think it would be more convenien t to me to see r. Ha:mnond on Saturday than any other ti~e . I can see him eit•er in tie mornin or afternoon . Perhaps, if convenien t to i , we could have a little ore time in the afternoon . If you :ill be kind enough to let me lmow at ihat time he will co~e to the Universit y, I shall plan to be at my office . I shall be lad to see you any ti~e you are in have some spare tin:e . I have my Sabbatica l next and revr York se~ester and rr.a.y not be around the Universit y all the ti~e . fith kindest personal regards to· rs . Riddle and yourself , I am Very sincerely yours J! C:S https://fraser.stlouisfed.org Federal Reserve Bank of St. Louis https://fraser.stlouisfed.org Federal Reserve Bank of St. Louis https://fraser.stlouisfed.org Federal Reserve Bank of St. Louis 0 • • • 1 • • • https://fraser.stlouisfed.org Federal Reserve Bank of St. Louis • • • • https://fraser.stlouisfed.org Federal Reserve Bank of St. Louis l •Orlll • ·o. UH Offic e Correspon e.!e To j~,r.~,lf--+-- fVJ From _ --'""'--'------1- , u fEl)ERAL RF.SERVE BOARD Date_ c Subject : --- 2- 8496 0 11 ' https://fraser.stlouisfed.org Federal Reserve Bank of St. Louis at ns fi C Q :Porn1 No. 131 Correspon ei To From • ot._ec r BOARD ou. ib r Subject: I ... I nd Ql ould Grou e FEDERAL RF.SERVE C nd C in i Co • C r to st fo t on B of r ch• ly tot 1 tt r. C. fus ~ ith, The re b ch banking J.C. https://fraser.stlouisfed.org Federal Reserve Bank of St. Louis tkins irst Nat. B nk of ouston, dated Dec. 4, 1930 hreveport Chapter, 'hreve ort, • .Jee. 2 2 849~ I I • • https://fraser.stlouisfed.org Federal Reserve Bank of St. Louis l • • Form. No. 131 Office CorrespondF ce To_ Mr. Riddle From _ Mr. Horbett • FEDERAL RESERVE BOARD I I Date~ecernb~r 2, 1930 Subject:_Cl&ssification of national banks according to capital and loans and investments Mr. KanP., ChiPf of thP Statistical Division of the Comutroller 1 s Office, callad me this morning to say that thus f~r hP had heard nothing furtber from either Mr. A alt or Mr, Pole on the ~►o.re subject, and that he was going to try to seP Mr. AwE:lt th4.s morning try to find out about it. About an hour later he c a l l e ~ d said thflt Mr. Awalt is so busy that it is oractically imoossible lo him about the matter. In view of this, and inasmuch as his force is not VPry busy at the present time, he decided to take a chance and work up so~e of the material that the Committee has requested. If later he hears from Mr. Awalt that the Committee I s request has been disapproved 7 it ftill simply mean that theoretically nothing has be n done. * ;eP 0 In order to go ahPad with the Job Mr. Kane would like to have 200 blank forms (Bl and B2 I think ere the nunt>ers). ~e will not need t e forms for ( the ~ouulation groun, inasmuch as no such request has come down to him from the Comptroller's Office. It might be well also to give him two or three ~J O sets of any mP.rnoranda that may have been ~ritt~n on the subject. If you - t ' ~l.t--will gP.t the fonns togP.ther as soon as practicable, I will have them sent I\ ever to Mr. KanP, In this connection Mr. Rane called my attention to a Doint that had PScaned me,that it is quite common for new national banks to bPgin business with only 50 per cent of their authorized canital actually paid in, tr.e remainder to be naid in monthly in six installments I believe. The question arisPs , therefore , hethPr these banks should be classified according to :eaid-in or accordi~ to a.lllbor1 zed capitol. Ur. ane 1 in any classificationJ that h has made in tne oas has used the paid-in cap tal which is the figure reoorted on the condition reports. I think that this is also the thing to do for thP. Committee's puroose. If it is not done it becomes necessary to refer to sources oth r than the condition reports to compile the desired infor~ation. I understood from Mr. Kane that the ractical effect of using """'ts!!!@ll:'' oaid-in caoital is but little different from using authori7.ed canital. 0 1 Mr. Kane also raised the point as to whether you wanted the figures for 0 ach state sub-divided by d str cts, where a given state is located in more than one district. I told him that so long as that as conv nient he might as well make the separation, as it might orove later on to be of some val O to him. I PlP.as let me kno your viPws on the last two paragraphs. would likP. tog t started on the job as soon aa oossible. https://fraser.stlouisfed.org Federal Reserve Bank of St. Louis Mr. Kane ( ' l • t • https://fraser.stlouisfed.org Federal Reserve Bank of St. Louis ' ' • • ., • • https://fraser.stlouisfed.org Federal Reserve Bank of St. Louis , 19uO. -2- tt o.- • • t • 1 - • t ent to all F. R. A nts https://fraser.stlouisfed.org Federal Reserve Bank of St. Louis • • • • • • • • Federal Reserve Corrunittee on :Branch, Group and Chain En nki ng State NUMBER OF ACTIVE STA-'I'E !:Ji;xs• CLASSIFIED :SY SIZE OF co:-r.JUNI'IT IW WHICH LOCATED June 30, 1920 Population g,rou:ps** Number of banks J1.L."1.c3 30, 1925 June 30, 1930 Aggregate .Ag·grega te Aggregate }Turnber Num'Jer . loans and loans and ~d a loans I of of invest,nents investments investinents ( 000 011i t ted) banks (OOO omittad) b8 nks (000 omitted) Less than q)0 500 - ggg 1,000 - 2,499 2,500 - 4,g99 5,000 - 9,999 10,000 - 24,999 25,000 - 49,999 50,000 - 99,999 100,000 and over *Including trust companies and stock savings banks, but not including Merri s Plan bank s, mu.tu.al savin 0 s banks, private ban:-:s, branch banks or other financial institutions. *>11:For 1920 and 1930 tne census figures for population shou ld be used. For 1925 the estimates give n i n the Ean!:ers Directory should be used. https://fraser.stlouisfed.org Federal Reserve Bank of St. Louis • • For:n :3-]. Federal Reserve Com.uittee on :Branch, Group and Chain Ea.nkint:State ----- ---- IH.D.GER OF .ACTIVE PRIV..1TE :B..,':..:.JKS • CLASStFIED :BY SIZE OF co:.(J~TI TY nr WH1CH LOC.:~TED Juna 30, 1920 Populatio n groups*• Jun,3 30, 1925 Jun.:3 30, 1930 J...g 6 rega te .'l.ggregate ,,:'_ggre,pte Num'Jer N't;..ub er Nu.nber/ loans and loc:1ns and loans and of of of investmen ts inve s tman ts investn'3n ts 'uanks (000 9mitted) 'Jan::-s (000 omitted) banks (000 o,:iitted) Lass than 500 500 - 999 1,000 - 2,499 2,500 - 4,999 5,000 - 9,999 10,000 - 24 999 ·· - - -- 25,000 - 49,999 50,000 - 99,999 100,000 and over *Do not include branches. *"'For 1920 and 1930 the census figurJs for populatio n should be used.. For 1925 the estimates given in tho Eankars Directory s:10uld be used. https://fraser.stlouisfed.org Federal Reserve Bank of St. Louis 1 • • https://fraser.stlouisfed.org Federal Reserve Bank of St. Louis 0 https://fraser.stlouisfed.org Federal Reserve Bank of St. Louis • https://fraser.stlouisfed.org Federal Reserve Bank of St. Louis • • ' • 7ederal Reserve Gomrni ttee on Branch, Group and Chain Banking Form!-..!± SUHM.ARY OF CF...AlJGES IN THE NUMBER OF ACTIVE PRIVATE BA.NKS SINCE 1920 State ________ Calendar 1921 Number of Private banks at beginning of year .. 1922 1923 1924 1925 vear 1926 1927 1928 1929 10-Year Period 1930 ..... . Decrease in number of Private banks: by Consolidation • . . . . . . . . . . Conversion to State charter • • by Conversion to National charter • by Suspension • by Liquidation by Total . .. . . ...... .. . ... . .... Decrease . . . . . . Increase in number of Private banks: • Conversion from State charter •• Conversion from ihtional charter by Reopening by Primary Organiz~tion liret Net . .. . . ... . . . . ...... Tot"tl Incre::1.se • . . . . . Decreas_e, or . . . . . . . . . . . Incre"tse . . . • • . . . . . . . . Number of Private bCll".ks at end of year https://fraser.stlouisfed.org Federal Reserve Bank of St. Louis · - ' -· I - - I I Federal Reserve Committee on :Branch, Group and Cha.in :Banking St'-3.te D'\ t e of ch3.r1ge ----------------- PRIVATE BA.."lllX CHANGES DURilJG 1921-1930 Report on a sep3.l'~te copy of this form each consolidation, suspension, liquidation, reopening, primnry organization, and conversion, and check in the space at the right the kind of change. Cit:v or town Nrune Popula.- NaID3s of all banks and trust companies, of !:UlV kind. involved in this chan~e tion* Lor.ms Total reand investments sources ( 000 1 s omitted) Paidin capital Name or names before chnnge .. KIND OF CH.A"'fGE: Consolid"l.tion Suspension Liquidation Reopening Pri1m.ry orgn.nization Conversion to: Sto.te charter N3. t 1 1 charter Conversion from: State ch'\rter !h t 11 charter NET CE.ANGE IN Name or names after change Wt.IMBER OF PRIVATE BANKS; I I I N.ewly organized (primal"'J) Increase Decrease • If above cl~ssifications are not self-explanatory, please use reverse side for details. *As given in the bankers directory at the time the change occurred. https://fraser.stlouisfed.org Federal Reserve Bank of St. Louis (COPY) RECOMMENDATto& r THE nJlE.RAL.1DVISORY COUNCI& • THE FEDERAL RESERVE :SOABD November 19, 19JQ. TOPIC No. 2. Development ■ in branch , chain and group banking with partic ular referen ce to the effecta of bank atock ownership by investm ent trust, and holdin g corpor ationa. RECOMMENDATION: The Federa l J.dviaory Council recomnende that the Jedere l Reserve Board appoin t a comnit tee to study the merits of the branch banking system as practic ed in this and other countr ies, (condi tions in Canada beiDg appare ntly more comparable with our own), the group or chain benk:ing system as develop ed in this country an:l elsewh ere, aid the unit banking system of this snd other countr ies; and furthe r, the effect of ownership of bank stocks by investm ent trusts and holding corpor ations, in order that the Federa l Reserve :Board may be in posses sion of accura te end author itative infonr etion on this import ant subjec t • • • https://fraser.stlouisfed.org Federal Reserve Bank of St. Louis • https://fraser.stlouisfed.org Federal Reserve Bank of St. Louis • ' https://fraser.stlouisfed.org Federal Reserve Bank of St. Louis • • https://fraser.stlouisfed.org Federal Reserve Bank of St. Louis • • .or tion of r. d • 9. 19.30 9 10 7,470 3,267 1,959 ot - • 1 0 23,85 3,618 70 2, city 1,14 12 2 12,9 9 12, 7 1,30 5 7,453 1,5 4 1,5 3 ,257 l 9,71 461 1,982 47 5 l 538 27 27s a o I ,144 0 1.2 ti 2,007 72 1,235 ti 137 14 7 116 •19 13 •1 7 ,6o 1, 022 5 r ing https://fraser.stlouisfed.org Federal Reserve Bank of St. Louis C n b nc ci 1 11 rio trict of Col io to ibi • , 705 l 515 • 1. 73 1,669 1 ,655 11,639 204 271 16 • 33 •2 rohi 1 o y 1 ial tion 2 3 6.915 6.456 1. 65 1, 6 59 l 205 1 1,169 -- Fonn No. 131 Office Correspondence To_ Mr. ltiddle From _ Mr. Borb t t FEDERAL RESERVE BOARD -- I Date_ NovembPr 19, 19]0 Subject:_ 0 ... /(/, I 2- 8495 P. lying to your T.Pmorandurr or yP.sterda v/r eg rdi=¥; branch banking statistics for 192b - 1929, callPd for by trP form ttachPd to your mPmorandum, I may say th8t P arP. prPoarPd to gi.vP you summary figurPs 1n thp dPsired fc~m ~or ~ach state, so f r as th9 numbP.r of banks nnd number of branchl'?s are concPrned, but not for loans nd inVPSttr"'nt" or resources, as of DecewbP.r 1920, June 1927, June 1328, June 1929, D"'ce~b"'r 1929 and Ju~P 1930. ° C3!1 also eivP you the loBn a~d inv ttmP.nt fig..irPs in the dP.sirl'?d form for Jun"' and DecembP.r 1929 and for Jun° 1930. Loar. and invest~Pnt iguros for 1920, 1927 and 1928 and rl'?sourcP. figurPs fer all yo rs ill havP to bP comoilPd, 1~ they are ncPdPd. ThP bPst ay to do this I think ould bl'? to mak"' a coroplotF> list of all branch "ystems .or p ch of thP d~tF>S and thPn tap off trP lo~n nd inVPStM 0 nt figur 0 s from tbP B·~~ 0 rs DirPctory. Vo can do this work oursPlv 0 s i noces~ary but I ould much rpfor rr.er ly o havP it donP under our sunPrvision if vou cen orovidP- thf> cleri.c.,l aesist1rnc~. I shall b dad to tplk to you about this at vour conv<>ni once. https://fraser.stlouisfed.org Federal Reserve Bank of St. Louis 0 0 • • ( • • 1 https://fraser.stlouisfed.org Federal Reserve Bank of St. Louis • 0 • https://fraser.stlouisfed.org Federal Reserve Bank of St. Louis https://fraser.stlouisfed.org Federal Reserve Bank of St. Louis _o_ • 0 r. https://fraser.stlouisfed.org Federal Reserve Bank of St. Louis • 1 • • • ~ederal Reserve Committee on Branch, Group and Chain Banking Form !-1 SUHMliRY OF CHANGES IN THE NUMBER OF ACTIVE PRIVATE BANKS SINCE 1920 State Calendar 1921 n . er of Private banks 1g23 1922 1924 vear 1925 1926 1928 1927 ..... Decrease in number of Private banks: by Consolidation • . . . . . . . . . by Conversion to State charter . • . by Conversion to National charter • by Suspension . . . . . . . . . . • by Liquidation . . . . . . . . . . • Total Decrease . . . . . . • beginning of year • .. Reopening • • • • • • Primary Organiz~tion l'Jet Net ·- j ... . ... .. • • Number of Private bGJ'l.ks at end of ye3,r https://fraser.stlouisfed.org Federal Reserve Bank of St. Louis - ... ... • Decrease, or . . . . . . . . . . . Incre.1.se . . . . . . . . . . . . . Total Incre.1.se 1930 .. Increase in number of Private banks: by Conversion from State charter Conversion from ihtional charter • 1929 10-Year Period . I Faieral Reserve Committee on Branch, Group and Chain Banking St~te D, t e of ch3.nge ------------------- PRIVATE BANK CH.1\.1:JGES DURnJG 1921-1930 Report on a separ~te copy of this form each consolicL-~tion, suspension, liquidation, reopening, primary organiz3,tion, and conversion, and check in the space at the right the kind of change. =e City or town Name Popula.- Names of all banks and trust companies, of MV kind involved in this ch-::u.1,'!e tion* Name or names before change Lor.ins Total reand investments sources ( 000 1 s omitted) Paidin cani tal . KIND OF CI-If.}JGE: Consoli d'l ti on Suspension Liquidation Reopening Prim'lry organization Conversion to: Stn.te charter Nat 1 1 charter Conversion from: State ch"l.rter N1,t 11 c'.1arter NET CHANGE IN Name or names after change WUMBER OF PRIVATE BANKS: Increase Decrease I Neuly organized ( prirnal"'J) If above cl'lssifications are not self-explgJ}_atory, please use reverse side for details. *As, given in the bankers direc tory a.t the time the ch-mge occurred. https://fraser.stlouisfed.org Federal Reserve Bank of St. Louis https://fraser.stlouisfed.org Federal Reserve Bank of St. Louis 1 0 1 0 ' • - - -- - --- - ~- .. •• Federal aeserve Committee on Branch, Group and Chain B8nking CHAWGES • Uovember 5, 1930. nr THE NU ,ffiER OF :S.Alri.:S 1921-1930 As a part of its study of banking concentration in the United States, the Committee on Branch, Group and Chain Banking has prepared a summary of the c:1anges in the number of national banks in each state each ye0.r since 1920. This summary shows the extent to which the different factors, suc:i as consolidations, suspensions, primary organizations, etc., have contributed to tl1e c}1a;_1ges in the number of ban:cs during that period. It is foe desire of the Committee that the various State Bo.:nking Commissioners, who have already generously cooperated on the Cornrrittee's work, supply corresponding summaries of changes in the number of banks under their supervision in t~e same period, so that both State and 1ratton::i.l ba:nk chan..:;es ITlq/ be included in the study. It will then be possible to offer a statistic:11 analysis, ~ccurate and simple, of one of the most striking fa.cts about Americar. ·onnking in recent yea.rs-- the decline in the number of bruiks from around 31,000 ii.1 1920 to around 23,000 in 1930, exclusive of br:mc~es. For the information. of e1,ch State bi11Y..ing department a cop; of the sumzmry of the changes in the number of nation:1,l ·b3,r.ks in th.'.:~t st-,,te h'\s been prepared and is attached hereto 11s Form A-1. Form A-2 c1,lls for a similar summary of the changes in the number of st'1te b:1:nks and each state b'1nking commissioner is requested to prep"..re t:1e sur.armry for his st1,te. Th~ number of conversions to and from n1,tional ch.::u-ter has alre~d;y been filled in on t~is form, since they had been worked u:2 for Form A-1. A list of these conversions io supplied. Form A-3 has been prep'U'cd for the purpose of recording i~1d.i vidUL\lly certain of the ch::mges to be surnr.nrized on Form.. A-2. T.is vrill ..,ive us the nti.mes of the banks involved in c:1M 6 es as well 8.S ce .:taL.1 st~.tistLc1.l d1,ta which .'.l.re essential in a study of b::uiking concentr:1tion. ·I1hc follo\7ing changes only .'.:I.re to be reported on Form A-3: consolidations, liq1.ud".tions, pri.mr-.f orgrmizations n.nd conversions of priv,, ,te bx,.ks to sto.te ch,,,rter. It is 1.mnecossary to prep'.'l.re t:1is form for sus?ensions c'.lllcl reopenings becaucc these :.-1,,_ve "tlru'ldy been reported on the Cammi ttee I s suspension schedule. Convernions of state wd national banks likewise ;-wed not be reported on this form bec:-,,1.1.se the:, h'"'..ve :'.lre..,_~- been listed ii.1 t:rn study on n"..tiom.l b ~ changes. A .fev, s:;iecimens of Jon, A-3 h:ive bc1.m ~ttached to illustrate its use. It is very import[l.nt th,,t t:rn kind of ch.-w1.ge which is being recorJ.ed should be checked in foe ap:;:,roprin.te spo.ce ,:,,. t the rig.rit of fae form, ~nd. also t:iq,t the incre"l.se or clecre"'.se in the number of s t'.:l.te b:1.!1lcs :ls :1. result of https://fraser.stlouisfed.org Federal Reserve Bank of St. Louis • • - 2 - the transact ion should be accurat ely entered . Ordin~r ily the change in number n.s n. result of ~ consoli ~tion, n. liq_uidn. tion, a primary org:1niz.- ,,tion, or n. convers ion of n. pri.v .... te b::i..'1...1{: wilJl. be one only, but occ.'.lsior u1lly a consolid ation will decrease the number of banks by two or more. Experien ce in prepn.ri ng the data for nationa l bo.n..l{:s indic'lte s that the best procedu re is first to record on Form A-3 all cronges in a given year. Th en the s:10ets may be sorted accordi ng as they indicate an incre':\.se or n. decrease , and each of t:1ese groups sorted n.grrin accordin g to the !:-::ind of cJ1.'.:tng_e! The results ma;r t:1en be recorde d on Form A-2. The totals for suspension s and reopenin gs of st.'lte banks mey be taken from the suspensi on. schedule which h'\s alren.cy been prep'1!'e d for the Comnitt ee. The tot:11 for convers ions to and from n'\tionn l charter will be found 11ren.dy entered. It is necess3 Iy in prep·:tri ng Form li.-2, of course, to see th1.t the ch·mges recorded ~ccount for the differen ce between the number of b:utlcs :1t the beginning of the ye.' \r nnd the number n.t the end of the ye"'\.r. It is desired that the record through 1929 be rm.de up at this time 3.Ild returned to us and tlnt the record for 1930 be reported :1.s soon '1S possibl e after the a~d of the yen.r. https://fraser.stlouisfed.org Federal Reserve Bank of St. Louis • lecleral Reserve Comrni ttce on Branc::, GrO"J.p and Chain :BankL1g • l!ovember 5, 1930. 3A:rr<: C::il.:JGDS--DZFBI TIOU OF TER!iffi In listing and classifying bank changes it is necessary th~t one uniforill p!·ocedure be follor;ed by all aut:iorities; otherwise the results when comJined for the various states r:ill be 1?ractically mea..'lingless. It is not possible, of course, to adopt all of the definitions anJ. descriptive terj;-JS now in ,,_se, for by law and by practice S'.l.Ch terms as consolidn.tion, :merger, absorption, amalga.rnation, conversion, liquidqtion, sus,ension, failure, etc., h..we different meanings and applications in different states. In order to sec'.l.re u..,ifoTI!.li ty, therefore, the follo,·1ing ter. s :mve been decided on .for this stucy. 'iliese definitions apply particularly to :i!'orms A-2 and A-3. State B::u'lks are incorporated institutions c:iartered by the state to engage L.1 co;n.--nercial banking with or without ot~er powers. They include trust companies and stock savings banks. They do not include Morris Plan banks, IIDJ.tu.al savings b::i.n.lrn, private banks or ba..."l.7.cers, or other financial ins ti tu tions C':"8!1 t;:ough these ma;y be ch'JXtercd, licensed .:uid supervised by s t:l te Dl: tho ri ty. Er1."'lches are not to be reported or enumer:1 ted .::is bo..nks. !_ Consolid'ltion is the corporate 1.mion of two or more going banks into one bnnk w11ich coatinues under a siaf;lo charter, either neYI or old. The term is used in this study not in a legal or technical sense, but in on economic sense, the e~sential feature being that the business of two or more going b~s bocomes conce:itrated under one cho.rtur md one mo.n-:1.gemcnt. The method o:f effecti!16 the consolidn.tion, nhether by purclul,sc of assets, assumptio;.1 of deposit liabilities, exch1,j:1_·e of stock, or other procedure, vnries ...-,it:'1 circumsb,nces ud is u.'1.essenti'll ia fois stucl;'.{. llhat is here described n.s consolid'ltion is freq1.1ently design:l.tcd by the tert'ls "merger, 11 11 nbsorption, 11 113.Ii.nlg .ntion, 11 11combin"..tion, 11 or •~i?urch:i.se, 11 '1.Ccorclinb to different points of vie,1. It i:1.clud0s those c.1.ses where one ban.le 'ibsorbs .:mother 'Uld turns it into a br:i..'1.ch. U;.uortu.1.'ltely for purposes of st"l.tistical cl'.:1.ssific.'.ltion, a consolid~tion is not a simple tr::1.nsactio~ like a conversion, a liquidation, a prim.-u-y org:uuzation, etc., but is .'.llmost inv"triably complicated by the fact th"tt t:1ese other transactions n.re inciclental to it. Th t is, n. consolidation generally entails :i. volu."lt~r liquid..3.tion a.nC: the issu."tnce of n ner, charter; but these .'.\ttend::i.nt circumst3.nces should not obscure in the st~tistics the import[l.nt f[I.Ct that n. conce:,itr~tion o:f br.wucing has been effected by the tr.'.lns.'.lc tion as a \7hole. https://fraser.stlouisfed.org Federal Reserve Bank of St. Louis • • - 2 - When two n:.1.tional bn..."'l.ks consolidate under a stci,te ch:u-ter, the transaction is to be reported as a consolid.1.tion, 3nd an incre1.se in the number of st1.te banks is to be entered on Form A-2 under the heading ''by Consolidation of N1.tional Banks. 11 .A.11 the b~cs that :1re parties to a consolidation must be open and in operation at the time of the consolidation. The absorption or liqui~'.ltion of a suspended b,'.:lnk 1 s (1Ssets by another bank is not a consolidn.tion, but is considered merely incidental to vdnding up the business of a bank already reported as having suspended. On the other h3lld, if the assets Md liabilities of a wen.le b3Ilk are transferred to another ban.le in order to avoid suspension, the transaction is to be counted as a consolid1.tion, and not as a suspension • .A. Conversion is the issun,nce to n. going bank of a sto.te ch'.lrter to supersede the Il.'ltionn.l charter under which it has previously been oper1.ting, or of a national charter to supersede a state ch:.1rter. In other words a charter in one system is given up and a new charter in tho other system is procured. Only si~le conversions looking tmvard pernu::i.nen t operD.tion under the newly issued charter and involving no other change are to be cou.n ted as conversions. M::my conversions, of course, are effected merely as a necessary leg(11 step in a consolidation. In such cases the converted bank is absorbed D.nd the new ch..1,rtor is surrendered shortly after the conversion. Such conversions are ignored in this study, cmd the transaction is reported simply as a consolid1.tion; except tiULt if the temporary bo.nlc 1 s existence runs over the end of the calendn.r year and it consequently enters the record v7i th an end of year condition re ,? ort, it is tl1en counted as a conversion for the year in which it occurred, o.nd as a consolidation for the year follovli.ng. Where a n.1tional bank surrend.ers its charter and is ::i,bsorbed by a state bank mich continues uninterruptedly under its own ch.:u-ter, the transaction is not to be classed 1.s a conversion, for no new charter is issued in lieu of the old. Inste1,d it is cl~ssed as a consoli~1.tion. It is the custom of some authorities in their reports not to show conversions as such, but to cl1.ssify them as liquid1.ted b~n.lrs or as newly chartered b1:mks, according to the point of vie,1 of the re·?orting .1.uthority. In this study, however, it is intended th1.t Dll c1.ses of 1.ct~k'll conversion be reported D.S such, v,i th the exception mentioned above of conversions which are involved with consolidation. The decreases by conversion in the number of state baril.cs are the srune as the increases by conversion in the number of n~tional banlcs; and vice versa. Accordingly~ list of the conversions occurring in the period of the study, classified under the method described, is attached so th'.lt the commissioner m..-zy check the \7ork th'.lt h~s 3J.rea.dy been done. https://fraser.stlouisfed.org Federal Reserve Bank of St. Louis • • - 3- Conversion of a private bank is the issuance of a state ch~rter to already existing private bnnk. 3ll ! Suspension is the closing of a ba.nlc to the public either temporarily or permanently on a.cc~.mt o~ fina..~cial difficu1ties, either by supervisory authorities or by the bank's board of directors, with or without ultimate loss to depositors. The term "failure 11 is often used as an equi val en t. In this study suspensions are identical with those reported separately on the Reserve Com.ui ttee I s Suspension Schedv.le ( COP'.{ attached), except that the numbers entered on Form A-2 should not, of course, include private banks. If the assets and liabilities of a weak bank are transferred to another bank in order to avoid suspension and the weak bank liquidc'"\.tes, the transaction is to be counted as a c omrnlidation, and not as a suspension. ! Reopening is the resumption of o;orations by a suspended bank. The reopening ma;y be attended by a change of name and i ssu.ance of a new ch:u-ter and still be cl3ssed statistically ~s a reopening rather than a prirm.ry organization. A reopening consequent upon consolidation of two or more suspended banks should be classed as a single reopening. If a suspended national b:mk reopens as a state bank, horrevcr, or vice versa, the transaction must be counted as a primary organization and not as a reopening. ! Primary Organization is the ch~rtering of a newly orgruiized ban.~. It can be readily distinguisl1ed from a consolidation, succession, or conversion of going banks, in spite of the fact that 3.lly of these transc,ctions may require the issuance of a new charter, but it will frequently be difficult to distinguish it from a reopening. The extent to which the stockholding interests, assets and deposits of a suspended bank continue intact must guide the , J.:.::.:. Jnent in determining i'lhether to classify the bank as a primary organization or a reopening. If a suspended national bank reopens as a state bank, however, or vice versa, the transaction must be co1.L.~ted as a primary orgn.nization and not as a reopening. There are numerous cases where the business of one or more depn.rtments of a banlc is sold to another b3lllc, either newly organized or already in operation. Such a newly orgn.nized b:mk is to be classed simply as a prim':l.I'y organiz~tion. If on the other hand, the trruisfer of assets occurred between bn.nks already in operation and both continue in operation after the transfer, it is not to be reported ~tall. There are also cases where a bwJcing office previously operated as a branch is incorporated as a w1i t bank. Such en.sea sho-..ud be classed as primary organizations. ~ Liguidn.tion for purposes of tnis stuey is the coll!>oratively rare instnnce of a going, solvent ba.'1.k discontinuing operations, surrendoring its ch:1rter, and quitting business. Voluntary liquidations lego,lly incidental https://fraser.stlouisfed.org Federal Reserve Bank of St. Louis .., ,. • - 4to conversi on or consolidation should not be reported separately, since they are implied i n the conversion or consolid~tion itself. Suspensions should not be reported as liquidations. If a bi"1....~ 1s assets or t ~o grc~tor portion of them nrc absorbed by another bank unc":.er some agroc:non t ,;,,ho rob;,· the latter assumes t~e li~bilitiee of tho former, the trans~ction should be rc?orted as a consolid~tion. If a state b~~ is absorbed by a nation:u bank, the transaction sho'.lld be reported as a consolicb.tion and not ~s a liquidation. No transaction s~o:1.ld be classified as a li~uiclation if it can possibly be cl~ssified otherwise. ! Succession is the rech::l.rtering of a going b:mlc under a ch.~nged ll3.me but by the same c!~rtering authority. A succession ffi'1J' be attended by a cert~in amount of reorga~ization, but if it involves consoli~~tion of two or more going b.'J.l---.:':s, the tro..nsac tion should be classed n.s a consolichtion o.nd not ::i.s a su.c -.,~•,s.:. o .:.. Since r·. );essio::is as such do not chn.n.:;e the nu.'!lber of banl::s, t:-:ey need not be reported. https://fraser.stlouisfed.org Federal Reserve Bank of St. Louis Feder:J,l Reserve Committee on .Bra..--ich, Group Md Ch:i.in B"nldng Form A-1 SUMMARY OF CHANGES IN THE lnJl.@ER OF ACTIVE NATIONAL BANKS SINCE 1920 Stn.te _ _ _ _ __ 1921 oer of National b~cs :it beginning of ye"l.r • • • • cre'\se in nU.!!lber of Na.tion3.l b'.k"l.k:S: by Consolid..."ltion • y Conversion to State ch-:i.rter • • . . .. .. . . . . . . . Ii I ! I Cn.lend'tr 1922 1923 1924 ve'.ll' 1925 1926 . I 1927 1928 1929 10-Year Period. 1930 . ·o;r Suspension ~y liquicbtio:i Tot'.ll . . • • . . ... • . . .. • . . .. ... Decre3.se . . . . . . • .- :.:rcre:ise in r.u.mber of l;3.tion:i.l banks: by i::onsoliJ..'1tion of St te ba.rJcs • . by Co:wersion from S hte ch'.:1.rter . . I Con"crsi on from Fri vr1. te bru'l!.-::s • . by ?.eopcni. 6 . . . . . . .. . . . Primn.ry Org:i..~iz~tion . . . . . • ,--. - :,- - . ,_ ,.._ ..... .. Decre'lse, or . . . . . . . . . . • Incre~se . . • . . . .. .• . • Tot:i.l Incre'.'l.se et Tet 'hur:ber of !T~tiono.l b.'.\nks at end of ye:J.r https://fraser.stlouisfed.org Federal Reserve Bank of St. Louis I I - - I by - ,__ - ·-- ,_ - - ·- ._ I .:;'oJor'll 3.cscrvc Cocr11i ttec 011. :Br:mch , Group :,nd c:1.1.i:.-1 B:-.1.ll:i::b E'or:n A- 2 §UMrJL-IBI OF CHA.i1Q:_ES Iii ~HR :i.TIJM3ER. OF AC TIVE S'iA'IE BAi.JKS SEJCE FJ20 S t8.te .___________-----F1921_i1922_ I ~;;~_C:;:dsr_-;::_i~92S ;]\ ---:oer oi St-:i,te b'.:1.l::cs at bec"in"c1int~ of ye'\r • . • • • • • • , 1 ___ .D':lcre,.,se in mu:foer of St.,te ·o'Ull;:s : . .. .. . -----+----·-·--- -- - ·- t·-- ----------- ------~ Tot~l Decre~se •• Incre:\se in m.mioer of St'"l.te bq:!ks : by Consol::.i.::l.tion. of N:-i.tio~1r,.l b"..!1::.:s • • • oy Conversion from lfo.tion.'.'\l ch1.rter by Conversi on fror:i Priv~te b1.1:21:s . :rct Decre::1.se, or • .. . ~:umber of State b.'l.nks at end of year https://fraser.stlouisfed.org Federal Reserve Bank of St. Louis .. .. ... . 3et i ncre'l.se • • • + 19_0~-[1c9_30 [_ lg:~~~ . . - - -i---- 1-----+-----+--- ------~-----+------- - - - - + - - - ~--- ~. -- -- -- .. L - . - - I Tot~l Increase •• 1928 I ------+-----+-----+-----li------1 -----+-i____t'------+----·--_ 7 I I 1 .. . .. _112L _ I . - I ----- -------- I =---t---,,-----,·-----~--~-~ -•---n~--t=-<-=-l=-== ! ·- -· -· - - - - · - j - - - t - - - - - - ! - - - - - 1 - - - - ~ - - - - - ~ - - - - ' - - - - - ---- +--- --------- -- ----+--------- - - - ~ - - t - - - - - + - - - - - 1 - - - - - - - --- - -----1-----+---·-·-'-----+------ - --r----->-- ---· L-~~::~--r---- ---+------ -----t-----t------+-----+----+-- ---l-------•-------+-------t··- ----~-------- = -------<l-----i-----t-----+---- -+-----+-----1----·--+------- ------------ - - - - .___,___ 1 - - + - - - - - + - - - --·--·---1-------1- , _____,_____-'------.....L..-----1.-----1------l--- -----'-----_.!.------,______..,_,____...._ Form A-~ Federal Reserve Committee on Branch, Group and. Chain J3anking St'.:1.te --------- ~ fute of change_ _ _ _ _ _ _ __ ].~~K CF~~TGES DURING 1921-1930 • Report on a. separa·~e copy of t:ds form ea.ch consolida.tion, liquidation, prilil'.lry organization; etc., and check in the space at the right the kind of change • Ci t;y or town I I Popula-1 H::i..rnes of 13.11 banks and trust comp-=mies, of fu"'l.Y ~d nd.. inv0lv0d in t:lis chan,c.:e I tion* I Name I 'Iotal I Loans in re( D.c"ld incnpi tc..l ivestmcnts socrcos (000 1 s omitted) Paid- I Cbnvcrsion of priv:.:i.te bunk 1 - l - ·-·-= -- = Name or I names af ~er change [ No\lly org:mized (prima.ry) ➔=1 • If above classifications are not self-expl.9.Il'.:1.to:cy-, plc~se use reverse side for details. •As given in the b'.3.IL~ers directory at the ti~e the change occurred. https://fraser.stlouisfed.org Federal Reserve Bank of St. Louis --- Prim'lry org.'l:.1.ize.tio11 j l Conzolid..,.,,tion Liquid"'. ti on Na.'!le or n3mes before change I ·--L--f Kii~D OF CnAJ.:G~: - NET C:'.!.A::JG-E I~T iiffiMBill OF S TA'IE INSTii"UTIONS: Incre-.se Decrease ,. •Federal Res e rve Corrnnittee on Br'Ulch, Group '.:t.nd Chain Banking Form A-3 State Date of change (/(,1 <f P-~ ~~ :2--ti, /'t'"J--¥ B.Am::: CHANGES WRING 1921-1930 Report on a separ.'.lte copy of this form each consolidation, liquidation, prim'.ll'y organization, etc., and check in the sp.'.1CC at tho right the kind<>£ ch:mgo. Cit or tOim Name Po:pul.'.l- N.'.lmes of n.11 banks and trust COJ:4)anies, tion * of an kind involved in this ch~::1.c: : e Knm OF CILUIJGE: Pa.id- Consolid:ltion / Liquid.1 .tion Na.me or no.mes before change loo I. 55"/ I &S 000 I 7lS -;..os-, ooo Prirro,ry organization_ __ Conversion of pri V'..1- to b.1.nk_ _ NET CHANGE ET HUMBER O? STATE DJS TI TUTI O:!S: 'I 'I Increase Decrease Ner1ly org3.nizod (prim.'lry) If above classifications arc not self-cx:pluna.tory, please use reverse side for details. *As given in the kmkers directory at the time the change occurred. https://fraser.stlouisfed.org Federal Reserve Bank of St. Louis 0 0 . Federal Reserve Commit tee on • :F3rnnch, C-rOU') wd Ch3,in :B,,.nking Form A-3 State D3,te of change /}~4~ ~r~~ is. t9vt-f- I :S.A.l~ CHAUGES DURii.JG 1921.-1930 Report on n, seporn.te copy of this form en.ch consolidation, liquid.3.tion, prim1.ry orgn...lli za tion, etc., and check in the spq,ce 1,t the right the kind of c.ri.a.nge. City or tovm 1~:1me Popul,'.1,tion* KIND OF C~iGE: PaidTotal Loans rein and inc::roi to1 vestments sources (ooo•s omitted) }fames of all b1,nks :md trust c omp!)..Tli es , of onv kind. involved in this ch~.e:e Consoli d-:t tion Li qui d.1, ti o;:i 1fa.me or names before ch'.IDge /)•_j/.~ 0Ar?t. ~,__ /( 07.-'-e/:: 1?5 ½ !3cUA-/C e>f: J -)- 7 7 I - ~~-e, , /J~Sr-a__.L- At'"~ l'C ,tf /0 3 I I[, ,j I N3me or nrunes after chruige 'L J, I I ?t~c1 -<ft-;,___~_ 7---.6- /3eu,.,-I--<. . l I I If n.bove classifications are not self- expl1natory, please use reverse side for debils . https://fraser.stlouisfed.org Federal Reserve Bank of St. Louis Conversion of pri V.:J. te b 'UJ.k I NET CHAi:TGE DJ lTUM:SER OF STATE IHSTI TUTI mrs: Incre.'.1se lTewly orgnnized (prirrnry) *As given in the b~ers directory at the time the change occurred. Pri111.;,1.ry org3.nizntion S7 ; 1-/,S r.S I J(erv-c.£.C ✓- Decrease I ·Federal Reserve Cormnittee on :Branch, Group nnd Chain :B'.mking Form A-3 Sb te / / U..--t- Date of change ~ --<2 C l'.-6 C-<.."v<.- Y, I 1/ J-? :BANK CHANGES DURING 1921-1930 Report on a separate copy of this form e~ch consolidation, liquid~tion, primary organization, etc., and check in the sp;:i.ce at the right the kind of change. Ci tv or torm Name Population* P3.idLoans in and incani tf.l.l vestments ( 000 1 s omit tcd) Names of all banks and trust companies, of 1mv ldnd. involved in this chanee KIND OF CHANGE: Total resources Consolidation - Name or n~es before change ,fl . J:~~ ff I:_Cr~~ foc, .ooo IJ J~ ,y: ~eru--ft ,ti~ J/1.-U-+.f Liquicbtion /,/t,J_,,deut4 J ~ f o , @o. I lfoo S"J&o 6.1/ 7.3 1--'o o //, &J.j f 3. II 7 \ l Nrune or names after change Primary organization Conversion of private bank l NET CHA.i.iJGE IN NUMBER OF STATE IlISTITUTIONS: Increase Decre3.se Newly organized (primary) If· above .classifications a.re not self-explanatory, ple1.se use reverse side for details. *As given in the bankers directory at the time the ch!l.llge occurred. https://fraser.stlouisfed.org Federal Reserve Bank of St. Louis / •Federal Reserve Cornmi ttoe on Branch, Group and Chain BMking Form S t8. te / ~ 1Ch--/( A-3 Date of ch::i.ngo B.,iHK CHANGES IIJRING 1921-1930 2i.,v,{L 3, l<j 3 D (/ Report on a sep'U'ato copy of this form o~ch consolid~tion, liquid'ltion, prim.:'U'y organization, etc., and check in the sp~ce .t the right the kind of ch8Ilgc. Cit or town lh.me Population* - KilJD OP CH:J.WE : PaidLoans Total in and inrec~ ital vestments sources (000 1 s omitted) Na.mes of o.11 bD.nks and trust companies, of a kind in7olved in this ch-:m:,.e Consoli d.tion N0,,me or nn..mes before ch't.."lgc ~ ~,/(e~ I 6,tJoo, ooc. I •I 'I ,, I/ Cle~ ? 1 a - ~ l3a.u..K. f:9-. ---, a__../....e..e,. 2 ~ f!o. 9;~~r<2- J~,- {_!JCJ Liquid:,.,tion loS. ooo I ~1 o 7,.2- s7 I. Primary org·iniz~tion_ _ J 1..:r:ooo I -5;,,ooo 7, , J I 5f 6 3 7, F o 7l 1 ;O I 'f. ooc> lf'S7o I I Nan10 or no.mes ofter chmge /( Convon,ion of pri V'1 to b[l.nk: ~S:73f::, I NET CHAN GE HJ 1TTJi.ffiliS OF ST.ATE EJSTI .1.·:JI'IONS: Incro,:,.so DocroC1.sc Ne·1ly org:mizcd (prim-u-y) If above cl::i.ssific'1..tions a.re not self-expln.n:i.tory, :plen.se use reverse side for dcto.ils. *As given in the bankers directory !).t the time tho change occurred. https://fraser.stlouisfed.org Federal Reserve Bank of St. Louis --- . • State Form A-} Federal Reserve Committee on :Branch , Group and Chain :Banking Date of change / (~c/'='1 ~ ,.Lo lft-1 BANK CHANGES DURING 1921-1930 Report on a separate copy of this form each consolidation, liquidation, primary organization, etc., and check in the space at the ri ght the kind of change. City or town Name Popula- Names of all banks and trust corr;panies, tion* of anv kind. involved in this chan~e Loans Paidin and incaui tal vestments (OOO 1 s orni tted) Total resources Name or names before change rr~~ J~ .9~ I I?~ ~.6-0 ?--. 70 4f-~ /3cu,./( r J ~ <!>o. ,i,U-.T,/3 _, l - { , ) ~ ~ t-5~ /Ja.u,;~ '?- . 7 oo l - Consolidation ~ Liquidation J-~/j~c_ 0 KIND OF CHAlmE: rs ?-1 J" 307 So J/ "f '1 S71-- ?--.6- jfto 51-j 'I I Primary organization Conversion of private bank I NET CHA.HGE IN NUMBER OF STATE Name ·.or names after change INSTITUTIOllJS: J~ ~ It I /B~-IC r- ✓~ @o , JS I I Increase I Newly organized (primary) If above classifications are not self-explanatory, please use reverse side for details. *As given in the bankers directory at the time the change occurred. https://fraser.stlouisfed.org Federal Reserve Bank of St. Louis Decrease -:2-- • State Form A-3 _ederal Reserve Comnittee on Branch, Group and Chain Bwldng Date of change /Ji 44 I a. ~ /4.u/~ /Jiu+ 2. 8°, I '71--3 BANK CHANGES DURING 1921-1930 Report on a separate copy of this form each consolicla.tion, liquidation, primaI'iJ organiz3tion, etc., and check in the space at the right the kind of change. City or tmm j Pop1.1.laN3.me tion~' Total PaidLoans reancl inin sources c~)i tal vestments (000 1 s omi ttecl) Names of 3.11 b3.:c1ks .:md trust companies, of an' kind. involved in tl:is ch'3.."1."'e. 12.~~ j"c,l,f.,.(_ I 3 0, DO O 'I I, - ,, I, I , J I aA-d C?./3 r.A---0 ~c. a.-4-"w-_u ?Jt ..e.-T4.--t!!..#n-t rvl--- Jit'( c:;,.~ 13. ff{, <:. I ) ~ Jtaif ;y1~1 1 /3 I, t'u.,.. /'(_ 7/-t..u.41" (!>c::> , I b~~fu~o 6 0 0 ' 8'Do I-/ 3 (.) 0 G.3oo 5.3co 7'1-'lo I l --- --- f 300 Prim.:"l.ry organizn.tion --- Conversion or priv~te t~.!1.k_ __ WET cµ_,.ArGE rn ]'ll!le or nanes o.fter ch::mge ., 13 hi CE --------+-----I--- ,{ju~ ~ @o . If p:oove classific~.~i ons are not self-e:;c_:,:>1'3.!13.tory, 91,c:=--..se use reverse side for dct::iils. *As given in the b:w1kers directory 3.t the time the change occurred. https://fraser.stlouisfed.org Federal Reserve Bank of St. Louis Consolid'.1tion Liquid.r•.. tion Name or n&~es before ch3.11Ge - .,., KIND OF CHAfTGE: ~TU'..13ER OF S ::::1r::-.: ms TI Turrr ,:x:s: Incre "..se C) Decre'lse 0 'Federal Reserve Committee on Branch, Group and Chain Banking Form State A-3 Ia te of change v , ),(~~ J./.J/.y I 6, I ? ~ 'f BANK CH.AlifGES DURING 1921-1930 Report on a separate copy of t~is form each consolida tion, liquidati on, primariJ organizat ion, etc., and check in the space at the right the kind of change. Ci tv or town :fame Popula- liames of o..11 banks and trust companies , of :c:inv kind involved in this chan{;(e tion* KiliTD OF CHJBT G:E: Total Loans Paidreand inin caoi tal vcstr.10nts sources (000 1 s omitted) Liquidati on Name or names before change "J,;3S-o (oo?;o o~ J ,, - 'I J~ J t ~ ~ < ~s ?--71-- 3S8'" -0-L& I f ~ 4f~ /3~ Jfo ?--10 ;,7 ~ _J I Na.me or names after change It ~~~~'<. 'I I 3o I I ! ~euly organized (prirory) If qbovc classific ations are not self-explo ..natory, please use reverse side for details. *As given i~ the barL~ers directory at the time the change occurrod. https://fraser.stlouisfed.org Federal Reserve Bank of St. Louis v Consolida tion Prirrn.ry orgrmizat ion Conversio n of private b,"l.IL~ -~ l iil"ET CH.ANGE IN 1JU!,ffi_;.:;__-q OF STAT.:: I]ST:.: 1IUi'ICHS: Incre:\se 0 Decre.:ise 0 ' Form A-} Feder'"l.l Reserve Cornmi ttee on ::Br.'.lnch, Group and Ch,:i.in :Bo.nldng Sbte fute of ch::mf;e - - ' . 9'Pf~,s JJ,(t,.,. cl._ 2 l'J~8 :BANIC CH.AlTGES DURETG 1921-1930 Report on a sep3.r:J.te copy of this form e[l.ch consolid'.\tion, li qui d'l ti on, prim'.lry orga.nizn.tion, etc., '.l.Yld check in the spn.ce r.i.t tho ri ght the kind of change. City or town H1.me Popul~tion* Lo::-..ns and investments (000 1 s orni tted) P'l.idin ca;pi t'.\l lfomes of :J.11 bn.nks n.nd trust compnnies, of any kind involved in this ch-m.r..:e KETD Ol CF...A:iG:,;;}: Tot-:tl resources Consolichtio 1 Li qui d..1. ti on :T:-unc or n..'\!Iles before ch1.11ge Prim'll'J' orgn.nization ✓ ' I I I - I I I I I t Increase I I I I Nerrly organized (primary) - ~ e. ½ lo ">1. e .e~ r-;;.." I Ooo S rc,_.t ~ - / j a..._t'-- I 3 (.) I If 3bove cl~ssific~tions nro not self-cxplw:J.torJ, ple~se use reverse side for detn.ils. . ._\.~ given in the bankers directory at tho time tho cl1!:'.llgc occurred. https://fraser.stlouisfed.org Federal Reserve Bank of St. Louis I lJET CHlilTGE HT 1TTfoffiER OF ST.."...TE INS TI TUTI OHS: 11.:l.me or no.mes 'lf ter cl'k.'l.nge I l Conversion of pri V'.\ te b:m~o:: Decrc1.so I Feaeral Reserve Comr.nttee on :Branch, Group 3.nd Ch:l.in B:".11king Form A-3 St:,,tc D'."1-tc of chwge ✓ lU-vl--JdAl._ JJtry I 7 177--% BAL'JX CHAlJGES DURING 1921-1930 Report on 3. se:p.'.lr:,,te copy of this form e1.ch consolid'ltion, liquid.:::1.tion, prim:iry organization, etc,, nnd check in the space o,t the right the kind of change. City or town Name Popul:ttion* lJ tunes of all banks and trust comp:mies, of .Rnv kind. involved in this chwr(e ICIHD OF CHANGE: Tot'.11 Loans P:1.idreo.,nd inin cauihl vestr!l.ents sources (000 1 s omitted) Consolidation Hame or names before cha;.1ge /3fL~,£r;_ 300 /3~~ ~ ~~ Liquida.tion lo ►S ✓ Prir.iary organization 38" Conversion of pri T'i te bank -. . - Name or names after change I NET CH.Ai:T GE Il1 NU~.IBER OF STATE INSTITUTIONS: Increase Decre~se Newly organized (primary) If ~bove classific~tions :1re not self-explnnatory, ple~se use reverse side for det~ils, *As given in the b.;1..'lkers directorJ' at the time the change occurred, https://fraser.stlouisfed.org Federal Reserve Bank of St. Louis I F~der:11 Reserve Corrrni ttee on Br'JJlcb, Group and Cho.in B<i.nldng Form A-3 St",tc Date of ch:-1.n[;c /Jt~d~~ ,Yu.u..- .'l-'-/ 1 1-i-7 (/ BANK CHANGES DURING 1921-1930 Report on a separate copy. of this form e.'lch consolid:1.tion, liquid.1.tion, prim-u-y orgrurlzation, etc., rmd check in the space at the right the kind of change Citv or town PopulaN3.l"llG tion* Loans Paidin Md incrrni t::1-l vestments ( 000 1 s omitted) names of 1.11 banks and trust compr.mies, of any kind. involved in this chan12:e Total resources Name ; or n3.mes before ch'.)Jlge ?Jut?;~( /,ooo ~(. o--f- ?Ju-. KIND OP CHAi:JGE: Consolid1.tion Liquidation 7;~_;__ lo Primary organization I I Conversion of pri v~ te b"..Li.k I, / I - lI I \ Name or names 'lfter chru1ge ,, /I I - JJiA l~~q_ -cf~ ~~ I i >~-1 I :Jerrly orgrurlzcd (prini-1.ry) . - ( -- I II i If ~bovc cl~ssificn.tions ~re not sclf-expln.n3.tory, please use reverse side for details. *As given in the bankers directory at the time tho change occurred. https://fraser.stlouisfed.org Federal Reserve Bank of St. Louis }J::LT C?'..Al:J GE I1J i.M,:BER OF STA TE L1STI TUTI ();:TS: Incrcnsc Dccren.se I F,prm No. 131 "Office Corres:pon To_ From r, rlov ( ce FEDERAL RESERVE BOARD r 13, 1930 J{~ 6'f~) r. https://fraser.stlouisfed.org Federal Reserve Bank of St. Louis 2-84.95 OPO 4 • - • • https://fraser.stlouisfed.org Federal Reserve Bank of St. Louis https://fraser.stlouisfed.org Federal Reserve Bank of St. Louis r • 0 • • • • ~e ~r81 R, se:.ve Co ...:. m itte3 on A Branch, Group anJ Chain Ba~ F. R. District No. g State Year TablG I7-e -- T:-r?ical o~erating ratios of groups of national banks classified accordin~ to rat o of net loss or net prof i t to investdd capital Operating rat i on an numbered on page 3 of "Analysis of Ban..'-<: Farni ngs 11 Tvnical o:12era t.inr ratios of c;ro u:Qs Showing no profit Showing net addition to nrofits• or a nJt loss• 0 l Le-,s f 0.00~ 6~ 31 12% 91 or II to tn&.n to to to r-nd ::; ggct, 8 991 ll .99t more I .;. 99~ 1~ over •'., I 1 . All grou.ps I - 2 3 - 4 I is - 6 - 7 8 I 9 10 11 12 13 14 15 16 . 17 18 19 20 21 22 23 I 2 25 26 .. Number of banks in group .A_gregate loans and inventment of o ~nks in group ( 'Iho.usa:i d. s of QO lla. r!:1 •Percentage https://fraser.stlouisfed.org Federal Reserve Bank of St. Louis 23 on sche u le for analysis of bank flarnings. Federal Reserve Committee on Branct, Group and Ctain Banking F. R. District No. State Year ------- ---- Table V-e -- Typical operating ratios of 5 roups of national banks classified accordin 5 to size of loans anct investments • rating ratios as numbereci. on l_)age 3 of ".Analysis of Ban,-: Ecirnings 11 1 2 Under I $150,000 I to j1r-i0 . COO 21~9,999 I I '!Ypicril ooo s2~0 .,I ' ' to to 4gr; ri93 74q _()99 I f 0T)8Tcl ti n,a- ratios of .o-rouns with loans and investments* $5oc, coo $750,000 $1,000,000 / $2,000,000 !$5, 000, 000 T310, 000, ooo /$:;0,000, 000 j to 9'19. qgg to 1. qqo to I to ~ 9 9_1: _ . a qg 4 agq ggc\_'h'.l0 3, 99-~ h and over ·- - 4 . ---- 6 7 g () ./ 10 11 12 • 13 ~ 14 https://fraser.stlouisfed.org Federal Reserve Bank of St. Louis grOU!JS --- 3 5 .All, -- - 15 16 17 18 19 20 21 ---- ---,--r ---t ---r ---t --~ f--- -+- ---+ ---i ---- -t-- ---L --- 22 23 25 26 ber of brnks in group ggregate oans an invest~3n ts ?f banks in group (Thousand s of -101 lars) https://fraser.stlouisfed.org Federal Reserve Bank of St. Louis *Item K on schedule for analysis of bank earnings. • • •• Federal Reserve Cornmittee on Branch, Group and Chain Banldnt;. November 12, 1930 Re: Tables IV-e and V-e of Earnings Pro.ject ~ach of these table forms should be filled in for each state or fraction of a state in your district for each of the four years, 1926 to 1929. Table IV-e analyzes the data with the end in view of discovering whether or not there are definite trends of operating ratios associated with various rates of return•. on invested capital. For the preparation of this table, the banks in a 9articular state for the year in question are ·grouped on the basis of the rate of return on invested capital as indicated in the box of the table. Then, representative operating ratios, as indicated in the stub of the table, a.re dPrived fr_;r each of the groups by means of a simple arithmetic average. If in 1926, for example, there were 88 banks in the group showing net profits of 6 to 8.99 per cent, the average of the 88 ratios numbered 1 is derived and placed in the appropriate space. In the same manner the average of each of the other ratios is derived for that group. It was decided to use the average rather than some more elaborate statistical device, such as the median, after consultation with various statisticians within and without the Federal Reserve System, and after experimentation here. The much shorter time required to procure the average as well as the variety of policies and practices from bank to bank in reporting balance sheet and income items suggested that the use of a statistical device more elaborate than the average would not be justified. It should be noted that when negative and positive items (red and black) are to be averaged in the same series, the addition should be algebraic, and the sum divided as usual by the number of banks in the group. If the algebraic sum is red, the average, of course, should be set down in red on the table form. Please observe that the various representative ratios of Pach group should be complementary and balancing just as in the case of any particular bank as described in the note at the bottom of page 3 on the blank, 11 Analysis of Bank ~arnings . 11 Accordingly they should be checked in the same manner. Table V-e groups the banks on the basis of size of loans and investments, as indicated in tho box, and the reure.sentative ratios are to be calculated for the groups as in the case of Table IV-e described above. With each of the tables which you transmit we should be glad if you will send a respective work sheet, which will give in the case of each typical ratio you compute the sum of the ratios of all of the banks in the group before dividing by the number of banks to g8t the average. In other words, thP figure you will set down in each case will be the same as the typical ratio multiplied by the number of banks in thn group. In organizing the material on a national basis, we shall use this figure Axtensively in combinations of groups and statPs which will be made for the purpose, among oth~rs, of avoiding a reprPsentative ratio of a group so small that an average would be unduly weighted by one or more radical banks. It is sugg~sted that blank Tables IV-A and V-e might be used for these work sheets if properly labellAd. https://fraser.stlouisfed.org Federal Reserve Bank of St. Louis -, • •• • - 2 - We are interested in making tests of some of the ratios to see how representative they are. In this connection experiments have been conducted here v:: ~h the average deviations of the components of particular averages. However, we should like to have the results of experiments on a larger body of 0·,ta and to this end are asking that you compute reoresentative ratios for your d istrict as a whole; that is, combine the states and work out Tables IV-e and dist~ict basis. A typical ratio for a particular group on a district V-e on basis can be obtained by combining the aggregates for ~tates, a! r~gu?sted in the preceding paragraph, and dividing by the total number of banks in the whole district in this particular group, After having done this, com~ute for each average giv~n the average deviation of the components from the average and set these deviations down on an accompanying work shePt for transmittal to us together with the tables of the ratios themselv~s. Blank Tables IV-A and V-e may be usnd here again as work sheAts, but they should be carefully labellAd, To illustrate an average deviation -- let us suppose that ~e have a series 1, 2, 3, 4, 5, 6, 7, J , 9. The sum of this series is 45, the average is 5, a Seri es 1 4 2 3 3 4 5 6 7 8 9 Sum Average Deviations from the average of 45 5 5. 2 1 0 1 2 3 4 Sum of the deviations 20 Average deviation 2.2 The average of the deviations from the average is thus 2.2. You will observe that there is a short cut method by which the average deviation may be obtained. 1. From the sum of all component ratios greater than the average ratio deduct the product of the average ratio multiplied by the number of these greater components. 2. From the product of the average ratio, multiplied by the numher of components which are less than the average, subtract the sum of these lesser components, 3. Add the results obtained in (1) and (2) and then divide by the total number of comoonent ratios. By comoaring the average deviation with the avera e, we get some feeling as to the compactness of the series, the comparative valuAs of various ratios and how much assurance one could have in generalizing from them. Thr.se deviations need to be work ed out for one year only. https://fraser.stlouisfed.org Federal Reserve Bank of St. Louis •• - 3 - • complePlease send in tables as you finish them withou t waitin g for the ial. mater the zing organi begin tion of the whole projec t in order that we may ncy with In experi ments condu cted here, we are impres sed with the freque checkafter even 11 which we find 11 earnin gs schedu les placed in a wrong group thing, of sort this ing. In order that the study may not suffer as a result of give will it is hoped that those charge d with the work in the variou s banks specia l attent ion to the matter of group ing. https://fraser.stlouisfed.org Federal Reserve Bank of St. Louis nt https://fraser.stlouisfed.org Federal Reserve Bank of St. Louis o all • R. nts • • • • Federal Reserve Committee on Branch, Group .:1.nd Ch.::1.in Banking st~te - - - - - - - - - NUMBER OF ACTIVE ST.ATE BANKS* CLASSIFIED BY SIZE OF LOANS AND INVESTMEl1TS June 30, 19c0 Loans .:md Investments June 30, 1925 June 30, 1930 Number Aggregate Number Aggreg'tte :Jumber A0 greG'-..te loMs .3,nd of of loans and lo:ms Md of b'l.nks investments brmks investments b;,n..1.cs investments (ooo omi t t0d) (ooo omit tea) boo omitted) Tot'll Number Under ~150,000 $150,00Q to J24q qqq 2'10.000 to 4qq qqq soo.ooo to 74q qgq 750,000 to 999 9qq __L_OOO om to _s_Q_OO 000 to S.000.000 to 1_qqq_C)qq 4 qgq g,:iq q qqq qqq 10 000.000 to 4o.gqq_qgo '20,000.000 '1nd over *Includin:; trust con:g;>anies .'.:l.nd stoc1: S.'.:l.Vings b::ml::s, but not including Morris Pl'.ln brui.ks, nru.tutn.l savings banks, pri V'l.te b'J.nks or other fin')Jlci~l institutions. https://fraser.stlouisfed.org Federal Reserve Bank of St. Louis • Federal Rer;erve Com:':ri. ttee oh Branch, Group and Chain Banking State - - - - - - - NUM3ER OF ACTIVE STATE BANKS* CLASSIFIED BY SIZE OF CAPITAL STOCK** June 30, 1920 Capital Stoel: June 30, 1925 June 30, 1930 Number Ag6 regate :-Ju.rnber Agcregate Number of of capital of capital ban:'.rn 000 omitted) banks (oOO orni t ted) ban...1-cs Aggregate capital boo omitted) Total Number Under Sil '=i 000 $1~ 000 ~24.oqq 15 ,00·1 to 2'1 000 25 ,OQl to 49,0.99 I 'JO 000 '10.001 to 99.999 100.000 100 001 to 199 c":Q9 200,000 to - 499 gqq ~00.000 to ooo,qoa 1 000 000 to 4,qqq cqo '=i 000.000 and over*** *Including trust companies and stoclc savings banks, but not inclucling Morris Plan banks, mutu.aJ. savin'""s banks, private ban1:s or other financial institutions. **"Cai::,i taJ. Stock 11 does not include surplus and profits. "'*>ICFlease attach a list giving the names and locatir-n of all banks with a capital of $5,000,000 or more. https://fraser.stlouisfed.org Federal Reserve Bank of St. Louis . • ' Jcacr~l Reserve Comrilittee on Br:1.nc:1, G-rou9 cmd Ch'1.in ::B1nl:,.L1g Sb.te - - - - - - - - - NlJ..iBER OF ACTIVE PRIVATE BA.:TI{S CL.t\.SSIFIED .j,C.CORDI JG TO SIZE OF LO.A1JS AWD INVESTMElTTS -Ju.."1.e 30, 1920 Loans a·1d. Inv es t.:iec1 ts June 30, 1925 Jun.J 30, 1930 I.lumber Aggrcg.1.te Number Acgrog'lte :Jurnbcr A;:::,rc:;s tc lO'U1S 'li1d of lo-,ns snd of lo"..ns "..:1d of 0:1ts investr ba.rus invostmcats ban~rn investments banl-rn boo orni t tcc1.) boo omit tcd) boo omitted) Total lJumbcr Under :jl =iO 000 $150,000 to $24c; qo9 2::;0,000 to 4qo,ggg 500.000 to 74°.9C19 750,000 to 999 999 1,000,000 to 1 9qg 999 2.000.000 to 4.999 099 s 9.999.990 000 000 to 10 000 .000 to 49 ggc, gqg 50,00Q.OOO and over https://fraser.stlouisfed.org Federal Reserve Bank of St. Louis -- -- . • . Federal Reserve Committee on Br:1nch, Grou:p o.nd Chain Bmking S t.'.1 te ------- NUMBER OF ACTIVE PRIVATE B.A.i.\TKS CLASSIFIED BY SIZE OF CAPITAL STOCK* June 30, 1925 June 30, 1920 Capita.l Stock Number Aggregate Number of of Ct.1pi t.'11 b:mks 000 om:i. tted) brmks June 30, 1930 Aggregate ~umber of capi bl boo omitted) b8.nks To'c:11 Humber Under Sl~ 000 $1r.:; 000 111.001 to $24.qqg 25.000 25 001 to I 49 999 50,000 50,001 to 99. qgq ·- 100, 000 100.001 to 193,999 200,000 to 4gg .9c;9 ~00,00Q__JQ 999 ,'")C9 . LQ00,_Q_0_Q to 4 gqq _qqq ~.000.000 rmd over * "C1.pi t'.11 Stock 11 does not include surplus and _,rofi ts. https://fraser.stlouisfed.org Federal Reserve Bank of St. Louis A~,breg-:i, te c.~pi t:il (ooo omitted) https://fraser.stlouisfed.org Federal Reserve Bank of St. Louis :, FEDERAL RESERVE BANK OF SAN FRANCISCO November 12, 1950. Mr. E. I. Smead, Chairman, Committee on Bank Reserves, c/o Federal Reserve Board, iVashington, D. C. Dear Mr. Smead• I replied to your it ould be convenient for me o oe in ashington on Monday, December 8th, to attend meetings of the Committees on Bank Reserves and Branch, Group and Chain Banking. My purpose in writing no is to suggest, if you think e shall not be able to complete our work before Friday, the 19th, that the opening date be set forward the necessary amount of time to enable us to accomplish this. I should like to be at home on Christmas Eve, and, to be here at that time, it would be necessary to leave ,ashington on Friday, the 19th. There are a number of thing~ I wish to go over ith Mr. Riddle before our meeting, 0 I shall plan in any event to be in \vashington before the 8th of December. 0 Your"' very truly, De mty Governor. cc Golden ei:ser, Round, • Fleming, • Riddle. I I https://fraser.stlouisfed.org Federal Reserve Bank of St. Louis of Ba k FEDERAL RESERVE BANK OF SAN FRANCISCO • I https://fraser.stlouisfed.org Federal Reserve Bank of St. Louis FEDERAL RESERVE BANK OF SAN FRANCISCO https://fraser.stlouisfed.org Federal Reserve Bank of St. Louis " FEDERAL RESERVE BANK OF SAN FRANCISCO • J<'orm :No. 181 Date---"'=-=-=="~-=-,,_________,,'-="___,,.-"'-=30 =---- From le l 0 o ett Co https://fraser.stlouisfed.org Federal Reserve Bank of St. Louis t ollor o t 1 0 S ,o een ell t1e cl J ovo on t si i~ ions o b oad :0 , ion l o I, s. 0 • • • • https://fraser.stlouisfed.org Federal Reserve Bank of St. Louis Feder~l Reserve Committee on Branch, Group and Chain B~nking St~te _ _ _ _ _ _ __ NUMBER OF ACTIVE ST.ATE BANKS* CLASSIFIED BY SIZE OF LOANS AND INVESTMENTS June 30, 19cb Loans -:md Investments June 30, 1925 June 30, 1930 Number Aggregate Number Aggreg'1.te :Jumber Aggr e f!.'"t t e lo:1ns and of of of lo'.1Jls md lo-ms and b.,nks investments bn.nks investments b,'1n..1cs investments boo omitted) (000 omitted) 000 omitted) Tot-:i,l Number Under ~150,000 - ~15Q,000 to j249.999 2'10.000 to 499. 999 500 000 to 749 999 750,000 to 999,goq 1.000 .ooo to 1 999 o,qq 2 000,000 to 4,99q,9;9 '1 000 000 to 9 999 999 10.000 000 to 4o qgq q90 ~o 000.000 '1nd over https://fraser.stlouisfed.org Federal Reserve Bank of St. Louis *Includin:; trust comp:mies o.nd stock savings banks, but not including Morris PlD.n bn.nks, mu.tuto.l savings b3llks, priv.'.'\.te b':'..nks or other fin'.lllcinl institutions. Federa.l Reserve Corr.mi t tee on Branch, Group and Chain Bankin5 State _ _ _ _ _ _ __ NUMBER OF ACTIVE STATE :BANKS* CLASSIFIED BY SIZE OF CAPITAL STOCK** June 30, 1920 Capital Stock June 30, 1925 Number .Ag6 regate :fomber of capital of b~rn ~000 omi t ted) banks June 30, 1930 Ag,.sregate Number of capital boo omi t ted) banks Aggregate capital boo omitted) To 'Gal Nurnber Under ~15,000 $1~ 000 15 001 to $24 o,s9 2~ 000 49 I (;gq 25,0Ql to I 50,000 ~o qq qgq 001 to 100.000 100.001 to 199 cqq 200,000 to .. ~ct , ooq (' ~00 000 to 00c, 1.000.000 to ~ gcig 4 qaa.aqo 000 . 000 and over*** *Including trust companies and stock savi:1gs banks, but not includinb Morris Plan banks, mutual savinbs banks, private banks or other financial institutions. ** 11 Ca"l)i tal Stock" does not include surplus and profits. "'*~lease attach a list siving the names and location of all banks with a capital of $5,000,000 or more. https://fraser.stlouisfed.org Federal Reserve Bank of St. Louis Form l2.-5. Feaer~l Reserve Committoe on Branc;.1, Group ·:i.nd Ch'lin B'lllkL1g St'lte _ _ _ _ _ _ _ __ NUMBER OF ACTIVE PRIVATE BAi-JKS CLlLSSIFIED :.c.cORDrnG TO SIZE OF LO.ANS .A.WD INVESTMEl:JTS June 30, 1920 Loans and Inves t.nen. ts Total 1hunber Under SFiO 000 $1 ')0 .000 to $249 999 2~0 000 to 400.0,qq 500.000 to 749.9()9 750,000 to qqq qqq 1.000.000 to 1. 999 goo 2,000.000 to 4.999 999 ~ 9.999.990 000.000 to 10,000,000 to 4g_ggci_gqg ')Q. 000. 000 and over https://fraser.stlouisfed.org Federal Reserve Bank of St. Louis I June 30, 1925 Jun0 30, 1930 Wumber Aggreg:1te Number Acgrog.'lte ~{umber A.,;:;r Cf;'\ te of lO'l.l.1S -md lo,:!lls -i,nd of of lo".ns '\l1d banks investments banks inves tn:c;.1 ts banks invest,.0::1ts 000 orni ttcd) boo omitted) boo omit tea), Federal Reserve Committee on Br.'..l,nch, Group .:ind Chain :B'Ul.king State _ _ _ _ _ _ __ Ntn.IDER OF ACTIVE PRIVATE :BAi.~KS CLASSIFIED :BY SIZE OF CAPITAL STOCK* June 30, 1920 Capi tnl Stock . Nwnber of D'.lllks June 30, 1925 Aggregate Nwnber of capital boo 0111.i tted) banks Aggregate Number of capital boo omitted) banks Total Nwnber Under Sl!'.i 000 $li=i 000 11=3.001 to $24.999 2.:j 000 ___0_ 001 to 49 999 50,000 50,ooL to 99,999 100 000 100.001 to 19q qqq 200 000 to 499. qcq f;00,000 to 999 ,o0,9 1,000,000 to 4 999 qgg 5_,_QQQ,000 rmd over * 11 C-,,pi tn.l Stock" does not include surplus n.nd .)rofi ts. https://fraser.stlouisfed.org Federal Reserve Bank of St. Louis June 30, 1930 A~.breg'J, te C(tpi tetl (ooo omitted) https://fraser.stlouisfed.org Federal Reserve Bank of St. Louis • • 1, 1 • • https://fraser.stlouisfed.org Federal Reserve Bank of St. Louis • • https://fraser.stlouisfed.org Federal Reserve Bank of St. Louis r https://fraser.stlouisfed.org Federal Reserve Bank of St. Louis . ... I I TREA SUR Y DEPA RTM ENT OFFICE OF THE SECRET ARY WASHI NGTON SECTION OF FINANCIAL AND ECONOMIC RESEARCH https://fraser.stlouisfed.org Federal Reserve Bank of St. Louis OV e r • • r-1anu c · ...)t ..,an1- an a .;,!'!l Ot J.. l or a.rti le on ·• rnn-. , .., 1a... n a s 1r '' ver· f ed • ttach . rinter . ou . .... r • ..:i iv:s· n of e rA.::. '1 eer ,J. ro ne ori "L nl ha has been sent to the fJ.rnis he ber 7 , 1930 nl , ..,hief , per '3oa.r l . t: ons , 1all roo 7ill be I a r ------------·--·~----·-· (1 https://fraser.stlouisfed.org Federal Reserve Bank of St. Louis 8 • https://fraser.stlouisfed.org Federal Reserve Bank of St. Louis - V https://fraser.stlouisfed.org Federal Reserve Bank of St. Louis • , •• https://fraser.stlouisfed.org Federal Reserve Bank of St. Louis • ' • ' • fl • • • https://fraser.stlouisfed.org Federal Reserve Bank of St. Louis • --- • • https://fraser.stlouisfed.org Federal Reserve Bank of St. Louis • • ... 8 t https://fraser.stlouisfed.org Federal Reserve Bank of St. Louis • 0 1 • https://fraser.stlouisfed.org Federal Reserve Bank of St. Louis https://fraser.stlouisfed.org Federal Reserve Bank of St. Louis Fe~eral Reserve Co~~uttee on Bra.n.c!1, Grau.p and Chain Banking Uovember 5, 1930. 3AfJK Crt.A.:rnES--DEFHJI TION OF TER!AS In listing and classifying ba,nk changes it is necessary that one uniform procedure be followed by all aut:iori ties; otherwise the results when comoined for the various states will be practically mea...'1ingless. It is not possible, of course, to adopt all of the definitions and descriptive terms now in P.se, for by law and by practice s"..lch terms as consolidation, :merger, absorption, amalga1Dation, conversion, liqui~?-tion, suspension, failure, etc., have di:tferent meanings and applications in different states. In order to secure u.,.,.iformi ty, therefore, the follov,ing terms }1.ave been decided on for this stu~-. These definitions apply particularly to Forms A-2 and A-3. State Banlcs are incorporated institutions chartered by the state to engage in co:i-:iercial banldng with or without other powers. They include trust companies and stock savings banks. They do not include Morris Plan banks, IIDJ.tual savin.;s b:sulks, private banlcs or bat"'lkers, or other financial ins ti tu.tions c •:en though these ~ be ch3,rtered., licensed o.nd supervised by state author~.ty. Bra..."lches are not to be reported or emuner3,ted as banks. I!:. Consolid'1.tion is the corporate 1.mion of two or more going banks into one bank which co:1tinues under a sL1gle charter, either new or old. The term is used in this stuey not in a legal or technical sense, but in an economic sense, the essential feature being th~t the business of two or more going ba.nks becomes conce.itrated u.ncier one chc..rtur md one IIU.1n1.gement. The method of effecting the consolida.tion, whether by purclmse of .'.'l.ssets, assumption of deposit liabilities, exchaa_~e of stock, or other procedure, varies 71ith circu.mst:mces :md is unessenti:11 in t..'1.is stuey. What is here described ':l.S consolid'ltion is frequently design'.:l.toc: by the terms "merger, 11 11 n.bsorption, 11 11.'.lffi'.llg:untion, 11 11combin.'J..tion, 11 or '~purch:i.se, 11 accordinb to different points of view. It includes those cases where one banlc ~bsorbs nnother '1Ild turns it into a br:::mch. Un.fortu.,.'1..'ltely for purposes of st'1tistical clo.ssification, a consolidation is not a simple transaction like '1 conversion, a liquidation, a prim'll"y org'\nization, etc., but is almost inv~riably complicated by the fact th'\t t:rnse other transactions are incident'll to it. Th1.t is, a consolidation generally entails 3, voluntnriJ liquidation .'.l,ne,. the issu..-mce of D. ner, ch~rter; but these attend.n.nt circumst::mces should not obscure in the st'ltistics the important fact that a concentr'J-tion of bClJllcing h.1.s been effected by the transaction as a v1hole. https://fraser.stlouisfed.org Federal Reserve Bank of St. Louis , - 2 - When two national b.'.w.iks consolidate under a s tn. te ch:,,r ter, the trr.tnsto be reported as a consolid'.1tion, 3lld an incre~se in the number is on ti :1c of stn.te banks is to be entered on Form A-2 u..,der the headinb ''by Consolid.ati on of N'.1 ti oml Banks. 11 All the b::mks th'.lt ~re parties to a consolidation mu.st be open 3lld in oper.'.l.tion 3.t the time of the consolid.'.ltion. The absorption or liquid:1tion of a suspended b.:uLc's ~ssets by n.nother bank is not a consolidation, but is considered merely incidental to winding up the business of a b3llk already reported as having suspended. On the other h3lld, if the assets n.nd liabilities of a 17e:iJ.c b311k are transferred to :lno ther b~c in order to .'.l.Voi d suspension, the transn.ction is to be counted as a consolid'.1tion, and not n.s a suspension. A Conversion is the issuMce to a going banl: of .'.l. state ch~rter to supersede the n:ltionn.l ch.,-u-ter under which it has previously been opcr'l.ting, or of n. n3tionn.l ch::i.rter to supersede 3 state charter. In other ,vords a charter in one system is given up and .'.l. neu charter in the ot:er system is procured. Only simple conversions looldng toward permn.nen t opcrn. tion under the newly issued ch'.1rter .'.l.nd involving no other ch'.lllge are to be counted as conversions. Mn.ny conversions, of co-.irse, .'.lrG effected merely as.:,. nccess~ legal step in a consoli~'.1tion. In such C.'.l.ses the co~verted b~nlc is absorbed 11nd the new ch.'l.rtcr is surrendered shortly after the conversion. Suc:1 conversions a.re ignored in this study, D..~d the transaction is reported simply as a consolid'.1tion; except that if the temporary banlc 1 s existence runs over the end of the calend.:i.r yen.rand it consequently enters the record \7ith on end of year condition re ,) ort, it is foen counted e:.s a conversion for the consolidation for the yeo.r following. year in w!1ich it occurred, 3lld as Where a nn.tionru. bunk surrenders its charter and is ::.bsorbed by a st'.1te bank mich continues uninterr1.4>tedly under its o,m ch.::i.rter, the transaction is not to be classed '.1s a conversion, for no new charter is issued in lieu of the old. Inste'l.d it is cl~ssed as a consolid'l.tion. It is the custom of some authorities in their reports not to show conversions .'.l.B such, but to cl'.1ssify them .'.lS liquid'.1ted b~.nl:s or as newly chartered bn.nks, according to the point of vie'\7 of the re·?orting 3.uthority. In this stud;y, however, it is intended th~t .'.lll C'.1ses of ~ctti.:il conversion be reported '.1S such, v,i th the exception mentioned 3.bove of conversions w!1ich are involved 'fi th consolicln.tion. The decre:1ses by conversion in the number of state banks ,'.lre the S,'.lI!le n.s the increases by conversipn in the number of n'.1tional ba.'1lcs; and vice vcrs.'.l.. Accordingly~ list of the conversions occurring in the period of the study, classified under the method described, is n.tbched so th'.1t the commissioner rn..v- check the nork th'.l.t h::i.s 3lren.dy been done. https://fraser.stlouisfed.org Federal Reserve Bank of St. Louis ' - 3Conversion of a private ba.11k is the issuance of a s ta.te ch::,,rter to nn ~lready existing private bruik. ! Su.snension is the closing of a bank to the public either temporarily or permanently on account of fina.~cial ~iffi~~".lties, either by supervisory au thori ti es or by the bank I s board of di rec tors, with or without ul tima. te loss to depositors. The term "failure II is often used as an equivalent. In this study suspensions are identical with those reported separately on the Reserve Com.l:rl.ttee 1 s Suspension Sched~le (copy attached), except that the numbers entered on Form A-2 should not, of co~rse, include private banks. If the assets and liabilities of a weaJ.t b.'.lnk are transferred to another bank in order to avoid suspension and the weaJ.,;: ba.i."lk liquicL"'l.tes, the transaction is to be counted as '.'I. c onsolid.ation, and not as a suspension. !_ Reopening is the res~tion of oryorations by a suspended bank. The reopening may be attended by a change of name and issuance of a new ch'll'ter and still be cl~ssed statistically '1.S a reopening rather tha~ a priID3.ry organization. A reopening consequent upon consolidation of two or more suspended banks should be classed as a single reopening. If a suspended national bank reopens as a state bank, ho·.1ever, or vice versa, the transaction nust be counted as a primary organization and not as a reopening. !_ Primary Organization is the ch~rtering of a newly org:mized bank. It CD.Il be readily distinguisirnd from a consolidation, su.cco~sion, or conversion of going banks, in spite of the fact that nny of these transo,ctions may require t}1e iss·J.ance of a new ch'lrter, but it will frequently be difficult to distinguish it from a reopening. The extent to which the stockholding interests, assets and deposits of a suspended b::mk continue intact !lllst guide the j". . .::. _,.nent in determining \'lb.ether to classify the bank as a prinnry organization or a reopening. If a suspended nn.tional bank reopens as a state ban_~, however, or vice versa, the transaction must be counted as a primary orgo..~ization and not as a reopening. There are numerous cases where the business of one or more depn.rtments of a bank is sold to anot.}ier b'..U'.k, either newly organiz0d or already in operation. Such a. net1ly orgo.nized bnn1':: is to be cl1.ssed simply as a prim'lry organiz~tion. If on the othor hand, the transfer of assets occurred betrreen bo.nks alrcndy in operatic~ a~d both continue in operation after the transfer, it is not to be reported ~tall. There are also cases where a b~'1king office previously operated o.s a branch is incorporated as a unit b::i.nk. Such cnses sho"Jld be classed as primar"J organizations. ! Liquid.'.ltion for purposes of t~is s~~cy is the cornp3rativcly rare instroice of a going, solvent bn.,.'1.k discontitl.ling opcro.tio~s, surrendering its ch:i.rter, and q1.J.i tting business. Voluntary liquidations let;nlly incidental https://fraser.stlouisfed.org Federal Reserve Bank of St. Louis - 4to conversion or consolidn.tion should not be reported sep3,rately, since they are i~licd in the conversion or consolida,tion itself. Suspensions should not be reported as liquidatio~s. If a bn..11.k 1 s assets or the gre~ter pottion of them arc absorbed by nnothcr bank under some agrccmen t whereby the latter assumes the liabilities of tho former, the trans~ction should be ro?orted as a. consolid::i.tion. If a state bank is absorbed by a nation/tl bank, the transaction should be reported as a consolicl.o,,tion and not as a liquidation. No transaction should be classified as a liquid..'.1tion if it cn.n possibly be classified otherwise. ,! Succession is the rech-u-tering of but by the same c:i.n ~tering authority. A cert~in amount of reorganization, but if more going b.-:i,;.--..>::s, the transaction should not o.s a suc,.,J ss:. o::.. Since e. ');essio:1s as baPJ:::s, they need not be reported. https://fraser.stlouisfed.org Federal Reserve Bank of St. Louis a going b.:mlc under a changed name succession m::w be attended by a it involves consolidation of two or be classed n.s a consolicl..1.tion n.nd such do not chn.n 6 e the number of https://fraser.stlouisfed.org Federal Reserve Bank of St. Louis • • • " https://fraser.stlouisfed.org Federal Reserve Bank of St. Louis https://fraser.stlouisfed.org Federal Reserve Bank of St. Louis https://fraser.stlouisfed.org Federal Reserve Bank of St. Louis Forni ·o. I 1 Office Corres po r. Gold8nwei• r To From e FF.DERAL Rf.SERVE BOARD Subject:_ r. Smead • •• pro and I t .DC:a,U"-4 erew of ng amal the baTe for I https://fraser.stlouisfed.org Federal Reserve Bank of St. Louis I/ ...--&4 6 https://fraser.stlouisfed.org Federal Reserve Bank of St. Louis 0 • e • https://fraser.stlouisfed.org Federal Reserve Bank of St. Louis • • 0!1. 10d...:r"'l R s,~:rve Co,..mi tte3 ]ranch, Group anJ. Chain ]a. F. R. District No. ng Sta t.J Year --- Tatlo I7-e -- T;r,;_:>ical o:perating ratios of groups of national banks classified accordi~ 0 to rat io of net loss or net profit to invest0d capital Operating ratios as numbered on page 3 of "Analysis of :Ban2.{ Earningsn '!v:Qical o·Qeratinp; ratios of grou12s Showing no profit Showing net addition to urofits• or a n.3t loss"' 6·1',J_ Le::;s yt 61 0.00~ 12% or I to thc..n to to to «nd ~ ggct more 11. gg~ . ,1 8 991, ll.99~ over .-2L. 1 9% All groups - 2 3 4 5 . 6 7 8 9 10 11 12 13 1 15 16 17 18 lg 20 21 22 23 24 25 . . 26 . Number of banks in group Aggregate loam, and investm.3nt of ~.nks in group (Thousan ·s of dollars "'Percentage 23 on scl1ed.ule for analysis of 1)ank earnings. https://fraser.stlouisfed.org Federal Reserve Bank of St. Louis Federal Reserve Committee on Branch, Group and Chain Banking • Year _ __ State F. R. District No. Table V-e -- Typical operating ratios of broups of national banks classified according to size of loans and investments -I• _erating ratios as numbered. on page 3 of 11 .Analysis of Bank Earnings" Tvnice l onerAtin~ ratios of Under 31•{) 000 I $150,000 $250,000 $5oc, coo $750,000 to 249 999 to 4q0 ')qq to 749.999 to 9gq qqq 0 rouns with loans and investments* i1, ooo .ooo $2, ooo, ooo $5, ooo, ooo ~10, ooo, ooo 1$:0,000, ooo I to 4_qqq 999 to 1 qqq o99 to to q_qqq qgq 4g q9q 999 I and over 1 All, grou:9s ---- 2 3 -- 4 5 6 7 8 a . .I 10 11 12 .... - 13 14 https://fraser.stlouisfed.org Federal Reserve Bank of St. Louis -- i 15 I l • • 16 17 - - -18 - - - , - - - t - - - - - - r - - - - t - - - - t - - - + - - - + - - - 4 - - - - + - - - + - - - - - L - -_JI l'J 20 21 ---...c::.._..._---t---,--,---t----t---t---+---1----t-----+---J_ _ __J 22 ---- - - - 1 - - - , - - , - - - r - - t - - - - t - - - - t - - - + - - - + - - - - - + - - - l - - --' 23 ------=------t----r--1----1-----1------t----+-------l---___j_----f---L---' 24 25 26 N. er of b;::nks in group -,--------1-------- --cgregate loans and iLV'Jst.T.Jnts of banks in grou9 (Thousands of uol lars) < FRASER Digitized for https://fraser.stlouisfed.org Federal Reserve Bank of St. Louis *Item K on schedule for analysis of ba~;k earnings. Octob r 30. 1930 r. ddle r. d https://fraser.stlouisfed.org Federal Reserve Bank of St. Louis ht 31. https://fraser.stlouisfed.org Federal Reserve Bank of St. Louis • • , FEDERAL RESERVE BANK OF NEWYORK October 28, 1950. Mr. E. A. Goldenweiaer, Chairman Committee on Branch, Group and Chain Banking Federal Reserve Board Washington, D. C. Dear Mr. Goldenweiser: Your letter has been received asking my views of the advisability of making for the committee a study of banking activities outside of the field of straight commercial banking, and also whether we would be willing to undertake such a study here in New York. We know of course that there is a considerable amount of this sort of thing done, the more progressive banks having developed a number of ways of adding to profits. I presume, to be useful to us in con- nection with the branch bank work, it will be necessary to determine if possible whether there bas been a:iv greater development of this sort of thing among the banks operating branch systems than among the unit banks; also whether the opportunities for developing these outside profits are greater for a branch banking system or group system than for the unit bank, and if so, to what extent and wlzy'. While I am not quite sure that we can get anj"thing that would be really conclusive in this connection, since it may be that the development of these new features bas resulted more from the type of management than from the character of the bank, it nevertheless seems like a worthwhile thing to do and I sball be glad to develop it and see what we can find out. LAL https://fraser.stlouisfed.org Federal Reserve Bank of St. Louis Very truly yours, r\ ~ L. R. Rounds Deputy Governor https://fraser.stlouisfed.org Federal Reserve Bank of St. Louis • October 25, 1950 Dr. E. A. Golden eiser, Chairman, Committee on Branch, Group and Chain Banking, c/o Federal Reserve Board, ashington , D. C. Dear Dr. Golden eiser; Re Report on Suspended Banks. One of the most important studies now being made which give rise to the suspensio n of banks. by our Committee is that of the cause As you may know, •e have been receiving from some of the State Superinte ndents of Banks a report on each bank which has suspended since January 1, 1921, on forms prepared by your Committee. To obtain a more nearly accurate review of the situation , I have had our Bank Credit Department prepare a specific report of the features leading up to the suspension o each member bank hich has gone into involunta ry liquidati on. The informati on obtained has been abstracte d from exmninati on reports and from other material contained in our credit files. U n completio n, these report were turned over to the officer who had charge of the liquidati on of any paper we might have held under discount for a suspended bank. Through this latter source e expect to extract new material such, for instance, as that the officer and/or directors of the bank ere excessive ly us5n the b nk 1 s funds (secretly or openly) to finance o erations in hich they ere personall y intereste d. After the ad tion of the~e comments, there will be added such informati on as we have gained from our experienc e in thee ension of credit to the member bank before its suspensio n. A composite statement will then be prepared and fonarded to you to be attached to the reports submitted by the Superinte ndent of Banks and the Cooptrol ler of the Currency. I am following this course because of my conviction that .f!_isho~ ty, self-serv in~ mismanagement and inexperience had far more to do with the SUS ension of banks than adversity arising out of economic distu.rban ces. ,,_ . ' , https://fraser.stlouisfed.org Federal Reserve Bank of St. Louis October 25, 1950. Dr. E. A. Goldenweiser - - 2 I wonder if it would be convenient for you to send me copies of the reports of National banks hich have been submitted by the Comptroller of the Currency. Possession of these records ould make very complete the history of bank failures in the Twelfth District. If this procedure appeals to you as adding something worth while to the Committee's studies, I should be inclined to recommend that each Federal Reserve Bank be requested to supplement the reports of the State Superintendents of Bank and the Comptroller of the Currency with comments setting forth their own views as 1D the causes of suspension of member banks. You realize, of course, that most of the Superintendents of Banlcs who are now furnishing this information to the Federal Reserve Agents were not in office at the time many of the banks suspended; consequently, they have had to depend upon cold records to find a reason for ~he suspension. In the case of the failure of member banks, many of us have had personal experiences which reveal more than can be found in the records. · Yours very truly, Deputy Governor. cc to Mr. E. L. Smead • L. R. Rounds ~r. M. J. Fleming Mr. J. H. Riddle • ✓ October 21, 1950. .. t Dr. E. A. Goldenweiser, Chairman, Committee on Branch, Group and Chain Banking, c/o Federal Reserve Board, Washington, D. c. Dear Dr. Goldenweiser: Considerable thought has been given to your letter of October 6, 1950, in which you inquire whether I would undertake to study and report on the past development and present status of branch banking in California. So much has been published on this subject that it is difficult to know where to begin with the presentation of any new material. However, your letter outlines subjects which make possible the presentation of a symposium which will give a fairly good picture of what has transpired in California's field of banking during the past twenty years. I shall be glad, of course, to undertake this work; in fact, it is now in progress. \. In giving me this task, you say that California is the one Stats in the Union in which state-wide branch banking has developed sufficiently to afford some basis for judging its merits. That, of course, is the generally-accepted view. I should like to state, however, that in my opinion it is far too early (and will remain so for some considerable time) to determine the success or failure of those expanded systems which are in existence at this time, even though some of them have been in the making for the past ten years or more. By success, I mean added servlce to the public and a fair return to stockholders. It must not be forgotten that these systems have been built up at a terrific expense, in management, advertising, duplication of bank buildings, premiums on stock, etc., etc., which cannot be repaid out of operations for a long time to come. Also, it must not be forgotten that the stock of these large banking groups was sold at extraordinary premiums to the public ~hile it had an insatiable and frenzied desire to invest in bank stocks. This advantage may be missing when systems to come are being developed; consequently, the development may be much C'low(;)r. iuch of the premiums which were paid for the:·e stocks was used to relieve the banks of undesirable assets. It is my https://fraser.stlouisfed.org Federal Reserve Bank of St. Louis .. ' , • ,. Dr. E. A. Goldenweiser - - 2 Octobe r 20, 1930 predic tion that stockh olders will wait e long ti.me (indef jnitely , it may be) before they ill receive dividen ds from these assets which, for eood and suffici ent reason s, were shifted from banks to affilia ted corpor ations. As I pointed out in previou s corresp ondenc e, j_t is not very diffic ult to make a bank's curren t operati ons appear profit able if stockh olders are willing to supply affilia ted corpor ations with suffici ent funds (in the form of premiums on stock) to relieve the bank of unde·i rable assets. In fact, it could be stated that the profits of a bank can almost be measured by the extent to which such relief has or has not been given. Yours very truly, v~~ Deputy Governor. cc to Mr. E. I,. Smead https://fraser.stlouisfed.org Federal Reserve Bank of St. Louis Mr. L. R. Rounds Ur. M. J. Fleming Mr. J. H. Riddle https://fraser.stlouisfed.org Federal Reserve Bank of St. Louis ent to all nts 0 October 20, 19300 r. ·111 ent, erve an o Chic o, Illinoi ~ ede ' ear ,r. Heath: In connectio n to it Y,O t fo el t in co. unit ie in 1 our u four e r • po lation fi en lly' s ic re o go t' t r s i r t t 1928 n in t nkBr ' Di ' b usod in located. anks ifica ion cla t as tion oul re lation fi t e pc 0 ill be sufficien t to t i ion o ul bmi tted ;ms 1 our letter of October 10th, t e u be n clas ic able II-o it e for one year for e c OU :l 0 t of 8 dition of cto 'Y. 8 trul • H. ecret Group our, le , Co ittee on Br c, Chain ankingo . ~•-. CorrespondenIce ·Office To _ Mr. Riddle From _ Mr. Horbett FEDERAL RF.SER VE BOARD • I I Date October 18. 1930 Subject: Proposed tabl~s IV-e and V-e of earnings ~oJe__ct. If it was up to me to decide at the present moment,,without further discussion,w hether or not the Federal reserve agents should be asked to compile the two new proposed tables, I would undoubtedly send them out for• compilation , in view of the fact that I know that Mr. Blattner and perhaps you too have gi van considerabl e time and thought, not only to the form of the tables but to the particular purpose that each is designed to serve. In other words, unless I can determine for UV'Belf how valuable the tables are,I am perfectly willing to accept the decision of someone else as well qualified as Mr, Blattner. As I told you yesterday, I have no doubt whatever that the three tables that have already been sent out to the agents are essential at this stage of the a tudy, and that they w111 not require a 'great dael of time to prepare, The compilation of the two tables now proposed, however, will probabl1 ~equire the expenditure of much tie, yet thus far I have been unable to determine for myself how much of the information called for by these tables is likely to be of value. If they were purely experimenta l and -were to be tried out for two or three states for one or two years, I would not uestion them at all. The particular points about which I am not fully satisfied are follows: a■ 1. Most of the operating ratios are being compiled on two bases -percentages of gross earnings and as t)8rcentagee of loans end investments. Ia it likely that a study of every operating ratio on both bases will be of value for ach state, for each year, for each of the groups of banks shown on the tables IV-e end V-e? 9.8 2. Will not some of the operating ratios - in so far as these tables are concerned -- be relatively meaningless , e.g., os. 2, 5, 9 and 19? 3. Will operating ratio No. nificance? 23 on table IV-e have any real sig- 4. Certain difficultie s will arise ffom the fact that typical operating ratios, which ot,dinarily might be expected to be complementary, e.g., ratios 1 and 2 which for an individual bank equal 100 per cent, wi 11 not be so on the prooos ed tables. How will these dif iculti~s be surmounted? 5. Will not the last mentioned difficulty be aggravated in the case of ratios 10-19, 1'hich are based on loans and investments , in view of the fact that this base 1e not identical for every benk. (In https://fraser.stlouisfed.org Federal Reserve Bank of St. Louis I - 2 - the case of ratios for eveey bank.) 1-9, the base • is always 100 per cent, i.e., identical 6. I em not at all sure that the method of determining the typical ratio is a correct one. Essentially it amounts to obtaining a median by adding together the two central quartiles and dividing the sum by half the number of banks in the group. This is commonly referred to as obtaining an •average of averages,N and generally speald.ng it is not considered very satisfactory. No particular harm is done if the group embraces essentially the same type of banks but if, for example, a $50,000,000 bank ia grouped with a $1,000,000 bank simuly because its profit ratio is the same, the resulting typical ratio by the proposed method might not be very repres~ntative. It is quite probable that,,auart from the fact that Mr. Blattner himself is satisfied that the proposed method is a legitimate one, he has discussed it with other qualified mathematicians or statisticians. However, I would very much like to try it out on Mr. Van Fossen and perhal)8 Mr. Cummings. Thus far, I haven• t had an opportunity to go over it with Mr. Van Fossen very carefully. What is the objection to treating the actual median as the typical ratio, instead of determining a typical ratio that mu.st be defined and which, when defined, may be subjact to criticism? 7. My suggestion is that, instead of sending these forms out to all of the Federal resPrve agents to fill out for all states and for all years, they be sent at this time only to two or three of the agents, preferably New York, Minneapolis and San Francisco, with the request that they preuare the tables for one year for one state and submit them with their comments. These comments should state whether the form of the tables is good, whether or not they are too exhaustive, what questions can p,rhaps be answered from the tables, and, in the case of a particular state, what the figures actually do bring out. A still better plan I think would be to wire, telephone or write two or three of the agents to send to the committee the analyses for individual national banks in a given representative state covering one year,ao that we here might' construct proposed tables IV-e and V-e, thereby determining not only what value they are likely to have,but also whether the amount of time consummated in compiling them will be worth the results. https://fraser.stlouisfed.org Federal Reserve Bank of St. Louis f I \f https://fraser.stlouisfed.org Federal Reserve Bank of St. Louis l CO Y Tru t Buil Phila lphi I P • Octo r 4 1 0 G ntl en: https://fraser.stlouisfed.org Federal Reserve Bank of St. Louis hot 1 t ur st Ve Cl t H. Con do . October 17, l r. Ir Clerk, Deputy Gov rnor ederal eserve B of an r San Fr c1 co, Cal. D r O. ci co r. Cl rks I hav Jan rad with much int r t to r. Rion i hich you discu of your bank b k in your lett f bet copy which you ent t e pr ctic or tran f rring et rn oiti s. 1' s trans ction ■ hav of cour e inter ste us d have at m de oar f'ul. c ck of th m when they ppear d to be running in erie, with a view t.o et rmining if po sibl what w be ng ccOJ1pli bed and t e why of' it all. und of oour shifted about th country for a vari ty or r o s, to the xten1; that trictly b tran f r ar de wtween ank:a in ub tantially qual ounts for number of cone cutive da;y-1, it i our beli f t t oh r er r e th ot J'ed ral fuada or rerYe balanc a from on district o nother. or int c, hen ov rnight oney command.a ra\e l ss an th r discount rat t ere evelopes atural t ndency on the part of h bank which i i re short in it res rves ould, therefore, in the ab ence of' y other w y of realising funs b obliged to borrow at er erv bank, o k to provid reserv fund in the open market, and since uch condition would only exist when other banks had a surplus or fun 1, t ere 1 enerally no difficulty 1n finding willing seller or t.he funds. Originally this bu.sin s of trading in ederal :t'unda was oontin to anka located within th aame city, but it haa gradually exp ed Ulltll now th re is a con ider bl traffic b tw n the larg r citi of the country. tim Referring to he tran ction which you h ve used as illustration fourth paragraph of your lett r, your l tt r su ests the poasibility r a N w ork bank transf rring its surplus r erve to r cl co bank more or l ss arbitrarily and regardl s of 'Whether the Francisco bank ha azq use for e funds. !heae hay been inatanc her ffillated banks would handle the tranaact.1on auch :manner, but. do you not thin ther ould uU&l.ly have been negotiation for e purchas of th fund by the San Fr cisco , d that the trans ction which you hav cited ally repr sents th parohaee on the pan of your mber bank of serve funds in th •• York market, whioh tUDde it 1J0uld otherwise haYe bad to obtain by borrowing f'r011 your bank? In 1n th er o , ou a transf' uld ot o be aoiually hort, in 1 s reserve continuously, xcept o cour in the vent ot borrowingt I would nn think that th s were erving y double purpo•• both in San Fr oisco d w York. oh funds ould be surpl\119 in ew York an ould loaned to a an Francisco bank ov rnight for whatever they would bring, ~he n rancisco bank ma.king good it re erY in t s for a er ging purpoaes but, a you have point d out, ing ct defici nt throughout the gr at r part of the day. It ia of course true that the trans otion ght a■ Uy work in the r vers wy. That 11, N w York bank might be tzying f' s from an Fr cisco. Inf llowi g thee trans ctions ther are times when it i ■ ceedingly difficult to tell which is actually buying t f s, this c eral.ly be det rmined b7 anal7•1ni th till or the trau.tara, s of course th bank holding th funds overnight would be th actual abaser. a•- on info atio 1ive in o tt r, terpretation of e t.ransaction1 oi d in th last paragr ph on p , wh e one of your eaber banlca tor at tr mf rr d very night, (tbia means, It, it, https://fraser.stlouisfed.org Federal Reserve Bank of St. Louis aed • ct £ n an https://fraser.stlouisfed.org Federal Reserve Bank of St. Louis • dpoint t ength1. e . aigh b Th t i , if abl portion ontinu i a true conditio uriDg at ery truly your, L. Dep Bo Go r l'orni No. 131 Offic e Corre spond e ce To From FEDERAL RESERVE BOARD Dr . Gol en ei ser r. • Date----9E to ber l ,_ l 9_v_O.;:..__ Subject: idle https://fraser.stlouisfed.org Federal Reserve Bank of St. Louis ter mentionin g .r . ~eltze uey~ I ,rote Rey Ch there ber tellin him confiden tially as a pos ibility of a vacancy in your staff and asking his o inion on ~eltzer . Both to you the otner ank eltzer . ttached is his reply . Kolbe ana. •'ria.ey have spolcon vocy hi 1ly of https://fraser.stlouisfed.org Federal Reserve Bank of St. Louis • FED E RAL H .ESEHVE BANR October 14, 19~0. Mr. J. H. Riddle, Secretary, Committee on Branch, Group and Chain BanJ.·ing, Federal Reserve Board, ~ashington, D. C. Dear Mr. Riddle: Your letter of September 29 th enclosures was received, but before replying I have been waiting for some definite information regarding the schedules referred to in the last paragra h. There is no reluctance on the part of the branch and group systems in giving us the information, but ·e have found that their problem i finding the op ortune time for compiling the information. There are certain people in these organizations who are able to an.we the questions in a way hich will actually mean something and e fee that it is better to allo them to handle the schedules in the ay that ill be productive of the best results and at the Slll!i.e tie interfere least ·th their op~rations. Very truly your~, EAC:l I https://fraser.stlouisfed.org Federal Reserve Bank of St. Louis • o r t1ons File • • https://fraser.stlouisfed.org Federal Reserve Bank of St. Louis Letter ent to all nts . ' • FEDERAL RESERVE COi.:JITTEE ON BRANCH, GROUP .AND CHAIN IL4NKING State F. R. District No. _ _ Year _ _ ------- Table I-e -- Number of natione,l banks classified by size and by ratio of net loss or net profit to invested capital Number of banks Size of loans and inve s t,nen ts* Showing no ~refit or a net loss** Total Gi or more 0.00% to ~.99% Showing net addition to profits** 3% Less than to i:i. 991, 3~ Total Under $150,000 $150,000 - $249,999 250,000 - 499,999 500,000 - 749,999 750,000 999,999 1,000,000 - 1,999,999 2,000,000 - 4,999,999 . 5,000,000 - 9,999,999 10,000,000 - 49,999,999 50,000,000 and over *Item K on schedule for analysis of bank earnings. •,i,perccnta6 e 23 on schedule for analysis of bank earnings. https://fraser.stlouisfed.org Federal Reserve Bank of St. Louis 6% to 8.911 9% to 11. 991, 12% and over ~EDER.AL RESE.:\VB CO J.U 'f'l'EE ON J3RANCH, GROUP AND CHAIN B. ➔NKDJG F. R. District No. _ _ Table II-e • State Year -------- ----- Number of nationcl benks classified by size of cummunity and by ratio of net loss or net :;_:>rofi t to invested capi ta,l Number of 'osnks Population of c01mnuni ty Total Showin5 no J?rofi t or a net loss* 6--1/0 o.oo'f, or more to s. 991 Sho1.,ing net addition to :::irofits• Less than ~I?& Total Less than 500 500 - 999 1,000 - 2,499 2,500 - 4,999 5,000 - 9,999 10,000 - 43,999 50,000 - 99,999 . 100,000 and over *?er cen tage https://fraser.stlouisfed.org Federal Reserve Bank of St. Louis 23 on sc:1edule for analysis of bank earnin.;s. ') yt 61 to aq1 to g_qq1 9% to 11-99% 12% and over FEDERAL RESERVE COMHI TTEE ON BRANCH, GROUP .AJ."'1D CHAIJ:J EAHKING State _ _ _ _ _ __ F. R. District No. __ Year ---- ~able III-e -- Number of national banks classified by ratio of time to gross deposits and by ratio of net loss or net profit to invested capital Number of banks Ratio of time to gross deposits* Total Showing no :profit or a net loss** 6<1,,~ 0.00% to or '1. ggct more Total 0 - 24.99% • <fl 25 - 49. 9910 50 - 74.99% 75% and over "'Percentage *"'Percentage https://fraser.stlouisfed.org Federal Reserve Bank of St. Louis 24 23 on schedule for analysis of bcmlc earnings. on schedule for analysis of bank earnin 6 s. Showing net addition to profits*"' Less than ,1 3°1, to '1. gg1, 6% to 8.996/4 9% to 11 ggt 12% and over https://fraser.stlouisfed.org Federal Reserve Bank of St. Louis • Investmen t <J{esearch (/orporati on PENOBSCOT BUILDING 'Detroit Octo er O, 9~0 ir. J. l. Riddle , Federal eserve oard, ashington, • C. Dear Jack: µ_ ,~ r. Seltz r as left the Rese rch Cor oration along these men cft ecause rn had to with sevl.ral ~ther ~en. cut expenses. of s 1 t., , and would heartil r. l>e and Frida. back up both the recommenda tions o wries not onl ert, quick mind, Seltzer h~s an clearl and logicall b t ith ease. In other ords, uttine do m his idea is not a tru ele with him as it is ·th lot convinced that he ould make of oth r a e research men. I al Reserve oard staff. de the to valuable addition a ve I think very hie There is only one other mun in the organizatio n vho e interested in oin to the oard, fr. E. R. ould like. of Sha • Mr. Sha got 1is P.H •• last yec..r at the Univcr i ch h s, th is Chica~o, and ha worked ri.th r . die h re. is on th investment policy of commercial bunks, h s ood .ros.ect~ of eine publ. hed by ore of th regular publis ine co .anies. Dr . Edie thinks very highl of ~r. Sha . If r. Golden eiser is int rested in talkin with ·m, he can writ to h · m at 925 ichigan Avenue, V/heaton Illinois. As I unde n ar future. stand it, r. Sha ex,ect to bo in th r tint st in to be ·n ·th or l loo d c rtain] as y t o fe a v.:sit ith n rt r m ket, ut I do think that sto a tat t re ·n t r confidence, if the n t t o o V ry c c/w arr inc 0 ' -• .._,•onn No • .1a1 Office Corres ponden ce To From d is.er FE7:>ERAL Rf.SERVE BOARD Date____Qctobor _lQ ._ ~O Subject:J ~ i ity o ~XD-e_diting_ the • Rido,le o.f t and Cha.in Gr.oup_ •ro unking . 2-84.U6 Presum bly when the suggestion , s made at the recent Conference of Governors and A ents that considerati on be given to wa:ys ana means of speedin, up the work of tne Co.mnittee on Branch, Groun and Chain Banking, it was not intended that the investigatio n should be abbreviated or mud.a less thorough and comprehensi ve . ~ime is , of course, a most important factor in the investigati on of this subject , but it rould be regrettable if haste prevented covering the field slight certain subjects nits broaa.er aspects, or forced us to hich have never been ade~uately treated . This is not an investigatio n of a. simple restricted phase of banking which might be easily focussed on a definite problem . It is alruost as broad as banking it self, and a true an lysis of the forces at ,1ork rith proper recognition of the various factors re uires much more than a hasty assembling of available data . In fact the p oblem seems to broaden in scope as we pursue it , and it is difficult at this stag~ to fix limits for the inve tigation. It involves not only a thorouch statistical analysis of the various fonns of banld.ng organizatio n and a study of the aiversified f'unctions of banld.ng, but also an annlysis, in so far as possible, of the forces hich have brou;ht about the recent changes in banking, including the extraordin ry number of failures and the grovth in the consoliuati on movement . This ta·ms us. back be ond the period of heavv fa· lures to the t :ime of the rapid expansion in the number of bank.in ins ti tut ions . It as doubtless during that period that the genn of mruzy of the later difficulties ·ras planted . https://fraser.stlouisfed.org Federal Reserve Bank of St. Louis • Dr . Goldenueiser 1Ir • • iddle -2- The report of progress of the Governors • Conference, September 24th, outlined briefly the various nrojects wnich the Coi.llllittee now has under way . The information is bein3' prepared by a number of different agencies and we cannot tell now fast it will come in . As the material arrives, we frequently find omissions or discrepancies wnich re uire further time to correct . At the same time other pnases of the subject are con- tinually suggesting themselves for consideration in order to round out the investigation . ,hen this infonnation is all co. piled, the work of ru.1.a.lysis 1il: be necessary, and then the preparation of the variou5 chapters of the report . At that time there will doubtless still be many r,aps in the data which it will be necessary to fi 11 in one way or another . major phases of t1rn s..1bjec t it wi 11 be necessar Aside :from the to prepare chapters on a number of otner topics; such as, the ~ranty or insurance of bank deposits , effect of banking trends on .!!'ederal .eserve System, membershi regardmg the ourch.a:,e of bank stocks, and branch ba.nkin condition in foreign countries , especially Canada • • o proceea. with the work as at present outllned ana. with the present personnel , it vould prob·wly take until around. tne Jia.dle of 1931 to comnlete the project . .1:h1.s estimate, of c ;urse, snoula. be ta.I.en with ma.ey reserv tions because of the fac ors outlined above . The Coilillittee now has working on the pro ·ect a staff of five people , ... side from the assistance which is being renuerea. by the employees of the Board and the various •oueral re serve banks . The sal aries of this staff agBre ate addition a small 2 , 180 :po , ount is spent each month for office rent . three peon le com".)il :n https://fraser.stlouisfed.org Federal Reserve Bank of St. Louis There are also d ta on suspensions in the office of the Comptroller of the Currency at a cost to the Committee of ,487 per month . will tenn.inate in onth, and in bout t 10 eeks , ho 1ever . T.1is 10rk s mo e of the material from .J •• ~J,..L. Golden 1eiser idle the Committee's -• ,.,3 C~ rojects comes in, it may b statistical assistance. .he •ederal reserve be. ~, :9 O. necessa~~ to employ additional b ks a e probably iucurrin some ext ·a expense in cormection 1ith tne analysis of earn:ngs and the schedule on suspensions . e have received from then no est:i.r. ate as yet of this extra "Ost, except that a fe.r of the .eserve banks have notL'ied us of approximate ru ounts 1hich t ey must pay certain state banking departments fo con ili.ng data on suspensions. ,:,he amounts entioned t us far aggre ate roug 1ly r...,, 000. The Comr: i ttee has al eady made an Ol..'1)ena.. ture of so ethin"' over 10,000 an if its outla._y should ru at the rate of 2 ,50J per month until the end o ... next June, the ada. it i onal cost ,muld be about ... 2, 000, mk.in total direct expenditure of the Co ni ttee about _;32 ,000. The additional outlays of the variou., • oserve banks mi ~50,000, but t br1n the tnis ficure to around ere again Ye have no basis as yet for making an accurate estimate and this oug;h figure is subject to change on the receipt of more infonnation. It might be possible to have the various eserv~ banks expea.ite somewhat the compilation of data ihich they have been requested to urepare or to secure from others. In fact I shall 1rite them shortly asking for reports on the various p ojects and an estimate of the time when 1e may expect the material. This, ho vever, is not the crux of the matter an can maJ-e no big difference in the speed of the work as a 1hole, because it is anticipated that shortly the data will begin to come in faster than the staff hero can analyze it. There are possibly two wa;-,s in which the vork could be effectively expedited. One would be to increase the staff by emnloyin two or three high grade men and assign to thorn specific parts of the report for prepara. https://fraser.stlouisfed.org Federal Reserve Bank of St. Louis ....., • .. Goldenv,ei ser .i:. • .1. iddle tion . I do not have in ,nind any such men, but doubtless they could be found . ~he second method would be to secure the assistance of the Federal reserve banks in the preparation of the report. This could be done by having the banks assign to the Committee individuals fro are their staffs who ualified to assist in the preparation of specific chapters or sections of the report . The thought also occurs that the personnel of the Committee itself might be enlarged by the addition of certain officials from other Reserve t>anks who ould una.ertake to prepare or to have prep"red certain phases of the report . the I am not sufficiently f~niliar with the personnel of eserve banks to make specific recomnendations in either of these cases , but the idea seems to be a feasible one . I https://fraser.stlouisfed.org Federal Reserve Bank of St. Louis https://fraser.stlouisfed.org Federal Reserve Bank of St. Louis October 9, 1950. Mr. E. A. Goldenweiaer, Chair.1la.Il, Committee on Branch, Group and Chain Banking, Federal Reserve Board, ashington, D. C. Dear Yr. Goldenweiaer: I have your letter of the 7th ith reference to a survey you would like to have me make in Cleveland. Of course I shall be glad to do what I can in this survey but the request is coming at a very unfortunate time. During the next two eeks I expect to be pretty well tied up with the program for our Pittsburgh branch building and if you are willing to wait until that is out of the way I assure you that I will do everything possible to get the in. ormatlon you desire. te on Branch and Chain Banking F.m l•OrDl. o. 131 Office Correspon To Mr. FEDERAL RF.SERVE BOARD Date_ October 9 1.930_ Subject:_Detailed list of bank g_ro_~" ' - - and cbeins June 19.3.Q_ ••• .2--&lU6 Inasmuch as t 9 detailed list of b&.n~ chains and grou.oe as of June we are now preparJng will cov r quite a number of nages and reg 1re a good deal of time to complete, it ie important that~~ make as few changes th~rein, aft it has been wr tten up, ae practicable. Therefore, I want to call your attention to the ma ner tm:.t we expect to take care of questions that arise in this connection from time to time. 1930 that 1. When the December list was orepar d, footnotes wer~ appended to the figures for all groupt and chains in which there had been a reduction in the number of banks, accounting for such reductton. In the present liat, we propose to account for redxtions bet ecn December 1929 nd June 1930, but not for those between June 1929 and December 1929, 1'hich were reviously accounted for • There may be two r thrPe instances where t~e number of banks did not cbs.nge bfllcause of the fact that withdrawals were offset by add.i ti ons, or vice versa, but we do not prooose to have a footnote about sue changes. They will, of course, be accounted for in the analysis of changes that we wi 11 repare. 2. The list is not going to account for increases in the number of constituent banks, inas ~ch as it will bes lf-avident that this is due to the addition of banks. However, we 1rl 1, of course, make uo an analysi1 of all changes, accounting for the net increase in the number of banks in the country as a whole. 3. The detailed list will not account for aw AllW~•-4~ A~~ and investments of groups and cbs.ins except those d~AJr~i11r1lgures previously published, in mich casP. the r eviaed fi es 1.11 be marked 11 rev sed. 11 There will be some changes 1~ loans and investments of individual chains resulting from the fact that ~ substituted more recent iguree (for the July 1929 figures) wher~ a constituent b3.Ilk: opened a branch or absorbed another bank, but we see no rAason for accounting in the list for such changes in the aegregate loan and investment account of the constituent bano of a given group or chain. https://fraser.stlouisfed.org Federal Reserve Bank of St. Louis 1'' orin No. 181 Office Correspon To r. Smead ce FEDERAL RESERVE BOARD ~ Subject: Stat., lc.."s o October 8, . .,J9r.3~Q..__ branch banking From Mr. Harb tt ••• 2 DI I t lephoned to tr. ingfi ld of the Couns 1 1 Of ice, as your qu ted. eth r t re had been any change in the tate laws r lating to to find out bulletin. H dvi ed as publish'°'d on t:e- e 258 of the A-oril banki1Je!" br~nch etter that the Coun l's Office had r c ived no e after looking into th advic of c'h3.nges, xce ta chan e that wa being contemulate d with r gard to savin banks in the State of New York of wh ch the Boa~d•s ~ounr"'l was advi d in the prin~ by the Coun 1 for the Federal Rs ve ank of .e York. However, Yor this a. tat'3mant of laws enacted by th legislature of the State of n 1 uch any o nactment the sho• not year does https://fraser.stlouisfed.org Federal Reserve Bank of St. Louis https://fraser.stlouisfed.org Federal Reserve Bank of St. Louis • • • https://fraser.stlouisfed.org Federal Reserve Bank of St. Louis • https://fraser.stlouisfed.org Federal Reserve Bank of St. Louis • '• ~ear r. October 7, l 30 . le ing: Branch, Group and Chain Banltin, it as suggested as desirable that cer- tain subjects on the Co 1ittee•s nro r Con mi ttee, esneciall y such ubjects be vorked u .., come by me bers of the · thin the exp ience and observati on of the members in the course of their regular ,,ork. stu that it seems coulu be appropria tely m ue in Cleveland is one on Banking 0o petition, -particula rly from Buildin and Loan sociation s, Credit Union, cceptance and inance Co s- orations, and governme ntal agencies for fann loans, all of unich without being banks neverthel ess encroach on the field of commercial barudng. from banlmr~ about the competiti on of Builuing nd Loan d cates The cor.iplaint s ssociatio ns in- pressure /._i) mey be that other ... unit banker of the old line more uifficul t . s the techniaue of business to 1hich he has been accustome d chan es, he mu.st , of course, adapt himself or drop out . His problem is the ffiore serious if the competiti on he suffers from co es from unfa~ilia r and unrecogni zed uarters • .ny intensifi cation of competiti on would be expected to effect banking concentra tion as manifeste d in branch and group ban in~ and in consolida tion into larger units The BancOhio vonpaey recently ac uired a ith more diversifi ed functions . orris Pla Bank , and t ere been examples in other states of groups ab or~ing mutual sav ngs b nk , acceptanc e companies , etc . https://fraser.stlouisfed.org Federal Reserve Bank of St. Louis ve -t I • The C()l'.:lpetition from the sources mentioned - competition for deposits anu competition for loan . sort the proble hich of credit risks, It would seem a ing degrees these competitive tendencies •rould be the c ercial ba ithout a stu y s more ifficult, but ho of the subject . here is also ay be affected by the fact that mone is be·ng offered by other a encies than b rues . va bove is of two ki if in the path of serious it 1s e cannot kno This stud, it seems to us sho ld give attention to the follo1·ng points : https://fraser.stlouisfed.org Federal Reserve Bank of St. Louis /hat a gro th in nu~ber and deposits of building it unions, etc . ? , c Has this ro th been at the e:xnense of co ercial ba s nd trust co~panie or has it c0; e fro auartor t t th latter rould not have reached? ven years, no v has t e gro vth of ions an or in number an in depo its ociations a loan nd buil ing and in depositu of number in change the vith c~ pared companies? trust an banks co ercial 00 tare the rate pai by buildin and loan etc ., as comp ed vltb those and trust companies? ssociations , iu by co curitie by oanks and ·nvo t d s le of the enla ment house out materially into the depo its of local banks? nies , Have building and lo.n ssociations , in u ance o ncies for f nn elief vel'IlZ ent savin s banks, md depr ssea inte st ates by the p assure o their funds on the a ket? Has tnis c netition f acted the u lity of available for investm nt by banks? nies hav evi once that •inn.nee Co Is t e fo erly 1 10 s deal 1 loc finoncin v ich or? s kB on their ort ages bso oed ve epended Is t ere evi once t t th u ~ o · tr e acceptanc bus·ness 1a:y from loc 1 b nks de lectod hn utu l or stock--a feet the 001- Io 7 do savin s ba petitive situation? • I • I there eviuenc e that the more p ogres~ ive and capable ba ill endeavo by ffiliat ion or mer to chi v the size and variety of functio n hich ill enable them to. eat the ne~ co petit on, 1ilo the o e conserv tive ones 1111 fail to a t the.rnselves? mhe purpos connec ted elp . of this letter is to sugges t so.1e of the problem s ith the subject that have occu red to us It seems to use peci 1 Clevela nd, since your distric t tivitie s is a r·ch fielu undert https://fraser.stlouisfed.org Federal Reserve Bank of St. Louis nd to enli&t your desir ble thc.t this study be e in itn its divers ified rural and urban ac- or observ ation . lea e let u e it . V cy tr-'11 you s, kno7 if you ill ead o _Q_!: _ . / https://fraser.stlouisfed.org Federal Reserve Bank of St. Louis 0 0 t l r. Le R. ound tob r 2 est en in or t o. i build by trus l go he itself. on t"llnotion , https://fraser.stlouisfed.org Federal Reserve Bank of St. Louis it servio 1ti in it r. L. R. https://fraser.stlouisfed.org Federal Reserve Bank of St. Louis oun 3 Oc ob r 1 o. https://fraser.stlouisfed.org Federal Reserve Bank of St. Louis • • https://fraser.stlouisfed.org Federal Reserve Bank of St. Louis • L. • ... https://fraser.stlouisfed.org Federal Reserve Bank of St. Louis • • October 2, 1930 . Dear ·r . ounds: xecutive Co uitte t the last meeting of the of the C ittee ng, mont ion was m do of the desirabilit y on Branch, Group and C in of having cert in subjects ~orkeu un by members of the Conmittee , especialithin the experience an as come 1. such subject eems could ap ropriately be made in A stua.y that it - such as securitie ctivitie These · th branch banldn enc ercial bank- to develop band if not most cases , and group bankin • securiti s busines , for instance, has mo e r1 York is busines, invest ent service , trust service, travel , insurance , etc .--nave ate in hand t co out iae the field of str activitie n one on b ing. ror • course of their regula bers in t observation of the mem- to do ith the fonnation of o over a marked characteris tic of oups than comnercial b nk ng as . some groups has been the inclusion of other than c ercial banking insti- tutions in their set-u; the BancOhio Compaey has orris Plan Bank, the Stoa irst s the Corporation insurance, mortga os, etc ., etc . lso is markeu by e cial banldng . justify it n one of t e olue t br https://fraser.stlouisfed.org Federal Reserve Bank of St. Louis anking, nevert ales r ache lated activitie . field of co oft· e These are only a fer, instances of now the ominant activity is osten ibly Branch bankin hie ompany control s a mutual erica has numerous subsidiarie s specializin g in savin s bank, anu Trans group hose ank Ce it Corporation (an ny), the H rtford- Connecticut acceptance co out into ir t e osits, an e as ten ency to go out iae to The Bo.nk of Italy " avi blic National , s A ociation , " the c b nks in e ; York Cit , i the Corn aving denosits s he chan , p ee~inentl p ado inantly ab bank ch bane, ha a type of deposit that makes its operatio ns unlike tnose of the typical comnerc ial bank. It does not seem to be an acciden t, therefor e, that the trend to~ard branch and group banking and to ,ard concent ration in neral sil.oulu be manifes ting itself at the smne t· e 1ith a t end toward uiversificati on of function . The exolana tion probably lies in co petition . The bank speciali zing in any kind of business is impelled to bring in addit :onal sourct"ls of profit and to invade other fields in order to make u for the invasion o and its om . It is cro ,dad by trust comp ies, b 0 bu ld ng loan associa tions, and by investme nt houses; but at the same time it discove rs that it c n in for some new things itself . ~ ConseQu ently we have In urin Selling uellin elling uelling entin, Placin real estato titles travel insuranc e investm ent service securiti es safe de osit vaults mort es ~nnin investme nt trusts '~inf' small loans 11 the foregoin g a'e aa.dit·on al not onl but to trust bu iness, to comne cal busines s hich is itwelf divided into co por te and persona l trust, and the lat tor into various hi hly speci lizea. fo such. as insured savill{,S, receive r hi Tho su ,este https://fraser.stlouisfed.org Federal Reserve Bank of St. Louis o trustees ip, for n krupt , etc . uestion s to be con iaorec in a study of bankin uch as is 't70uld seem to include the follorin g: 'hat are the activiti es actually bein c ·ried on b o ghat extent are these activiti es in tha~ elve present or future profit? e these activiti es such b nks? sources of s lend them elv s acvant eou ly to ... I ' - -3- large scale operations through a system of branches or subsidiary banks? Tnat banking functions are being ca rogularly recognized as banks~ such ciations, credit unions, acceptance panies, factors, ~orris Pla. B~nks, ried on by corporations not as, bui ing and loan assocorporationi::, finance cometc . , etc . ? lb.at specific evidence is tne.e in support or contravention of the idea that more and wore activities not traditionally recognized as "banking" ±'!met ions are coming to be perfonned by single corpor~ tions with ma.n.y activities rather than by corporations specir:i.lizing in one? Ho:7 do these activities affect the maintanance of liquidity·? In this connection you may be interested in the attached lotter of the Bank of Italy offering travel much as participations in an issue might be offered . 1eference a also be made to the ssociation of j\nlerican Bank Travel Bureaus , and its publications ; ancl to the Bank Trave l Departr:cent of the Bankers ' ·onthl y . The publ i c ations of the National ssociation of Finance Companies might also be 01· the study shoul d be confined to New York, but the new York Bank has unusual m ,ans for making a general survey which might be the basis for a l arger study . Please let us know what you think of the idea C.,... I https://fraser.stlouisfed.org Federal Reserve Bank of St. Louis Vecy trul y yours , E . A. Goluenweiser , ()nainuan , Co ..imittee on Branch, Group and Chain Banking. I https://fraser.stlouisfed.org Federal Reserve Bank of St. Louis • '• https://fraser.stlouisfed.org Federal Reserve Bank of St. Louis https://fraser.stlouisfed.org Federal Reserve Bank of St. Louis . • _ , .,... ••• DIE D.!!.:UTSCHEN .ICB.EDITB_1-1iJKEN von A 1 e x i s G o l d e n w e i s e r Inhaltstibersicht: Klassifikation der Kreditinstitute Zahl und geographische Verteilung der Depositeninstitute Geschichtlicher Htickblick und allgemeine Konzentration~ursachen, Oharakteristik Vorteile, Nachteile Konzentration~ Wege und Formen _'1y. EXI)a(Sl.Oll und Dezentralisation der Berliner Grossoanken. Ii https://fraser.stlouisfed.org Federal Reserve Bank of St. Louis Entwicklung der Bilanzsummen , des Eigenkapitals, der ~n Depositen,des Gewinns und der Zinssatze(mit Taoell ~ Rechtliche Stellung.-Bilanzpublizitat.-Barreserven und 11 L.i qui di tat u ~rivatoankgeschafte und die lnsolvenzen von 1929 und I9.30 Anlage I. Notiz tiber deutsche ~otenbanken nlage II. Konzentration im Hypothekenoankgewerbe en . . nl ge I I I . ~otiz ti er die Staatsbank(und offentliche ~ pezialbanken Anlago I • Sc em ~nlage v. dex Z ischellbilan.zen Literaturtibersicht • https://fraser.stlouisfed.org Federal Reserve Bank of St. Louis I • • https://fraser.stlouisfed.org Federal Reserve Bank of St. Louis https://fraser.stlouisfed.org Federal Reserve Bank of St. Louis • • https://fraser.stlouisfed.org Federal Reserve Bank of St. Louis • FEDERA L RESEI~ VE l~ANK OF CL.EVELA ND Sept .uber 26 , l Sec et r .. , ch, Go and hain escrve Board, • in t n, • J Co • Bid 1 • , e: in h SU . on h d", t f t t +h r e You c ~ read·1 in the o ition of acking an nlrea suboi.tted through the to them rect . V C: t · ours, ' https://fraser.stlouisfed.org Federal Reserve Bank of St. Louis L tt r nt to 11 • R. nt pt r. Ourti : Ve • t..5, 19 t ly our o. • • Committee on :Branch, Group and Chain ]anking September 25, 1930 Re: Handling of Negative Items on Farnings :Blanks In connection with the schedules on earnings which the Committee on ]ranch, Group and Chain :Banking transmitted to you by letter on August 11, suggestions have been made with respect to the treatment of negative items in the income accounts, :By negative items are meant cases where, for example, item G on the schedule shows a net deficit in operating income instead of net earnings, or item H shows recoveries exceeding losses, or item J shows a net deficit for the year instead of a net addition to profits. When these items are negative instead of positive, they should obviously be given some unusual sign such as being written in red ink. Ratios derived from such negative items should also be appropriately ,:nrked, and when such ratios are to be added to others, the addition should be algebraic as illustrated in the paragraphs below. There are several general classes under which such negative treatments will arise. Three of these are described in the following paragraphs, and a specimen form illustrating a case falling under the second class is enclosed for your information and guidance. 1. Whenever a bank has during a year an excess of recoveries over losses, it is suggested that iteo Hon page 2 of the form be extended in red and that ratios 7 and 17 on page 3 be extended in red. Item I (eye) will be D + E + F minus H. In order to arrive at ratio 8, subtract 7 from 3 + 4 + 5. In order to arrive at 18, subtract 17 from 13 + 14 + 15. 2. Whenever a bank's operating expenses for a year eJO::ced its gross earnings, it is suggested that item G, and item J if appropriate, on page 2 of the form be extended in red and that ratios 6, 16 and 22 on page 3 be extended in red, as well as ratios 9, 19 and 23 if appropriate. Ratio 6 subtracted from ratios 3 + 4 + 5 should equal 100% Ratio 16 subtracted from 13 + 14 + 15 should equal ratio 12. 3. Whenever a bank's net losses for a year exceed its net earnings, it is suggested that item Jon page 2 of the form bo extended in red and that ratios 9, 19 and 23 on page 3 be extended in red. https://fraser.stlouisfed.org Federal Reserve Bank of St. Louis Ratio 9 subtracted from rrtio 8 should equal 100% Ratio 19 subtracted from ratio 18 should equal ratio 12. • ' I, FEDERAL RESERVE BANK OF NE\ YORK r 15, 19 FOR SPECIAL ANALYSIS OF BANK E.A 'l'HE FEDERAL RESERVE BOARD. 1• • • ; {' 7 ro 15+1·+1. 12. ✓ ').. 1 i , 1 https://fraser.stlouisfed.org Federal Reserve Bank of St. Louis 1 FEDERAL RESERVE COMMIT TEE ON BRANCH , GROUP AND CHAIN BANKING • E XHI BI T I ANALYSIS OF BANK EARNINGS ( se a separat e blank for each year for each bank) State_ _ _ _ _ ___.,N..,.e'-"w,__.Y..,.o...r._..k.__ _ _ _ _ _ __ Year 1926 First Nation al Bank Name of bank _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ __ City _ _ _ _ _Gaspo rt, N_._Y_._ https://fraser.stlouisfed.org Federal Reserve Bank of St. Louis _ _ __ Federal Reserve District No.- -~ 2 • N OTE. -See page 4 for instructions as to exact composition of the items below a nd the reconciliations from one report to another. EARNINGS AND EXPENSE FIGURES (Aggregates of the two semi-annual reports) Amounts in dolla rs (omit cents) 21 , 421 A. 2,840 B. Total earnings ............................. . . . .. . .............. . 24,261 C. D. Salaries and wages . ............. . . .. ....... ....... . .. . . .. . .... .. . .. . . . . 4 , 080 D. E. Interest paid on gross deposits ... .... . ..... . . . ......................... . 8,107 E. F. Other expenses . . . ............................... .. . . .. . .. . ........... . 5,147 F. G. Net earnings before losses .. ....... .. .... . .. .... ................. . 6,927 G. H. Net losses .. .. ........... .. . . ....... . .... .. .. . .... .. ................. . 1,915 H. + E + F + H) . . 15,421 I. J. Net addition to profits ... . . ..... . . . . . ........ . ..... . .................. . 8,840 J. 588 170 K. L. Capital, surplus, profits and reserves (except reserves for expenses, etc.) .... . . ~4., 4_21 _ _ L, M. Time deposits (including postal savings) . . .. .... . . . . . ................... . 35,945 M. N. Gross deposits (bank, demand, time a nd U. S.) . . ... . . ....... . . . ..... . ... . 335,592 N. A. Interest and discount on loans and investments ....... .. . . .. . ............ . $ B. Other ea rnings .... . .................................................. . C. I. Total expenses and losses .. ... . . ... . . ... .. ... (D CONDITION FIGURES (Average of Spring, June, Fall and December calls) K. Loans and investments ... . .. . . .... . ............... . ................... . NoTE. -ltems K to N should be checked individually before computing the ra tios. the earnings and expense items. https://fraser.stlouisfed.org Federal Reserve Bank of St. Louis s Checking the percentages on page 3 will check I • ' PERCENTAGES OF GROSS EARNINGS Per cent (two decimals) ;;: l 1. Interest and discount on loans and investments ............ (A + C) 88 29 2. Other earnings ........................................ (B + C) ll 71 3. Salaries and wages .................................... (D + C) 16 82 , 4. Interest paid on gross deposits .......................... (E + C) 5?; 42 I 4. 5. Other expenses ........................................ (F + C) 21 21 / Net earnings ................................... (G + C) 28 66 7. Net losses ............................................ (H + C) Z 89 6. J + 4 + 5 + 7) 65 56 9. Net addition to profits .................................. (J + C) 56 4A. 8. _T otal expenses and losses ................ (3 100% / /2. 3. 100% / 5. 6. / I 1. v / I 8. 9. ) 100% / PERCENTAGES OF LOANS AND INVESTMENTS 10. Interest and discount on loans and investments ............ (A+ K) 5 52 / 10. 11. Other earnings ........................................ (B + K) 75 11. + 11) 6 25 / 12. 13. Salaries and wages .................................... (D + K) 1 05 <' 13. 14. Interest paid on gross deposits .......................... (E + K) 2 09 1S. Other expenses ........................................ ( F + K) ] 16. Net earnings .................................... (G + K) 1 78 / 16. 17. Net losses ............................................ (H + K) . 49 / 17. 12. Total earnings ................................ (10 5 97 19. Net addition to profits .................... ....... ... .... (J + K) 2 28 20. Capital, surplus, profits and reserves ..................... (L + K) 14 02 / 21. Gross deposits ........................................ (N + K) 86 40 / 21. Totalexpensesandlosses ........... (13 14 + ✓ 15. 52 + 17) 18. + _L 14. 15 18. / 19. l I = Item 12 = Item 12 J 20. OTHER PERCENTAGES 22. Net earnings (before losses) to invested capital ............ (G + L) 12 75 I 23. Net addition to profits to invested capital ................. (J + L) 16 24 / 23. 24. Time deposits to gross deposits ........ . ................. (M + N) lO 72 / 24. 25. Invested capital to gross deposits ........................ (L + N) 16 25 / 25. 26. Interest on deposits to gross deposit ..................... (E + N) 2 42 + / 22. 26. NoTE.-Check ratios by seeing that: (a) Items 1 2 equal 100 per cent; (b) Items 3 to 6 equal 100 per cent; (c) Items 8 equal 100 per cent; (d) Items 13 to 16 equal item 12; (e) Items 18 + 19 equal item 12; (f) Items 20 to 26 are calculated twice. https://fraser.stlouisfed.org Federal Reserve Bank of St. Louis + Q RECONCILIATION OF EARNINGS AND EXPENSE FIGURES OF NATIONAL BANKS The following shows the individual items on the various reports of earnings, expenses, and dividends during 1926-1929 which should be included in the earnings and expense figures on page 2 labelled A to J. Earnings and expense report for six months ending- nterest and discount 0 n loans and in vestments A June 30, 1926 .. . . . . . ..... .. . . ............ . Dec. 31, 1926 to Dec. 31, 1929, inclusiYe .. . .... . + Total earnings Salaries and wages Interest paid on gross depos its --- C D - - - ~ ,- - -- - - - B 1 (a) (a) Other earnings l(b) l(b) to l(f) 1 (Total) 2(a) l(c) to l(i) do do Net earnings (before losses) ct losses Net addition to profits F G II J + 2(e) 3 5 minus 4 6 + 2(f) + 2(g) 3 <lo 6 E 2(b) -t 2(d) 2(c) 2(c) Other expenses + 2(d) + 2(c) 2(h) RECONCILIATION OJ<' CONDITION FIGURES OF NATIONAL BANKS The following shows the individual items on the various reports of condition during 1926-1929 whic-h should be included in the condition figures on page 2 labelled K, L, M and N. Loans and investments Capital, ~urplus profits and reserves Time deposits (including postal ~avings) K L 1\1 Reports of condition as of- Apr. 12, 1926 . Items 1, 2, 4 and 5 minus the sum of items f and g of schedule 5 and items 38 and 39 of liabilities. June 30, 1926 and Dec. 31, 1926 .. Items 1 to 4 minus items f ;\lar. 23, 1927 to June 30, 1928, inclusive ... . . Items 1 to 4 minus 45 Oct. 3, 1928 to Dec. 31, 1929, inclusive ..... . Items 1 to 4 https://fraser.stlouisfed.org Federal Reserve Bank of St. Louis + g of schedule S Cross deposits (bank, demand, time and U. S.) Items 17 to 19 Items 33 to 36 Itc111s 22 to J7 I terns 19 to 21 I tcms 35 to 38 I tcms 24 to 39 do do ltl'ms 15 to 18 Item 23 do Items 21 to 21 - FEDER L RESERVE COMMITTEE ON' BRANCH, GROUP AND CHAI.. BANKING • EXHIBIT II ANALYSIS OF BANK EARNINGS (Use a separate blank for each year for each bank) tat.._______ Ne Jersey \'ear_ _1926 _ __ ~amc f bank Peoples Notional. Bank, City_ https://fraser.stlouisfed.org Federal Reserve Bank of St. Louis Federal Reserve District No._ • OTE.-See page 4 for instructions as to exact composition of the items below and the reconciliations from one report to another. EARNINGS AND EXPENSE FIGURES (Aggregates of the two semi-annual reports) Amounts 10 dollars (omit cents) s 23,74Q A. B. Other earnings ........... ........... ........... ........... ........... . .576 B. Total earnings. . ........... ........... ........... ........... .. . 24,3~5 C. D. Salaries and wages .. ........... .. ........ . ........... .......... ...... . . 8,715 D. E. Interest paid on gross deposits .. ........... \ ........... ... ... .. . ... . ... . 6,59.4..__ A. Interest and discount on loans and investments . . . . . . . . . . . . . . . . . . . . . . .... C. F. Other expenses ... . .. .. ..... .... . .... . ......... .......... ........... .. . G. Net earnings before losses. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . H. Net losses ...... ........ ...... .. ..... ...... ..... ........... .......... . I. J. - E. ll 1 228 F. 2,212 G. 0 H. + E + F + H) . . 26,5?:7 I. et addition to profits . .. .. .. . ........ ... ........... . ......... . ....... . 2~212 J. Total expenses and losses .. ........... ....... (D CONDITION FIGURES (Average of Spring, June, Fall and December calls) K. Loans and investment s.. ..... . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . ..... 558i,..:;;.;;:c:..:..:2_ _ K. L. Capital, surplus, profits and reserves (except reserves for expenses, etc.) ..... . M. Time deposits (including postal savings) ...... .. . ... . ..... ... ........... . 102,848 M. N. Gross deposits (bank, demand, time and U.S.) . ... ....... ........... .... . NOTE.-ltems K to N should be checked individually before computing the ratios. the earnings and expense items. https://fraser.stlouisfed.org Federal Reserve Bank of St. Louis Checking the percentages on page 3 will check • PERCENTAGES OF GROSS EARNINGS Per cent (two decimals) 1. Interest and discount on loans and investments ............ (A + C) 97 22 r1. 2. Other earnings ........................................ (B + C) 2 78 2. 3. Salaries and wages .................................... (D + C) 55 8~ 3. 4. Interest paid on gross deposits .......................... (E + C) 27 11 4. . ................... (F + C) 46 16 5. Net earnings ................................. ~. (G + C) 9 JO 6. 7. Net losses ............................................ (H + C) 0 7. + 4 + 5 + 7) 109 10 8. 9. Net addition to profits ................................ ':. (J + C) 9 10 9. 10. Interest and discount on loans and investments ............ (A + K) 4 41 10. 11. Other earnings ........................................ (B + K) 12 11. 11) 4 55 12. 13. Salaries and wages .................................... (D + K) l 62 13. 14. Interest paid on gross deposits .......................... (E + K) 1 2B 14. 15. Other expenses ........................................ (F + K) 2 09 15. Net earnings ................................. ~. (G + K) 41 16. 17. Net losses ............................................ (H + K) 0 17. 5. Other expenses. . . . . . . . . . . . . . . . . . 6. 8. Total expenses and losses ................ (3 100%/ ) 100% / PERCENTAGES OF LOANS AND INVESTMENTS 12. 16. Total earnings ................................ (10 + + + + 17) 4 94 19. Net addition to profits ............................. .... . (J + K) 4l 19. 20. Capital, surplus, profits and reserves ..................... (L + K) 28 27 /20. 21. Gross deposits ........................................ (N + K) 95 1 / 21. 22. Net earnings (before losses) to invested capital ............ (G + L) 1 4.5 22. 23. Net addition to profits to invested capital ................. (J + L) 1 45 23. 24. Time deposits to gross deposits .......................... (M + N) 20 04 / 24. 25. Invested capital to gross deposits ........................ (L + N) 29 66 / 25. 18. Total expenses and losses ........... (13 14 15 18. } = Item 12 / = Item 12 / OTHER PERCENTAGES 26. Interest on deposits to gross deposits ..................... (E + N) + 1 29 / 26. NOTE.-Check ratios by seeing that: (a) Items 1 2 equal 100 per cent; (b) Items 3 to 6 equal 100 per cent; (c) Items 8 equal 100 per cent; (cl) Items 13 to 16 equal item 12; (e) Items 18 + 19 equal item 12; (f) Items 20 to 26 arc calculated twice. https://fraser.stlouisfed.org Federal Reserve Bank of St. Louis +9 RECONCILIATION OF EARNINGS AND EXPENSE :FIGURES OF NATIONAL BANKS The following shows the individual items on the various reports of earnings, expenses, and dividends during 1926- 1929 which should be included in the earnings and expense figures on page 2 labelled A to J. Earnings and expense report for six months ending- - Inte rest and di scount on Ioans and inve stments Other earnings - ----- - A - Total earnings Salaries and wages C D - - - ,_ B - - Interest paid on gross deposits Other ex·penses Net earnings (before losses) F G ---- ------ June 30, 1926 ........... . . . .. . .......... . l (a) l(b) to l(f) 1 (Total) 2(a) Dec. 31, 1926 to Dec. 31, 1929, inclusive . .. ... , l(a) + l(b) l(c) to l(i) do do 2(c) 2(c) Net lo,ses -- -- - E + 2(d) + 2(c l\l't addition to profits ,_ - - ll J 2(b) + 2(d ) + 2(e) 3 5 minus 4 6 2(b) + 2(f) + 2(g) 3 do (J ~- - RECONCILIATION OF CONDITION FIGURES OF NATIONAL BANKS The following shows the individual i terns on the various reports of condition during 1926· 1929 whi h should be included in the condition figures on page 2 labelled K, L, M and N. Loans and investments apital, surplus profits and resen·cs Time deposits (inc-luding postal savings) K L :\I Reports of condition as of- .\pr. 12, 1926 .... . Items 1, 2, 4 and 5 minus the sum of items f and g of schedule 5 and items 38 and 39 of liabilities. June 30, 1926 and Dec. 31, 1926 ........... . . Items 1 to 4 minus items f :\1ar. 23, 1927 to June 30, 1928, inclusive . . ...... . Items 1 to 4 minus 45 Oct. 3, 1928 to Dec. 31, 1929, inclusive ..... . .. . Items 1 to 4 https://fraser.stlouisfed.org Federal Reserve Bank of St. Louis + g of schedule 5 Gross deposits (hank, demand, time and U. S.) Items 17 to 19 Item~ 33 to 36 Items 22 lo 37 I trms 19 to 21 I terns 35 to 38 ltl'lllS 24 to 39 do do do Items 15 to 18 Item 23 Items 21 to 24 - . , FEDER.\L RE~ERVE COMMITTEE ON BRA. ·cH, GROUP AND CHAI.. BANKING • • EXHIB IT II!_ ANALYSIS OF BA K EARNINGS (U c a eparate blank for each year for each bank) York- - - - - - City_ _ https://fraser.stlouisfed.org Federal Reserve Bank of St. Louis Je.mesto ., N. Y. \ ear 1926 Federal Re;;e rve District o .. _ • • OTE.-See page 4 for instructions as to exact composition of the items below and the reconciliation from one report to another. EARNINGS AND EXPE SE FIGURES (Aggregates of the two semi-annual reports) Amounts in dollars (omit cents) A. Interest and di count on loans and investments . . . . . . . . . . . . . . . . . . . ..... . ,~ ____8=2..,__594___ A. B. Other earnings ........... ........... ........... ........... ........... . C. 5 571 B. 20,000 D. ---- Total earnings. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .... D. Salaries and wages ........... ........... ........... ........... ........ . E. Interest paid on gross deposib. ............. .. . ........... ... . E. F. Other expense s.......... ............ ............ ........ . .... F. G. H. I. J. et earnings before losses ........... ........... ...... . H. et losses ........... ........... ........... ........... ....... . Total expenses and los es ........... ......... (D + E + F + H) . . 68,867 et addition to profits.. ............ ............ ........... . .. CO DITIO I. J. FIGURES ( verage of pring, June, Fall and December calls) K. I{. Loans and investn1en ts..... . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . L. apital, surplu., profits and reserves (e.cept reserves for expenses, etc.) ..... . 609 _ L. M. Time deposits (including postal savings) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . M. Gross depo it (bank, demand, time and U.S.) ........... ........... .... . - N. NoTE.-ltems K to.' hould be checked individually before computing the ratio . the earnings and expense items. https://fraser.stlouisfed.org Federal Reserve Bank of St. Louis Che-eking the percentages on page 3 will check I • • f PERCENTAGES OF GROSS EARNINGS Per cent (two decimals) r 1. 1. Interest and discount on loans and investments ............ (A + C) 95 65 2. Other earnings ........................................ (B + C) 4 JS 3. Salaries and wages .................................... (D + C) 25 27 / 3. 4. Interest paid on gross deposits .......................... (E + C) 59 01 / 4. 5. Other expenses ........................................ (F + C) 50 56 / 5. Net earnings ....................... ~ ........... (G + C) 7 16 / 7. Net losses ............................................ (H + C) 87 04 / 7. 7) 179 88 I 8. 9. Net addition to profits .............................. .Y. (J + C) 79 88 / \ 100% / 6. 8. Total expenses and losses ................ (3 +4 +5 + / 2. 100% 6. /9, ) 100% / PERCENTAGES OF LOANS AND INVESTMENTS 10. Interest and discount on loans and investments ............ (A + K) 5 54 11. Other earnings ........................................ (B + K) + / 10. / 11. 11) 5 78 / 12. 13. Salaries and wages .................................... (D + K) 1 34 / 13. 14. Interest paid on gross deposits .......................... (E + K) 2 26 / 14. 15. Other expenses ........................................ (F + K) 1 77 I 15. Net earnings .................................... (G + K) 4l / 16. 17. Net losses ............................................ (H + K) s o;z, / 17. 10 40 / 18. 12. 16. 18. Total earnings ................................ (10 Total expenses and losses ........... (13 + 14 + 15 + 17) 19. Net addition to profits ............................... -v. (J + K) 4,62 20. Capital, surplus, profits and reserves ..................... (L + K) 17 79 / I = Item 12 l j = Item 12 19. 21. Gross deposits ........................................ (N + K) OTHER PERCENTAGES 22. Net earnings (before losses) to invested capital ............ (G + L) 2 53 I I 23. Net addition to profits to invested capital .............. .V:. (J + L) 25, 95 24. Time deposits to gross deposits .......................... (M + N) 65' 15 / 25. Invested capital to gross deposits ........................ (L + N) 20 70 26. Interest on deposits to gross deposits ..................... (E + N) 2 62 + 22. 23. 24. I 25. / 26. ' TOTE.-Check ratios by seeing that: (a) Items 1 2 equal 100 per cent; (b) Items 3 to 6 equal 100 per cent; (c) Items 8 19 equal item 12; (f) Items 20 to 26 are calculated twice. equal 100 per cent; (d) Items 13 to 16 equal item 12; (e) Items 18 https://fraser.stlouisfed.org Federal Reserve Bank of St. Louis + +9 RECONCILIATION OF EARNINGS AND EXPENSE FIGURES OF NATIONAL BANKS The following shows the individual items on the variou reports of earnings, expenses, and dividends 1926-1929 which should be included in the earnings and expense figures on page 2 labelled A to during J. - --- - - - ---,---- -.-- ----,-- ~ Earnings and expense report for s ix months ending- Interest and discount on loans and investments Other earnings A B ,_ -June 30, 1926 .... . . . ........ .. ....... . . .. ' Dec. 31, 1926 to Dec. 31, 1929, inclusive . ... ' . t(a) Interest pa id on gross clcp osits D ct earnings (before losses) el losses Net addition to profits F G II J E - - ~ Other xpcnscs -- -C - ' ... -- Salaries and wages Total earnings t(a) 1(b) to 1 (f) 1 (Total) 2(a) + l(b) t(c) to t(i) do do 2(c) l(c) + 2(d) + 2(e) - - -- 2(h) + 2(d) + 2(e) 3 5 minus 4 6 2(b) + 2(f) + 2(g) 3 do (> RECONCILIATION OF CONDITION FIGURES OF NATIO AL BANKS The following shows the individual items on the various reports of condition during 1926-1929 which should be included in the condition figures on page 2 labelled K, L, M and N. ---- --Loans and investments Reports of condition as of - K ,\pr. 12, 1926 .. .. . ........ . ....... . Items 1, 2, 4 and 5 minus the sum of items f and g of schedule 5 and items 38 and 39 of liabilities. June 30, 1926 and Dec. 31, 1926 Items 1 to 4 minus items f ~Jar. 23, 1927 to June 30, 1928, inclusive ... . . . Items 1 to 4 minus 45 Oct. 3, 1928 to Dec. 31, 1929, inclusive . Items 1 to 4 https://fraser.stlouisfed.org Federal Reserve Bank of St. Louis + g of schedule 5 Capital, surplus profits and rcser\'CS Time deposits (including postal savings) Gross clepo~its (bank, demand, time and U. S.) L 1\1 N ~--- Items 17 to 19 Items 33 to 36 Itrms 22 to .17 Items 19 to 21 Itrms 35 to 38 I terns 24 to 39 do do do Items 15 to 18 Item 23 - Items 21 to 24 - f I Washington, D. C., September 24, 1930 REPORT OF PROGIU5S BY 'IHE COMMITTEE ON BRANCH, GROUP AND CHA.IN :S.ANXING TO THE GOVERNORS I CONFERENCE SEPTEMBER 24, 1930 The Federal Reserve Board at i,ts meeting on February 26, 1930, appointed Messrs. Goldenwe iser and Smead, of the Board 1s staff, and Messrs. Rounds, Fleming and Clerk represent ing the Federal reserve banks "as a committee to assemble and digest informati on on branch banking as practised in the United States, group and chain banking systems as developed in the United States and elsewhere , the unit banking system of the country, and the effect of ownership of bank stocks by investmen t trusts and holding companie s." At a la~er date the committee was made a System rather than a Board committee . This comnittee held its first meeting in Washington, D. C., on March 4-6 with Dr. Goldenweiser as chairman, for the purpose of discussin g the functions of the Committee, the scope of its work and the method of procedure . It was the vtew of the members that the purpose of the Committee was primarily fact finding, and that its objective should be to assemble such informati on as would make possible a comparison and evaluatio n of the different types of banking from the point of view of the public interest. It was agreed that the program should include a. thorough study of the development and present status of branch, chain and group banking a.s well as the unit system; the relative merits of the various systems including the element of safety, availabil ity of credit and value of general services performed ; the causes or motivatin g forces back of the general tendency in the field of banking towards concentra tion of ownership and control and the diversifi c~tion of functions ; and an estimate of what is likely to be the norm'.ll development in the future and how far this tendency or development might be advantage ously directed. A review of the history and present status of branch banking in certain foreign countries , especiall y Canada, was also suggested as a supplemen t to the study of condition s in this country. The Committee was aware that this was a mjor undertaki ng which involved rmch time, labor and expense and to be successfu l would need the whole-he arted cooperati on of all the Federal reserve banks as well as the state and national superviso ry authoriti es, but in view of the economic importanc e of the changes which are going on in our entire banking structure including the distress caused by the extraordi nary number of failures during the past ten years, the Committee felt that its investiga tion should be comprehensive and thorough. https://fraser.stlouisfed.org Federal Reserve Bank of St. Louis - 2 Messrs. Goldenweiscr, Smead and Rounds were constituted an Executive Comnittee with authority to act for the Committ.30 as a 1. ·'lolc in tho a.o sonco of the other members, and :1'ir. J. H. Riddle was appointed Secretary of the Coomi ttee. The Executive Comni ttc3 met in Washington on May 23, 1930, in order to deter;::ino more definitely the various lines of investigation and the scope of each. Tho investigation as outli~cd includes various statistical studies, case studies on special topics, and in some instances cpeci2l field investigations. The statistical studies include: Suspensions Earnings :Branch banking Chain and group banking Mergers and consolid:1.tions Branch ban~dng in so,ne of the princip~l for0ig.1 countries The case studies include: :Branch banking Group bcmking Branch and chain s?ste1:is which have failed After the various data in the statistical and case studiec are assembled and analyzed it may be necessar" for the Comni ttee to sup 1lernen t this material by sending a reprosentative, or representatives, into p.:i.rticular districts or con:munities to cake dir~ct surveys of the conditions which prevail. These surveys should cover especiall:· the branch ban.lcing systems in California and the Canadian ban..lcing s~r ste.n. The Commi ttce is ma.ldng uso of the vast fund of statistical and other material v,hich has alroa~· been collected by the :Soard and other agencies. It ms proved necessary, howev3r, to su~?lcm,nt the available material by collecting additional data an~ the Com.aittee has prepared various schedules for this 9urpose. Schedules have been forwarded to the Federal reserve banks for collecting naterial on the followin~ subj()Cts: ]ranch and chain s~rstems whj ch have failed Branch banks in operation for specific years prior to 1920 Effect on banking accounts of changes in industrial organization Branch banking sys te:~s in operation Group banking syste.,1s in operation Suspensinn~ since January 1, 1921 Earnings. This infoIT.lation is now bei~ 6 compiled by the Reserve b ~nks ~nd state Commissioners -=ind p rts of it have alread:r been received uy the Co1:11:li ttee. 'lhe https://fraser.stlouisfed.org Federal Reserve Bank of St. Louis 3 Federal reserve banks themselves a.re r>reparins the material on earnings and on branch and chain systems which have failed. The schedules on suspJnsions were sent to the various state banking departments and to the office of the Comptroller of the Currency, while the questionnaires on branch and group banking were sent to tho institutions fro ..1 ~,horn the data. are desired. The CoDJi.11ittoe is ::ru.ch gratifi~d with the cooperation and assistance which it has received and continues to rccJivo from the various Federal reserve banks, the state ba~<=ing depart,....-.ents, the Comptroller of the Currency and from the various institutions fro ... whom information has been requested. https://fraser.stlouisfed.org Federal Reserve Bank of St. Louis J. H. Riddle, Sec re tar?. https://fraser.stlouisfed.org Federal Reserve Bank of St. Louis • 0 ,prntions fil 3 r. le r. https://fraser.stlouisfed.org Federal Reserve Bank of St. Louis ,1 0 https://fraser.stlouisfed.org Federal Reserve Bank of St. Louis https://fraser.stlouisfed.org Federal Reserve Bank of St. Louis • .. . .. ... .. . .. ... • . . . 7 • 17 221 • 6 . 6 . 5 7 2 • C 2 • • . .. . cond . • V .. ion 9-30 30 . . . . • . . . • - 12 l 6 3 1 1 1 ,216 FEDERAL RESER VE BOARD TO ___ l/.!l'. Hammond_ From Y.r. Cummings __ - - - - - - - - -- Date_ September 23 L 1930. Subject:_ r~u.r memorandU!Il of - - - - ~ Se tem_ber 22 ... M memorandum of last wee have illl'.)ressed you as being a rather formal reAponse to your request for comments. I had no intention of undertaking any serious criticism of your proposal. The meroo was si~ply the easiest way of expressing entirely personal commeot 1 and this one also is quits personal. You may very well have a more correct understanding of the purposes of the inquiry being mede by the Committee t:::ian I have. Ithas seemed to me that anv analysis of the reduction in the number of banks since 1920 must involve more thl:\n a mere statement of the net numerical decrease resulting from consolidations, suspensions, liquidati~n~, reopenings, a.nd organi=~tions -- that it mu~t take account of, among other things, tne incidence of that decrease as affectiug membership in the Federal Reserve System -- narticularly since it is the Federal Reserve System that is conducting the inquiry. I should even expect our Board to be interested in banking concentration primariJ:.y as a condition of svstem administration and policy, although of course not to the exclusion of other things. You say that thi distinction of member and nonmember and that between National and State baw..s are subordinate and. without economic significance, being ratber dmply "legal distinctions". They seem more than that to me. I should say that the recent interest in banking concentration has largely originated in orecisely ti1ese effects of concentration 1Jpon membership in the· Federal reserve, in the National, and in the several State banking systems. It may be true, as you say, that membership is not a 11positl ve in1'luence for or a ., inst concentration 11, and be true nevertheless that concentration has a material influence upon membership, and so tends to bring about a material modification of our banking system. To show changes in and out of the system would of course "increase the task of analysis 11, but it would not, I should think, very greatly increase the task of the State commissioners to indicate membership on their lists for individual banks involved in the chan.es listed. So far as getting sum:naries made up for calendar years is concerned. that is a very small point, but I can't see yet that it mekes any difference hether the commissioners close their own official reports on Dece~ber 31, or on some other dat.e, since they will be listing individual bank chan~es, and might add the~e up for calendar ae well as for any other years. In other words, where the individual changes are listed chronologically 1th dates given the annual report period of the State ould seem to be a IDf'l.tter of indifference. My point about inserting Deceinber 1928 figures as end of the period figures, also, was a very small point -- simply that it might be misleading. I realized of course th8.t you would not have in hand December 1929 figures, and I should be inclined to leave that space blank to be filled in by the commissioner. https://fraser.stlouisfed.org Federal Reserve Bank of St. Louis 2. Mr. Hammond September 23, 1930. The "serious difference" between us i~ probably not so serious ~fter all. You interpret the purpose of the Committee's inquiry to be to make a study simply of the causes of banking concentration, and you m:;.y very well be correct in so interpreting it. These causes lie largely out ide the banking sy~tem, a.nd are the same for member as for nonme~ber banks. So that the classification by membership naturally seems to you of small importance. I have felt that any uch inquiry as that being :made should take account of t~e consequences as well as of the causes of concentration, among which is the effect upon membership in the Feder~l Reserve System as measured i~ number of banlcs and in banking resources. I may say, however, that it seems to me quite conceivable that membership should be found to be a condition of considerable importance as in~urtng or tending to impair, for example, solvency, and conversely nonmembe ship as predisposing to insolvency and so as one condition to be ta'ken into account among the causes as well as among the consequences of bank failures which indirectly lead to concentration of resources. Whether membership is or is not such a condition ought I should say in any case to be determined by the inquiry. https://fraser.stlouisfed.org Federal Reserve Bank of St. Louis I • • TELEGRAM FEDERA L RESERVE BOARD LEASED WIRE SERVICE WASHINGTON ll--lk6' Septe Clerk - I nspo M to in ui17 t hill uder date ot t• r 17 I https://fraser.stlouisfed.org Federal Reserve Bank of St. Louis « ch, to re r. a■ t llow : r thi ■ r 19, 19.30 ct I OD e co ••• ••• l gra ' •o. 1a1 r or.IU Office Corres To Mr. Hammond From Mr• Cu..'lllllin~ F£1)ERAL RESERVE BOARD ·- I Date____§_eptembe;-_ 19, 1930. _ Subject:_On_forms for reporting changes in number of State banks. ••o 2-8496 I have, as you know, felt that any inquiry conducted by the Federal Reserve Board should take account of changes into and out of the Federal reserve system, and that accordingly provision should be made for recording membership or nonmembership on any forms used. Perhaps tne only material suggestion I should be inclined to make with reference to the forms you are proposing to send out to State offices to be used in listing bank changes is that provision be made on these forms for indicating changes in membership and resources for the Federal reserve system. The distinction between member and non-member banks seems to me quite as important as the distinction between National and State banks. You might consider adding a column for indicating membership to the proposed form for listing changes. By way of specific coimnent on some small points of your memorandum and accompanying forms: (1) It is not clear to me whether or not you expect the lists of individual bank changes to be prepared in every case by the State commissioners and to be sent in with their surmnaries, but I assume the plan to be to have such lists made up in every case, since if they are not it will not be possible to verify the classifications, or to reconcile the State commissioners' figures covering changes involving National banks with corresponding figures made up independently for National banks, or to make any detailed tabulations by size of community, or by size or class of bank. If the lists are to be made up as I assume they are, it would seem po~sible to make up the summaries in each case for calendar years, since the date of che.nge is to be entered for each change listed, and it would, therefore, not seem necessary to say, as you do in your memorandum to commissioners, (first paragraph,) that the figures should be changed 11 if possible II to cover the year ended December 31 but that this is 11not necessary". Why isn't it necessary? Even entering total for any other date than December 31 on the specimen forms might be misleading, unless it is carefully explained in the memo that such totals are entered simply by way of illuses have not been t.rating what is anted and only because end-of-the-year fi made available. (2) The memorandum seems to imply that the tabulation i to cover ape iod ended December 31, 1928. You have entered on the Missouri form the number of banks on December 31, 1928, as the number at the end of the period to be covered, and in your memorandum, (third paragraph,) you speak of the "whole period 11 a ending with December 1928. Your proposed form nevertheless covers 1929, and I can see no rea on for excluding 1929. In any case the period to be covered might perhaps be more clearly indicated. (3) On the pecimen sheet for Mis ouri the merger of two State banks under a National charter is listed as three consolidations -- to cover a decrease of 2 for State banks and an increase of 1 for National banks, (this increase not being entered on thi form.) The issouri Commissioner, as you explain in your https://fraser.stlouisfed.org Federal Reserve Bank of St. Louis ... . 2• • Hammond September 19, 1930 • memorandum, would p obably l i t thee changes as a decrease of l by conv r ion in number of State bank, a.nd of 1 by con olidation with a National. Obviously the case is one involving conver ion as well a consolidatio n, and that it is so eems to me to be more clearly indicated by the Commi s1oner 1 s method than by the method prop ed by the Committee. The Committee may of course sho separately in its co:npilation s the number of instances of two or more State banks conolidating under a National charter, or oft o or more Nationals consolidatin g under a State charter, but uch instances re not instanc~s simply of con olid tion. The increase for tr~ Jational system in the Missouri case would be by by consolidati on. If this case be cla sified as a 11 conconver ion rather t olidation11 of two State banks, then the record mu t show decrease of 1 (not 2) by thi consolidati on, and a decrease of 1 by conver ion. It seems to me misleading and even incorrect to record the change s involving a decreas of 2 by consolidati on, and to list the conver ion as a 11 consolidati on 11 which ittplies t t th change will be listed on th schedule for National ban a an increase of 1 for Nationals by "consolid.at ion" rather than by 11 conversion 11 • Any increase in number of benks by 11 consolidatio n 11 would certainly require careful expla.naems proposed .ion, and I can see no adva.nt8€8 in following such a procedur as te banks, St for 1 of decrease a involves actually case by the Committee. The of decrease a and conversion, by Nationals for 1 of and a correspondi ng increase ccord in me to seems This National. a with on 1 for St te banks by consolidati 1th the economic facts, as well as with the legal procedure. (4) As noted sbove I think membership in the Federal Reserve System should be shown for all institution s involv din mergers or other changes, and I would sugge t addition to the form of a column to provide for indicating membership or non-memb rehip of the institution s involved. This might involv some elaboration , long lines which I have sugge ted in o.n earlier memo, of the stub of the form for summarizing changes. https://fraser.stlouisfed.org Federal Reserve Bank of St. Louis https://fraser.stlouisfed.org Federal Reserve Bank of St. Louis • • https://fraser.stlouisfed.org Federal Reserve Bank of St. Louis • • J./ FEDER AL RESER VE BANK OF NEWY ORK Septemb er 18, 1930. Mr. C. B. Hammond, Corrmittee on Branch, Group end Chain Banking , Federal Reserve Board, eshingto n, D. c. Dear Ha.mmond: I am sending you a few notes which I dictated after talking to ernette on branch banking in Califor nia. you probably covered all this ground,a nd more too,in your talk with him and these notes any value to you. I merely dictated them for my own benefit and for the files and you may have gotten some addition al points to add to these. ery truly yours, Enc. https://fraser.stlouisfed.org Federal Reserve Bank of St. Louis ey not be of hich you may ant • Interview with Mr. wernette on Branch Banking in California Mr. ~P. Ylernette, an instructor at Harvard, has spent the summer in California sti;ing the branch banking situation in that state. He feelsthat branch banking is still in a transition stage, even in California, end that the branch systems are still very busy working out problems of organization and policy. The development is so new that any comparisons or opinions expressed as to the relative merits between branch banking and independent banking must be made with many reservations. It is still too early to form any reliable comparisons between the two systems or to form any opinions which may not have to be revised after branch banking has had a longer trial. He found among the majority of the CO!Il!llunities which he visited what might be termed 4 mild antagonism to the branch banks. There exists in these communities a certain local pride in their own institutions which cause4 them to lean to the independent bank. As a result, the business of independent banks is expanding somewhat more rapidly than that of the branch banks here the two operate in the same communities. The independent banker, therefore, seemingly no longer fears the competition of the branches and in some cases expressed the views that competition from branch banks was not so keen as competition from other independent banks of the same communities. Mr. Wernette expressed some doubt as to the advantages of the branches over independent banks in operating economies. He collected some figures on salaries paid which he did not show me but which he said indicated that the salaries and wages paid by the independent banks were no larger, in some cases, than the salaries and wages paid by the branches, in proportion to assets. As to purchases of supplies, he felt there might be some saving by the branch systems but that the item was so small that it was not of great importance. He pointed out in this connection that there are now in California some two or three associations of independent bankers whose purpose is to secure sane of the economies and ad• vantages of cooperative action, especially in the matter or purchases or supplies or the securing of minimwn insurance rates, etc. He is not sure that the develop!11ent of branch banking in California has resulted in lower interest rates in the state. Rates are somewhat lower at present than a few years ago, but that may be attributed to several causes, one of which may perhaps be branch banking. On the whole, he does feel that branch banking has been a benefit to the state, even though it may not be so obvious that they have brought about oper ting economies or lower rates. He thinks the competition has made the independent banker a better banker, more alert in improving his methods and providing additional and better services. Branch banks make innovations and in a measure the independent banks follow. Where the branch banks refuse poor business, the independent bank is loath to take it. f https://fraser.stlouisfed.org Federal Reserve Bank of St. Louis J • Form. 118 t TELEGRAM • FEDER AL RESER VE BOARD LEASED WIRE SERVICE 'WASHING TON 2-e- ••• ptember 17, 1930 trater • Clewla 171 g 70ur tel• n b r&Dch, re on to t roup fo ttee on nc will be ble to fortbcom.na oonteren , brief report co• r1 https://fraser.stlouisfed.org Federal Reserve Bank of St. Louis chain 1 ther the oo t • cb oo rea ne• or t a reli n&l'J tt•• will nbld.t a https://fraser.stlouisfed.org Federal Reserve Bank of St. Louis Letter sent to a • gents ept ber 17, 1930. •r •.• L. cClu , deral es ve Agent, Federa l Res rve Bank of K nsas City, ns City, issour i. Dear lr. cClure : In connec tion lli.th tne earnin g p oject of the Co ittee on ranch, Group and Chain Banking we ha e been aslmd to rule on certain points with respec t to the l~mina tion of banks fr a p rticula r year' compil ation b cau e of su ension , consol idation , or the likoo e re enclos ng for your inform ation and idance a imeograph o the point aised and our replies thereto o Very truly your, • Gold nwei ittee on Br in Banki Enco G'IB/CH • n and • • .. ,. Federal Reserve Corn.mi ttee on Branch, Group and Caain Banking September 17 , 1930 In connection with the earnin:<;s project outlined to the Federal Reserve Agents in the letter of A~1-e,ust 11th , this Committee has been asked to rule on the following points: "Shall we attempt to make an analysis for periods of less than one year, as for ex3l!lple (a) Where one or more call reports for the year are missing, or where one earnings and eA"l)ense reiJort is missinb, because of organization, suspension, consolidation, etc., within the year. (b) Where all condition and earnings reports are in our files, but where the bank was organized between January 1 and the first call date. "In the case of consolidations between natioM.1 b :mko, •,rill it be advisable to make up our figures for the consolidated ban].,;: for the year in \7hich the consolidation occurred by combining the re·:? orts submitted by the bon.k after consolidation ,rith the reports of both bAiiks 2rior to consolid1tion. 11 To the above the Cammi ttee replied as follows: "In cases of org3nizn.tion or ous:9ension of '.1 n.o.tion,-,,1 b::ink where a tnelve months 1 e:1.rnings record is not av'1ilable, the b'lnk in question should be excluded from the particul '.lr ye:1r 1 s compil.'.:l.tion. However , in cases '.7here a. bank is suspended for a short period only, 3.!ld you deem its earnin:;;s figures representative of a year 1 s activity, the bank could be retained. Moreover, when a. national bank is absorbed by a state ban~. it will also be necessary to omit it for that year, since a t,,el ve months I earning; record is unavailable. On the other hand, ,.men a national ban..~ absorbs other oan~s during the year, it is hoped than an effort ,rill be made to aggregate the figures, both the condition and earnings, for all the banks in the consolidation for the year, so that the bank may be retained. We may illustrate what we mean by assuming that National Bank A absorbs National Bank B and Trust Company C in A.ugust. The autumn and Dece,nber call reports roi.d the December 31 earnings report will obviously include the figures for all three banks. It is hoyed. in a case such as this that the separate fi 6ures for e:ich of the three banks for the June 30 earnings report and the Spring 3.lld June 30 call reports will be combined to co~plete the year I s tabulation. "It seems clear that in cases where the early re:;?orts of the year cannot be put on a basis colll'_,?arable with those of the latter "9art of the year the ba..--ik in question will have to be omitted for that year. Ho~-rever, a general J;>Olicy of excluding any ba..-i:: that •)resents problems Pi thout an attem<>t to .;et com,)8.rable figures for the twelve months would unquestionably eliminate much useful data, and , therefore, it has seemed best to us to suggest that all :::,racticable efforts be made to retain them along the lines indicated. 11 https://fraser.stlouisfed.org Federal Reserve Bank of St. Louis • • Federal Reserve Committee on Branch, Group and Chain Banking September 17 , 1930 In connection with the earnin'.~ project outlined to the Federal Reserve Agents in the letter of Au6ust 11th, this Committee has been asked to rule on the following points: "Shall we attempt to make an analysis for periods of less than one year, as for example (a) Vlhere one or more call reports for the year are missing, or where one earnings and expense re"!)ort is missinb, because of organization, suspension, consolidation, etc., within the year. (b) Where all condition and earnings reports are in our files, but where the bank was organized between January 1 and the first call date. 11 In the case of consolidations between nation.'.3.l b"nkn, rtill it be advisable to ma.lee up our figures for the consolidated ban1..: for the year in ,1hich tbe consolidation occurred by combining the re·,;,orts submitted by the bank after consolidation vtith the r~2orts of both banks ~rior to consolid.:ltion. 11 To the above the Committee replied as follows: "In cases of org:mizn.tion or SUSJ>ension of :l no.tional b::mk where o. trrelve months' e3,rnings record is not av::i.ilable, ti.1e b-mk in question should be excluded from the particll.l'.:1.r ye'l.I' 1 s compib.tion. However . in cases nhere a ban2:'.: is suspended for a short -period only, 3.!ld you deem its earnin.;s figures representative of a year's activity, the bank could be retained. Moreover, when a national bank is absorbed by a state ban~, it will also be necessary to omit it for that year. since a t,1el ve months I earning; record is unava.i lab le. On the other hand, ,.men a national bank absorbs other banks during the year, it is hoped than an effort ,till be made to aggregate the figures, both the condition and earnings, for all the banks in the consolidation for the year, so that the bank may be retained. We may illustrate what we mean by assuming that National Be..nk A absorbs National Bank B and Trust Company C in A.ugust. The autumn and Dece.nber call reports 3nd the December 31 earnings report will obviously include the figures for all three banks. It is hoped in a case such as this that tl1e separate fi 6ures for e3.,ch of the three banks for the June 30 earnings report and. the S!)ring 3.nd June 30 call reports will be combined to complete the year's ta.bula.tion. "It seems clear that in cases ;1here the early reports of the year cannot be put on a basis comparable rri th those of the latter :9art of the year the ba"lk in question will have to be omitted for that year. Ho~10ver, a general :policy of excluding any ba.."'0.: that ~Jresents problems TTi thout an atte~t to .:;et com_:_:>a.rable figures for the hrelve months would unquestionably eliminate much useful data, and , therefore, it has seemed best to us to s~gest that all ,:>racticable efforts be ma.de to retain them along the lines indicated. 11 • https://fraser.stlouisfed.org Federal Reserve Bank of St. Louis • • Federal Reserve Committee on Branch, Group and Chain Ba..~king September 17 , 1930 In connection with the earnini;s project outlined to the Federal Reserve Agents in the letter of Au6ust 11th, this Committee has been asked to ru.le on the following points: "Shall we attempt to make an analysis for periods of less than one year, as for example (a) \There one or more call reports for the year are missing, or where one earnings and eA'})ense r81)ort is missinb, because of organization, suspension, consolidation, etc., within the year. (b) Where all condition and earnings reports are in our files, but where the bank was organized between January l and the first call date. "In the case of consolidations between nation~.l b::mks , ·,fill it be advisable to ma.lee up our figures for the consolidated ban!,;: for the year in ,1hich the consolidation occurred by combining the re·;;iorts submitted by the bank after consolidation with the reports of both bAnk:s ::;irior to consolid::ttion. 11 To the above the Committee replied as follo~s: "In cases of org3Ili zation or suspension of ~ n:i. tion::,,l bonk where a tnel ve months' e"l.rnings record is not av'lilable, the b'Ulk in question should be excluded from the particu.13.r ye::i.r I s com_f)il'.:1. tion. However . in cases •,;here a bank: is suspended for a short period only, and you deem its earnin.;s figures representative of a year's activity, the ba.i."'1k could be retained. Moreover, when a national bank is absorbed by a state banl-'.:, it will also be necessary to omit it for that year. since a t,1elve months' earnin~record is unavailable. On the other hand, ,,men a national bank absorbs other baru;:s during the year, it is hoped than an effort r,i 11 be ma.de to aggregate the figures, both the condition and earnings, for all the banks in the consolidation for the year, so that the bank may be retained. We may illustrate what we mean by assuming that National Bank A absorbs National Bank B and Trust Company C in A.ugust. The autumn a.nd Dece;nber call reports and the December 31 earnings report will obviously include the figures for all three banks. It is ho:9ed in a case such as this that the se9arate figures for e.'.)..ch of the three ban..lcs for the June 30 earnings report and the Spring and June 30 call reports will be combined to complete the year's tc'.lbulation. "It seems clear that in cases ;7here the early rej?Orts of the year cannot be put on a basis comparable with those of the latter j_)art of the year the ba...k in question ,vi 11 have to be omitted for that year. Ho~rever, a general policy of excluding any bank that -•) resents problems m. thout a.n attem-Jt to ...:>~·et com,)8.rable figures for the twelve months would unquestionably eliminate much useful data, and , therefore, it has seemed best to us to s~ges t tha. t all :practicable efforts be made to retain them along the lines indicated. 11 https://fraser.stlouisfed.org Federal Reserve Bank of St. Louis • r • Federal Reserve Comrni ttee on Branch, Group and Chain Ba.."'lking September 17 , 1930 In connection with the earninGS project outlined to the Federal Reserve Agents in the letter of Au.e,ust 11th , this Committee has been asked to rule on the following points: "Shall we attempt to make an analysis for periods of less than one year, as for eX3lli_Ple (a) IThere one or more call reports for the year are missing, or wnere one earnings anQ ex-2ense r8l)ort is missinb, because of organization, suspension, consolidation, etc., rrithin the year. (b) Where all condition and earnings reports are in our files, but where the bank was organized between January 1 and the first call date. "In the case of consolidations bet,1een nationo'.".l b t>n..l.co, ·,·rill it be advisable to ma.lee u-:_:, our figures for t:1e consolidated b~,; for the ye.'.lr in uhich the consolidation occurred by combining the re·.)orts submitted by the bnn..'lc after consolidation i7i th the reports of both brml~s ?rior to consolid'.ltion." To the above the Comrrri. ttee replied as follor,s: "In cases of org:mizn.tion or sus1>ension of '.l n'.ltion:;,,l b'IDlc where a tuelve months I e'.'l.rnings record is not a.v~ila.ble, t~1e b'Ulk in question should be excluded from the partic\.113.r ye.1.r 1 s com..9ib.tion. Ho·.1ever , in c:1ses \7here a ba.r0:: is suspended for a short period only, 3.nd you deem its earninGs figures representative of a year 1 s activity, the bank could be retained. Moreover, when a national bank is absorbed by a state ban~. it will also be necessary to omit it for that year, since a t.relve months 1 earning,record is unavailable. On the other hand, •,'/hen a national bank absorbs other bam~ during the year, it is hoped than an effort ,rill be made to aggregate the figures, both the condition and earnings, for all the ba.nlrs in the consolidation for the year, so that the bank may be retained. We may illustrate what ·,1e mean by assuming that National Bank A absorbs National Bank B and Trust Company C in .A.u5ust. The autumn and Dece,nber call re-ports .'.ll'ld the December 31 earnings report will obviously include the fi 6ures for all three banks. It is !10",J ed in a case such as this that the se·parate figures for eo.ch of the three banlcs for the June 30 earnings report and t£ie S~ring 3.lld June 30 ca.11 reports will be combined to complete the year 1 s tabulation. "It seems clear that in cases -.-,here the early regorts of the year cannot be put on a basis comparable r,i th those of the latter :9art of the year the ba.'1k in question will have to be omitted for that year. Ho:-,ever, a general :policy of excluding any ba..--il: that .:_) resents problems TTi thout an attem:-Jt to .:;;et com)arable figures for the t"1elve months would unquestionably eliminate much useful data, and therefore, it has seemed best to us to sU€{;est that all ,racticable efforts be made to r eta.in them along the lines indicated. 11 https://fraser.stlouisfed.org Federal Reserve Bank of St. Louis - https://fraser.stlouisfed.org Federal Reserve Bank of St. Louis SE rr TO ALL FEDERAL RESERVE BA1IBS https://fraser.stlouisfed.org Federal Reserve Bank of St. Louis r l • https://fraser.stlouisfed.org Federal Reserve Bank of St. Louis / FEDERAL RESERVE COMMITTEE ON BRANCH, GROUP AND CHAIN BANKING I BANK SUSPENSIONS SINCE JANUARY 1, 1921 Report on a separate schedule each bank closed to the public either temporarily or permanently by supervisory authorities or by the bank's board of directors on account of financial difficulties. This form should not be used for merged or consolidated banks but should be used for those banks suspended on account of financial difficulties, even though they are subsequently taken over by other institutions. In case a bank has suspended more than once a schedule should be made out for each suspension. Type of bank reported-check appropriate one of the following D D D D D D National bank Name of State State bank Trust company Stock savings bank Mutual savings bank Private bank 1. Name of ba.u a________________Town or City_ _ _ _ _ _ _ _County_ _ __ __ 2. Date organized~-------~Date suspendel..L--------'- opulation of town or city* _ _ _ _ __ 3. Federal reserve distric~-----------~-fomber or nonmember of F. R. Systen~---- 4. Number of branches operated: In city of parent b a n . ~ - - - - - - - - - - - - Outside city of parent b a n k * * - - - - - - - - - - 5. Was this bank a member of a chain or group? If so give the name of the chain or group _ _ _ _ _ _ _ _ __ * Latest census figures or estimate as shown in bankers' directory. 0 Attach a list giving the name and location of each outside branch at time of suspension. https://fraser.stlouisfed.org Federal Reserve Bank of St. Louis 6. Condition figures, as of (date*) _ _ _ _ _ _ _ _ _ _ _ __ Loans and discounts: On real estate. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . S--------- Other .............................................. . Total loans and discounts. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . S - - - - -- - -Real estate acquired in satisfaction of debts ....... . ........................ . Investments ................................... . ........................ . All other resources ................... .. ................................. . Total resources .............. . ............................... . . Capital ................................................................ . Surplus and undivided profits .......... . .................................. . Deposits: Due to banks** ...................................... $_________ Demand deposits, including U. S. Govt. deposits ........ . Time deposits, including postal savings ................ . Total deposits. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $,_________ Borrowings from F. R. bank .............................................. . Borrowings from other banks ............................................. . All other liabilities ...................................................... . Total liabilities ............ . .................................. . 7. Has this bank been reopened? _ _ _ _ If so give: Date of reopening_______________ Name under which rcopene'-'-----------------Loss to depositors on: Amount of loss Per cent of loss to claims Secured claims.. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $,_________ Preferred claims . . . . . . . . . . . . . . . . . . . . . . . . . . . . . General claims .............................. . Total. ................................. . • Condition items should be as of date of suspension, if possible, otherwise as of the last call or examination prior to suspension. •• Including certified and cashiers' checks, cash letters of credit and travellers' checks outstanding. https://fraser.stlouisfed.org Federal Reserve Bank of St. Louis 8. Has this bank been taken over by another bank? _____ If so give: Name of bank by which taken over____________________________ Date taken over_______________________ Loss to depositors on: Amount of loss Per cent of loss to claims Secured claims.. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $_________ Preferred claims ............................ . General claims .............................. . Total .................................. . 9. Is this bank still in process of liquidation? _____ If so give payments to date: (Amounts in dollars) Claims allowed Payments from guaranty fund Dividenrls paid from collections Total payments Per cent of payments to claims allowed Secured claims .... Preferred claims ... ~ General claims .... Total claims .... I 10. Has this bank been finally liquidated? _ _ _ _ If so give: Date liquidation was complete.u______________ Collections: From liquidation of assets. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $. ____ ~ - - From assessments on shareholders ........................... . Other collections (explain) .................................. . Total collections ............. ... .... . . ..... ........... . Offsets to claims (loans paid, etc.).. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $_ _ _ _ _ _ __ Payments to depositors: (Amounts in dollars) Claims allowed Dividends paid from collections Payments from guaranty fund Total payments Per cent of payments to claims allowed Secured claims .... Preferred claims ... ,_ General claims .... Total claims ... · I https://fraser.stlouisfed.org Federal Reserve Bank of St. Louis - - - - - - ~ 11. Causes of suspension: Check in the appropriate column those of the following which apply, either as primary or contributing causes, amplifying the indicated causes with such supplementary data as may be available. Primary cause II Contributing cause Decline in real estate values ................................... .... . Losses due to unforeseen agricultural or industrial disasters such as floods, drouth, boll weevil, etc ........................................ . Insufficient diversification ......................................... . Incompetent management, i.e., poor credit judgment, laxity in collections, lack of enterprise, etc ......................................... . - Defalcation ..................................................... . . Heavy withdrawals of deposits ..................................... . Failure of affiliated institution (Name) .............................. . Failure of correspondent (Name) ................................... . Failure of large debtor (Name) ..................................... . Other causes, (specify) ............................................ . -- Did the slow, doubtful or worthless paper held by the bank represent largely one particular type of industry or agriculture?______________ If so, state what industry or type of a g r i c u l t u r " ' - - - - - - - - - - - - - - - - - - - - - - What was the approximate date of the beginning of the difficulty which ultimately caused the suspension? ________________________ _______________ 12. Were there any assessments, voluntary or otherwise, on the directors or stockholders either before or after the bank suspended?_ _ _ _ _ _ _ __ If so, give dates and amounts of all assessments https://fraser.stlouisfed.org Federal Reserve Bank of St. Louis • • FEDER AL RESERV E BOARD WASHINGT ON ADDRESS OFFICIAL CORRESPONDEN CE TO THE FEDERAL RESERVE BOARD https://fraser.stlouisfed.org Federal Reserve Bank of St. Louis S pt ber 10, 1930 Dear Mr. Riddle: I have your note and I am gllld to be in contact ith you one mor. I auppo I ahall see you here at the end of the hay fevers a on, but I ~ have occasion to be in New York before then. Sincerely yours, Mr. J. H. Riddle c/o Federal Re Ne York City rve Bank https://fraser.stlouisfed.org Federal Reserve Bank of St. Louis • . • • 4 • • https://fraser.stlouisfed.org Federal Reserve Bank of St. Louis • • • https://fraser.stlouisfed.org Federal Reserve Bank of St. Louis • • https://fraser.stlouisfed.org Federal Reserve Bank of St. Louis t 11 t. • et al. • Trust ., ., 0 • et al • • l • https://fraser.stlouisfed.org Federal Reserve Bank of St. Louis • 1, • 1 • • 1 • • roup 1 1 ' 1 1 "l ' 1 5 71 1. et al. • • 7,1 l 11 ' 1 1 1 • ... • . 1 10 et al. • 10 • 1 ir e n i1y https://fraser.stlouisfed.org Federal Reserve Bank of St. Louis 1 • • l l • eo 1 • • • • • • • • al. e • • https://fraser.stlouisfed.org Federal Reserve Bank of St. Louis l • 7 ' • • ' • 1 11 • l https://fraser.stlouisfed.org Federal Reserve Bank of St. Louis • • l l https://fraser.stlouisfed.org Federal Reserve Bank of St. Louis ill 63 58 0 • • • t • l • • 11 • 1 https://fraser.stlouisfed.org Federal Reserve Bank of St. Louis I • e • I . 0 • • • • • • • I 1• . https://fraser.stlouisfed.org Federal Reserve Bank of St. Louis T ll • "' 0 lit., . nn. https://fraser.stlouisfed.org Federal Reserve Bank of St. Louis fl l :L • • 7 • • 1 • • • • https://fraser.stlouisfed.org Federal Reserve Bank of St. Louis 11 11 • 1 66 fe 1 0 5 3 lifo l lif t . 11 • ia oi lif., https://fraser.stlouisfed.org Federal Reserve Bank of St. Louis • • • • https://fraser.stlouisfed.org Federal Reserve Bank of St. Louis -- Form No. 1a1 FEDERAL RF.SERVE BOARD Office Corres ponden ce To Mr. !:aMl"lond From _ Mr. Horbe~t Subject: Date ---- August 21, 193Q_ _ Branch bankins statistics sources, etc. ust 4 ich gives I am returning herP 1th your memorandQ~ date.~ com~ilPd for the be to are that statistics banking branch of sources the • 11 banks "total on data of sources the aleo 1929, 1900 period I see nothing wrong with the memorandum but it is orobably well to ttPntion to the fact tat the Board (this division) com iles your call quarterly condition figures covering all national banks and all nonnational banks u..~der state sup rvision. In so far as thP numbPr of bank includPd in our com il tio is concerned, it is al ays less than then ber given in the Comntroll .. r 1 s statement, which of course, is published: -'; once a yPar in his annual rpport. ·r he rPason for this dif er .. ncP is that th Comptroll r obtains reports directly from e numbPr of private banks that are not under ste.te suoer·,islon . Furthe ()re, I beli"'V,.. that he makes a certain estimate covering private bans not undP.r state sun rvision hich do not rPport even to the Comptroller . Apa.rt from this the diser Dancy in the number of banks bet een our figures and the Comptroller 's f1.gures may be due to th fact that in sorr.e instances his figures includ.A the number of branches -- wherP thP state banking departm,..nt counts the nurober of branch s ith the nurrber of head of ices without specificall y indicating that fact. 0 0 0 The condition figuree covPring all banks comoilPd byte ComptrollPr and by the Board dif er for the samp reasons and for the furth r reason that we oursPlves ake tr.e classificat ion o loans and 1 vest~ nts fro~ the state banking dqpertmPnt abstracts, and we do not in fOrnP instance erP our clas ification follow the classific~t ion of the Comptroller . hav rPached the conwe n investigatio after differs it does so because an effort to classify make We one. correct the is clusion that our ethod possibl"' on the same as nearly as ban1rs r "'mb ncn of loans and investments and inv"' tments. loans their clas~ify to banks rcember require P basis and for nonm ~ber ber me (for es fi of sets two the s th do not If ~ did based condition credit of s revie and comoarable, be not ould banks) misleading. be mtght thPr<>on 0 0 https://fraser.stlouisfed.org Federal Reserve Bank of St. Louis 1 orn1 ,, -·. - 131 Office Correspo n ence To r • .Borbett FEIJERAL RESERVE BOARD Subject: From 1th reterence to your memorandum ot the tourteenth comnenting between the D'UIJlber of national bank branches in opdiscrepancy the upon by the Comptroller and as reported in the reported as 1915 in eration Lewis in the Comptroller's ottice thie Mr. on called I 1111s Inqui~, ot national bank& that you list a.a branchee the morning am a sud about not 11st. does he which but 1915 in operation in !he explanation with respect to the Pirat Camden ]!fational Bank operating a bramh in Philadelphia, is that this branch was not legalised until the McFadden A.ct, February 25, 1927. Gonsequently, it was not recoginized or reported unt 11 that act authorized U. The branohea operated in On&ba by the Live Stock National Bank and the Paonr• National Bank were not recognized or reported tor a similar reason. The Act legalized brBZ1Ches ot national b&Dka operating in states where branch operation i ■ not in contrayention of state law. Inasmuoh as branch operation la not allowed by the 1!Jebraslm state law, the Comptroller cannot ta.kB official cognizance of the two branches ill question; consequently, he does not report them. !he 01 t isas l'at ional Bank of 1!Jawport, Bew Hampshire, after the passage of tbe McFadden .Act, cla!JDed that it• branch at warner had been in operation twenty-fiTe years prior to the date of the A.ct, February 25, 1927. llr. Lewis said his records indicated nothing about the e:detenoe of the bra.nob prior to that t!JDe, but that a certificate was issued as of II.arch 27, 1930, authorising the operation of the branch. am. three foregoing caaea in llew Jersey, Nebraslla, recognise4 officially not ll911' Hampshire were all caaea of de :facto branches by the Comptroller. Tbey should, of course, be counted in our own record, inasmuch as we are not under the constraint that the Comptroller is in the matter. The other three bank& that you speak of, namely, the Hwison County Bational Banlt ot Jeraey City, the City !lational Bank and Trust Compan;y of Battle Creek and the .American 1!Jational Bank of M.ilwaulme, were all three state b&11k& in 1915. !hey were nationalized between that year and 1915, however; and consequently, in the Board'• Slmma~ of Branch Banking, publiahed on page 935 for 1924, they were indicated as national bank branches 1915. This, howeTer, was not the case. The You will alao be interested in 11.r. Lewis' account of the aoquisit ion of twelTe branches in 1915 by tbe Chatham & PhoeDix Hational Bank. On September 10, 1915, !he Century Bank with twelve branches was converted into !ha Century ational Bank, charter #10778. On September 18, 1915, !ha Cllaibllll &: PhoeDiX Bational Bank of Bew York, charter #U575, TOlunt&l"ily liquidated and consolidated under section 5223 of the 1!Jational Bank ot w1 th The Chatham & Phoenix •at1onal Bank of the city of Hew York, charter #10778, 1t'hich was the new title of The Oen~ ational Bank chartered the week before. https://fraser.stlouisfed.org Federal Reserve Bank of St. Louis Mr. Horbett #2 August 18, 1930. In other 1AOrds, the Chatham &: Phoenix National by oonsolidation with a converted state bank having branches was able to acquire the old Century .Bank's branch offices. You will observe that the Chatham&: Phoenix then had twelve branches instead of sixteen, as you say in your memorandum of the fourteenth. The Public .Bank of New York in 1915 had four branches, but it was nationalized by 1924. In the 1924 sumna:cy, consequently the twelve branches of the Chatham &: Phoenix National and the four branohes of the Public National were set down as 1915 branches of national banks as of' the year 1924. l '"T~--~-~ ~ eight branches reported by the Comptroller recently>plus the twe ve acquired by the Chatham & Phoenix National in e_ptember 1915 plus ~~Mtll. branches belongillg to the two Camden banks, the two Omaha banks and the New Hampshire bailk respectively make twenty-five known national bank branches in operation at sometime in 1915. The Willis Committee reports thirty-one. Four of these are unquestionably the four branches of the Public Bank. The other two are probably to be accounted for by one or two bankS With two or one branches respectively operating as state banks in 1915 but nationalized by the year 1924. I imagine the best we can do is to disregard the Willis figure of 1921 and use the figru-e that we are able to substantiate. https://fraser.stlouisfed.org Federal Reserve Bank of St. Louis '2.. I https://fraser.stlouisfed.org Federal Reserve Bank of St. Louis t 12, 1930. r. r. t r. t r to r. r 1 nt on ic t 1 r. t OU if te t r ent to all F. https://fraser.stlouisfed.org Federal Reserve Bank of St. Louis gents, r. Round, r. 1 ing, r. Clerk. ll • l • https://fraser.stlouisfed.org Federal Reserve Bank of St. Louis • • • l, 1930. f' 8 https://fraser.stlouisfed.org Federal Reserve Bank of St. Louis • 1 • 19 t • , t • FEDERAL RESERVE COMMITTE E ON BRANCH, GROUP AND CHAIN BANKING • I ANALYSIS OF BANK EARNINGS (U e a separate blank for each year for each bank) Stat·- - - -- - - - - Year_ _ _ _ __ ame of bank _ _ _ _ _ _ _ _ _ __ City _ _ _ _~ https://fraser.stlouisfed.org Federal Reserve Bank of St. Louis Federal Reserve District o .. • I NoTE.-See page 4 for instructions as to exact composition of the items below and the reconciliations from one report to another. EARNINGS AND EXPENSE FIGURES (Aggregates of the two semi-annual reports) / Amounts in dollars (omit cents) A. Interest and discount on loans and investments ........................... $, _ _ _ _ _ _ _ _ _ A. B. Other earnings ........................................................ C. - - - - - - - - - B. Total earnings ................................................. . C. D. Salaries and wages .................................................... . D. E. Interest paid on gross deposits ......................................... . E. F. Other expenses ....................................................... . F. G. Net earnings before losses ....................................... . H. Net losses ........................................................... . I. J. Total expenses and losses .................... (D ======= - - - - - - - - H. + E + F + H) . . ======== Net addition to profits ................................................ . G. I. ======= J. CONDITION FIGURES (Average of Spring, June, Fall and December calls) K. Loans and investments ........................................... •••••• $,_________ K. L. Capital, surplus, profits and reserves (except reserves for expenses, etc.) ..... . L. M. Time deposits (including postal savings) ................................ . M. N. Gross deposits (bank, demand, time and U. S.) .......................... . N. NoTE.-Items K to N should be checked individually before computing the ratios. the earnings and expense items. https://fraser.stlouisfed.org Federal Reserve Bank of St. Louis Checking the percentages on page 3 will check • . • PERCENTAGES OF GROSS EARNINGS Per cent (two decimals) 1. Interest and discount on loans and investments ............ (A + C) 1. 2. Other earnings ..................................... . .. (B + C) 2. 3. Salaries and wages .................................... (D + C) 3. 4. Interest paid on gross deposits .......................... (E + C) 4. 5. Other expenses ........................................ (F + C) 5. Net earnings ................................... (G + C) 6. 7. Net losses ............................................ (H + C) 7. + 4 + 5 + 7) 8. 9. Net addition to profits .................................. (J + C) 9. 6. 8. Total expenses and losses ................ (3 l 100% 100% l 100% PERCENTAGES OF LOANS AND INVESTMENTS 10. Interest and discount on loans and investments ............ (A + K) 10. 11. Other earnings .........................•.............. (B + K) 11. 12. + 11) 12. 13. Salaries and wages .................................... (D + K) 13. 14. Interest paid on gross deposits .......................... (E + K) 14. 15. Other expenses ........................................ (F + K) 15. Net earnings .................................... (G + K) 16. 17. Net losses ............................................ (H + K) 17. 16. 18. Total earnings ................................ (10 Total expenses and losses ........... (13 + 14 + 15 + 17) 19. Net addition to profits .................................. (J + K) 18 19. 20. Capital, surplus, profits and reserves ..................... (L + K) 20. 21. Gross deposits ........................................ (N + K) 21. = Item 12 l = Item 12 OTHER PERCENTAGES 22. Net earnings (before losses) to invested capital. ........... (G + L) - - - - - - - 22. 23. Net addition to profits to invested capital. ................ (J + L) _ _ _ _ _ _ _ 23. 24. Time deposits to gross deposits .......................... (M + N) _ _ _ _ _ _ _ 24. 25. Invested capital to gross deposits ........................ (L + N) - - - - - - - 25. 26. Interest on deposits to gross deposits ..................... (E + N) _ _ _ _ _ _ _ 26. NoTE.-Check ratios by seeing that: (a) Items 1 + 2 equal 100 per cent; (b) Items 3 to 6 equal 100 per cent; (c) Items 8 equal 100 per cent; (d) Items 13 to 16 equal item 12; (e) Items 18 + 19 equal item 12; (f) Items 20 to 26 are calculated twice. https://fraser.stlouisfed.org Federal Reserve Bank of St. Louis +9 RECONCILIATION OF EARNINGS AND EXPENSE FIGURES OF NATIONAL BANKS The following shows the individual items on the various reports of earnings, expenses, and dividends during 1926- 1929 which should be included in the earnings and expense figures on page 2 labelled A to J. Earnings and expense report for six months ending- Interest and discount on loans and investments Other earnings Total earnings alarics an<l wages - - Interest paid on gross deposits - A B C D E June 30, 1926 . ... .... . ................ ....... l(a) l(b) to l(f) 1 (Total) 2(a) 2(c) Dec. 31 , 1926 to Dec. 31, 1929, inclusive . .. ..... 1(a) + l(c) to l(i) do do 1 (b) Net earnings (before losses) Other expenses l(c) F + 2(d) + 2(e) Net lossl's - H G -- Net addition to profits J 2(b) + 2(d) + 2(e) 3 5 minus 4 6 2(b) + 2(f) + 2(g) 3 do 6 RECONCILIATION OF CONDITION FIGURES OF NATIONAL BANKS The following shows the individual items on the various reports of condition during 1926-1929 which should be included in the condition figures on page 2 labelled K, L, M and N. Loans and investments Capital, surplus profits and reserves Time deposits (including postal savings) Gross deposits (bank, demand, time and U. S.) K L M N Reports of condition as of- --- Apr. 12, 1926 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Items 1, 2, 4 and 5 minus the sum of items f and g of schedule 5 and items 38 and 39 of liabilities. Items 17 to 19 I terns 33 to 36 Items 22 to 37 + g of schedule 5 I terns 19 to 21 Items 35 to 38 I terns 24 to 39 do do do June 30, 1926 and Dec. 31, 1926 . . . . . . . . . . . . . . . . . Items 1 to 4 minus items f Mar. 23, 1927 to June 30, 1928, inclusive . . .. . . . . . . . Items 1 to 4 minus 45 Oct. 3, 1928 to Dec. 31, 1929, inclusive .... ... ....... Items 1 to 4 https://fraser.stlouisfed.org Federal Reserve Bank of St. Louis Items 15 to 18 Item 23 Items 21 to 24 - I'Ol"lll • 0, 131 Office Corres ponden ce To FEDERAL RESERVE BOARD • ugust 5 1930 • Smead • Dorsey From _ ft In re ponse to your reque t of ev n date thereis submitted her iith a list of property, th~t can be temporarily ,loaned by the Divisio Operation • r Ite. Unit l 4 C IRS, de k, rotary, 2 D SKS, 1 BLE, 3 https://fraser.stlouisfed.org Federal Reserve Bank of St. Louis t i C 1 9 ood set · slat back flat top, double pede tal .§.' x 33" of nk Rema.r 2 Up for r pairs https://fraser.stlouisfed.org Federal Reserve Bank of St. Louis • o -r . r. J 11 r https://fraser.stlouisfed.org Federal Reserve Bank of St. Louis r. r 1 1 • t1 • r. https://fraser.stlouisfed.org Federal Reserve Bank of St. Louis o • st t B 0 • • • 1 • 1 I 8 https://fraser.stlouisfed.org Federal Reserve Bank of St. Louis • , • I• I• FEDE RAL RESE RVE BOAR D ADDRESS OFFICIAL CORR ESPONDEN CE TO THE FEDERAL RESERVE BOARD r. • trul Jur , . /7-- ~-;e/ C . l ' ch, n • :; 1930 V I II WASHI NGTON https://fraser.stlouisfed.org Federal Reserve Bank of St. Louis F, REC' D-BK. QP AUG t r. https://fraser.stlouisfed.org Federal Reserve Bank of St. Louis • o. https://fraser.stlouisfed.org Federal Reserve Bank of St. Louis , 19 r or n l n • io 1 o ion l o. https://fraser.stlouisfed.org Federal Reserve Bank of St. Louis -2- r t • 1 1 t to t f. r- n • t t • t https://fraser.stlouisfed.org Federal Reserve Bank of St. Louis https://fraser.stlouisfed.org Federal Reserve Bank of St. Louis 0 no• p- https://fraser.stlouisfed.org Federal Reserve Bank of St. Louis For:m. No. 1a1 Office Correspondence To Mr~ Blattner From _ Mr. Horbett I I( • FEDERAL RF.SERVE BOARD Date_ A~t 1, 1_930_ _ Subject:~chedules showing condition and_ earninga and expense items to be abstracted by Federal reserve banks 2-8496 I an returning herewith the pencil schedules which you prepared showing, by number, the specific items in the quarterly call reports and semi-annual earnings and expense reports of national and of I state bank member required for the prep~ation of the proposed earnings and 9:?tPense e tudy for the period 192,-1929. The suggested changes to" be made in your schedule in order that the figures for the entire pe,:-iod might be on a comparable basis have been noted on your schedules. In the case of the condition figures you will note that the changes are as f ollowa: 1. Provision is made for eliminating bills sold with indorsement from gross loans and discounts. 2. Provision is made for placing aggregate deposits on substantially the present basis by adding cash etters of credit and travelers• checks which were not treated as deposit~ until the October 1928 call. This change is not important except in the case of relatively few big banks. This change does not, however, make the deposit figures absolutely comparable, for the reason that amounts set aside for dividends unpaid, which are now reported as a ,J2.,8I't of 11 Reserves for dividends. contingencies, etc. 11 were included in part __ "Demand deposi t_;J_!',.,.;\,P to and including the autumn call of 1927. The extent to which tbis~~done cannot be definitely ascertained. In the interest of simplicity. it might be Just as well to make no adJustment for the cash letters of credit and travelers• checks and I would recomnend that no such adJustment be ma.de. 3. In the case of state bank members the~ undivided profits can be designated more specifically by using the item No. 19-c • .A.a a matter of fact, if reference were made merely to item 19 (as must be done in the case of national banks) the s mne result would probably be obtained. but so long as it is possible to use a more specific designation I think it might as well be done. 4. In the case of national banks it is necessary, for the spring call of 1926. to make an additional adjustment due to the fact that up to and including that cell national banks reported securities borrowed. as a pa.rt of their own holdings of securities. https://fraser.stlouisfed.org Federal Reserve Bank of St. Louis