Full text of Annual Report to the Directors of the Federal Reserve Bank of Minneapolis : Auditor's Report for the Year 1936

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AUDITOR «S HEPOKI*

m m A L RESSR?E BANK 07 UIHM&FOLIS

FOB THE T I B

* 9 3 6

To the Directors?

In the following statement* will be fauna the results of.our
operations for the calendar year 1936, and comparisons with the similar
functions of the previous year, together with comments offered, with
the thought of drawing to your attention the more important matters*
As indicated one year ago our revenues were not sufficient
to cover all requirements, which included special charge-offs and
reserves*

Net results, however, should be considered satisfactory, be

cause of the substantial decrease obtained in operating costs*,

Further

improvement in this respect will be evident ishen the 1937 Budget esti
mates are presented*
All-time high marks were reached during the year in deposits,
circulation, transit daily volume and securities held in our safekeeping
for member bank©»

Fiscal operations were heavy at times but so spread

that we were able to make use of more of our regular employees.,

creased volume in other functions helped to reduce the staff 6? persons*
Fuller information is given in the report*
One audit was made of the Branch during 1936 and one examines
tion of Minneapolis and Helena isas made by the Board examiners«

All

audits confirmed the records as reflecting our condition and that our
operations were being efficiently conducted*

Respectfully submitted*

Auditor*

January 1, 1937*

Auditing . ............... ............................................................. 7g-73
Bank Examination Department . . . . . . . . . . . . .................. . . . . . ............ *.

75-81

Bank and Public Relatione ............. . . . . . ............................ ............. .

Bank premises
Minneapolis building 0.......................................... * ........ .
Helena building . ................................................ .......... . . . . . . . . . . .
Costs, cnarge-offs, reserve and book value . . .................... ..
Comments .............................................................................. .............

41
42
43*44
45*47

Cafeteria * ......... . . ................................................................. ...............

Check Collectione - Transit Department . *......... . . . . . . .............. ...

55-58

Closed Banks ................. . . . . . ............ * ................ . . .......... ........... .

51-52

C ollateral......... . . . . . . . . ...................................................................

Collectione - Non-Casb......... ........ ..................... . . . . . . . . . . . . . . . . . .

Currency and Goin
Comnente
........... ............... .
Number and amount of shipments received and sent ....................
Volume of transactions and snipping charges absorbed %......... *

62
63
61

Custodies . . . .................... » .......................... . . ............... ................... %

Deficient Reserve Penalties . ....... ...................... ............... ..........

Discounts
Comments ......... . • • • • « . . . .......... .................................................. .
Bates .................. . ..................... ............... ..........♦. .......... ............
Statement of operations.....................................................

48-49
15
60

Dividends paid since organisation , . ...........

.................................

Earnings
Comparative statement 1936-1934 ............... .............................
Average rates on earning saosets ..................................................
Comments „ . » . . • • • ....................................... ..................

14
15
16*19

Expenses
Comparative statement 1936*1934 ........................................
Comparative statement of Miscellaneous Expenses ......... .
Comments ........................................ ...................... .
Reimbursable Expenditures ................................... .................... .

20
21
2&-36
37-38

Failed Banks ............................. ............................................................

51-52

Federal Emergency Administration of Public Works

Federal Reserve Agent’ s Functions
Bank Examinations % . . . . . .................... *..............................* ..........

75*81

Federal Reserve Hotes
Comments * .................... ........................................ .
Statistics .........................................* ...................

64~66
66*68

I H D E X

FiBCal Agency Functions

(Contd)

......... . . . . . . ................. ..................

Franchise Tax paid since organisation

............. . ................

82-85
7

Paraiture and Equipment ........... .................... «........................ ...........

39-40

Helena Branch
Bank Premises . „................................... . . . . .....................................

42 & 44

Investments . ....................................................................................... ..

Leased Tfire . . . . . . ............................................ <•.................................. .

Liabilities, Comparative Statements 1936-1935 . . . . ........................

M-saber Banks
Reserve Balances........................................ . .......... . .......................
Changes in membership 9. „ ....... . . . . . ..............................................

70
80-81

Hon-Cash Collections , ................................................. . ..................... .

Personnel,
Changes in staff ............. ., . * • ............ . . . . . ................................

Profit and Loss
Statement in detail for year 1936
........................... «.
Summary report for year 1936 . . . . . . .............................................
Dividends, franchi se tax ........................................................... ..
Surplus . . . . . . . . . . . . . . . ...................................................................
Comments „ . . o . ..................................................................................

3
4-6
?
8
9-13

Beconstruction Finance Corporation ................................... .

84-85

Reimbursable Expenditures ............................ ......................................

37-38

Reserve Position «............................................................. ...................

69-70

Resources, Comparative Statement 1936-35 ................................... .

Securities
Safekeeping ........... .............. .......................................................... *
Investments held
............................................................

60
19

Surplus
Detail statement since organization ........................................ . .

Taxes . . ............................. >............................................................. ... *

28 A 47

Telegraph . . . . . . .................... . . .......... . . ...............................................

Transfer of funds
Comments .............................................................................................

Transit Functions
Comments . o. . . ............. » . . ...........................................* .......... .
Statistics ................. ................................. *.................................. .

53-55
56-58

(x&PAfovfliv.a s t a t ^ n t w masoifoogs
F*D>&AL &!&:.jL'-lViS

OF iaK3B*gOLIS A.jD BjfoftNA BHA.^Cfl

(After cl)sing entries)

fl»9^ S S £ J R * M &
Cash 3U*serves:
"
4
Oftld certificates with F, S„ Agent . . . . . .
3 128,000,000a00
Redemption fund - F« R. K a t e s ....... 9l4r568.48
Inter-district settlement fund
^7*995*044.65
Total gold certificate reserveB ...........

$ 1G6,500,000.00
539*753*^5
30,244,532*53

$ 176*909.613*13

$ 137* 2S4,286*18

7,301*326*40

8, 228, 657.76

Other c a s h ................................................... .
Total cash reserves ., . . ..........................

i2j^aSLSLJlJJ3h

£ 184,210,

$ 1^57512

Hills and Securities:
Bills secured by U. S. Government obliga
tions, direct or fully guaranteed . . . . . . .
3 *000,00
Bills otherwise secured and unsecured . . .
• Bills bought iji open market ......................
60(6b2„7g
Industrial advances *, * ............................. .
1 „063, 812. 01
tJ0 Sc Government securities ......... .
90,707#500,00
Foreign loans on gold , . #a..................................... 7 , 200*00
Total bills and securities....................

33*^7S«3®
61,006.52
1 , 5*$9*$ 66•1 3
75*567»939»07
8,400*00

$ ' 91 , 8^ , 17^ 79

77,260,390.10

Due from 3?oreign bonks . . ........... « . . . ............ ............ 2*991*32
FcF.eNotss of other Federal Reserve Banks*
l , ^ ^ * 000,00

2,971*18
1,248,000.00

Uncollected Items?
Transit items ...................... ........................
SxcJhangee for clearing h o u se........... .
Other cash items
..........................

1 7 *2 02 ^93 ,0 7
5$*»938.78
748,75$°76

Total uncollected items ..........................

I S , 536, 190,61

16,070,893*75

Federal Deposit Insurance Corporation Stock
Bank premises-Less depreciation reserves ».

3*509*467.65
1*487*513*72

3* 509***67»65
1*531*075*57

14,663,648.80
36*5*202.33
1,038,842*62

Miscellaneous Assets?
Premium on securities ................................................... Interest Accrued . , ......... ...................... , . .
13*567*73
Reimbursable expenditures
.............
1 8 ,3 ^ .2 1
Deferred charges .........................................
15*722.22
Claims Account Closed B a n k s ......... .............
93*601*67
Miscellaneous assets acquired in
settlement of claims account
'
closed b a n k s ............. ...............................
77 *570.26
All other resources .. „ .....................
13*531*48
Total miscellaneous assets ............. .

TOTAL U^SOUfiOiSS ..........................

232,339*57

$ 301*561,6x9.19

10,659.81
78,016*21
19,284,61
22,087*45
179.933*89

105, 821*00
11,428.65
$

427,231*62

$ 245s562,973o81

comparative sTMsam^a oar liabilities
FISD.^AL JEUS^RTS BAM. Off MliWaAJPOLIS AMD HaL&iA BRANCH
(After closing entries)

December 3 1 t 1 9 3 6

December 3 1 * 1 9 3 5

F. fl. not«s in actual circulation.............

$ 136 *096, 365.00

$ 110,562,515,00

U* S, Treasurer - General account .............

5#**70»909»59

3*15^*902.63
96 ,2 2 8 ,0 7 4 .8 4
69S.U 79. i 3

Members**reserve a c c o u n t ..................... 120 ,530*139* 28

Dae to foreign banka .. „ . ........................ . . .
Officers' checks. Other deposits . . . . . . . . .
Total d ep o sits......................................

Deferred availability ite m s ........................
Miscellaneous Liabilities 1
Accrued taxes unpaid .................................
Sundry items payable .................................
Unearned discount ......................................
All o t h e r ................................................... .

2,376,383.54

5*^5*0 70.43

7.057.053«58

$ 133.822,502*84

£ 107,138,510,15

18,825,773*16

Total miscellaneous l i a b i l i t ie s ____

Capital stock paid i n ............... ......... .
Surolus Fund - Section 7 .............................
Surplus Fund - Section 13 «33» ......... ..........
Fed* Deposit Ins* Corp*Stock-Paid i n * . . . .

15, 513, 178, 8!

65,853*30

78*895*00

17,652*22
333*03
64,045*49

58*686.87
644.78
50.U56. 2i

iU7,88U*o'4

188,684.86

2,943,050.00
3,116*430*29

2*998,650.00
3*1^8,502.93

Reserve for self insurance ...................... .

1,002,914.21
3*509*^67,65
515*379*97

1 , 002, 91^021
3*509*^67*65
515*379*97

Reserve for prior service liability under
Retirement System...................................... *
Reserve for other lasses .............................

249,128*00
1,332,724.03

332,168*00
653*002,20

TOTAL LIABILITIES ...............................

$ 301,5^1,619.19

$ 245,562,973.81

jm ja & u m m

rat i 9ss

Xarnings from:
Discounted bills - Minneapolis................................................. $
Foreign loans on g o l d ................................................................
Discounted blXla-Helena Brandi.................................................
Purchased b ills .............................................................................
Industrial advances.....................................................................
Commitments to stake industrial advances............... .................
United States Government direct obligations:
Participation In F.B. System Open Market Account...............
Bank1s investment account.................................................. .
Investments for self-*Insurance f u n d . . . . . ............................
Temporary Investments............................................................
Deficient reserve penalties ~ Minneapolis........... . . » ..........
D efidsnt reserve penalties - Helena B ra n ch ...*..................
Income from banking houee................................................... « . . .
Interest on past due paper of closed banks............................
Sale of waste paper....................................................................
Service charges on collection items returned unpaid...........
Clearing house fines...........................................................
Hcntal of furniture and equipment...........................................
il l other....................................................... ...............................

1,148,441.74
108,688.63
7,780.91
607*58
220.18
20.11
12,317.22
12,962.20
75.65
29.90
34.00
2,401.22
..........
5.48

Total current earnings................. .............................................

$1,276,419.05

Additions to earnings:
Profit on sale of U.S.Government securitiesFrom participation in F.R.System Open Market Account... .
From our osn portfolio............................................................
Recoveries of eapense in connection with cloeed banka........
Recoveries on transit Items previously charged o ff*...........
Recovery of cash difference previously charged to Profit
and Loss through difference account.....................................
Recovery of amount charged to profit and loss Sept. 14,1922,
on account of abraelon of gold coin shipped to Mint by
Helena Branch............. ........... .......................................* ........
Proceeds of sale of fixed machinery and equipment...............
Proceeds of sale of other real eetate acquired for
purpoees other than banking house.................... .................
Withdrawn from reserve for prior service liability under
Retirement System.......................................... ..... .....................
Set Income from other real estate otherwise acquired.........

927.46
1 0 0 .6 2 .
20.67
560.76 79,125.14
979.46

191,316.56~
497,793.35 ^
18,705.01
89.26
100.00 <

I„246o60
30.00 s
3,684.18-^
83,040.00
75.90

Expenses:
Cost of Federal Reserve Currency........................ ....................
Other current espenses - Minneapolis.......................................
Other current expeneee - Helena Branch.................................

$
62,283.47
1,025,635.55
111.066.66

Total current expenses................................................................ $1,199,985.68
Other deductions:
Furniture and equipment - Minneapolis.....................................
Furniture and equipment - Helena Branch................................
Reserves for depreciation on bank premises:
Mlnneapolie building (2 $ of estimated replacement cost).
Helena Brandi building {2$ of estimated replacement cost)
Helena Branch building (balance of account)........* ............
Fixed machinery and equipment - Minneapolis....................
Assessment for building for Board of Governors of the
Federal Reserve Sysvem................. ..........................................
Counterfeits and discount on foreign currencgr^Mlnneapolls.
Counterfeits and discount on foreign currency-Helena.........
Loss on mutilated coin and to m and mutilated currency.. . .
Shortages in currency shipments received from member banks
absorbed because of delay in proving the currency.. . . . . .
Losses on Industrial advances...................................................
Difference account-Mlxmeapolle........................... ...................
Difference acoount~Helena Branch.............................................

8,018.53
2,292.28
25*665.62
2,700.00
17,481.26*
866,96
47,516.18
275.95
80.CO7
18.46
12.00
13,607.57"
40.02
10.06

laterest paid Secretary of Treasury, Section 13b.................

l^l'oiB*!

Reserve fox^losses and contingencies......................................
Withdrawn from surplus-Sectlon 7 ..............................................

6891109.91
32,072.64
$2,204,482.61

$2,204,483.61

i; Jum*

a ?;u

U j

PJiujlTi;
Rcyiswu

S:‘jjl1

j
O.F i«iJN i/u;Oili ,-

a d ju s t yjsar 1936

Minneapolis
Total Earn i ngq
Total I'iRt Sxpeneee

$ 1 . 361. 96?.53
..I . 033,

Current Het Warnings

Helena
$

328c506.05

Combined

50, ?£
109.726*96

t; 1,362,018.36
1,141.1^.49

102, -'7^* >&

21S . 829.S 7

1 , 246*60
1 , 246* 60

689,109*91
83,040.00
2 ^.830.95
79*5*980*86

Additions io Current Net Barnlntfs
Profits on sales of Gov^riMncnt Sreurities
'•?ithdravm from reserve for prior service liability to Retirement. System
All Other
'Zbttl Adri\t,ion?, to Current WoI Uar^:.n:js

689,109*91
83,040,00
22^&h .y >
? * . 2 I 1L .? i .......

Deductions .ire* Current Wet Kernings
Reser ? s fox C-:ntin&encies
Additional Iteserve For Depreciation Helena
.Hlnrthquake damage
Prior service contributions to Hetir««f*at System
Assessment for Building for Board of Qoverccr^
All Otaer

6-'!?,’ 09.91
75,607.92
"7,57 6 .i<?
3’+.153..99

Total deductions frora Gwr>:ii.t r‘e t "•. /'-••irv.s

826, 366.00

Net 'Sarnies

296

Jr'aid U. Sc Treasurer (Sec* 13b)
x^ividends Paid
‘rr.-.asferrsc1 to Surplus (S*c» 13b)
'»/ithdr&«rn front Surplus (Sec« 7)

•

7 1

6*9.109*91
17r481 *26
7*432.05

, 2

83 r040 C00
47,5l6„ 18
14,223*93

69.91*
r»t?

---- - 1 V$,41g*St>

7 ,

851. 371 . 2s
__________
...... •

1 6 2 .H 3 9 A

16,4b0„05
179t0$2„04

16.460.05
179,052.04

3P.072.bU

32,072c64

raPERAl RESERVE BANK 0? MINNEAPOLIS

Head
Office

Total
Earninga
Current expenses
Current net earnings

Additions to current net earningsi
Withdrawn from reserve for losses
(Schedule "D ")
Profit on United States Government
securities sold-Net (i f net lose
show under “Deductions*)
All other (Sohedule MAM)
Total additions

Helena
Branch

$1,376,419.05
I . 199.985.68
$ 176,433.3?

$1,376,368.27

k g g j a a « .« L
$ 287,449.88

83,040.00

689,109.91
.23*S§4>35

689,109.91
.3 3 ,8 ^ 9 5

Deductions from current net earnings;
Bank premises - depreciation
(Schedule MC«)
$
46,713.85
$
26,532.59
Furniture and equipment
11,410.91
8*018.53
Beserve for losses (Schedule ’’D*)
689,109,91
689,109.91
All other (Schedule “B")
..... 61.740.11__________ 61.670.17
Total deductions

Net additions to (plus) or deductions
from (minus) current net earnings
£.
$ 168.439.45
Net earnings

Dividends paid
Payment to Secretary of Treasury
(Section 13b)
Withdrawn from surplus (Section 7)

50.78
111.066.66
111.015.88

296.852.31

20,181.26
3,392.38
_________ § 2 * 2 4

133.412.86-

179,052.04
16,460.05
32,072*64

W W b .W m

u m . & . « i« F U k > i,; s

PBQyg AMD LOSS a w B B M W FOB

1936

Schedule *AW - "All other*1 additions to current net earnings
Head
Description
Office
... *otal
Recoveries of expense in connection
with closed banks

$ 18,705*01

$ 18,705.01

Recoveries on transit items previously
charged off

89*26

89o26

Recovery of cath difference previously
charged to Profit and Lobs through
difference account

100.00

Helena
Branch

Recovery of amount charged to Profit and Loss
September 14,1933 on account of abrasion
on gold coin shipped to Mint by Helena
Branch
1,246.60
Proceeds of sale of fixed machinery
and equipment

1,246.60

30,00

30.00

3,584*18

3,584.18

75.90

$23,830.95

$22,584.35

Proceeds of sale of other real estate
otherwise acquired
Het income from other real estate
otherwise acquired

1,246.60

Schedule "B" - “All other11 deductions from current net earnings
Description
Assessment for building for Board of
Governors of the Federal Reserve System

Total

Head
Office

$47,516.18

355.95

275.95

Loss on mutilated coin and tom and mutilated
currency

18.45

Shortages in currency shipments received
from member banks

12.00

13,807.57

29.96

40.02

$61,740.11

$61,670,17

Counterfeits and discount on foreign
currency

Losses on industrial advances
Difference account

Helena
Branch

80.00

10.06+
$

69,94

)
gEDBBAL resm s , MNK OT MIWIEAPQI.IS
fBpyp ABD. M SS grATOrep ,

i9.e>e

tor

Schedule “0" - Baolc Premieee - Depreciation_____________________
Head
Helena
'J-P.
Office___________
m

■■.«■■■, IK ,WWWW|»WWW

M . . w w a w w iw " ■ ! ■ » » W I I W U I II

i .... ................. ........ »IM

III

.....................

■l y n ^ l i i r t l l l

1.
2c

Boole value at beginning of year
Debits during year

$1,021»140*83
0

$1,000,959.57
0

20*181.26
0

Book value at end of year before
$1,021,140.83
closing entries

$1,000,959.57

20,181.26

25,665.63
975,293.94

$
$

20.181*26
0

4n
5*

Credit to depreciation reserve
$
Book value after closing entries $

4 S .8 4 6 .M
975,293.94

$
$

FIXED MACHINERY AND EQUIPMENT

5.
6h
70

4,414#08
4,414.08
Book value at beginning of year $
$
3.152.00
3.152.00
Debits during year
57.00
57.00
Credits during year
$
$
Book value at end of year before
closing entries
....
_ L.5Q.?,Q8.
866.96
866.96
Credit to depreciation reserve
$
$
Debit to depreciation reserve
______ 57,00
$ .....57.00
Book value after closing entries $
6 , 6 9 9 ^ . __

o o

1.
2o
3»
4.

0
0

$
$

___

0 _________
0
0

Schedule wDtt - Reservea

Reserves* at beginning of year (Item
TOOK on daily balance sheet, Form 34)
Debita during year:
Reserves for:
Losses on discounted bills
Prior service liability under
Retirement System
Total debits

$1,500,550*17

9,388.08
83,040*00

$ 92,428.08

Credits during year:
Other losses
Total credits

Bet Credit

Reserves* After closing entries (Item
TOOK on daily balance sheet, Form 34)

$689,109.91
$689,109.91
$

596,681.83

* Other than for depreciation on "Fixed machinery and
equipmentw and “Bank building (including vaults)"*

1916
1917
1918
1919
1920
1921
1902
1923
1924
1925
1926
1927
1928
1929
1930
1931
1932
1933
1834
1935
1936

December
December
June 20,
December
Decerafcer

31, 1918
31* 1920
1921
31, 1 9 a
1922

December
December
December
December
December

31,
31,
31,
ft.
31*
31,
31,
31,
31,
31,
31*

Member

December
December
December
December
Dsceeber

1922
1923
1924
1925
1926
1927
1928
1929
1930
1931
1932

57,719.87
363,894.19
168,102,97
180,186.21
195,870.65
211,657.03
213,774.01
212,732.68
202,827.98
193,559*46
187,609.25
180,726.51
181,202.86
184,029.92
184,445*39
180,454.53
175,494.80
171,568.89
181,117.61
185,448.45
179,052.04

3,991,475.20

Transferred from Profit and Loss
$
37v500-00
f!
n
»
524,233*58
ti
tt
M
1,284,497*62
tt
N
tt
1,166,468.98
tt
on account of underpayment
years 1920 and 1921
52,423*36
K
Profit and Loss
512*028.98
tt
tt
101*450.25
H
0
tt
113,646.58
H
tt
ii
37,255.04
tt
tt
it
234*380.91
0
tt
ti
103,815*90
#
u
tt
390,150.58
n
II
#
549,658.58
it
»
tt
8,229.60
M
tt
tt
ffone
(«
tt
A
87,158.54
$5,202,898.50

Transferred to Surplus from profit and Xioss
«»

from Heserve for franchise Tax
to Surplus from Profit and loss

(i
ii

»?

»
M

ft
ft
ft

ft
ft

ft
tl

ft
u

•

ti
n
M

II
N

ft
ft
»
ft
ft
from Heserve for de*
preciation on 17* S. Securities
M

37,800.00
688.871.82
688.871.82
904,35^.40
1,249,399.04
1,609,241*66
1,801,706.64
323,121.96
166,407.6?
66.892.10
11,272.26
12,627.39
4,1 39 .46
26,042.32
11.636.10
43,360.06
61,073.18
914.40
Hone
9,684.28

•January 4 , 1918
December 31, 1918
UorCh 4, 1919
June 30, 1919
December 31, 1919
June 30, 1920
December 31, 1920
June 30, 1921
December 31, 1921
December 31, 1922
December 31, 1923
December 31, 1924
December 31, 1926
December 31, 1926
Beceotoer 31, 1927
December 31, 1928
December 31, 1929
December 31, 1930
December 31, 1931
December 31, 1932
December 31, 1932

S epv

o
0

663,000.86
$8,369,009.18

Less i
December 31, 1932 Additional franchise fax
paid for the years 1920 and 1921. . . * . $
62,423.36
December 31, 1927 Withdrawn from Surplus
to redoes book value of building. . . . .
600,000.00
December 31, 1931 Trsnsferred from Surplus
for depreciation on U. S. Securities. ♦ .
663,000.85
December 31, 1931 Transferred to Profit
and loss* » « . » • • • . • • « » • • • •
134,649.67
December 31, 1933 transferred to Profit
and loss............... ....................................... ...
89,483.63
January 6, 1934 Transferred from Surplus
for purchase of Federal Deposit Insurance
Corporation Stock . . . . . . . . . . . .
3,509,467.66
December 31, 1936 transferred to Profit
and Loss..........................................................
271,431.09
Dsoo&bstr 31, 1936 Transferred to Profit
and L o g s . .......................... % .........................
32,072.64

$0,243,578.89

Balance in Surplus**Section 7 Jan. 1,1937. . . T .* V . V .

$3,116,430.29

m a sL m s m
Transferred from Treasury Department
for purpose of making Industrial loan#
October 30, 1934 ............................................
Hofember 26, 1934............................................
December 28, 1934............................................
January 9 , 1935................................................

s e ,,

251,936.74
261,936.74
261,936.74
261.986.74
$1,007,746.9*5

tteeember 31, 1934
Net expense over income on Industrial
advances from funds transferred by
freeeory Department.....................................
art Surplus ~ Section 13 *>BH Jan. 1, 1937

$ i , 002,914.21

PBOFIT ASP LOSS
Current income for the past year was $79,000 less than in 1935, bat
current expenses in 1936 were $93,000 lower than the similar costs in 1935*

Thus

we find that our total current earnings of $1,376,419.05 plus $795,960.86 obtained
from various other sources, enables us to present a better statement than one year
ago when current Income was $1,455,877.17 and additional earnings $191,399.59.
For several years the substantial additions to our revenues have made it
possible to cover our ordinary requirements, but unusual conditions during 1934*5*6
were responsible for withdrawal of funds from our surplus*

In January, 1934, one-

half of our surplus or $3,509,467.65 was turned over to the Federal Det>osit Insur
ance Corporation, and at the close of 1935 the decision to set aside the full
amount of the Bank#s prior service liability under the Hetirement System required
a charge to surplus of $271,481.09.

During the years we have been participating

in the profits from sales of Governments held in System account, the Board has not
objected to our placing the full amount of such profit in reserve, provided we had
sufficient other Income to cover all needs«

As to the 1936 profit from System

account and the profit from the sale of our permanent holdings in June last, the
Board gave approval to our adding the total profit to "Beserve for Iiosses and
Contingencies11 although to cover all other requirements we have found it necessary
to withdraw $32,072*64 from surplus.
All current profit items will be discussed under "Earnings11 and the re
gular items which make up our operating costs will be described in the "Expense"
classification.

Other items which are credited directly to, or charged in, "Profit

and Loss" will be explained on the following pages.
Due to the increased percentage of our holdings in System account, we
obtained a larger portion of the profit from sales than in 1935.

The amount credit

ed us by Kew York was $191,316*56 compared to $146,765,12 in 1935.

Through the

sale of our own holdings to System account at the close of June at the market, we
obtained a profit of $497,793.35, which was placed in "Profit and Lo s b " account
until the close of the year,
f

One of the most Important additions to earnings for some years has been
the recovery of expense in connection with the collection of paper at closed banks.
All interest collected is applied to reduction of principal, after i&lch any excess
is used as a recovery of expense i f incurred during the present or proceeding year
and credited to "Profit and loss" if incurred during a prior period.

Direct credits

to profit and loss during 1936 for expense recoveries, amounted to $18,705.01

PBOglT AND LOSS

(Cont'd.)

compared to $32,826.73 in the previous year and $74,160.06 in 1934.
The amount of $1,246.60 previously charged to profit end loes in 1933 was
recovered in 1936.

This represented abrasion on gold coin shipped to the Denver

Mint by Helena Branch, prior to the date on which the Treasury decided to absorb
the abrasion on all gold coin.

Some persistence on our part brought this recovery.

Another item shown under "Additions to Earnings* Wes $83,040.00 trans
ferred from “Reserve for prior service liability under Retirement System**, which
account was established in the amount of $332,168.00 at the close of 1935.

Each

month $6,920 (1/12 of $83,040) is charged to expense and paid to the Trustees of
the Retirement System, with a like amount transferred from the reserve account to
f*
profit and loss*
Several sales were arranged during the year, of property we had acquired
through our claims at closed banks.

Full payment was not received in each case.

The four properties disposed of were priced at $7,453.08 and the payments received
up to the close of the year amounted to $3,584.18..

Net Income from other property

acquired in the same manner was $75.90 during 1936*
With the transfer to profit and loss of $1,376,419.05 current earnings,
we had, with the items directly credited, a total income of $2,172,409.97.

With

the approval of the Board of Governors these funds were disposed of as follows!
CUBBEBT
EXPENSES
- mnmm i— . ........ —
Minneapolis $1,088,919,02
Helena
111,066.66

$1,199,985.68

During the first half of 1936 the actual operating expense m e $613,270.11
or $48,545.57 less than the amount estimated in making up the budget figures at
the first of the year.

We revised our estimates in July and anticipated costs for

the last six months to be $610,928,14.
$24,212*57 less than estimated.
estimates for the full year.

Actual expenses were $586,715.57 or

An improvement of $72,758.14 was made over the

In comparison with 1935 operating costs we showed

a reduction of $96,642.87 at Minneapolis and an increase of $3,578.18 at Helena.
The most important factor in the expense contraction was payroll decrease through
dismissals and salary reductions, offset in part by dismissal wages.

Many other

items enter into the total costs and these will be detailed in that portion of the
report devoted to the expense classification.

FURNITURE AND EQUIPMENT
Minneapolis
Helena

$8,018.53
3,392.38

$ 11,410.91

PROFIT AND IOSS

(Cont«d*)

At the beginning of 1936 we estimated oar equipment and furniture re*
quirements at Head Office and Branch to be $15*000.

In line with the curtailment

of current expense we deferred purchases of equipment so that the total was $3,600
less than the amount expended in 1935.

The Helena purchases were double those of

1935, made necessary through the reorganisation of the transit work*

Classifica

tion of all purchases is made elsewhere in the report.
RESERVE TOR DEPBBCIATIOB
OK BANK PREMISES
Minneapolis
$35,665.63
Helena
8,700.00
Helena (Special)
17.481.26
$45,846.89
With no change in the replacement value of our building since 1927, there
has been no variation in the amount added to reserves each year.

In addition to

$1*033,464.34 written off original cost to establish present replacement cost, we
#
have set aside from earnings the sum of $307,987.56 for depreciation, placing the
net book value of the building at $975,293.94.
In addition to approving the regular depreciation allowance of $2,700 on
our Helena Branch building,the Board of Governors authorised the appropriation of
an amount sufficient to increase the depreciation reserve to 100# of gross book
value*

The amount required was $17,481.26.
RESERVE FOR DEPRECIATION OH
FIXED MACHINERY ABD EQUIPMENT
Minneapolis
$ 866,96
Helena
0.
$ 866.96
All depreciation on original fixed machinery and equipment had been pro

vided at Minneapolis by the close of 1934.

Since then the construction of steel

turrets and more recently the installation of a water pump have added $8,669.60 to
fixed machinery and equipment account, 10$ of which was reserved at the close of
1936.

Although some of the air conditioning equipment had been installed prior to

the close of the year, no reserves will be set up until the end of 1937.
The required reserves at Helena had been accumulated by the close of 1931*
ASSESSMENT FOR BUILDIKG FOB
BOARD OF GOVERNORS OF THE
FEDERAL RESERVE SYSTEM
$47,516.18
An Important item in our costs for 1936 was the assessment to provide a
building for the Board of Governors in Washington.
1935«

Our payment was $24,403.41 in

The payment originally assessed for 1936 was $53,404, but in December the

Board advised us that the final 20$ would not be called for.
have $5,887.82 added to our 1937 payments.

This means we will

We have paid $71,919.69 to the close

of 1936 and will contribute $33*087.60 during the first half of 1937.

PROFIT AKP LOSS

(Cont'd.)

This represents two loans charged o ff on which final loss was determined,.
Losses assumed were as follows:
Rhinelander Refrigerator Corporation
Bed Wing Advertising Company

$9,715,68
4,091.89

COUNTERFEITS AND DISCOUNT
OK FOREIGN CURRiffCY
“
••

Minneapolis
Helena

$ 275*95
80.00

$355*95

For Beveral years we have had greater losses from counterfeit bills than
from cash shortages*

Many of these counterfeits are difficult to detect* espe

cially for the younger and inexperienced money sorters*

In 1935 the amount charged

off in this connection m s $527.57*

LOSS OK MUTILATED
CURRENCY AND COIB

$ 18.45

This represents the difference between the amount we allowed depositors
as bullion value on mutilated coin and the amount paid us by the Mint*

we have

since reduced the allowance per ounce for mutilated silver.
DIFFERENCE ACCOUNT
Minneapolis
Helena

debit
credit

$40.02
10*06

Net debit $29,96

Although the net amount charged off for differences was lees than in
former years, we actually had more small cash differences in 1936 than in 1935 be
cause of new money sorters, and the elimination of "fanning” of small bills.
differences showed a net debit of $126.48 for the year.

Cash

Unlocated differences in

transit work were mostly Quite small, with a net overage of $86.91 shown for 1936.
At Helena, differences are infrequent»
INTEREST PAID SECRETARY
OF THE TREASURY

$16,460.05

After providing for the expenses in connection with making and handling
Industrial loans and charging off $13,807.57 in losses, we were able to pay the
Treasury the above amount.

In 1935 we uaid the Treasury $16,853.49.

Although

loans fell off during the past year, the amount of the advances provided through
Treasury funds remained at $1,002,914.21 for both years.

This means that if

expense and losses exceed income from industrial loans in 1937, the excess will be
chargeable to Surplus Section 13 HB«.

For 1936 the participation of the Bank and

the Treasury in earnings, expenses and losses was 29.15$ for the Bank and 70.85$
for the Treasury.

PROFIT AND LOSS

(Cont3d .)

RESERVE FOR LOSSES
AND CONTINGENCIES

$689,109.91

The addition to above reserve ia made up of the full amount of the
profit from the sal© of $7,011,650 Governments held in our Permanent account
on June 30, 1936;

$500,000held in our Self-Insurance Reserve and our share

of the profit from System sales during 1936*

From our own holdings the profit

wae $497,793.35 and from System participation $191,316.56.
After making the additions referred to and allowing for charges which
occurred during the year, our accumulated reserves at the close of 1936 were as
follows:
Self-Insurance
Depreciation on U. St Government direct obligations
Losses on Bills discounted
Other Losses and Contingencies
Reserve for prior service liability under Retirement
System

DIVIDENDS PAID

$ 515,379.97
203,196.03
199,008*88
930,519.12
249.128.00
$2,097,232.00
$

179,052,04

The payment of $6,396.41 less in dividends than in 1935, reflects an
average reduction in capital stock holdings of members of $105,000 during 1936.
The actual change since December 31, 1935, was a reduction of $55,600.
organisation dividends have aggregatsd $3*991,475.20.

Since

Dividends for the last

half of 1936 were paid to 417 National banks and 6? State bank members,

This is

a net reduction of 16 National bank members and 1 State bank member since 1935.

SURPLUS ACCOUNT DECEMBER 31.1936
Surplus Section 7
Surplus Section 13 MB»

$3,116,430.29
1,002,914.21

As a result of transferring all bond profit to a reserve account, and
making several special appropriations, we found it necessary to reduce our ordinary
surplus $32,072.64.

No change was necessary in the 13 "B11 Surplus representing

funds placed with us by the Treasury Department for industrial loan purposes.

g a i ) m .M M ,B A » K

gg, K I ^ ^ O L I S , Agp Hfflaia'BBAaCH

Minneapolis
___ kae^xmgs m ou

1936

Discounted bills * .............................................................. . $
Purchased bills ♦ . , . . ............................................ . .
Industrial advances * ......................... ... .................. . . •
United States government direct obligations ...................
Municipal Warrants . . . . . . . . . . .
...................... .
Commitments to make industrial advances
Deficient reserve penalties . . ........................................
/Income from banking house ................................. . . . . .
Interest received on past due paper of cXosed banks » .
Participation in transactions with foreign banks . . . .
Sale of waste paper, m:>ney bags, etc. . . ............... ... .
Service charges on collection items returned unpaid . c
Monthly letters s o l d .................... ........................................
Clearing house f i n e s .................. ... ........................................
Past due Acceptances . . .......................................................
j Rental of furniture and equipment . . . . . . . . . . .
All o t h e r ................................" .......................... ... ..................

Total Sarnings

Helena Branch
133b

1 , 023,09
560*76
79, X25„lU
1,265,518*86

Combined

1936

1935

i,oU «„76

1,038.50

15 , 839.65
223.82
15.92*
1.3**6.
M .0 5

560.76
79.125.1**
1 , 265, 518.86

1,292,200.50

979. **6
350.29
12 . 317.22
13 . 962.20

93***37
39>».i9
1 , ^ 51.91
**■
2, 779.31

75*65
39c90

75.65
39.90

90.16
51.07

115.70
51.00

3^*00

3**.00

20.00

*48.00

2 ^ 0 1 *3 3
50hs

2.U01.33

157.05

979*^6
320*15
12,, 3X7.22
13o962.20

..................................... $ 1 , 376, 368.27

30.11

587.U
116 , 167.00

6.co

1 / 212.65
>.**77.62
i.^59.

36.58
5M

50.78

1, 376, ^ 19.05 $ l . 1*55.877-17

$ 1,**15.096.82

daily Afa&Aaa holdikos

3ille Dis-...... ____________
V£/ ?/«/
/?*)

193^
1935
193^
1933
1932
1931
1930
1929

Bills
Purchased
(pC>

47.206 4
6o#864
Us,594
69.523
589,1*38
531.212
2.936,456
6,267,577
li.9 3 3 .8 0 i
1,649,414
4. 818,935
7.607,324
4, o42. 859
7.870.007
21,624.673
6.328,387

Industrial
Advances
lYl OJSp

U. So Se
curities

i^Raum assists

Federal I n t o
Credit Bank
Debentures

i /743

$ 1,314,784 $ 82,208,224 $
0
72,398.064
0
1 , 936.117
265,476
0
65.803.357
0
5«.209.32l
43.724.b5i
b$,904
158,671
26.761.330
22,786,786
Q
2.
579.
65s
9.812.359

2.545
64,520
152.197
97.671
34,220
140.326

AV£!Ufej hats ay sailings os
B ills J)1bcounted

1936
1935
193**
1933
1932
1931
1930
1929

2o00S£
2.090
2.942
3.538
3*507
3^500
4*2b5
4.845

B ills

Purchased

. 921^

Industrial
Advances

6. so 0
b«000$

.844

6.000

.547
lo 280
3.961
1.748
2.901*
4.902

6 ^ 000

u. s. n*ourities

/■j ^ 7
1*5392
1.785

Federal Int.
Credit Bank

& u w im

Municipal
Warrants

....Jte&ssfetfsft.....

2.107
2.233
3*280

0
0
3. 500^
3 . 5CC
3o500
3.500
3.877

3.960

4.783

4o989

2.046

Discount
Discount
Discount
Discount
Discount
Discount
Discount
Discount
Discount
Discount
Discount
Discount
Discount

/ (p&f"
$ b,308
1,469
1M 93
0
0
. 0.275
0
28,340

assets

0
0
0
0
2*773#
2.598
0

2.027

Foreign
Loans on
Gold

Municipal
Warrants

rat«a effective January l fi 1922

rate lowered
rate lowered
rate lo u red
rate lowered
rate raised
rate raised
rate raised
rate lowered
rate lowered
rat© lowered
rate lowered
rate lowered
Discount rate lowered

January 11 e 1322 to
August 15 , 1922 to
October l4, 1924 to
September 13,1927 to
February 8,1928 to
Anril 25* 1928 to
May 14, 1929 to
Pebxu ary S# 1930 to
April 15, 1330 to
September 12,1930 to
March lb. 1934
January 8, 1935
May 14* 1935

Commitments to
make Industrial
Advances

!% 94,390
92. 56s

, Total

<f£ f g o
83.731.776
74.546.335
67, 206, 1a
67.477.874
57,523.967
39.450.206
34.733.872
40,513.7^3

t
Foreign
Loans on
Gold ..
/.4&s
1.595?*

1.555
1.500
0
0
1.779
0

5.031
$hfs
5$
4»\$
4$
3£$
4^
kfyp
5$
4#
3£«J

Commitments to
make Industrial

... JftSBSSSft.......... .......
/. o J S
1.038^
1.009

Total
/•

1.609$
1.593
2«,05&
2.219
2*455
2.299
3*310
4.636

EAHK XHGS
Earned at Minneapolis
Earned at Helena

$1,376,368*27
_________ 50,78

$1,376,419.05

The situation ae to the source of our earnings has changed very little
during the past few year**

With industrial loans decreasing and recoveries of

interest on closed bank paper narrowed down to a few thousand dollars yearly, it
is to be expected that a high percentage of our earnings must continue to be from
Investments in United States securities*
As was noted at the beginning of 1936, we could not expect to cover all
needs with our then volume of Government holdings, especially with the earning
rate trending steadily downward and the certainty that collections of expense and
past due interest at closed banks would be materially less than in the previous
year.

Some of the decreased earning power \sas offset by reducing our actual ex

penses considerably below the budget estimates and through rentals obtained from
Government Agencies*
Our loans throughout 1936 were confined pretty much to industrial ad
vances from which we received income of $79,125*14 plus commissions of $979*46
for cosaaitments*

These earnings were obtained from average advances of $1,315,000*

In 1935 we had average advances of $1,936,000 from which we earned $116,167*00
interest and $934.37 as commissions*

On December 31, 1936, the amount of outstand**

ing advances was $1,064,000, of uhich $1,002,914.21 was supplied from funds pro
vided by the Treasury Department.

Within a short time the only fundB in use will

be those of the Treasury and none of the net earnings will be apportioned to the Bank*
When that time arrives, ezpenseB and losses will be deducted from the income and if
that is insufficient, any deficiency will be charged to Surplus 13 MBM*
At Minneapolis we had a small amount of member bank paper under discount
for the first 7 months of 1936.
rediscounts*

From August to Hovember, Inclusive, we had no

At Helena a few notes were discounted in May and June, with no borrow

ing during the other months of the year.

Bills discounted averaged $47,206 in 1936,

providing earnings of $1,048*76 for the year*
the earnings $1,038*50.

In 1935 the average was $48,594 and

We held no acceptances during 1936.

The profit of $560*76

shown as coming from purchased bills represented our participation in investments
made through Foreign banks*
Reference to our average holdings of earning assets will show that Govern*
ments held were nearly $10,000,000 greater than in 1935, but that our income of

1 6

JSAHHIKGS

(C o a t'd .)

$1,266,518.86 was $26,681 *64 lees than la 1935* Baring 1935 the dally average of
•
*• * ,
Governments held was $72,398,000 and the average earning rate oa such securities
1*785$.

Oar System Account holdings did not change in 1936 until the end of June,

but the rate fell gradually to a 1*626$ average basis for June.

On the last day

of June ve transferred $7,011*650 of Governments from our Permanent Account, and
$500*000 held in Self-insurance reserve to the System Account, receiving the market
price of that day.

At the same time the Open Market Conference realloted the Sys

tem holdings on the basis of each bank's requirements for operating costs and depre
ciation*

This gave us a oet increase of $11,032,000, and a dally average of

$86,597,000 in July, compared to holdings of $75,957,000 in June.

Although ve had

a net increase in holdings, the average earning rate for July was only 1.402$ and
our dally income changed but little from that of June.

Since July, however, the

rate has improved a little each month and averaged 1,539$ for 1936*
• •

Farther increase was made in our holdings at the beginning of the final
quarter under the plan of the Open Market Conference to adjust allotments to needs
at the first of each quarter.

In December tr* were also apportioned a few securities

which TOuld mature in December, Our daily earnings from System Account were
•*
$3,588„61 on December 1 and $3,647.18 on December 31. We were also advised that on
January 2 our proportion of the System holdings would be reduced $5,279,000.
At the time of turning our holdings over to the System Account on June 30,
we were able to credit profit and loss $497,793.35 being the difference between
market and the price at which carried on our books.

On December 31 the New York

bank credited us with our share of the 1936 profits on sales made from System
account amounting to $191,316.56.

As previously advised, the entire profit from

sales during 1936 has been placed in "Reserve for loss and Contingencies'*•
♦ e

In mentioning earnings from deficient reserve penalties) it is only to
draw attention to the small amount of such penalties inflicted.

The major part

Of the $350.29 collected in 1936 is largely the result of oversight and ifcich the
strict rules laid down prevent our condoning.

It is possible more penalties may be

charged in 1937 if the suggested Increase in reserves is brought about.
Rental Income became a more important item in 1936.
6 Government Agencies and the Treasury Department.

A charge was made to

We experienced some objeetioa

from the Reconstruction Finance Corporation, first as to paying any rent and later as
to the rate per square foot.
square foot, annual rate.

In December a compromise was effected at $2.00 per

All payments for rental space amounted to $12*317.22 in

HAJBM1KQS

(Cont *d.)

1936 compared to $1,451.91 received during the previous year.

The Treasury Depart

ment pays us rental for space occupied in handling current Issues only and In the
event we have further difficulty in covering our needs we should endeavor to get
reimbursement for other services from the Treasury, including space occupied.
Charges to Government Agencies for rental of equipment increased our
revenues $2,401.33 during the year.
purchase the equipment outright*

The Agencies preferred to pay rent rather than

We charge IS$ of the cost as yearly rental for

adding machines and typewriters, and 8$ for desks, chairs, etc*

The rental income

received during 1936 is 21$ of all furniture and equipment purchases during the
same period*

Other small receipts in 1936 amounted to $155*03 and covered sale of

waste paper, service charges on collections, clearing house fines, etc.
All earning assets averaged $83,732,000 in 1936 with the income derived
therefrom at a rate of 1.609$.

Government issues made up 98.2$ of total holdings

and also furnished 92$ of our current earnings*

In 1935 these respective percent

ages were 97 and 68*76,
The total holdings of Governments in System Account is $2,430,226,850 of
shich we owned $90,707,500 or 3 .7 3$ on December 31.
show the classification of issues and maturities.

The following Schedule will
In comparison with one year ago

about the same amount of securities mature within 5 years.

The amount maturing

after 5 years sas $194,449,300 or 8.75$ at the close of 1935 and $433,859,150 or
17,8$ at the close of 1936,
It was mentioned one month ago that in order to show the true condition
of the institution in connection with Government holdings, each bank, after the
first of January, would set up a premium, discount and accrued interest account.
Such accounts have now been opened on our books and as of January 2, 1937, were
as follows:

Premium $695,184,585 Discount $12,184*125 Accrued interest $307,598.83.

BABHIKOS

( Cont »d.)

Income from District

1936

1935

i2 2 i

Discount from members
Industrial advances
Commitments to malee Ind. Adv#
Warrants
Deficient Reserve Penalties
Interest on paBt due paper of closed
banlcs
Income from Banking House
Miscellaneous

948c 13
79,125*14
979.46
0
350.29

1,038.50
116.167.00
934.37
0
394.19

15,628.25
15,928.59
0
89.05
1,212.65

25,459.98
6,477.62
214.70

13,962*20
12,317.22
2,556*36

42,779.31
1,451.91
324.28

110,238*60

$ 163,089*56

65,010.84

$
587.11
1,292,200*50
0

3,223.82
1,346.609.66
211*40

Income from Without District
Discount from Purchased Bills

Interest on U.S.Securities
Foreign Loans on Gold
Participation In transactions
with Foreign Banks
Miscellaneous

560.76
1,265,518.86
100.63

4 .5 2
36.58

0
0

0
0
$1 ,2 6 6 ,ISO*35

$ 1 ,2 9 2 ,?87,61

$1,350,085.98

CLASS IFICATIOK OP HOLDINGS IN FRBSBAL RESERVE SYSTM

Treasury Bills maturing in 1937

$598,621,000

Treasury Notes maturing in 1937
a
H
ft
* 1938
a
a
ft
« 1939
tt
it
H
*■ 1940
h
ft
ft
w 1941

185j047,000
375.306.100
275,438.960
371.961.100
133,210.000

$598,621,000

$1,340,963,150
Treasury Bonds June 15,
n
m Aug. 1,
0
it Mar. 15,
M
it Oct* 15,
it June 15,
a
te
u April 15,
M Dec* 15,
w
ti
it Sept.15,
N
« Jnne 15,
tt June 15,
ft
ft
a Mar. 15,
H Oct, 15,
II
ft
ft iiar. 15,
ft Dec. 15,
«
«
ft Dec. 15,
ft June 15,
W
10
ft Sept.15,
u
n Mar. 15,
u
It Sept%15,

1940-43
1941
1941-43
1942-45
1943-47
1944-46
1944-54
1945-47
1946-48
1946-49
1946-56
1947-52
1948-51
1949-52
1949-53
1951-54
1951-55
1955-60
1956-59

3 3 /8$
3 1/4#
3 3/8#
3 1/4#
3 3/8#
3 1/4#
4#
2 3/4#
3#
3 1/8#
3 3/4#
4 1/4#
2 3/4#
3 1/8#
1 3/4#
55# ,
2 7 /8 $
2 3/4#

2,432,450
47,173,400
7,177,700
22,830,500
3,834,000
34,081,400
6,435,500
21,288,250
44,036,000
5,906,000
4,987,700
630,600
59,123,000
7,268,000
81,425,000
52,524,000
1,158,900
34,435,800
53,894.500

490,648,700

90.707.S00

Total System Holding*
OUR PABTICIPATIOH IN SYSTEM OPEN MARKET ACCOUNT AS OF
DECEMBER 31. 1936
Treasury Bills
Treasury Notes
Treasury Bonds

$ 22,343,000
50,051,500
18.313>000

CQMPARATIY& STATffi/feJtiP
0U&R&4T iOPaaSflS OF THE jf£l>KRAL RBSfrKVS BANK Off &aMU£APQLlS AM) M

Salaries:
O f f i c e r s ...................... ... ........................................... . „

Printing and stationery
Telephone

.......................................................
...........................................
„

M is c e lla n e o u s ...................................................

.........

..................

federal Reserve currency;
Original cost, including shipping charges
Cost of redemption, including shipping charges
Tax on F* Ro B&nic note circulation .........................
.

•

♦Other than those connected with Presidents1 and
Agents1 conferences and meeting of Directors

and Advisory Council.

1336

1936

Combined

1936

1934

1935
•

10b,629*18
326, 505**16
107,500.29
102,516.56
55^06

14, 032.50
36. 256.70
12 , 911.54
10,504.80
- *

.........

Helena Branch

URAtfCH

Other employees ........................................
Contributions - Retirement System , # ......................
Presidents9 Conferences • ...................................................
Federal Reserve Agent's conferences » - . .......................
Federal Advisory Council ................................................. .
Directors’ Meetings ........................................ ... ..................
Industrial Advisory Committee „ * .....................................
♦Traveling expenses » . ,
................ .............................
Assessment for Board of Governors F0R0System expenses .
Legal Fees * . . . . . .
«. ...................................................
Insurance on currency and security shipments 0
•
Other Insurance ............................................ ... .....................
Taxes on banking house ................................................... . «
Light, heat, power and water . . . . . .
..........................
Repairs and alterations
0
........................................
«

Minneapolis

1,102.05
2, 366.86

120.66l.68
362, 762.16
120,411,83
U 3.O 2i .36
554„o 6
«
l 8204„57
10 .293-15
1 , 628.83
27 . 096. 21
39,750*73

119 , 679.17
421, 026.63
139.6R1.98
119.201.74
6IS .55
•
1 , 617.23
11,300.69
3,315.01
27,022.34
34, 118.34
1 1 , 878.60
7.775.31*
20.506.85
82, 079.12
19 , 993.90
6. 977.09
14,086.16
18,231.92
7.3 01 .85
12,490.10
106, 725.75
9,870.70
40,979.80

115,321.63
427.566.23
119.533.80
50,260.08
719.84

415.70
1 . 307*62
7.993.92
1.371.27
23,412.52
3 1 .5 3 M 2
12.503.80
10 , 110,70
23.311.44
83. 698.54
20. 321.53
11.758.89
20,215.37
28,601.12
7,812.29
13.735.93
115,608.03
7,326.90
38,725.07

1 . 204.57
9,191.10
1 , 628.83
24-. 729.35
39.750.73
9.926.8b
7 ,8 3 9 .a
18 , 706.26
65, 81*6.27
18.622 .38
6.793.67
11.532.77
16,375.46
5.480.58
10,026.58
93.503.0^
9,642.24
31 , 130.10

1 . 499.62
2.240.90
970.49
1,1)44.83
46.91
1,769.20
2.022.74
898.73
3.622.93
14 , 893.59
1,873.62
2.608.65

9,926086
9.338.83
20, 9^ 7.16
66, 816.76
20, 067*21
6,840*58
13 301.97
18,3980 20
6 , 379.31
13 . 649.51
108, 396.63
1 1 , 515.86
33. 738.75

1.025.635.55

1 1 1 , 066.66

1 , 136 , 702o21

1.2 36 .47 8.8 6

1 , 167 , 166.94

57.825 o66
5,^57.81

51,146.94
5,424.57

24,137.07
4,841.88
9,18**„27

57,825.66
5.457.81

mm
mm

*“

$ 1 . 088, 919.02

•

«•

•

l l l . 06b.bb

1,199.985.68

1.293.050.37

(

1.205.330.16

rjjftil&flt} STAl'iwJkiT SHuWIStf Ai&JUrfCS X^OLOiJ-iU IA klSQigkUfcteuUS tf-Cfc^JSS'.iS
jainneapolis
... 1936
$
50H.05
779-53

.............................

fieatal of furniture and equipment . ........................................ .
fleoairs and maintenance of furniture and emiiwasnt . . . . . .
Outside protection, vault inspection, etc« ........................... ,
Outside laundry and cleaning charges, e t c . .................. * . .
Licenses and oensits....................... ...
.................... ... . 0
Local transportation- car fare and taxi hire • • » « . . . . »

268.05

1.181.01
W .01

303.51

3t>2.79 .

Newspapers, periodicals, books, binding, etoa 0 ................. * .
Collection charges and protest fees absorbed . . . . . . . . .
Clearing bouse memberKhin dues . . . . . . . .
. . . . *" • • .
Supoliee furnished member banks
................. . . , .
Cooissr of bank examination re p orts...........................................

2, 762.88
97.69
•m

4,070.00

579*73
10.00

105o45
2BX^-t>3
^.5*K>*31
U62o37
13-75
2, 566*00
2, 050.00

Employees* education? American Institute of Banking,All Other a

2500GG

. ............... . ..................... ...

3^5oOO
lb5*00
273*
1*5.00

Credit Men’ s Associations ............................................................
American Acceptance Council . . . . . .
.................................

757.20
150.00

Tax Payers’ Association ...................................... . . . . . . .
Minneapolis Police and Firemen’ s Benevolent Associations . •
National Industrial Conference Board, Inc.
Exchequer Club of Ulnneaoolis.......................................... . .
Christmas donations . . . . . . . .
................................... . *
Miscellaneous exoense in connection with closed banks . . . . .

20c00
87*50

lb 8.22

1*529.9b

Sxcess expense over commissions in handling foreign business. ..
expense F.H.Bank Motion Picture "Back of Banks & Business*1
Ventilating and air conditioning survey bank building . . . . .
Our share of expenses of Sub-Committee on Reimbursable Expanses
Expense in connection with finger prints qf employees
Services for analysis of central files
Our oro rata share expenses "*3PA Closed Bank Study
All other
.............................
M

2. 365.^2

I b c .

H8. S6

25*00
125.00
1, 500.02

TOTAL UISCiSLL^LKQUS KXPSHS3S » . .

Combined
Combined
. . 1936
. . 1935
$
537. 05^ *
369. 58^
1.U85.94-'
1 , 45s. 12-^'
1.763.07
^ 7.73
1, 320. 5**
2.151.25
**5.5i
3S.75
360.98
303.51
618.29
I , 02!».l6
2, 902.88
U,107.92
135.
102.55
20,00
60.25

..................

20*00

207.00

^,277.00
879.73
1C. CO
123. U5
2. 276.12
4.5&0.31

18.00
79.^9
M
k
121.50
-

80.00

300.00
15.00
210.00
36.00

2fi405*00
2,575*00

201.00

265*00
*0K5.00
1S3.00
300o00

150.00

611.80
150c00
«»

20.00

20.00
87.50
95-^9

JL.130.X0

$ 2,bOS.b5

l , 513*51
9*Li*5
3. 96**30

500.00

1*8.86
25.00
i??5.oo
1, 500.02

5-50

30.00

*7*50

2. 3b5.te

33*738-75

299.00

265.00
350.00
165.00
300,00
30.00
662.63
125.00
100.00
20.00
59.20
7^7.51

788.56
1, 151*26
«.
—
«•

•

80. 50
$

10.00
1.50

2, 677,00
3, 100.00

M 7 5 .5 1
15^.52

603.87

1,529.9b

288.90

' 12.75
2,61*8.00
2.350.CO

•*
-

32-75
508.85

2*$86.42
5, 158.08
738*00

168,22

355.36

2.72**. 11

32-50
905.65
6. 076. 91*
1*60.65

273-66
**5.co
787.20

•
-

392.92
2, 210.52

7.583.00
1, 161. 1*7
-

555.00

**.653.35
3.121.36

265.00

75*oo

Combined
193U

______________

—

Advertising................................. ... . .....................................
Photographs
•* . . . .................. • * . # • .
Medical service,, supplies and Dhysioal examinations . . . . . .
Cafeteria net expense
. / ........................................ ... *
f
.isntertainment of bankers and others not in bank1* iwsploy . » ,
Officers* and employees1 dinners ............. . . . . ............. .
Membership dues and donations;
American Bankers® Association *

Helena Branch
. -*356
i
33-00
672.59
199-68
139-53
1.50
255*50
1* 0,00
U. 8&

«*

**0,979.80

$ ‘5S.7?*5.07

KKEEKSES
Minneapolis
Helena

$1,088*919*08
111,066.66

$1.199,985,68

With a smaller expense total in December than for any other month of the
year, we were able to show a yearly total for operating coat© $72,758.14 leas than
our budget estimates and $93,064.69 lea© than the operating expenses in 1935.

One

year ago our coats were raised substantially over estimates because of the decision
to reduce mors rapidly the liability for prior Gervice under the Retirement System
The additional charge in 1935 to make the plan effective was $57,711,00*

This was

necessary to make the yearly contributions for prior service $83,040.00,

At that

time, the full requirement to be distributed over the following four years was
charged to profit and loss and placed in a reserve account*

In order to provide

uniform system handling of contributions our expenses will be increased £83,040.00
yearly and a like ©mount transferred out of the reserve account*

These faots are

mentioned again because retirement payments have been almost 10$ of our total
current expenses the past year*
Although many items carry importance in the make-up of our expense total;
reductions in payroll and tax payments are the most important in bringing abouV a
7 .2 $ decrease compared to 1935 total operating costa,

Better progress na© made in

1936 towards obtaining more adequate reimbursement from fiscal agencies.

The im

provement has referred more to rent than to services, and such payments are treated
in our statements as income rather than deductions from expense*

It shculd be

mentioned that the Board of Governors* has outlined a revised method of reporting
expenses which will include all fiscal e^enses which are reimbursable and will
also reclassify the items so as to give more prominence to certain costs such as
note expense, Board operations, prior service contributions and normal depreciation
allowances.

We have not yet received the Board forms and for that reason are pre

senting the Information on our costs in the usual manner*
We have heard more during recent months about curtailing our free ser
vices to member banks or making a charge for these services.

This should not be

done until the yearly results bring about a change in System policy* but we Bhould,
in the meantime, prevent the abuse of any privilege accorded the member banks*

EXPENSES

(Contd)

Daring 1935 the flftc&X expense amounted to $254,089.50 at Minneapolis, of
$173,943.07 was reimbursed*
ment of $10,085.46o

lich

At Helena such expenee was $14,077*80 with reimburse

Tor 1936 fiscal costs vere $228,934.53 at Minneapolis, with

$187,297.22 received as reimbursement,

Helena costs for fiscal services were

$13,209*73 with reimbursement obtained for $8,791.06* It will be noted there was
I • •*
$460G55»98 of expense for f&ich no reimbursement &as received* This is practically
all espense created by Treasury services and for vhlch we might reasonably expect
#

to be paid, especially during periods of low earnings*
Note costs have been high in 1936 and promise to be even higher for
several years to come.

Nothing has been said recently about the substitution of

new notes for the unused notes of the earlier series containing the gold clause*
Particulars of our note issue will be referred to elsewhere.
The total expenee of making industrial loans in 1936 was $43.063e36 in
comparison with $81,515.57 expended in 1935.
exceeded the expense by $37,041.24.
materially.

The income from these advances

In 1937 both Income and expense should decline

It is unlikely the Bank will obtain any profit from these transaction*

in 1937 but we hope to receive sufficient income to offset the cost of operations
and any losses.
by the Treasury.

In any event the shortage would be charged out of funds furnished

EXPENSES

(Contd)

SALARIES
Minneapolis
Helena

$640*634.93
§3,200.74

$603,835.67

Het changed from 1935
Ret Decreases
PajraeotB to Clerical staff
Payments to Guards, building
employees and other non-clerical
.employees

$ 58,264.47

ffet Increases
Payments to officers

_ _9 8 & 5 l

Net decrease compared to 1935

$ 76,552.11

At the beginning of the year the indicated salary hasis other than reim~
bursable amounts was $646,000.00 which meant a total $34,000.00 less than in 1935„
Although there were salary increases to many employees the reductions to others
prevented any inflation of the payroll*

Dismissal sages were paid during the year

to 33 persons at Minneapolis and 4 persons at Helena.

The yearly salary payments

to those dismissed aggregated $51,280.00 and the amounts paid at time of release
totaled $16,760o63o

Using the salaries in effect January 1» 193V, as a b a s H , the^s

is an indicated payroll of $533,294.00 after reimbursements for fiscal services
and $70,500*00 less than the actual payments in 1936.

It Bhould be understood that

many employees of our ^regular banking departments are transferred temporarily to
fiscal work and the payment for time used on such work will he by the Treasury De
partment and the various Government agencies,

For this reason it is difficult to

make a very close estimate of the yearly payroll.

In former years recoveries of

salary expense of representatives at closed banks were substantial.

Most of the

recoveries in 1936 went direct to profit and loss* only $670.32 of representatives*
salaries being credited to expense.

During 1935 salary payments were reduced

$6,704*55 by collections at closed banks»
On January 1, 1936, we had 375 employees at Minneapolis and 39 at Helena
or a total of 414.
year 1935*

This was the result of a reduction of 81 persons during the

On January 1, 1937, the Minneapolis personnel had been reduced to 315

person® with 32 persons comprising the staff at Helena.

With a reduction of 81

persons in 1935 and 67 in 1936 there has been a 30% decrease in personnel for the
past two years.

EXPSHSBS

(Cont*d.)

PRESIDENTS3 CONFERENCE
FEDEBAL ADVISORY COHFEHEHGES

554.06
1,204.5?

Four meetings were held of the Presidents and a like number were attend
ed by our Advisory Council member.
$350.00 of secretarial expense*

Included in the Advisory Council expense is

One year ago the attendance at meetings cost mora

because Mr. tfold attended the meeting of our Board in Montana*

DIRECTORS9 MEETINGS
Minneapolis
Helena

$ 9,191,10
1.103.05

$10,293.15

Minneapolis directors9 expense was less than one year ago for the same
number of meetings because of the additional cost in 1935 through holding the July
meeting in Montana and the travel expense to Helena of the Building Oommittee*
Helena directors held 8 meetings in 1936, two less than in 1935, but costs were
$136.35 greater on account of the meeting in Minneapolis with our Board on October 17.

IBDUSTBIAL ADVISORY CXHffKSII*

$1,628.83

1?ith meetings less frequent in 1936 travel and maintenance costs paid the
above members was less than one-half the total payments of 1935.

Ho fees are

allowed the Council members.

TRAVELING EXPENSES
Minneapolis
Helena

$24,729.35
2.366.86

$27,096.21

There was little change in the total travel costs at Minneapolis and
Helena compared to such esqpense in the previous year.

We continued our visits to

all the banks of the District as well as making it a point to attend most of the
group meetingso

Expense at closed banks has been materially reduced, and a much

smaller amount m s required for industrial loan investigations.
investigations is now paid at Minneapolis.

Expense of Montana

The bank movie "Back of Banks and

Business'1 continues to be in good demand.
For the complete year, our travel costs at Minneapolis were distributed
at follows;
Industrial loan investigations
Bank and Trust examinations
Representatives at failed banks
Showing of bank movie
Group meetings and conventions
Ban* visitations
Attendance at A.I.B.Convention
System Conferences
Visits at other Federal Beserve Banks
Miscellaneous meetings, etc*

$ 4,323.17
4,341*87
3,025.71
4,138.91
1,556.19
4,697.83
485.75
1,320.81
640,75
198.36

$24,729.3(>

EXPENSES

(Cont}d , )

Branch travel costs include visite of Minneapolis employees for the re
organisation of the transit and other work, and the cost of the examination of the
branch by Head Office auditors.

Messrs. Hoerr and Larson also spent considerable

time at Minneapolis studying Head Office procedure.

ASSESSMENT FOB EXPENSES OF THE
BOARD OF GOVERNORS OF THE
FEDSftM, RESERVE SYSTEM

$ 39,750*73

In January, 1936, it was our understanding that the cost of the building
under construction at Washington for the Use of the Board of Governors, could not
be carried on the books in the same manner as the banks carry their own buildings,
and ve assumed our proportion of the assessment would be a monthly charge to ex
pense.

we were later Informed that the assessment for building purposes was to be

a direct charge to profit and loss when called for*

Under the circumstances, the

above expense represents operating costs only of the Board, and these were
$5,632.39 greater than the amount paid for the same purpose in 1935.
For the first half of 1937 our assessment for Board operating costs will
be $17,973.52 compared to $19,293*03 for the first half of 19364

We should exper

ience a marked increase in the assessment for the second half of 1937 when the
Board will occupy its new buildings

LEGAL FEES

9,926.86

Fees paid for legal services were lower in 1936 than for many years past,
the net payment being only $926.66 more than the regular retainer*

This is because

of the lessened amount of closed bank work and some recovery on fees previously
paid.

For eight months in 1935 we paid a retainer to Counsel Weir at Helena, but

no legal retainer was paid other than to Ueland and Ueland in 1936*

INSURANCE OK CURRENCY
AND SECURITY SHIPMENTS
Minneapolis
$ 7,839.21
Helena
1.499.62

9,338.83

Both Head Office and Branch costs for this purpose are higher in 1936
than for the previous year, the Head Office excess being $1,000.00 and the Brandi
approximately $550.00.

Increased volume of currency shipments is mostly the cause

of the greater Insurance payments*

An increased amount of our own securities sent

out explains the larger insurance payments on items of this classification.

EXPENSES

(Contd)

OTHER IKSURABCK
Minneapolis
Helena

$18,706*26
g .240,90

$20,947.16

Due to a special credit of $2,500*00 received in May, 1935, our Minnea
polis insurance payments appear higher than in 1935.

Decreases have been brought

about in several classifications as indicated by the following figures:
1936

1935

Employees fidelity
$
241.70
$
575,05
Bankers9 Blanket Bond* etc*12,676.34
13,684.31
Workmens Compensation1,502*65
1,745,34
Fire on Equipment and Supplies51-39
367,98
407,64
Contributory Group Life 1,823,93
Pire (Bldg) Liability, etc-1,281.13
1,269.73
Autoo and armored car
1 .1 2 9 .1
2
____________ 739,52
$ 18,706.26
$ 17,974-29
Fidelity insurance m s decreased in 1936 through the reduction in number
and amount of the bonds covering representatives of the Agentfs Department in
connection with nets issues*

The Blanket bond NTas reduced $750.00 in price making

a total of $13,250*00 now paid yearly.

Workmens compensation and Group Life pay

ments frave declined by reason of reductions in the staff..

Fire insurance payments

for coverage of equipment and supplies was $316.59 less in 1936*

Several premium*

had been paid for a period of three yearB in 1935 with only one snail payment made
in 19#$.

It is not our policy to amo^fcy.** payment's* monthly unless in excess of

$500.00.

The fire insurance cn our building has been reduced to $500,000.00 in the

form of a policy taken with the Associated Factory Mutual Insurance Companies, vfcich
policy also covara oontents of the building and will remove the necessity for sep

arate coverage for furniture and equipment-

Under this policy we are also protected

to the full amount in damage .from tornado, aircraft and smoke.

Added features; are

coverage to the extent of $125,000.00 for damages from vandalism and sabotage.

The

policy Juat taken Trill cost u« over a period of six years $2,632.50, whereas the
policies replaced would require payments of $5,084.76 for the same period.

It is

also our understanding that b/ sed on the usual experience, the dividend to be paid
ud

in the time mentioned, vcu. d be $1,867,50, making a net cost to us of $766,00

for six years coverage*

Increase io automobile insurance is due to the bank absorb

ing one-half the cost of collftrAon coverage for officers and other employees using
personally oimed cars in bank business,
Helena costs are reduced $29^..,66 from 1935 principally on account of the
reduced proportion of the blanket bond which the branch assumes as well as the lower

EXEEMSBS

cost of the bond.

(Contd)

Formerly 1/8 of the premium was paid by Helena and now 1/10 is

the proportion*

TAXES jJS BAm premises
Minneapolis
Helena

$ 65,846.27
970.49

$66,816.76

Substantial reductions have been obtained in the amounts reserved daring
1936 both at Minneapolis and Helena.

The real estate taxes at Minneapolis reserved

in 1935 amounted to $78,720.00 to sfaich we added $1,258.73 in order to wipe out all
special assessments for paving, park improvement, etc., and cave the interest there
on.

An adjustment was made of the amount reserved in 1936 because of a reduction

in value granted by the assessor«

This reduction, together with a revision in the

tax rate from 96 mills to 93 mills, made it necessary for us to provide $14,132.46
less than in 1935.

Our counsel is endeavoring to bring about a further decrease in

valuation.
Helena values were more than cut in half for 1936 on account of earth
quake damage.

The payment of $970.49 is $1,129.90 less than the tax payment in 1935*

LIGHT. HEAT. POWER AND WATER
Minneapolis
Helena

$18,622,38
1.444.83

$20,06?.21

These costs slightly exceeded those of 1935 because of the heavy purchase
of fuel oil in December.

Deliveries of 42,864 gallons raised the total for the year

to 151,401 gallons compared to 132,794 paid for in 1935.

Throughout 1935 the price

per gallon was 5& cents with the same price prevailing most of 1936.
was renewed October 1, 1936 for one year.

Our contract

Maximum price is fixed at 5& cents per

gallon but this price has not been reached to date.

Bower and light furnished it on

a better basis than for 1935 with such costs $9,609.04 in 1936 and $10,537.24 one
year earlier,

A continuation of the lower rate with fewer employees indicates a

further saving for 1937.

More use was made of city water than in 1935 with our

coBtB $639*16 for the year, and $548*12 in 1935.
At Helena there was some falling off In the above costs during the last
half of the year compared to 1935, resulting in a saving of approximately $90.00
compared to 1935,
staff*

Power and light costs should decrease some in view of the smaller

The branch uses gas for heat in preference to coal or oil*

EXPENSES

(Contd^

B3SPAIBS AND ALTERATIONS
Minneapolis
Helena

$ 6,793*67
46.91

$6,040.68

A* indicated, most of the e^endltures for repairs and alterations were
<aade by Minneapolis with rery little spent at Helena since the Fall of 1935.

seems customary to never estimate sufficient in our Budget for repairs and altera
tions.

Over the past three years we have required $25,576.56 for such expenses or

In excess of $700.00 per month.
elevator maintenance.

Included in each month*s charges is $180.50 for

In December we had $366.00 for repairing a break in the eater

main and $235.26 for changes made in the piping system.

At Helena very little re

pair work has been done except that necessary for protection,

in December our Board

authorised an expenditure up to $2*000.00 for removing the tile pllaeters from the
front of the building and for additional wooden bracee and bolts to support the boil dingo

OFFICE ASP BUILDING SUPPLIES
Minneapolis
Helena

$11,632.77
1.769.20

$13*301.97

One year ago reduced costs and a decreasing number of employees made
possible a cost total 30# below that of 1934.

Such expenses in 1936 have been lower

than for many years largely because of further staff deletions,

prices have re-

mained about the same, but the purchase# of the past couple of months have been less
than normal.

These costs should really be combined with Printing and Stationery be

cause there are many items shich may be classified under eitner heading.

Everything

required by our guards* building and equipment mechanics is Included in the above total•Supplies for the Branch have cost $170.53 more than in 1935* with Minneapo
lis showing a reduction of $954.72.

PRIHTIBO AND STATIONERY
Minneapolis
Helena

$16,375.46
2.022.74

$18,398.20

Saall increases were shown both at Vinneapolle and Helena over the 1935
costs?

There has been considerable expense for new forms during the past year, es

pecially in the Safekeeping and Transit departments.
among printers, prices have changed very little.

Although competition is keen

The total expense would have been

higher but for the fact that our stock has been held to smaller quantities before
reordering.

Bids are required on all but small orders.

A committee acts on all

purchases and no order in excess of $500.00 is given until approved by the members

•

EXCESSES

(Coxitd)

PRINTING AMP STATIONERY
of the Discount Committee.

Helena participates with Minneapolis on quantity orders,

and also placee individual orders through the Read Office lfcen cost here plus shipp
ing expense is less than the crice offered at Helena*

TELSPKOKK
Minneapolis
Helena

$5,480.58
698.73

$ 6,379.31

These costs show reductions because of a decrease of nearly $600.00 in
toll calls and a more equitable distribution of equipment rental to the various
Government agencies.

The same conditions affected Helena.

Seduced expense was

$841*45 at Minneapolis and $81.09 at Helena*

TEUEGRAPH
Minneapolis
Helena

$10,026.58
3.622*93

$13,649.51

There was an increased volume of wire transfers at Minne&Tttlis over 1935
but the expense of the leased wire system to

was $1,400.00 lese than in 1935.

Our payments of salaries to wire operators were $1,934.35 compared to $2,567.45 in
1935 with the 1936 payments classified as Telegraph expense, end those of the pre~
vious year shown in salaries.

The installation of the teletype machines should

reduce our costs in 1937, especially if the other Federal reserve banks adopt the
same method of handling messages.
in wire expense for some time*

The past year was the first to show an increase

This was the result of more wire transfers being

sent, and later through a change in arrangements for handling San Francisco District
telegrams*

Formerly the branch paid the cost of messages between Spokane and

•

Helena, with Spokane relaying messages to the other San Francisco offioes without
charge*

How Helena will send messages direct to all San Francisco offices over the

commercial wires*

Helena’ s increase in telegraph cost over 1935 was $454*72.

POSTAGE
Minneapolis
Helena

$93,503.04
14.893.59

$108,396.63

Both offices showed small increases over 1935 in the amount of postage
used on mall and currency shipments or absorbed for member banks*
shipments made up the major part of postage expense*

Postage on money

On outgoing shipments from

Minneapolis, we required $20,893*53 for currency and $6,386.08 for oolu*

Member

EXPENSES

(Oonta)

POSTAGE
banks were credited with $21,664*83 as reimbursement for postage placed on currency
shipped to us.

Out of a total of $93,503.04 used for postage at Minneapolis,

$48,944.44 m s in connection with money shipments, $787.06 on securities, and
$43,771,54 for ordinary mail sfaich includes transit letters.

One year ago we used

$47,558,12 for money shipments and $45,024.24 for other purposes.

Surcharges were

Included in the totals mentioned, being $14*969.99 in 1936 and $13,557.78 for the
previous year.

The expense of moving new Federal reserve notes from Washington to

Minneapolis, Including surcharges, is not included with our regular postage Charges.
Such expense during 1936 sas $4,396*21 for postage and $7,216.80 for surcharges.
Branch postage expenditures were $750.00 greater than in 1935 and nearly
$400.00 was added to Expressage for checks previously sent by mail.

Currency shipp

ing charges, including insurance, were $1,500 more in 1936.
We use practically no postage stamps and find postage meters very helpful
in controlling the use of postage.

Under this plan only the postage actually used •

each month appears in expense, the surplus being held in *Deferred Charges" until
required.

Helena obtained additional meters during the past year,

EXFRESSAfrE
Minneapolis
Helena

$9,642.24
1.873.62

$11,515.86

These costs were higher for 1936 than for any previous year since 1933
sfcen we absorbed considerable costs on incoming shipments of coin during and after
the banking holiday.

The present cause for the increased costs concerns coin to

only a minor degree.

We have found it to our advantage at both Minneapolis and

Helena, to send many of the larger transit letters by express.

Handling transit

letters at Minneapolis created express charges of $2,488.75 in 1936 or $725.07 more
than in 1935.

Government checks are usually seat to the Treasury by express and we

expended $556.88 for this purpose compared to $806.79 In 1935.

Maintenance of our

truck and mall car is treated ae eapreesage and required $1,526.97 during the year
in comparison with $1,002.64 needed one year ago.
Helena expreesage was $600.00 higher than for the previous year.

Besides

$400.00 additional used in forwarding checks, the Brandi auto truck was overhauled,
making total repairs for the year $306.75 compared to $41.50 in 1935.

EXPENSES

(Contd)

FEDERAL RESERVE CURRENCY

$57,825.66

Original cost and shipping charges

After the heavy expenditures for notes in 1935, we expected some re
duction i© the amount required for 1936*

Our estimate of $38,000 proved entirely

Inadequate, being exceeded by nearly $20,000,

We had assumed the Treasury De

partment would take steps to replace, without cost to ue, the unissued notee of
the 1928 series, which we had paid for hut were requested not to issue,

TThjn

this tfas not done we had to replenish our stock at Minneapolis with larger ship
ments from Washington.

Actually, printing costs of $44,105,10 were less than in

1935, hut shipping expense of $13,720.56 on notes brought here added materially
to our operating costs.
Other conditions which affected note costs were the increased demand,
especially during the period of bonus payments and the using up of our surplus
supply of legal tender 5 #s.

We had been able to curtail printing orders for 5 's

a year earlier, but had to increase our order the past year.

Unless a period of

note contraction soon appears, we may expect fully as high printing costs for
193? as In 1936.

FEDERAL RESERVE CURRENCY

$5,457,81

Cost of redemption, including shipping charges

Host of this expense was incurred in the payment for insurance cover
age on our own fit notes returned to us by other Federal reserve banks and the
cost of shipping unfit notes of all the banks to Washington.

Each bank bears the

postage expense for notes shipped, but declares the Insurance on all of Its own
fit notes#
Head Office.

Any expense of this character at the Branch Is transferred monthly to
The above charges also Include the amount reserved by us monthly

for the payment of redemption expense at Washington,

On December 31, 1935, we

had $90?. 12 reserved for this purpose and added $1,350 during the past year.

The

charge to us for redemption and destruction of notes to close of the last fiscal
year June 30, 1936, was $1,095.17, leaving a balance of $1,161.95 on December 31,
1936.

For the first six months we will reserve $100 monthly to fully provide for

redemption charges.

BXPBHSSS

(Contd)

MI SGEI.IAHBD0S EXPEHSE?
Minneapolis
Helena

$31,130.10
2.608.6S

433.738.»d

On a sheet following the current expense classification, will he found
an i ton! sat ion of miscellaneous payments made daring the year.
cost of these items is $7,241,05 leas than in 1985*

’The aggregate

Important disbursements were

as followst

RBHTAL

o f fuhhitube akd squipmeht

Minneapolis
Helena

$ 504*05
33.00

537,05

These chargeB are for rent of typewriters used daring audits and exam
inations whsa extra employees are required*

Also for rental of movie equipment

and Bound projector for use la showing bank film,

REPAIRS AND MAIflTEKANCE OF EQUIPMENT
Minneapolis
Helena

$ 779.53
672,. 59

$ 1,453*12

Very little is paid to outside concerns for maintenance of Minneapolis
equipment.

We use our

o «q

men and the expense represents costs of materials for

carpenter and repair parts for machines.

At Helena no mechanics are employed*

the disbursement being to the concerns servicing our adding machines under a
yearly contract.
OUTSIDE LAUNDRY AND CLEAHIEQ
Minneapolis
Helena

$1,181.01
139,, 53

$ 1 ,320o54

Improvement is again shown over the previous year.
used and very few hand towels,.

No roller towels are

The continued reduction in personnel helped to

reduce Minneapolis costs $830.63.

There was no change at Helena*

POST OFFICE BOX AND POSTAGE METER RENTAL
Minneapolis
• Helena

$362.79
255.50

$•'

618.29

Ueter costs at Vlnneapolis have been reduced more than one*half because
of a decrease in rates,

Helena increased the number of meters used but are unable

to employ sufficient meters to obtain the lower rate.

Total meter costs were

$1,02^,16 one year ago.

BXFBKSBS
CAFETEBIA

(Contd)

(SET EXPENSE) $4,540 31
o

On ilay 1, 1986, the operation of our cafeteria was transferred to Kies
Elsenbarth.

Under the terms of the contract, the bank provides the space for

kitchen and lunch rooms and furnishes heat* light, electricity and equipment with
out charge.

Miss Eiaenbarth hires the help, purchases food and other supplies and

has general supervision of the cafeteria.

Her compensation was fixed at 10$ of

the net operating income, hut in no event lees than $100 per month*

It was farther

agreed that the Ik?,ok would absorb any deficits that occur from month to month«
The Board of Governors of the Federal Reserve System allows us to absorb
not more than one^third of the total cost of food and service.
furnish noon day meals to employees at a nominal cost.

The purpose is to

It is sot contemplated

that the cafeteria should be operated at a profit.
The net Cafeteria expense absorbed by the bank during 1936 was
$4,540*31 compared to $6,076.94 in 1935.

The net costs which the bank is called

upon to absorb have been reduced under the revised arrangement and it is quite
apparent that the amount will be lower in 1937 than for the past year.

NEWSPAPERS. BOOKS., BINDBIQ, ETC.
Minneapolis
Helena

$2,762.88
140,00

$2,902.88

These payments include Federal Reserve Act service, all publications
made use of in statistical work, books and papers for the library, etc.

The re

duction of $1,200 from 1935 costs is largely through discontinuance of ticker
service.

Any subscriptions not amply justified have not been renewed.

Helena

receives a copy of the Act service, some business service besides subscribing to
magazines and papers*
COPIES OF BANK EXAMINATION REPORTS
Minneapolis
Helena

$4,070*00
207.00

$ 4.277.00

There m s no change in the per item cost of reports furnished us during
1936,

In 1935 the price had been reduced to $5,00 per report for copies furnished
#

•

••

•

Minneapolis and $2«25 for extra copies of Montana bank reports supplied Helena.
State departments charge us $2.60 per report when none of our men accompany the
State Examiner making an examination.
$376.35 less than one year ago.

Total cost of examination reports was

BXSSSfSfcS

( Contd)

C0V»SRCIA1» AGENCY CREDIT REPORTS AND SERVICES

$879.73

Reports of the above character are for use of the industrial loan divi
sion,

The charge compares with $3,121*36 in 1935 and will show a further de

crease in 1937,
MEDICAL SERVICE SUPPLl&S AND
p h y s ic a l ex a m in a tion s

Minneapolis
Helena

$2«196.63
79.49

$ 2 ,2 76 .12

Of the Minneapolis expense $2,170 was paid for physical examinations
compared to $608.00 one year earlier.

Our plan originally was for 8& examination

every other year for those under 45 and yearly for those over that age.

September last, the plan was changed for an examination once each five years for
those under 45*

The rate for first examination remains at $5.00 with subsequent

examinations $3.00 per person*

The estimated cost of examinations at Minneapolis

in 1937 is $350.00.
At Helena, the 1935 cost of examinations was $49.91 and will not likely
exceed this amount in 1937.

ENTERTAINMENT OF BANKERS AND OTHERS
NOT IN BANK'S EMPLOY
Minneapolis
Helena

$482.37
121.SO

$ 603.87

These amounts cover meals served to visitors in our own lunch room and
payments made by officers for the entertainment of bankers and others at lunch-

eons and dinners elsewhere in Minneapolis and Helena.

.EMPLOYEES1 EDUCATION: AMERICAN INSTITOTS
OP BANKING; OTHER EDUCATION
Minneapolis
Helena

$2,568.00
60.00

$2,648.00

The largest payment tinder this heading is the contribution of $1,456.00
mads toward the support of the local chapter of the A.I.B* with $1,112.00 for
rebates made employees completing courses.

At Helena, rebates were $80.00.

FEDERAL RESERVE CLUB
Minneapolis
Helena

$2,050.00
300.00

$2,350.00

Curtailment of some of the activities of the Club made donations by the
Bank $750.00 less than in 1935.
clubs in 1937,

Aprroximately $2,100 will be allowed the two

EXPENSES

(Contd)

MEMBERSHIP DUES AM) DONATIONS
Minneapolis
Helena

$1,336*16
261.00

$1,89?.16

Thee© payments were for dues in the American Bankers4 Association,
various State and other Bankers* Associations, Creditmens* Association, etc*,
donations to police and others*

TAX PATERS* ASSOCIATION (MINHEAK>LIS)$

787.20

This is a voluntary payment made on the basis of X percent of our real
estate tax payment.

The funds are used in maintaining an organisation to natch

bond issues and all matters affecting local property*

EXCESS EXPENSE OVER COMMISSIONS IK HANDLIKG
FOREIGN BUSINESS (Minneapolis) $1,529.96
There has been no nrofit through commissions from handling foreign
business for the System during the past several years.

We have no definite

knowledge of the operations, basing our charge on information given us by Hew York,

EXPENSE MOVIE PICTURE ‘’BACK OF BASKS AND
BUSINESS*’ (Minneapolls) $3,363.42
This expense comes from a revision of the film and additional film fur*
nished with other suprlies during the year.

Any equipment used in showing the

film and the expense of operators is included with travel costs and salaries.
%
OUR PRO P.ATA SHARE IK EXPENSE OF W.P.A.
CLOSED BANK STUM $1,500.02
This was our share of a System expense over which we had no control.

\
FISCAL AGENCY, CUSTODIAN SHIP AffD DEPOSITARY
REIMBURSABLE EXPENSES
(Minneapolis Only)
1936
CURREBT ISSUES
Salaries - Officers
Salaries - Employees
Retirement System
Postage and Shipping charges
Traveling Expenses
Printing, Stationery & Supplies
Telephone & Telegraph.
Rental of Furniture & Equipment
Rental of Space
All Other
Total
ADJUSTED SERVICE BOBDS
Salaries - Officers
Salaries - Employeee
Retirement System
Postage & Shipping charges
Traveling Expenses
Printing, Stationery & Supplies
Telephone & Telegraph
Rental of Furniture & Equipment
Rental of Space
All Other
Total

741.6?
31,073*78
1,686.44
5,015*32
94.75
3,028.81
1,508.88
491.42
3,318.33
81.10
$47,040.50

$ 1*970.83
43,916*21
2,369*34
9,531*22
oft

5.320*15
870.67

522*95
$64,501«37

354*15
18,515.76
897.98
21,991.28
100*15
1,460.59
775.39
179.07
1,659.89
51.07
$45,885*33

FOREIOH EXCHANGE TRANSACTIONS
Salaries - Employees
Retirement System
Postage & Shipping’ Chargee
Printing, Stationery & Supplies
All Other
Total

RECONSTRUCTION FIHAKCB CORPORaTIOH
Salaries ~ Officers
Salaries - Employees
Retirement System
Poetage & Shipping Charges
Traveling Expenses
Printing, Stationery St Other Supplies
Telephone & Telegraph
Rental of Furniture & Equipment
Rental of Space
All Other
Total

$ 2,750.00
35,105.19
1,947*63
997.64
12.70
694.76
730.10
290.46
5,010.97
194.88
$47,734.33

FARM CREDIT ADMINISTRATOR
Salaries - Officers
Salaries - Employees
Retirement System
Postage & Shipping Charges
Printing, Stationery & Supplies
Telephone & Telegraph
Rental of Furniture & Equipment
Rental of Space
All Other
Total

612*46
9,420.53
535.35
702.75
155*83
76.38
194.00
1,261.46
9.96
$18,968.72

1935

117,34
6.24
4.35

127.93

$ 4,500.00
44,257.81
2,489.70
1,538.43
692.90
214.44

10.00
124,47
$53,827.75

550.00
20,970.23
1,054.73
15,654.49
885.83
52.68
1,451*91
J8,g g
$40,688.09

grsgAi

■m s m m
(Minneapoli a OnlyV

1936
PUBLIC WORKS APMIKISTRATIOK
Salaries - Officers
Salaries - Employees
Retirement System
Postage & Shipping Charges
Printing, Stationery & Supplies
Telephone & Telegraph
Rental of Space
All Other
Total

HOME OfflflBRS* LQMl CORPORATION
Salaries - Officers
Salaries - Employees
Retirement System
Postage & Shipping Charges
Printing, Stationery & Supplies
Telephone & Telegraph
Rental of Furniture & Equipment
Rental of Space
All Other

WORK RELIEF CHECKS
Salaries - Employees
Retirement System
Postage & Shipping Charges
Printing, Stationery & Supplies
Telephone & Telegraph
Rental of Furniture & Equipment
All Other
Total

124.99
4,221.95
231*53
126.94
43*55
348.71
461,31
________ 4.30
$ 5,563,28

1985

245.83
5,031.66
281.80
122.93
50.48
5.25
116*09
605.26
______ 5*25
$ 6,464.55

5,337.54
285.10
225.67
87.94
875.96
________ 6.98
$ 6,819.19

$ 19,318.64
1,028.24
8*61
222.30
20.14
895.43
_____19.J&
$ 21.5is.es

4 ,2 13 ,25
212.90
267.98
£07.30
15.02
-*
«■
»
40.86
5,057.31

2,757.57
147.59
28.53
5.28
157.05
2*34
3,098.36

H7B3ITUKE AND BC3PIPMSNT

Purchases made* in 1936 were greater in number, but for a smaller total
cost than in 1935.

Usually adding machines are the chief item of the equipment

classification, but only one machine of thie type was purchased during the year
at Minneapolis, with four required &t Helena in connection with the transit voric.
Total purchases at Minneapolis for the year v?ere $9,048.03.

From this amount

should be deducted $1,029*50 allowed on furniture and equipment sold or traded in.
At Helena the net purchases amounted to $3,392*38.

Total expended for add

ing machines was $2,005*20 at Helena and $562.8? at Minneapolis*

In 1935 we

bought 7 adding machines at Minneapolis at a cost of $3,632*32 and 2 at Helena for
$1 ,53 0.4 0.
Replacement of our Chevrolet truck: and purchase of a Plymouth in connec
tion with the showing of the bank film required

$1,049,15, $707*65 being paid for

the Plymouth car and $341*50 for the Chevrolet*

In order that our transfer vault

might be fully equipped, we bought 252-4 roller transfer cases at a cost of $725.76.
To be able to seat the staff for lectures and other purposes, we paid $482*42 for
100 folding chairs and 23 other chaire.

In order that tnose holding vault comblna-*

tions might be better protected when throwing the dials on vault chests, 170 dial
shields were purchased and Installed at a cost of $69?.00,

Twenty-nine filing and

other cabinets were required in various departments, $885.88 being expended there
for.

To increase the efficiency of the transit sorting, $308.70 was paid for 10

sorting cases and stands*
In addition to the adding machines procured by the Branch, one electrio
check endorsing machine costing $459,92; 14 chairs costing $233.45; 5 check sort*
ing racks for $175.00 and 4 transit tables costing $98.30 were needed to round out
the transit equipment.
Amount expended for furniture and equip
to close of 1935
Purchased during 1936-Mlnneapolis
Purchased during 1936-Helena

$533,245.71
9,048.03
3.424.88

Less amounts received for furniture and
equipment sold or traded in
Fire Insurance carried at Minneapolis
Fire Insurance carried at Helena

$545,718.62

25.379.05
$520,339.57
$ 25,000.00
10.000.00

$ 35,000.00

FUHHITOOS MI) EqUIPMEHff
Description of 1936 Purchases
MIHKEAPOLIS
1
1
1
252
123
170
2
29
3
1
1
10

1
1
1
3
1
1
3
4
2
1

Plymouth car
Chevrolet car
'
Electric Duplicator
Four roller Transfer Cases
Chairs
Dial Shields
Elliott Fisher Machines
Filing and other Cabinet©
Desks
National Adding Machine
Marchant Calculator
Sorting Cases and Stands
Equipment for Cafeteria
Motion picture Equipment
Typewriter
Machinery and Equipment for Loading Shells
Table with Castors
Hug Pad
Hooked Hugs
Buffet
Letter Scale
Venetian Blinds
Fire Extinguishers
Chrome Smokers
Screen
Total amount of purchases-Minneapolis

707.65
341*50
446*00
725,76
482.42
697.00
515.00
885,88
309«50
562.87
552.50
308.70
2 ,0 8 5 .5 8
90.59
73*30
70 .90
2 0 .0 0
9 .6 8
55*50
2 8 .5 0
5 ,5 0
32*00
2 9 ,4 0
5*90
6*40

$ 9 ,0 4 8 .0 3

Less amounts received for Furniture &
Equipment sold or traded in
4 Typewriters
1 Implicating Machine
Building equipment sold
Miscellaneous Furniture
1 Monroe Calculator
7 Dictaphones

3 52.50
60.00
406,00
186*00
150.00
175,00

$1 ,0 2 9 .5 0
$8 ,0 1 8 ,5 3

Het Purchases - Minneapolis

HELENA BRANCH
2
4
1
1
1
14
1
5
1
4
1

Typewriters
Burroughs Adding Machines and Stands
Check endorsing Machine
Detex Watch Clock
Police Revolver
Chairs
Ledger Desk
Check Sorting Racks
Money Truck
Transit Tables
Cabinet

Total amount of Purchases - Helena Branch

$3^424*0*88

Less amounts received for equipment traded in:
2 Typewrit ere
$ 30.00
2*50
1 Patrol watca lock
Net Purchases - Helena

;

184.00
2,005*20
45 9.92
69 .0 2
2 4 .0 0
233*45
148.65
175.00
12.34
9 8 .3 0
15*00

32*50
$ 3 ,3 9 2 .3 8

Net Total of Combined Purchases 1936

$11,410.91

n m t h s g B z a m ji& m B e s m S t J W

m u m s ®i

Original cost of la n d ...........................................$ 600,000.00
Incidental espcaidi Vires connected with purchase •
2.468.66
Total................................................................ $ 602,468.66
Lass proceeds from sal© of salvaged material. . .
I . 948^00
0o®t of building sit© ............. ............................. $ 600,520.66
m m m
Preliminary aspendi tares............................................$
3,000.48
Cost of cons tractions
Building exclusive of vaults
and fixed machinery and equipment..................
1,730,065*37
Vault construction, including
any additional structure or
foundation made necessary by
vault, and vaul#; equipm en t.............................
323,750.54
Fixed machinery and equipment • • . $632* 635.15*
Less cost of equipment sold
Tfoish m s not r e p l a c e d ...............
3.969.00
628,666,15
Miscellaneous building construction ex
pense Incurred by federal Reserve .Banks
Fm s & Eaqaensea: iKrchiteet#a .................................
148,027.79
Engineer9*. .................................
15,846.00
T a x o a .............................................................................
74,350.00
Maintenance . . ........................................ ..................
..... 3? 705,66
Cost of new building................................................... $2t945,411.99
Cost of building and building n iU ..........................$3,545,932.65
Charge~offt:
Depreciation alloisanees.....................................$1,037,408.68
Taxes.....................................................................
74,360.00
Maintenance..........................................................
21.705.
Total..................................................................... $1.133.464.34
Book value of property............................................... fe,412]4t>0,3l

m m sm
Reserve against depreciation;
Building. . . . . .
...................................................
$ 307,987.56
Fixed machinery and equipment .................................
621.967.03
Total..................................................................... $ 929,954.59

Includes $1013,00) of architect's fees and expenses.

m a r a l Beeepra BranqfaBaBfc

-XsafafliL-,

Original cost of lend and building .............................. $
Cost of remodeling:
Building, exclusive of vaults
and fixed machinery and equipment ........................
Vault construction, including
any additional structure or
foundation xsado necessary by vault..................... .
Vault equipment, Including doors,
lining, and a ll interior equipment. . . ...............
Fixed machinery and equipment..............................

16,000.00
57,642.93
9,266.00
66,580.53
16,108.99

Tees:
Architect's................................. * ....................
Contractor’ a Commission.......................................

5,433.67
7.442.12

Total Cost................................................................. $ 177,474.14
7&.0Q
Less proceeds from sale of salvaged material............ ..

O S
Depreciation allowances charged off;
Charged to current net earnings............ ..

21,290.15

Book value of property . ..................... 156,106.99

Beaerve against depreciation:
Building.............................................................. $
Fixed machinery and equipment............... .............. ....
$

135,000.00
16,108,99
151,108.99

Floor space:

Occupied by F» B. Bank......... ......... .....................
Baited..* ............ ............ ............ .....................
Unoccupied.*.. . . ................................................ .
Total floor area In building.......................... .

4700
0
©
4700

sq.ft.
sq.ft.
sq.ft.
sq.ft.

m m t i m a m s bask o v mwtBamxs
. m m premises xssm o itm m

Fixed Machinery
I-amd

1926 Adjustment ot Archlteot '■
( M s , transferred from trallding
to fixsd machinery end equipment
Eqalpffiaat cold, not replaced

fiBU&tiaMBfc-

> 532,635*15

100,000.00

100 000*00

$ 600,520.66 $3,316,745.84

$ 628,666.15

100,000.00

1920
1921

3.9S9.QQ

2aM

$3,549,901.66

3.969.00
$3,546,932.66

100,000.00

3,381.40
11,646.87
37,222.97
293,310*62
30,463.84
57,438.64

1932

1923
1924
1925
1926
1927

600.SS0.65 *2,416,745.84

J W

$otal

Boole ValUS £T088

f i S l

&
$ 500,520.66 $1,383,281.50

$ 628,666.15

$2,412,468.31

EgPRECXATIOK RESERVE AND ffEg BOOK VAKPB
Depreciation fiasorves
1924
1925
192$
1927
1926
1929
1930
1931
1933
1933
1934
1935
1936

Total depreciation re8ertres$

38,814.40
32,516.86
5,665.63
25,665.63
25,665.63
25,665.63
25,665.63
25,665*63
25,665.63
25,665.63
25,665.63
25.665.63
$ 307,987.56

Hot Book value

T 975,293.94

$ 500,520.66

12,814.73
52,396.55
71,222.95
62.005.35
62,005.35
62,005.36
62,005*33
62,005.37
39,839.354
599839.35A
54,465.63A
551.76
809i9SB
$ 621,967.03

$ 929,954.89

f 6,699.12

(A) Hot after deducting $2,166.00 for Otis Elevator Service Contract
(3)

Hot after deducting $57.00 of reserves for equipment which ms sold and
not replaced.

Fixed HUUM 17
Betiding

JttA

S. 000.CO $ XS8.ggQ.X5

Total oo«t
Otexged o ff 1920
Book value groee

JbS39»SSL

21,390.18
^X36.ooo.oo

nmft TMlTIMIrt
$

i& m a a

Total
(e

21,290.15

a s s a m m
fif^q teU g a ^fK m

1920
1921
1901
1923

1934

1925
1926
1927
1998
1929
1930
1931
1932
1933
1934
1936
1936

66,447,49
1,893.23
l f 655*37
1,871*06
3,126*30
3,126*80
2,700.00
2,700*00
3*700.00
2,700*00
2,700.00
2,700.00
2,700*00
2,700.00
2,700*00
22,700*00

Total depreciation reserves
ISet book value

Het after deducting $69.1? for replacements.

$
1,610.90
1,641*73 *
1,610*90
1,610*90
1,610.90
1,610*90
1,610.90
1,610.90
1,6&0*90
1,680,06
0
0
0
0
0
J
16.108.99
$
$

6. 900.00

BANK PREMISES
Many repairs, alterations and installation® have been necessary during
the past year, and some of the changes contemplated towards the close of 1935 have
not yet been carried out.

One of these was the repairing of the sound-proof ceil

ing on the second and third floors*

Considerable painting as well has been d&»

ferred until the work of installing the air-conditioning equipment has been com
pleted.

This should be finished in February and will afford considerable relief

on the second and third floors during the Summer months.

No payment has been made

on the air-conditioning equipment, but we hatfe made changes in our deep well
machinery, replacing the old air lift and other parte with a new deep well pump.
This will provide ample cold water for air-»cooling and other building purposes.
The pumping equipment cost was charged to fixed machinery and equipm-ynt, and is
being amortised 10$ yearly,

fhe air-conditioning equipment, which will cost

$27,423.00 will be similarly treated.
Repairs and alterations made during 1936 cost $6,793*67 compared to
$6,409.00 in 1936.

In addition to the elevator maintenance contract which requires

$2,166.00, some of the important items making up the balance of $4,627.67 were as
follows:

Removing old plaster and replastering on the upper and basement floors;

caulking and repairing sky lights and roof points; piping changes in the well water
system; redecorating executive offices, reception room and recreation room; repointing entire bank building and repairing doors in garage*
Through the breaking of the water main just outside the building wall, we
were put to plumbing expense of $386.00.

In order to provide more space for the

officers* lunch room and the cafeteria, part of the welfare department was used
with the secretary*s office transferred to one of the rooms formerly used for the
library.

The statistical department and the library now have the space formerly

occupied by the industrial loan department on the second floor*

By these changes

we were able to turn the room formerly used as an officers* lunch room, into addi»tional kitchen space and also provide more convenient and roomier quarters for the
officers and employees»

Other changes have been effected on the third floor and

on the main banking floor, but these are largely rearrangements of space within de**
partment and causing little expense*

There are many electric aad *phone connections

to make which work is done by our own workmen.

Cabinets and other wood work is also

done on the premises*
During the year our guard force was reduced from 30 to 24 guards, with

BASK PREMISES
no apparent weakening of protection measures*

(Cont«d.)
The guards completed purchase of

target pistole in August, paying $489.00 in all, and have shown marked improvement
in shooting.

Equipment for loading shells was purchased, eliminating the expense

of new ammunition for target practice.

Our armored truck was completely overhauled

and is now in first-class condition*
The cost of operating our Minneapolis property for 1936 was $129,626.93.
Through arrangements with various Government Agencies, we have been able to obtain
more reimbursement for rent th&n formerly*

All Agencies had been making monthly

payments except the Custody Division of the Reconstruction Finance Corporation.

December, they agreed to pay rental on the yearly basis of $2.00 per square foot,
from January 1, 1936.

Total rental income in 1936 has been $12,317*22, leaving a

net operating cost of $117,309.71.

This is $27,574.84 less than the 1935 costs.

Besides collecting $10,865.31 more of rent than in 1935, we paid $14,132,46 less
taxes.

Average number of building employees was 20,65 In 1936, compared to 21o66

in 1935*

Salaries paid in 1936 were $30,755.53, a reduction of $1,600 compared to

the previous year*

Fuel oil consumption was 151,401 gallons during 1936 at a

Cost of $8,265,18.

One year earlier we used 132,794 gallons at an expense of

$?,3£ 6076»

Oil prices during the paet two months have been lower than a year ago*

but will show an advance in Januaryu Maximum price paid for several years has been
5 ^ per gallon.

Our ligfrt and power contract for the past year has reduced the&e

costs from $10,537.24 in 1935 to $9,609.04 in 1936.
BAHK PREMISES

(Depreciation)

Ho change has taken place in the yearly amount allowed by the Board to
be set aside for depreciation on our Minneapolis building since our occupancy in
1925c

The replacement value fixed at $1,283,281.50 is being set aside at 2ff> yearly

or $25,665.63 and has now reached a total of $307,987.56.

As $1,033,464.34 las

written off the property up to the close of 1927 to give the present replacement
value, there still remains a net book value of $975,293.94.

With the land carried

at $500,520*66 and fixed machinery and equipment at $6,699.12, our entire property
at Minneapolis had a net value of $1,482,513.72 on December 31«
Through the installation of a deep well pump, we added $3,152 to our
fixed machinery and equipment. Increasing our depreciation allowance to $866.96.
After allowing for a deduction of $57.00 for equipment sold and not replaced, we
had $6,699.12 remaining to be amortised 10# yearly.

On the completion of the

BARK PREMISES

(Cont*d.)

air conditioning work, we will have approximately $27,423 to add to this account.
Since 1924 we have reduced the gross book value of our building equipment $621,967*03.
Under approval of the Board of Governors, we eet aside on December 31, 1936,
sufficient to eliminate the Branch building account*

The original cost of this pro

perty was $177,399.14, including $5,000 fixed as the value of the land.

The building

cost was $156,290.15 with $16,108.99 allocated to fixed machinery and equipment.
placement cost of the building, including the vault, was placed at $135,000.

Although

we were allowed to set aBide the coat of the vault the first year, the replacement
value was never changed.
reserve of $20,000.

One year ago we asked and obtained approval for a special

The earthquake damage was such that it seemed desirable to write

off the remainder of the building account at the close of 1936.

In order to do so we

obtained permission from the Board to set aside, in addition to the regular reserve
of $2,700, the sum of $17,481.26.

BANK PREMISES

(Taxes)

Through a reduction in the tax rate from 96 mills to 93 mills, and a lower
ing of the value of our property for tax purposes, we are able to report a decrease
of $14,132.46 in the amount reserved for real estate taxes, compared to 1935*

The

actual reduction is $12,873.73 because in 1935 we paid up $1,258.73 in special taxes
to sa^e interest charges.

Our Counsel has been endeavoring to bring about a substan

tial reduction in the valuation of our property but the assessor stated he was making

a voluntary reduction*

The previous valuation was $2,050,000 and the assessor's

figure was given as $1,770,250.

As these figures are in the records we felt Justified

In lowering the amount we were setting aside for payment in 1937.

On the basis given,

our payment for 1936 taxes will be $65,846.27*
In addition to our regular taxes we contribute 1$ of our yearly tax to
the Tax Payers1 Association, an organisation which watches valuations, levies and
prospective bond issues, in the interests of the tax payers#

Our payment to this

Association was $787.20 in 1936*
At Helena, the earthquake damage resulted in a valuation of $38,930 being
placed on our property for tax purposes.

This was a reduction of $40,450 from the

valuation of the previous year and resulted in the branch paying a tax of $970.49
compared to $2,100.39 in 1935.

M ASS, ..Hp iS C ppfflS AgP.Ap C m AHgBS

There uaa very little demand from member banks for discount accomoodations during the past year.

Loans totaling $549,861.75 were made to eleven banka.

On December 31, 1935, bills discounted for member banks amounted to $33,478*38 and
on December 31, 1936, $3,000.00, a single loan.
banks were entirely out of debt to us-

From July 3 to December 8, member

In addition to $3,000.00 of bills dis

counted, our participation in foreign loans on gold amounted to $7,200.00, making
a total of $10*200*00 bills discounted.

Our discount rate remained at 2 per cent

during the year.
No purchased bills, other than investments through foreign banks, were
held during the past year.

On December 31, 1935, our participation in Investments

through foreign banks amounted to $61,006.52 which was reduced to $60,662.78 at
the close of 1936„
In August, 1934, we began making industrial advances to established in
dustrial or commercial business for the purpose of providing working capital.
These loans are made for a period not exceeding five years and bear six per cent
interest.

We advanced $2,033,350.00 up to the close of 1934, banks and financing

institutions participating to the extent of $146,700*00.

Of the $1,886,650.00

of Federal Reserve Bank funds loaned, $134,212.23 was repaid during 1934, leaving
a balance of $1,752,437.77 outstanding at the close of 1934.

No commitments to

mak<8 industrial advances were made during 1934.
Daring 1935 we made 101 industrial loans totaling $1,146,000.00, in which
financing institutions participated to the extent of $148,900.00, leaving a net of
$997,100.00 advanced by us.

Repayments totaled $1,158,669.65 during 1935 on the

amounts advanced by the Federal Reserve Bank and a balance of $1,288.66 on one
loan iras charged off as a lose, leaving $1,589,566,13 outstanding on December 31,
1935.

Repayment of eight loans, with balances of $369,287.32, was the result of

refinancing*
In addition to the industrial advances we issued commitments to make in
dustrial advances totaling $296,644*50.

A charge equivalent to one per cent

interest per annum is made on commitments.

Our contingent liability on commitments

to make Industrial advances amounted to $138,397,51 at the close of the year 1935*
During 1936 we made forty industrial loans totaling $305,202.00, in which
financing institutions participated to the extent of $69,879.00, leaving a net of

LQABS. HEDISOQUNTS ASP ACCEPTABCBS

$235,323*00 advanced by us*

(Cont'd.)

Repayments totaled $74?,5??,00 during 1936 on the

amounts advanced by this bank and the balanced of two loaas, amounting to
$13,500,00, were charged off

3L©e»e«, leaving $1,063,812.00 outstanding on

Decsmber 31, 1936*. Repaymeat of four loans with balances amounting to $98,097.41
was the result of refinancing.
In addition to the industrial advances, we issued commitments to make
industrial advances totaling $20,000.00 during 1936.
Our contingent liability on commitments to make industrial advances as
of December 31, 1935, was $71,279.00.

O
if )

DISCOUNT QP-hlHATlO-NS ^ MlNflKiVPOLIS AND HKLWSA BRANCH
(excluding Industrial Advances)
Number of Banks
— Served
-oath January
February
March
ipril
U'ay
June
July
August
September
October
November
December

1935........ *934______________________ 193b

193&

1
1
3
2
7
2
C
0
0
C
C
3

0
0
1
5
1
2
6
4
3
4
2
2

dumber dif
ferent Banks 11
Minn.
^ )
No, Dak* i }
So, Dak. 4 )
Mont*
1 ) 11 - 193b
3is.
0 )
Mich*
1 )
Itfuff'ber pieces
1936
Hediscounted
1935
193^
1933

Total amount
Hediscounted

1936
1935
193H
1933

Number of Items
Received

Amount Bediecounted
0G0 Omitted_____ ,

1935___________ J^JU__________________i25§____________1221__________ i22!t

0
0
1
8
2
23
26
20
14
39
6
3

172
71

11
7
8
12
6
5
2
4
1
0

S
1
27
5
46
4
0
0
0
0
0
3

1U2

26
13

54
26
10
52
29
10
5
10
1
0

39
10
149
105
190
21
0
0
0
0
0
36

0
0
15
161
100
59
135
67
28
63
19
10

uuo

$ 550

$ 057

536
320
222
112
82
600
101
92
329
126
5
0
* 2.525

V0LUIAJ2 0Y REDISCOUNTS

North

South

Minnesota

Dakota

Montana

25
19
54
3,914

8
4
46
1,162

1
1
25
980

Minnesota

North Dakota
$
30. 000o00
14,000.00
126, 830.63
1 ,6 3 M 9 6 * 3 0

349,992.00
273.877.00
130,224.90
23, 286, 581.87

116
225
4,403
South Dakota
$

125 . 269.75
30u . 993.u 2
uu7 . 756. 2u
10 , 099. 097.60

Montana
$
14,000.00
9,000*00
204,780.00
6 , 527, 076.26

Wisconsin

Michigan

1
2
32
801

0
0
58
m
Wisconsin
$

<t>
1.2U5.S59.37
3.6U3.7UU.93

Total

~W~
142
4ll0

12,038

Michigan
$
30, 000,00
55. 000.00
37O.O 22.76
4 ,781,030.98

Total
$
5^ 9 . 861.75
656.s 70.u 2
2 . 525. 473.90
50. 172 .u 27 . 9u

m U S C BANKS

At the close of busines? December 31, 1935, the unpaid liability to us
of forty-five suspended member banks was $500,471.08*
member banks suspended which were indebted to

Daring the year 1936 no

ub*

The total collection from all sources during 1936 amounted to $120,2530 42.
Of this amount $96,314o72 was applied to reduce the direot liability of the sus
pended banks, leaving a net balance due from these banks of $404,156.36 (including
charges to the reserve for losses on discounted bills)at the close of the year 1936,
Of this latter amount the remaining liabilities of twenty-two banks, aggregating
$234,309c42 were charged to the Special Heserve for Losses, as follows*
Twenty prior to 1936, totaling $227,894*85, and two during 1936, totaling $6,414*57*
TJhcollectible advances of various nature of thirteen banks aggregating $18*681*70
hate been charged to Special Reserve for Losses, as follows:

Eleven prior to 1936,

totaling $15,708*19 and two during 1936, totaling $2*973*51, making a total of
$252,991*12 charged to such reserve account*
Names of the banks from which recovery may not be made and the uncollected
liability of each are given in the December report from the Closed Bank Department«
The thirty-eight banks shown on our closed bank list as Indebted to us
on December 31, 1936, include the twenty-two banks mentioned above*

As security to the

principal liabilities of the remaining sixteen closed banks amounting to $169,846*94,
we hold $743,716*06 in notes.
sum of $359,392*63*

In addition we still retain worthless paper in the

This paper is collateral from the twenty-two banks i&ose in

debtedness to us has been charged off?
As of December 31, 1936, four hundred eighteen member banks and one non
member bank had closed, with total liabilities to us at date of suspension of
$18,638,905*20*

Of this amount, we have received payments aggregating $18,234,748.84,

including full liquidation of original liability due us from 380 member banks and
one non-member bank, and there remains now due the sum of only $404,156*36 as here~
tofore indicated*

In addition, we have received $464,417*26 interest and $439,649.86

in reduction of our collection expense*

Unpaid collection expense accumulated as of

December 31, 1936, amounted to $85,634o74*

During the past year $20,045*51 of expenses

incurred in collecting paper during the current and preceding years was recovered,
$13,244,46 of interest was collected from these closed banks, and $717.74 interest on
other advances made to protect our interests*
In addition to the recoveries mentioned, we have collected $1,904*90 from

FAILED BAMS

(Coat’d*)

banks expected to fully pay original liabilities, collection expense and accrued
interest, which amount will be eventually applied as recovery of collection
expense and/or interest*,
Kith respect to the one non-member bank mentioned above:

The First

national Bank of Scranton, Korth Dakota, consolidated on March 2, 1931, with the
Bank of Scranton, a State non-member, i&lch latter bank at consolidation assumed
liability of the member bank to us on account of rediscounts in the sum of
$44,653*00*

On October 14, 1931, the Bank of Scranton suspended with this lia

bility only partially reduced.

It was reopened April 25, 1932, and the assumed

liability was fully paid on February 6, 1933*
The average number of employees on this work during 1936 was 4 .2 5 as
compared to 9*58 during 1935.

An average of *47 officers* time was allocated to

this function in 1936 in comparison with 1,25 in 1935*

COMPARATIVE FUSCTIOML EXPENSE
1936
Salaries - Officers
Salaries « Employees
Contributions - Retirement System
Traveling Expenses
Stationery and Supplies
Telephone and Telegraph
All Other

Total

$ 3,004.22
8,767.80
643.92
3,035.71
91.50
99*00
376.86
$16,003.01

1935
$

9,875.00
16,045.54
1,896.46
3,732.96
350*65
220*40
915.23
$33,036,34

CHECK COLLECTION FUNCTIOK
(Minneapolis Only)

Daring 1936 this function handled 28,859,625 items totaling
$4,754,957,277.09, an increase of 3,170,915 items and $589,580,680.01 In amount
as compared to 1935 with 25,688,710 items totaling $4,165,376,597.08.

The number

of checks handled was the highest in the hietory of the Check Collection Depart
ment, due chiefly to the increasing volume of Work Belief checks received*
A coe pari eon of the number and amount of items handled, the average
number of employees and the total expense of the Check Collection Function for the
last seven years followss

Year

Number
of Items

1936
1935
1934
1933
1932
1931
1930

28,859*625
25,688j710
24,797,686
18,867,768
17,182,392
18,974,067
21,139,178

Amount

Average
Number of
Employees

$4*754,957,277.09
4,165,376,597.08
3,758,673*996.86
2,869,953,896,60
2,342,396,256.44
2,742,741,808.63
3,224,678,472*48

60.91*
49.65*
54.95
46.50
38.40
39.82
43*57

Total
Expense
$92,961.49*
79,190.39*
79,426.01
72*110.78
63,996.23
71,196.45
77,873.79

* Includes $21«512.58 expense and 16.69 average number of employees for 1936 and
$3*098.36 expense and 2*33 average number of employees for the year 1935 in connec
tion with handling of Work Relief checks*
from the U.S.Government.

All Work Relief expense is re'mlarsable

After deducting $21*512*58 Work Relief expense for 1936

and $3*098*36 for 1935, the figures show that the Check Collection Department re
duced its cost in 1936 over 1935 by $4,643.72.
The following table indicates the number of items handled by the sub**
divisions of the Check Collection Function for the years 1934 through 1936.
Items Handled on
Twin City Banks (Clearings
Member & Non-member banks
(This district)
Other Federal Reserve Districts
Direct to Member banks other
Federal Reserve Districts
To Helena Branch, Helena, Montana
Treasurer of the Uhited States
U.S.Government TTork Relief Checks

1936

1935

1934

4*094,20?

4*070,358

3,758,656

15,627,522
2,139*902

15*217,863
1,751,608

13,811,289
1,430*123

49,382
53,647
2,690,227
4,204.738
28,859,625

47,867
56,157
3,990,948
553.909
25*688,710

65*904
50,197
5,681,517
24,797,686

The cost of handling 100 items in three units of this function for the
years 1930 through 1936 follows:

CHECK OOLUSCTIQS FUMCTIOK

1936
1935
1934
1933
1932
1931
1930

(Cont*d.)

City Checks
(C lu in g *}

Country Checks
(p u t^ in ^) _

18,0 cents
16,0
« *
2 0.6
*»
17,6
*
19.2
•
19.4
«*
20,1
•

20,02
22,0
23,3
27o0
24*7
25.1
24,9

Hetom

$ 1.E8
1.29
1.69
1.16
1.26
1.36
1.36

cents
*
*
»
«
*
«

The average number of items handled per person per da? In these
this function for the years 1930 through 1936 follows:
•*
Tear
1936
1936
1934
1933
1932
1931
1930

Country Checks

City Checks
X&SS&S&JL

J t a t a t l K l __

Return
Items,,

2,273
2,089
1,796
1,574
1,911
2,040
2,063

432
407
268
452
431
462
482

2,537
2,476
2,031
2,315
2,216
2,274
2,156

A comparison of our 1936 check collection costs with latest available
figures for the other Federal Reserve Bank Head Offices (first half year 1936)
shows that our costs are below the average of all main offices#

The average

costs of handling 100 items in three units of this function for all Head Offices
for the first half of 1936 and our costs for the full year 1936 were as follower
City Checks
.(Clearings 1
Our 1936 Costs
Average costs Federal Reserve
Banks Head Offioes

Country Checks
(Outgo log). ..

18,0 cents

20,02 cents

26,3

28.3

Return
ItfflS$ 1*28
1,62

The following table gives a comparison of the number of items handled
per employee per day by ourselves for the year 1936 and the latest available
figures for the other Federal Reserve Bank Head Offices (first half year 1936)
which shows that our average per person is above the average of all main offices*
The average number of items handled per employee per day in the City Checks and
Country Checks divisions are the highest in the history of the Check Collection
Department.
City Checks
(Clearings)
Our 1936 average
Average for Federal Reserve Bank
Head Offices

Country Checks
(optgoing)

Return
Items

2*637

2>273

432

2,161

1,561

361

CHICK QQIXECTloy FUKCTIOK

<Oont*d.)

Daring 1936 we handled 244,773 return items totaling $28,545,802.82
as compared to 242,598 item* totaling $19,879,247*63 in 1935.

Included in

thege figures are non-par items sent us in error, non-cash items forwarded to
us as cash Items, items returned by drawee banks for various reasons, and other
items returned to depositors.
The daily average number of transit letters received and sent, the
number of banks reported closed, number voluntarily liquidated, number reopened,
and the number' added to or removed from our par list during the years 1930
through 1936 are given in the following table:

lear,

Head off icq only
Letters
Letters
received
sent
daily
daily

1936
1935
1934
1933
1932
1931
1930

1,263
1,245
1,287
1,391
1,162
1,244
1,351

851
B66
■895
942
1.020
1,150
1,312

Banks
reported
closed
4
0
9
134
143
274
160

Hi nth Federal Reserve
Banks vol- Banks
untarily
reported
lioui dated reonened
8
9
15
8
5
10
5

0
4
4
15
2
28
7

District ___ _______
Banks add- Banks reed to our
moved from
Bar list
p^r list
2
11
6
24
11
5
2

32
24
22
58
58
97
70

During the month of October, 1936, we adopted the system of eliminating
the proof on approximately seventy per cent of the incoming cash letters containing
country checks.

This method of procedure has enabled us to reduce our staff, there

by making it possible to handle more items per person in this division and at a
lower cost per hundred checks over last year.

Fifljj&ku. itaSiglVti BAMK Of MIMtUSAPOhlS
KaPOflT OF TRuttSIT Uia-AHTliKijT FUtt THK YEAH 193b
MOriSH

193b
January
February
March
April
^
June
July
^eust
September
October
November
Uecember
*•*»!
monthly Ave.ho. Items
Monthly Ave. Amoants

UL.lWUMt;S

iiBUBKR & KON-lOillBiSR

dumber

326.488

292,424
349.&94
334,383
321,585

352.266
352.493

328.609

33^.331
374.688
346,644
381,002

4, 094,207
341,184

Amount

$ 171.343.937-73
138, 617,902.52
182,668,703,24
183,071.924.13
188, 91S . 525.29
221, 968. 489.44
234.*>97. 329-16
235.297,738.07
218,46b,654.98
239. *>60,525.05
208, 502, 287.53
229,458,743.20
"' *2, 452, 072. 700.34

Number

1,161,124
932.293
1.240,177
1, 287,630
1, 270,310
1 ,425.233
1.380.139
1, 314,314
1,334,122
1,473,893
1,307.085
1.451,202
15.b27.522 $

DIRKCT TO BANKS
IH OTHftH RESSRVK DISTRICTS
Kuinber
January
February
March
April
“ ey
JUnB
July
August
September
October
November
uecember

Totl»l
Monthly Ave. Ho. Items
Monthly Ave. Amounts

^.356
2,974
3,896
3,913
3.725
**.714
4,167
4 . 36b
4.109
4,806
4.462
3,894
“ 9.382
4,115

Amount

84, 857,153.24

3,507,252.71
4,281,946.31
4 , 294, 561.09
4.857,648.43
4 , 853, 232.27
5.447,505-82
5.416.774.53
5,753.987.11
5,960,011.6b
4,850,018.05
5 .1 5 8 .037.76
f 58, 745. 513.53

Number
Amount
4,380 $ 406, 635.79
3.818
287,357.58
4,457
413.888.66
4,473
520.080.80
5.134
576,576.76
5,010
519,849.55
4,582
484,407.76
4.2 27
4 6 b ,948.42
4,3 12
471,231.44
4,631
564, 998.88
4,1 06
445,921.15
4,517
400.506.07
53.647 ¥5.558.402.86

4.895,459.46

Grand Total Items ........................................ ^*8,859,625
Grand Total Amounts . . * ..............................75*^957,277.09

Number

179,580

Amount

•$

147,364

29, 753.S76.45
22,458,198.54

182,730

28, 022, 760.99

182,052

33,229.191.09
28. 364, 818.39
33.C55,l4l.4i
41. 921, 760.12
33, 928, 906.31
35,784,524.27
36,599,620.15
37,458,368.51
37,745,477.91
398, 322, 644.14

33,193,553.67

169,369
188,334
187,353
172,326

166,195
196,709
156,175
211.715

2, 139,902

178,325

TflSASUR.-it OF TEB
TO OUR HKLBNATR12ASURHR OF THS
UNITS!) STATES
BRANCH BY USUNITKD STATES
V?QRK RKLISP CHBCKS

4 4 ,364.537.79

Amount

69,184,213.92
87,848,099-37
95,547.825.87
94.334.369.07
112, 141. 915.70
113. 613, 773. 3b
110. 113. 533-44
109,464,664.07
118,421,542.07
105,348,439.46
114,034.974.26
1, 214, 920",513.83
1,302,294
$
101,243,376.15

204, 389. 396.69

02H!SH HiSSiitiVri BANKS

Number
177,966
i4o,46o
165,884
202,641
220,460
485,559
3 U .9 4 1
230.779

Amount
$ 28, 505, 629.34
19.378,142.75
20.l62.087.8i
21,354,173.49
29, 668. 613,93
166, 715 . 613.04
4 4 , 528, 702.68
32,121.929.37
194,166
32.551,981.30
190.865
28,942,146.74
171,997
25,811,255.59
197.509
28.054.770-62
2, 690,227 S 477.795.046.66
4,471 284,185
$ 463,200.24 £ 39,816,253.89

Humber
Amount
321.765 $ 8, 487, 591.93
287.936
8, 400, 498.07
374,743
10,719,458.05
358.218
U . 740.398 .31
313.372
10 , 712 , 449.63
278,460
8. 690. 799.90
253.853
1 0.88 1 , 168.56
280,258
11.223,747.08
349,905
1 3,10 6 , 157.68
455,935
17,489,848.18
460,610
1 7 , 313, 002.78
469.683
18.177.275.56
4,204,738 *146.942,395.73
350,395
* 12,245.199.64

‘i'tf-UI GITT CLKASIfiilgS M lOU G H

J^SaEVK BANK

U im t* SKW1WGS TO OTW & BgSeftVl, bAHKS
BY UUR iftUflSB BANKS loib and

OF KiarifeiAPOLIS FOK lS'Sb find

Month

January
February

March
April

May

June

July
Au^sust
September
October

November
December

Amount of Items Amount of Items
on Mpls. i3anks on St, Paul JSics*
$132,034, 350.05
109. 227. 730.95
145,928,289.62
150,216,478.43
153.273.728.22
179.823.180,10
188. 501.169.23
195. 949.0b6.27
176,683, 749.18
194.435. 238.04
171.71b.579. 72
185. 703. 554.05

^9 ,82 7 ,1 25.21
55.502,823.67
73.647.597.07
72,976,155.62
69,071,046.55
83. 910, 651.15
84.099,281.17
81,614,167.48
81. 332, 294.05
89, 844,254.76
82,150,011.82
93,41b,375.33

Total . f . L,983.493,113. 8b

?©rage by
Months'

Grand Total
1936
$201, 861, 1475.26
164,730,554.62
219.575.886.69
223. 192,634.05
222,31P4.774.77
263,733.831.25
272, 600,450.40
277. 563,233.75
258,01b,043.23
284,279,492.80
253.906,591.54
279.U 9 .929.38

$2,920,924,897.74
$937,431,783.88

$165,291,092.99

57s.li 9. 3i 5.32

$243,410,408.15

Grand Total

Daily Average Amount
Clearinga
Held Over

___ i 2 g „
4il?7.83i.390.97
1 oO .613 j375.28

198.930,315.52
215.23S.760.31
224,419,946.98
218,710,283.23

248,491 , 950.07
238, 090, 203.73
260, 697, 336.90
270. 976. 859.70
231,084,0(54.34
223,145,116.60

- M a .....
$155,428.27
148,535,30
164, 556.35
172. 427.62
182,171.12
155. 518.88
1 76. 502.62
132.359.86
198,633.68
184.765.99

188, 827.53

182,960.25

122l .

A231

IM l
122L
_12&

97.She $29, 859, 207.28 $28,256,328.44
25*068,066.21 21,260,006.01
85,069
122 698.20 109,968 95.3)6 3 3 . 5 3 0 , 1 0 4 . 2 1 29.053.414.02
146,425.53 110,568
99.001 35, 221, 233.42 28,428,544.64
136,923.79 109.206 103.853 2 8 . 7 9 9 . 5 3 4 . 0 0 35<092,^13.04
W 2 . 599.TO 119.899 101,421
3 3 . 7 1 0 , 2 7 3 . >« 27.823,209.58
4 o ,l i t , 557.71 32.886,733.19
138,452.5a 121.096 103,183
134, 128.23 113,231 100,981
34, 345. ^ 6.71 28, 252. 619.06
187.404.58 114.990
98,495 35.23 6 ,7 /3.4 7 35.**83, 536.34
178.769.51 131.100 115.417 4 0 , 1 4 6 , 9 7 1 . 9 1 37.300,775-64
188. 939.67 117.1?* 105.187 3 2 , 9 3 1 , 6 4 2 . 2 0 28, 894, 339.17
179.610.51 141,040 115.872 3 5 . 8 5 ^ . 4 0 3 - 8 8 32.476,264.^99

#105,084,68
123.358.88

U9.192
94,404

S2.o42. 8B7.47
1, 401,848
$407, 615, 016.48
$2, 6b6, 233,b03.63
$1,784,395.79
1.220.9J3
$365,208,184.12
$222, 351, 966^97

^170.240.62

5148. 699.65

116,820 101,744 $33,984,584.70 $30, 434,015.34

COMPAKATIYIS FICftJifoS FQK TRANSIT JGU^a R T O M

BY MONTHS
Daily Average Number
of Transit Letters
received

J&L
January
February
fctarch
April
Stey
June
July
August
September
October
November
December
Average by
Months

1.271*
1.236
1.259
1.29b
1.21*2
1 , 29>*
1,27^
1.258
1.232
1.257
1.315
1.217

i m
1.179

1,236
1.22U
1.271
1,260
1.191
1,186

1,168
1.3C*
1.2t>5
1,327
h iE .

Daily Average Number
of Transit Letters
sent

1226

1221

849
825
sso
843
840

852

8b2
879

869
850
844
841
83^

860
856
837
834
&bj

862
869
902
899
894
882

Daily Average All
Other Items
sent

Daily Average Number
of Return Items
Handled

1226

Jt22i

83.679
SO. 751
89*276
94,801
92.022
105, 36s
99.656
90,191
95,486
100,057
111,412
104,596

MINNEAPOLIS ONLt

78,296
Sb 1220
79.^24
88,694
86,762
8 3 >7&9
80,599
73.515
83.019
5b, 863
93.998
98*721

77^
658
717

782

822
832
820

768
854
837
960
875

1225.
715

728

682
751
777
811
892
827
849

852
869
848

Daily Average
Transit Items
sent direct by our
’.'ember Banks

1225.

132L
4*584
4,104
4.230
4,422

3 .7 ^
3,867
3.662
3.960
3.99^
M 57
3,968
3.7**0
4,104

4,368
4,611
4,658
>*.355

4,600

4.856
5.324
5,424

^275

4,383
•

1»263

1.245

Daily Average Clear
ing Items Returned
Unpaid

851

Daily Average Clear
ing Items Missent

January
February
March
April
{.Say
June
July
August
September
October
November
December

21
26
21
25
19
20
19
19
15
19
22
24

22
20
23
20
22
23
22
22

16
20
13
19
20
19
18
16
16
16

Average by
Months

24
25
19
19

866

16
18

18
15

95.608

84,990

Daily Average Out-ofTown Items Missent

808

Daily Average Number of
Drafts Received in Other
Than Twin City Exchange

22
22
21
20
18
21

20
3^
25
27
30
28
25
24

21
22
22
28
27
21
25
17
22
17
13
16

139
122
145
13S
142
136
130
135
132
127
126
117

132

21
28
24
19

15
13
25
31

800

4,628

4,032

Daily Average
Number of
Employees

156
158
151
150
150
148
142

69c10
69,57
71.97
69.68
67.29
68*67
7?.53
70,27
67.25
64.84
69.56
70.36

76.52
75.91
65.35
58.31
59.^3

l4s

69.25

66.00

139
146
147
144
146

60.61
64*84
64*70
65.03
6lc97
67.06
71.56

BOH-CASH COLLECTIOH FOKOflQH
(Minneapolis Only)
The volume of noa-cash collection Items handled daring 1936 shoved a substantlal decrease oyer the previous year.

Most of the decrease ooeorred In city

collections and was the result of drouth conditions in the territory served and the
elevator strike in Minneapolis which caused a drop in the number of grain drafts
handled*

From September 1, 1936, until the end of the year, we handled 225,000

fewer grain drafts than during the same period of 1935.

For the entire year we

handled 632,713 items payable in Minneapolis, including grain drafts, as compared
* •
,
•
to 748,488 collections in the previous year, a decrease of l i d ,775 items. The
i*

value of city items handled in 1936 was $255,632,000 as compared to $226,796,000
in the previous year, an increase of approximately $28,836,000.
Country collection items handled increased from 64,206 in 1935 to 72,831
during the past year, an increase of 6,625 items.

The value of these items in

creased from $43,212,000 in 1935 to $48,271,000 in 1936, an increase of approximate-'
ly $5,059,000*
Coupon and security collections (other than TJ,S*Government coupons and
securities) numbered 48,229 collections valued at $47,326,000, as compared to
53,379 items valued at $34,488,000 handled in 1935$ a decrease of 5,150 items and
an Increase of $12,838,000 in amount.
Member banks forwarded 7,026 collections totaling $16,245,000 direct to
other Federal Reserve Banks for their credit with us during 1936, and 4,817 items
totaling $14,997,000 during 1935.
OOMPABISOK OP SOMBER OF ITEMS BSCBIYED FOB COLLECTION

1936
46,911
33,228
49,027
48,495
51,424
48,872
51,436
93,667
60,364
42,407
41.147

1935
29,140
27,942
29,285
33,074
36*891
33,743
40.114
83,476
150,348
141,172
81,644
61.659

632,713

748,488

January
February
March
April
May
J'one
July
August
September
October
November
December
Total

Amount (000) omitted
1936
$255*682
226,796
1935

1936
5,630
4,919
5,757
5,943
5,506
6,431
6,026
6,347
6,431
7,326
6,163
_____6,352
72,831

1935
4,415
4,491
4,572
4,443
4,524
4,733
4,771
5,085
6,591
7,563
6,840
6.178

1936
4,3 14
3,051
4,169
3,898
4,006
5,933
3,795
3,042
3,549
3,626
3,558
5.288

64,206

48,229

$48,271
43,212

_____ 19L35.....
r
4,292
3,380
4,093
4,367
4,228
6,227
4,100
4,968
3,912
3,742
3,920
S. 150______
53,379

$47,326
34,488

sscoRm Ks - s a fek eb piks
(Minneapolis Only)

Securities held in our custody for safekeeping end for collateral pur
poses, exclusive of unissued stock held for the Treasury Department and other
Governmental Agencies, reached a new high total of $426,671,8560 80 on November 5,
1936.

The figures at the close of 1936 showed an increase of $43,429,157,95 com

pared to the close of 1935, as indicated in the statement shown at the bottom of
this page*
The total (Government and miscellaneous securities held in safekeeping

for our member banks increased $57,400,000, while the total of pledged securities
went up $3,700,000.

The increase of $J.*«522300Q over last yearfls total of U» S.

Savings Bonds held for individuals, firms, corporations, and non-member banks,
indicates the increased demand for that type of investment0
The decrease in the total held for the Reconstruction Finance Corpora
tion was caused principally by the retirement of preferred stock previously
purchased by them from banks; shile the decrease of securities held for the Public
Works Administration represents resale of holdings purchased from various munici
palities, school districts, etc-, offered to the public and sold to the highest
bidder through the Eeconstrixc ;ion Finance Corporation*
In 1936 we received 109,720 pieces compared to 121,028 in 1935, and
delivered 90,865 pieces compared to 113,028 delivered the previous year.

The

number of coupons clipped last year was 283,000 as compared to 281,687 the year
before*
COMPARATIVE STATEMENT OF SECURITIES HELD
DECEMBER 31, 1936 and 1935
Dec, 31. 1936
Government and Miscellaneous securities held
in safekeeping for members;
/$2 8 5,987,444„70
Sec.ir ties pledged to secure public deposits*
78,684,377.03
U*S.Savings bonds held for individuals, firms,
corporations, and non-member banks:
^ 1 ,8 7 4 ,4 0 0 .0 0
Securities held for U„S*Govts officials;
/ 8 , 4 9 8 , 000,00
”.
m w
public Works Administrations / 2,220,147.00
“
«
o Reconstruction Finance C o r p . ,119,968,72
Collateral to. War Loan Deposits;
/ 4,080,850.00
Collateral to Discounts, Rediscounts and
Industrial advances
^ 353,829*50

$416,819,016.95

Dec, 31. 1935

$228,536,560.00
74,956,545.00
552,000-00
13,578,000-00
2,845,259.60
48,270,157.00
4,314,250.00
337,088.00
$373,389,859 *00

CURRENCY AMD COIN
(Minneapolis Only)
t h e t a b le g iv e n below shows t h e volume o p currency t r a n sac tio n s and s h ip p in g chahqes

ABSORBED FOR THE TEAR 1936 AS COMPAREDTO THE YEAHS 1935 AND 1934.

TWIN CITY MEMBER BANKS;
g W e n c y received by, us:

1936

1935.

1934

$107*885,645
3,429

$101,627*345
3,47jl

$109,709,600
1,480

$ 99,541,377
1,463

Amount*............. ........... ................ $ 57,466,666
Number of their shipments..........
11,745

$ 69,089,530
13,585

$ 55,633,742
18,213

Shipping charges absorbed.........$ 25,7X1*60

Amount............ .......... ...................$ 94,906,022
Vumbj- of our shipments..............
23,311

$ 77,313,796
21*796

$ 78,315,698
23,143

Amount of our shipping costs..* $ 22*063.81

19,?60«39

21,016*80

2,471,279
1,850

2,596,055
1,927

2,220,258
1,634

4*938,11

5,013.60

3,608*86

2,966,121
7,667

2,810,392
7,506

3,319,298
8,003

6,4 99 .25

6,809.96

7,621.35

Amount............................................ $109,750*002
Humber of their shipments..........
3,447
Currency delivered by us:
toom t..'........... *-- *....... .......... $119,627*300
Number of our shipments,..........
1,613

Currency received by us:

24,820*09

34,$61*33

COIN RECEIVED BY US FROM MEMBER
m

ts * ,_________

Amount................................................ $
Number of shipments*...........
Shipping charges absorbed.. * . . . * . $
COIN SHIPPED BY US TO W SBtR
AND NON-MEMBER BANKS;
Amount................................................$
Number of shipment s . ...... ..........
Shipping charges absorbed*. . . . . . .

THE FOLLOWING TABLE SHOWS THE NUMBER OF NOTES RECEIVED AND SORTED, AND A C0I/PABISQN
OF THE EXPENSES FOR SPECIFIED PERIOD,
1936

j?g5

Receiving and Sorting Costs

$ 21,088*00

Average number of receiving
tellers and sorters

12*99

Number of notes received and counted

45,696,000

Average number of hotee sorted dally
by each employee

11*610

Our average corrency receiving end
sorting costs per each 1000 notes

4?M

23,430-00

1934
$

25,230.00

14,05 •

15*56

42,814*000

41,015,000

10*057

8,712

55#

62£

&JR32FCY AND COIK

(Contd)

THE TOlimiKO SCHEDULE SHOWS THE AJ/OUKT OF 00IKS RECEIVED AND COMPARISON 0?
.______________________ THB EXPENSES FOR THE SPECIFIED PERIODS. _ ________ .________
1936
Salaries and Supplies

$ 6,359.99

$ 7,719.09

$ 5,507.00

2.27

3*37

2.21

Average number of coin tellers
Humber of coins received and sorted

1934

18,290,610

18,133,000

13,643,000

26,592

21,304

20,442

Average number of coins handled
by each employee dally
Unit cost per 1000 coins

The latest available comparative

35#

43*

40?

operating expense figures of the

Federal Reserve Bank Head Offices (first half of 1936) indicate that the
average cost for the system for sorting each 1,000 notes was 521 as compared
to our oost of 414 for the last half of 1936, and that the system* s average
notes sorted daily per employee m s 10,600 as compared to our latest average
of 13,141*

From January I , 1934 to July 1, 1936, the highest average number of

notes sorted dally during any semi-annual period for any one of the Federal
Reserve banks amounted to 13,513 per employee.
The reduction in our cost and the Increased daily volume sorted by
our currency sorters were accomplished through the elimination of the re*»
handling of a large volume of currency (by discontinuance of the oroof count
of notes of lower denomination); lengthening tne Forking hours; Improving
working facilities; and adjusting salaries of sorters on the basis of their
efficiency*

Incidentally, as a result of such salary adjustments, the average

salaries paid Increased slightly*
Our currency sorting machines have been in service for ten years.
Due to their present worn condition, it rill be necessary to moke replace
ments*

Kew equipment should be a factor in further decreasing the sorting

costs.
The total cost of the Currency and Coin function for 1936 was $103,504
as compared to tne 1935 cost of $104,460*

The 1936 cost includes tne absorption

by us of $61,225 in shipping charges on currency and coin es compared to $58»2?Q
in 1935.

The 1936 total expense includes *13,252 of o^wte Iwddent to retiring

unfit currency from circulation and the expense of preparing currency shipments
to member banks, and in 1935 such costs were $13,832*

COBBEHCT ABB COIK
NUMBER AND AMOUNT OP CURRENCY SHIPMENTS RECEIVED PROM AND
SHIPPED TO MEMBER AMD HOR-UEMBER BANKS BT WOHTBS 1936
(Minneapolis Only)
CURRENCY RECEIPTS
City Member Banks
Number
Amount
Shipments
January
Pebruaxy
March
April
May
June
July
August
September
October
November
December
Total

018
264
292
281
270
267
283
285
278
290
335
, 284
3,447

Qtoar Member apd
Non-Mgnber. Bank*
Humber
^Mtsuents

Amount

9,117,700
7,263*200
8,397,150
8,916,900
9,157,600
8,668,660
9,236,859
8,438,291
10,024,169
10,526,412
8,884,371
11.11$J390

1,072
651
741
967
989
961
859
1,082
1,087
1,188
888
J .B 6 0

$109,750,002

11,745

$ 67,466,666

4,872,435
2,499,121
2,992*890
4,308,300
4,743,300
4,463,759
7,571,481
5,691,564
8,499,651
5,278,492
3,406,550

CURRENCY SHIPMENTS

City Member Banks
Number
Shipments
Amount
January
Pebruary
March
April
May
Jude
July
August
September
October
November
December
Total

114
110
128
126
125
150
119
140
120
134
104
143
1,513

Other Member and
Non-Member Banks
Number
Amount
g&inments

8,284,000
9,093,000
9,208,500
9,325,500
10,041,000
11,855,000
8,987,000
11,264,000
9,570,000
11,232,000
9,543,200
liJ B L J t t l

1,220
1,372
1,955
1,870
1*86?
2,696
1,786
2,393
1,981
2,040
1,916

4,006,044
6,052,200
6,859,216
6,718,921
6,413,834
13,606,459
6,515,648
9,992,419
8,068,088
9,131,168
8,128,902
— Sti i $ * .m

$119,627,300

23,311

$ 94,906,022

COIN SHIPMENTS
Member and
Non-Member Banks

W ® RECEIPTS
Member and
Non-Member Banks
Number
Shipments
January
Pebroary
March
April
May
June
July
August
September
October
November
December
Total

Amount

249
120
99
129
140
135
194
164
195
159
110
1^6

1,850

Humber
Shitjments

418,392
151,090
139,33?
119,292
198,945
165,823
235,824
243,383
226,342
211,016
151,090
210,745

212
268
494
572
645
939
913
932
748
697
611
636

2,471,299

7,667

Amount
$

83,939
156,130
190,000
220,591
241,383
349,812
328,554
357,359
304,633
250,056
237,403
246.261

2,966,121

FEDERAL HESK3VE NOYES

All time highs in note circulation were continually established during

•t

the last half of 1936, with each month from August on showing Increased volume.
At the close of the year the Agent’ s records showed $142,110,000 as the total
amount outstanding.

As the tellers were holding $6,014,000 of our notes, the n8t

circulation of our institution was $136f096,p00«

After a Bmall contraction during

the first two months of 1936, there was only slight Increase in demand until June*
»wfcien large withdrawals of currency were made In anticipation of bonus payments.
For that reason, the net increase of nearly $8,000,000 in circulation «as the largest
of any month in 1936.

The total outstanding remained practically the same in July,

after ?&lch the increase was steady until the close of the year#
In analysing our issue over the period of our existence, we find only two
years in which greater amounts of notes were withdrawn from the Agent than during
1935,

These years were 1929 ?&en the change was being made from the large sise note

to the smaller note, and 1933 when there was a very heavy demand prior to and after
the banking holiday.

But for the fact that we had a*supply of legal 5*s on hand,

and 'ahich we paid out, our issue in 1936 uould have exceeded $60,000,000.
Of the $58,050,000 Issued to the Bank in 1936 by the Agent, $51,410,000
consisted of new notes and $6,640,000 of notee previously circulated.

In thie

connection it might be stated that during the past two years, fit notes to the
amount of $8,615,000 were retired to the Agent and $16,302,000 withdrawn, leaving
no unused notes in the custody of the Agent except in denominations of 50 *s and
higher.

Another feature of our issue was that no new notee other than 10*8 and

20 *8 were requlstoned by the Bank in 1935 and only $2,210,000 of other denomina
tions of new notes.in 1936.

Thus we find that 9 7.3$ of all the new notes leeued in

the past two years has been in 10*s and 2 0 4*,

During the latter part of 1936 we

took $800,000 of new 5«s and $1,575,000 of f U —for-uae 5 9s from the Agent or 4.09#
of the total issue of the year, with 10*e representing 49.63# and 2 0 fs 37.69#«
The destruction of notes during the year, has been such that although the net gain
in notes outstanding has been nearly $27,000,000, there are $103,000 less 5 fs out
standing than one year ag$t

This would indicate that legal 5 4s and silver certifi

cates are being supplied in sufficient volume to allow us to continue curtailing
our o m 5 3s.

FEDERAL RESERVE KOTES

(Contd)

Some years ago there mas a elope relationship between the amount of
silver certificates and legal tender notee we eent in for redemption, and the
amount of new notes of like kind forwarded us by the Treasury.

this has not been true.

Of late years

During 1936 we paid out silver certificate 5*s to the

amount of $6,420,000 and legal 5°s to the amount of $9,080,000.

Shipments of

silver certificate 1 °e aggregating $16,700,000 were also obtained from the
Treasury Department *
The volume of our notes in circulation should be some indication of
an increase in the amount of notes destroyed*

In 1926 our notes destroyed

amounted to $29,248,290 which was £929,000 less than the amount destroyed In 1935.
There can hardly be any doubt but that the destruction schedule in 1937 will show
a decided increase.

Xn connection with the retirement of our notes, we might men

tion that $388,785 of the old large sise notes, issue of which stopped In 1929,
were destroyed during the year, leaving $2,898,170 still outstanding*
On December 31, 1936, the Agent had on hand at Minneapolis $56,810,000
of new notes and $7*590,000 of fit~for~use notes*

Of the new notes $41,000,000

was in the 1928 series not being issued by request of the Treasury Department*
Besides the 1928 series notes held at Minneapolis $104,160,000 of the same series,
printed and paid for, is held at Washington*

Out of the total of $145,160*000

in 1928 series notes $50,460,000 Is in S ’ a, 1 0 *s and 20*s.

The replacement of

these notes of the smaller denominations, without cost to us, by notes of the 1934
series, would give us $115,000,000 or a two year»s supply based on present demand*
Note printing costs in 1936 were $44,105.10 to v&ich should be added
$13,720*56 of shipping charges and surcharges* making a total of $57,825*66.
July 1, the printing cost w&b advanced from $86*00 to $93*50 per 1*000 sheets.
estimate for note expense in 1936 was $38,000*

After
Our

The Budget estimate for note costs

in 1937 is $32,000, but there is no certainty these costs will be much lower than
in 1933*

6 5

S H B fe B M H lt

.REGEiYm.Agj).,,issgaj) by ,assbt pgRiNft, 1936

IN HA303S OP AGENT DECEMBER 31. 1935

NEW
Fives
Tens
Twenties
Fifties
Hundreds
Five Hundreds
Thousands
Total

FIT-FOR-USE

$ 6 , 200,000

1,410,000
0
0
2.575.000
5.900.000
' 865.000
„J U 4 .g 5 ,0 0 0
$ 12.175.000

7,610,000
3.880.000
4,000,000
14.975.000
15.900.000
7.065.000
- - ita a iSR
$ 60.255,000

RECEIVED FROM
*COBgTRQLItSR

RETURNED BT
BANK
F1T-F01MJS3S

TOTAL
RECEIVED

3.830.000
4.000.000
12.400.000

10 000,000

6.200.000
___ fajQBiffift
$ 48,080,000

EEW

Fives
Tens
Twenties
Fifties
Hundreds
Five Hundreds
Thousands
Total

TOTAL

5,000,000
28.800.000
22,640,000

1 000.000

165,000
810,000
680,000

1 ,200,000

200,000
200,000

1.200,000
500,000
1.000.000
$ 60,140,000

5,165,000
29.610.000
23.320.000

1,400,000
500,000

0
0
2,055,666

__ i.«afloJjaaa
$ 62,195,000

ISSUED TO BANK
NEW
Five*
Tens
Twenties
Fifties
Hundreds
Five Hundreds
Thousands
Total

800,000
28,000,000

21 ,200,000

450.000
960.000
0
_______ ,0
$ 51,410,000

FIT-FOR-USB

TOTAL

1,575,000
810,000
680,000
875.000
1,750,000
250.000
______700,000
$ 6,640,000

2,375,000
28,810,000
21,880,000
1.325.000
2.710.000
250.000
700.000
$ 58.050,000

IN HANDS OF AGENT DECEMBER 31. 1936
NEW
Fives
Tens
Twenties
Fifties
Hundreds
Five Hundreds
Thousands
Total

$ 10,400,000
4.680.000
5.440.000
12.950.000
10.240.000
6.700.000
6.400.000
$ 56.810,000

FIT-»FOR**USE

TOTAL

0
0
0
1.900.000
4.350.000
615,000
„ - J g 5 ,0 0 0
$ 7,590,000

$ 10,400,000
4.680.000
5.440.000
14.850.000
14.590.000
7.315.000
_______1

RATIO OF ISSUE BY DENOMINATIONS
1936
Fives
Tens
Twenties
Fifties
Hundreds
Five Hundreds
Thousands

4.09
49.63
37.69
2.28
4,67
,43 .
1.21
100.00#

1935

1934

1933

1932

1.47
51.66
38.76
2*02
3.79
.76
1*54
100.00#

25*27
40.25
32.31
.72
1.24
0

18*90
30.05
26.26
5.94
12.31
2.05
^ s.49
100.00#

16.13
30.09
32.81
3.46
12.59
1.29
3.63
100*00#

100.00#

* 1

* 0

$ 64,400,000

m m m m m

issued to bahk

COMPARATIVE BY MONTHS 1936-1952
1936

1834

122§

January
$ 1,190,000
8,540,000
February
UbX & l
4,185,000
April
3*795,000
2,100,000
May
10,505,000
Jus®
4,275*000
July
5,930,000
Aagoat
3,680,000
September
5,330,000
October
Hoveabar
6,260,000
-6.260.000
December
Total for
Year
$58,000,000

1932

1222

$ 1,000,000
3,770,000
1,984,000
2,688,000
2,550,000
2,300,000
X ,625,000
4 S470,000
6 s380,000
4,660,000
4,325,000
6 ,U 0 .0 p 0

$ 3,176,000
$ 5,386,000
4,430,000
1,940,000
2,640,000
2,360,000
4,780,000
8,060,000
5,250,000
3,180,000
3,215,000
3.985.000

$ 3,980,000
12,590,000
36,186,000
1,680,000
1,170,000
2,160,000
4,790,000
4,100,000
7,205,000
1,940,000
1,700,000
5 .1 65 .pOO

$ 5,680,000
3,268,600
4,210,000
7,340,000
7,830,000
4,735,000
7,260,000
2,070,000
4,160,000
3,010,000
2,200,000
4.251.500

$40*862,000

$48,400,000

$81,665,000

$55,905,000

m H A l RESERVE K0TSS DBSgBOYBD AT
WASHXHGEOU
CQMPASMIVB BY MONTHS 1936-32
•

1935

Jasaary
$ 2,928,505
1,568,905
February
2,378,850
Marefo
4pm
2,069,250
2,629,000'
May
2,338,650
ttmo
2,390,050
July
2,352,650
Angust
September
2,591,180
October
2,702,650
2,967,950
ftoYembe?
December
2 .4 4 0 .4 8 )
Total for
$29,343,290
Year

1933

$ 2,820,050
2,038,050
2,357,250
2,326,850
2,640,200
2,237,650
2,894,800
2*282,275
2,754,400
2,833,050
2,671,650
r 2,32l,550

$ 1,969,650
2,532,360
2,503,550
3,172,550
3,120,000
2,497,150
2,930,250
2,157,950
2,604,450
2,872,980
2,674,200
3.432*850

$ 1,763,650
1,178,300
1,107,100
1,540,410
2,451,100
1,513,050
1,990,250
2,769,400
1,854,350
2,598,500
2,463,800
2.129*550

$ 1,636,560
1,189,000
1,569,950
1,447,345
2,025,050
1,419,260
1,579,850
1,970,500
1,511,500
2,281,500
1,671,150
1.593*175

$30,277,775

$31,467,940

$23,359,460

$19,894,830

FEDERAL HE SERVE NOTES ISSUED AND
agsgafftB). j a m

1914
1916
1916
1917
1918
1919
1920
1921
1922
1923
1924
1925
1926
1927
1928
1929
1930
1931
1932
1933
1934
1935
1936
TOEM.

Issued to

destroyed at

Ban*

MtfflgSflft-

260,000
$
13,742,000
9,880,000
42,230,000
87,140,000
39,990,000
39,460,000
39,266,000
43,360,000
40,206,000
52,030,000
44,330,600
46,702,000
36,694,500
40,015,000
73,754,000
39,052,000
42,180,000
56,906,000
81,666,000
48,400,000
40,862,000
58,050,000

0
0
895,956
8,988,096
9,421,640
36,771,806
40,766,786
49,748,680
32,784,220
27,320,320
28,173,396
30,108,365
31,836,960
23,970,336
26,8081036
55,134,960
43,217,265
19,595,996
19 894,830
23,359,460
31,467,940
301277,775
29,348,290

$985,162,000

$ 599,889,985

HEISSlB..MD.PE^.HUg
SINCffi, pm HIBg,OF BABK fi.SJ

Received from
Comptroller t
r

Tens
Twenties
Fifties
Hundreds.
.
Five Hundreds
Thousands
Total

____

267.560.000
_
240.640,000
2 8 .8 0 0 .( m
______ 42.4Q0.000
__________ 1 1 , 4 0 0 ^ 0
14.300.000
$806,400,000

Returned to
Agent by bank

.... — .

,
_
.

HYVI....
80.150.000
82.700*000
9.965.000
17,935,000
2*944,000
7.668.000
$243,162,000

Total
*t
f
,,,
347.71Q.000
323.340.000
38.765.000
.
60.. 335,000
14.344.000
.
21,868.000
$1,049,562,000

ISSUED TO BANK
New

Ten$
Twenties
Fifties
Hundreds
Five Hundreds
Thousands
Total

262.880.000
235.200.000
_ _
.
15.860.000
............._ 32.160.000
,
4.700,000
7.800.000

Fit-For-Use

^otal

80.150,000 _
82.700.000
8.065.000
13.685,000
.
2.329.000
....... ..... 6,943^000......

343.030.000
317.90p.000
23.915,000
45.745.000
7,029,000
14.743.000

1)749,590,000

$236,572,000

$985,162,000

DESTROYED AT WASHINGTON
Returned
By A^ent
$4,260,000
?lT«e._______
Tens...................... ...... <,545,000
Tweutieq
1.020.000
Fifties
25.000
Hundreds.
_...... 30,000
Five Hundreds
________ 0 -...
______
0 ......
Thousands
Total

Returned by
Treasurer
$4,518,285
5.877,410
6.662.420
506.950
967.600
126.500
215.000

$7,880,000 $17,874,165

Returned by Returned by other
Minneapolis Fed.Res.Banks
$97,333,900 $80,069,530
108.424.000 92.517,040
77.645.600 89.713.500
5.435.000
3.781.950
7.960.000
6.0 05 .30 0 .....
1,494.500
790.500
1.033.000
1.932.000

$300,225,000$273,910,820

In hands of Agent
December 31. 1936

Fives
Tens
Twenties
Fifties ......... ,
Hundreds
Five Hundreds
Thousand*............
Total

Total

$186,181,715
209,363.450
174.041.520
9.748.900
14.962.900
2.411.500
3.180.000
$599,889,985

Outstanding
.31. W 6

______ $ 4.818.285
$10,400,000
4.680.000
... __53.61_6.550
61.158.48Q
5,440,000
_
4.201.100
.......
.... ........... 14,850.000_______
........ ,
. 14.590.000....
......
- 12.847.100
.......
7.316.000
1.673.500
3.895.000............
... ... ...................................... _________

*64,400.000

$148,110,016

RESEHVB POSITION

Total reserves amounted to $184,211,000 on December 31, 1936, and the
ratio of reserves to deposit and federal Reserve note liabilities combined, m s
68*2% compared to 66.8<£ at the close of 1985, when the total reserves amounted to
$145,513,000,

The principal changes in our reserve position during this period

were an increase in reserves of $38,698,000 and an increase of $14,582,000 In our
holdings -of bills and securities, offset by en increase of $26,684,000 in total
*i
•
deposits and an increase of $25,534,000 in the amount of Federal Heserve notes in
actual circulation.
Member bank reserve requirements were increased 50# effective August 16,
1936,

by order of the Board of Governors of the Federal Reserve System.

This ao*

tion m s taken to sterilize escess reserves rather then to increase deposits In the
Heserve banks.

Total reserve balances of member banks in our District fluctuated

widely during the year*

On December 31, 1935, the total m s $96,228,000 and

reached the high point of $135,330,000 on March 9, 1936, dropped to a low of
$72,036,000 on May 4, 1936, then showsd a gradual Increase with average dally bal
ances ranging from $116,000,000 to $126,000,000 throughout the last half of the
year.

Treasury financing has a material effect on member bank reserve balances.

When new issues of United States Government securities are sold and the Treasurer*b
deposits increased, funds are withdrawn from the member banks to pay for securities;
as the Treasurer spends the money the funds are again deposited In the banks.

is apparent too, that there has been a tendency to reduce duplication of bank de
posits by transferring fundB from correspondent banks to the Reserve Bank.
Our Federal Heserve notes In actual circulation amounted to $110,562,500
on December 31, 1935.

There m s some contraction during the first part of the year,

followed by a gradual increase to meet the requirements of advancing prices and in^
creased business activities, with a total of $135,096,365 In circulation at the
close of the year.

In addition to the notes In circulation, notes on hand and for

warded for redemption amounted to $6,013,650, making a total of $142,110,015 out
standing.

The collateral pledged with our Federal Heserve Agent to secure outstand

ing notes consisted of $3,000 in eligible paper, $15,000,000 of United States
Government securities and a balance of $128,000,000 in the gold certificate fond
held by the Treasury Department for account of our Agent.
The changes in our earning assets affecting the reserve position are ex
plained in the comments on earnings.

DAILY AVERAGE MEMBER BASK RBSERVE BALANCE BY MONTHS
Mlnneapolie end Helena Combined

1936
January
February
March
April
May
June
July
August
September
October
November
December

1935

110.492.000
121.900.000
116.064.000
82.400.000
85.831.000
92.500.000
116.034.000
125.423.000
124.882.000
116.568.000
126.288.000
124,291,000

$ 103,039,000
99.008.000
100*891,000
96.262.000
101.567.000
112.969.000
118.338.000
115.134.000
104.947.000
106.020.000
108.227.000
104.226.000

Daily average member bank balances, Minneapolis and Helena 1936
»t
b
u
«
ii
ii
m u
1935
it

1934

X933

1932

$ 111,906,000
105,945,000
78.323.000
47.306.000
40.094.000

MEMBER BASK RESERVE BALANCE FLUCTUATIONS
LOW

Minneapolis 0niy»Marcft 9, 1936
Helena Only
November 28,1936
Combined
March 9, 1936
Combined
July 10,1935

$121*126,447
20,095,038
135,330,412
129,455,360

Minneapolis Only-May 4,1936
Helena Only
June 1,1936
Combined
May 4,1936
Combined
May 2,1935

$ 60,623,919
9,835,635
72.036,209
86,453,913

COMPARISON OP MEMBER AND NON-MEMBER BANK BALANCES
AS OF DECEMBER 31. 19S6-1Q8S-1934>1933~1932
(Thousands only 000 omitted)

1936
Michigan
Minnesota
Montana
North Dakota
South Dakota
Wisconsin

1935

1934

1933

1932

$ 5,146
80,885
15,876
5,175
9,578
3,871

$ 3,485
58,772
17,068
6,137
7,297
3,469

$ 3,403
68,750
11,121
3,893
6,869
3,385

$ 3,635
43,404
7,160
3,398
3,613
3,120

$ 2,019
23,289
5,521
2,175
2,490
2,266

$120,531

$96,228

$97,421

$64,330

$37,760

DEFICIENT RESERVE PENALTIES

Total penalties for 1936
STaatber of banks penalised
Maximum penalty rate

Minneapolis
1936________

Helena
1936

Combined
1936

Combined
1935-6

$320,18
47
4#

$ 30.11
4
4$

$ 350.29
51
4$

$ 394.19
37
&f>

mflSPER AHD CODS DEFAfffraiT
(Minneapoli • Only)

The Transfer Department handled 20,306 transfers amounting to
$1,719,291,000 during 1936, as compared to 22,844 transfers totaling $1,443,484,000
in 1955.

This represents a decrease of 2,538 transactions, hut an increase in

amount of $275,807,000 as compared to 1935*
The retirement of national Bank Note circulation during 1935 resulted in
the die continuance of Five Per Cent Redemption Fund transfers in June, 2,830 of
such transfers totaling $2,249,000 being handled in 1935*
The number and amount of incoming and outgoing wire transfers handled
during the years 1936, 1935, 1934, 1933 and 1932 were as follows;

Year

Outgoing Wire Transfers
Amount
Number

1936
1935
1934
1933
1932

6,111
5,666
5,332
6,184
7,424

Incoming Wire Transfers
Number
Amount

$ 370,723,000
344,724,000
268,776,000
420,027,000
416,578,000

6,624
5,870
6,723
9,461
10,567

$ 914,381,000
724,422,000
758,917,000
967,900,000
824,915,000

Messages coded and decoded during 1936 other than transfers were 18,390
as compared to 18,713 in 1935*

TELEGBAPH PKIT
(Minneapolis Only)

During 1936 we sent 468,939 words over the Federal Reserve System leased
wires and during 1935, 525,980 words.

The System leased wire between Minneapolis

and Chicago was contracted for on a nine hour daily except Sunday basis, January
through September, and the time reduced to an eight hour basis effective October
1, 1936*

Effective January 1, 1937, the leased wire between Minneapolis and

Chicago m s discontinued and Teletypewriter Exchange service substituted.

An es**

timated annual saving to the System of between $4,000 and $5,000 is expected from
this change in service.

AUDITING

The Auditing Department makes periodic audits of all balance sheet
accounts, Fiscal Agency and other operations of the bank subject to audit.

Earn

ings and accruals, other than earnings from participation accounts with the Federal
Heserve Bank of New York, are proved and verified to the control accounts.

The

balances In various participation accounts vith Federal Heserve Bank of New York,
and earnings thereon, as shown by our books, are verified periodically vith the
Auditor of the Hew York Bank,

Expense items are inspected, checked ae to exten

sions, additions and official approval, listed and verified to the expense accounts*
All expense checks are countersigned by the Auditor.,

Bequests for purchases of

equipment or supplies are placed on requisitions and referred to the Auditor for
approval*

No purchase is authorised until the need is established and price con-

sidered satisfactory.

Bills for $500 or more and all bills for alterations to

building must be approved by the Bank9s Discount Committee*

The payroll is audited

currently and any changes from the previous payroll are verified with the personnel
officer*
•

In addition, at intervale the Auditors accompany the Paymaster when pay-

envelopes are distributed, obtain signed receipts from employees and check the re~
*

csipts to the payroll records.

Deductions from salaries for contributions to

Retirement System, group life Insurance, etc,, are proved and checked for proper
disposition of the funds.
Signed receipts are obtained from consignees for all outgoing shipments
of cash and securities.

A duplicate record of registered mall packages delivered

to our bank by the Minneapolis Postoffice, is sent direct to the Auditing Depart**
meat by the Postmaster.

A daily check is made to see that all packages described

on this record have been delivered by our Registered Kail Division to the operating
departments.
The Auditing Department maintains a record of securities deposited with
us for safekeeping or for collateral purposes, and any changes in the accounts are
checked to the records of the Custody Department and to the memorandum control
accounts on the general ledger dally.

Securities delivered from our Fiscal Agency

Division are Checked against the stock records daily*

AUDITIHS

(Cont*d*)

Subscriptions to and allotments of new issues of United States Government
securities are reviewed to see if each subscription was handled in accordance with
Treasury Department regulations and without discrimination, between subscribers*
Payments for new issues alio ted are checked against the credit entries to the Treasur
er of the United States.
All requests received from examiners and other supervising authorities
for verification of noteB or securities held in our custody, reconcilement of
accounts, etc., are handled by the Auditing Department.
An Independent representative of Head Office Auditor is maintained at
Helena Brafich.

In addition to the auditing work conducted by this representative,

a balance sheet audit of the Branch

wrb

conducted by Head Office Auditors as of

September 21, 19365

A 1)

7 3

RETORT 0F BANK AND PUBLIC RgLATlOHS ACTIVITIES
AT FEDERAL RESERVE BARK OF MIHMEAPOliIS
DURING 1936

Eighteen bank officers and other representative8 traveled 112,600 miles
on public relatione work during 1936 at a travel cost of $10,356.08.

They

attended 6 bankers' conventions and 47 other meetings, delivered 30 addresses, and
made 857 visits at member banks and 1,111 visits at aon-member banks in the district.
Practically every bank in the district was visited at least once during the year*
The attendance at showings of the Federal Reserve Bank movie during 1936
was 173,096 people*
The Board of Directors of this bank held their September meeting in
LaCrosse, Wisconsin, and were guests at lunch of the bankers at LaCrosse.
All member and non-member banks were offered the use of any book In our
library without cost except that of the postage involved.

President Peyton wrote

a personal letter to the executive officer of evary bank in the drouth area of
this district, offering the facilities of the Federal Reserve Bank in any possible
way to tide over the difficult situation in prospect,,

loose-leaf binders contain

ing full sets of the regulations of the Board of Governors and the more Important
Circular letters of this bank were sent to all member banks.

The pamphlet

"Father Coughlin vs. The Federal Reserve System," was mailed to a number of bankers
in the district.

Memberships have been purchased in the state Banker *s Associa

tions of the six states in trialch this bank operates,
Twelve issues of the Monthly Review were printed and distributed to a
mailing list which, in December, consisted of 7,736 names.

BAKK EXAMINATION DEPARTMENT

At least one complete examination has been made of each State member
bant of the ninth Federal Heserve District during 1936 by examiners for the Federal
Heserve Bank of Minneapolis.
There are eleven State member banks that are exercising trust powers, and
eleven examinations were conducted of trust departments of State member banks dur
ing 1936 (tea by the trust examiner and one by an examiner) and two examinations of
trust departments of State banks applying for membership.

There are ninety-two

national banks that have full or limited trust powers and flftywthree of those banks
are exercising trust powers*

The trust examiner has not examined the trust depart-

taents of national banks during 1936e

The trust examiner reviews the reports of

trust departments which are attached to the national examiners * reports.

Ninety-

nine such reports were reviewed during the year.
Two applications by a national bank for fiduciary powers were received
during 1936.

The first application was denied and a later application was granted.

Trust powers of five national banks were surrendered during the year.
The examinations by this Department In the various States were as follows:
Michigan . . ......................
Minnesota.............................
Montana* » ..........................
South Dakota......................
Wisconsin, ..........................

7^*^
14
21
26
2
70

Summary of fcwmlnatlom and Special

Examiner
John Carlander
W. J . Stutsman
Ho 0 . McConnell
A* W. Mille
T* H. Hodgson

Examined
for Membershln
1
4
1
2 (a )

Regular
Examinetlons

Special
Visits

Assisted
-1
2
1

Miles
Traveled

8
60
1

3,552
19,624
l e304
310
7,528

10(a)

•
1

«•
-

66
4
3

19,489
1,386
1,334

-.
--1

2
1
80

504
- ?S0
65,781

Assistant Examiner
J* B« Johnson
H. C, Jones
C« J . Larson
Examiners8 Clerk
C« W. Groth
Ao Wlkholm

_r_-„
80

(a) Trust Department examinations*

RAM EXAMINATION DEPARTMENT

(Contd)

Examiner Stutsman and Assistant Examiner Johnson devote practically all
of their time to bank examination work.

Examiner itoConnell spends considerable time

with the Industrial loan Department, and such time has been charged to that function*
Examiner Carlander is Department Office Manager and makes examinations only occasion*
ally.
Exafflinatlpn of Holding Caproanr Affiliates,
No examinations made of holding company affiliates during the year.

How*

ever* Messrs* Thomson and Ford of the Northwest Bancorporation on December 7 re*
quested that we review the application of September 21, 1933 for a voting permit,
and stated that the applicant would submit information tending to show the present
condition of that corporation*

Mr* Paulger's letter of December 4 indicated that

a memorandum prepared on the basis of certain data supplied by the Northwest Ban
corpo ration might form the basis of a memorandum and that a memorandum showing the
condition of the applicant as of September 30, 1936, would be satisfactory to the
Examination Division at Washington,

The Examination Department spent two weeks

compiling information and preparing a memorandum, for shich we received a fee O f /
$548* 19*

No other examinations or reviews of holding company affiliates made dur

ing the year 1936*

STAf a BANK APPLICATIONS FOR MEMBERSHIP - 1936
Five applications were received from State banks in this District for
membership in the Federal Reserve System.

The applications were from the Security

Bank and Trust Company of Owatonna, Owatonna, Minnesota, Com Exchange Savings
Bank, Sioux Falls, South Dakota, The Manistique Bank, Manistique, Michigan, Fnlton
State Bank, Fulton, South Dakota, and Belt Valley Bank, Belt, Montana.

The Security

Bank and Trust Company of Owatonna was examined as of January 13, 1936, the appli
cation was approved by the Board at Washington on March 6, 1936, and membership was
completed as of April 11, 1936.

The Com Exchange SavingB Bank, Sioux Falls, was

examined as of July 20, 1936, the application was approved by the Board at Washing
ton on October 30, 1936, and membership was completed as of November 18, 1936.
Examinations were made of The Manistique Bank, Fulton State Bank, and Belt Valley
Bank, but membership of those banks was not completed as of December 31, 1936.

7 6

BANK EXAMINATION PEPABTMBHT

(Contd)

Stains of Applications for Membership Which Were on Hand December S I .1935.
Total number on hand ...................... . . . . . . . .
Admitted to membership ...............................................
Withdrew application * • • .....................................*

i
0
1

of ACTUcgtlopa f or Membership Becglyefl Paring 1.936
Total number received*

Admitted to membership « ........................................ ...
Incomplete • * . # ............... . * ..................... * » *

2
3n

PgPICS WORK
Beports of Examination of National Banks
Humber of reports received from the Chief National Bank Examiner's Office » . 850
(The oo8t of these reports aggregated $4,350*00 for the calendar year.)
Ninety-six (96) duplicate copies of the reports of examination of Montana
national banks were received from the Chief Examiner's Office, and the cost
of those additional copies aggregated $216.00 for the year*
Reports of Examination of State Member Banks
The number of reports of examination received from the variouB State
Banking Departments in the Ninth District* of State member banks examined inde
pendently by them, was as follows;
Michigan . . . . . . . . .
1
Minnesota. . • * ...............11
Montana* « * • * . « . . «
8
South D akota......................
9
Heports of all examinations made by examiners for the Federal Reserve
Bank of banks In the Ninth District were typewritten in this office*

One copy m s

forwarded to the Board at Washington, one copy retained for our files, one copy
sent to the bank examined, and one copy forwarded to the State Banking Department*
The confidential section 1 b not attached to the copy of the report sent to the bank
nor attached to the oopy sent to the State supervising authorities*

Copies of r»*

ports of examination of all State member banks in Montana are sent to the Helena
Branch*

Analyses of reports of examination of all State member b&®ks made by ex

aminers for the federal Heserve Bank and reports of independent examinations made
by State authorities are made on either the revised TOrm 212 or form 213*
analyses are formrded to the Board at Washington*

Such

The analysis font sets forth

important facts and figures pertaining to the condition of the bank; alto ranch
general information; and concludes with a recommendation as to «hat action, if any,

(Contd)

should be taken by the Board of Governors of the federal Reserve System, together
with the reasons therefor, which recommendations are made by the President and
concurred in by the Federal Reserve Agent*
t
In connection with applications of State banks for membership in the
Federal Reserve System, one copy of the examiner *s report is forwarded to the
Board of Governors o f the Federal Reserve System, together with all legal papers
in connection with the organ!sation or reorganisation of the applicant bank*

The

Board at Washington is also furnished, in each instance, with a complete memoran
dum covering the organisation, management, location, and condition of the apply*
ing bank*
All examination reports, both State and national, were analysed on com
parative analysis sheets, one copy being furnished Federal Reserve
one copy to Vice President Yaeger, and one to Vice President Ziemer,

Agent Geery,
These sheets

contain a general statement aa to the condition of the bank; also a brief summary
of the examiner's conclusions*
When State member banks are shown by reports of examination to be in
an unsafe or unsatisfactory condition, special letters are written either to the
bank or to the State supervising authorities, calling attention to the unsatiefac*
tory and criticised matters, with a request or direction that corrective action be
taken*

Conferences are held with those at interest in caseB shere such action

appeared desirable and constructive*
Reporte. of_Earnings ana Dividend,. Rqpo*t» of Condition, and Related Saport*.
Approximately 4.476 reports of earnings and dividends, reports of condi
tion, and related reports were received checked, and recorded*
Application for permission to SxerclBe Fiduciary Powers Approved, etc.
The following application for permission to exercise fiduciary powers
was approved by the Board

Washington during 1936%

Kame of Bark
The First National Bank and
Trust Company in Sioux Falls

Location
Sioux Falls, So.Dakota

Approved Capital
-gowejrA
$250,000* Additional
11-5*36 $$>0,000**
(* Prefefred)
(** Common)

The following applications for surrender of fiduciary powers were
approved during 1936?

B AM KXAMIMIOK DEPARTfefiEBT

(Contd)

Date of
Heme of Bank
First national Bank
First National Bank
Red Wing national Bank
& Trust Company
Farmers National Bank

i&ssJiaa

Date
Approved

Albert lea, Minnesota
Spring Valley, Minnesota

1-3-36
1-28-36

&»8—36
6-11-36

Red Wing, Minnesota
Waseca, Minnesota

8-18-36
9-20-35

12-4*36
1-11-36

The application of the First national Bank:, Ovatonna, Minnesota, for sur**
render of fiduciary powers was received November 12, 1936, bat notice of approval
of that application had not been received as of December 31*

In consideration of Section 8 of the Clayton Act and the Board's Regula
tion L, examiners* reports are analysed and records maintained with a view of
ascertaining any relationships that are not in conformity with the law*

Bo appar

ent violations have been noted*
Applications Made Under Section 32 of the Banking Act of 1933»
Ho permits have been issued with respect to Section 32 of the Banking
Act of 1933, and relationships with dealers in securities are now governed, in
consideration of amendment of aaid Section 32, which became effective January I ,
1936, by revised Regulation R, which became effective January 4, 1936,
Applications for Adjustment of Holdings of Federal Reserve Bank Stock.
Daring the year tno hundred fifty-eight applications for adjustment of
holdings of Federal Reserve Bank stock: were received from member banks; stock was
also issued to two new State bank members*

nineteen applications for surrender of

stock by member basks were received, sixteen from national banks in voluntary li
quidation and three from State member banks withdrawing from the System*

The

Examination Department handles applications for adjustment* for new stock, and for
cancellation of stock*
ftyp.llcati.oan for National Charters.
No applications for national bank charters were referred to this office
for recommendation during the year#
Reports to Board of Governors of the Federal Reserve System on Changes, in Banks
Status, etc.
Weekly reports are forwarded to the Board at Washington showing changes
in the status of all State and national hanks In the District*

Records are also

maintained and weekly reports sent to the Board with reference to status of applications received from State bank© for membership in the Federal Reserve System,

BASK m M I & m O K DBPABTMgBT

(Contd)

Weekly reports are alto sent to the Board with reference to status of applications
for fiduciary powers*
She Examination Department handles correspondence and inquiries with
reference to the Board*s Regulation T and prepares and forsards to the Board at
Washington consolidated statements of those firms belonging to national securities exchanges where the home office of such firms is within this District.

The

Department maintains a record of non*-member state banks that have signed agreements
in conformity with Regulation T.

BAW CHANGES IK 1936
(Per Stock Book Records)
Total number of member banks in the District January 1, 1936 •
flew national banks organised • • • « • * • * • . » « • » • . • • . • * • » •
State banks admitted » * » .......................... ... .......................................

National banks absorbed by other national banks.................. ... . •
national banks succeeded by non-member State institutions. . . ,
National banks liquidated............... ... ................................ * . . « •
State member bank withdrawal*. . . . * ...................♦ . • . . . * •

SOX
0
2
SOS

1
12
3
3

Total number of member banks holding stock in the Federal
Reserve Bank of Minneapolis at the end of the year. •

Member nhip.

484

At the close of the year there were 484 member banks in this District,
as compared with SOI member banks at the beginning of the year*
loss of 16 national banks and a net loss of 1 State bank*

There was a net

The total membership

at the close of the year was divided into 417 national banks and 67 State banks.

leeued. ta

Mambas fonks
of Sb&res

Bam a_pf Bank
Security Bank and Trust Company of Owatonna,
Com Exchange Savings Bank

X o a c tio n
Owatonna, Minnesota
Sioux Falls, So* Dak.

123
101

Stats Bank

jitf**
Michigan
Minnesota
Montana
Horth Dakota
South Dakota
Wisconsin

Ho* of State
Ho .of State Banks WithdrawBank Members ing from Member*
shin Daring Year
k & f l L ___
7
0
15
2
0
a
0
0
1
23
JL
- JL.
3
68

Ho* of State
Banks Admitted
During Year
0
1
0
0
1
JSL
2

Ho* of State .
Bank Members
i&*k £ 6
7
14
21
0
23
2
67

BAKK SKAUIKATIOB DEPAOTMHn?

MEtlBEH BAHKS SEVERING

1 IBIS FEDEBAli BBSERTO BABE DOSIHO 1936

Ra t I ohal

Bata
9-a- 36

(Contd)

BY OTHER KATIOHAI. BiJiKS

Name of Bank

HO. of Shares
Surrendered

Location

m & m m » ***** ........... ...

The Red Wins Rational Bank
& Trust Company
Red Wing, Minnesota
(Absorbed by ttte First National Bank of Red Wing.)

NATIONAL BANKS SUCCEEDED BY NONMEMBER STATE INSTITUTIONS
10*6-36

The First National Bank of
Appleton
Appleton, Minnesota
(Succeeded by Northwestern State Bank of Appleton*)
6*2-36
The National Bank of Benson
Benson, Minnesota
(Succeeded by The First State Bank of Benton.)
10-6-36
Northwestern National Bank of
Dawson
Dawson, Minnesota
(Succeeded by Northwestern State Bank of Dawson.)
12-21-36 The Hancock National Bank
Hancock, Minnesota
(Succeeded by Hancock State Bank, Hancock)
9-4-36
The Cltisane National Bank of
Olivia
Olivia, Minnesota
(Succeeded by The Citlsene State Bank of Olivia*)
10-15-36 First national Bank in Winthrop
Wlnthrop, Minnesota
(Succeeded by Wlnthrop State Bank, Winthrop.)
7-29*36
The First National Bank of
Killdeor
Ktlldeer, North Dakota
(Succeeded by Bank of Killdeer.)
12-14-36 The First National Bank of
Napoleon
Napoleon, North Dakota
(Succeeded by Stock Growers Bank in Napoleon.)
3-18-36
First National Bank in Neche
Neche, North Deucota
(Succeeded by Citisens State Ba&k of Nsche.)
3-18-36
The First National Bank of
New Rockford, North Dakota
(Succeeded by Ifoe First State Bank of New Rockford*)
10*9-36
Batter County National Bank
of Gettysburg
Gettysburg* South Dakota
(Succeeded by Potter County Bank, Gettysburg,)
11-13-36 The Oldham National Bank
Oldham, South Dakota
(Succeeded by The Oldham State Bank, Oldham*)

26
37

22
36

30
27
60

54
16

RATIONAL BANKS LIOffIDATED
Name of Bank

Date
12-7-36
9-19-36
6*15*36

Tha First National Bank of Nashua
(Voluntary Liquidation.)
The First National Bank of Harvey
(Voluntary Liquidation.)
The First National Bank of Hudson
(Voluntary Liquidation.)

Location

No. of Shares
Surrendered

Nashua* Montana

Harvey, North Dakota

Hudson, South Dakota

STATE MEMBER BANK WITHDRAWALS
1-17-36
4—29—36
10-28*36

State Bank of Gibbon
Citisens State Bank of Westbrook
Farmers State Bank

Gibbon, Minnesota
Westbrook, Minnesota
Winner, South Dakota

24
a
24

NUMBER OF MEMBER BANKS IN ACTUAL OPERATION DECEMBER 31. 1936
National banks
State banks
Total

414
67
481

8 1

•

FISCAL AGEKCY FUHCTIOBS - 1936

VOLUME OF OPERATIONS,

Issues, redemptions or exchanges of various United States Government
securities, including Treasury Savings Certificates, United States Savings bonds,
and Adjusted Service bond?, which were handled by the Fiscal Agency operated by
us for the United States Qovernment, numbered 678,903 pieces and amounted to
$374,648,313.76 as compared with 318,763 pieces anountlng to $316,102.506.26 in
1935*
This Agency also handled during 1936, 2,713 purchases and 4,647 sales
of Government securities totaling $39,450,150.

In addition, either delivery or

payment or both, Has handled for banks and trust companies on 1,158 transactions
in Government securities amounting to $235,081,100.

There were also 6,883 transac*

tion® of Government guaranteed and miscellaneous general market securities aggre
gating $32,005,574.25.

Altogether, of these various transactions there were

15,401 totaling $306,536,824.25 as compared to 29,292 totaling $310,494,562.93 in
1935.

The decrease in the number of transactions handled in 1936 as compared with

1935 1is due partly to a difference in method of counting; the money value of the
transactions for the two years is approximately the same.
Delivery of 37,713 pieces totaling $145,013,497.50 was made on purchase
and resale transactions for other than our own account.

In addition, on exchange

transactions, such as denominational exchange, the exchange of coupon for
registered securities, etc., 17,878 pieces were delivered, amounting to $170,656,200.
r

The total number of pieces delivered was 55,591 amounting to $315,669,697.50 in
comparison with 113,443 totaling $£02,170,895.12 during the preceding year.
On exchanges and redemptions of bonds handled by this Agency as Fiscal
Agent for the Federal Farm Mortgage Corporation during 1936 there were 14,724
pieces amounting to $9,652,800.

There were also 19,533 pieces totaling $14,344,375

for the Home Owners5 Loan Corporation and 10,136 rieces aggregating $11,908,900 for
the Federal Land Banks.

In addition, 53 Federal Intermediate Credit Bank deben

tures amounting to $1,740,000 *ere redeemed*

Altogether, on issues, exchanges and

redemptions of other than direct United States Government securities, there were
44,446 pieces, contained in 5,773 applications, totaling $37,646,075.
The total number of individual securities received and delivered by the
Fiscal Agency Department (including other than the direct United States Government
securities) during 1936 was 978,940 totaling $727,564,086,25 as compared with

F1SCA1. AGESCT FUKCTICHS

(Cont'd.)

559,235 totaling $783,972,736.37 in 1935.
The Fiscal Agency operated by us for the Government redeemed 334,528
Government coupons amounting to $10,249,024*39 during the past year as compared
to 390,870 coupons totaling $9,062,768*68 during 1935.

We also redeemed 356,095

Federal land Bank, Federal Farm Mortgage Corporation and Home Owners1 Loan Corpor
ation coupons amounting to $3,630,146.46 daring 1936 as compared to 412,400
totaling $3,807,970.76 in 1935.

• OTHER SERVICES.

In February, the Treasury Department gave notice that the Federal
Reserve Banks were to issue Adjusted Service bonds in payment of Adjusted Service
certificates.

From April to October 15, 1936, we prepared 77,239 individual ship

ment o to veterans consisting of 822,238 pieces of Adjusted Service bonds, on each
of which we inscribed the veteran's name and number, and which amounted to
$41,111,900.

Incidentally, we are informed we will shortly begin handling redemp

tion and payment of such bonds.
On March 18, 1936, we were designated agentB for the sale of United
States Savings bonds.

From March 30, 1936 to December 31, 1936. we received 1,826

individual orders for these bonds representing 5,706 nieces amounting to $2,508,625.
A new series of such bonds is to be sold during 1937.
Without inclusion of Treasury bills, there were seven offerings of United
States Government securities during 1936.
three, short term.

Four of such issues were long term and

We received and handled 6,492 Individual subscriptions con

tained in 3,732 different aptllcations aggregating $384,980,900*
allotted on these subscriptions was $117,832,550.

During 1935,

The amount
13,832 individual

subscriptions were submitted in 13,598 different applications covering fifteen
similar offerings and $89,062,400 was allotted.
During 1936,

96 tenders amounting to $14,490,000 were received by this

Agency on 65 offerings of Treasury bills.

Of these, 22 tenders on a discount

basis ranging from .08 per cent to «25 per cent and amounting to $4,135,000 were
accepted.

During 1935, 147 tenders amounting to $18.621,000 were received and 19

tenders totaling $8,251,000 were accepted on the 74 offerings of Treasury bills
made that year.

FISCAL AGENCY FPHCTIOKS

(Cont«d*>

At the close of 1936 there were 184 banks and trust companies in this
district Khich were designated as special depositaries of public moneys, quali
fied to make payment through their Var loan Deposit Accounts on a by credit
basis fbr subscriptions to new offerings of Government securities.

At the close

of the preceding year there were 241 banks and trust companies so designated*
Including the weekly circular giving current market quotations on
the various outstanding Government issues, ihich m e sent on reguest to 383 banks
i

in the district, 110 circular letters were sent to banks and trust companies in
the district during 1936 in connection with Fiscal Agency operations*

During the

preceding year there were 163 circular letters*

RECONSTRUCTION FINANCE CORPORATION
Our bank continues to act as Custodian, fiscal agent and depositary for
the Reconstruction Finance Corporation*
has been sometdiat less than in 1935*

The volume of work during the past year

There are a number of receivers termination

loans to be completed shortly*
The amount due December 31, 1936, from Open and Closed Banks, $878,000*00
was reduced during 1936 by $590,300*00 and increased by $9,300*00, leaving a re
mainder of $297,000.00 due and unpaid at the close of the year.

Miscellaneous

loans of $6,700,000.00 (largely a loan to the Federal Land Bank of St. Paul) were
reduced by $600,000*00 to a balance of $6,100,000.00*

Preferred stock holdings

of $36,086,000.00 ae of December 31, 1936, were increaeed by $1,000,000*00 and were
reduced by redemptions in the amount of $7,686,000.00, leaving a remainder of
$19,600,000.00.

Loans to individuals, secured by preferred stock, were reduced

from $1,246,000*00 to $264,000*00.

Debentures purchased from state banks were

$8,185,000.00 at the beginning of this year, increased by $30,000*00 and reduced
by $1,060,000.00, leaving a balance of $7,165,000*00.
Loans to liquidating agents and receivers of closed state banks at the
beginning of the year totaled $151,000*00 and were reduced by $107,000.00 to
$44,000*00 by payments.

Industrial loans as of December 31, 1935, totaling

$76,000.00 were increased by $320,000.00 and reduced by payments of $16,000*00
to $381,000.00.

The Corporation's participation in industrial loans at the

beginning of the year was $186,000.00 which amount was Increased by $49,000.00

RBCONSTRUCTION FINANCE CORPORATION

(Cont»d.)

during 1936 aad reduced by payments of $47,000.00 to a balance of $187,000.00.
Receivers* termination loans at the end of 1935 totaled $437,000.00; additional
disbursements daring the year amounted to $175,000.00; reductions by payments
leave a balance of $504,000.00 as of December 31, 1936,
This Corporation, prior to 1936, purchased drainage bonds aggregating
$263,000.00 which was the amount of such bonds at the beginning of the year.
Additional purchases during 1936 totaled $90,000.00; payments aggregated $11,000.00
leaving a balance o f $342,000.00 aB of December 31, 1936.

Bonds purchased from

the Public Works Administration held at the beginning of the year aggregated
$2,275,000.00; additional purchases of $1,740,000.00 were made and $2,652,000.00
were sold end redeemed, leaving a balance of $1,363,000.00.
The RPC Mortgage Company, a subsidnary of the Reconstruction Finance
Corporation, purchased Federal Housing Administration insured mortgages totaling
$60,998.12 reduced by payments of $1,418.35 to a balance of $59,579.77, and made
direct loans on business real estate properties aggregating $275,500.00 reduced by
payments of $12,783.61 to a remainder of $262,716.39.
The Commodity Credit Corporation, a subsidiary, will again make corn
loans for the period 1936-1937.

All notes which we handled for the Commodity

Credit Corporation on the previous three corn loans were paid, except three that
were purchased during the 1935-1936 loaning period.

FEDERAL EMERGENCY ADMINISTRATOR OP PUBLIC WORKS

At the close of 1935 we held $2,845,000*00 of bonds for account of the
Federal Emergency Administration of Public Works.

Daring 1936 we disbursed as

the purchase price for thirty-seven issues $1,471,250.00 and handled seventy-six
sales, aggregating $1,743,345*00, besides collecting bonds aggregating
$15,234.00, and coupons.

We also handled grant payments effected by releases of

bonds*
On December 31, 1936, we held securities totaling $2,234,200*00 for
their account.

Janv&ry 1, 1937
Minneapolis
Minneapolis
Minneapolis
Minneapolis

Officers
Bank General
Failed Banks Department(Collector)
Transit and Mail Departments

♦

December 1
11

♦179(7 exohelp)

180(7

* 80

270

~~ 273
32

Fiscal Agency Department (employees)

* 30

Reconstruction Finance Corporation (employees)

• 15

of employees

reimbursed)

ex.,help)

Helena Branch (Salaries of

3«>25#

1936

347

351

Decrease and changes accounted for as foliows*
Minneapolis Officers.
Minneapolis Bank General

Mr, Geery now on fee basis
2 employees le ft in December
employee transferred from RFC
«
M
« Mail DeptD
ti

Minneapolis Transit and Mail Departments

employee le ft in December
w transferred from Fiscal Agency
H
w
M Bank General
11
n
to Fiscal Agency
M
"
MBank General

Helena Branch,............................... .............................

employee le ft in December
*' transferred from R 7

Fiscal Agency Department............. .............................

Agency

employee transferred from Transit Dept*
ti

Reconstruction Finance Corporation........................ a„l employee transferred to

* During December the salaries of one officer and 109 employees were
partially reimbursed by various governmental agencies*

a ll

Lack General

Full text of Annual Report to the Directors of the Federal Reserve Bank of Minneapolis : Auditor's Report for the Year 1936

FRASER