The full text on this page is automatically extracted from the file linked above and may contain errors and inconsistencies.
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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
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Federal Reserve Bank of St. Louis
J
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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.
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Federal Reserve Bank of St. Louis
Yours very t r u l ~
./
Deputy~~
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Federal Reserve Bank of St. Louis
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Federal Reserve Bank of St. Louis
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Federal Reserve Bank of St. Louis
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Dr.
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Federal Reserve Bank of St. Louis
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Federal Reserve Bank of St. Louis
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Federal Reserve Bank of St. Louis
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Federal Reserve Bank of St. Louis
for .r.
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Federal Reserve Bank of St. Louis
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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
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n it miz d
t C , if any,
nd c rcy th
th t at
ount
no
of your
th t
Co
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ur
trul:v
0
• A. ,,olden
h i:n an, Co
roup and Chain
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Federal Reserve Bank of St. Louis
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Federal Reserve Bank of St. Louis
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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
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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.
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Federal Reserve Bank of St. Louis
tee
I
Q.Lolnmhia ~htitwr itr
in thtQlitp of J l rm l)ork
\,
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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
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Federal Reserve Bank of St. Louis
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Federal Reserve Bank of St. Louis
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Federal Reserve Bank of St. Louis
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Federal Reserve Bank of St. Louis
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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
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Federal Reserve Bank of St. Louis
at ns fi
C
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: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
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r to
st
fo
t
on B
of r
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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~
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Federal Reserve Bank of St. Louis
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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.
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Federal Reserve Bank of St. Louis
Mr. Kane
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Federal Reserve Bank of St. Louis
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Federal Reserve Bank of St. Louis
, 19uO.
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tt
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•
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ent to all F. R. A nts
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Federal Reserve Bank of St. Louis
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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.
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Federal Reserve Bank of St. Louis
•
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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.
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Federal Reserve Bank of St. Louis
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Federal Reserve Bank of St. Louis
0
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Federal Reserve Bank of St. Louis
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Federal Reserve Bank of St. Louis
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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
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Federal Reserve Bank of St. Louis
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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.
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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 •
•
•
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Federal Reserve Bank of St. Louis
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Federal Reserve Bank of St. Louis
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Federal Reserve Bank of St. Louis
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Federal Reserve Bank of St. Louis
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.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.
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Federal Reserve Bank of St. Louis
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Federal Reserve Bank of St. Louis
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Federal Reserve Bank of St. Louis
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Federal Reserve Bank of St. Louis
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Federal Reserve Bank of St. Louis
• 1
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~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
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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.
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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.
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Federal Reserve Bank of St. Louis
•
•
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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
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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.
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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.
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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
•
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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
•
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Date---"'=-=-=="~-=-,,_________,,'-="___,,.-"'-=30
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Federal Reserve Bank of St. Louis
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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
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Federal Reserve Bank of St. Louis
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Federal Reserve Bank of St. Louis
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https://fraser.stlouisfed.org
Federal Reserve Bank of St. Louis
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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
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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.
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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.
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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
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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.
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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
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Federal Reserve Bank of St. Louis
•
•
•
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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
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FF.DERAL Rf.SERVE
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Federal Reserve Bank of St. Louis
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Federal Reserve Bank of St. Louis
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Federal Reserve Bank of St. Louis
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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
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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
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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.
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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
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Federal Reserve Bank of St. Louis
Very truly yours,
r\
~
L. R. Rounds
Deputy Governor
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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.
,,_
.
'
,
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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
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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
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Federal Reserve Bank of St. Louis
Mr. L. R. Rounds
Ur. M. J. Fleming
Mr. J. H. Riddle
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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
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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.
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Federal Reserve Bank of St. Louis
f I
\f
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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,
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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
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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
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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
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Federal Reserve Bank of St. Louis
•
o
r t1ons File
•
•
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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.
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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
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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
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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 .
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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
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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.
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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
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Federal Reserve Bank of St. Louis
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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.
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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
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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 .
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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 :
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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
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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_!: _ .
/
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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.
•
...
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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
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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
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Federal Reserve Bank of St. Louis
Vecy trul y yours ,
E . A. Goluenweiser ,
()nainuan , Co ..imittee on Branch,
Group and Chain Banking.
I
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Federal Reserve Bank of St. Louis
•
'•
https://fraser.stlouisfed.org
Federal Reserve Bank of St. Louis
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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
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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
•
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Federal Reserve Bank of St. Louis
I
•
•
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Federal Reserve Bank of St. Louis
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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
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in
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on
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d",
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You c ~ read·1
in the o ition of acking an
nlrea suboi.tted through the
to them rect .
V
C:
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· ours,
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Federal Reserve Bank of St. Louis
L tt r
nt to
11
• R.
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pt
r. Ourti
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•
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.
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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
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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_._
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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.
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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.
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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
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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_
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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.
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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.
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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
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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
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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
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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.
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-
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
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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.
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Federal Reserve Bank of St. Louis
J. H. Riddle,
Sec re tar?.
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Federal Reserve Bank of St. Louis
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Federal Reserve Bank of St. Louis
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Federal Reserve Bank of St. Louis
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Federal Reserve Bank of St. Louis
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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.
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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.
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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
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Federal Reserve Bank of St. Louis
«
ch,
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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
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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.
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Federal Reserve Bank of St. Louis
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Federal Reserve Bank of St. Louis
•
•
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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.
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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
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Federal Reserve Bank of St. Louis
J
•
Form. 118
t
TELEGRAM
•
FEDER AL RESER VE BOARD
LEASED WIRE SERVICE
'WASHING TON
2-e-
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ptember 17, 1930
trater • Clewla
171 g 70ur tel•
n b r&Dch,
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to t
roup
fo
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nc will be ble to
fortbcom.na oonteren ,
brief report co• r1
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Federal Reserve Bank of St. Louis
chain
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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
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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
•
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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
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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
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Federal Reserve Bank of St. Louis
-
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Federal Reserve Bank of St. Louis
SE rr TO ALL FEDERAL RESERVE BA1IBS
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Federal Reserve Bank of St. Louis
r
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•
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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.
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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.
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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
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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
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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
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Federal Reserve Bank of St. Louis
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Federal Reserve Bank of St. Louis
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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.
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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.
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Federal Reserve Bank of St. Louis
'2..
I
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Federal Reserve Bank of St. Louis
t 12, 1930.
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Federal Reserve Bank of St. Louis
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FEDERAL RESERVE COMMITTE E ON
BRANCH, GROUP AND CHAIN BANKING
•
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ANALYSIS OF BANK EARNINGS
(U e a separate blank for each year for each bank)
Stat·- - - -- - - - -
Year_ _ _ _ __
ame of bank _ _ _ _ _ _ _ _ _ __
City _ _ _ _~
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Federal Reserve Bank of St. Louis
Federal Reserve District
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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.
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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.
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+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
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Federal Reserve Bank of St. Louis
Items 15 to 18
Item 23
Items 21 to 24
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0, 131
Office Corres ponden ce
To
FEDERAL RESERVE
BOARD
•
ugust 5
1930
• Smead
• Dorsey
From _
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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 •
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FEDE RAL RESE RVE BOAR D
ADDRESS OFFICIAL CORR ESPONDEN CE TO
THE FEDERAL RESERVE BOARD
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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.
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