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Twenty-Sixth

MIUAL REPORT
of the

BOARD OF GOVERNORS of the
FEDERAL RESERVE SYSTEM

COVERING OPERATIONS
THE
YEAR




1939

FOR

BOARD OF GOVERNORS OF THE FEDERAL RESERVE SYSTEM
December 31, 1939
M A R R I N E R S. ECCLES,

RONALD RANSOM, Vice

Chairman

Chairman

M . S. SZYMCZAK

C H E S T E R C. D A V I S

J O H N K. M C K E E

E R N E S T G. D R A P E R

LAWRENCE CLAYTON, Assistant

to the

Chairman

ELLIOTT THURSTON, Special Assistant to the Chairman
C H E S T E R M O R R I L L , Secretary

LISTON P . BETHEA, Assistant

Secretary

S. R. CARPENTER, Assistant Secretary
J. C. NOELL, Assistant Secretary
W A L T E R WYATT, General Counsel

J. P . DREIBELBIS, Assistant General Counsel
GEORGE B. VEST, Assistant General Counsel
B. MAGRUDER WINGFIELD, Assistant General Counsel
E. A. GOLDENWEISER, Director, Division of Research and Statistics
WOODLIEF THOMAS, Assistant Director, Division of Research and Statistics
L E O H . PAULGER, Chief, Division of Examinations
R. F . LEONARD, Assistant Chief, Division of Examinations
C. E . CAGLE, Assistant Chief, Division of Examinations
EDWARD L. SMEAD, Chief, Division of Bank Operations
J. R. VAN FOSSEN, Assistant Chief, Division of Bank Operations
J. E . HORBETT, Assistant Chief, Division of Bank Operations
CARL E . PARRY, Chief, Division of Security Loans
P H I L I P E . BRADLEY, Assistant Chief, Division of Security Loans
O. E . FOULK, Fiscal Agent
JOSEPHINE E . LALLY, Deputy Fiscal Agent
II




CONTENTS
Text of Report
PAGE

Summary
Federal Reserve Policy
Flexible Open-Market Portfolio
Liquidation of Treasury Bills
Open-market Purchases on Outbreak of War
Recovery of Bond Prices
Significance of Flexible Portfolio
Change in Maturity Distribution
United States Acquisitions of Foreign Gold
Prewar Capital Inflow
Prewar Merchandise Balance
Prewar Gold Acquisitions
First Months of War
Banking Developments
Growth in Reserves and Deposits
Increase in Government Securities
Increase in Commercial Loans
Changes in Banking Structure
Business Conditions
Developments Prior to the Outbreak of War
Developments Subsequent to the Outbreak of War
Federal Reserve Bank Operations
Earnings and Expenses of Federal Reserve Banks
Interdistrict Collection System
Credits to Foreign Central Banks
Legislation Relating to the Federal Reserve System
Changes in Regulations of the Board of Governors
Bank Examinations
Grants of Authority
Trust Powers of National Banks
Holding Company Affiliates
Foreign Banking Corporations
Foreign Branches of Member Banks
Regulation T—Agreements with Nonmember Banks
Meetings of the Federal Open Market Committee
Meetings of the Federal Advisory Council
Board of Governors—Staff and Expenditures
Change in Board Staff
Board Expenditures




1
2
2
3
4
7
9
9
10
11
11
12
12
13
13
14
14
15
15
17
18

,

.

,

in

19
19
21
22
22
23
25
25
25
26
27
27
28
28
28
28
28
29

Tables
PAGE

No. 1. Statement of Condition of the Federal Reserve Banks (in Detail) December 30, 1939
No. 2. Statement of Condition of Each Federal Reserve Bank at End of 1938
and 1939
No. 3. Holdings of U. S. Government Securities by Federal Reserve Banks at
end of December 1937, 1938 and 1939
No. 4. Volume of Operations in Principal Departments of Federal Reserve
Banks, 1935-1939
No. 5. Earnings and Expenses of Federal Reserve Banks During 1939
No. 6. Current Earnings, Current Expenses, and Net Earnings of Federal Reserve Banks and Disposition of Net Earnings, 1914-1939
No. 7. Number and Salaries of Officers and Employees of Federal Reserve
Banks
No. 8. Receipts and Disbursements of the Board of Governors of the Federal
Reserve System for the Year 1939
No. 9. Federal Reserve Bank Discount, Interest, and Commitment Rates and
Buying Rates on Acceptances, December 30, 1939
No. 10. Maximum Rates on Time Deposits
No. 11. Member Bank Reserve Requirements
No. 12. All Member Banks—Condition on December 30, 1939, by Classes of
Banks
No. 13. All Member Banks—Classification of Loans, Investments, Real Estate,
and Capital on December 30, 1939, by Classes of Banks
No. 14. Member Bank Reserve Balances, Reserve Bank Credit, and Related
Items—End of Year 1918-1939 and End of Month 1939
No. 15. Number of Banks and Branches in United States, 1933-1939
No. 16. Analysis of Changes in Number of Banks and Branches during 1939...
No. 17. Number of Banks on Par List and Not on Par List, by Federal Reserve
Districts and States, on December 31, 1938 and 1939
No. 18. Money Rates, Bond Yields, and Stock Prices
No. 19. Business Indexes

32-33
34-37
38
39
40-41
42-43
43
44-45
46
47
47
48-49
50-51
52
53
54
55
56
57

Appendix
Record of Policy Actions—Board of Governors
60-66
Record of Policy Actions—Federal Open Market Committee
67-74
Recommendations of the Federal Advisory Council to the Board of Governors of
the Federal Reserve System
75-80
Board of Governors of the Federal Reserve System
81
Federal Open Market Committee
81
Federal Advisory Council
82
Senior Officers and Directors of Federal Reserve Banks
83-90
State Bank and Trust Company Members
91-99
Description of Federal Reserve Districts
100-105
Federal Reserve Branch Territories
106-107
Map of Federal Reserve Districts
108
Index
109-119

IV




LETTER OF TRANSMITTAL

BOARD OF GOVERNORS OF THE
FEDERAL RESERVE SYSTEM ,

Washington, April 12, 1940.
T H E SPEAKER OF T H E HOUSE OF REPRESENTATIVES.

Pursuant to the requirements of section 10 of the Federal Reserve
Act, as amended, I have the honor to submit the Twenty-sixth Annual
Report, prepared by direction of the Board of Governors of the Federal
Reserve System, covering operations during the calendar year 1939.
Yours respectfully,




M. S.

ECCLES,

Chairman.
v

-finnual

Mepott

ofo the jSaatd
redetal

/Qe&etve

ok Qovatnotl

ob

the

Sultem

SUMMARY

AT T H E beginning of 1939 business activity had recovered about half
•E*- of the severe decline that had occurred between the middle of 1937
and the summer of 1938. In the early months of 1939 there was a slight
recession in industrial output but other types of business activity were
for the most part maintained. In the middle of the year an upward
movement got under way, which was sharply accelerated in September
when war broke out in Europe. In the closing months of the year the
current rate of output in terms of quantity of goods and services was
higher than at any time in the country's history. With continued growth
of population, however, output per capita was no larger than in 1929.
Unemployment, while reduced materially from the highest level of the
depression, was still in large volume. In the latter part of the year
there was an increase in commitments for new industrial plant and particularly for new equipment, which will further increase and improve
productive capacity. Building activity increased in 1939 but was still
far below the levels of the 1920's. National income and distribution of
commodities to consumers also increased in the last few months, and
exports were considerably larger. In many lines, however, it appears
that production rose more rapidly than consumption, with a consequent
increase in inventories in the hands of producers and distributors. Unfilled orders, which had been in unusually large volume after the buying
wave in the early autumn, had declined somewhat by the end of the year.
During the year recurring war crises in Europe resulted in an increased
flow of gold to this country, and at the end of the year our gold stock
reached the unprecedented total of $17,650,000,000, representing twothirds of the world's monetary gold.
This inflow of gold resulted in a corresponding growth of member bank
reserves and deposits, and this, together with some expansion of bank
loans and investments, carried bank deposits to new high levels. Required
reserves increased correspondingly but this increase fell far short of absorbing the additions to bank reserves, so that excess reserves rose further
to a volume in excess of five billion dollars.
The principal medium of Federal Reserve policy during the year was
open-market operations. In the middle of the year, when rates on Treasury bills were practically on a no-yield basis, the Federal Open Market
Committee decided that, whenever market conditions warranted, holdings of Treasury bills wrould be allowed to mature without replacement.



1

2

ANNUAL REPORT OF BOARD OF GOVERNORS

In the autumn when hostilities broke out in Europe and United States
securities, as well as other high-grade fixed-interest obligations, fell rapidly in price, the System bought Government securities freely with a
view to cushioning the decline and exerting an influence against disorganization in the capital market. It was not the System's objective
to hold Government security prices at any given level but to prevent
them from falling so rapidly as to result in panicky conditions in the
market. When the shock of the outbreak of the war had subsided and
prices of Government securities, after a substantial recovery, had advanced further, the System sold some securities from its portfolio.
As a net result of the year's operations, the System's open-market portfolio at the end of 1939 was $80,000,000 lower than at the beginning of
the year.
In its annual report for 1938 the Board presented a brief review of the
problems of banking and bank supervision with which the country is
confronted. No material changes in the situation described in the report
occurred during 1939, except a further large expansion of bank reserves.
In the summer the United States Senate adopted a resolution introduced
by Senator Wagner of New York, reading in part as follows: "Resolved,
That the Committee on Banking and Currency is authorized to conduct
a study and to hold hearings to consider and recommend a national
monetary and banking policy by which the monetary and banking
authorities of the Federal Government shall be guided and governed,
and to consider and recommend the character of governmental machinery
best calculated to carry out such policy. The Committee shall report to
the Senate as soon as practicable the results of its study, together with
its recommendation for the enactment of any legislation it may deem
necessary."
FEDERAL RESERVE POLICY

An important change in the System's open-market policy during 1939
was the departure from the practice of recent years of maintaining a
constant amount of securities in the System account. This change reflected a shift in emphasis in the use of open-market operations from
their influence on member bank reserves to their direct influence on conditions in the capital market. As a corollary of this change it was no
longer necessary to attach as much importance as previously to having
at all times a large amount of securities of short maturity.
Since the autumn of 1933 the System's open-market portfolio had
been approximately $2,500,000,000. No net changes in the portfolio
had occurred, except for relatively minor purchases in
Flexible
the spring of 1937 for the purpose of attempting to
portfolio1*
preserve orderly market conditions and in the autumn
of that year for the purpose of providing funds to meet
seasonal requirements. Maintenance of a constant portfolio had reflected



3

FEDERAL RESERVE SYSTEM

the judgment of the Federal Open Market Committee that, so long as
business recovery was incomplete and there was no evidence of overexpansion of credit, there wTas no occasion for a reduction in the System's
open-market holdings. On the other hand, there was no occasion to increase the portfolio materially so long as excess reserves were abundant
and growing, bank deposits were in unusually large volume, and interest
rates were lowr.
In 1939, however, developments in the market caused the System to
depart from the practice of maintaining a constant portfolio. These developments were, first, the difficulty of replacing maturing Treasury bills
without paying a premium over a no-yield basis, and, later, the sharp
decline in United States Government security prices at the outbreak of
the war in Europe.
As early as the last quarter of 1938, the diminution in the supply of
Treasury bills in the face of a growing demand had resulted in a decline
in the rate on weekly bill issues almost to zero, and on
Liquidation of
some occasions bills were not obtainable except at a
lreasury bills

x
#

premium above a no-yield basis. This matter was
discussed by the Federal Open Market Committee as early as December
1938, and the following statement was released to the press on December 30:
"The Federal Open Market Committee announced, following a
meeting today, that weekly statements of the total holdings in the
Federal Reserve System's Open Market Account may at times show
some fluctuation depending upon conditions in the market affecting
the Committee's ability to replace maturing Treasury bills held in
its portfolio. The volume of Treasury bills available on the market
has declined materially during the year and, owing to the large and
increasing demand, such bills are already selling either on a no-yield
basis or at a premium above a no-yield basis. It has, therefore,
become difficult and in some weeks impossible for the System to find
sufficient bills on the market to replace those that mature. Shortterm notes are also selling on a no-yield basis and longer-term notes
have at times been difficult to obtain. In these circumstances, it
may be necessary from time to time to permit bills held in the portfolio to mature without replacement, not because of any change in
Federal Reserve policy but solely because of the technical situation
in the market. Because no change in Federal Reserve policy is contemplated at this time, maturing bills will be replaced to the extent
that market conditions warrant."
For nearly six months after this announcement it was found possible
to replace maturing bills each week with other bills or with short-term
Treasury notes without paying a premium above a no-yield basis or with




4

ANNUAL REPORT OF BOARD OF GOVERNORS

longer-term Treasury notes without causing undue disturbance in the
market for such notes. The difficulty of replacing bills, however, became
continuously more pronounced. On June 21, the Open Market Committee considered the matter again and decided that no useful purpose
would be served by continuing to replace maturing bills for which there
was a strong demand in the market and that, therefore, the System's
holdings of bills should be allowed to run off without replacement unless
market conditions made this undesirable for any given week. On June 30
the following statement was issued:
"As a result of a reduction in holdings of Treasury bills, this
week's statement of condition of Federal Reserve banks shows a
decline of $13,378,000 in the System Open Market Account. This
is in accordance with action taken by the Federal Open Market
Committee on June 21, 1939. For some time past, Treasury bills
have been purchased for the System's account at or near a no-yield
basis and the account at times has had difficulty in replacing its
maturing bills. I t was decided that it would serve no useful purpose
to continue full replacement of maturing bills, the supply of which
is not always equal to the market demand. This action is in response
to technical conditions in the bill market and does not represent a
change in general credit policy."
In the course of 24 weeks the total of Treasury bills held on June 21
amounting to $477,000,000 was liquidated, and since December 6 no
Treasury bills have been held in the System's open-market account.
While the gradual liquidation of the System's Treasury bills was in
process, world events precipitated conditions in the bond market which
caused the System to make purchases of other United
Open-market
States obligations on a substantial scale. As early as
outbre*akSoTwar
^ s meeting on April 19 the Federal Open Market
Committee had taken cognizance of the possibility
of serious disturbances in the Government security market in the event
of an armed conflict in Europe. At that meeting the committee gave
authority to its executive committee to arrange for large-scale purchases
of United States Government securities in case war should break out
and result in serious disturbances in the capital market in the United
States. This authority was renewed on June 21 at the last meeting of
the committee before the outbreak of the war.
On September 1, when war in Europe actually began, prices of United
States Government and high-grade corporate bonds declined abruptly.
Prices of Government bonds had advanced almost continuously from
September 1937 to June 1939 and were at that time at the highest level
on record, with the average yield on long-term Treasury bonds at 21/4:
per cent. Even prior to the actual outbreak of hostilities high-grade



FEDERAL RESERVE SYSTEM

D

bond prices had declined somewhat as the result of uncertainties in the
world outlook, but early in September the break in the bond market became more pronounced.
In the circumstances, the Federal Reserve System deemed it to be in
the public interest to exert its influence in a positive way toward maintaining orderly conditions in the market for United States Government
securities. While the System has neither the obligation nor the power
to assure any given level of prices or yields for Government securities,
it has been its policy in so far as its powers permit to protect the market
for these securities from violent fluctuations of a speculative, or panicky
nature. Prices of fixed-interest rate securities, including those of the
Government, inevitably adjust to changes in long-time interest rates.
Consequently, an orderly rise or fall in United States bond prices in response to changes in underlying credit conditions, as expressed in interest rates, does not call for action by the System. Violent temporary
movements, however, caused by such circumstances as the shock of the
outbreak of European hostilities, make it in the public interest for the
System to use its influence toward preventing a disorganized condition
in the market.
In undertaking large-scale open-market operations in September 1939,
the System was guided principally by the following considerations:
(1) By helping to maintain orderly conditions in the market for
United States Government securities the System can exert a steadying
influence on the entire capital market, which is an essential part of the
country's economic machinery, and disorganization in which would be
a serious obstacle to the progress of economic recovery. The market
for United States Government securities is the only part of the capital
market in which the System is authorized by law to operate, and Government securities occupy a vital place in that market.
(2) The System also has a measure of responsibility for safeguarding
the large United States Government portfolio of the member banks from
unnecessarily wide and violent fluctuations in price. The System cannot
and does not guarantee any current prices of Government obligations,
nor does it undertake to preserve for member banks such profits as they
may have on their Government securities, or to protect them against
losses in this account. The Government security market, however, has
become in recent years the principal part of the money market, and
member banks are in the habit of adjusting their cash positions through
sales and purchases of United States Government securities. This practice has arisen partly because of a shrinkage in the availability of other
liquid assets, such as Street loans and bankers' acceptances, which in
earlier years were in much larger volume and were the medium through
which banks were likely to adjust their positions. In the enhanced importance of the Government portfolio to member banks, the System sees



6

ANNUAL REPORT OF BOARD OF GOVERNORS

an additional reason for exerting its influence against undue disturbances
in Government security prices.
On September 1 the System announced that all the Federal Reserve
banks stood ready to make advances on Government securities to member and nonmember banks at par and at the discount rate. The discount rate at the time was 1 per cent in New York and 1% per cent at
the other Reserve banks. During September the rate for such advances
was reduced to 1 per cent at six Federal Reserve banks. The purpose
of the announcement and of the reduction in the discount rates was to
assure all banks, as large holders of Government obligations, that a temporary decline in prices of Government securities should not be regarded
as an occasion for selling these securities, as, in case of need, these holdings could be the basis for obtaining their par value in cash at the Federal Reserve banks.
A more tangible expression of System policy, however, was the active
intervention of the Federal Reserve banks, at the direction of the Federal Open Market Committee, in the market for Government securities.
In the early part of September the System made substantial purchases
with a view to preventing the development of disorderly conditions or
unreasonably abrupt declines in prices. Offerings were increasing and
there was a scarcity of buyers. Consequently, prices were falling rapidly.
A few purchases of United States Government securities were made in
the closing days of August. On September 17 when war actually
broke out and long-term Government bonds declined by a full point,
the System purchased more than $100,000,000 of Government securities. This amount included $61,000,000 purchased from dealers in
order to prevent these holdings from hanging over the market, or from
demoralizing the market further if the dealers attempted to liquidate
them at once. The understanding with dealers during this period was
that they were expected to act in effect as brokers only and were not to
take positions on either the long or the short side of the market. For a
brief period from September 1 to September 6 dealers were also requested,
when offering securities to the Federal Reserve banks, to give the names
of the sellers of the securities. This plan was adopted as a means of
detecting possible speculative short sales and in general as a method of
having better knowledge of developments in the market. The policy of
requiring the names of sellers was discontinued as soon as market conditions justified its abandonment. As a further precaution it was agreed
that dealers would stop trading in United States Government obligations
at 4 o'clock in the afternoon.
During the period in September when the Federal Reserve banks were
making purchases in the open market, many banks cooperated with the
System's program by refraining from making sales from their portfolios
of United States Government securities.




7

FEDERAL RESERVE SYSTEM

The aggregate amount of securities purchased by the System from
August 28, when the purchases began, to September 25, when they terminated, was $473,000,000.
Toward the end of September prices of Government and high-grade
corporate obligations steadied and shortly thereafter began to advance.
By the end of the year their level had advanced to
Recovery of
^ n a ^ prevailing prior to the outbreak of the war in
J

b o n d prices

^

•

Europe. Advances m Government security prices during the last three months of the year were at times so rapid that it was
thought advisable to sell some of the System's holdings, particularly of
issues for which there was a strong market demand. In the course of
these months a total of $77,000,000 was sold. As a net result of the
year's open-market operations, the System's portfolio at the end of
December was about $80,000,000 smaller than a year earlier.
Two charts are presented in this connection. The first chart shows
for the last five months of 1939 daily changes in the price of a representative long-term Treasury bond (2% per cent bonds of 1960-65) and
daily purchases or sales of securities by the Federal Reserve System.
The chart shows that over a period of a few weeks a sharp drop in the
OPEN-MARKET OPERATIONS AND TREASURY BOND PRICES
AUGUST-DECEMBER, 1939
112

*RS

DOLLARS
112

108

108
^TREASURY BOND PRICES

104

100

100

96

96
92

92
MILLIONS OF DOLLARS

MILLIONS OF DOLLARS

100

FEDERAL RESERVE
PURCHASES

SO

K

50

J

I
FEDERAL RESERVE
SALES

50

50
AUGUST

SEPTEMBER

OCTOBER

NOVEMBER

DECEMBER

Prices of Treasury bonds of 1960-1965. Purchases and sales are shown as of date
of purchase or sale rather than date of delivery and include all Government securities,
except Treasury bills.




©

A N N U A L REPORT OF BOARD OF GOVERNORS

prices of Treasury bonds was followed first by a period of relative
stability and subsequently by an advance toward the level that had
prevailed before the outbreak of the war. It is apparent from the
chart that open-market operations by the Reserve System were so timed
as to moderate the more extreme daily movements of bond prices but
not so as to prevent the market from following over the period the general pattern of decline and recovery. The second chart shows for a period
of years average yields on long-term Government bonds, excess reserves
BOND YIELDS, EXCESS RESERVES, AND BANK DEPOSITS
rfrNT

MONTHLY AVERAGES OF DAILY FIGURES

PFR

rl

b

4

\

TRLMOURI

D\Jl\U

1ICL.U

s

3

2

i £

1
t

0
BILLIONS OF DOLLARS
6

BILLIONS OF DOLLARS

4
EX CESS F?ESERV s

-

y

2

x.~

„—*%

i)

0

E

2
MILLIONS OF DOLLARS
70

60

RESERV
0 SCALE)

V"

ES

CALL REPORT DATES

BILLIONS OF DOLLARS
70

TO-fAL DEI3 0SITS AND CIURREN CY

60

J

50

50

40

40

30

30
1928

1930

1932

1934

1936

1938

Average yields on Treasury bonds due or callable after 12 years. Borrowed reserves
are bills discounted by member banks at Federal Reserve banks. Excess reserves in the
period 1928-1930 and borrowed reserves in the period 1934-1939 were small and are not
shown. Bank deposits and currency figures are partly estimated. Currency figures
represent amounts outside bank vaults. Deposit figures are for all commercial and savings banks in the United States and Postal Savings System; they exclude interbank
deposits and are adjusted for cash items in process of collection.




FEDERAL RESERVE SYSTEM

9

of member banks, and bank deposits and currency outside of banks.
The extraordinary inflow of gold has been the principal factor in the
growth of excess reserves and of bank deposits in recent years with a
consequent large volume of funds seeking investment. As a result, interest rates have declined to record low levels, as is indicated by the course
of Government bond yields on the chart. The sudden sharp rise in these
yields in the autumn of 1939, without a change in the deposit and reserve
position of banks or a substantial increase in credit demands by commerce and industry, was a temporary development rather than a reflection of a change in underlying credit conditions.
Adoption by the System in 1939 of a flexible portfolio in place of the
fixed portfolio held for the preceding six years was in response to monetary conditions that had developed over the past few
Significance of
years. In earlier years changes in the System portflexible portfolio
folio had been made with reference to their effect on
member bank indebtedness or the volume of excess
reserves. With bank reserves at an unprecedented and constantly
mounting level, and with a vast amount of funds in the hands of individual and institutional investors seeking outlets, such changes in
member bank reserves as are caused by System open-market operations
are no longer a major factor in easing or tightening credit conditions.
On the other hand, such operations exert an influence on conditions in
the capital market. The entry or withdrawal of the System as an active
buyer or seller has an influence not only on prices of the particular
issues that the System buys or sells, but also on the market for Government obligations as a whole and to some extent on the capital market
in general. In view of the fact that member banks hold a large volume
of Government and corporate bonds, the endeavors of the System to contribute to the maintenance of an orderly bond market tend to stabilize
banking conditions and, through their effect on the capital markets, they
contribute to general economic recovery.
The change in the immediate objective of open-market operations has
had the incidental effect of making it less important for the Federal
Reserve System to have its portfolio of United States
Change in
Government securities consist in large part of shortmaturity
distribution
term obligations. The chart following shows the extent of the decrease in the last six months of 1939 in
the System's holdings of obligations maturing in a year or less and the
increase in obligations maturing in more than five years. At the end of
the year about one-tenth of the System's portfolio had a maturity of
one year or less, compared with one-third at the end of 1938.
When open-market sales and purchases by the System were primarily
for the purpose of affecting the volume of member bank reserves, it was



10

ANNUAL REPORT OF BOARD OF GOVERNORS

considered important to hold a large amount of securities that would
mature in a short time or could be sold without sustaining losses or
causing a disturbance in the market. With the shift in emphasis in openmarket operations from their effect on member bank reserves to their
effect in contributing to orderly conditions in the market for United
States Government obligations, it has become less important for the

UNITED STATES GOVERNMENT OBLIGATIONS
HELD BY FEDERAL RESERVE BANKS
BILLIONS OF DOLLARS
3

1936

BILLIONS OF DOLLARS
3

1937

1938

1939

System to have a large proportion of its portfolio in short-term obligations. The change in the distribution of maturities in the portfolio
during the year was consistent with this viewpoint.
UNITED STATES ACQUISITIONS OF FOREIGN GOLD

Gold movements to this country in recent years have been influenced to
an increasing extent by apprehensions of war and by actual hostilities.
In the last year and a half the movement of capital to the United States
has been almost entirely determined by the war situation, which has also
been a powerful influence on American exports.




FEDERAL RESERVE SYSTEM

11

The war flight of capital to the United States assumed large dimensions in September 1938 with the events leading up to the dismemberment of Czechoslovakia. During the year ending
Tapital inflow
August 1939, according to the reported figures, $1,800,000,000 of capital came to the United States from
abroad, a larger sum than in any other period of equal length. Roughly
half the total inflow occurred during the twelve weeks of severest crisis—
four in September 1938 on the occasion of the first Czech crisis, five in
March and April 1939 following the German absorption of Bohemia and
Moravia, and three in August, immediately preceding the outbreak
of war.
The bulk of the capital inflow represented private money seeking
refuge in the United States, most of which was placed on deposit, but
foreign central banks and governments also participated in the movement. In the year ending August 1939 official balances held with the
Reserve banks and certain other institutions rose by $260,000,000. The
increase would no doubt have been much larger were it not for the fact
that foreign central banks are permitted to hold gold in this country, a
facility denied to private persons. Gold earmarked for foreign account
increased $700,000,000 in the year ending August 1939, bringing the total
accumulation of foreign official resources in the United States during the
period to approximately $1,000,000,000.
A second important factor in the gold flow to the United States in the
prewar period was the excess of merchandise exports. The sudden
emergence of a large export surplus in the latter part
P ewa m r
u .? £ i
of 1937 was due less to war influences than to the
chandise balance

coincidence of diminishing business activity in the
United States with increased agricultural output after a year of short
crops occasioned by drought. Imports of industrial goods declined and
certain agricultural commodities shifted from an import to an export
basis. But in addition to these domestic developments there was also a
strong foreign demand for American manufactures. Military expenditures abroad contributed to this demand, partly through enlarging the
flow of goods and materials needed directly for armament and partly
through intensifying the whole range of foreign business activity. The
growth in exports of American manufactures was the chief factor in
maintaining the export surplus of this country at an unusually high level
even after the domestic conditions which had played a large part in
creating the surplus in 1937 had disappeared.
In the middle of 1938 business began to recover and in the ensuingyear there was a renewed expansion of raw material imports, while exports of agricultural products, reflecting chiefly a decline in cotton
exports, receded to an unusually low level; but owing to larger shipments of
 manufactured goods the excess of exports was maintained


12

ANNUAL REPORT OF BOARD OF GOVERNORS

during the year ending August 1939 at $800,000,000, compared with
$1,100,000,000 in the previous twelve months.
Acquisitions of foreign gold by the United States during the year
ending August 1939 reached the unprecedented total of $3,400,000,000.
Most of this gold, as already indicated, was received
m connec on
acquStfons
^
with the reported inflow of capital and
the excess of exports, but a substantial portion represents transactions which have not been identified. It seems probable,
however, that many of these transactions constituted capital transfers
hidden for the purpose of evading exchange restrictions abroad and
particularly the compulsory relinquishment of foreign assets to the
governments.
With the outbreak of war and the imposition of war controls the
recorded inflow of capital came to a halt, but the merchandise export
surplus and credits due to unidentified transactions
rose to
of^a^ 10111118
£ r e a t e r volume. This country continued to
acquire gold from abroad on nearly the same scale as
before. Gold acquisitions in the first four months of the war averaged
$55,000,000 a week, compared with $65,000,000 a week in the record
year that preceded the declaration of war.
The cessation of the recorded capital inflow that occurred following
the commencement of hostilities in Europe reflected two offsetting movements. Capital continued to arrive from the neutral countries of Europe
at fully as great a rate as before the war, but the inflow from England,
France, and Canada came to an end and was succeeded by a release of
funds for account of these countries which offset the continuing receipts
from other areas. The belligerent countries, with the exception of Germany, which had taken such steps some years before, imposed foreign
exchange restrictions immediately after the outbreak of war. For the
most part these restrictions were designed to prevent the further transfer
of capital abroad. In England, moreover, the public was required to offer
short-term assets denominated in dollars and other leading currencies to
the Treasury, which was also authorized to requisition stocks and bonds.
Compulsory sale of foreign assets was not decreed in France, but measures designed to encourage capital repatriation were taken. In the four
war months of 1939 nationals of England, France, and Canada reduced
their holdings of short-term balances in the United States by about
$300,000,000 and sold more than $100,000,000 of American securities.
Some of the proceeds of this liquidation went into official deposits in this
country, and there was some further return of United States capital so
that the net capital outflow to these countries was about $300,000,000.
The net inflow from the rest of the world was of approximately equal
magnitude.
The effect of the war on American foreign trade was equally prompt
though less spectacular. Exports from the United States increased sharply



FEDERAL RESERVE SYSTEM

13

in September and October and, after a setback in November, rose further in December. The rise was partly seasonal, but it carried the figures
well above those of a year previous. By far the largest increase as
compared with 1938 occurred in exports of raw cotton, which had been
unusually small the year before. Iron and steel manufactures, aircraft,
petroleum products, industrial machinery, coal, industrial chemicals, and
copper also showed large advances. Except for cotton, agricultural exports showed few increases, and shipments of tobacco fell off sharply.
Imports also increased under the stimulus of rapidly expanding business activity, but not to the same extent as exports. The export
surplus increased substantially during the last four months of 1939. At
$400,000,000 it was the principal known factor bringing gold to the
United States. Transactions whose nature could not be determined precisely from available figures, but which probably in large part represented
some form of capital movement, also continued to be important.
From the outbreak of war to the end of the year the United States
acquired nearly $1,000,000,000 of foreign gold. In the year and a half
in which the war influence was predominant the United States acquired
$4,500,000,000 of gold, an amount larger than the dollar value of the
entire gold stock of this country at the end of 1933. The gold stock at
the end of 1939 was $17,650,000,000; and it was increasing at the rate
of about $2,500,000,000 a year.
BANKING DEVELOPMENTS

Bank reserves and bank deposits increased further during 1939 to
the highest level on record. The principal factor in the increase was the
inflow of gold from abroad but deposits were expanded also by an increase
in bank holdings of United States Government obligations. The growth
of deposits during the year was larger than the rise in economic activity
with the consequence that the turnover of deposits declined further.
Total reserves of member banks rose by $3,000,000,000 in 1939, following a rise of $2,000,000,000 in 1938; over the two-year period the
amount of reserves held by banks in excess of legal
^nd"dtehositseSerVeS r e < l u i r e m e n t s increased from about $1,000,000,000 to
eposi s
$5?5oo?000,000, the highest on record. At the
a b ^
end of 1939, therefore, nearly half of the $12,000,000,000 of reserves held
by member banks were excess reserves. Rapid expansion of bank reserves in recent years has been due chiefly to the acquisition of foreign
gold, discussed in the preceding section of this report.
Gold imports, together with the increase in bank loans and investments, have also added to our already swollen volume of bank deposits.
Although recent increases in bank deposits have been widespread, with
substantial percentage increases in some of the Southern and far Western
States, the largest growth has been at banks in New York City. These
banks are the chief holders of balances of large institutional and indi-




14

ANNUAL REPORT OF BOARD OF GOVERNORS

vidual investors and receive most of the deposits of funds representing
the capital inflow from abroad, which was mainly responsible for our
gold imports and deposit growth in 1939.
Banks were purchasers of United States Government securities on a
large scale in 1939 and their combined holdings of direct and guaranteed
obligations rose above the previous peak reached in
Increase in
1936. Changes in bank holdings of Government oblisecu^m^esf11
gations in recent years have been chiefly at city banks.
In 1939 the increase was mainly at member banks
in New York City, and in 1938 it was mainly at member banks in other
leading cities. As shown by the chart, United States Government securities held by banks in New York and 100 other leading cities increased
by $1,900,000,000 from June 1938 to the end of 1939; this compares with
an estimated increase of $2,100,000,000 at all commercial banks.
MEMBER BANKS IN 101 LEADING CITIES
BILLIONS OF DOLLARS
1 2

WEDNESDAY FIGURES

BILLIONS OF DOLLARS

12

1937
1935
1936
1938
1939
Government securities include direct and fully guaranteed obligations. Commercial
loans based on new classification, beginning May 12, 1937.

The chart also shows that city banks experienced a livelier demand for
loans from commercial and industrial borrowers in the latter half of
1939, when a sharp increase m business activity
commercial loans brought a growing need for funds to finance the current expansion of business operations, including the
acquisition of enlarged inventories. In this period commercial loans at




FEDERAL RESERVE SYSTEM

15

banks in 101 leading cities rose by nearly $600,000,000, or 13 per cent.
About half of this increase was at New York City banks. Taking the
year as a whole, commercial loans increased at city banks in each Federal Reserve district, except the San Francisco district. Outside the
leading cities there were moderate but widespread increases in commercial and industrial loans and in real estate loans.
During 1939, as during the previous year, there was a decline in the
number of operating banks which was offset only in part by an increase
™
.
in the number of branches. As a result the number
Changes in

banking structure of offices at which banking business is conducted declined during the year, continuing the trend of the
four previous years. The proportion of branches to total banking offices
again increased but at a slower rate than in most earlier years. Details
of these changes may be found in tables 15 and 16 on pages 53-54 of this
report.
There was a net decrease of 160 operating banks during the year, reflecting principally 122 consolidations, absorptions, and mergers. There
were 41 voluntary liquidations and 42 bank suspensions. Thirty new
banks were organized and 15 were added to the records as a result
of revisions. The number of Federal Reserve member banks increased
during the year, while the number of insured nonmember banks and of
noninsured banks continued to decline. The increase in Federal Reserve
membership was due mainly to the admission of 85 nonmember State
banks.
During 1939 the number of branch offices of banks showed a net increase of 49, slightly more than in 1938, but increases in each of these
years are much less than those of the previous four years. The net increase in 1939 was wholly accounted for by branches located outside the
head-office city; the number of head-office city branches has remained
almost unchanged for several years.
BUSINESS CONDITIONS

By the end of 1939 business activity was at a much higher level than
at the beginning of the year. A considerable part of the rise was due
to the influence of war conditions abroad, which in early autumn stimulated a general wave of buying and greatly accelerated the rise in production already under way. The increase in production extended quite
generally throughout industry and led to large increases in payrolls and
many other types of income payments. Cash farm income from marketings rose more than seasonally in the autumn and for the year was about
the same as in 1938, while Government payments to farmers were larger.
Distribution of commodities to individual consumers in turn increased
and this rise, together with larger orders for capital goods, particularly
equipment, took a large part of the expanded output off the market; also,




16

ANNUAL REPORT OF BOARD OF GOVERNORS

exports of industrial products expanded. Part of the increased output,
however, went into inventories and in some lines, as production toward
the end of the year reached levels clearly in excess of current consumption, new orders fell to a level below current output and unfilled orders
wTere being reduced from earlier peak levels. Such developments indicated that in these industries a decline in activity was to be expected
during the early part of 1940. In some other lines, however, it appeared
that new orders were continuing at relatively high levels and that the
volume of unfilled orders on hand at the end of the year was sufficient
to maintain activity at high levels for a considerable period. The extent
of any decrease in output as a whole appeared to depend on whether the
decline would prove cumulative or whether it would be stopped by new
demands forthcoming from domestic sources or from abroad.

SELECTED BUSINESS SERIES
BILLIONS OF DOLLARS
MONTHLY BASIS

BILLIONS OF DOLLARS
ANNUAL BASIS

84
1
NCOME PAYMENTS

72
60
1923-25 = 100

1923-25 = 100

140

140

120

120
^ ^ 1 N D USTRIAL PRODUC T10N

/

100

100

80

80

140

120

100

1935

1936

1937

1938

1939

Sources: Income payments, Department of Commerce; industrial production, Board
of Governors of the Federal Reserve System; common stock prices, Standard Statistics
Company; wholesale commodity prices, Bureau of Labor Statistics. Income payments
and industrial production are adjusted for seasonal variation.




FEDERAL RESERVE SYSTEM

17

The course of industrial production, as measured by the Board's seasonally adjusted index, is shown for 1939 and other recent years on the
accompanying chart. During the first half of 1939
Developments
there was some decline, reflecting in large part reducoutbreak of war
tions in activity in the steel and automobile industries
and a protracted shutdown at bituminous coal mines
pending settlement of contract negotiations between mine operators and
the miners' union. In most important steel-consuming lines, with the
exception of the automobile industry, activity was maintained during
this period or increased further; the decline in steel production was due
largely to the fact that in the latter part of 1938 steel production had
been in excess of consumption and there had been some accumulation
of inventories at steel-consuming establishments. Production of textiles,
shoes, and certain other nondurable goods showed some reduction from
the levels reached at the end of 1938.
In the construction industry activity during the first half of 1939 was
maintained near the highest level in recent years owing to a large volume
of public work and to a substantial amount of private residential building.
Total income payments, which include many items not affected directly
or immediately by changes in industrial activity, did not decline and
distribution of commodities to consumers showed about the usual seasonal fluctuations until May when there was a moderate decline.
In June industrial output began an advance, which continued through
the summer. Steel production increased and coal production rose considerably, following reopening of mines in the latter half of May. There
was an increase in automobile production schedules during the remainder
of the model year, made possible by an improvement in retail sales of
new and used cars. Activity in the machinery and other steel-consuming industries rose further. There were increases also in output of textiles and other nondurable goods. On the railroads, where shipments
had decreased considerably during the shutdown of coal mines, loadings
were in larger volume during the summer. In August retail trade advanced to the level prevailing in the first part of the year.
Throughout the first eight months of 1939 manufacturers and distributors had followed a policy of inventory reduction so that by the
beginning of September their stocks of industrial materials and products
were generally in smaller volume than earlier in the year and in some
instances were at low levels. Stocks of agricultural products, however,
particularly cotton and wheat, were large.
Commodity prices as a whole declined somewhat in the period, reflecting reductions in prices of farm products, particularly livestock;
prices of industrial products showed little change. Common stock prices
at the end of August were generally somewhat lower than at the begin


18

ANNUAL REPORT OF BOARD OF GOVERNORS

ning of the year, although during the summer they had advanced from
the lower levels reached in the spring during the period of unusual international tension.
When war broke out in Europe at the beginning of September industrial activity had already increased to about the level reached at the
close of 1938 and a further increase was anticipated
Developments
in many quarters. The outbreak of war greatly acsubsequent to the

outbreak of war

n

,

i

xl

•,

T

v x i

ex.

celerated the advance. Immediately a wave ol buying developed, extending beyond the commodities and
securities markets to industrial materials and products not traded in on
organized exchanges, such as steel and textiles, and, for a short time,
even to some retail markets. For the most part the buying was from
domestic sources, although foreign demand also increased. Prices of
basic commodities and of many equity securities rose sharply in this
period, while bond prices declined.
The buying wave that occurred at the outset soon subsided but purchasing of some materials continued in considerable volume and was
supplemented by a large volume of orders for finished products, such as
machine tools and other machinery and railway equipment. By the end
of October producers in some lines had sufficient orders on their books for
capacity or near-capacity production throughout the remainder of the
year and in certain instances well into the first quarter of 1940. Commodity prices generally showed little change after the sharp advances of
the first few weeks in September. Prices of semi-finished and finished
steel for delivery in the first quarter of 1940 were reaffirmed in November, and in December prices of grains, cotton, and silk rose substantially,
while there were declines in prices of steel scrap and some nonferrous
metals. Commodity prices at the end of 1939 were generally somewhat
higher than a year earlier but considerably below the levels reached in
1937 at the culmination of the previous recovery in business.
Prices of common stocks, particularly those that earlier had risen
sharply, declined after the middle of October. At the year end stock
prices were generally about the same as a year earlier. In a few lines,
however, notably the public utility and aircraft industries and some
companies producing nondurable goods, especially textiles and foods,
prices were above the level prevailing at the end of 1938.
Industrial output rose sharply in September and October and in the
remaining months of the year continued at a high rate, near capacity
levels in a number of industries. There were also considerable increases
in employment, in total income payments, and in distribution of commodities to consumers. Expenditures on publicly-financed construction,
other than works projects, continued at the high level reached in the
summer, but the volume of public construction undertaken declined
toward the end of the year and was considerably below that of a year




19

FEDERAL RESERVE SYSTEM

earlier when a new Public Works Administration program was initiated.
Private residential building continued at the highest level in recent years.
Other private work was at a level somewhat greater than during the
summer but still considerably below the levels reached in 1937.

FEDERAL RESERVE BANK OPERATIONS

Current earnings, current expenses, net earnings and distribution of
net earnings of the twelve Federal Reserve banks for 1939 as compared
with 1938 are shown in the following table.
Earnings and
As in other recent years, most of the earnings of the
e x p e n s e s o f F e d e r a l 771 i

Reserve banks

i T>

U

I

j

i

r

• x

x

J

* ederal Reserve banks were derived irom interest and
discount on their holdings of United States Govern-

ment obligations.
EARNINGS,

E X P E N S E S , AND DISTRIBUTION OF N E T EARNINGS OF FEDERAL
B A N K S DURING 1939 AND 1938

RESEEVE

[In t h o u s a n d s of dollars]
1939

1938

C u r r e n t earnings

38,501

36,261

C u r r e n t expenses:
Net o p e r a t i n g expenses
Assessments for B o a r d ' s expenses .
Cost of F e d e r a l R e s e r v e c u r r e n c y .

25,669
1,621
1,357

25,557
1,725
1,629

28,647

28,911

Total.

9,854

Additions to c u r r e n t n e t e a r n i n g s 1
Deductions from c u r r e n t n e t earnings 2
Net a d d i t i o n s .
Net earnings..
P a y m e n t to U n i t e d States T r e a s u r y (sec. 13b).
Dividends paid
Transferred t o s u r p l u s (sec. 13b)
Transferred to surplus (sec. 7)

|

7,350

4,814
2,425

Current net earnings.

9,827
7,595

2,389

2,232

12,243

9,582

25
8,110
-426
4,534

120
8,019
-419
1,862

1
Principally profits on sales of U. S. Government securities.
2
Principally charge-offs on bank premises and reserves for losses, and in 1938 contributions to retirement system for prior service.

Since nearly all member banks have reserves substantially in excess of
requirements, they have had little occasion to borrow from their Federal Reserve banks. As a result, earnings on discounts for and advances
to member banks amounted to only $61,000 in 1939. Earnings on industrial advances and commitments made under section 13b of the Federal Reserve Act, which authorizes the Federal Reserve banks, under
certain conditions and limitations, to make industrial advances to established commercial and industrial enterprises either direct or in participation with financing institutions and to enter into commitments to make
such advances, aggregated $744,000. Expenses connected with industrial



20

ANNUAL REPORT OF BOARD OF GOVERNORS

advances and commitments amounted to $424,000 and in addition provision was made in 1939 for estimated losses on such advances in the
amount of $739,000.
Net operating expenses of the Federal Reserve banks, which consisted
of total operating expenses after deducting reimbursements of $4,939,000
received from the United States Treasury and other Government agencies for fiscal agency, depositary and custodianship work, were slightly
larger in 1939 than in 1938, but decreases in the assessments for expenses
of the Board of Governors and in the cost of Federal Reserve currency
resulted in a slightly smaller total of current expenses as compared with
1938. Principal items of expenses were salaries and contributions to
the Retirement System, $20,663,000, postage and expressage, $3,356,000,
taxes and normal depreciation allowances on bank premises, $2,717,000,
and printing, stationery and supplies, $783,000.
As shown in the foregoing table current net earnings of the Federal
Reserve banks amounted to $9,854,000 in 1939. After adding to this
amount $4,391,000 net profits on sales of United States Government securities and other credits to profit and loss aggregating $423,000 and deducting $1,417,000 for special depreciation allowances and charge-offs
on bank premises, $739,000 for losses and reserves for estimated losses
on industrial advances, and other charges to profit and loss aggregating $269,000, there remained net earnings of $12,243,000, as compared
with $9,582,000 in 1938.
Federal Reserve banks paid dividends to member banks aggregating
$8,110,000 at the rate of 6 per cent per annum on paid-in capital, as provided in the Federal Reserve Act. Payments to the United States Treasury under provisions of section 13b of the Federal Reserve Act, relating
to industrial advances, amounted to $25,000. These payments are made
in accordance with the provisions of the Federal Reserve Act wliich require the Federal Reserve banks to pay to the Secretary of the Treasury
2 per cent, if earned, on the amounts paid to the Federal Reserve banks
by the Secretary of the Treasury for the purpose of making industrial
advances. The remaining net earnings of the Federal Reserve banks,
transferred to surplus, amounted to $4,108,000, as compared with $1,443,000 in 1938. Itemized earnings and expenses in 1939 and distribution of net earnings for each Federal Reserve bank are shown in Table
5 on pages 40-41.
Total earnings on bills and securities were $2,177,000 more in 1939
than in 1938. The increase in earnings was the result of an increase of
$20,000,000 in daily average holdings of United States Government securities and an increase from 1.34 per cent to 1.43 per cent in the average
rate of earnings thereon. The increase in the rate of earnings was due
to the replacement of maturing bills with bonds and notes. Average
daily holdings of bills and securities, together with average rates and



21

FEDERAL RESERVE SYSTEM

amounts of earnings thereon, during the last four years are shown in
the following table:
EARNINGS ON BILLS AND SECURITIES
[Amounts in thousands of dollars]

Total

Daily average holdings:
1936
1937
1938
1939
Earnings:
1936
1937
1938
1939
Average rate of earnings (per cent):
1936
1937
1938
1939

Bills
discounted
m

United States
Government
Bills
Industrial
securities,
bought in
advances
open market direct and
guaranteed

2,469,688
2,542,545
2,590,597
2,602,590

6,135
13,749
8,739
5,103

3,725
3,390
543
440

2,430,657
2,503,865
2,564,877
2,584,268

29,171
21,541
16,438
12,779

36,909
40,352
35,404
37,581

108
212
124
61

30
24
3
2

35,184
39,025
34,446
36,903

1,587
1,091
831
615

1.49
1.59
1.37
1.44

1.76
1.54
1.42
1.20

.81
.71
.48
.45

1.45
1.56
1.34
1.43

5.44
5.06
5.05
4.81

The number of banks on the Federal Reserve par list at the end of
1939 was 11,758, comprising all of the 6,362 member banks and 5,396
nonmember banks. The number of nonmember banks
Interdistnct
(other than mutual savings banks and banks on which
collection system

°

no checks are drawn) not on the par list was 2,719.
Banks on the par list pay without deduction of exchange charges such
checks drawn upon them as are forwarded for payment by the Federal
Reserve banks.
Changes in the number of par and nonpar banks during 1939 reflect
principally changes in the banking structure. 1 During the year there
was a net reduction of 3 in the number of nonpar banks, due to 44
such banks terminating their existence and 16 becoming par banks,
offset by 21 new banks opening as nonpar banks and 36 par banks assuming a nonpar status. As these figures show, more of the banks which
were in existence throughout the year withdrew from the par list than
were added to it. The number of banks on the par list declined 185
during the year, as a result of mergers, voluntary liquidations, suspensions, and withdrawals from the par list.
Of the gross addition of 57 to the number of nonpar banks, 20 were
in the Atlanta and 15 in the St. Louis Federal Reserve districts. The
net increase in the number of nonpar banks in the Atlanta district was
9 and in the St. Louis district 5. The distribution of the number of
nonpar banks by States at the end of the year was as follows: Minnesota 411, Georgia 260, Mississippi 175, Tennessee 171, Nebraska 161,
Wisconsin 158, Arkansas 132, Alabama 130, North Carolina 126, South
Carolina 120, North Dakota 117, Iowa 110, Missouri 106, Louisiana 104,
1

See page 15 and table 17, page 55.




22

ANNUAL REPORT OF BOARD OF GOVERNORS

Texas 102, South Dakota 93, Florida 87, Virginia 43, and twelve other
States 113.
The credit to the National Bank of Hungary, granted by the Federal
Reserve banks in 1931, was reduced during 1939 in accordance with the
terms of the renewal agreement of 1937 (Annual ReCr

ntrllbanks e i g n

P

°rt

f

°r

193?

>

P

'

3 5

^

0 n

D e C e m b e r

31

>

1939

>

t h e

share of the Federal Reserve banks in the outstanding
amount of the credit was $1,830,000, as compared with $2,055,000 at the
end of 1938.
With authorization of the Board of Governors, four loans secured by
gold earmarked at the Federal Reserve Bank of New York were granted
by that and other Federal Reserve banks to a foreign central bank in
June, September, November, and December. The first loan, which had
been renewed once, and the second loan matured in December, when
they were replaced by a fourth loan in the form of a credit for a larger
amount, to be made available as required. Repayment in full of this
credit is due not later than June 15, 1940. The third loan, which was
not covered by the fourth, was repayable in February 1940. Amounts
outstanding on December 31, 1939, under the third and fourth loans
totaled $5,020,000.
LEGISLATION RELATING TO THE FEDERAL RESERVE SYSTEM

Renewal of Loans to Executive Officers of Member Banks.—By an
Act of Congress approved June 20, 1939, section 22(g) of the Federal
Reserve Act was amended so as to permit loans made to an executive
officer of a member bank prior to June 16, 1933, to be renewed or extended, subject to the other provisions of the law, for periods expiring
not later than June 16, 1944. (The law had previously limited such
renewals or extensions to June 16, 1939.)
Repeal of Compulsory Federal Reserve Membership of Insured State
Banks.—The Act of June 20, 1939, which amended section 22(g) of the
Federal Reserve Act as indicated above, also repealed section 12B(y)
(1) of the Federal Reserve Act which had required that after July 1,
1942, each State bank with average deposits of $1,000,000 or more must
be a member of the Federal Reserve System in order to have its deposits
insured by the Federal Deposit Insurance Corporation under section 12B
of the Federal Reserve Act.
Government Obligations as Collateral for Federal Reserve Notes.—By
an Act of Congress approved June 30, 1939, the second paragraph of
section 16 of the Federal Reserve Act was amended so that the authority
of the Board of Governors of the Federal Reserve System to permit
direct obligations of the United States to be used as collateral for Federal
Reserve notes was extended from June 30, 1939, until June 30, 1941.
Existing Interlocking Bank Directorates.—A bill, S. 2150, to amend
the second paragraph of section 8 of the Clayton Act so as to extend




FEDERAL RESERVE SYSTEM

23

from February 1, 1939, to February 1, 1944, the period during which
certain interlocking relationships lawfully existing on the date of the
Banking Act of 1935 might continue was vetoed by the President of
the United States on August 5, 1939.
CHANGES IN REGULATIONS OF THE BOARD OF GOVERNORS

The regulations of the Board of Governors were changed during the
year 1939 in the following respects:
Rediscount of Notes Secured by Adjusted Service Certificates.—On
April 6, 1939, the Board of Governors repealed its Regulation G, series
of 1932, relating to the rediscount by Federal Reserve banks of notes
secured by adjusted service certificates. No notes covered by the regulation had been discounted with the Federal Reserve banks in several
years, and the Board announced that if any applications for the rediscount of any such notes should be received in the future they would
be handled under the pertinent provisions of the law in the same manner
as if the provisions of the regulation were still in effect. (As indicated
below, the designation "Regulation G" was applied later in the year to
the regulation issued by the Board on noncash collections.)
Extension of Credit by Brokers, Dealers, and Members of National
Securities Exchanges.—Effective May 22, 1939, the Board of Governors amended its Regulation T, relating to the extension and maintenance of credit by brokers, dealers, and members of national securities
exchanges. The amendment clarified and liberalized, with appropriate
safeguards, provisions that relate to bona fide cash transactions in
securities and to certain other classes of transactions that are not effected
in margin accounts.
Loans to Executive Officers.—Effective July 1, 1939, the Board of
Governors amended the definition of the term "executive officer" contained in section 1(b) of its Regulation 0, which relates to loans to
executive officers of member banks. The regulation had previously
included as "executive officers," among others, all persons who have
certain titles, such as chairman of the board, president, vice-president,
etc., regardless of their actual duties. The amendment provided that
the term should include only those officers who actually participate or
have authority to participate in the operating management of the bank
or a branch, but provided that persons having certain titles, such as
chairman of the board, president, vice-president, etc., would be assumed
to be executive officers "unless it is provided by resolution of the board
of directors or the bank's by-laws that any such officer is not authorized
to participate in the operating management of the bank and he does
not actually participate therein."
The amendment also changed the date in section 4(a) of the regulation to "June 16, 1944." This change was made to conform to the change




24

ANNUAL REPORT OF BOARD OF GOVERNORS

in the law, as referred to above, which extended until June 16, 1944,
the date to which loans made by member banks to their executive officers prior to June 16, 1933, may be extended or renewed.
Interlocking Bank Directorates under the Clayton
Act.—Effective
August 1, 1939, the Board of Governors amended sections 3(a) and
3(e) of its Regulation L, relating to interlocking bank directorates
under the Clayton Act, so as to extend until February 1, 1940, the time
during which certain persons who had been serving member banks might
continue to serve a member bank and not more than one other bank.
Check Clearing and Collection.—Effective September 1, 1939, the
Board revised its Regulation J, relating to check clearing and collection. The revision, which made a number of technical changes in the
regulation, was adopted in connection with the new procedure established at the Federal Reserve banks to give their member banks more
prompt credit for checks deposited with the Reserve banks for collection and to reduce the amount of work required in preparing checks for
deposit with the Reserve banks.
Trust Powers of National Banks.—Effective November 20, 1939, the
Board of Governors amended its Regulation F, relating to trust powers
of national banks. The only substantial change made was in the requirements of section 11 regarding self-dealing in the investment of trust
funds and the sale or transfer of trust assets. The change exempted
from the requirements of the section all transactions which are specifically authorized by court order. Certain other clarifying and technical changes also were made in the regulation.
Membership of State Banking Institutions in the Federal Reserve
System.—Effective November 20, 1939, the Board of Governors amended
its Regulation H, relating to membership of State banking institutions
in the Federal Reserve System. A number of technical changes were
made in the regulation, but the principal changes were those made necessary by the repeal, as referred to above, of the statutory requirement
in subsection (y) of section 12B of the Federal Reserve Act that after
July 1, 1942, each State bank with average deposits of $1,000,000 or
more must be a member of the Federal Reserve System in order to have
its deposits insured by the Federal Deposit Insurance Corporation under"
section 12B of the Federal Reserve Act.
Regulation on Noncash Collections.—On December 26, 1939, the
Board of Governors adopted a regulation governing the collection by
Federal Reserve banks of notes and bills and other "noncash items" for
member banks and nonmember clearing banks. The new regulation was
made effective February 1, 1940, and was designated Regulation G.
(The designation "Regulation G" had previously applied to the Board's
regulation relating to the rediscount by Federal Reserve banks of notes
secured by adjusted service certificates, but that regulation, as indi


FEDERAL RESERVE SYSTEM

25

cated above, was repealed on April 6, 1939.) The regulation on noncash
collections was issued by the Board in order that the principal terms
and conditions relating to the collection of such items might be published in the Federal Register and it required no change in the existing
practices of the Federal Reserve banks. Other provisions regarding the
collection of noncash items are contained, as heretofore, in the circulars
of the individual Federal Reserve banks.
BANK EXAMINATIONS

Federal Reserve Banks.—Each of the 12 Federal Reserve banks was
examined during the year by the Board's Division of Examinations.
Foreign Banking 'Corporations.—The head office of the one banking
corporation now in active operation organized under the provisions of
section 25(a) of the Federal Reserve Act to engage in foreign or international banking was examined during the year by the Board's Division
of Examinations.
Member Banks.—All member banks are examined by a Federal
agency; national banks by the Comptroller of the Currency, and State
member banks by the Federal Reserve System.
State member banks are subject, under the provisions of the Federal
Reserve Act, to examinations made by direction of the Board of Governors of the Federal Reserve System or of the Federal Reserve banks
by examiners selected or approved by the Board of Governors. The
policy approved by the Board of Governors for examinations pursuant
to such provisions is that at least one regular examination of each State
member bank, including its trust department, be made during each
calendar year by examiners for the Federal Reserve banks. In order to
avoid duplication of examinations and to minimize inconvenience to the
banks examined, the policy of making joint examinations in cooperation
with the State banking authorities wherever practicable was followed
during the past year as in previous years.
GRANTS OF AUTHORITY

During the year 1939, 20 national banks were granted authority by
the Board to exercise one or more trust powers under the provisions of
section 11 (k) of the Federal Reserve Act. This numnatimud banks
^eY m c m d e s grants of one or more additional powers
to three banks which previously had been granted certain trust powers; it also includes one grant of trust powers contingent
upon the consolidation of a national bank with a State institution having a trust department, and one grant of trust powers contingent upon
the conversion of a State bank into a national banking association, neither
of which transactions had been consummated by the end of the year.



26

ANNUAL REPORT OF BOARD OF GOVERNORS

In ten cases the grant of trust powers did not represent the establishment of new trust facilities. In nine of such cases the grants were made
in connection with the conversion of a State bank into a national bank
or the consolidation of a State bank with a national bank, thereby
enabling the national banks concerned to continue operation of trust departments acquired by reason of such conversions or consolidations. In
the other case the grant was made to a newly organized national bank to
enable it to acquire the trust business of its predecessor national bank.
One grant of trust powers was made to a newly chartered national
bank which was organized solely for the purpose of doing a trust business. I t appears that this is the first instance of a national bank being
chartered under such circumstances.
During the year, 12 operating national banks surrendered their trust
powers, and the trust powers of 15 other national banks were terminated,
14 because of the banks being placed in voluntary liquidation and one
because of a consolidation with another national bank having trust
powers. The reasons generally given for the surrender of trust powers
were either the entire lack of trust business, or that the small amount of
such business, past or prospective, did not justify maintenance of a trust
department.
The net result of the various actions with respect to trust powers
during the year 1939 was a decrease of ten in the number of national
banks holding one or more general powers, and a decrease of one in the
number of national banks holding restricted trust powers.
On December 31, 1939, 1,873 national banks held permits to exercise
trust powers. A list of such banks with indication of the power or powers
each bank is authorized to exercise will be supplied to those requesting
it. This list does not include 12 national banks which had authority at
that time to exercise restricted trust powers only.
The term "restricted trust powers" as used above refers to powers
granted a bank to acquire certain trust accounts but not to acquire other
fiduciary business. Such restricted powers have been granted to enable
a newly organized, consolidated, or converted institution to acquire the
trust business held by a predecessor bank or banks, or to enable a bank
to administer one or more specific trust accounts, when, in the light of
all the facts and circumstances in the particular case, such action was
deemed warranted.
During the year 1939 the Board acted upon the applications for voting permits submitted by holding company affiliates of member banks
in accordance with the provisions of section 5144 of
?ffililtl s C O m p a n y t h e R e v i s e d Statutes and section 9 of the Federal Reserve Act, and authorized the issuance of six permits
for general purposes and six permits for limited purposes.
Under the authority of section 301 of the Banking Act of 1935, the



FEDERAL RESERVE SYSTEM

27

Board determined that seven organizations were not engaged directly
or indirectly as a business in holding the stock of, or managing or controlling, banks, banking associations, savings banks or trust companies,
and that, therefore, they were not holding company affiliates except
for the purposes of section 23A of the Federal Reserve Act.
During the year there were no changes in the list of foreign banking
corporations operating under agreements entered into with the Board of
Governors pursuant to section 25 of the Federal ReForeign banking
s e rve Act and of foreign banking corporations charcorporations
i -r»
i i
..
tered by the Board under the provisions of section
25(a) of the Federal Reserve Act,
The 4 corporations organized under State law and operating under
agreements with the Board pursuant to the provisions of section 25 of
the Federal Reserve Act relating to the investment by member banks
in stocks of corporations engaged principally in international or foreign
banking are: Bankers Company of New York, which is affiliated with
the Bankers Trust Company of New York; International Banking Corporation, which is affiliated with the National City Bank of New York;
First of Boston International Corporation, wrhich is affiliated with the
First National Bank of Boston; and French American Banking Corporation, wrhich is owned by the Guaranty Trust Company of New York, the
First National Bank of Boston, and the Comptoir National D'Escompte
of Paris.
The Chase Bank, which commenced business in 1930 and is affiliated
with the Chase National Bank of New York, is the only banking corporation in active operation organized under the provisions of section
25(a) of the Federal Reserve Act to engage in international or foreign
banking.
Two of the five corporations referred to above have no foreign
branches. The other three corporations operate, either directly or
through subsidiary corporations, 11 foreign branches or offices. There
has been no change in the list of such branches during the past year,
and they are located as follows: in England, 3; France, 3; Spain, 2;
China, 2; Hong Kong, 1.
During the year the Board granted a member bank permission to
establish two foreign branches, which, however, had not been formally
opened for business by the end of the year. Due to
Foreign branches w a r cono }itions certain member banks with branches
of m e m b e r banks

in London obtained the Board's permission to transfer
the banking activities of the branches to points outside that city whenever such action is deemed necessary during the present emergency.
Two London offices of member banks have been temporarily closed by
reason of exigencies of the war.
At the
 end of the year, 7 member banks were operating a total of 92


28

ANNUAL REPORT OF BOARD OF GOVERNORS

branches or offices located in 62 cities in 22 foreign
dencies or insular possessions of the United States.
and offices, 4 national banks were operating 83, and
bers were operating 9. The foreign branches were
phically as follows:
Argentina
Belgium
Brazil
Canal Zone
Chile
China
Colombia
Cuba

9
3
4
4
2
7
2
16

Dominican Republic.. 6
England
11
France
2
Hong Kong
1
India
4
Japan
4
Mexico
1
Panama
4

countries or depenOf the 92 branches
3 State bank memdistributed geogra-

Peru
Philippine Islands . ..
Puerto Rico
Straits S e t t l e m e n t s . . .
Uruguay
Venezuela

Under section 8(a) of the Securities Exchange Act of 1934 and the
Board's Regulation T, brokers and dealers subject to the Act may not
borrow in the ordinary course of business from a nonRegulation T—
member bank on registered securities (other than
agreements with

. .

°

nonmember banks exempted securities) unless such nonmember bank has
signed an agreement with and in the form prescribed
by the Board of Governors of the Federal Reserve System. At the end
of the year there were 152 nonmember banks with such agreements in
force.
MEETINGS OF THE FEDERAL OPEN MARKET COMMITTEE

Meetings of the Federal Open Market Committee were held in Washington on the following dates in 1939: March 6-7, March 20, April 19,
June 20-21, September 18, and December 13. The executive committee
of the Federal Open Market Committee met from time to time throughout the year as occasion required. A record of actions taken by the
Committee on questions of policy relating to open-market operations is
published as an appendix to this report,
MEETINGS OF THE FEDERAL ADVISORY COUNCIL

Four meetings of the Federal Advisory Council were held in Washington during 1939 on the following dates: February 13-14, June 5-6,
October 9-10, and November 20-21. Recommendations of the Federal
Advisory Council to the Board of Governors are published in the appendix to this report.
BOARD OF GOVERNORS-STAFF AND EXPENDITURES

Mr. Lauchlin B. Currie, who had been serving as an Assistant Director of the Board's Division of Research and Statistics since December 1934, was appointed as Administrative Assistant
Change in
t o t h e p r e s i d e n t of the United States, effective July
Board staff

'

J

17, 1939.
conducting the work of the Board during the year

The total cost of



29

FEDERAL RESERVE SYSTEM

1939 was $1,577,825.41. Details are shown in table 8 on pages 44-45.
For the general expenses of the board two assessments
Board
were levied against the Federal Reserve banks aggreexpenditures

.

°

gating $1,621,463.77 or about one-half of one per cent
of their average paid-in capital and surplus for the year. Under an
arrangement with the Federal Reserve Bank of Chicago the accounts of
the Board were audited twice during the course of the year 1939 by the
Auditor of the Federal Reserve Bank of Chicago, who certified them to
be correct.







TABLES

32

A N N U A L REPORT OF BOARD OF GOVERNORS

NO. 1.-STATEMENT OF CONDITION OF THE FEDERAL RESERVE BANKS (IN DETAIL)
DECEMBER 30, 1939
ASSETS
Amounts in the column to the right are those shown in the Board's weekly statement, their components being
shown in the column to the left. (In thousands of dollars)
Gold certificates with Federal Reserve agents
Gold certificates in interdistrict settlement fund with Board of Governors
Gold certificates held by banks
Gold certificates on hand and due from U. S. Treasury
Redemption fund—Federal Reserve notes
Total gold reserves
Other cash:
United States notes
Silver certificates
Standard silver dollars
National and Federal Reserve bank notes
Subsidiary silver, nickels and cents

5,371,000
8,317,676
1,510,444

15,209,023
71,830
223,079
2,932
1,128
16,225

Total other cash

315,194

Total reserves
Bills discounted:
Secured by U. S. Government obligations, direct and guaranteed:
Discounted for member banks
For others

15,524,217

549
25

Total secured by U. S. Government obligations, direct and guaranteed
Other bills discounted:
For member banks
For others

15,199,120
9,903

574
1,171
5,020

Total other bills discounted

6,191

Total bills discounted

6,765

Industrial advances
U. S. Government securities, direct and guaranteed:
Bonds
Notes

11,044
1,351,045
1,133,225

Total U. S. Government securities, direct and guaranteed

2,484,270

Total bills and securities

2,502,079

Due from foreign banks
Federal Reserve notes of other Reserve banks
Uncollected items:
Transit items
Exchanges for clearing house
Other cash items
Total uncollected items
Bank premises
Other assets:
Miscellaneous assets acquired account industrial advances.
Industrial advances past due
Other bills and securities past due
Claims account closed banks
Total
Lessreserves
Net
Interest accrued
Premium on securities
Deferred charges
Suspense account and miscellaneous assets
Total other assets
Totalassets
1

Before closing books at end of year.




47
33,454
813,755
28,776
24,675
867,206
43,166
1,215
2,565
1,834
1,586
7,200
4,446
2,754
8,551
43,831
608
3,387
59,131
19,029,300

FEDERAL RESERVE SYSTEM

33

No. L—Federal Reserve Banks (In Detail)—Continued
LIABILITIES
Amounts in the column to the right are those shown in the Board's weekly statement, their components being
shown in the column to the left. (In thousands of dollars)
Federal Reserve notes outstanding (issued to Federal Reserve banks)
Held by issuing Federal Reserve banks and branches
Forwarded for redemption

5,274,522
300,531
15,445

Federal Reserve notes in actual circulation (including notes held by Treasury and
by Federal Reserve banks other than issuing bank)
Deposits:
Member bank—reserve account
U. S. Treasurer—general account
Foreign bank
Other deposits:
Nonmember clearing account
Officers' checks
Federal Reserve exchange drafts
All other

4,958,546
11,652,396
634,245
397,443
166,156
34,564
137
54,980

Total other deposits

255,837

Total deposits

12,939,921

Deferred availability items
Other liabilities:
Accrued dividends unpaid
Unearned discount
Discount on securities
Reserves for estimated losses on bills and securities
Suspense account and miscellaneous liabilities

776,665
836
6
285
2,287

Total other liabilities

3,414

Total liabilities

18,678,546
CAPITAL ACCOUNTS

Capital paid in
Surplus (sec. 7)
Surplus (sec. 13b)
Other capital accounts:
Reserve for contingencies

135,599
149,152
27,264
32,665

Earnings:
Gross earnings
Current expenses

38,501
28,647

Current net earnings
Add—profit and loss.
Deduct:
Dividends accrued since closing of books

9,854
4,330

Net earnings available for depreciation allowances, reserves and surplus
Total other capital accounts
Total liabilities and capital accounts

6,074 •




8,110
38,739
19,029,300

CO

NO. 2.-STATEMENT OF CONDITION OF EACH FEDERAL RESERVE BANK AT END OF 1938 AND 1939
[In thousands of dollars]
Total
1939

Boston
1938

1939

New York

Cleveland

Philadelphia

1938

1939

1S38

1939

1938

1939

Richmond

1938

1939

1938

405,603
935
20,223

356,645
1,222
21,917

>

ASSETS
Gold certificates on hand and due fromU. S. Treasury. 15,199,120 11,787,720
9,873
Redemption fund—Federal Reserve notes
JL903
368,213
Other cash
315,194

865,816
924
28,528

660,319
328
36,112

7,225,434
1,619
71,716

5,115,945
1,226
103,924

846,062
1,071
26,470

546,461 1,027,910
1,236
816
29,221
21,340

783,882
810
23,751

15,524,217 12,165,806

895,268

696,759

7,298,769

5,221,095

873,603

576,918 1,050,066

808,443

Bills discounted:
Secured by U.S.Government obligations, direct
and guaranteed
Other bills discounted
Total bills discounted
Bills bought in open market
Industrial advances

426,761 379,784

w

M
O

w
574
6,191

2,099
1,872

30

32
9

90
2,258

804
241

150
513

704
473

113
542

191
54

42
230

54
153

.^6,765

3,971
549
15,644

30

41
41
1,945

2,348

1,045
215
3,879

663

1,177
56
3,120

655

245
51
618

272

207
24
1,466

•*11,044

1,301

2,035

3,084

315

948

U. S. Government securities, direct and guaranteed:
Notes
Bills

>

1,351,045
1,133,225

840,893
1,156,947
566,175

98,098
82,283

63,287
87,073
42,611

419,593
351,944

2,564,015

180,381

192,971

2,584,179
172
32,570
710,849
42,768
44,348

181,712
3
584
82,640
2,889
3,887

194,998
13
757
69,882
2,945
2,893

19,027,335 15,580,692

1,166,983

9 68,247

Total U. S. Government securities, direct
and guaranteed
/ . 2,484,270

267,426
367,938
180,058

115,673
97,022

771,537

815,422

212,695

775,920
18
4,336
245,509
9,895
17,226

820,561
65
5,337
207,064
9,038
13,388

216,442
5
1,945
73,955
4,573
5,829

8,351,673

6,276,548

1,176,352

140,975
118,247

84,554
116,335
56,931

70,076
58,778

39,461
54,291
26,569

222,761

259,222

257,820

128,854

260,192
4
2,137
97,538
5,547
6,523

258,734
16
1,966
74,509
6,017
5,018

130,074
2
4,189
64,944
2,545
3,486

122,018
7
2,946
47,040
2,621
2,508

869,972 1,422,007 1,154,703

632,001

556,924

ffl
o
>
H

o
*1
o
o
<J

120,321

227,114
17
2,081
54,506
4,699
4,637

O

73,057
100,515
49,189

O
Total bills and securities
Due from foreign banks
Federal Reserve notes of other Federal Reserve banks
Uncollected items
Bank premises
Other assets
Total assets




2,502,079
47
33,454
867,206
41,749
58,583

(Jl

LIABILITIES
Federal Reserve notes in actual circulation 1

4,958,546

4,451,824

408,195

384,130

1,269,922

1,029,296

348,938

320,562

463,123

427,467

229,550

208,287

Deposits:
Member bank—reserve account
U. S. Treasurer—general account
Foreign bank
Other deposits

111,653,232
! 634,270
i 397,443
! 255,836

8,724,050
923,225
199,211
241,512

544,545
77,716
29,243
6,758

392,294
81,324
14,360
4,251

6,319,837
139,593
136,108
165,324

4,460,340
212,295
71,369
188,479

598,597
65,043
39,417
16,820

374,231
58,155
19,545

680,194
113,236
37,791
8,181

477,880 282,998
25,590
116,296
17,473
18,349
2,513
7,228

231,576
48,507
8,576
2,033

Total deposits
Deferred availability items
Other liabilities including accrued dividends

J12,940,781 10,087,998
| 776,665
694,217
J
2,558
2,998

658,262
76,082
183

492,229
67,897
175

5,760,862
199,137
873

4,932.483
194,382
1,214

719,877
73,866
965

458,830
57,591
664

839,402
86,696
126

619,753
75,047
134

328,574
58,805
10

290,692
43,155
108

1,550 15,237,037

1,142,722

944,431

8,230,794

6,157,375

1,143,646

837,647 1,389,347 1,122,401

616,939

542.242

134,575
149,152
27,264
32,664

9,384
10,405
2,874
1,598

9,411
10,083
2,874
1,448

50,972
53,326
7,109
9,472

51,043
52,463
7,457
8,210

12,115
14,198
4,393
2,000

5,171
5,247
3,246
1,398

5,005
4,983
3,293
1,401

19,027,335 15,580,692

1,166,983

8,247

8,351,673

6,276,548

1,176,352

27
2,677

930

7
1,525

1,140

7
2,234

761

3
1,282

1,362,927
93,005

1,134,257
104,961

368,874
19,936

340,668
20,106

488,021
24,898

451,834
24,367

245,605
16,055

222,006
13,719

1,269,922

1,029,296

348,938

320,562

427,467

229,550

208,287

457,000
232

250,000
57

230,000
207

457,232

250,057

230,207

Total liabilities

18,i

CAPITAL ACCOUNTS
Capital paid in
Surplus (sec. 7)
Surplus (sec. 13b)
Other capital accounts

;
•

Total liabilities and capital accounts

|
I

135,599
151,720
26,839
34,627

12,213
13,696
4,416
2,000

9,070

76
14,272

479

1,297

FEDERAL RESERVE NOTE STATEMENT
Federal Reserve notes:
Issued to Federal Reserve bank by Federal Reserve
agent
Held by Federal Reserve bank

5,274,522
315,976

4,790,047
338,223

429,660
21,465

408,865
24,735

4,958,546

4,451,824

5,371,000
1,365

4,888,000
3,397

440,000
30

420,000
36

1,385,000
184

1,155,000
997

375,000
177

345,000
827

! 5,372,365
I

4,891,397

440,030

420,036

1,385,184

1,155,997

375,177

345,827

In actual circulation *.

Total collateral held
1

13,546
14,323
1,007
3,426

869,972 1,422,007 1,154,703

Contingent liability on bills purchased for foreign
correspondents
Commitments to make industrial advances

Collateral held by agent for notes issued to banks:
Gold certificates on hand and due from U. S.
Treasury
Eligible paper

13,830
14,323
1,007
3,500

491,000

556,924

Includes Federal Reserve notes held by the U. S. Treasury or by a Federal Reserve bank other than the issuing bank.




CO
Or

A7o. 2.—Statement of

Condition—Continued

CO

[In thousands of dollars]
Atlanta
1939

Chicago

1938

1939

St. Louis

1938

1939

Minneapolis

1938

1939

Kansas City

1938

1939

1938

Dallas
1939

San Francisco
1939

1938

Gold certificates on hand and due from U.S. Treasury.. 300,831 275,267 2,455,662 2,200,214 413,898 316,830 258,566 241,452 348,852 304,342 242,196 210,498
624
745
772
629
583
843 • 219
478
606
509
364
191
16,661 15,526
39,906
51,557 17,783 19,634 9,268
Other cash
7,786 17,418 14,773 15,259 14,400

808,290
1,336
30,622

775,865
1 690
29,612

318,237 291,376 2,496,192 2,252,400 432,453 337,307 268,053 249,844 366,748 319,624 257,819 225,089

840,248

807,167

1938

ASSETS

Total reserves
Bills discounted:
Secured by U. S. Government obligations, direct
Other bills discounted

20
190

75
111

210

186
19
825

643

34,279
47,163
23,080

148,547
124,599

90,644 45,803
124,714 38,419
61,031

100,392 104,522

273,146

276,389 84,222 106,791 57,441

101,296 105,552
2
6
3,617
3,443
33,471 24,887
2,034
2,076
2,359
1,809

274,113
6
5,475
119,172
3,390
5,974

^

694
U. S. Government securities, direct and guaranteed:
Bills
Total U. S. Government securities, direct
Total bills and securities
Due from foreign banks
Federal Reserve notes of other Federal Reserve banks
Bank premises
Other assets
Total assets
* Less than $500.




54,597
45,795

643

324

55
74
129
68
415

15
186
201
11

50
216

43
91

25
906

74
567

4
146

4
20

35
361

63
34

266

134
2
964

931

641 _ 150
16
500
268

24
16
775

396

743

908

97
39
1 348

35,023 36,677
48,187 30,764
23,581

18,633
25,636
12,546

61,021
51,183

45
45
2
21

181

>
H
hd
O
W

o
*)
w
o

>

37,140 48,970 30,913
51,101 41,075 42,531
25,007
20,814

111,015
93,116

66,476
91 463
44,758

©

56,815 112,204 113,248 90,045 94,258

204.131

202,697

a
o

o
*j

277,001 84,434 106,859 68,450 57,915 113,316 114,173 90,695 95,073 205,435 204,181
1
21
1
3
2
5
1
5
4
12
* 1,428 1,975 1,453 865 1,308 4,505 3,034
5,886 2,510
2,931
95,915 36,269 29,838 1,316 16,889 33,000 32,624 26,817 25,622
33,096
32,073
3,964 2,243
2,291 20,795
3,106
1,524
3,089 1,175 1,261
2,956
3,243
1,396
4,349 1,903
1,679
1,096
2,514
1,779 2,140 1,565
5,120
3,627
1,622
461,016 429,149 2,904,322 2,639,536 559,813 480,908 361,632 328,698 520,660 472,747 379,512 349,923 1,091,364 1,053,337

<

W

o
w
w

LIABILITIES
Federal Reserve notes in actual circulation l

U. S. Treasurer—general account
Other deposits

996,721 193,549 183,131 141,427 136,857 183,908 171,390 83,575 81,375

388,040

361,210

211,821 188,709 1,528,702 1,299,880 270,676 209,543 154,788 113,568 260,687 227,796 216,794 183,468
22,462 41,110
71,030
176,765 32,195 35,355 24,452 43,294 23,077 24,886 21,233 38,428
4,587 11,784
9,346
5,784 11,784 5,784
5,983
23,734 11,784
14,222
6,980
49,169
9,584 2,686
3,779
6,105
7,294
5,093
991
1,476
4,168
5,312
1,658
6,813

583,593
18,643
29,322
20,141

564,765
46,810
14,160
13,762

255,318 240,967 1,654,213 1,502,037 321,949 255,974 194,691 165,228 296,539 259,942 259,395 230,366
120,150
96,322 33,564 31,361 16,362 17,480 29,887 31,468 25,388 27,254
30,078 24,190
72
48
37
95
153
51
87
46
160
199
15
17

Deposits:

651,699
26,650
2

639,497
28,070
122

162,941 151,398 1,085,378

448,354 416,708 2,859,901 2,595,279 549,077 470,517 352,567 319,660 510,406 462,846 368,406 339,032 1,066,391 1,028,899

Total liabilities
CAPITAL ACCOUNTS

4,621
5,725
713
1,603

Other capital accounts
Total liabilities and capital accounts
Contingent liability on bills purchased for foreign

4,495
5,630
713
1,603

13,494
22,824
1,429
6,674

13,488
22,666
1,429
6,674

4,073
4,709
538
1,416

3,946
4,685
545
1,215

2,931
3,152
1,001
1,981

2,903
3,153
1,001
1,981

4,314
3,613
1,142
1,185

4,212
3,613
1,142
934

4,066
3,974
1,268
1,800

3,961
3,892
1,266
1,772

10,628
10,224
2,121
2,000

10,352
9,965
2,121
2,000

461,016 429,149 2,904,322 2,639,536 559,813 480,908 361,632 328,698 520,660 472,747 379,512 349,923 1,091,364 1,053,337
2
46

2,960

6
8,578

177,629 166,266 1,121,094 1,031,415 204,926 200,495 146,847 142,702 193,713 180,418 92,100 89,921
9,028 8,525 8,546
5,845
9,805
34,694 11,377 17,364
5,420
14,688 14,868
35,716

443,126
55,086

421,200
59,990

996,721 193,549 183,131 141,427 136,857 183,908 171,390 83,575 81,375

388,040

361,210

180,000 169,000 1,140,000 1,050,000 209,000 207,000 147,500 143,500 195,000 185,000 94,500 92,500
82
744
627
157
24
129
118
55

464,000

434,000
79

180,000 169,157 1,140,000 1,050,129 209,055 207,000 147,618 143,582 195,744 185,627 94,500 92,524

464,000

434,079

78

3
157

22

9
58

303

2
548

62

2
212

532

2
658

FEDERAL RESERVE NOTE STATEMENT
Federal Reserve no tes:
Issued to Federal Reserve bank by Federal Reserve
Held by Federal Reserve bank
In actual circulation

1

162,941 151,398 1,085,378

Collateral held b y a g e n t for n o t e s issued t o b a n k s :
Gold certificates o n h a n d a n d d u e from U . S.

T o t a l collateral held
1

Includes Federal Reserve notes held by the U. S. Treasury or by a Federal Reserve bank other than the issuing bank.




CO
^3

38

ANNUAL REPORT OF BOARD OF GOVERNORS

NO. 3.-H0LDINGS OF UNITED STATES GOVERNMENT SECURITIES BY FEDERAL RESERVE BANKS
AT END OF DECEMBER 1937, 1938, AND 1939
[In thousands of dollars]
R a t e of
interest
(per c e n t )
T r e a s u r y b o n d s of:
1941
1941-43
1940-43
1943-45
1945
1944-46
1943-47 r
1945-47
1947
1946-48
1948
1946-49
1948-51
1950-52
1947-52
1949-52
1949-53
1951-53
1951-54
1944-54 <".
1951-55
1946-56
1956-59
1955-60
1958-63
1960-65

bonds:
of 1942-44
of 1944-52
of 1942-47
of 1944-49
of 1944-64

50,832
7,894
99
24,743
41,466
30,881
14,965
31,816

Dec. 31,
1938

56,325
14,123
10,297
41,202
19,820
45,195
27,678
41,443
35,000
53,972
3,183
11,671
54,502
36,558
1,927
31,404
49,142

D e c . 30,
19S9

2%
2
3

VA
zy8
2%
2V2
4M
3^
2V2
2H
2H
4
3

&A
2%
2%
2%
2%

:

84,694
20,041
28,922
13,901
62.932
39,811

57,173
28,455
31,295
15,331
53,436
48,606
54,591
18,566

57,027
14,669
10,675
46,523
29,258
53,132
30,443
63,681
44,156
71,870
25,197
27,746
88,536
80,715
10,698
30,378
91,644
96,000
93,394
35,078
45,952
24,025
58,200
79,894
57,006
74,399

751,539

m.

Total Treasury bonds
Guaranteed
HOLC
HOLC
FFMC
FFMC
FFMC

Dec. 31,
1937

840,893

1,340,295

45,901
13,384
100,044
2,314
28,327
108,573

4,000
2,000
1,000
3,550
200

2K
3
3
3
....

10,750
Treasury notes:
Series m a t u r i n g :
M a r . 15, 1938
J u n e 15, 1938
S e p t . 15, 1938
Dec. 15, 1938
M a r . 15, 1939
J u n e 15, 1939
S e p t . 15, 1939
D e c . 15, 1939
M a r . 15, 1940
J u n e 15, 1940
D e c . 15, 1940
M a r . 15, 1941
J u n e 15, 1941
Dec. 15, 1941
M a r . 15, 1942
S e p t . 15, 1942
Dec. 15, 1942
J u n e 15, 1943
D e c 15 1943
M a r . 15, 1944
J u n e 15, 1944
S e p t . 15, 1944

....

3
2V8
2V2
Ui
VA
2V8

m
1H
VA
1V2

m

IN

m
2

. .

1

%
1

Guaranteed notes:
R F C of J a n . 15, 1942

16 t o 30 d a y s
31 t o 60 d a y s
61 t o 90 d a y s

85,197
70,466
102,676
156,440
139,628
94,586
91,410
53,900
42,950
73,500
62,535
32,900
113,259
37,500

IH
IVs

Total Treasury notes

T r e a s u r y bills:
Series m a t u r i n g w i t h i n : ^

107,212
87,921
90,784
42,785
75,066
84,947
34,700
88,676
89,875
97,862
80,974
62,060
37,150
48,450
61,000
46,035
19,500

1,154,997

1,156,947

C)

(*)
0)

1,132,172
1,053

H
0)
0)
(l1)

136,783
105,974
118,822
60,397
44,069
85,872
68,294
33,801
144,420
79,096
113,498
79,441
61,705

24,385
33,296
68,350
170,581
280,541
80,326
657,479

! 2,564,015

* Rates did not
http://fraser.stlouisfed.org/ exceed 1 per cent on Treasury bills of any maturity.
Federal Reserve Bank of St. Louis

105,340
88,872
252,208
119,755

566,175
2,564,015 I

M847270

39

FEDERAL RESERVE SYSTEM

NO. 4.-V0LUME OF OPERATIONS IN PRINCIPAL DEPARTMENTS OF FEDERAL RESERVE BANKS,
1935-1939
[Number in thousands; amounts in thousands of dollars]
1935

1936

1937

1938

NUMBER OF PIECES HANDLED i
Bills discounted:
Applications
Notes discounted
Advances m a d e
Industrial advances:
Advances m a d e
.
C o m m i t m e n t s to m a k e i n d u s t r i a l a d vances
Bills p u r c h a s e d i n open m a r k e t for own a c count
C u r r e n c y received a n d c o u n t e d
Coin received a n d c o u n t e d
Checks h a n d l e d
Collection i t e m s h a n d l e d :
U . S. G o v e r n m e n t coupons paid 2
All other
Issues, r e d e m p t i o n s , a n d exchanges b y fiscal
agency d e p a r t m e n t :
U . S. G o v e r n m e n t direct obligations
All o t h e r
Transfer of funds

.4
.2
.2
2,089,987
2,676,248
1,098,115

2,148,485
2,590,859
885,190

2,232,980
2,665,190
1,009,264

2,257,892
2,730,387
1,044,553

22,633
7,119

18,806

18,566
6,705

17,802

6,838
3,742

27,919
1,538
951

3,892
661
980

3,456
575
853

AMOUNTS HANDLED
Bills discounted:
9,622
Notes discounted
6,886
16,187
219,924
160,714
Advances m a d e
516,852
Industrial advances:
28,479
8,519
4,932
Advances m a d e
C o m m i t m e n t s to m a k e i n d u s t r i a l a d 29,223
12,583
vances
6,978
Bills purchased in open m a r k e t for own a c 31,446
25,207
25,252
count
C u r r e n c y received a n d c o u n t e d
9,837,681
10,059,637 10,199,559
Coin received a n d counted
275,608
287,708
276,323
Checks handled
202,989,742 234,417,787 255,453,609
Collection i t e m s h a n d l e d :
2
751,916
798,925
865,465
U . S. G o v e r n m e n t coupons p a i d
7,948,641
7,089,008
6,159,828
All other
Issues, r e d e m p t i o n s , a n d exchanges b y fiscal
agency d e p a r t m e n t :
30,755,611 25,196,825 19,304,020
U. S. G o v e r n m e n t direct obligations
3,346,189
1,691,863
2,223,136
All o t h e r
80,483,190 87,001,630 94,596,861
Transfer of funds

10,472
226,687
6,500
11,217
2,781
8,883,728
271,128
•231,820,217
854,273
5,321,443
24,450,791
2,581,611
82,219,749

r
Revised.
Two or more checks, coupons, etc., h a n d l e d as a single item are counted as one "piece.'
* Includes coupons from obligations g u a r a n t e e d b y t h e U n i t e d S t a t e s .

1




NO. 5.-EARNINGS AND EXPENSES OF FEDERAL RESERVE BANKS DURING 1939
Total

Boston

New
York

Philadelphia

Cleveland

Richmond

Atlanta

Chicago

St.
Louis

Minneapolis

Kansas
City

Dallas

CURRENT EARNINGS
Discounted bills
Purchased bills
U. S. Government securities
Industrial advances
Commitments to make industrial advances.
All other
Total current earnings

$5,620
$2,744
$15,448
$1,644
$60,898
$7,383
$4,068
$4,983
$2,145
$2,742
$1,992
$8,456
$3,673
174
167
2,323
897
235
216
100
81
14
11
67
293
68
36,903,367 2,707,507 10,887,682 3,069,558 3,732,788 1,941,562 1,593,067 4,044,306 1,585,350 1,069,782 1,798,964 1,422,670 3,050,131
52,372
77,168
117,648
132,954
18,367
61,823
38,564
333
50,206
10,459
32,598
615,169
22,677
128,577
790,331
38,500,665

5,641
15,807

21,312
168,077

2,035
52,211

14,199
76,203

9,335
27,684

635
12,376

1,068
183,516

5,511
16,729

1,295
11,662

12,592
164,920

127
7,076

2,809,041 11,211,064 3,264,376 3,845,841 2,045,487 1,646,868 4,254,602 1,609,929 1,134,600 1,995,459 1,466,211 3,217,187
CURRENT EXPENSES

Operating expenses:
Salaries:
502,074
117,374
173,774|
Officers
2,210,856
123,181
Employees
17,486,823 1,062,445) 4,422,828 1,273,482 1,555,965
Retirement System ^ contribu241,968
tions for current service
55,8201
83,0251
964,8491
69,110|
14,803
Legal fees
64,765
10,367
6,116
4,946
12,822
Directors' fees and expenses
134,268
8,267
6,571
8,575|
Federal Advisory Council, fees
16,102
930]
and expenses
1,157
1,105
7501
Traveling expenses (other than of
directors and members of Fed15,247
43,907
eral Advisory Council)
282,815
23,369]
25,872]
552,5841 289,284
Postage and expressage
3,356,450
363,225
316,413
18,633
82,748
28,910]
Telephone and telegraph
459,7161
46,778]
147,103
Printing, stationery and supplies.
782,704
73,843
77,987
66,659
Insurance on currency and se41,290]
35,527
28,049
curity shipments
236,389
21,937]
32,167
15,655
18,922
17,128
232,087
Other insurance
477,675
150,822
73,567
140,338
1,501,035
Taxes on bank premises
236,205
55,832
126,532
152,055
1,215,582
Depreciation on bank building
64,4721
27,523
32,100
46,581
Light, heat, power, and water
388,167)
Repairs and alterations to bank
13,362
building
,
3,473!
11,6471
25,663
160,181
Rent.
142,783)
96
695|
71,077
337,710
26,682
34,986]
70,779
Furniture and equipment
17,9181
634,707
76,544
Allother
56,701
46,0291
36,432)

141,900
137,120! 247,690
953,598 1,027,473] 2,219,840

160,327
988,646]

120,094|
757
6,524|

58W
10,731
1,275

108,238) 172,360
591,5171 1,014,145

121,768
964,234

31,851'
9,112
9,173

60,884
98
23,011

51,344!
4,368i
9,796!

1.323J

1,610

1,371

54,820
498
6,566

56,857
2,000
14,819

575

l,382i

1,196

23,143
269,660
28,778
44,835

22,206,
204,927

44,987;
60,581

28,296
411,864
32,274
81,525

20,161
160,717
34,878
45,840|

21,726
132,970
19,029
30,179

16,734
216,124!
43,182]
44,639

13,301
162,681!
34,099
42,010]

17,024
13,971
69,103
76,189
22,664

13,245
15,420)
60,804
42,589
34,100

25,655
20,075
186,412,
110,739'
40,584

5,389
20,853
52,0371
51,687
21,722

7,488
17,707
69,567
34,336
19,622

9,156
21,522
88,853,
155,959!
28,537]

7,584
17,882
33,613,
69,660|
24,202

1,6131
16,994)
11,752]
34,602

26,956!
1,277)
63,172!
58,174

9,213

6,915l
3,120
13,913
52,797

15,110

44,466
80,624|

16,146
35,181

11,784
4,112
19,326
42,127!

13,637
1,751
5,775
44.756

Total operating expenses
30,607,989 2,067,960) 7,016,047 2,284,411 2,848,060 1,788,285
Less reimbursements for certain
fiscal agency and other expenses., 4,939,082
248,782J
255,428
654,206
185,886
204,131

687,576




54,827
54,070

3,667,828 1,709,077 1,170,275 1,974,163 1,623,832
775,218!

447,582

269,201

355,713'

509,981

N e t o p e r a t i n g expenses
Assessment for expenses of B o a r d of
Governors
Federal Reserve c u r r e n c y :
Original cost
Cost of r e d e m p t i o n

25,668,9071 1,882,074

901,0741 1,618,450 1,113,851 2,224,584

116,514!

577,662

157,586

150,738

69,373!

56,5461

196,358

47,914

36,797

46,8451

47,6791

117,452

1,196,535
159,949

103,259
10,053

336,877
35,156

93,129
10,315

102,936
14,182

69,000
12,157

38,228
10,675

201,953)
25,431

41,367
7,202

30,752
6,116

38,004
6,715

31,931
6,015

109,099
15,932

28,646,8551 2,111,900

T o t a l c u r r e n t expenses

6,361,8411 2,080,280 2,592,632 1,539,503 1,200,513 2,892,6101 1,261,4951

1,621,464

7,311,536 2,341,310 2,860,488 1,690,033 1,305,962 3,316,352 1,357,978

974,739 1,710,014 1,199,476 2,467,067

PROFIT AND LOSS
38,500,665
28,646,855

C u r r e n t e a r n i n g s (above)
C u r r e n t expenses (above)

2,809,041 11,211,064 3,264,376 3,845,841 2,045,487 1,646,868 4,254,602 1,609,929 1,134,600 1,995,459 1,466,211 3,217,187
2,111,900 7,311,536 2,341,310 2,860,4881 1,690,033 1,305,963 3,316,352 1,357,978
974,739 1,710,014 1,199,476) 2,467,066
3,899,528

Current net earnings
A d d i t i o n s to c u r r e n t n e t e a r n i n g s :
Profits o n sales of U . S. G o v e r n m e n t securities
All o t h e r

985,353

355,454

340,905

938,250

487,914
33,399

4,390,869
423,9331

319,978
50,65l|

1,261,918
94,295'

369,951
37,5301

432,876
24,636

229,376
21,0961

189,295
97,805'

4,814,802

Total
D e d u c t i o n s from c u r r e n t n e t e a r n i n g s :
Losses a n d reserves for losses o n
i n d u s t r i a l a d v a n c e s (net)
Special reserves a n d charge-offs
on bank premises
All o t h e r

370,629

1,356,213

407,481

457,512

250,472

287,100

739,040

32,475

405,3

266,735

1,417,404
268,803

120,2

70,554

5,198,

321,838
224,363

12,245

546,201

82,799

139,648
7,579

216,<
8,3481

169,192
8,514

147,227

225,257

177,706

372,768
31,561

39

14,819
231,2001

201,044
8,5191

462,500
146

33,000

14,000

4,045

100,000
655

78,000
240

223,866
2,664
261,089

P a i d U . S. T r e a s u r y (sec. 13b)
D i v i d e n d s paid
T r a n s f e r r e d to s u r p l u s (sec. 13b)
T r a n s f e r r e d to s u r p l u s (sec. 7)

contin-

S u r p l u s (sec. 7), D e c . 31, 1939




19,048

32,493

424,356

125,484

4,084

133,655

172

92,240

2,389,555

338,136

931,857

281,997

41,072

44,667

205,479

13,572

225,085

85,466

143,240

12,243,365

N e t earnings

18,

2,425,247

Total
N e t a d d i t i o n s to c u r r e n t n e t e a r n i n g s .

S u r p l u s (sec. 7), J a n . 1,1939
Addition, as above
T r a n s f e r r e d to reserves for
gencies

923,066

1,035,277

4,831,385 1,205,063

381,977

982,917

457,430

173,433

510,530

352,201

893,361

24,579
8,110,462
-425,653
4,533,977

51
563,982

14,810
272,229

5,120|
819,532

617
241,185

158,265

174,905
-479)
-993

3,981
256,136)

94,938

239,369
-6,664
224,725

3,054,991
-348,859
2,125,253

725,1
-22,527!
502,210

823,216
-290
73,738

305,414
-46,834
264,547

476,6

250,413

149,151,35* 10,083,351 52,462,949 13,695,587 14,322,790 4,982,672 5,629,690 22,666,003 4,685,498 3,153,414) 3,612,681 3,891,870
4,533,977
471,244! 2,125,2531
73,738
502,210
264,547
94,938
158,265
-993
250,413
224,725
no,;
-1,964,919

-150,000 -1,261,917

-73,738

-201,044

-250,413

634,123
259,238
i,964,851
259,238

-27,807

151,720,414 10,404,595 53,326,285 14,197,797 14,322,790 5,247,219 5,724,628 22,824,268 4,709,179 3,152,421 3,612,681 3,974,462 10,224,089

NO. 6.-CURRENT EARNINGS, CURRENT EXPENSES, AND NET EARNINGS OF FEDERAL RESERVE BANKS AND DISPOSITION OF NET EARNINGS, 1914-1939
Earnings and expenses

Current earnings

All Federal Reserve b a n k s b y y e a r s :
1914-15
1916
1917
1918
1919

Current
expenses

Disposition of net earnings

Net earnings

1

Dividends
paid

Franchise tax
paid to U. S.
Treasury 2

Paid to U. S.
Treasury
(Sec. 13b)

Transferred
to surplus
(Sec. 13b)

Transferred
to surplus
(Sec. 7)

Direct
charges
to surplus
(Sec. 7)3

2,173,252
5,217,998
16,128,339
67,584,417
102,380,583

2,320,586
2,273,999
5,159,727
10,959,533
19,339,633

-141,459
2,750,998
'9,582,067
52,716,310
78,367,504

217,463
1,742,774
'6,804,186
5,540,684
5,011,832

2,703,894

1,134,234
48,334,341
70,651,778

1920
1921
1922
1923
1924
1925
1926
1927
1928
1929

181,296,711
122,865,866
50,498,699
50,708,566
38,340,449
41,800,706
47,599,595
43,024,484
64,052,860
70,955,496

28,258,030
34,463,845
29,559,049
29,764,173
28,431,126
27,528,163
27,350,182
27,518,443
26,904,810
29,691,113

149,294,774
82,087.225
16,497,736
12,711,286
3,718,180
9,449,066
16,611,745
13,048,249
32,122,021
36,402,741

5,654,018
6,119,673
6,307,035
6,552,717
6,682,496
6,915,958
7,329,169
7,754,539
8,458,463
9,583,913

60,724,742
59,974.466
10,850,605
3,613,056
113,646
59,300
818.150
249,591
2,584.659
4,283,231

82,916,014
15,993,086
-659,904
2,545,513
-3,077,962
2,473,808
8,464,426
5,044,119
21,078,899
22,535,597

1930
1931
1932
1933
1934

36,424,044
29,701,279
50,018,817
49,487,318
48,902,813

28,342,726
27,040,664
26,291,381
29,222,837
29,241,396

7,988,182
2,972,066
22,314,244
7.957,407
15,231,409

10,268,598
10.029,760
9,282,244
8,874,262
8,781,661

17,308
2,011,418
-60,323

-2,297,724
-7,057,694
11,020,582
-916,855
6,510,071

1935
1936
1937
1938
1939

42,751,959
37,900,639
41,233,135
36,261,428
38,500,665

31,577,443
29,874,023
28,800,614
28,911,608
28,646,855

9,437,125
8,512,433
10,801,247
9,581,954
12,243,365

8.504,974
7,829,581
7,940,966
8,019,137
8,110,462

297,667
227,448
176,625
119,524
24,579

27,062
102,880
67,304
-419,140
-425,653

607,422
352,524
2,616,352
1,862,433
4,533,977

731,313
448,835
1,964,919

1,315,810,118

617,471,959

622,257,875

178,316,565

845,843

4-707,870

294,665,037

142,944,624

Total—1914-1939




to

>
1,134,234

149,138,300

d

O
W
H

500,000

O
*J
W

o

>

W
O

O
*J

139,299,557

Q
O

<

W

O
W
W

Aggregate for each F e d e r a l Reserve b a n k
1914-1939:

SanFrancisco

88,522,827
387,360,596
102,941,732
117,326,297
62,726,710
61,577,965
182,538,169
56,612,826
42,696,257
63,076,956
46,769,051
103,660,732

44,560,333
150,159,256
47,271,149
56,953,972
33,541,148
28,540,922
80,691,203
31,631,095
22,693,956
37,901,946
27,884,580
55,642,399

41,055,022
224,184,718
52,029,945
51,943,228
24,783,477
26,294,831
88,967,766
19,344,351
17,186,895
21,112,200
14,777,303
40,578,139

13,070,207
59,621,470
17,163,486
17,984,247
7,635,786
6,368,038
20,969,595
6,470,659
4,514,669
6,066,337
5,767,276
12,684,795

7,111,395
68,006,262
5,558,901
4,842,447
6,200,189
8,950,561
25,313,526
2,755.629
5,202,900
6,939,100
560,049
7,697,341

91,743
82,987
293,888
36,868
66,714
23,876
100,179
5,948
34,319
35,204
74,117

-3,155
-643,412
194,990
-8,446
-174,722
-44,304
11,681
-8,169
-7,062
-3,622
14,255
-35,904

20,784,832
97,117,411
28,818,680
29,088,112
11,055,510
10,996,660
42,572,785
10,120,284
7,442,069
8,075,181
8,361,606
20,231,907

10,380,237
43,791,128
14,620,883
14,765,323
5,808,291
5,272,032
19,748,517
5,411,103
4,289,648
4,462,499
4,387,145
10,007,818

r
Revised.
C u r r e n t earnings less current expenses, plus other additions and less other deductions.
The Banking Act of 1933 eliminated the provision in the Federal Reserve Act requiring payment of a franchise tax.
3
Direct charges to surplus (sec. 7) represent amounts transferred to reserves for contingencies, except as follows: 1927—$500,000, depreciation on bank premises; 1934—$139,299,557, cost of Federal Deposit Insurance Corporation stock purchased by Federal Reserve banks.
4
In 1935 the Federal Reserve Bank of Boston credited $1,810 and the Federal Reserve Bank of St. Louis charged $1,176 direct to surplus (sec. 13b). Total payments received from the Secretary of the Treasury under section 13b of the Federal Reserve Act to the end of 1939 and credited to surplus (sec. 13b) amounted to $27,546,311.
2

*4
O

>
NO. 7—NUMBER AND SALARIES OF OFFICERS AND EMPLOYEES OF FEDERAL RESERVE BANKS

W
W

(December 31, 1939)

<
O t h e r officers
Federal Reserve Bank
(including b r a n c h e s )

Annual salary
of P r e s i d e n t
Number

A n n u a l salaries

E m p l o y e e s , except t h o s e
w h o s e salaries a r e
reimbursed to bank
Number

A n n u a l salaries

Employees whose
salaries a r e
reimbursed to bank
Number

A n n u a l salaries

Total

Number

A n n u a l salaries

Richmond

Dallas
Total




$30,000
50,000
25,000
25,000

9
40
11
18

$88,500
463,000
103,700
149,200

610
1,994
691
847

$926,836
3,878,406
1,146,948
1,394,130

72
284
77
100

$103,374
530,034
124,200
180,340

692
2,319
780
966

$1,148,710
4,921,440
1,399,848
1,748,670

21,000
20,000
35,000
20,000

17
21
21
19

121,200
119,020
205,450
140,200

519
381
1,070
491

766,703
513,423
1,622,771
698,801

138
401
456
268

183,615
484,189
659,368
316,073

675
804
1,548
779

1,092,518
1,136,632
2,522,589
1,175,074

25,000
25,000
18,000
25,000

New York
Philadelphia

13
19
15
26

83,600
147,500
106,600
182,300

253
467
364
689

400,098
724,481
572,174
1,139,721

149
298
313
182

197,262
392,116
425,676
283,959

416
785
693
898

705,960
1,289,097
1,122,450
1,630,980

319,000

229

1,910,270

8,376

13,784,492

2,738

3,880,206

11,355

19,893,968

GO

44

ANNUAL REPORT OF BOARD OF GOVERNORS

NO. 8—RECEIPTS AND DISBURSEMENTS OF THE BOARD OF GOVERNORS OF THE FEDERAL
RESERVE SYSTEM FOR THE YEAR 1939
General fund account:
Balance January 1, 1939:
Available for general expenses of the Board
Available for expenses chargeable to Federal Reserve banks

$89,324.14
80,086.63

Total

$169,410.77
RECEIPTS

Available for general expenses of the Board:
Assessments on Federal Reserve banks for estimated general
expenses of the Board
$1,621,463.77
Subscriptions to the Federal Reserve Bulletin
5,708.59
Reimbursements for leased wire service
31,775.75
Miscellaneous receipts, refunds, and reimbursements
8,038.40
Total receipts available for general expenses of the Board
Available for expenses chargeable to Federal Reserve banks:
Assessments on Federal Reserve banks for:
Cost of printing Federal Reserve notes
Expenses of leased wire system (telegraph)
Expenses of leased telephone lines
Expenses of the Federal Reserve Issue and Redemption
Division (office of Comptroller of the Currency)
Miscellaneous expenses

$1,666,986.51
852,596.20
66,469.16
20,762.87
56,306.53
5,988.04

Total receipts available for expenses chargeable to Federal Reserve
banks
$1,002,122.80
Total receipts
2,669,109.31
Total available for disbursement

DISBURSEMENTS
For general expenses of the Board:
Expenses of 1939 (per detailed statement)
$1,577,825.41
Less accounts unpaid December 31, 1939
28,864.23
Expenses of 1938 paid in 1939
Expenses of leased wire service, reimbursable
Miscellaneous refunds and reimbursable expenses
Total disbursements for general expenses of the Board
For expenses chargeable to Federal Reserve banks:
Cost of printing Federal Reserve notes
Expenses of leased wire system (telegraph)
Expenses of leased telephone lines
Expenses of Federal Reserve Issue and Redemption Division
(office of Comptroller of theCurrency)
Miscellaneous expenses

2,838,520.08

1,548,961.18
18,477.88
32,443.37
5,951.74
1,605,834.17
878,264.20
66,469.16
22,062.37
55,123.49
6,582.06

Total disbursements for expenses chargeable to Federal Reserve banks..

1,028,501.28

Total disbursements
Balance in general fund account December 31, 1939:
Available for general expenses of the Board
Available for expenses chargeable to Federal Reserve banks




2,634,335.45

150,476.48
53,708.15
204,184.63

FEDERAL RESERVE SYSTEM

45

No. 8.—Receipts and Disbursements—Continued
PERSONAL S E R V I C E S

Salaries
Retirement System contributions for current service
TotalPersonal Services

$1,231,868.35
56,369.73
$1,288,238.08

NON-PERSONAL SERVICES

Traveling Expenses
Postage andExpressage
Telephone and Telegraph
Printing and Binding
Stationery and Supplies
Furniture andEquipment
Books and Subscriptions
Light, Heat, Power and Water
Repairs and Alterations to Building
Rental and Repairs (Furniture andEquipment)
Medical Service and Supplies
Insurance
Miscellaneous
Total Non-Personal Services
GRAND TOTAL




$

70,789.44
1,498.99
56,143.39
74,059.44
21,704.74
20,001.66
5,722.49
23,850.92
4,314.16
2,451.29
491.75
2,221.93
6,337.13
289,587.33

$1,577,825.41

46

ANNUAL REPORT OF BOARD OF GOVERNORS

NO. 9.-FEDERAL RESERVE BANK DISCOUNT, INTEREST, AND COMMITMENT RATES, AND BUYING
RATES ON ACCEPTANCES
[Per cent per annum]
In effect December 30, 1939
Boston

New Phila- Cleve- Rich- AtdelYork phia land mond lanta

MinSan
Chi- St. neap- Kan- Dallas Fransas
cago Louis olis City
cisco

Rediscounts for and advances to member banks
under sees. 13 and 13a of
the Federal Reserve Act.
Secured by direct and
eligible guaranteed
obligations of the
1
1

1
0)1

IK
IX

2

2

1
To nonmember banks.
2H
Advances direct to industrial or commercial organizations under sec. 13b
of the Federal Reserve Act 3^-6
Advances to financing institutions under sec. 13b
of theFederalReserveAct.
On portion for which
institution is obli3
On remaining portion.. 3H
Commitments to make advances under sec. 13b of
theFederalReserveAct... X-l
Minimum buying rates on
prime bankers' acceptances payable6 in dollars.. 0)
1-15 days
16- 30 days
31- 45 days
46- 60 days
61- 90 days
91-120 days
121-180 days

1
ZX

IX

IX
IX

1
IX

1
IX

1
IX

IX
IX

vnx

OHM

IX
IX

2

2

2

2

2

2

2

2

2

IX

1
2X

1
4

4

IX

1
2X

1
2X

VX
4

4-6

5-6

5-6

4
4

4
5-6

3-4
4-5

(5)2

1

X-2

2

All other
Advances to member banks
under sec. 10(b) of the
Advances to individuals,
partnerships or corporations, secured by direct
obligations of the United
States (last paragraph of
sec. 13 of the Federal Re-

(inx

ix (*nx
2X

3X

4

4-6

3
5-6

4-6 4^-6

5-6 4-5H
6

6

3
4-5

mx
(4)

4

4-6
4-6

5
5

1-2

X-2

1

1-2

X

X
X
X
X
X
H
1

(7)

(7)

(7)

1
The same rate applies to United States Government
2
2X per cent to other lenders than banks.
3
Authorized rate 1 per cent above prevailing discount
4
Same as to borrower but not less than 4 per cent.
5
Minimum charge one-half of one per cent.
6

mx
5-6

(7)

1-2
I7)

VX 4^-5
4 4^-5
(5H
0)

1

(7)

(7)

(7)

0)

securities bought under repurchase agreement.
rate.

This rate also applies to acceptances bought under repurchase agreement, which agreements are always
for7 a period of 15 days or less.
The same minimum rates in effect at the Federal Reserve Bank of New York apply to purchases, if
any, made by other Federal Reserve banks.




47

FEDERAL RESERVE SYSTEM
NO. 10.-MAXIMUM RATES ON TIME DEPOSITS

Maximum rates that may be paid by member banks as established by the Board of Governors under provisions
of Regulation Q
[Per cent per annum]
Nov. 1, 1933,
to
Jan. 31, 1935

Feb. 1, 1935,
to
Dec. 31, 1935

Savings deposits
Postal Savings deposits
Other time deposits payable in:
6 months or more
90 days to 6 months
Less than 90 days

In effect
beginning
Jan. 1, 1936

2H
2M
2K

2
1

NOTE.—Maximum rates that may be paid by insured nonmember banks as established by the Federal Deposit
Insurance Corporation, effective February 1, 1936, are the same as those in effect for member banks. In
some States the maximum rates established by the Board and the Federal Deposit Insurance Corporation are
superseded by lower maximum rates established by State authority.

NO. 11.-MEMBER BANK RESERVE REQUIREMENTS
[Per cent of deposits]

Classes of deposits and banks

June 21, 1917Aug. 15, 1936

Aug. 16, 1936- Mar. 1, 1937Feb. 28, 1937 Apr. 30, 1937

On net demand deposits:
Central reserve city..
Reserve city
Country

15
10H

12H

On time deposits:
All member banks...

4H

May 1, 1937- Apr. 16, 1938Apr. 15, 1938
and after

VA

1

22%
12

Gross demand deposits minus demand balances with domestic banks (except private banks and American branches of foreign banks) and cash items in process of collection.




GO

NO. 12.-ALL MEMBER BANKS-CONDITION ON DECEMBER 30, 1939, BY CLASSES OF BANKS
[Amounts in t h o u s a n d s of dollars]

All
national
member
banks

All S t a t e
member
banks

13,961,820
11,184,195
3,143,960
2,691,687
376,697
2,142,672
439,477
33,940,508
11,603,504
841,215

9,021,748
7,101,805
1,955,835
1,782,161
257,645
1,470,268
220,873
21,810,335
6,493,792
611,339

4,940,072
4,082,390
1,188,125
909,526
119,052
672,404
218,604
12,130,173
5,109,712
229,876

5,370,257
136,112
23,796
7,827
1,807,370
924,273
287,709
130,774
107,543
100,159
79,902

4,113,177
101,927
15,971
7,027
1,153,289
598,665
131,669
65,551
55,843
57,872
40,917

55,360,949

37,487,815
24,603,982
742,566
2,321,334
8,507,394
749,251
563,288

All
member
banks

Central reserve city
member banks1
Chicago

Reserve
city
member
banks1

3,296,299
3,496,994
1,274,508
578,749
128,541
404,298
159,921
9,339,310
5,914,718
89,034

569,289
1,030,661
172,303
162,288
24,980
117,005
28,356
2,104,882
993,082
41,885

5,328,533
4,222,057
972,226
889,746
129,486
575,309
154,795
12,272,152
3,118,161
347,527

4,767,699
2,434,483
724,923
1,060,904
93,690
1,046,060
96,405
10,224,164
1,577,543
362,769

1,257,080
34,185
7,825
800
654,081
325,608
156,040
65,223
51,700
42,287
38,985

122,852
2,017
14,108
800
560,243
206,679
28,818
11,140
74,741
33,962
14,625

267,368
15,166
857

2,554,445
59,684
1,933

127,640
20,404
4,523
858
3,153
8,006
6,923

2,425,592
59,245
6,898
7,027
827,661
321,404
107,221
90,619
27,607
39,438
36,177

35,257,374

20,103,575

16,413,047

3,594,747

19,686,729

15,666,426

23,368,070
14,921,445
540,296
1,733,425
5,431,9£8
356,836
384,070

14,119,745
9,682,537
202,270
587,909
3,075,396
392,415
179,218

13,763,924
9,030,363
73,906
250,918
3,541,727
689,032
177,978

2,834,938
1,675,767
79,610
167,425
879,144
9,115
23,877

13,004,583
8,001,603
434,969
812,640
3,515,944
49,542
189,885

7,884,370
5,896,249
154,081
1,090,351
570,579
1,562
171,548

New York

Country
member
banks1

ASSETS
L o a n s (including overdrafts)
U n i t e d S t a t e s G o v e r n m e n t d i r e c t obligations
Obligations g u a r a n t e e d b y U n i t e d S t a t e s G o v e r n m e n t
Obligations of S t a t e s a n d political subdivisions
O b l i g a t i o n s of G o v e r n m e n t c o r p o r a t i o n s a n d agencies, n o t g u a r a n t e e d b y U n i t e d S t a t e s .
Other bonds, notes, and debentures
C o r p o r a t e s t o c k s (including F e d e r a l R e s e r v e b a n k s t o c k )
Total loans and investments
Reserve with Federal Reserve banks
Cash in vault
D e m a n d b a l a n c e s w i t h b a n k s i n U n i t e d S t a t e s (except p r i v a t e b a n k s a n d A m e r i c a n
b r a n c h e s of foreign b a n k s )
O t h e r b a l a n c e s w i f h b a n k s in U n i t e d S t a t e s
B a l a n c e s w i t h b a n k s i n foreign c o u n t r i e s
D u e from o w n foreign b r a n c h e s
C a s h i t e m s i n process of collection
B a n k p r e m i s e s o w n e d a n d f u r n i t u r e a n d fixtures
O t h e r r e a l e s t a t e owned
I n v e s t m e n t s a n d o t h e r a s s e t s i n d i r e c t l y r e p r e s e n t i n g b a n k premises or o t h e r real e s t a t e . .
C u s t o m e r s ' liability o n a c c e p t a n c e s
I n c o m e a c c r u e d b u t n o t y e t collected
Other assets
Total assets

291,826
375,786
147,147
28,157
2,042
18,753
22,177

LIABILITIES
D e m a n d deposits—Total
Individuals, partnerships, a n d corporations
United States G o v e r n m e n t 2
S t a t e s a n d political subdivisions
Banks in United States
B a n k s i n foreign countries
Certified a n d officers' checks, cash l e t t e r s of credit a n d t r a v e l e r s ' checks, etc




| 11,852,337

O t h e r liabilities
Total liabilities
CAPITAL

4,736,102

5,877,878

427,846
24,133
178
30,400
3,000
9,850

5,125,289
467,043
14,721
70,375
34,649
139,657
26,144

3,330,345

3,944,330
162,012
8,614
247,057
13,681
240,149
116,859
3,400
17,740,685

13,762,248

85,896
18,036
9,730
14,977
34,180

3,531
800
1,569
8,256
132

121
32,090
11,528
28,386
29,274
16,180

3,120
2,238
7,604
16,625
16,183
7,644

31,859,991

17,979,199

14,820,631

3,344,633

17,858,264

13,815,662

1,529,103
1,213,857
445,206
176,960
32,257

834,126
952,535
229,528
99,653
8,534

548,245
814,572
173,100
53,260
3,239

101,700
87,260
29,530
31,498
126

794,362
671,187
238,165
111,733
13,018

918,922
593,373
233,939
80,122
24,408

3,397,383

2,124,376

1,592,416

250,114

1,828,465

1,850,764

w

55,360,949

35,257,374

20,103,575

16,413,047

3,594,747

19,686,729

15,666,426

Hi

30,325,868
25,681,234
6,362

18,110,036
15,885,651
5,187

12,215,832
9,795,583
1,175

13,080,829
8,899,016
36

2,441,365
1,739,429
14

9,756,072
8,176,467
346

5,047,602
6,866,322
5,966

42,517
1,185
6,137
14,506,874
150,938

Other capital accounts

Total liabilities a n d capital accounts

„

1
Banks are classed according to the reserves which they are required to carry (see table 11). Some banks classed as "country banks" are in outlying sections of reserve
cities or central reserve cities, and some banks classed as "reserve city banks" are in outlying sections of central reserve cities. Figures for each class of banks include assets
and liabilities of their domestic branches, whether located within or outside the cities in which the parent banks are located.
2
United States Treasurer's time deposits, open account, are combined with postal savings (time) deposits.
3
Demand deposits other than interbank and United States Government, less cash items reported as in process of collection.




*1
O

>

ACCOUNTS

C a p i t a l (for p a r v a l u e see n e x t t a b l e )
Surplus
U n d i v i d e d profits

N u m b e r of b a n k s

495,407

385,648
23,341
921
283,201

5,521,759

D i v i d e n d s declared b u t n o t y e t p a y a b l e
I n c o m e collected b u t n o t y e t e a r n e d

742,950

2,992,721
149,008
8,016
371,752
6,799
88,830
40,251
4,080
17,781,202
39,906
359
59,582
14,300
18,616
27,742
37,492

2,363,229
2,166,392
674,734
276,613
40,791

S t a t e s a n d political subdivisions

3,661,457

6,890,392
527,521
16,418
259,281
44,531
343,343
103,937
5,457
31,558,950
111,032
2,882
64,173
23,668
37,694
40,948
20,644

49,839,190

C h r i s t m a s savings a n d similar a c c o u n t s
Open a c c o u n t s

8,190,880

9,883,113
676,529
24,434
631,033
51,330
432,173
144,188
9,537
49,340,152
150,938
3,241
123,755
37,968
56,310
68,690
58,136

Individuals, partnerships, a n d corporations:
S a v i n g s deposits

W

<
w
H

Ox
O

NO. 13.—ALL MEMBER BANKS-CLASSIFICATION OF LOANS, INVESTMENTS, REAL ESTATE, AND CAPITAL ON DECEMBER 30, 1939, BY CLASSES OF BANKS
[In t h o u s a n d s of dollars]

All
member
banks

All
national
member
banks

All S t a t e
member
banks

Central reserve city
member banks1
New York

Chicago

Reserve
city
member
banks1

Country
member
banks1

Loans—Total
C o m m e r c i a l a n d i n d u s t r i a l loans
A g r i c u l t u r a l loans
C o m m e r c i a l p a p e r b o u g h t in open m a r k e t
Bills, a c c e p t a n c e s , etc., p a y a b l e in foreign c o u n t r i e s
A c c e p t a n c e s of o t h e r b a n k s , p a y a b l e in U n i t e d S t a t e s
R e p o r t i n g b a n k s ' own a c c e p t a n c e s
L o a n s t o b r o k e r s a n d dealers i n securities
O t h e r loans for p u r c h a s i n g or c a r r y i n g securities
Real estate loans: On farm land
On residential property
On other properties
L o a n s to b a n k s
All o t h e r loans
Overdrafts

13,961,820
5,385,773
729,539
290,817
9,229
63,246
91,681
790,316
700,351
288,696
1,883,553
784,476
56,350
2,876,628
11,165

9,021,748
3,484,417
620,283
192,795
6,883
30,827
54,233
313,864
415,309
231,806
1,208,313
461,559
26,524
1,970,156
4,779

4,940,072
1,901,356
109,256
98,022
2,346
32,419
37,448
476,452
285,042
56,890
675,240
322,917
29,826
906,472

3,296,299
1,768,266
7,465
8,053
239
53,625
57,756
611,019
188,394
656
58,695
73,221
43,528
419,029
6,353

569,289
365,331
6,306
12,879
1,945
82
2,375
40,651
66,158
386
7,870
4,711
179
60,263
153

5,328,533
2,100,962
221,094
111,479
5,790
7,685
29,856
118,621
222,205
93,834
861,870
378,948
8,638
1,164,778
2,773

4,767,699
1,151,214
494,674
158,406
1,255
1,854
1,694
20,025
223,594
193,820
955,118
327,596
4,005
1,232,558
1,886

United States Government direct obligations—Total
T r e a s u r y bills
Treasury notes
B o n d s m a t u r i n g in 5 y e a r s or less
B o n d s m a t u r i n g in 5 t o 10 y e a r s
B o n d s m a t u r i n g in 10 t o 20 y e a r s
B o n d s m a t u r i n g after 20 y e a r s

11,184,195
562,737
2,223,277
773,492
3,017,960
3,657,326
949,403

7,101,805
447,521
1,429,756
471,686
1,785,405
2,390,642
576,795

4,082,390
115,216
793,521
301,806
1,232,555
1,266,684
372,608

3,496,994
315,234
796,724
317,554
921,088
917,053
229,341

1,030,661
152,953
176,268
32,919
122,597
444,524
101,400

4,222,057
63,396
819,404
267,491
1,311,395
1,403,013
357,358

2,434,483
31,154
430,88!
155,528
662,880
892,736
261,304

3,143,960
2,082,254
833,690
1,500,513
444,449
365,308

1,955,835
1,195,322
439,622
987,670
287,983
240,560

1,188,125
886,932
394,068
512,843
156,466
124,748

1,274,508
1,002,449
439,544
546,765
168,856
119,343

172,303
163,635
112,365
24,029
4,592
31,317

972,226
555,507
167,317
547,409
131,507
125,993

724,923
360,663
114,464
382,310
139,494
88,655

376,697
280,968
94,977
154,365
127,355

257,645
180,168
77,477
86,526
93,642

119,052
100,795
17,500
67,839
33,713

128,541
116,861
11,673
83,442
33,426

24,980
12,845
12,185
8,021
4,774

129,486
102,482
26,668
54,176
48,642

93,690
48,775
44,451
8,726
40,513

Obligations guaranteed by United States Government—Total
Total amount maturing in 5 years or less
Reconstruction Finance Corporation
Home Owners' Loan Corporation
Federal F a r m Mortgage Corporation
O t h e r G o v e r n m e n t c o r p o r a t i o n s a n d agencies
Obligations of G o v e r n m e n t corporations a n d
United States—Total
Total amount maturing in 5 years or less
Federal Land banks
Federal Intermediate Credit banks
O t h e r G o v e r n m e n t c o r p o r a t i o n s a n d agencies




agencies, not guaranteed

by

Foreign c o r p o r a t i o n s

F a r m l a n d (including i m p r o v e m e n t s )

909,536
1,240
25,716
671,499
211,071

578,749
743
2,806
488,951
86,249

163,288
180
45,113
96,416
20,579

889,746
3,007
57,390
493,447
335,902

1,060,904
3,092
66,944
566,237
424,631

3,143,673
77,557
451,364
731,149
604,513
527,541
93,015
186,454

1,470,368
47,488
253,480
513,912
409,520
373,231
47,177
126,428

673,404
29,774
197,884
217,237
194,993
154,310
45,838
60,026

404,398
21,310
109,747
121,914
97,532
106,595
20,607
57,650

117,005
1,571
49,955
24,836
43,118
32,608
1,735
14,708

575,309
25,213
142,697
185,326
152,707
152,169
35,410
49,697

1,046,060
29,163
148,965
399,073
311,156
236,169
35,263
64,399

439,477
135,546
100,069
20,369
181,778
1,715

330,873
82,087
46,190
7,893
83,856
847

318,604
53,459
53,879
12,476
97,922

159,931
40,719
42,759
2,526
73,449
468

38,356
5,667
276
36
22,362
15

154,795
43,799
50,697
8,796
50,700
803

96,405
45,361
6,337
9,011
35,267
429

1,311,983
848,862
75,411
21,835
116,135
149,739

730,334
540,123
58,542
15,894
46,489

481,648
308,739
16,869
5,941
69,646
80,453

335,497
205,945
734
28
10,743
18,047

34,937
20,320
84
390
1,354
2,779

438,635
289,153
32,251
7,433
37,348
62,440

533,933
333,444
42,342
13,984
66,690
66,473

65,551
50,725
14,826

65,333
35,272
29,951

11,140
8,874
2,266

858
795
63

90,619
57,581
33,038

38,157
18,747
9,410

1,531,637

834,887
43,677
69,759
7,824
713,627

548,345
464
9,237

101,700

195,407
16,205
1,320,015

538,544

101,000

794,363
26,720
101,961
8,100
657,581

933,307
16,493
153,268
15,929
736,517

335,277
29,499

Other domestic banks

1,783,161
5,782
146,537
973,552
656,290

3,366,514
43,677
265,166
24,029
2,033,642

Industrials

3,691,687
7,022
172,253
1,645,051
867,361

130,774
85,997
44,777

I n default
W i t h o u t specific m a t u r i t y
M a t u r i n g in 5 y e a r s or less
M a t u r i n g after 5 y e a r s

228,068
18,228

107,209
11,271

122,890
8,500

188,773
20,999

Capital:

F o r f o o t n o t e see p r e c e d i n g t a b l e .




700'

52

ANNUAL REPORT OF BOARD OF GOVERNORS

NO. 14.-MEMBER BANK RESERVE BALANCES, RESERVE BANK CREDIT, AND RELATED I T E M S END OF YEAR 1918-1939 AND END OF MONTH 1939
[ I n millions of dollars]
Member
bank reserve
balances

Reserve bank credit outstanding
End of
year
or month

U.S.
Government
securities

Bills
disBills
count- bought
ed

Treasury
Treascur- Money ury
in
Gold rency
cash
Other
stock * outcircu- holdRestand- lation ings*
serve Total
ing3
credit l

Treas- Non- Other
ury
mem- Federal
deposits ber
Rewith
serve
deacF. R. posits 5
counts 6 Total
banks

Excess 7

1,766
2,215
2,687
1,144

287
574
260
145

239
300
287
234

206
203
120
40

2,498
3,292
3,355
1,563

2,873
2,707
2,639
3,373

1,795
1,707
1,709
1,842

4,951
5,091
5,325
4,403

288
385
218
214

51
31
57
96

121
101
23
27

118
208
298
285

1,636
1,890
1,781
1,753

"99

618
723
320
643

272
355
387
374

436
134
540
375

79
27
54
67

1,405
1,238
1,302
1,459

3,642
3,957
4,212
4,112

1,958
2,009
2,025
1,977

4,530
4,757
4,760
4,817

225
213
211
203

11
38
51
16

29
23
39
29

276
275
258
272

1,934
1,898
2,220
2,212

59
—44

1926
1927
1928
1929

637
582
1,056
632

381
392
489
392

315
617
228
511

49
64
35
48

1,381 4,205 1,991
1,655 4,092 2,006
1,809 3,854 2,012
1,583 3,997 2,022

4,808
4,716
4,686
4,578

201
208
202
216

17
18
23
29

65
26
27
30

293
301
348
393

2,194
2,487
2,389
2,355

—56
63
—41
—73

1930
1931
1932
1933

251
638
235
98

729
364
339
817
33 1,855
133 2,437

29
59
22
20

1,373
1,853
2,145
2,688

4,306
4,173
4,226
4,036

2,027
2,035
2,204
2,303

4,603
5,360
5,388
5,519

211
222
272
284

19
54
8
3

28
110
43
132

375
354
355
360

2,471
1,961
2,509
2,729

96
-33
576
859

1934
1935
1936
1937
1938

7
5
3
10
4

6
5
3
1
1

2,430
2,431
2,430
2,564
2,564

20
45
64
38
33

2,463
2,486
2,500
2,612
2,601

8,238
10,125
11,258
12,760
14,512

2,511
2,476
2,532
2,637
2,798 ;

5,536
5,882
6,543
6,550
6,856

3,029
2,566
2,376
3,619
2,706

121
544
244
142
923

189
255
259
407
441

241
253
261
263
260

4,096
5,587
6,606
7,027
8,724

1,814
2,844
1,984
1,212
3,205

5
4
4
3
4
5
5
5
6
6
8
7

1
1
1
1
1
1
1
1
1

2,574
2,564
2,564
2,571
2,564
2,551
2,488
2,426
2,804
2,736
2,552
2,481

28
30
18
20
4
23
-8
14
68
59
89
102

2,607
2,598
2,587
2,595
2,573
2,579
2,486
2,446
2,879
2,801
2,650
2,593

14,682
14,874
15,258
15,791
15,957
16,110
16,238
16,646
16,932
17,091
17,358
17,644

2,816
2,824
2,839
2,849
2,862
2,881
2,895
2,907
2,919
2,932
2,947
2,963

6,653
6,731
6,817
6,905
6,967
7,047
7,049
7,171
7,293
7,342
7,483
7,598

2,776
2,740
2,691
2,699
2,636
2,563
2,360
2,325
2,244
2,254
2,367
2,409

747
1,148
1,229
931
920
944
752
708
545
286
419
634

458
488
533
545
586
739
693
622
753
728
819
653

255
254
257
255
253
258
257
255
240
241
241
251

9,215
8,936
9,157
9,900
10,029
10,018
10,507
10,918
11,655
11,973
11,628
11,653

3,644
3,387
3,559
4,098
4,218
4,140
4,553
4,758
5,352
5,553
5,160
5,209

1918
1919
1920
1921
1922
1923
1924
1925

,

1939-Jan...
Feb. .
Mar.
Apr. .
May .
June .
July.
Aug..
Sept..
Oct..
Nov..
Dec..

51
68

"i4

1
Includes Government overdrafts in 1918, 1919, and 1920; includes industrial advances outstanding since
July 1934.
2
By proclamation of the President, dated January 31, 1934, the weight of the gold dollar was reduced from
25 8/10 grains to 15 5/21 grains, nine-tenths fine. Between January 31, 1934, and February 1, 1934, the gold
stock increased $2,985,000,000, of which $2,806,000,000 was the increment resulting from the reduction in the
weight of the gold dollar and the remainder was gold which had been purchased by the Treasury previously
but not added to the gold stock. The increment was covered into the Treasury as a miscellaneous receipt, and
appeared together with the new gold as a General Fund asset. These transactions were also reflected in an
increase in the item "Treasury cash." The increment arising from United States gold coin turned in by the
public after January 31, 1934, was also added to both gold stock and Treasury cash at the time of receipt. The
increment from this source amounted to about $7,000,000, from February 1 to December 31, 1934, to about
$1,000,000 in 1935, to $1,800,000 in 1936, to $1,200,000 in 1937, to $500,000 in 1938, and to $350,000 in 1939.
3
Comprises outstanding United States notes, national bank notes, silver bullion, Treasury notes of 1890,
standara silver dollars, subsidiary silver and minor coin, and the Federal Reserve bank notes for the retirement of which lawful money has been deposited with the Treasurer of the United States, including the currency of these kinds that is held in the Treasury and the Federal Reserve banks as well as that in circulation.
<Cash (including gold bullion) held in the Treasury excepting (a) gold and silver held against gold and silver
certificates and (b) amounts held for the Federal Reserve banks.
6
Item includes all deposits in Federal Reserve banks except Government deposits and member bank reserve
balances.
•This item is derived from the condition statement of the Federal Reserve banks by adding capital, surplus,
other capital accounts, and "other liabilities, including accrued dividends," and subtracting the sum of
bank premises and "other assets."
7
Represents excess of total reserve balances over reserves required to be held by member banks against their
deposits. Figures not available prior to 1929 except on call dates, and since April 1933 are for licensed member
banks only. For required reserves and changes in the percentages of requirements see table 11.




FEDERAL RESERVE SYSTEM

53

NO. 15.-NUMBER OF BANKS AND BRANCHES IN UNITED STATES, 1933-1939

Nonmember banks

Member banks

E n d of y e a r

Other than mut u a l savings a n d
private banks

figures
National

Total
Mutual
savings P r i v a t e

State
Insured

]

Noninsured

Branches

2

In
headoffice
cities

Outside
headoffice
cities

x

N u m b e r of b a n k i n g
offices
1933
1934
1935
1936
1937
1938
1939

6,275
6,705
6,715
6,723
6,745
6,723
6,705

1,817
1,961
1,953
2,032
2,075
2,106
2,177

9,041
3
9,579
8,556
1,088
8,436
1,043
8,340
997
8,224
958
8,098
931

704
705
698
693
691
690
«683

103
246
143
139
79
73
«69

17,940
19,196
19,153
19,066
18,927
18,774
18,663

N u m b e r of b a n k s
( H e a d offices)
1933
1934
1935
1936
1937
1938
1939

5,154
5,462
5,386
5,325
5,260
5,224
5,187

857
980
1,001
1,051
1,081
1,114
1,175

8,<341
1,108
7,693
1,046
7,728
1,004
7,588
7,449
960
7,316
917
7,171
887

579
579
570
565
563
555
551

98
241
138
134
74
68
63

15,029
16,063
15,869
15,667
15,387
15,194
15,034

1,121
1,243
1,329
1,398
1,485
1,499
1,518

960
981
952
981
994
992
1,002

125
126
128
128
128
135
132

5
5
5
5
5
5
6

2,911
3,133
3,284
3,399
3,540
3,580
3,629

N u m b e r of
branches
1933
1934
1935
1936
1937
1938
1939
1

7t)0
778
828
848
891
908
927

42
39
37
41
44

1,784
1,776
1,754
1,749
1,757
1,743
1,738

1,127
1,357
1.530
1.650
1,783
1,837
1,891

F e d e r a l deposit i n s u r a n c e did n o t b e c o m e o p e r a t i v e u n t i l J a n u a r y 1, 1934.
T h e figures for D e c e m b e r 1934 include 140 p r i v a t e b a n k s which r e p o r t e d t o t h e C o m p t r o l l e r of t h e
C u r r e n c y u n d e r t h e provisions of Section 21(a) of t h e B a n k i n g A c t of 1933. U n d e r t h e provisions of t h e
B a n k i n g A c t of 1935, p r i v a t e b a n k s n o longer r e p o r t to t h e C o m p t r o l l e r of t h e C u r r e n c y a n d , accordingly,
only such p r i v a t e b a n k s as r e p o r t t o S t a t e b a n k i n g d e p a r t m e n t s a r e in t h e figures s h o w n for s u b s e q u e n t
years.
3
S e p a r a t e figures n o t available for b r a n c h e s of i n s u r e d a n d n o n i n s u r e d b a n k s .
4
C o m p r i s e s 51 i n s u r e d b a n k s with 24 b r a n c h e s a n d 500 n o n i n s u r e d b a n k s with 108 b r a n c h e s . T h e figures
for 1939 exclude one b a n k w i t h 4 b r a n c h e s which heretofore was classified as a n insured m u t u a l savings
b a n k b u t is n o w included w i t h " N o n m e m b e r b a n k s other t h a n m u t u a l savings a n d p r i v a t e b a n k s . "
5
C o m p r i s e s 1 i n s u r e d b a n k w i t h n o b r a n c h e s a n d 62 n o n i n s u r e d b a n k s w i t h 6 b r a n c h e s .
2




54

ANNUAL REPORT OF BOARD OF GOVERNORS
NO. 16—ANALYSIS OF CHANGES IN NUMBER OF BANKS AND BRANCHES DURING 1939
Member banks

Total
National

State

Nonmember banks
Other than mutual
savings and
private banks

Mutual Private
savings

NonInsured Insured

Analysis of Bank Changes
Number of banks on December 31, 1938
Increases in number of banks:
Decreases in number of banks:
Suspensions
Voluntary liquidations 2
Inter-class bank changes:
Conversions—
State into national

15,194

5,224

1,114

7,316

917

+30

+3

+1

+24

+2

-4
-7
-30

-3
-3
-8

-25
-15
-74

-9
-12
-7

+13
-12

-9
+2
+85
-4

-4
+10

-42 1
-41
-122

Federal Reserve membership 3
Withdrawals of State banks
Federal deposit insurance 4

-3

68

-1
-4

-1

+17

-17

+2

+ 15
Net increase or decrease in number

-84
+4

555

+14

-1

-160

-37

+61

-145

-30

-4

-5

15,034

5,187

1,175

7,171

887

551

63

3,580

1,499

992

908

41

135

5

+48
+48

+6

+6
+5

+2
+1

+1

-9
-40

+14

+33
+27
-2
-17

Analysis of Branch Changes
Number of branches onDecember 31, 1938.
Increases in number of branches:
Banks converted into branches
Decreases in number of branches:
Inter-class branch changes:
Branches of a national bank which became a State member bank
Branch of a national bank which be-

-7
-14

-9
-4
-1
+13

Branches of a nonmember bank which
Branches of nonmember banks which
became branches of State member

+4

Number of branches onDecember 31, 1939. ,.
1
Exclusive
2
Exclusive
3

+1
-13
-16
+6

+2
Net increase or decrease in number
of branches

+1

+49

+19

+16
+10

3,629

1,518

1,002

-4

+19

+3

-3

+1

927

44

132

6

of new banks organized to succeed operating banks.
of liquidations incident to the succession, conversion and absorption of banks.
Exclusive of conversions of national banks into State bank members, or vice versa, as such conversions
do4 not affect Federal Reserve membership.
Exclusive of conversions of member banks into insured nonmember banks, or vice versa, as such conversions do not affect Federal Deposit Insurance Corporation membership.
6
Includes 2 branches of an insured nonmember bank which was absorbed by a State member bank, and
14 branches of insured nonmember banks which became State member banks.




55

FEDERAL RESERVE SYSTEM
NO. 17.-NUMBER OF BANKS ON PAR LIST AND NOT ON PAR LIST/ BY FEDERAL
RESERVE DISTRICTS AND STATES, ON DECEMBER 31, 1938 AND 1939
Federal Reserve
district
or State
DISTRICT

New York
Richmond

Dallas
San Francisco
Total

N o n m e m b e r b a n k s , other t h a n
m u t u a l savings b a n k s

Member banks

O n p a r list

N o t on p a r list

D e c . 31,
D e c . 31, 1 D e c . 31,
D e c . 31,
1938
1938*
1939
1939
353
356
167 1
168
772
768
274
257 1
655
652 i
249 !
258
624
639
590
617
406
410
306
315
320
315
86
89
787
804
1,458
1,504
391
392
695
727
461
467
133
153
734
!
736
964
946
544
544
270
283
288
282
239
253

D e c . 31,
1939

D e c . 31,
1938'

2
295
698
217
442
703
176
158
28

2
298
689
218
437
710
178
161
29

2,719

2,722

6,362

6,338

5,396

5,605

43
53
42
154
14
58

44
53
42
155
14
59

27
12
33
42
9
61

27
11
33
43
9
62

563
277
775

563
283
776

178
84
309

188
96
314

344
148
404
213
134

327
145
395
207
133

357
355
417
249
280

378
363
435
262
288

3
27
1
158

4
28
1
161

209
143
142
50
64
148
203

206
142
141
50
64
150
200

58
405
378
4
8
114
471

67
412
389
5
12
116
482

411
110
106
117
93
161
1

410
108
105
125
92
163
1

19
73
14
162
96
51
25
70
56

20
74
13
157
98
52
24
73
57

24
103
8
109
79
18
5
17
16

25
106
9
115
79
17
5
17
18

43
6
126
120
260
87

43
6
129
120
254
83

112
77
82
26

111
77
82
27

282
52
5
4

295
55
6
4

12
171
130
175

12
169
130
175

56
36
220
501

57
37
221
501

49
5
161
256

53
5
165
269

132
104
12
102

129
104
12
105

68
28
35
91
27
7
33
7

67
30
35
89
27
7
33
5

23
23
21
53
14
5
26
4

26
22
21
54
14
5
26
4

20

21

2
1

2
1

60
34

63
35
117

53
36
94

59
37
102

25
3

25
4

STATE

New England:
Maine
Vermont
Rhode Island
Connecticut
Middle Atlantic:
New Jersey
Pennsylvania
East North Central:
Ohio
Michigan
West North Central:

Kansas
South Atlantic:
District of Columbia

Georgia
East South Central:

West South Central:

Texas
Mountain:

Utah
Pacific:

115 1
1
Revised.
Includes all member banks, and all nonmember banks on which checks are drawn
(except mutual savings banks, on a few of which some checks are drawn). Banks not on the par list
comprise nonmember banks that have not agreed to pay without deduction such checks drawn upon them
as are forwarded for payment by the Federal Reserve banks. The difference of 6 between the number
of nonmember banks on December 31, 1939 shown in this table and in table 15 is due to the fact that

this table excludes 159 banks (principally 65 industrial banks and 74 non-deposit trust companies) on which
no checks are drawn, and includes 153
private
http://fraser.stlouisfed.org/are drawn but which banks (principally 122 to State banks and 22 cooperative banks)
on which checks
(1) are not reporting
banking departments, (2) are in
r

Federal Reserve Bank of St. Louis

56

ANNUAL REPORT OF BOARD OF GOVERNORS

NO. 18.-M0NEY RATES, BOND YIELDS, AND STOCK PRICES'
Open-market rates in
New York City'
(per cent per annum)
Year and month

Prime
commercial
paper,
4-6
months

Common stock prices4 (1926 =» 100)

Corporate
U.S.
Treasury
bills

U.S.
Treasury
notes

U.S.
Treasury

Total
Aaa

Baa

Industrial

Railroad

Public
utility

4-6

2-6

30

30

420

348

32

40

1.402
0.879
0.515
0.256
0.137
0.143
0.447
0.053
0.022

2.66
2.12
1.29
1.11
1.40
0.83
0.59

4.73
5.32
5.09
4.30
4.36
4.06
3.86
3.68
3.34
3.33
3.60
3.29
3.34
3.68
3.31
3.12
2.79
2.65
2.68
2.56
2.36

5.49
6.12
5.97
5.10
5.12
5.00
4.88
4.73
4.57
4.55
4.73
4.55
4.58
5.01
4.49
4.00
3.60
3.24
3.26
3.19
3.01

7.25
8.20
8.35
7.08
7.24
6.83
6.27
5.87
5.48
5.48
5.90
5.90
7.62
9.30
7.76
6.32
5.75
4.77
5.03
5.80
4.96

70.7
64.2
55.2
67.7
69.0
72.8
89.7
100.0
118.3
149.9
190.3
149.8
94.7
48.6
63.0
72.4
78.3
111.0
111.8
83.3
89.2

72.6
66.1
51.6
64.7
66.6
69.6
88.4
100.0
118.5
154.3
189.4
140.6
87.4
46.5
65.7
81.1
90.8
127.3
131.3
99.4
104.9

70.1
63.9
61.8
72.7
71.9
76.7
89.5
100.0
119.1
128.5
147.3
124.9
72.5
26.4
37.7
41.5
34.0
51.2
49.3
26.1
28.2

60.3
54.5
57.8
70.9
73.8
78.9
94.9
100.0
116.0
148.9
234.6
214.6
148.7
79.1
78.1
68.9
71.4
.104.3
94.8
73.2
84.5

1 00
1 00
88
88
88
88
75
75
69
69
69
63

0.099
0.084
0.074
0.083
0.027
0.023
0.053
0.047
0.096
0.023
0.024
0.007

1.13
1.09
1.01
0.94
0.77
0.67
0.70
0.71
0.82
0.68
0.71
0.67

2.65
2.64
2.64
2.62
2.51
2.52
2.52
2.51
2.58
2.48
2.50
2.49

3.17
3.20
3.22
3.30
3.22
3.26
3.22
3.18
3.21
3.15
3.10
3.08

5.89
5.97
6.30
6.47
6.06
6.25
5.63
5.49
5.65
5.36
5.23
5.27

81.6
80.7
77.9
70.7
73.9
73.1
88.0
89.5
86.0
91.1
94.7
92.0

95.7
95.7
92.7
84.2
87.4
86.4
105.3
108.0
103.9
109.6
113.6
110.6

29.0
28.3
25.5
20.9
21.8
20.5
27.3
27.8
25.5
28.1
30.0
28.8

75.7
71.2
68.5
64.0
69.5
69.2
76.5
75.0
72.2
77.4
80.9
77.9

.56
.56
.56
.56
.56
.56
.56
.56
.69
.69
.63
.56

0.002
0.004
0.005
0.019
0.006
0.006
0.017
0.046
0.102
0.028
0.018
0.012

0.65
0.63
0.51
0.50
0.42
0.39
0.45
0.48
1.07
0.77
0.64
0.51

2.47
2.44
2.34
2.30
2.17
2.13
2.16
2.21
2.65
2.60
2.46
2.35

3.01
3.00
2.99
3.02
2.97
2.92
2.89
2.93
3.25
3.15
3.00
2.94

5.12
5.05
4.89
5.15
5.07
4.91
4.84
4.85
5.00
4.88
4.85
4.92

91.8
90.1
91.7
81.9
83.1
86.0
86.1
86.3
92.4
95.3
94.2
91.8

109.3
106.3
108.0
95.9
97.0
100.5
100.6
100.5
109.4
112.7
110.9
107.9

29.8
28.0
29.7
24.8
25.0
25.9
25.7
25.4
29.7
32.9
31.6
29.6

81.2
83.8
85.8
80.0
82.4
84.7
84.9
87.0
84.3
86.0
87.3
86.7

N u m b e r of issues
1919
1920
1921
1922
1923
1924
1925
1926
1927
1928
1929
1930
1931
1932
1933
1934
1935
1936
1937
1938
1939

Bond yields3
(per cent per annum)

5.56
7.54
6.56
4.48
5.01
3.88
4.03
4.34
4.11
4.86
5.85
3.59
2.63
2.73
1.72
1.02
.76
.75
.95
.81
.59
1938

January
March
April
May
June
July
August
September
October
November
December
1939
January
February
March
April
May
June
July
August
September
October
November
December

1
Annual data are averages of monthly figures.
* For commercial paper, monthly data are prevailing rates; for Treasury bills, the average rates on new issues
within period; and for Treasury notes the averages of daily figures for 3- to 5-year issues. Treasury bill series
comprises 90-day bills to February 16, 1934; 182-day bills from February 23, 1934 to February 23, 1935; 273-day
bills fromMarch 1, 1935 to October 15,1937; bills maturing aboutMarch 16, 1938, from October 22 to December
10,3 1937; and 91-day bills thereafter.
Monthly data are averages of daily figures. U. S. Treasury bond yields are averages of all outstanding
bonds due or callable in more than eight years from 1919 to 1925 and in more than twelve years beginning
in 1926. Corporate average yields are as published by Moody's Investors Service; until 1928 each rating
group included 15 bonds; since the early part of 1934 there have been less than 30 bonds in the Aaa group
owing to the limited number of suitable issues in the industrial and railroad groups.
4
Standard Statistics Co. Monthly data are averages of Wednesday figures.




57

FEDERAL RESERVE SYSTEM
NO. 19—BUSINESS INDEXES 1
[Adjusted for seasonal variation, 1923-1925 average=100]

Industrial production

Year and month

Dur- Nondurable
Total man- able
ufac- mantures ufactures

83
87
67
85
101
95
104
108
106
111
119
96
81
64
76
79
90
105
110
86
105

83
92
53
80
102
92
106
110
101
112
122
89
59
33
50
57
76
99
107
64
95

99
88
98
97
102
110
110
100
112

81
79
79
77
76
77
83
88
90
96
103
104

56
54
54
53
51
50
58
64
69
83
94
92

101
99
98
92
92
98
101
103
111
121
124
128

88
84
80
76
71
82
88
92
103
123
130
141

Construction contracts awarded
(value)2

Minerals

Resi- All
dential other

99
84
71
82
86
91
105
116
98
108

63
63
56
79
84
94
122
129
129
135
117
92
63
28
25
32
37
55
59
64
72

44
30
44
68
81
95
124
121
117
126
87
50
37
13
11
12
21
37
41
45
60

94
120
135
139
142
142
125
84
40
37
48
50
70
74
80
81

93
94
93
91
93
95
102
107
107
106
110
114

108
103
104
100
92
93
93
95
97
98
102
110

52
51
46
52
51
54
59
66
78
82
96
96

26
32
33
37
37
42
49
53
56
57
56
57

110
110
110
95
98
104
106
91
114
121
124
120

86
73
69
67
63
63
67
73
73
76
83
86

55
58
55
58
55
58
62
67
68
68
61
60

111
85

86
83 i

70
93 1 74
100 105
96
104
106 108
110 107
112 106
117 115
79

101 !

67
71
78
76
82
101
107

Na-

100)

73
66
56
65
62
64
68
77
96
102
128
128

110
109
110
105
108
110
110
115
117
119
118
120

Whole-

tional
income
payments
(1929=
100)

DeFacsale
parttory Fac- Freight-] ment comtory
car
em- paymodity
ploysales prices*
ment rolls*
(value) (1926=

109
90
97

94
94
94
93
94
95
96
98
101
103
105

117
76
81
103
96
101
104
102
104
110
89
68
47
50
65
74
86
'103
78
91

86
85
87
84
90
94
102
102
104

84
91
78
85
100
98
103
107
104
104
107
92
74
55
58
62
64
75
78
62
70

78
94
87
88
98
99
103
106
107
108
111
102
92
69
67
75
79
88
92
85
90

139
154
98
97
101
98
104
100
95
97
95
86
73
65
66
75
80
81
86
79
77

100
92
78
61
57
66
72
83
89
82
85

90
88
86
83
78
82
83
83
86
84
89
89

107
107
82
91
104
96
100
102
100
100
106
92
78

81
80
80
79
78
78
79
78
78
78
78
77

83
82
82
81
80
80
80
81
82
83
83
83

88
87
88
88
85
86
86
89
91
90
95
96

77
77
77
76
76
76
75
75
79
79
79
79

83
83
84
83
83
84
84
85
87
88
89
90

* Without seasonal adjustment.
1
Indexes compiled by the Board of Governors of the Federal Reserve System, except for indexes of wholesale
commodity prices and factory payrolls, compiled by the United States Bureau of Labor Statistics, and the
index of income payments, compiled by the United States Department of Commerce. Descriptions and back
figures for the Board's indexes may be obtained from the Division of Research and Statistics.
2
Three-month moving average, centered at second month, based on F. W. Dodge Corporation data for 37
Eastern States.







APPENDIX

RECORD OF POLICY ACTIONS-BOARD OF GOVERNORS
MEETING ON APRIL 6, 1939

Members present: Mr. Eccles, Chairman; Mr, Ransom, Vice Chairman; Mr. Davis, Mr. Draper.
Repeal of Regulation G, Rediscount of Notes Secured by Adjusted Service
Certificates.

By unanimous vote, Regulation G, Rediscount of Notes
Secured by Adjusted Service Certificates, was repealed
effective as of April 6, 1939.
At the time this action was taken the Federal Reserve banks did not
hold any notes secured by adjusted service certificates and no such notes
had been rediscounted with the Federal Reserve banks for a number
of years. Furthermore, the law provided for the payment of an adjusted
service certificate by the Veterans' Administration at the option of the
veteran holding the certificate and authorized the Administration to make
a loan on such certificate, and, while commercial banks might still make
loans on the security of the certificates, it seemed improbable in the
circumstances that a Federal Reserve bank would be called upon to rediscount a note evidencing such a loan. In advising the Federal Reserve
banks of its action, the Board requested that if such a note were presented by a member bank for rediscount it be handled under the pertinent
provisions in the law in the same manner as it would have been handled
if Regulation G were still in effect.
MEETING ON MAY 9, 1939

Members present: Mr. Eccles, Chairman; Mr. Ransom, Vice Chairman; Mr. McKee, Mr. Davis.
Amendment to Regulation T, Extension and Maintenance of Credit by Brokers,
Dealers and Members of National Securities Exchanges.

By unanimous vote a number of provisions of Regulation T were amended, effective May 22, 1939. The principal
changes made by the amendment were as follows:
Cash sales jor customers.—When a broker sells a security for a
customer in a special cash account, without first having obtained
the security from the customer, the broker will no longer be required
by the regulation to get the security within a period of 7 days, or
within any other specified period. Such a sale cannot be a short
sale, since the making of a short sale by a customer in a special
cash account is forbidden.
Cash purchases for customers on C.O.D. basis.—When a broker
buys a security for a customer in a special cash account and the
transaction is of the type in which the customer arranges to have
the security delivered to him promptly against payment, the broker
will no longer be required by the regulation to obtain payment (and
60




FEDERAL RESERVE SYSTEM

61

consequently to make delivery) within a period of 7 days. The
time limit is not altogether removed, but is fixed at 35 days. The
broker is not permitted, however, without the permission of an
appropriate committee of a national securities exchange, to give
the customer more than 7 days if the customer, for any reason whatever, has failed to settle with him promptly in full on any cash
transaction during the preceding three months.
Cash transactions between brokers or dealers.—Cash transactions
between one broker or dealer and another, as distinguished from
transactions and relations with the general public, are relieved from
the 7-day limitation, or any similar limitation, provided the transactions are in good faith for prompt settlement in accordance with
the ordinary usage of the trade.
Loans by one member of an exchange to another.—A new provision has been added to the regulation to facilitate the making of
a loan by one member of a national securities exchange to another
member for the purpose of enabling the borrower, in his capacity
as a partner in a member firm, to make a contribution of capital to
his firm. Unless the loan is by one partner in a firm to another
partner in the same firm, however, it must be approved, in accordance with conditions specified in the amendment, by an appropriate
committee of the exchange, and one of these conditions is that if the
firm is one that does any dealing in securities for its own account,
the loan must not be for the purpose of enabling the firm to increase the amount of such dealing.
The changes were made for the purpose of clarifying and liberalizing
the provisions of the regulation that relate to bona fide cash transactions
in securities and to certain other classes of transactions that are not
effected in margin accounts. The Board was of the opinion that in
making the changes necessary safeguards were provided and that the
regulation would not be weakened.
MEETING ON JUNE 23, 1939

Members present: Mr. Ransom, Vice Chairman; Mr. Szymczak,
Mr. McKee, Mr. Davis, Mr. Draper.
Amendment to Regulation O, Loans to Executive Officers of Member Banks.

By unanimous vote Regulation 0 was amended, effective July 1, 1939,
in the following respects:
(1) Subsection 1(b) was changed to read as follows:
"(b) The term 'executive officer' means every officer of a
member bank who participates or has authority to participate in the operating management of the bank or any
branch thereof otherwise than in the capacity of a director
of the bank, regardless of whether he has an official title or
whether his title contains a designation of assistant and
regardless of whether he is serving without salary or other
compensation. It will be assumed that the chairman of the
board, the president, every vice president, the cashier, secretary, treasurer and trust officer of a member bank are
executive officers, unless it is provided by resolution of the
board of directors or the bank's by-laws that any such




62

ANNUAL REPORT OF BOARD OF GOVERNORS

officer is not authorized to participate in the operating management of the bank and he does not actually participate
therein."
(2) Subsection 4(a) was amended by striking out "June 16, 1938," in
the first and last sentences of such subsection and inserting in lieu thereof "June 16, 1944."
The reasons for the Board's action were set forth as follows in a
statement which was released to the press:
"Section 22(g) of the Federal Reserve Act, which restricts loans
to 'executive officers' and which is implemented by the Board's
Regulation 0, makes a distinction between 'executive officers' and
other officers. On reviewing this subject, the Board concluded that
the regulation should be amended to give clearer recognition to
this distinction and to the view that the question whether or not
a person is an 'executive officer' does not depend upon the title
which he has but upon the nature of his duties. As amended, the
regulation would not apply to a person, regardless of his title, who
has no authority to perform and actually does not perform the
duties of an executive especially in view of the fact that the law
does not restrict loans to directors who are not also executive
officers.
"The Board also amended its Regulation 0 by changing the date
in section 4(a) to 'June 16, 1944.' This amendment was made to
conform to the change recently made in the law extending until
June 16, 1944, the date to which loans made by member banks to
their executive officers prior to June 16, 1933, may be renewed or
extended."
MEETING ON JULY 31, 1939

Members present: Mr. Eccles, Chairman; Mr. Ransom, Vice Chairman; Mr. McKee, Mr. Davis.
Amendment to Regulation J, Check Clearing and Collection.

By unanimous vote Regulation J, Check Clearing and
Collection, was amended, effective September 1, 1939, in
the following respects:
(1) Section 3 was amended so as to permit, but not to require,
a Federal Reserve bank to receive from member banks and nonmember clearing banks in its own district items drawn on banks
in other districts.
(2) The first paragraph of Section 5 was amended to provide
indemnification to a Federal Reserve bank for loss resulting from
forged endorsements, and also to provide that each member and nonmember bank sending checks to a Federal Reserve bank shall be
deemed to guarantee all prior endorsements on such checks whether
or not a specific guaranty is incorporated in an endorsement of
the sending bank.
(3) Section 5 was further amended by the addition of a new
paragraph to provide that with respect to any check sent direct by
a bank in one district to a Federal Reserve bank in another the
relationships and the rights and liabilities existing between such




FEDERAL RESERVE SYSTEM

63

sending bank, the Federal Reserve bank of its district and the
Federal Reserve bank to which the check is sent will be the same
as though the item had been sent to the Federal Reserve bank in
the sending bank's district and by it to the other Federal Reserve
bank.
(4) The first sentence of Section 6 was amended to provide that
each Federal Reserve bank may promulgate rules not inconsistent
with the terms of the law or the regulation, governing the sorting,
listing, packaging, and transmission of items.
(5) Certain other amendments of a minor and unimportant
character.
The changes in the regulation were adopted by the Board in connection with a revision in the check collection procedure of the Federal
Reserve banks, having as its purpose a reduction in the work required
in preparing checks for deposit with the Federal Reserve banks and a
reduction in the maximum time for which credit is deferred. The Board
released to the press on August 21, 1939, a statement with respect to
this action as follows:
"The Board of Governors of the Federal Reserve System announced today that the Federal Reserve banks will put into effect
on September 1, 1939, certain changes in their check collection procedure designed to give member banks more prompt credit for checks
deposited with the Federal Reserve banks for collection and to
reduce the amount of work required in preparing the checks for
deposit with the Federal Reserve banks.
"Heretofore member banks have been given credit for checks
deposited with the Federal Reserve banks in accordance with time
schedules which were based on the actual time required to collect
the checks. After September 1 the Federal Reserve banks will
credit member banks within three days or less for all checks deposited with them for collection. Immediate credit or credit within
one or two days will continue to be given for most checks.
"The Board's Regulation J relating to the clearance and collection of checks and the check collection circulars and time schedules
of the Federal Reserve banks have been revised. Copies are being
sent by the Federal Reserve banks to all member banks and to all
other banks which maintain deposit accounts with the Federal
Reserve banks."
MEETING ON AUGUST 1, 1939

Members present: Mr. Eccles, Chairman; Mr. Ransom, Vice Chairman; Mr. McKee, Mr. Davis.
Amendment to Regulation L, Interlocking Bank Directorates Under the
Clayton Act.

On November 7, 1938, the Board amended Regulation L to permit
(1) any director, officer, or employee of a member bank or any private
banker who was lawfully serving as a director, officer, or employee of a
Morris Plan bank or similar institution on January 31, 1939, to continue
to serve until August 1, 1939, and (2) any director, officer, or employee of
any member bank who, on August 23, 1935 (date of approval of the
Banking Act of 1935), was lawfully serving at the same time as a private




64

ANNUAL REPORT OF BOARD OF GOVERNORS

banker or as a director, officer, or employee of any other bank and whose
services in such capacities had been continuous since such date, to continue until August 1, 1939, to serve such member bank and not more than
one other bank.
At this meeting, by unanimous vote subsections 3(a) and
3(e) of Regulation L were further amended effective immediately to authorize the continuation of such relationships
until February 1, 1940.
On the date this action was taken Congress had passed and sent to the
President for signature Senate bill 2150 which would amend the second
paragraph of Section 8 of the Clayton Act to authorize a director, officer,
or employee of a member bank who was lawfully serving other banks on
the date of the enactment of the Banking Act of 1935 to continue such
service until February 1,1943. On August 1, 1939, the President had not
signed the bill * and in these circumstances it was decided that the permission previously granted by the Board should be extended to February
1, 1940. As annual elections of directors and appointments of officers
usually take place in the early part of January, this action had the effect
of permitting the necessary adjustments to be made in most cases at the
usual time of the ensuing regular elections instead of terminating immediately the services of the directors, officers, or employees affected.
MEETING ON AUGUST 25, 1939

Members present:
Davis, Mr. Draper.

Mr. Ransom, Vice Chairman; Mr. Szymczak, Mr.

Reduction by the Federal Reserve Bank of New York in Rate on Advances to
Nonmember Banks on Government Obligations.

By unanimous vote, approval was given to a rate of 1%
fixed by the board of directors of the Federal Reserve Bank
of New York, effective immediately, on advances by the
bank to nonmember banks secured by direct obligations of
the United States.
This action, which established the same rate for advances to member
and nonmember banks secured by Government obligations, was taken by
the bank, and the new rate was approved by the Board, in anticipation
of the adoption of a policy (which became effective on September 1) in
accordance with which the Federal Reserve banks would be prepared to
make advances to member and nonmember banks on Government obligations at par at the rate prevailing for member banks.
MEETING ON SEPTEMBER 1, 1939

Members present:
Mr. Draper.

Mr. Eccles, Chairman; Mr. Szymczak, Mr. Davis,

Advances by Federal Reserve Banks to Member and Nonmember Banks on
Government Obligations.

By unanimous vote, the following statement for the press
was approved for release in the afternoon papers of September 1, 1939:
* This bill was vetoed on August 5, 1939.




FEDERAL RESERVE SYSTEM

65

"The Board of Governors of the Federal Reserve System announces that in view of current developments in the international
situation, the Federal Reserve banks are prepared at this time to
make advances to member and nonmember banks on Government
obligations at par at the rates prevailing for member banks."
In April 1939 members of the Board of Governors discussed informally
with presidents of the Federal Reserve banks the question of action that
might be taken by the System in the event of armed conflict abroad
resulting in serious disturbances to the markets in this country and it
was agreed that during such an emergency the Federal Reserve banks
should follow a policy of making advances to member and nonmember
banks on the security of direct obligations of the United States at par
at the discount rate. The presidents had been advised of the decision
reached by the Federal Open Market Committee to authorize, in case of
such an emergency, an increase in the System open market account by
not to exceed $1,000,000,000 if deemed necessary for the purpose of exercising an influence toward the maintenance of orderly market conditions,
and the policy with respect to advances to member and nonmember banks
on Government obligations was considered desirable as a further means
of lending stability to the markets.
War having broken out in Europe with sharp repercussions on the
markets in this country, it was decided on September 1 that the policy
should be put into effect and thereupon the Board issued the press statement set forth above.
On September 1 reductions in the rates in effect at all Federal Reserve
banks except New York (for which a reduced rate was approved on
August 25) were approved by the Board in accordance with the announced policy.
MEETING ON NOVEMBER 7, 1939

Members present: Mr. Eccles, Chairman; Mr. Ransom, Vice Chairman; Mr. Szymczak, Mr. McKee, Mr. Davis, Mr. Draper.
Amendment to Regulation F, Trust Powers of National Banks.

By unanimous vote, Regulation F, Trust Powers of National Banks, was amended in certain respects to become
effective November 20, 1939.
The principal amendment affected the provision relating to "self dealing" in the investment of trust funds and sale or transfer of trust assets,
contained in section 11, and was prompted by inquiries received from
time to time which indicated that in some instances the best interests of
trusts would be better served if the requirements were more flexible. For
that reason, transactions were excepted from such requirements when
specifically authorized by court order. The other amendments were of
a minor nature and were made for the purpose of clarification or to conform to amendments to the Internal Revenue laws.
Amendment to Regulation H, Membership of State Banking Institutions in
the Federal Reserve System.

By unanimous vote, Regulation H, Membership of State
Banking Institutions in the Federal Reserve System, was
amended in certain respects to become effective November
20, 1939.




66

A N N U A L REPORT OF BOARD OF GOVERNORS

Congress on June 20, 1939, repealed the requirement in subsection (y)
of Section 12B of the Federal Reserve Act that certain State banks having deposits of $1,000,000 or more become members of the Federal
Reserve System not later than July 1,1942, in order to continue as insured
banks. This change in the law made necessary the elimination from
Section 2 of the regulation of all reference to such statutory provisions
and the related provisions of Section 9 of the Federal Reserve Act concerning the waiver of membership requirements.
In section 6, standard condition of membership numbered 4 was
amended and a previously approved revision of standard condition of
membership numbered 5 was incorporated. Both conditions deal with the
exercise of trust powers by State member banks and were modified in
order to conform to comparable requirements contained in the Board's
Regulation F, Trust Powers of National Banks.
Other changes were of a perfecting nature and did not involve any
change in policies or practices already in effect.
MEETING ON DECEMBER 26, 1939

Members present: Mr. Eccles, Chairman; Mr. Ransom, Vice Chairman; Mr. McKee, Mr. Davis, Mr. Draper.
Adoption of Regulation G, Collection of Noncash Items.

By unanimous vote, a new Regulation G, relating to the
collection by the Federal Reserve banks of noncash items,
was adopted to become effective February 1, 1940.
The reason for the adoption of the regulation is set forth in the
following statement which was released to the press on December 29,
1939:
"The Board of Governors of the Federal Reserve System announced today the adoption of a regulation, effective February 1,
1940, governing the collection by Federal Reserve banks of notes
and bills and other 'noncash items' for member banks and nonmember clearing banks. This regulation has been issued by the
Board in order that the principal terms and conditions relating to
the collection of noncash items may be published in the Federal
Register and requires no change in the existing practices of the
Federal Reserve banks. Other provisions regarding the collection
of noncash items will be contained, as heretofore, in the circulars
of the individual Federal Reserve banks."




RECORD OF POLICY ACTIONS—FEDERAL OPEN MARKET COMMITTEE
MEETING ON MARCH 7, 1939

Members present: Mr. Eccles, Chairman; Mr. Harrison, Vice Chairman; Mr. Szymczak, Mr. McKee, Mr. Ransom, Mr. Davis, Mr. Draper,
Mr. Fleming, Mr. Leach, Mr. Martin, Mr. Hamilton.
Authority (1) to Replace Maturing Securities and to Make Shifts of Securities in the System Open Market Account and (2) to Increase or Decrease
the System Open Market Account.

Upon motion duly made and seconded, the following
resolutions, which were in the same form as the resolutions adopted at the meeting on December 30, 1938, were
adopted, Messrs. Harrison, Szymczak, McKee, Davis,
Fleming, Leach, Martin and Hamilton voting "aye," and
Messrs. Eccles, Ransom, and Draper voting "no":
"That the executive committee be directed until otherwise directed by the Federal Open Market Committee, (1) to arrange for
the replacement of maturing Treasury bills in the System open
market account with other Treasury bills or Treasury notes, or,
from time to time, to allow such bills to mature without replacement or pending subsequent replacement (a) when market conditions are such as to make it impossible to procure other bills or
notes without paying a premium over a no-yield basis, or (b) when
such notes are not obtainable without undue disturbance to the
market; (2) to arrange for the replacement of maturing Treasury
notes and bonds in the System open market account with other
Government securities; and (3) to arrange for such shifts in
maturities in the System open market account as may be necessary
in the proper administration of the account; provided, (a) that the
amount of securities in the account maturing within two years be
maintained at not less than $1,000,000,000; (b) that the amount of
bonds in the account having maturities in excess of five years be
maintained at not less than $500,000,000 nor more than $900,000,000;
and (c) that, if Treasury bills in the account are allowed to mature
without replacement, the total amount of securities in the account
be not decreased by more than $200,000,000.
"That, in addition to such authority as may be contained in
other resolutions of the Federal Open Market Committee and until
otherwise directed by the Committee, the executive committee be
authorized, upon written, telephonic or telegraphic approval of a
majority of the members of the Federal Open Market Committee,
to arrange for the purchase or sale (which would include authority
to allow maturities to run off without replacement) of Government
securities in the open market from time to time for System open
market account to such extent as the executive committee shall
find to be necessary for the purpose of exercising an influence




67

68

ANNUAL REPORT OF BOARD OF GOVERNORS

toward maintaining orderly market conditions, provided (1) that
the total amount of securities in the account be not increased by
more than $200,000,000 nor decreased by more than $200,000,000
including such decreases as may result from allowing Treasury
bills in the account to mature without replacement, and (2) that
the amount of bonds in the account having maturities over five,
years be maintained at not less than $500,000,000 nor more than
$900,000,000."
These resolutions were adopted for the purpose of continuing the
existing policy of the Federal Open Market Committee and for substantially the same reasons as prompted similar action at the meeting
of the Committee on December 30, 1938. These reasons are set forth
in the policy record on pages 80 to 84, inclusive, of the annual report
of the Board of Governors for the year 1938.
MEETING ON MARCH 20, 1939

Members present: Mr. Eccles, Chairman; Mr. Harrison, Vice Chairman; Mr. Szymczak, Mr. McKee, Mr. Ransom, Mr. Davis, Mr. Draper,
Mr. Fleming, Mr. Leach, Mr. Martin, Mr. Hamilton.
Authority (1) to Replace Maturing Securities and to Make Shifts of Securities
in the System Open Market Account and (2) to Increase or Decrease the
System Open Market Account.

Upon motion duly made and seconded, the following
resolutions, which were in the same form as the resolutions
adopted at the meeting on March 7, 1939, were adopted,
Messrs. Harrison, Szymczak, McKee, Davis, Fleming,
Leach, Martin and Hamilton voting "aye" and Messrs.
Eccles, Ransom and Draper voting "no":
"That the executive committee be directed until otherwise directed
by the Federal Open Market Committee, (1) to arrange for the
replacement of maturing Treasury bills in the System open market
account with other Treasury bills or Treasury notes, or, from time
to time, to allow such bills to mature without replacement or pending subsequent replacement (a) when market conditions are such
as to make it impossible to procure other bills or notes without
paying a premium over a no-yield basis, or (b) when such notes
are not obtainable without undue disturbance to the market; (2) to
arrange for the replacement of maturing Treasury notes and bonds
in the System open market account with other Government securities; and (3) to arrange for such shifts in maturities in the System
open market account as may be necessary in the proper administration of the account; provided, (a) that the amount of securities
in the account maturing within two years be maintained at not
less than $1,000,000,000; (b) that the amount of bonds in the
account having maturities in excess of five years be maintained at
not less than $500,000,000 nor more than $900,000,000; and (c) that,
if Treasury bills in the account are allowed to mature without
replacement, the total amount of securities in the account be not
decreased by more than $200,000,000.
"That, in addition to such authority as may be contained in
other resolutions of the Federal Open Market Committee and until




FP]DERAL RESERVE SYSTEM

69

otherwise directed by the Committee, the executive committee be
authorized, upon written, telephonic or telegraphic approval of a
majority of the members of the Federal Open Market Committee,
to arrange for the purchase or sale (which would include authority
to allow maturities to run off without replacement) of Government
securities in the open market from time to time for System open
market account to such extent as the executive committee shall
find to be necessary for the purpose of exercising an influence toward
maintaining orderly market conditions, provided (1) that the total
amount of securities in the account be not increased by more than
$200,000,000 nor decreased by more than $200,000,000 including
such decreases as may result from allowing Treasury bills in the
account to mature without replacement, and (2) that the amount
of bonds in the account having maturities over five years be maintained at not less than $500,000,000 nor more than $900,000,000.
This action continued the existing policy of the Committee and was
taken for substantially the same reasons as prompted similar action by
the Committee at its meetings on March 7, 1939, and December 30, 1938.
MEETING ON APRIL 19, 1939

Members present: Mr. Eccles, Chairman; Mr. Harrison, Vice Chairman; Mr. McKee, Mr. Ransom, Mr. Davis, Mr. Draper, Mr. Fleming,
Mr. Leach, Mr. Martin, Mr. Hamilton.
1. Authority to Increase System Open Market Account in the Event of Serious
Disturbance in the Government Securities Market Resulting from Armed
Conflict Abroad.

At this meeting Chairman Eccles reported that on April 13, 1939, the
executive committee of the Federal Open Market Committee agreed
unanimously that the executive committee should ask the Federal Open
Market Committee' for authority, in the event of serious disturbance in
the Government securities market resulting from armed conflict abroad,
to direct the purchase of securities for the System portfolio in an amount
not to exceed $500,000,000 with the understanding that in making such
purchases it might become necessary to exceed the $900,000,000 limitation on bonds having maturities over five years contained in the second
resolution adopted at the meeting of the Federal Open Market Committee on March 20, 1939, and that on April 14, 1939, all of the members of
the Federal Open Market Committee who were not members of the executive committee approved the granting of authority to the executive
committee as set forth above.
Upon motion duly made and seconded, and by unanimous
vote, the action of the members of the Federal Open Market
Committee in granting this additional authority to the executive committee wras approved, ratified and confirmed.
This action was taken because of the expectation that an outbreak of
armed conflict in Europe would result in serious disturbance to the securities markets in this country and there was complete agreement that,
should such disturbance occur, the System should be prepared to exercise
its influence toward preventing disorderly conditions in the market for
Government securities.




70

ANNUAL REPORT OF BOARD OF GOVERNORS

2. Authority (1) to Replace Maturing Securities and to Make Shifts of Securities
in the System Open Market Account and (2) to Increase or Decrease the
System Open Market Account.

Upon motion duly made and seconded, the following
resolutions were adopted, Messrs. Eccles, Harrison, McKee,
Ransom, Davis, Fleming, Leach, Martin and Hamilton
voting "aye" and Mr. Draper voting "no":
"That the executive committee be directed until otherwise directed
by the Federal Open Market Committee (1) to arrange for the
replacement of maturing Treasury bills in the System open market
account with other Treasury bills or Treasury notes, or, from time
to time, to allow such bills to mature without replacement or pending subsequent replacement (a) when market conditions are such as
to make it impossible to procure other bills or notes without paying
a premium over a no-yield basis, or (b) when such notes are not
obtainable without undue disturbance to the market; (2) to arrange
for the replacement of maturing Treasury notes and bonds in the
System open market account with other Government securities; and
(3) to arrange for such shifts in maturities in the System open
market account as may be necessary in the proper administration
of the account; provided (a) that the amount of securities in the
account maturing within two years be maintained at not less than
$1,000,000,000; (b) that the amount of bonds in the account having
maturities in excess of five years be maintained at not less than
$500,000,000 nor more than $1,000,000,000; and (c) that, if Treasury bills in the account are allowed to mature without replacement,
the total amount of securities in the account be not decreased by
more than $200,000,000.
"That, in addition to such authority as may be contained in other
resolutions of the Federal Open Market Committee and until otherwise directed by the Committee, the executive committee be
authorized, upon written, telephonic or telegraphic approval of a
majority of the members of the Federal Open Market Committee, to
arrange for the purchase or sale (which would include authority to
allow maturities to run off without replacement) of Government
securities in the open market from time to time for System open
market account to such extent as the executive committee shall find
to be necessary for the purpose of exercising an influence toward
maintaining orderly market conditions, provided (1) that the total
amount of securities in the account be not increased by more than
$200,000,000 nor decreased by more than $200,000,000 including such
decreases as may result from allowing Treasury bills in the account
to mature without replacement, and (2) that the amount of bonds in
the account having maturities over five years be maintained at not
less than $500,000,000 nor more than $1,000,000,000."
These resolutions were adopted for the purpose of continuing similar
authority granted at the three previous meetings of the Committee and
for substantially the same reasons. The change from $900,000,000 to
$1,000,000,000 in the maximum amount of bonds having maturities in
excess of five years which might be held in the System account was in
recognition of the possibility that a substantial increase in the holdings
of bonds might result from disturbed market conditions.




FEDERAL RESERVE SYSTEM

71

3. A u t h o r i t y t o Increase t h e A m o u n t of Securities i n t h e S y s t e m A c c o u n t i n
t h e Event of Armed Conflict or Political Developments Threatening Armed
Conflict Abroad.

Upon motion duly made and seconded, and by unanimous
vote, the following resolution was adopted:
"That, in the event that armed conflict or political developments
threatening armed conflict abroad result in serious disturbance to the
Government securities market in this country, the executive committee be authorized, in addition to the authority granted by the
resolutions set forth above and notwithstanding any limitations or
restrictions in those resolutions, to increase the securities in the
account by not to exceed $500,000,000, and upon written, telephonic
or telegraphic approval of a majority of the members of the Federal
Open Market Committee by not to exceed an additional $500,000,000,
if deemed necessary for the purpose of exercising an influence toward
the maintenance of orderly market conditions, and, if and when
market conditions warrant, to sell securities in the amount of any
securities so purchased. Any purchases made under the authority of
this resolution shall not be construed as limiting the powers granted
under resolutions previously adopted at this meeting."
The reasons for this action are stated above in connection with the
ratification of the previous action of the members of the Federal Open
Market Committee in authorizing the executive committee to increase the
System account in the event of the outbreak of hostilities abroad.
MEETING ON JUNE 21, 1939

Members present: Mr. Eccles, Chairman; Mr. Harrison, Vice Chairman; Mr. Szymczak, Mr. McKee, Mr. Ransom, Mr. Davis, Mr. Draper,
Mr. Fleming, Mr. Leach, Mr. Martin, Mr. Hamilton.
Authority (1) t o Replace M a t u r i n g Securities and t o Make Shifts of Securities i n t h e S y s t e m Open Market Account, (2) to Purchase or Sell Securities
from t h e S y s t e m Open Market Account, and (3) to Increase or Decrease
t h e Account i n t h e Event of Armed Conflict or Political Developments Threate n i n g Armed Conflict Abroad.

Upon motion duly made and seconded, the following resolutions were adopted, Messrs. Eccles, Harrison, Szymczak,
McKee, Ransom, Davis, Fleming, Leach, Martin, and
Hamilton voting "aye" and Mr. Draper voting "no," he
being opposed to authorizing the executive committee to
allow bills to run off without replacement but otherwise
favoring the resolutions:
"That the executive committee be directed until otherwise directed
by the Federal Open Market Committee (1) to arrange for the
replacement of maturing Treasury bills in the System open market
account with other Treasury bills or Treasury notes, or from time
to time, whenever market conditions warrant, to allow part or all
of such bills to mature without replacement; (2) to arrange for
the replacement of maturing Treasury notes and bonds in the System open market account with other Government securities; and
(3) to arrange for such shifts in maturities in the System open
market account as may be necessary in the practical administration
of the account; provided (a) that the amount of securities in the




72

ANNUAL REPORT OF BOARD OF GOVERNORS

account maturing within two years be maintained at not less than
$700,000,000; and (b) that the amount of bonds in the account
having maturities in excess of five years be maintained at not less
than $500,000,000 nor more than $1,000,000,000.
"That, in addition to such authority as may be contained in other
resolutions of the Federal Open Market Committee and until otherwise directed by the Committee, the executive committee be authorized, upon written, telephonic or telegraphic approval of a majority of the members of the Federal Open Market Committee, to
arrange for the purchase or sale (which would include authority
to allow maturities to run off without replacement) of Government securities in the open market from time to time for System
open market account to such extent as the executive committee
shall find to be necessary for the purpose of exercising an influence
toward maintaining orderly market conditions, provided (1) that
the total amount of securities in the account be not increased by
more than $200,000,000 nor decreased by more than $200,000,000
excluding such decreases as may result from allowing Treasury bills
in the account to mature without replacement under the preceding
resolution, and (2) that the amount of bonds in the account having
maturities over five years be maintained at not less than $500,000,000
nor more than $1,000,000,000.
"That, in the event that armed conflict or political developments
threatening armed conflict abroad result in serious disturbance to
the Government securities market in this country, the executive
committee be authorized, in addition to the authority granted by
the resolutions set forth above and notwithstanding any limitations or restrictions in those resolutions, to increase the securities
in the account by not to exceed $500,000,000, and upon written,
telephonic or telegraphic approval of a majority of the members of
the Federal Open Market Committee by not to exceed an additional $500,000,000, if deemed necessary for the purpose of exercising an influence toward the maintenance of orderly market conditions, and, if and when market conditions warrant, to sell securities in the amount of any securities so purchased. Any purchases
made under the authority of this resolution shall not be construed
as limiting the powers granted under resolutions previously adopted
at this meeting."
With the exception of a change with respect to allowing bills to run
off without replacement these resolutions were in the same form as the
resolutions adopted at the previous meeting of the Committee and were
adopted for substantially the same reasons. The change in the first
two resolutions with respect to allowing Treasury bills to run off without replacement was made for the reasons set forth in the following
statement for the press which was approved at this meeting for publication when the first reduction was made in the amount of Treasury
bills held in the account pursuant to the first resolution:
"As a result of a reduction in holdings of Treasury bills, this
week's statement of condition of Federal Reserve banks shows a
decline of $ 1
in the System Open Market Account. This
1

Subsequently, on June 29, 1939, the above statement was released to the press, showing a decline

of $13,378,000.



FEDERAL RESERVE SYSTEM

73

is in accordance with action taken by the Federal Open Market
Committee on June 21, 1939. For some time past, Treasury bills
have been purchased for the System's account at or near a no-yield
basis and the account at times has had difficulty in replacing its
maturing bills. It was decided that it would serve no useful purpose
to continue full replacement of maturing bills, the supply of which
is not always equal to the market demand. This action is in response
to technical conditions in the bill market and does not represent a
change in general credit policy."
On the question of the approval of the statement Messrs.
Eccles, Harrison, Szymezak, McKee, Ransom, Davis, Fleming, Leach, Martin and Hamilton voted "aye" and Mr.
Draper voted "no."
MEETING ON SEPTEMBER 18, 1939

Members present: Mr. Eccles, Chairman; Mr. Harrison, Vice Chairman; Mr. Szymezak, Mr. McKee, Mr. Ransom, Mr. Davis, Mr. Draper,
Mr. Fleming, Mr. Leach, Mr. Martin, Mr. Hamilton.
1. Authority to Increase t h e A m o u n t of Securities in t h e S y s t e m Open Market
Account for t h e Purpose of Exercising a n Influence Toward t h e M a i n t e n a n c e of Orderly Market Conditions.

On September 9, 1939, in accordance with the provisions of the third
resolution adopted at the meeting on June 21, 1939, and at the request of
the members of the executive committee, the members of the Federal
Open Market Committee approved an increase of $500,000,000 in the
authority of the executive committee to purchase securities for the System open market account.
Upon motion duly made and seconded, and by unanimous
vote, the action of the members of the Federal Open Market
Committee in granting the additional authority referred to
above was approved, ratified and confirmed.
The outbreak of armed conflict in Europe had resulted in serious disturbances in our markets and at the close of business on September 8
the System had purchased $317,000,000 of the $500,000,000 of purchases
authorized at the meeting on June 21, 1939, for the purpose of exercising
an influence toward the maintenance of orderly conditions in the Government securities market. The above action was taken to place the
executive committee in a position to continue to make purchases of
securities for the same purpose within the limit set.
2. Authority to Effect Transactions i n t h e S y s t e m Open Market Account.

Upon motion duly made and seconded, the following resolution was adopted by unanimous vote:
"That the executive committee be directed until otherwise directed
by the Federal Open Market Committee to arrange for such transactions for the System open market account (including purchases,
sales, exchanges, replacement of maturing securities, and letting
maturities run off without replacement) as in its judgment from
time to time may be necessary for the purpose of exercising an influence toward maintaining orderly market conditions; provided
that the aggregate amount of securities held in the account at the
close of this date shall not be increased nor decreased by more than
$500,000,000."




74

ANNUAL REPORT OF BOARD OF GOVERNORS

This action was taken in the light of the unsettled conditions existing
in our markets at the time which had resulted from the war in Europe
and it was agreed that the executive committee should be given more
flexible authority to execute transactions in the System account for the
purpose of exercising an influence toward maintaining orderly market
conditions.
MEETING ON DECEMBER 13, 1939

Members present: Mr. Eccles, Chairman; Mr. Harrison, Vice Chairman; Mr. Szymczak, Mr. McKee, Mr. Ransom, Mr. Davis, Mr. Draper,
Mr. Fleming, Mr. Leach, Mr. Martin, Mr. Hamilton.
Authority to Effect Transactions in the System Open Market Account.

Upon motion duly made and seconded, the following
resolution was adopted by unanimous vote:
"That the executive committee be directed until otherwise directed
by the Federal Open Market Committee to arrange for such transactions for the System open market account (including purchases,
sales, exchanges, replacement of maturing securities, and letting
maturities run oft without replacement) as in its judgment from time
to time may be necessary for the purpose of exercising an influence
toward maintaining orderly market conditions; provided that the
aggregate amount of securities held in the account at the close of
this date shall not be increased nor decreased by more than $500,000,000."
This action resulted in the renewal of the authority granted to the
executive committee at the meeting of the Federal Open Market Committee on September 18, 1939, and was taken for substantially the same
reasons as prompted the granting of the earlier authority.




RECOMMENDATIONS OF THE FEDERAL ADVISORY COUNCIL TO THE BOARD
OF GOVERNORS OF THE FEDERAL RESERVE SYSTEM
FEBRUARY 14, 1939

Topic:

Easy Money Policy.

RECOMMENDATION: The Federal Advisory Council, considering that
many of the fundamental effects of the continuing cheap money policy
have not been fully appreciated, recommends that the Board of Governors
of the Federal Reserve System conduct a study of the long-range consequences of the continuing policy of cheap money upon the accumulation
and investment of the savings of the people, and upon the financial structure of the country, with especial reference to its effects upon the maintenance of a sound banking system.

Topic:

Interlocking Directorates.

RECOMMENDATION:
Section 8 of the Clayton Anti-Trust Act, as
amended by Section 329 of the Banking Act of 1935, permits a director,
officer or employee of a member bank of the Federal Reserve System, or
a branch thereof, who was lawfully serving as a private banker or as a
director, officer, or employee of any other bank, banking association,
savings bank, or trust company, or any branch thereof, on August 23,
1935, to continue such service to February 1, 1939.
The Board of Governors of the Federal Reserve System by regulation
has permitted such service as director, officer, or employee of a member
bank and in not more than one other banking institution, to continue to
August 1, 1939.
The service of the directors, officers and employees who are now serving
under the authority of the aforesaid law and regulations is in many cases
extremely valuable to the banking institutions of which they are such
directors, officers, or employees, and the discontinuance of such service
would not result in a commensurate benefit to the public.
Therefore, the Federal Advisory Council believes that any director,
officer or employee of any member bank of the Federal Reserve System
or any branch thereof, who is now lawfully serving at the same time as
a private banker, or as a director, officer, or employee of any other bank,
banking association, savings bank, or trust company or any branch
thereof should be permitted to continue such service so long as the stockholders of any such banking institution shall desire to retain such persons
in such capacities, and so long as such persons shall accept the election or
appointment to such positions. This, of course, means that no permits
for new interlocking directorates will be issued.

Topic:

S. 477 (Corporate Trusteeships).

RECOMMENDATION: The Federal Advisory Council desires to call the
attention of the Board of Governors of the Federal Reserve System to
Senate Bill 477 relating to the regulation of trust indentures under which
securities are issued.




75

76

ANNUAL REPORT OF BOARD OF GOVERNORS

The Council feels strongly that the imposition of some of the liabilities
as provided in the bill would create contingent liabilities for banks of
deposit accepting corporate trusteeships which might be dangerous to
themselves and the banking system as a whole. Broadly speaking, no
corporations other than banks of deposit have either the financial responsibility or the experience which qualify them to act as corporate trustees.
Furthermore, the Council believes that the bill would materially increase the cost of, and make more difficult long-term public financing;
particularly to smaller corporations, and would thus tend to hinder
expansion of plants and businesses at a time when such expansion is
particularly desirable in the interest of business recovery.
The Council also believes that the restrictions contained in the bill on
the right of security holders to waive defaults, and the requirements that
the trustee must act in the event of default if it is to avoid liability,
would force into receiverships, or the bankruptcy courts, many businesses
that otherwise might survive, particularly in times of depression, with
resultant loss to their creditors, including banks, and to their stockholders
and to their employees and the communities in which they are located.
The Council requests the Board to submit this expression of its opinion
to the Senate Committee on Banking and Currency with the request that
it be put in the record of the hearings before its Subcommittee considering the bill.
The Council understands that the record of the Subcommittee of the
Senate Committee on Banking and Currency, in the absence of further
hearings, will be closed on February 16th, and therefore requests that it
be forwarded by that date.
Topic: In Re: Chandler Act.
. RECOMMENDATION: The Federal Advisory Council suggests that the
Federal Reserve Board give consideration to amendments to the Federal
Bankruptcy Act as amended by the Chandler Act, approved June 22,
1938, and particularly to Section 60 (a) — (b), to alter the provisions of
that Section.
To an increasing extent member banks of the Federal Reserve System
are making loans secured by assignments of receivables and other types
of collateral. For the most part, such loans are made to relatively small
and inadequately capitalized enterprises and without notification to
borrowers' debtors, in a spirit of cooperation with the borrowers to
preserve their credit standing.
The Federal Advisory Council is of the opinion that under the provisions of Section 60 (a) — (b) the reliance that banks place upon such
collateral, unless title thereto is perfected to comply with the requirements of this Section, is illusory and may result in heavy losses. Attention is also called to the timing of perfection of title with relation to
the date of the loan, leading to a possible classification of the loan as an
antecedent debt.
In addition to loans secured by accounts receivable, other types of
collateral loans may be affected, among which are:
A—Loans secured by assignment of money payable under a contract
or rents under a lease.
B—Loans secured by assignments of life insurance policies.
C—Loans secured by assignments of rights and interests in estates
and trusts.




FEDERAL RESERVE SYSTEM

77

D—Loans on the security of instruments which appear to be but are
not in fact negotiable instruments.
E—Loans upon borrower's promise to deliver collateral, whether or
not the collateral is segregated or escrowed.
F—Loans secured in whole or in part by equities of the borrower in
collateral owned by the borrower but pledged to secure other
indebtedness.
The language of Section 60 (a) — (b) is presumably intended to prevent secret liens, but its provisions bear so heavily upon business and
banking practice that restrictions in making loans will ensue, thus adversely affecting general business, or if such loans are made without
complete compliance with the requirements of this Section, heavy losses
may be encountered by banks.
JUNE 6, 1939

Topic:

Easy Money Policy.
RECOMMENDATION: At the meeting of the Federal Advisory Council
with the Board of Governors of the Federal Reserve System held on
February 14, 1939, the Council submitted a resolution expressing the
opinion that many of the fundamental effects of the continuing "cheap
money" policy have not been fully appreciated and recommending that
the Board conduct a study of the long range consequences of this policy
upon the accumulation and investment of the savings of the people, and
upon the financial structure of the country, with especial reference to
its effects upon the maintenance of a sound banking system.
At that meeting some members of the Board informally expressed
regret that the Council had not made its recommendation more concrete.
Other members expressed doubts whether any such special study as
recommended would add to the knowledge already possessed and constantly being acquired through the medium of current studies now being
made not only by the Board but by other official bodies. In a letter
from the Assistant Secretary of the Board to the Secretary of the Council
dated March 31, 1939, the latter view was formally expressed and the
Council interprets this letter as meaning that the special study recommended is not to be undertaken.
In this situation, and in view of what the Council believes to be the
dangerous condition toward which the country appears to be moving,
the Council conceives it to be its duty to place formally upon the record
its general opinion concerning the results of the "easy money" policy
to date and some of the probable results of its further continuance.
The so-called "easy money" policy has been followed since 1929 upon
the theory, as the Council understands it, that "easy money" would act
as a stimulant to business and that it would cause business to borrow
and impel banks to lend. It has done neither; but it has done and is
doing undeniable economic injury to the whole savings .class of the
American people.
The Council believes that the "easy money" policy, through its failure
to bring to the banks normal rates on their loans and investments, is
tending to weaken the capital position of banks and is encouraging an
essentially unhealthy position of the bond portfolios of the banking
system through its inducement toward lengthened maturities at progressively lower rates.
In addition the Council believes that the operation of the "easy money"




78

ANNUAL REPORT OF BOARD OF GOVERNORS

policy, by lessening the current cost of Government financing, has made
the people, and even Congress itself, indifferent to the steadily mounting
Government debt and is tending to create illusions as to the eventual
burden of carrying a constantly increasing debt.
It has become evident during the past two or three years that the cumulative effect of the policy in question is profoundly and adversely
affecting that large group of industrious and thrifty persons who are, by
virtue of their character and habits, the backbone of the country's social
and economic structure. Steadily they have seen the returns on their
accumulated savings decrease as savings institutions, faced with constantly diminishing earnings, have been forced, step by step, to decrease
the rate of interest paid on savings deposits. Steadily, year by year,
they are meeting increased discouragement in their attempts, through
the purchase of life insurance, to provide for their own old age and for
the protection of their families, as the cost of insurance slowly mounts
and as the dividends payable on policies steadily diminish. Schools,
colleges, churches, hospitals and educational and charitable institutions
of all sorts see the returns on their accumulated endowments constantly
lessening, the salaries of their staff members reduced and their promotions delayed, services to students, patients and dependents curtailed, and
more and more of the functions which are normally and most efficiently
performed by private or semi-private agencies necessarily taken over by
public boards at the expense of the taxpayers unless essential social needs
are to be neglected.
So far as the banking system is concerned, the Council recognizes that
it is only a part, but an essential part, of the economic structure taken
as a whole. I t believes, nevertheless, that the time has come to face
squarely the fact that the entire banking system is confronted with a
distinct menace to the soundness of its capital structure through the
continuation of an abnormally "easy money" policy. A prolongation
of this situation threatens the existence of private banking and with it
the whole system of private enterprise.
The Council is not unmindful that the long continued "easy money"
policy has created a condition, the correction of which can only be
gradually attained. But it is now a serious problem portending critical
consequences. The Council, therefore, urges upon the Board as one of
the greatest single services which it can render to the country as a whole,
the modification of the policy of extreme "easy money."
Topic:

Mead Bill (S. 2343).

RECOMMENDATION:
The Federal Advisory Council desires to call to
the attention of the Board of Governors of the Federal Reserve System
Senate bill No. 2343 on which hearings are now being held by a subcommittee of the Banking and Currency Committee of the Senate.
The Council believes that the great majority of businesses needing
loans for a period of years, where a reasonable assurance of repayment
exists, can and do obtain such loans from banks and other non-governmental sources such as insurance companies. In those cases where such
loans are not obtainable from banks or private sources the Reconstruction Finance Corporation is already empowered by existing legislation to
make, and through participation arrangements, in effect, to guarantee or
insure percentages of such loans, and does so make and in effect insure
loans.




FEDERAL RESERVE SYSTEM

79

Under present legislation the Reconstruction Finance Corporation is
restricted in that the loans must be in the opinion of its board "of such
sound value or so secured as reasonably to assure retirement or repayment" and to concerns "only when in the opinion of the board of
directors, the business enterprise is solvent." Under Senate bill No. 2343
no such restrictions are imposed. If it is the intent of the bill that the
Reconstruction Finance Corporation will under it only insure loans the
repayment of which in its opinion are reasonably assured, the bill should
be so amended.
If it is the intent of the bill that the Reconstruction Finance Corporation shall insure loans the repayment of which in its opinion are not
reasonably assured, and the Reconstruction Finance Corporation should
insure such loans, the Council feels that the result would be injurious to
industry as a whole and would tend to restrict longer-term credit now
being made available by banks and others to businesses which in the
opinion of the lenders do have reasonable assurances of being able to
repay such credit. The extension of credit, through insurance or direct
loans, by governmental agencies or by private capital, to businesses not
able to repay not only is costly to the lender and does not benefit the
borrower, but enables inefficient, poorly managed and uneconomic businesses to compete for a time with other people's money against successful,
well managed and economic businesses in the same line. By so doing it
retards the expansion of sound business enterprises and because these are
faced with unsound competition, makes it more difficult for them to
obtain credit either short- or long-term, and makes it even more difficult
for them to obtain additional proprietary capital. In fairness to the
sound and solvent businesses of the country, and apart from any considerations of probable loss to the Treasury, the Council believes that
no governmental agency should be empowered to make or insure loans to
industry or commerce unless after examination the agency feels that such
loans are reasonably certain to be repaid.
The provisions for the rediscount of the insured portions of loans contained in the bill should be eliminated. In the case of member banks the
Federal Reserve banks could under existing law accept them as collateral
for short-term loans which can be renewed if necessary. Member banks
should not be indebted through rediscounts to Federal Reserve banks
over long periods of time as would be the case if notes running up to ten
years were rediscounted. Nor should nonmember banks be able to use
the credit facilities of the Federal Reserve banks but should depend on
their correspondents.
The Council urges that before legislation is enacted which puts the
Government in the business of insuring industrial and commercial loans
on a permanent basis, as contemplated by the bill, and which might have
far-reaching ultimate effects on industry, commerce and banking, that
an investigation be made by Congress of the extent to which existing
agencies meet the need for term loans on the part of business and of the
extent of the unsatisfied justifiable demand for such loans. The Council
is informed that various studies are in progress which might well be used
in connection with such an investigation.
The Council requests that a copy of this expression of its views be sent
by the Board to the subcommittee considering Senate bill No. 2343. If the
subcommittee will give opportunity the Council would be glad to have
one or more of its members appear and testify regarding the bill.



80

ANNUAL REPORT OF BOARD OF GOVERNORS
OCTOBER 9, 1939

Topic:

Easy Money Policy.
RECOMMENDATION:
In connection with further consideration of the
"easy money" policy, as suggested in the letter of the Secretary of the
Board of Governors of the Federal Reserve System to the Secretary of
the Federal Advisory Council, dated August 18, 1939, the Federal Advisory Council was led to examine the recent changes in the yields of
corporate and Government bonds. As to the general topic of extreme
easy money, the Council reaffirms the views expressed in its recommendation to the Board of Governors dated June 6, 1939.
While the Council fully recognizes the need in a grave emergency, such
as that recently experienced, of taking steps designed to preserve an
orderly market in Government securities, it also believes that the market
price of Government bonds should be allowed to find its natural level,
free of official intervention, as rapidly as possible consistent with an
orderly market.
The operations of the Open Market Committee, acting for the Federal
Reserve banks, in maintaining an orderly natural market (as distinguished from a pegged market) should not be influenced by its judgment
as to what the proper price level should be, but that level should be the
result of general operations of walling normal buyers and sellers. Neither
should it be influenced by any considerations of maintaining or extending the former policy of extremely easy money.
The Council believes that any policy of maintaining an orderly natural
market in Government securities makes advisable the sale of the bonds
and notes bought in the process of maintaining an orderly market as and
when the free market will absorb them, and that these bonds and notes
should not be withheld with a view to forcing the price of bonds back
toward pre-September prices.
NOVEMBER 20, 1939

Topic:

Easy Money Policy.
RECOMMENDATION: Referring to its resolution of October 9, 1939, the
Council is pleased to observe that the Open Market Committee has
recently initiated some sales from the System's portfolio of long-term
Governments. This action has not been attended by any disturbance
in the market or by any apprehension on the part of banks lest the
action represent a profound alteration in credit policy. On the contrary,
the price of long-term Governments advanced after the sales, as well as
before. When the Council passed its resolution on October 9, last, the
quotation of the two longest issues was 101-7/32. On November 16 it
was 104-7/32.
The Council recommends that the volume of sales be promptly expanded in an orderly manner. It is not believed to be consistent with
sound central banking principles that the System retain an unduly large
quantity of long-term Governments especially at a time when nearly all
insurance companies and many banks are desirous of acquiring these
securities. Furthermore, from the current earnings record of the System,
it does not appear that the retention of all the bonds purchased last
September is really requisite. The System should seize the opportunity
in an orderly market to clear the decks so that wThen and if another grave
emergency develops, it will be in a position to act without then having on
hand an unnecessarily heavy inventory of long term Government bonds.



81

FEDERAL RESERVE SYSTEM

BOARD OF GOVERNORS OF THE FEDERAL RESERVE SYSTEM
(December 31, 1939)
MARRINER S. ECCLES, of Utah, Chairman
RONALD RANSOM, of Georgia, Vice Chairman
M. S. SZYMCZAK, of Illinois

Term expires
January 31, 1940
January 31, 1942
January 31, 1948

J O H N K. MCKEIB, of Ohio
CHESTER C. DAVIS, of M a ^ l a n d
ERNEST G. DRAPER, of Connecticut

January 31, 1946
January 31, 1944
January 31, 1950

LAWRENCE CLAYTON, Assistant

to the

ELLIOTT THURSTON, Special Assistant
CHESTER MORRILL,

Chairman.

to the

Chairman.

Secretary.

LISTON P . BETHEA, Assistant

Secretary.

S. R. CARPENTER, Assistant
Secretary.
J. C. NOELL, Assistant
Secretary.
WALTER WYATT, General

Counsel.

J. P . DREIBELBIS, Assistant General Counsel.
GEORGE B . VEST, Assistant General Counsel.
B. MAGRUDER WINGFIELD, Assistant General Counsel.
E. A. GOLDENWEISER, Director, Division of Research and Statistics.
WOODLIEF THOMAS, Assistant Director, Division of Research and Statistics.
LEO H . PAULGER, Chief, Division of Examinations.
R. F . LEONARD, Assistant Chief, Division of
Examinations.
C. E . CAGLE, Assistant Chief, Division of Examinations.
EDWARD L. SMEAD, Chief, Division of Bank Operations.
J. R. VAN FOSSEN, Assistant Chief, Division of Bank
Operations.
J. E . HORBETT. Assistant Chief, Division of Bank
Operations.
CARL E. PARRY, Chief, Division of Security
Loans.
P H I L I P E. BRADLEY, Assistant Chief, Division of Security
Loans.
0 . E . FOULK, Fiscal Agent.
JOSEPHINE E . LALLY, Deputy Fiscal Agent.

FEDERAL OPEN MARKET COMMITTEE
(December 31, 1939)
Members
M A R R I N E R S. ECCLES,

Chairman

GEORGE L. HARRISON, Vice

Chairman

M. S. SZYMCZAK
J O H N K. M C K E E
RONALD RANSOM
C H E S T E R C. D A V I S
E R N E S T G. D R A P E R
M. J. FLEMING
H U G H LEACH
WILLIAM M C C . M A R T I N
GEORGE H . HAMILTON

Officers
C H E S T E R MORRILL, Secretary

S. R. CARPENTER, Assistant

Secretary

E. A. GOLDENWEISER, Economist
JOHN H . WILLIAMS, Associate Economist
WALTER WYATT, General Counsel

J. P. DREIBELBIS, Assistant General Counsel
Agent
FEDERAL R E S E R V E BANK OF N E W YORK

R. G. ROUSE, Manager of System Open Market Account



82

ANNUAL REPORT OF BOARD OF GOVERNORS

FEDERAL ADVISORY COUNCIL
(December 31, 1939)

OFFICERS
President, W A L T E R W. SMITH
Vice President, HOWARD A. L O E B
Secretary, W A L T E R LICHTENSTEIN

EXECUTIVE COMMITTEE
W A L T E R W. SMITH

L E O N FRASER

HOWARD A. L O E B

ROBERT M . H A N E S

THOMAS M. STEELE

EDWARD E . BROWN

MEMBERS
District No. 1.—THOMAS M. STEELE, President, First National Bank & Trust Company
of New Haven, New Haven, Connecticut.
District No. 2.—LEON FRASER, President, The First National Bank of the City of New
York, New York, New York.
District No. 3.—HOWARD A. LOEB, Chairman, Tradesmens National Bank & Trust
Company, Philadelphia, Pennsylvania.
District No. 4.—T. J. DAVIS, President, First National Bank, Cincinnati, Ohio.
District No. 5.—ROBERT M. H A N E S , President, Wachovia Bank and Trust Company,
Winston-Salem, North Carolina.
District No. 6.—EDWARD BALL, Barnett National Bank Building, Jacksonville, Florida.
District No. 7.—EDWARD E. BROWN, President, T h e First National Bank of Chicago,
Chicago, Illinois.
District No. 8—WALTER W. SMITH, President, First National Bank in St. Louis, S t .
Louis, Missouri.
District No. 9.—JOHN CROSBY, Vice President, Farmers and Mechanics Savings Bank,
Minneapolis, Minnesota.
District No. 10.—JOHN EVANS, President, First National Bank, Denver, Colorado.
District No. 11.—R. E. HARDING, President, T h e Fort Worth National Bank, Fort
Worth, Texas.
District No. 12.—PAUL S. DICK, President, United States National Bank, Portland,
Oregon.




83

FEDERAL RESERVE SYSTEM

SENIOR OFFICERS AND DIRECTORS OF FEDERAL RESERVE BANKS
(December 31, 1939)
CHAIRMEN AND DEPUTY CHAIRMEN

Federal Reserve Bank of-

Chairman

Deputy Chairman

Boston

Frederic H. Curtiss.

Henry S. Dennison

New Y o r k . . . .

Owen D. Young.. . .

Beardsley Ruml

Philadelphia. .

Thomas B. McCabe.

Cleveland. . . .

George C. Brainard.

Reynold E. Klages

Richmond....

Robert L a s s i t e r . . . .

William G. Wysor

Atlanta

Frank H. N e e l y . . . .

Joe Frank Porter
Robert E. Wood

Chicago
St. Louis

William T. Nardin.

Oscar G. Johnston
Walter C. Coffey

Minneapolis. .
Kansas City. .

Robert B. Caldwell.

John J. Thomas

Dallas

James H. M e r r i t t . . .

Jay Taylor

San Francisco.

St. George Holden

Each Federal Reserve bank has nine directors; the term of office of a director is
three years. One-third of the directors, known as Class C directors, are appointed
by the Board of Governors of the Federal Reserve System, and cannot be officers,
directors, employees, or stockholders of any bank. Another third, elected by member banks and known as Class B directors, must be actively engaged in some commercial, agricultural, or industrial pursuit and may not be officers, directors, or
, employees of any bank. The remaining one-third of the directors, known as Class A
directors, are elected by the member banks as the banks' own representatives.
For the purpose of electing Class A and Class B directors, the member banks in
each Federal Reserve district are divided into three groups—large, small, and
medium-sized banks. Each of the three groups elects one Class A and one Class B
director. The Board of Governors of the Federal Reserve System designates one
of the Class C directors as chairman and Federal Reserve agent, and another as
deputy chairman. The board of directors of each Federal Reserve bank appoints a
president and a first vice president, subject to the approval of the Board of Governors, to serve for terms of five years, The president is the chief executive officer
of the bank and all other officers and employees are responsible to him.
Federal Reserve bank branches have either five or seven directors, of whom a
majority, including the managing director, are appointed by the board of directors
of the parent Federal Reserve bank and the others are appointed by the Board of
Governors of the Federal Reserve System.




84

ANNUAL REPORT OF BOARD OF GOVERNORS

PRESIDENTS AND VICE PRESIDENTS
Federal
Reserve
Bank of—

President

First Vice President

William W. P a d d o c k . . . William Willett 1

Boston

Roy A. Young

New York

George L. Harrison. . . Allan Sproul

Philadelphia. . John S. Sinclair

Vice Presidents

Ray M. Gidney
L. Werner Knoke
Walter S. Logan
Leslie R. Rounds
Robert G. Rouse
John H. Williams

Frank J. Drinnen

W. John Davis
Ernest C. Hill
Clarence A. Mcllhenny 2

Cleveland. . . . Matthew J. Fleming. . Frank J. Z u r l i n d e n . . . . William H. Fletcher
William F . Taylor 2
George H. Wagner
Richmond. . . . Hugh Leach

J o h n S . Walden, J r . . . . John G. Fry
George H. Keesee 1
William S. McLarin, Jr. Malcolm H. Bryan
Harry F . Conniff

Atlanta

Robert S. Parker

Chicago

George J. S c h a l l e r . . . . Howard P. P r e s t o n . . . . James H. Dillard
William H. Snyder 2
Clifford S. Young

St. Louis

William McC. Martin. F. Guy Hitt

Minneapolis. . John N. Peyton

Olin M. Attebery
Clarence M. Stewart 1

Oliver S. Powell

Ernest W. Swanson
Harry I. Ziemer 2

Kansas City. . George H. Hamilton. . Carroll A. Worthington James W. Helm 2
Harold G. Leedy
Dallas

Robert R. Gilbert

San Francisco. William A. Day

1

Cashier.




E t h a n B. Stroud

Robert B. Coleman
William J. Evans
Walter 0 . Ford 1

Ira Clerk

Cecil E. E a r h a r t 1
William M. Hale
Richard B. West
2

Also cashier.

FEDERAL RESERVE SYSTEM

85

DIRECTORS OF FEDERAL RESERVE BANKS

District No. 1—Boston

Expires
Dec. SI

Class A.Leon A. Dodge
Lewis S. R e e d
Allan F o r b e s
Class B.Edward J. Frost
E d w a r d S. F r e n c h
P h i l i p R . Allen
Class C.H e n r y S. D e n n i s o n
Henry I. Harriman
Frederic H . C u r t i s s

President, First National Bank, Damariscotta, M e
President, Citizens a n d Mfg. N a t . B a n k , W a t e r b u r y , C o n n . .
President, S t a t e Street T r . Co., Boston, M a s s

1939
1940
1941

Vice P r e s i d e n t a n d Director, W i l l i a m Filene's Sons Co., B o s ton, Mass
P r e s i d e n t , B o s t o n & M a i n e R . R . , Springfield, V t
C h a i r m a n , Bird & Son, I n c . , E . W a l p o l e , M a s s

1939
1940
1941

P r e s i d e n t , D e n n i s o n M f g . Co., F r a m i n g h a m , M a s s
Director, N e w E n g l a n d P o w e r Co., B o s t o n , M a s s
Vice P r e s i d e n t , B o a r d of T r u s t e e s , Wellesley College, Wellesley, M a s s

1939
1940
1941

District No. 2—New York
Class A:
William F . Ploch
William C. P o t t e r
Otis A. T h o m p s o n
Class B:
R o b e r t T . Stevens
Thomas J. Watson
W a l t e r C . Teagle
Class C.Edmund E. Day
Owen D . Y o u n g
Beardsley R u m l

P r e s i d e n t , N a t i o n a l C i t y B a n k , L o n g Beach, N . Y
C h a i r m a n , G u a r a n t y T r u s t Co., N e w Y o r k , N . Y
P r e s i d e n t , N a t . B a n k & T r . Co., Norwich, N . Y

1939
1940
1941

P r e s i d e n t , J . P . S t e v e n s & Co., I n c . , N e w Y o r k , N . Y
P r e s i d e n t , I n t e r n a t i o n a l Business M a c h i n e s C o r p . , N e w Y o r k ,
N. Y
C h a i r m a n , S t a n d a r d Oil Co. of N e w J e r s e y , N e w York, N . Y . .

1939
1940
1941

P r e s i d e n t , Cornell U n i v e r s i t y , I t h a c a , N Y
C h a i r m a n , G e n e r a l Electric Co., N e w Y o r k , N . Y
T r e a s u r e r , R . H . M a c y & Co., I n c . , N e w Y o r k , N . Y

1939
1940
1941

Buffalo B r a n c h
Appointed by Federal Reserve Bank:
Robert M . O'Hara
M a n a g i n g Director, Buffalo, N . Y
F r e d J . Coe
P r e s i d e n t , P o w e r C i t y T r u s t Co., N i a g a r a Falls, N . Y
William A . D u s e n b u r y
P r e s i d e n t , F i r s t N a t i o n a l B a n k , Olean, N . Y
Frank F . Henry
C h a i r m a n , W a s h b u r n C r o s b y Co., I n c . , Buffalo, N . Y
Appointed by Board of Governors:
Gilbert A . Prole
Genesee F a r m S u p p l y Co., B a t a v i a , N . Y
H o w a r d Kellogg
P r e s i d e n t , Spencer Kellogg & Sons. I n c . , Buffalo, N . Y
M a r i o n B . Folsom
T r e a s u r e r , E a s t m a n K o d a k Co., R o c h e s t e r , N . Y

1939
1939
1940
1941
1939
1940
1941

District No. 3—Philadelphia
Class A.George W . Reily
John B. Henning
Joseph Wayne, J r
Class B:
J. Carl DeLaCour
C. F r e d e r i c k C . S t o u t
Harry L. Cannon
Class C.Thomas B. McCabe
Warren F . Whittier
Alfred H . Williams

President, Harrisburg N a t . Bank, Harrisburg, P a
President, Wyoming N a t . Bank, Tunkhannock, P a
President, Philadelphia N a t . Bank, Philadelphia, P a

1939
1940
1941

Vice President, W i n . S. Scull Coffee Co., C a m d e n , N . J
John R. E v a n s & Company, Camden, N . J
P r e s i d e n t , H . P . C a n n o n & Son, I n c . , Bridgeville, D e l

1939
1940
1941

P r e s i d e n t , Scott P a p e r Co., Chester, P a
F a r m e r , D a i r y m a n a n d C a t t l e Breeder, Douglassville, P a . . . .
D e a n of W h a r t o n School of F i n a n c e , U n i v e r s i t y of P e n n s y l vania, P h i l a d e l p h i a , P a

1939
1940
1941

District No. 4—Cleveland
Class A:
Ben R . C o n n e r
H a r r y B . McDowell
F r a n k F . Brooks
Class B:
John E . Galvin
Ross P . Wright
George D . C r a b b s
Class C.R e y n o l d E . Klages
George C . B r a i n a r d
James C. Stone

P r e s i d e n t , F i r s t N a t i o n a l B a n k , A d a , Ohio
P r e s i d e n t , M c D o w e l l N a t . B a n k , Sharon, P a
President, First National Bank, Pittsburgh, P a

1939
1940
1941

P r e s i d e n t , Ohio Steel F o u n d r y C o . , L i m a , Ohio
S e c r e t a r y - T r e a s u r e r , Reed M f g . Co., E r i e , P a
P r e s i d e n t , Philip C a r e y Mfg. Co., C i n c i n n a t i , Ohio

1939
1940
1941

P r e s i d e n t , C o l u m b u s A u t o P a r t s C o . , C o l u m b u s , Ohio
P r e s i d e n t , G e n e r a l Fireproofing C o . , Y o u n g s t o w n , Ohio
T o b a c c o Dealer, Lexington, K y

1939
1940
1941

Cincinnati Branch
Appointed by Federal Reserve Bank:
Benedict J . L a z a r
M a n a g i n g Director, C i n c i n n a t i , Ohio
William H . C o u r t n e y
P r e s i d e n t , F i r s t N a t . B a n k & T r . C o . , Lexington, K y
John J. Rowe
P r e s i d e n t , Fifth T h i r d Union T r . C o . , C i n c i n n a t i , Ohio
Appointed by Board of Governors:
Stuart B. Sutphin
P r e s i d e n t , I . V. S u t p h i n C o . , C i n c i n n a t i , Ohio
F r a n k A. B r o w n
F a r m e r , Chillicothe, Ohio




1939
1939
1940
1939
1940

86

ANNUAL REPORT OF BOARD OF GOVERNORS
Pittsburgh Branch

Appointed by Federal Reserve Bank:
Percy A. Brown
Managing Director, Pittsburgh, Pa
Clarence Stanley
President, Union Trust Company, Pittsburgh, P a . . . ,
Samuel W. Harper
President, Wheeling Dollar Sav. & Trust Co., Wheeling,
W. Va
Appointed by Board of Governors:
Harry S. Wherrett
President, Pittsburgh Plate Glass Co., Pittsburgh, P a . . .
George T. Ladd
President, United Engineering & Foundry Co., Pittsburgh, Pa.

Term
Expires
Dec. SI
1039
1939
1940
1939
1940

District No. 5—Richmond
Class A:
Charles E. Rieman
James C. Braswell
Lewis E. Johnson
Class B:
CharleB C. Reed
John H. Hanna
Edwin Malloy
Class C:
William G. Wysor
Robert Lassiter
Charles P. McCormick

President, Western National Bank, Baltimore, Md
President, Planters Nat. Bank & Tr. Co., RQcky Mount, N. C.
Chairman, First National Bank, Alderson, W. Va

1939
1940
1941

Vice President and General Manager, Williams & Reed, Inc.,
Richmond, Va
Chairman, Capital Transit Co., Washington, D. C
President and Treasurer, Cheraw Cotton Mills, Inc., Cheraw,
S. C

1939
1940

General Manager, Southern States Cooperative, Inc., Richmond, Va
Chairman, Mooresville Cotton Mills, Mooresville, N. C. . . . .
President, McCormick & Co., Inc., Baltimore, Md

1939
1940
1941

Baltimore B r a n c h
Appointed by Federal Reserve Bank:
W, Robert Milford
Managing Director, Baltimore, Md
Morton M. Prentis
President, First National Bank, Baltimore, Md
James Dixon
President, Easton National Bank, Easton, Md
George W. Reed
President, National Marine Bank, Baltimore, Md
Appointed by Board of Governors:
Vacancy
W. Frank Roberts
President, Standard Gas Equipment Corp., Baltimore, M d . . . .
W. Frank Thomas
Construction Engineer and Real Estate Management, Westminster, Md

1941

1939
1939
1940
1941
1939
1940
1941

Charlotte Branch

Appointed by Federal Reserve Bank:
William T. Clements
Managing Director, Charlotte, N. C
Byron M. Edwards
Executive Vice President, South Carolina National Bank, Columbia, S. C
Torrence E. Hemby
Executive Vice President, American Trust Co., Charlotte,
N. C
,
J. Gerald Cowan
Vice President, Wachovia Bank & Trust Co., Asheville, N. C
Appointed by Board of Governors:
Christie Benet
Benet, Shand & McGowan, Columbia, S. C
George M. Wright
President, Republic Cotton Mills, Great Falls, S. C
George S. Harris
Executive Vice President, Springs Cotton Mills, Lancaster,
S. C
Class A:
Ryburn G. Clay
William D. Cook
George J. White
Class B:
John A. McCrary
Fitzgerald Hall
Ernest T. George
Class C.Joe Frank Porter
Rufus C. Harris
Frank H. Neely

Appointed by Federal Reserve Bank:
Paul L. T. Beavers
John C. Persons
John S. Coleman
Frank M. Moody
Appointed by Board of Governors:
Howard Gray
Edward L. Norton
Donald Comer




1939
1939
1940
1941
1939
1940
1941

District No. 6—Atlanta
President, Fulton National Bank, Atlanta, Ga
Executive Vice President, First National Bank, Meridian,
Miss
President, First National Bank, Mount Dora, Fla
Vice President and Treasurer, J. B. McCrary Co., Inc.,
Atlanta Ga
President,' Nash.',"Chat! & St! Louis Ry., Nashville, Tenn!!
President and Chairman, Seaboard Refining Co., Ltd., New
Orleans, La
President, Tenn. Farm Bureau Fed., Columbia, T e n n . . . . .
President, Tulane University, New Orleans, La
Executive Vice President and Secretary, Rich's, Inc.,
Atlanta, Ga

1939
1940
1941

1939
1940
1941
1939
1940
1941

Birmingham Branch
Managing
President,
President,
President,

Director, Birmingham, Ala
First National Bank, Birmingham, Ala
Birmingham Trust & Sav. Co., Birmingham, Ala.
First National Bank, Tuscaloosa, Ala

1939
1039
1940
1941

Farmer, New Market, Ala
Executive Vice President, Munger Companies, Birmingham, Ala
Chairman, Avondale Mills, Birmingham, Ala

1940
1941

1939

FEDERAL RESERVE SYSTEM
Jacksonville Branch
Appointed by Federal Reserve
George S. V a r d e m a n , J r
George J . A v e n t
Junius C. McCrocklin

87
Term
Expires
D*c. SI

Bank:
Managing
President,
Executive
Springs,
President,

William R. McQuaid
Appointed by Board of Governors:
H o w a r d Phillips
Bayless W . H a y n e s
Robert H . Gamble

Director, Jacksonville, F l a
F l o r i d a N a t i o n a l B a n k , Jacksonville, F l a
Vice P r e s i d e n t , F i r s t N a t i o n a l B a n k , T a r p o n
Fla
B a r n e t t N a t i o n a l B a n k , Jacksonville, F l a

E x e c u t i v e Vice P r e s i d e n t , D r . P . Phillips Co., I n c . , O r l a n d o ,
Fla
P r e s i d e n t , Wilson & T o o m e r Fertilizer C o . , Jacksonville,
Fla
P r e s i d e n t , F l o r i d a B r i c k & Tile C o r p . , Jacksonville, F l a . . .

1939
1939
1940
1941

1939
1940
1941

Nashville Branch
Appointed by Federal Reserve
Joel B . F o r t , J r
Frank M. Farris
George N . B a s s

Bank:
M a n a g i n g Director, Nashville, T e n n
P r e s i d e n t , T h i r d N a t i o n a l B a n k , Nashville, T e n n
Cashier, F i r s t N a t i o n a l B a n k of F r a n k l i n C o . , D e c h e r d ,
Tenn
Cashier, Peoples N a t i o n a l B a n k , Shelbyville, T e n n

Edward B. Maupin
Appointed by Board of Governors:
William E . M c E w e n
Elbridge W . Palmer
Clyde B. Austin

1939
1939

F a r m e r a n d Stock Raiser, W i l l i a m s p o r t , T e n n
President, Kingsport Press, Inc., Kingsport, T e n n
P r e s i d e n t , T h e A u s t i n C o . , I n c . , Greeneville, T e n n

1939
1940
1941

1940
1941

New Orleans Branch
Appointed by Federal Reserve
Lewis M . C l a r k
E m i l e E . Soulier

Bank:
M a n a g i n g Director, N e w Orleans, L a
Vice P r e s i d e n t a n d Cashier, F i r s t N a t i o n a l B a n k , L a f a y e t t e ,
La
P r e s i d e n t , N a t i o n a l B a n k of C o m m e r c e , N e w Orleans, L a .
P r e s i d e n t , D e l t a N a t . B a n k , Yazoo C i t y , Miss

Oliver G. L u c a s
Herbert Holmes
Appointed by Board of Governors:
H e n r y G. Chalkley, J r
E u g e n e F . Billington
Alexander F i t z - H u g h

1939
1940
1941

1939

G e n e r a l M a n a g e r , Sweet L a k e L a n d & Oil C o . , I n c . , L a k e
Charles, L a
Vice P r e s i d e n t & Secretary, Soule S t e a m F e e d W o r k s , M e ridian, M i s s
Vice P r e s i d e n t , P . P . Williams C o . , V i c k s b u r g , M i s s

1940
1941

1939

District N o . 7—Chicago
Class A.W a l t e r J. C u m m i n g s

C h a i r m a n , C o n t ' l . 111. N a t . B a n k a n d T r u s t C o . , Chicago,
111
President, Waukesha N a t . Bank, Waukesha, Wis
E x e c u t i v e Vice P r e s i d e n t a n d Cashier, F i r s t C a p i t a l N a tional B a n k , I o w a C i t y , I o w a

E d w a r d R. E s t b e r g
F r a n k D . Williams
Class B:
Max W. Babb
Charles B . V a n D u s e n
Nicholas H . N o y e s

P r e s i d e n t , Allis-Chalmers Mfg. Co., M i l w a u k e e , W i s
Director, S. S. Kresge C o . , D e t r o i t , M i c h
S e c r e t a r y a n d T r e a s u r e r , E l i Lilly a n d C o . , I n d i a n a p o l i s ,
Ind

Class C:
Vacancy
F r a n k J . Lewis
Robert E . Wood

C h a i r m a n , F . J . Lewis Mfg. C o . , Chicago, 111
C h a i r m a n , Sears, R o e b u c k & Co., Chicago, 111

1939
1940
1941
1939
1940
1941
1939
1940
1941

Detroit Branch
Appointed by Federal Reserve
Ralph H . Buss
James E . Davidson
W a l t e r S. M c L u c a s
Joseph M . Dodge

Bank:

Appointed by Board of Governors:
H a r r y L . Pierson
Alfred C . M a r s h a l l
L. Whitney Watkins

Managing
President,
Chairman,
President,

Director, D e t r o i t , M i c h
Peoples C o m . & S a v . B a n k , B a y C i t y , M i c h . . . .
T h e N a t i o n a l B a n k of D e t r o i t , D e t r o i t , M i c h . .
T h e Detroit Bank, Detroit, Mich

1939
1939
1940
1941

President, Detroit Harvester Co., Detroit, Mich
Vice P r e s i d e n t a n d G e n e r a l M a n a g e r , D e t r o i t E d i s o n C o . ,
Detroit, Mich
Farmer, Manchester, Mich

1940
1941

1939

District N o . 8—St. Louis
Class A.Max B. Nahm
George R . Corlis
Sidney M a e s t r e
Class B.James W . Harris
Harvey C. Couch
John R. Stanley
Class C.William T . N a r d i n
Oscar G. J o h n s t o n
Vacant




Vice P r e s i d e n t , Citizens N a t i o n a l B a n k , Bowling Green, K y .
Cashier, A n n a N a t i o n a l B a n k , A n n a , 111
P r e s i d e n t , Mississippi Valley T r u s t C o . , St. Louis, M o . . . .

1939
1940
1941

Chairman, Harris-Langenberg H a t Co., St. Louis, M o
P r e s i d e n t , A r k . P o w e r & L i g h t C o . , P i n e Bluff, A r k
Secretary, T r e a s u r e r , S t a n l e y C l o t h i n g Co., E v a n s v i l l e , I n d .

1939
1940
1941

Vice P r e s i d e n t a n d G e n e r a l M a n a g e r , P e t M i l k C o m p a n y ,
S t . Louis, M o
*
P r e s i d e n t , D e l t a a n d P i n e L a n d C o . , Scott, Miss

1939
1940
1941

88

ANNUAL REPORT OF BOARD OF GOVERNORS
Little Rock B r a n c h

Appointed by Federal Reserve Bank:
Arthur F. Bailey
Managing Director, Little Rock, Ark
James H. Penick
Vice President, W. B. Worthen Co., Little Rock, Ark
Arthur E. McLean
President, Commercial Nat. Bank, Little Rock, Ark
Paul R. McCoy
Chairman, Peoples Nat. Bank, Stuttgart, Ark
Appointed by Board of Governors:
Frederick K. Darragh
President, Darragh Co., Little Rock, Ark
Ira N. Barnett, Jr
Manager, Barnett Bros. Mercantile Co., Batesville, Ark.. .
Henry H. Tucker
President, Fones Bros. Hardward Co., Little Rock, Ark. . .
Louisville B r a n c h
Appointed by Federal Reserve Bank:
Frank D. Rash
Managing Director, Louisville, Ky
James O. Sanders
President, First National Bank, Huntingburg, Ind
Phil E. Chappell
Cashier, Planters Bk. & Tr. Co., Hopkinsville, Ky
Ralph C. Gifford
President, First National Bank, Louisville, Ky
Appointed by Board of Governors:
William P. Paxton
President, Southern Textile Machinery Co., Paducah, Ky.
Perry B. Gaines
Farmer and Stock Raiser, Carrollton, Ky
James B. Hill
President, Louisville & Nashville R. R., Louisville, Ky. .. .

Term
Expires
Dec. 13
1939
1939
1940
1941
1939
1940
1941

1939
1939
1940
1941
1939
1940
1941

Memphis Branch
Appointed by Federal Reserve Bank:
William H. Glasgow
William R. King
Bert A. Lynch
Oliver Benton
Appointed by Board of Governors:
Douglas W. Brooks
Rufus C. Branch
J. Holmes Sherard

Managing
President,
President,
President,

Director, Memphis, Tenn
National Bank of Commerce, Memphis, Tenn. .
Farmers Bank & Trust Co., Blytheville, Ark. . .
National Bank of Commerce, Jackson, Tenn.. . .

1939
1939
1940
1941

President, Union Compress & Warehouse Co., Memphis,
Tenn
Cotton Farmer and Ginner, Pecan Point, Ark
J. Holmes Sherard & Co., Sherard, Miss

1939
1940
1941

District No. 9—Minneapolis
Class A:
H. C. Hansen
Melvin O. Grangaard
James R. McKnight
Class B:
Albert P. Funk

Churchs Ferry, N. D
Vice President, First Nat. Bk. & Tr. Co., Minneapolis, Minn.
President, Pierre National Bank, Pierre, S. D
President and Treasurer, LaCrosse Rubber Mills Co.,
LaCrosse, Wis
President, W. O. Washburn & Sons, St. Paul, Minn
President, Eddy's Bakeries, Inc., Helena, Mont

William D. Cochran
Roger B. Shepard
Appointed by Federal Reserve Bank:
Robert E. Towle
Peter Pauly

Appointed by Federal Reserve Barik:
Joseph E. Olson
Roblin H. Davis
William C. Kurtz
Harold Kountze

1939

Helena B r a n c h
Managing Director, Helena, Mont
Vice President, Deer Lodge Bank and Tr. Co., Deer Lodge,
Mont
Vice President, Montana National Bank, Billings, Mont. . .

1939
1940

1939

1940

1939

District No. 10—Kansas City

Joseph M. Bernardin
Lee E. Phillips
Clats C.Edward P. Brown
Robert B. Caldwell
John J. Thomas




1940
1941

Farmer, Square Butte, Mont
Vice President and Treasurer, Western Life Ins. Co., Helena,
Mont

Arthur R. McDermott
Appointed by Board of Governors:
Hobart D. Myrick
Alex Cunningham

Class A.Thomas A. Dines
Frank W. Sponable
Edward E. Mullaiiey
Class B:
Willard D. Hosford

1939
1940
1941

Dean, College of Agriculture, University of Minnesota, St.
Paul, Minn
President, W. D. Cochran Freight Lines, Iron Mountain,
Mich
President, Finch, Van Slyke & McConville, St. Paul, Minn.

William O. Washburn
James E. O'Connell
Class C:
Walter C. Coffey

1939
1940
1941

President, U. S. National Bank, Denver, Colo
President, Miami County Nat. Bank, Paola, Kans
President, Farmers & Merchants Bank, Hill City, Kans. . .

1939
1940
1941

Vice President and General Manager, John Deere Plow Co.,
Omaha, Neb
Vice President, Burk Lumber Company, Dawson, N. M.. .
Phillips Petroleum Co., Bartlesville, Okla

1939
1940
1941

Farmer, Davey, Neb
McCune, Caldwell & Downing, Kansas City, Mo
Attorney-at-Law, Seward, Neb
Denver B r a n c h

193P
1940
1941

Managing Director, Denver, Colo
President, Denver National Bank, Denver, Colo
President and General Manager, Independent Lumber Co.,
Grand Junction, Colo
President, Colorado National Bank, Denver, Colo

1939
1939
1940
1941

FEDERAL RESERVE SYSTEM

89
Term
Exyirts
Dec. $1

Appointed by Board of Governors:
Wilson M c C a r t h y
Albert K. Mitchell
James B. Grant

P r e s i d e n t , D e n v e r & Salt L a k e R R Co., D e n v e r , Colo
P r e s i d e n t a n d G e n e r a l M a n a g e r , T . E . M i t c h e l l & Son, Albert, N . M
Lewis a n d G r a n t , D e n v e r , Colo

1939
1940
1941

Oklahoma City Branch
Appointed by Federal Reserve
Cyrus E . Daniel
Frank T. Chandler
Samuel W . Hayes

Bank:

Leroy D . Edgington
Appointed by Board of Governors:
T h o m a s S. H a n n a
Lee Clinton
Neil R . J o h n s o n

M a n a g i n g Director, O k l a h o m a C i t y , Okla
Vice P r e s i d e n t , O k l a h o m a N a t i o n a l B a n k , C h i c k a s h a , Okla
H a y e s , R i c h a r d s o n , Shartel, Gilliland & J o r d a n , O k l a h o m a
C i t y , Okla
P r e s i d e n t , F i r s t N a t i o n a l B a n k , P o n c a C i t y , Okla
P r e s i d e n t , B a k e r , H a n n a & B l a k e Co., O k l a h o m a
Okla
R e a l t o r , T u l s a , Okla
F a r m e r a n d C a t t l e m a n , N o r m a n , Okla

1939
1939
1940
1941

City,
1939
1940
1941

Omaha Branch
Appointed by Federal Reserve
Bank:
Lloyd H. E a r h a r t
W . Dale C l a r k
" George A . Bible
George W . H o l m e s
Appointed by Board of Governors:
H a r r y L. D e m p s t e r
William H . Schellberg
Robert E. Campbell

Managing
President,
President,
President,

Director, O m a h a , N e b
Omaha National Bank, Omaha, Neb
First National Bank, Rawlins, W y o
F i r s t N a t i o n a l B a n k , Lincoln, N e b

P r e s i d e n t , D e m p s t e r Mill Mfg. Co., B e a t r i c e , N e b
P r e s i d e n t , U n i o n Stock Y a r d s Co., O m a h a , N e b
C h a i r m a n , Miller & P a i n e , Lincoln, N e b

1939
1939
1940
1941
1939
1940
1941

District No. 11—Dallas
Class

A:
Ed H. Winton

E x e c u t i v e Vice P r e s i d e n t , C o n t i n e n t a l N a t i o n a l B a n k , F o r t
Worth, Tex
President, First National Bank, Itasca, Tex
P r e s i d e n t , Citizens N a t i o n a l B a n k , Denison, T e x

1939
1940
1941

President, Cooper Company, Inc., Waco, Tex
C h a i r m a n , W e s t P r o d u c t i o n Co., H o u s t o n , T e x
P r e s i d e n t , T e x a s Refining Co., Greenville, T e x

1939
1940
1941

Rafter O. C a t t l e C o m p a n y , Amarillo, T e x
W o m a c k & Cozzo, Dallas, T e x
Retired, McKinney, Tex

P a t E . Hooks
F o r d Seale
Class B.Jesse R . M i l a m
James M. West
John D. Middleton
Class C.Jay Taylor
J o s e p h B . Cozzo
James H. Merritt

1939
1940
1941

El P a s o Branch
Appointed by Federal Reserve
Bank:
J o s e p h L. H e r m a n n
Samuel D . Y o u n g
Charles N . Bassett
F r a n k R. Coon
Appointed
by Board of Governors:
Ray E. Sherman
Jack B. Martm
Franklin M . Hayner

Managing Director, El Paso, Tex
Vice P r e s i d e n t , E l P a s o N a t i o n a l B a n k , E l P a s o , T e x
President, State National Bank, El Paso, Tex
P r e s i d e n t , M i m b r e s Valley B a n k , D e m i n g , N . M

1939
1939
1940
1941

P r e s i d e n t , Leavell a n d S h e r m a n , I n c . , E l P a s o , T e x
P r e s i d e n t , Arizona Ice & Cold Storage Co., T u c s o n , Ariz. .
P r e s i d e n t , L a s Cruces L u m b e r Co., L a s Cruces, N . M . . . .

1939
1940
1941

Houston Branch
Appointed by Federal Reserve
Bank:
William D . Gentry
Preston B. Doty
J o h n W . Neal
Sam R. Lawder
Appointed by Board of Governors:
Sam T a u b
George G. C h a n c e
H e n r y Renfert

Managing Director, Houston, Tex
President, First National Bank, Beaumont, Tex
C h a i r m a n , Second N a t i o n a l B a n k , H o u s t o n , T e x
Vice P r e s i d e n t , F i r s t N a t i o n a l B a n k , H o u s t o n , T e x

1939
1939
1940
1941

J. N . T a u b & Sons, H o u s t o n , T e x
Farmer, Bryan, Tex
R e n f e r t - H e l m b r e c h t Co., G a l v e s t o n , Tex

1939
1940
1941

San Antonio Branch
Appointed by Federal Reserve Bank:
Miers C r u m p
George C . Hollis
Claude M. Bartholomew
John K. Beretta
Appointed by Board of Governors:
Edwin F . Flato
D o l p h Briscoe
Jamie M . Odom

M a n a g i n g Director, San A n t o n i o , T e x
President, First National Bank, Eagle Pass, Tex
Vice President^ A u s t i n N a t i o n a l B a n k , Austin, T e x
P r e s i d e n t , N a t i o n a l B a n k of C o m m e r c e , San A n t o n i o , Tex.

1939
1939
1940
1941

P r e s i d e n t , C o r p u s Christi H a r d w a r e Co., C o r p u s C h r i s t i , T e x .
Stock Raiser, U v a l d e , T e x
Contractor, Austin, Tex

1939
1940
1941

District No. 12—San Francisco
Class

A:
K e i t h Powell
Charles K. Mcintosh
R e n o Odlin




P r e s i d e n t , Salem F e d . Sav. & L o a n Assn., Salem, Ore
C h a i r m a n , B a n k of Calif., N . A., S a n Francisco, Calif. . . .
P r e s i d e n t , P u g e t Sound N a t i o n a l B a n k , T a c o m a , W a s h . . .

1939
1940
1941

90

ANNUAL REPORT OF BOARD OF GOVERNORS

Class B.Reese H. Taylor
Elmer H. Cox
William G. Volkmann
Class C:
Carlyle Thorpe
St. George Holden
Vacancy

Term
Expires
Dec. 31
President, Union Oil Company, Los Angeles, Calif
President, .Madera Sugar Pine Co., San Francisco, Calif.. .
Vice President, A. Schilling and Co., San Francisco, Calif..

19$9
1940
1941

General Manager, California Walnut Growers Association,
Los Angeles, Calif
President, St. George Holden Realty Co., San Francisco,
Calif

1989

Los Angeles B r a n c h
Appointed by Federal Reserve Bank:
W. Norman Ambrose
Managing Director, Los Angeles, Calif
Charles E. Brouse
President, Citizens Nat. Trust & Sav. Bank, Riverside,
Calif
Victor H. Rossetti
President, Farmers & Merchants Nat. Bank, Los Angeles,
Calif
Appointed by Board of Governors:
Carl V. Newman
President, Calavo Growers of California, Los Angeles, Calif,
William S. Roseorans
Land Management & Investments, Los Angeles, Calif. . . .
Appointed by Federal Reserve Bank:
David L. Davis
Ernest B. MacNaughton
Nona A. Davis
Appointed by Board of Governors:
George T. Gerlinger
Albert E. Engbretsen
Appointed by Federal Reserve Bank:
Winnie L. Partner
Frederick P. Champ
Orval W. Adams
Appointed by Board of Governors:
Herbert S. Auerbach
John Thomas

1939
1939
1940
1939
1940

Portland Branch
Managing Director, Portland, Ore
.
President, First National Bank, Portland, Ore
.
Vice President, Baker-Boyer National Bank, Walla Walla,
Wash

1940

President, Willamette Valley Lumber Co., Portland, Ore.
President, Engbretsen Seed Co., Astoria, Ore

1939
1940

1939
1939

Salt Lake City B r a n c h
Managing Director, Salt Lake City, Utah
President, Utah Mortgage Loan Corp., Logan, Utah
Executive Vice President, Utah State Nat. Bank, Salt Lake
City, Utah

1939
1939

President, Auerbach Company, Salt Lake City, Utah
Livestock Raiser and Farmer, Gooding, Idaho

1939
1940

Seattle B r a n c h
Appointed by Federal Reserve Bank:
Clarence R. Shaw
Managing Director, Seattle, Wash
George H. Greenwood
President, Pacific National Bank, Seattle, Wash
Ned A. Telyea
President, Old Nat. Bank & Union Trust Co., Spokane,
Wash
Appointed by Board of Governors:
Charles F. Larrabee
Vice President, Pacific American Fisheries, Inc., Bellingham, Wash
Fred Nelsen
Dairy Farmer, Seattle, Wash




1940
1941

1940

1939
1989
1940
1939
1940

FEDERAL RESERVE SYSTEM

91

STATE BANK AND TRUST COMPANY MEMBERS

Following is a list of the 1,175 State bank and trust company members of the Federal Reserve System on December 30, 1939.
DISTRICT NO. 1 (42 banks)
CONNECTICUT (5 banks)
Hartford
Phoenix State Bank & Trust
Co.
New Haven
Union & New Haven Trust Co.
Torrington
Brooks Bank & Trust Co.
Waterbury
Colonial Trust Co.
Waterbury Trust Co.
MAINE (5 banks)
Augusta
Depositors Trust Co.
Bangor
Merrill Trust Co.
Bar Harbor
Bar Harbor Banking & Trust
Co.
Ellsworth
Union Trust Co.
Sanford
Sanford Trust Co.
MASSACHUSETTS (29 banks)
Arlington
Menotomy Trust Co.
Boston
New England Trust Co.
Old Colony Trust Co.
Pilgrim Trust Co.
State Street Trust Co.
United States Trust Co.
Bridgewater
Bridge water Trust Co.
Brookline
Norfolk County Trust Co.
Cambridge
County Bank & Trust Co.
Harvard Trust Co.
Fall River
B. M. C. Durfee Trust Co.
Fall River Trust Co.
Gloucester
Gloucester Safe Deposit &
Trust Co.
Greenfield
Franklin County Trust Co.
Holyoke
Hadley Falls Trust Co.
Hyannis
Hyannis Trust Co.
Lynn
Security Trust Co.
Milton
Blue Hill Bank & Trust Co.
Newton
Newton Trust Co.
Norwood
Norwood Trust Co.
Quincy
Quincy Trust Co.
Salem
Naumkeag Trust Co.
Somerville
Somerville Trust Co.
Springfield
Springfield Safe Deposit &
Trust Co.
Union Trust Co.
Taunton
Bristol County Trust Co.
Wellesley Hills . . . . Wellesley Trust Co.
Winchester
Winchester Trust Co.
Worcester
Worcester County Trust Co.
NEW HAMPSHIRE (1 bank)
Conway
Carroll County Trust Co.
RHODE ISLAND (2 banks)
Providence
Industrial Trust Co.
Union Trust Co.
DISTRICT NO. 2 (172 banks)
NEW JERSEY i (46 banks)
Bayonne
Bayonne Trust Co.
Bloomfield
Bloomfield Bank & Trust Co.
Community Trust Co.
Bogota
Bank of Bogota
Boonton
Boonton Trust Co.
Carteret
Carteret Bank & Trust Co.
Cranford
Cranford Trust Co.
Dover
Dover Trust Co.
Dunellen
Peoples Trust Co.
East Orange
Savings Investment & Trust
Co.
Elizabeth
Central Home Trust Co.
Elizabethport Banking Co.
Fort Lee
Fort Lee Trust Co.
Franklin
Sussex County Trust Co.
Glen Ridge
Glen Ridge Trust Co.
Glen Rock
Glen Rock Bank
Hackensack
Hackensack Trust Co.
Peoples Trust Co. of Bergen
County
L

DISTRICT NO. 2—Continued
NEW JERSEY—continued
Jersey City
Commercial Trust Co. of New
Jersey
Linden
Linden Trust Co.
Montclair
Bank of Montclair
Montclair Trust Co.
Morristown
Morristown Trust Co.
Newark
Clinton Trust Co.
Columbus Trust Co.
Federal Trust Co.
Fidelity Union Trust Co.
Franklin-Washington Trust Co.
Merchants & Newark Trust Co.
United States Trust Co.
West Side Trust Co.
Nutley
Bank of Nutley
Passaic
Bank of Passaic & Trust Co.
Peoples Bank & Trust Co.
Perth Amboy . . . . First Bank & Trust Co.
Plainfield
Mid-City Trust Co.
Plainfield Trust Co.
State Trust Co.
Ridgefield Park... .Ridgefield Park Trust Co.
Rochelle Park
Rochelle Park Bank
Rutherford
Rutherford Trust Co.
South Orange
South Orange Trust Co.
Summit
Summit Trust Co.
Tenafly
Tenafly Trust Co.
Westfield
Peoples Bank & Trust Co.
Westfield Trust Co.
NEW YORK (126 banks)
Citizens & Farmers Trust Co.
First Trust Co.
State Bank of Albany
Amityville
Bank of Amityville
Amsterdam
Montgomery County Trust Co.
Arcade
Citizens Bank
Avoca
Bank of Avoca
Batavia
Genesee Trust Co.
Belmont
State Bank of Belmont
Binghamton
Marine Midland Trust Co.
Blasdell
Bank of Blasdell
Brooklyn (see New York)
Buffalo
Liberty Bank
Manufacturers & Traders Trust
Co.
Marine Trust Co.
Canandaigua
Ontario County Trust Co.
Canaseraga State Bank
Canisteo
First State Bank
Cattaraugus
Bank of Cattaraugus
Center Moriches.. Center Moriches Bank
Chatham
State Bank of Chatham
Chestertown
Chester-Schroon-Horicon Bank
Clymer
Clymer State Bank
Cohocton
Cohocton State Bank
De Ruyter
De Ruyter State Bank
Dunkirk Trust Co.
Dunkirk
Ellenburg Depot. State Bank of Ellenburg
Chemung Canal Trust Co.
Elmira
Elmira Bank & Trust Co.
Endicott Trust Co.
Endicott
Union Trust Co.
Evans Mills .. Peoples Bank
Bank of Farmingdale
Farmingdale ...
Floral Park Bank & Trust Co.
Floral Park
Citizens Trust Co.
Fredonia
Garden City Bank & Trust Co.
Garden City
Geneva Trust Co.
Geneva
Gloversville . . . . Trust Co. of Fulton County
Bank of Great Neck
Great Neck ...
Peoples Bank
Hamburg
Bank of Hammondsport
Hammondsport
Bank of Hicksville
Hicksville
Tompkins County Trust Co.
Ithaca
Bank of Jamestown
Jamestown
Johnson City... Workers Trust Co.
Adams
Albany

Exclusive of part of State located in another district.




92

ANNUAL REPORT OF BOARD OF GOVERNORS
DISTRICT NO. 2—Continued

NEW YORK—continued
Katonah
Northern Westchester Bank
Kingston
Kingston Trust Co.
Lackawanna
American Bank
Little Falls
Herkimer County Trust Co.
Locke
Citizens Bank
Lowville
Lewis County Trust Co.
Malone
Peoples Trust Co.
Massena
Massena Banking & Trust Co.
Mayville
State Bank of Mayville
Middletown
Orange County Trust Co.
Millbrook
Bank of Millbrook
Mineola
Nassau County Trust Co.
Mount Kisco
Insurance Loan Trust Co.
Mount Vernon ....Fleetwood Bank
Mount Vernon Trust Co.
New York
Amalgamated Bank
Bankers Trust Co.
Bank of the Manhattan Co.
Bank of New York
Bank of Yorktown
Bronx County Trust Co.
Brooklyn Trust Co.
Central Hanover Bank & Trust
Co.
Chemical Bank & Trust Co.
City Bank-Farmers Trust Co.
Clinton Trust Co.
Colonial Trust Co.
Continental Bank & Trust Co.
Corn Exchange Bank Trust Co.
Federation Bank & Trust Co.
Fifth Avenue Bank
Fulton Trust Co.
Guaranty Trust Co.
Irving Trust Co.
Lawyers Trust Co.
Manufacturers Trust Co.
Marine Midland Trust Co.
Merchants Bank
New York Trust Co.
Pan American Trust Co.
Pennsylvania Exchange Bank
Schroder Trust Co.
Trade Bank & Trust Co.
United States Trust Co.
Niagara Falls
Power City Trust Co.
North Collins
Bank of North Collins
Ogdensburg
Ogdensburg Trust Co.
Olean
Olean Trust Co.
Oneida
Madison County Trust & Deposit Co.
Ontario
State Bank of Ontario
Orchard Park
Bank of Orchard Park
Oriskany Falls
First Trust & Deposit Co.
Ossining
Ossining Trust Co.
Patchogue
Patchogue Citizens Bank &
Trust Co.
Pearl River
State Bank of Pearl River
Perry
Citizens Bank
Pleasantville
Mount Pleasant Bank & Trust
Co.
Port Chester
Mutual Trust Co. of Westchester County
Rochester
Central Trust Co.
Lincoln-Alliance Bank & Trust
Co.
Rome
Rome Trust Co.
Sag Harbor
Peconic Bank
Salamanca
Salamanca Trust Co.
Saratoga Springs. .Adirondack Trust Co.
Sayville
Oystermen's Bank & Trust Co.
Schenectady
Schenectady Trust Co.
Sea Cliff
State Bank of Sea Cliff
Smithtown Branch. Bank of Smithtown
Southampton
Southampton Bank
Spring Valley
Ramapo Trust Co.
Stony Brook
Bank of Suffolk County
Syracuse
First Trust & Deposit Co.
Syracuse Trust Co.
Tarry town
Washington Irving Trust Co.
Utica
First Citizens Bank & Trust Co.
Warsaw
Wyoming County Bank &
Trust Co.
Watertown
Northern New York Trust Co.
1

Exclusive of part of State located in another




DISTRICT NO. 2—Continued
NEW
Westbury
Westhampton
Beach
West New
Brighton
White Plains

YORK—continued
Bank of Westbury Trust Co.
Seaside Bank
West New Brighton Bank
Citizens Bank
County Trust Co.

DISTRICT NO. 3 (66 banks)
DELAWARE (4 banks)
Wilmington
Equitable Trust Co.
Industrial Trust Co.
Security Trust Co.
Wilmington Trust Co.
NEW JERSEY i (5 banks)
Camden
Camden Trust Co.
Hightstown
Hightstown Trust Co.
Princeton
Princeton Bank & Trust Co.
Riverside
Riverside Trust Co.
Swedesboro
Swedesboro Trust Co.
PENNSYLVANIA i (57 banks)
Allentown
Liberty Bank & Trust Co.
Bloomsburg
Bloomsburg Bank - Columbia
Trust Co.
Carlisle
Carlisle Trust Co.
Chester
Chester-Cambridge Bank &
Trust Co.
Clearfield
Clearfield Trust Co.
Danville
Montour County Trust Co.
Du Bois
Union Banking & Trust Co.
Easton
Easton Trust Co.
East Petersburg... East Petersburg State Bank
Egypt
Farmers Bank
Harrisburg
Central Trust Co.
Dauphin Deposit Trust Co.
Hazleton
Markle Banking & Trust Co.
Peoples Savings & Trust Co.
Traders Bank & Trust Co.
Honesdale
Wayne County Savings Bank
Houtzdale
Houtzdale Trust Co.
Huntingdon
Grange Trust Co.
Jenkintown
Jenkintown Bank & Trust Co.
Lancaster
Farmers Bank & Trust Co.
Northern Bank & Trust Co.
Lemoyne
Lemoyne Trust Co.
Lewistown
Lewistown Trust Co.
Littlestown
Littlestown State Bank
Lock Haven
Lock Haven Trust Co.
Lykens
Miners Bank & Trust Co.
Mahanoy City
Merchants Banking Trust Co.
Middletown
Citizens Bank & Trust Co.
Mount Carmel
Liberty State Bank & Trust
Co.
Myerstown
Myerstown Trust Co.
Nanticoke
Peoples Bank
New Oxford
Farmers & Merchants Bank
Norristown
Montgomery Trust Co.
Norristown-Penn Trust Co.
Orrstown
Orrstown Bank
Paoli
Paoli Bank & Trust Co.
Philadelphia
Fidelity-Philadelphia Trust Co.
First Trust Co.
Gimbel Bros. Bank & Trust Co.
Girard Trust Co.
Integrity Trust Co.
Ninth Bank & Trust Co.
Pennsylvania Co. for Insurances on Lives and Granting
Annuities
Provident Trust Co.
Prospect Park
Interboro Bank & Trust Co.
Quakertown
Quakertown Trust Co.
Re'ading
Reading Trust Co.
Schnecksville
Schnecksville State Bank
Schuylkill Haven.. Schuylkill Haven Trust Co.
Steelton
Steelton Bank & Trust Co.
Tamaqua
Peoples Trust Co.
Temple
Temple State Bank
Wilkes-Barre
Wilkes-Barre Deposit & Savings Bank
itrict.

FEDERAL RESERVE SYSTEM

93

1
DISTRICT NO. 4—Continued
DISTRICT NO. 3—Continued
OHIO—continued
PENNSYLVANIA—continued
Middlepoint
Middlepoint Banking Co.
Williamsport
West Branch Bank & Trust
Middletown
First American Bank & Trust
Co.
Co.
Wyomissing
Peoples Trust Co.
Minster
Minster State Bank
York
Guardian Trust Co.
Monroeville
Farmers & Citizens Banking Co.
York Trust Co.
Mount Blanchard. Citizens Bank
Mount Gilead
Peoples Savings Bank Co.
DISTRICT NO. 4 (135 banks)
Mount Vernon
Knox County Savings Bank
Napoleon
Community Bank
1
K E N T U C K Y (7 banks)
Newark
Licking County Bank
Newark Trust Co.
Catlettsburg
Kentucky-Farmers Bank
New Lexington.... Perry County Bank
Covington
Peoples-Liberty Bank & Trust
New Philadelphia. Ohio Savings & Trust Co.
Co.
Northfield
Macedonia-Northfield Banking
Lexington
Bank of Commerce
Co.
Security Trust Co.
Norwalk
Huron County Banking Co.
Paris
Bourbon-Agricultural Bank &
Norwood
Norwood-Hyde Park Bank &
Trust Co.
Trust Co.
Peoples Deposit Bank & Trust
Oak Harbor
Oak Harbor State Bank Co.
Co.
Oberlin
Oberlin Savings Bank Co.
Richmond
State Bank & Trust Co.
Orrville
Orrville Savings Bank
Pomeroy
Farmers Bank & Savings Co.
OHIO (100 banks)
Reading
Reading Bank
Akron
Firestone Park Trust & SavRittman
Rittman Savings Bank
ings Bank
Russellville
Bank of Russellville
First-Central Trust Co.
St Bernard
Citizens Bank
Antwerp
Antwerp Exchange Bank
St. Marys
Home Banking Co.
Apple Creek
Apple Creek Banking Co.
Sandusky
Citizens Banking Co.
Archbold
Peoples State Bank Co.
Western Security Bank
Ashland
Ashland Bank & Savings Co.
Shelby
Citizens Bank
Bellevue
Union Bank & Savings Co.
Shiloh
Shiloh Savings Bank Co.
Bellville
Farmers Bank
Sylvania
Farmers & Merchants Bank Co.
Brecksville
Brecksville Bank Co.
Sylvania Savings Bank Co.
Canal Winchester.. Peoples Bank Co.
Toledo
Commerce Guardian Bank
Canton
Geo. D. Harter Bank
Morris Plan Bank
Castalia
Castalia Banking Co.
Ohio Citizens Trust Co.
Celina
Commercial Bank Co.
Toledo Trust Co.
Christiansburg
Farmers & Merchants Bank
Utica
Utica Savings Bank Co.
Co.
Vandalia
Vandalia State Bank
Cincinnati
Central Trust Co.
Van Wert
Peoples Savings Bank
Fifth-Third Union Trust Co.
Wakeman
Wakeman Bank Co.
Peoples Bank & Savings Co.
Waterville
Waterville State Savings Bank
Provident Savings Bank &
Wellington
First Wellington Bank
Trust Co.
Woodville
State Savings Bank
Southern Ohio Savings Bank
Wooster
Commercial Banking & Trust
& Trust Co.
Co.
Western Bank & Trust Co.
Yellow Springs.... Miami Deposit Bank Co.
Cleveland
Cleveland Trust Co.
Youngstown
Citv Trust & Savings Bank
Lorain Street Bank
Dollar Savings & Trust Co.
Union Bank of Commerce Co.
PENNSYLVANIA 1 (25 banks)
Columbiana
Union Banking Co.
Aliquippa
Woodlawn Trust Co.
Columbus
Fifth Avenue Savings Bank Co.
Conneaut
Citizens Banking & Savings Co.
Ambridge
Economy Bank
Conneaut Banking & Trust Co.
Beaver
Beaver Trust Co.
Cortland
Cortland Savings & Banking
Dormont
Dormont Savings & Trust Co.
Co.
Elizabeth
Bank of Elizabeth
Coshocton
Peoples Bank & Trust Co.
Erie
Security-Peoples Trust Co.
Croton
Croton Bank Co.
Homestead
Monongahela Trust Co.
Danville
Commercial & Savings Bank
McKeesport
Peoples City Bank
Co.
Meadville
Crawford County Trust Co.
Delphos
Commercial Bank
New Brighton . . . . Beaver County Trust Co.
Peoples Bank
New Castle
Lawrence Savings & Trust Co.
Delta
Peoples Savings Bank Co.
Paint Borough
East Liverpool.... Potters Bank & Trust Co.
(Scalp Level
Elyria
Elyria Savings & Trust Co.
P. O.)
Merchants & Miners Bank
Savings Deposit Bank & Trust
Pittsburgh
Allegheny Trust Co.
Co.
Allegheny Valley Bank
Colonial Trust Co.
Findlay
Ohio Bank & Savings Co.
Commonwealth Trust Co.
Fort Recovery . . . . Fort Recovery Banking Co.
Homewood Bank
Geneva
Geneva Savings & Trust Co.
Iron & Glass Dollar Savings
Gibsonburg
Home Banking Co.
Bank of Birmingham
Gnadenhutten ... Gnadenhutten Bank
Peoples-Pittsburgh Trust Co.
Hillsboro
Hillsboro Bank & Savings Co.
Potter Title & Trust Co.
Hubbard
Hubbard Banking Co.
Kipton
Kiijton Rank Co.
Union Trust Co.
Leesburg
Citizens Bank & Savings Co.
Somerset
Somerset Trust Co.
Lorain
Central Bank Co.
Turtle Creek
Turtle Creek Bank & Trust Co.
Warren
Warren Bank & Trust Co.
Lyons
Farmers State Bank
Madison
Citizens Bank
Windber
Windber Trust Co.
Mansfield
Farmers Savings & Trust Co.
WEST VIRGINIA 1 (3 banks)
Marengo
Marengo Banking Co.
Sistersville
First-Tyler Bank & Trust Co.
Martins Ferry
Peoples Savings Bank Co.
Wheeling
Security Trust Co.
Mason
First-Mason Bank
Wheeling Dollar Savings &
Massillon
Ohio-Merchants Trust Co.
I
Trust Co.
Maumee
State Savings Bank Co.
1
Exclusive
 of part of State located in another district.


94

ANNUAL REPORT OF BOARD OF GOVERNORS

DISTRICT NO. 5 (77 banks)
DISTRICT OF COLUMBIA (5 banks)
Washington
American Security & Trust Co.
National Savings & Trust Co.
Security Savings & Commercial Bank
Union Trust Co.
Washington Loan & Trust Co.
MARYLAND (10 banks)
Baltimore
Baltimore Commercial Bank
Calvert Bank
Fidelity Trust Co.
Maryland Trust Co.
Union, Trust Co. of Maryland
Cambridge
County Trust Co. of Maryland
Ellicott City
Commercial & Farmers Bank
Forest Hill
Forest Hill State Bank
Hagerstown
Hagerstown Trust Co.
Salisbury
Farmers & Merchants Bank
NORTH CAROLINA (9 banks)
Charlotte
American Trust Co.
Concord
Citizens Bank & Trust Co.
Edenton
Bank of Edenton
Marshall
Citizens Bank
Tryon
Tryon Bank & Trust Co.
Washington
Bank of Washington
Wilmington
Peoples Savings Bank & Trust
Co.
Wilmington Savings & Trust
Co.
Winston-Salem ...Wachovia Bank & Trust Co.
SOUTH CAROLINA (5 banks)
Bishopville
Peoples Bank
Camden
Commercial Bank
Charleston
Carolina Savings Bank
Chester
Commercial Bank
Hartsville
Bank of Hartsville
VIRGINIA (32 banks)
Abingdon
Farmers Exchange Bank, Inc.
Amelia
'. Union Bank & Trust Co.
Blackstone
Citizens Bank & Trust Co.
Chase City
Peoples Bank & Trust Co.
Farmville
Planters Bank & Trust Co.
Front Royal
Bank of Warren
Glade Spring
Bank of Glade Spring
Halifax
Bank of Halifax
Kenbridge
Bank of Lunenburg (Inc.)
Lacrosse
Bank of Lacrosse
Lawrenceville
Farmers & Merchants Bank
Lynchburg
Lynchburg Trust & Savings
Bank
Mathews
Farmers Bank
Montross
Peoples Bank
Odd
Citizens Bank of Poquoson
Petersburg
Petersburg Savings & American Trust Co.
Phoebus
Bank of Phoebus
Portsmouth
Merchants and Farmers Bank
Powhatan
Bank of Powhatan
Richmond
Bank of Commerce & Trusts
Mechanics & Merchants Bank
Southern Bank & Trust Co.
State-Planters Bank & Trust
Co.
Rural Retreat
Peoples Bank
Smithfield
Bank of Smithfield
Merchants & Farmers Bank,
Inc.
South Hill
Citizens Bank, Inc.
Suffolk
American Bank & Trust Co.
Farmers Bank of Nansemond
Tazewell
Farmers Bank of Clinch Valley
Williamsburg
Peninsula Bank & Trust Co.
Winchester
Union Bank
WEST VIRGINIA * (16 banks)
Belington
Belington Bank
Berwind
Berwind Bank
Buffalo
Buffalo Bank
Charleston
Kanawha Banking & Trust Co.
Kanawha Valley Bank
Hurricane
Putnam County Bank
Lewisburg
Greenbrier Valley Bank

DISTRICT NO. 5—Continued
WEST VIRGINIA-continued
Martinsburg
Peoples Trust Co.
Parsons
Tucker County Bank
Petersburg
Potomac Valley Bank
Rainelle
Bank of Rainelle
Romney
Bank of Romney
St. Albans
Bank of St. Albans
St. Marys
Pleasants County Bank
Spencer
Traders Trust & Banking Co.
Summersville
Farmers & Merchants Bank
DISTRICT NO. 6 (51 banks)
ALABAMA (16 banks)
Aliceville Bank & Trust Co.
Birmingham Trust & Savings
Co.
Clanton
Peoples Savings Bank
Clayton
Bank of Commerce
Columbiana
Columbiana Savings Bank
Cullman
Parker Bank & Trust Co.
Dothan
Dothan Bank & Trust Co.
Eutaw
Merchants & Farmers Bank of
Greene County
Guin
Marion County Banking Co.
Marion Junction... Marion Junction State Bank
Oneonta
Citizens Bank
Pine Apple
Bank of Pine Apple
Selma
Peoples Bank & Trust Co.
Thomaston
Planters Bank & Trust Co.
Winfield
Winfield State Bank
York
Bank of York
Aliceville
Birmingham

FLORIDA (4 banks)
Fort Lauderdale... Broward Bank & Trust Co.
Marianna
Citizens State Bank
Ocala
Commercial Bank & Trust Co.
St. Petersburg
Union Trust Co.
GEORGIA (18 banks)
Bank of Adairsville
Trust Co. of Georgia
Georgia Railroad Bank &
Trust Co.
Bainbridge
Citizens Bank & Trust Co.
Blackshear
Blackshear Bank
Brunswick
Brunswick Bank & Trust Co.
Canton
Bank of Canton
Columbus
Columbus Bank & Trust Co.
Merchants & Mechanics Bank
Commerce
Northeastern Banking Co.
Lawrenceville
Brand Banking Co.
Millen
Bank of Millen
Monroe
Farmers Bank
Pelham
Farmers Bank
Savannah
Citizens Bank & Trust Co.
Savannah Bank & Trust Co.
Soperton
Bank of Soperton
Swainsboro
Central Bank
Adairsville
Atlanta
Augusta

LOUISIANA^ (5 banks)
Alexandria
Rapides Bank & Trust Co.
Lake Charles
Lake Charles Bank & Trust Co.
New Orleans
American Bank & Trust Co.
Louisiana Savings Bank &
Trust Co.
Slidell
Bank of Slidell

Forest
Jackson

Carthage
Chattanooga
Greeneville
Hartsville
Knoxville
Nashville

1
Exclusive
 of part of State located in another district.


MISSISSIPPI (2 banks)
Bank of Forest
Deposit Guaranty Bank &
Trust Co.
TENNESSEE (6 banks)
Citizens Bank & Trust Co.
American Trust & Banking Co.
Greene County Bank
Bank of Hartsville
Commercial Bank & Trust Co.
Commerce Union Bank

FEDERAL RESERVE SYSTEM

95

I
DISTRICT NO. 7—Continued
DISTRICT NO. 7 (265 banks)
INDIANA—continued
ILLINOIS i (62 banks)
Argenta
Gerber State Bank
Hartford City . . . . Citizens State Bank
Bloomington
Corn Belt Bank
Hebron
Citizens Bank
Peoples Bank
Indianapolis
Fletcher Trust Co.
Blue Island
State Bank of Blue Island
Jamestown
Citizens State Bank
Bushnell
Farmers & Merchants State
Kokomo
Union Bank & Trust Co.
Bank
Mohawk
Mohawk State Bank
Byron
Rock River Community Bank
Monticello
State & Savings Bank
Chadwick
Farmers State Bank
• Muncie
Merchants Trust Co.
Chicago
Amalgamated Trust & SavPoland
Poland-State Bank
ings Bank
South Bend
First Bank & Trust Co.
Drexel State Bank
Tipton
Farmers Loan & Trust Co.
East Side Trust & Savings Bank
Valparaiso
First State Bank
Harris Trust & Savings Bank
Kaspar-American State Bank
IOWA (35 banks)
Lake Shore Trust & Savings
Algona
Iowa State Bank
Bank
Security State Bank
Lake View Trust & Savings
Avoca
Avoca State Bank
Bank
Main State Bank
Blencoe
Blencoe State Bank
Metropolitan State Bank
Cherokee
Cherokee State Bank
Metropolitan Trust Co.
Churdan
First State Bank
Northern Trust Co.
Davenport
Davenport Bank & Trust Co.
Personal Loan & Savings Bank
Des Moines
Bankers Trust Co.
Sears-Community State Bank
Fairfield
Iowa State Bank & Trust Co.
State Bank of Clearing
Fontanelle
State Savings Bank
Uptown State Bank
Fort Dodge
The State Bank
Cicero
Western State Rank
Fort Madison
Fort Madison Savings Bank
Cowden
State Bank of Cowden
Glenwood
Glenwood State Bank
Elburn
Kane County Bank & Trust
Holstein
Holstein State Bank
Co.
Ida Grove
Ida County State Bank
Lineville
Lineville State Bank
Eureka
State Bank of Eureka
Evanston
Evanston Trust & Savings
Maquoketa
Jackson State Savings Bank
Bank
Mason City
United Home Bank & Trust
!
State Bank & Trust Co.
Co.
Freeport
State Bank of Freeport
Monticello
Monticello State Bank
Fulton
Fulton State Bank
Moorhead
Moorhead State Bank
Galesburg
Farmers & Mechanics Bank
Muscatine
Central State Bank
Muscatine Bank & Trust Co.
Geneva
State Bank of Geneva
Joy
Joy State Bank
Newton
Jasper County Savings Bank
Osage
Home Trust & Savings Bank
Kankakee
City Trust & Savings Bank
Ottumwa
Fidelity Savings Bank
Lanark
Exchange State Bank
Union Bank & Trust Co.
Lostant
Farmers State Bank
McHenry
West McHenry State Bank
Riceville
Riceville State Bank
Metamora
Metamora State Bank
Royal
Home State Bank
Shenandoah
Security Trust & Savings Bank
Milford
Citizens State Bank
Storm Lake
Commercial Trust & Savings
Momence
Parish Bank & Trust Co.
Bank
Morrison
Smith Trust & Savings Bank
Security Trust & Savings Bank
Niantic
State Bank of Niantic
Strawberry Point. Union Bank & Trust Co.
Niles Center
Niles Center State Bank
Templeton . . . .
Templeton Savings Bank
Oak Park
Oak Park Trust & Savings
Washington
Washington State Bank
Bank
Williams
Williams Savings Bank
Petersburg
Schirding State Bank
Piper City
State Bank of Piper City
Riverdale
First Trust & Savings Bank
MICHIGAN 1 (120 banks)
Rochester
Rochester State Bank
Adrian
Adrian State Savings Bank
Rushville
Rushville State Bank
Commercial Savings Bank
Shannon
First State Bank
Lenawee County Savings Bank
Shelbyville
Shelby County State Bank
Albion
Commercial & Savings Bank
Springfield
Springfield Marine Bank
Algonac
Algonac Savings Bank
Thomson
Thomson State Bank
Alpena
Alpena Savings Bank
Tolono
Bank of Tolono
Alto
Farmers State Bank
Citizens Bank
Ann Arbor
Ann Arbor Savings & ComTuscola
Tuscola State Bank
mercial Bank
Walnut
Citizens State Bank
State Savings Bank
Washington
Danforth Banking Co.
Armada
Armada State Bank
Wenona
First State Bank
Bay City
Bay City Bank
Wheaton
Gary-Wheaton Bank
Peoples Commercial & Savings
Wheaton Trust & Savings
Bank
Bank
Belleville
Peoples State Bank
Wilmette
Wilmette State Bank
Berrien Springs ..Berrien Springs State Bank
INDIANA (23 banks)
Big Rapids
Big Rapids Savings Bank
Blanchard
Blanchard State Bank
Angola
Steuben County State Bank
Blissfield
Blissfield State Bank
Auburn
Auburn State Bank
Bronson
Peoples State Bank
Avilla
Community State Bank
Brown City
Brown City Savings Bank
Cambridge City... Wayne Trust Co.
Byron Center
Byron Center State Bank
Columbia City ...Citizens State Bank
Capac
Capac State Savings Bank
Connersville
Fayette Bank & Trust Co.
Cass City
Cass City State Bank
Darlington
Farmers & Merchants State
Pinney State Bank
Bank
Cassopolis
Cass County State Bank
Elkhart
St. Joseph Valley Bank
Charlevoix
Charlevoix County State Bank
Gary
Gary State Bank
Charlotte
Eaton County Savings Bank
Gary Trust & Savings Bank
Chelsea
Chelsea State Bank
Greencastle
First-Citizens Bank & Trust
• Chesaning
Chesaning State Bank
Co.
1
Exclusive
 of part of State located in another district.


96

ANNUAL REPORT OF BOARD OF GOVERNORS

DISTRICT NO. 7—Continued
MICHIGAN—continued
Clare
Citizens State Bank
CJarkston
Clarkston State Bank
Coloma
State Bank of Coloma
Coopersville
Coopersville State Bank
Corunna
Old Corunna State Bank
Croswell
State Bank of Croswell
Davison
Davison State Bank
Detroit
Detroit Bank
Industrial Morris Plan Bank
United Savings Bank
Dundee
Monroe County Bank
Durand
Shiawassee County Bank
Ecorse
Ecorse Savings Bank
Farmington
Farmington State Bank
Fennville
Old State Bank
Fenton
State Savings Bank
Flint
Citizens Commercial & Savings Bank
Genesee County Savings Bank
Merchants & Mechanics Bank
Fountain
Fountain State Bank
Frankenmuth
Frankenmuth State Bank
Fremont
Fremont State Bank
Old State Bank
Gagetown
State Savings Bank
Grand Haven
Grand Haven State Bank
Peoples Savings Bank
Grand Rapids
Old Kent Bank
Grandville
Community State Bank
Greenville
Commercial State Savings
Bank
First State Bank of Greenville
Grosse Pointe
Grosse Pointe Bank
Harbor Springs .. Emmet County State Bank
Hillsdale
Hillsdale State Savings Bank
Holland
Holland State Bank
Peoples State Bank
Holly
First State & Savings Bank
Howell
First State & Savings Bank
Imlay City
Imlay City State Bank
Jackson
Jackson City Bank & Trust
Co.
Jonesville
Grosvenor Savings Bank
Kingston
Kingston State Bank
Lakeview
Bank of Lakeview
Lansing
American State Savings Bank
Bank of Lansing
Lapeer
Lapeer Savings Bank
Lawrence
Home State Bank
Lowell
State Savings Bank
Manchester
Peoples Bank
Union Savings Bank
Manistee
Manistee County
Savings
Bank
Marcellus
G. W. Jones Exchange Bank
Mason
Farmers Bank
Midland
Chemical State Savings Bank
Milan
Peoples State Bank
Milford
Oakland County State Bank
Monroe
Dansard State Bank
Montague
Farmers State Bank
Mount Clemens .. Mount Clemens Savings Bank
Mount Pleasant ..Exchange Savings Bank
Isabella County State Bank
New Baltimore ... Citizens State Savings Bank
New Boston
Peoples State Bank
New Haven
New Haven Savings Bank
North Branch
Pioneer Bank
Onsted
Onsted State Bank
Oxford
Oxford Savings Bank
Petoskey
First State Bank
Pigeon
Pigeon State Bank
Pinconning
Pinconning State Bank
Richmond
Macomb County Savings Bank
Romeo
Romeo Savings Bank
Saginaw
Saginaw State Bank
St. Charles
St. Charles State Bank
St. Clair
Commercial & Savings Bank
St. Johns
State Bank of St. Johns
Saugatuck
Fruit Growers State Bank
Sebewaing
Farmers & Merchants State
Bank
South Haven
Citizens State Bank
First State Bank
Sparta
Sparta State Bank

DISTRICT NO. 7—Continued
MICHIGAN—continued
Spring Lake
Spring Lake State Bank
Springport
Springport State Savings Bank
Traverse City ....First-Peoples State Bank
Traverse City State Bank
Trenton
Trenton State Bank
Vassar
State Bank of Vassar
Wayne
Wayne State Bank
Whitehall
State Bank of Whitehall
Williamston
Peoples State Bank
Wyandotte
Wyandotte Savings Bank
Yale
Yale State Bank
Zeeland
Zeeland State Bank
WISCONSIN 1 (25 banks)
Antigo
Fidelity Savings Bank
Burlington
Bank of Burlington
Chilton
Commercial Bank
Edgerton
Tobacco Exchange Bank
Evansville
Farmers & State Bank
Green Bay
Peoples Trust & Savings Bank
Green Lake
Green Lake State Bank
Kaukauna
Bank of Kaukauna
Manitowoc
Manitowoc Savings Bank
Markesan
Markesan State Bank
Mayville
State Bank of Mayville
Milwaukee
American State Bank
Marshall & Ilsley Bank
West Side Bank
Platteville
State Bank of Platteville
Sauk City
Farmers & Citizens Bank
Sheboygan
Bank of Sheboygan
Citizens State Bank
South Milwaukee.. Home State Bank
Sturgeon Bay
Bank of Sturgeon Bay
Viioqua
State Bank of Viroqua
Waupaca
Farmers State Bank
Waupun
State Bank of Waupun
Wausau
Citizens State Bank
Whitewater
First Citizens State Bank
DISTRICT NO. 8 (78 banks)
ARKANSAS (7 banks)
Batesville
Citizens Bank & Trust Co.
Blytheville
Farmers Bank & Trust Co.
Fordyce
Fordyce Bank & Trust Co.
Little Rock
W. B. Worthen Co., Bankers
Russellville
Bank of Russellville
Peoples Exchange Bank
Waldron
Bank of Waldron
ILLINOIS 1 (15 banks)
Breese
State Bank of Breese
Chester
First State Bank
East St. Louis
Union Trust Co.
Edwardsville
Bank of Edwardsville
Effingham
Effingham State Bank
Eldorado
C. P. Burnett & Sons, Bankers
Hillsboro
Montgomery County Loan &
Trust Co.
Hoyleton
Hoyleton State & Savings
Bank
Jacksonville
Elliott State Bank
Johnston City . . . Johnston City State Bank
Litchfield
Litchfield Bank & Trust Co.
Red Bud
First State Bank
Richview
Rich view State Bank
St. Peter
First State Bank
Steeleville
State Bank of Steeleville
KENTUCKY i (10 banks)
Bardstown
Farmers Bank & Trust Co.
Campbellsville ...Citizens Bank & Trust Co.
Clay .Farmers Bank
Danville
Boyle Bank & Trust Co.
Hartford
Citizens Bank
Hopkinsville
Planters Bank & Trust Co.
Louisville
Kentucky Title Trust Co.
Lincoln Bank & Trust Co.
Louisville Trust Co.
Owensboro
First - Owensboro B a n k &
Trust Co.

1
Exclusive
 of part of State located in another district.


FEDERAL RESERVE SYSTEM
DISTRICT NO. 8—Continued
MISSOURI i (46 banks)
Camdenton
Camden County Bank
Carrollton
Carroll County Trust Co.
Clayton
St. Louis County Bank
Clinton
Union State Bank
Farmington
United Bank
Fulton
Callaway Bank
Glasgow
Glasgow Savings Bank
Hannibal
Farmers & Merchants Bank
& Trust Co.
Lancaster
Schuyler County State Bank
Lebanon
State Savings Bank
Luxemburg (St.
Louis P. 0.)....Lemay Bank & Trust Co.
Maplewood . . . . . . Maplewood Bank & Trust Co.
Peoples Slate Bank
Marshall
Wood & Huston Bank
Memphis
Bank of Memphis
Moberly
City Bank & Trust Co.
Mechanics Bank & Trust Co.
Monroe City
Monroe City Bank
Normandy
Normandy State Bank
Pine Lawn
Pine Lawn Bank & Trust Co.
Sedalia
Sodalia Bank & Trust Co.
St. Louis
Baden Bank
Bremen Bank & Trust Co.
Cass Bank & Trust Co.
Chippewa Trust Co.
Easton-Taylor Tnist Co.
Jefferson Bank & Trust Co.
Jefferson-Gravois Rank
Lindell Trust Co.
Manchester Bank
Manufacturers Bank & Trust
Co.
Mercantile-Commerce Bank &
Trust Co.
Mississippi Valley Trust Co.
Mound City Trust Co.
North St. Louis Trust Co.
Plaza Bank
Southern Commercial & Savings Bank
Southwest Bank
Tower Grove Bank & Trust
Co.
United Bank & Trust Co.
St. Louis County. Gravois Bank
Sweet Springs . . Chemical Bank
Vandalia
Vandalia State Bank
Versailles
Bank of Versailles
Washington
Franklin County Bank
Webster Groves... Webster Groves Trust Co.
DISTRICT NO. 9 (81 banks)
MICHIGAN^ (11 banks)
Escanaba
State Savings Bank
Ewen
State Bank of Ewen
Gladstone
Gladstone State Savings Bank
Iron Mountain .. Commercial Bank
Iron River
Miners' State Bank
L'Anse
Commercial Bank
Menominee
Commercial Bank
Newberry
Newberry State Bank
Sault Ste. Marie.. Central Savings Bank
Sault Savings Bank
South Range
South Range State Bank
MINNESOTA (18 banks)
Caledonia
Sprague State Bank
Cannon Falls
Security State Bank
Chatfield
Root River State Bank
Clinton
Clinton State Bank
Houston
Security State Bank
Lakefield
Farmers State Bank
Madelia
Farmers State Bank
Minneapolis
Fidelity State Bank
Owatonna
Security Bank & Trust Co.
Plainview
Peoples State Bank
Rockville
State Bank of Rockville
Rushmore
First State Bank
St. Cloud
Zapp State Bank
1

Exclusive of part of State located in another dif




97

DISTRICT NO. 9—Continued
MINNESOTA—continued
Springfield
Farmers & Merchants State
Bank
State Bank of Springfield
Wadena
Wadena County State Bank
Welcome
Welcome State Bank
West Concord
Farmers State Bank
MONTANA (25 banks)
Anaconda
Daly Bank & Trust Co.
Belt
Belt Valley Bank
Big Timber
Citizens Bank & Trust Co.
Billings
Security Trust & Savings
Bank
Bozeman
Gallatin Trust & Savings Bank
Security Bank & Trust Co.
Broadus
Powder River Coun.v Bank
Butte
Metals Bank & Trust Co.
Cascade
Stockmens Bank
Choteau
Citizens State Bank
Columbus
Yellowstone Bank
Deer Lodge
Deer Lodge Bank & Trust Co.
Denton
Farmers State Bank
Fromberg
CI arks Fork Valley Bank
Glasgow
Farmers-Stockgrowers Bank
Great Falls
Montana Bank & Trust Co.
Helena
Union Bank & Trust Co.
Laurel
Yellowstone Bank
Libby
First State Bank
Richey
First State Bank
Ronan
Ronan State Bank
Terry
State Bank of Terry
Townsend
State Bank of Townsend
Victor
Farmers State Bank
Worden
Farmers State Bank
SOUTH DAKOTA (23 banks)
Alcester
State Bank of Alcester
Alpena
Bank of Alpena
Arlington
Citizens State Bank
Belle Fourche
Bank of Belle Fourche
Belvidere
Belvidere State Bank
Buffalo
First State Bank
Burke
Burke State Bank
Faith
Farmers State Bank
Flandreau
Farmers State Bank
Freeman
Merchants State Bank
Fulton
Fulton State Bank
Huron
Farmers & Merchants Bank
Madison
Security Bank & Trust Co.
Mcintosh
Security State Bank
Miller
Hand County State Bank
Mitchell
Commercial Trust & Savings
Bank
Mobridge
Citizens Bank
Presho
Farmers & Merchants State
Bank
Sturgis
Bear Butte Valley Bank
Toronto
Bank of Toronto
Vermillion
Citizens Bank
Webster
Security Bank
Woonsocket
Sanborn County Bank
WISCONSIN i (4 banks)
Boyceville
Bank of Boyceville
Glenwood City
First State Bank
Rhinelander
Merchants State Bank
Tomahawk
Bradley Bank
DISTRICT NO. 10 (76 banks)
COLORADO (13 banks)
Brighton
Brighton State Bank
Craig
Moffatt County State Bank
Del Norte
Rio Grande County Bank
Delta
Colorado Bank & Trust Co.
Denver
Central Savings Bank & Trust
Co.
International Trust Co.
Eaton
Eaton Bank
Fort Morgan
Farmers State Bank
Haxtun
Haxtun State Bank
La Junta
Colorado Savings & Trust Co.
Sterling
Commercial Savings Bank
Security State Bank
Yuma
Farmers State Bank

98

ANNUAL REPORT OF BOARD OF GOVERNORS

DISTRICT NO. 10—Continued
KANSAS (21 banks)
Abilene
Citizens Bank
Augusta
Prairie State Bank
Eldorado
Citizens State Bank
Goodland
Goodland State Bank
Great Bend
American State Bank
Hiawatha
Morrill & Janes Bank
Hutchinson
Hutchinson State Bank
Kansas City
Riverview State Bank
Liberal
Citizens'. State Bank
Luray
Peoples Stat© Bank
Ness City
First State Bank
Oakley
Farmers State Bank
Osage City
Citizens State Bank
Pratt
Peoples Bank
Sedan
Sedan State Bank
St. Marys
St. Marys State Bank
Sylvan Grove
Sylvan State Bank
Tonganoxie
First State Bank
Topeka
Fidelity Savings State Bank
Wakefield
Farmers & Merchants State
Bank
Winfield
The State Bank
MISSOURI 1 (10 banks)
Albany
Gentry County Bank
Carthage
Bank of Carthage
Craig
Bank of Craig
Kansas City
Commerce Trust Co.
Merchants Bank
King City
, First State Bank
Lamar
Barton County State Bank
Rich Hill
Security Bank
St. Joseph
Empire Trust Co.
South St. Joseph.. First St. Joseph Stock Yards
Bank
NEBRASKA (13 banks)
Alma
Harlan County Bank
Bancroft
Citizens Bank
Blair
Washington County Bank
Chappeil
Deuel County State Bank
Hartington
Bank of Hartington
Lexington
Farmers State Bank
North Platte
McDonald State Bank
Pawnee City
Citizens State Bank
Scribner
Farmers State Bank
Stromsburg
Stromsburg Bank
Valley
Bank of Valley
Wahoo
Wahoo State Bank
Wallace
Farmers State Bank
NEW MEXICO i (2 banks)
Aztec
Citizens Bank
Taos
First State Bank
OKLAHOMA i (8 banks)
Ada
Oklahoma State Bank
Eldorado
First State Bank
Fairview
Fairview State Bank
Garber
Bank of Garber
Okarche
First Bank of Okarche
Purcell
First State Bank
Stroud
First State Bank
Woodward
Bank of Woodward
WYOMING (9 banks)
Evanston
Stockgrowers Bank
Lusk
Lusk State Bank
Mountain View
Uinta County State Bank
Newcastle
First State Bank
Saratoga
Saratoga State Bank
Sundance
Sundance State Bank
Wheatland
State Bank of Wheatland
Stock Growers Bank
Worland
Farmers State Bank
DISTRICT NO. 11 (63 banks)
ARIZONA^ (1 bank)
Tucson
Southern Arizona Bank &
Trust Co.
LOUISIANA i (2 banks)
Minden
Minden Bank & Trust Co.
Shreveport
Continental-American Bank &
Trust Co.
1

DISTRICT NO. 11—Continued
NEW M E X I C O 1 (3 banks)
Carlsbad
American Bank
Deming
Mimbres Valley Bank
Logan
McFarland Bros. Bank
OKLAHOMA i (1 bank)
Atoka
Atoka State Bank
TEXAS (56 banks)
Bay City
Bay City Bank & Trust Co.
Beaumont
Security State Bank & Trust
Co.
Beeville
State Bank & Trust Co.
Bremond
First State Bank
Brownfield
Brownfield State Bank
Bryan
First State Bank & Trust Co.
Celina
First State Bank
Clarendon
Farmers State Bank
Clifton
Farmers State Bank
Dalhart
Citizens State Bank
Dallas
Liberty State Bank
De Kalb
State Bank of De Kalb
Del Rio
Del Rio Bank & Trust Co.
Dodsonville
First State Bank
East Bernard
Union State Bank
Eden
Eden State Bank
Ferrisl
Farmers & Merchants State
Bank
Forney
Forney State Bank
Franklin
First State Bank
Gatesville
Guaranty Bank & Trust Co.
Gonzales
Gonzales State Bank
Goose Creek
Citizens State Bank & Trust
Co.
Granger
First State Bank
Hamilton
Hamilton Bank & Trust Co.
Houston
Citizens State Bank
Iola
Iola State Bank
Kosse
First State Bank
Ladonia
Farmers & Merchants State
Bank
Llano
Moore State Bank
Loraine
First State Bank
Madisonville
Farmers State Bank
Matador
First State Bank
Mathis
First State Bank
Maypearl
First State Bank
McAllen
City State Bank & Trust Co.
Mount Pleasant... Guaranty Bond State Bank
Pearsall
Security State Bank
Ralls
Security State Bank & Trust
Co.
Richardson
Citizens State Bank
Robert Lee
Robert Lee State Bank
Roscoe
Roscoe State Bank
Rusk
Farmers & Merchants State
Bank & Trust Co.
San Marcos
State Bank & Trust Co.
Schertz
Schertz State Bank
Shamrock
Farmers & Merchants State
Bank
Shiro
Farmers State Bank
Silsbeo
Silsbee State Bank
Sinton
Commercial State Bank
Spearman
First State Bank
Thorndale
Thorndale State Bank
Tomball
Guaranty Bond State Bank
Trent
Home State Bank
Wellington
Wellington State' Bank
Wharton
Security Bank & Trust Co.
Wharton Bank & Trust Co.
Winters
Winters State Bank
DISTRICT NO. 12 (69 banks)
ARIZONA 1 (1 bank)
Buckeye
Buckeye Valley Bank
CALIFORNIA (15 banks)
Carmel
Bank of Carmel
Fairfield
Solano County Bank
Long Beach
Farmers & Merchants Bank
Los Angeles
California Bank
California Trust Co.
Union Bank & Trust Co.

Exclusive of part of State located in another district.




FEDERAL RESERVE SYSTEM
DISTRICT NO. 12—Continued
CALIFORNIA—continued
Newman
Bank of Newman
Oakland
Bank of Commerce
Pasadena
Citizens Commercial Trust &
Savings Bank
First Trust & Savings Bank
Salinas
Monterey County Trust &
Savings Bank
San Francisco
American Trust Co.
Wells Fargo Bank & Union
Trust Co.
San Rafael
Bank of San Rafael
Santa Paula
Citizens State Bank
Aberdeen
Arco
Boise
Hazelton
Kellogg
Malad City
Orofino
Richfield
Soda Springs
Twin Falls

IDAHO (10 banks)
Bank of Aberdeen
Butte County Bank
First Security Bank of Idaho
Hazelton State Bank
First State Bank
J. N. Ireland & Co., Bankers
Bank of Orofino
First State Bank
Largilliere Co., Bankers
Twin Falls Bank & Trust Co.

Elko

NEVADA (1 bank)
Nevada Bank of Commerce

Albany
Beaverton
Dallas
Gold Beach
Halsey
Myrtle Point
Oakland

OREGON (7 banks)
Bank of Albany
First Security Bank
Dallas City Bank
Curry County Bank
Halsey State Bank
Security Bank
E. G. Young & Co. Bank




99

DISTRICT NO. 12—Continued
UTAH (20 banks)
Brigham
State Security Bank
Cedar City
Bank of Southern Utah
Ephraim
Bank of Ephraim
Gunnison
Gunnison Valley Bank
Helper
Helper State Bank
Kaysville
Barnes Banking Co.
Logan
Cache Valley Banking Co.
Nephi
Commercial Bank
Ogden
Commercial Security Bank
Price
Carbon Emery Bank
Provo
Farmers & Merchants Bank
Salina
First State Bank
Salt Lake C i t y . . . . Tracy Loan & Trust Co.
Utah Savings & Trust Co.
Walker Bank & Trust Co.
Spanish Fork
Bank of Spanish Fork
Commercial Bank
Springville
Springville Banking Co.
Vernal
Bank of Vernal
Uintah State Bank
WASHINGTON (15 banks)
Almira
Almira State Bank
Cashmere
Cashmere Valley Bank
Coulee City
Security State Bank
Kelso
Cowlitz Valley Bank
Lacrosse
First State Bank
Pomeroy
Pomeroy State Bank
Pullman
Pullman State Bank
Puyallup
Citizens State Bank
Ritzville
Ritzville State Bank
Rockford
Farmers & Merchants Bank
Seattle
Seattle Trust & Savings Bank
Selah
Selah State Bank
Spokane
Washington Trust Co.
Uniontown
Farmers State Bank
Wilbur
State Bank of Wilbur

100

ANNUAL REPORT OF BOARD OF GOVERNORS

DESCRIPTION OF FEDERAL RESERVE DISTRICTS
Land area Population
(square July 1,1937
miles)
(estimated)

Federal Reserve district

No.
No.
No.
No.
No.
No.
No.
No.
No.
No.
No.
No.

61,345
51,886
36,846
73,424
152,316
248.226
190.513
194,810
414.004
480,438
386,116
683,852

129,257,000

61,345

8,178,000

4,189
29,895
8,039
9,031
1,067
9,124

1,322,000
856,000
4.426,000
510,000
681,000
383,000

51,886

16,756,000

631
3,601

419,000
3,378,000

47,654

Total

8,178,000
16,756,000
8,009,000
11,737,000
12,028,000
12,085,000
18,863,000
10,413,000
5,452,000
8,155,000
7,337,000
10,244,000

2,973,776

1—Boston
2—New York
3—Philadelphia
4—Cleveland
5—Richmond
6—Atlanta
7—Chicago
8—St. Louis
9—Minneapolis
10—Kansas City
11—Dallas
12—San Francisco

12,959,000

FEDERAL RESERVE DISTRICTS
DISTRICT NO. 1—BOSTON
Connecticut (excluding Fairfield County)
Maine
Massachusetts
New Hampshire
,
Rhode Island
Vermont
DISTRICT NO. 2—NEW YORK
Connecticut (Fairfield County)
New Jersey
Counties of—
Bergen
Hunterdon
Essex
Middlesex
Hudson
Monmouth
New York

Morris
Passaic
Somerset

Sussex
Union
Warren

DISTRICT NO. 3—PHILADELPHIA
Delaware
New Jersey
Counties of—
Atlantic
Cape May
Burlington
Cumberland
Camden
Pennsylvania (eastern part)
Counties of—
Adams
Clinton
Bedford
Columbia
Berks
Cumberland
Blair
Dauphin
Bradford
Delaware
Bucks
Elk
Cambria
Franklin
Cameron
Fulton
Carbon
Huntingdon
Center
Juniata
Chester
Lackawanna
Clearfield
Lancaster
DISTRICT NO. 4—CLEVELAND
Kentucky (eastern part)
Counties ofFleming
Bath
Floyd
Bell
Boone
Garrard
Bourbon
Grant
Boyd
Greenup
Bracken
Harlan
Breathitt
Harrison
Campbell
Jackson
Carter
Jessamine
Clark
Johnson
Clay
Kenton




8,009,000
1,965
3,913

30,968

11,737,000
1,395,000

Ocean
Salem

Lebanon
Lehigh
Luzerne
Lycoming
McKean
Mifilin
Monroe
Montgomery
Montour
Northampton
Northumberland
Perry

6,783,000

73,424

Gloucester
Mercer

261,000
965,000

Philadelphia
Pike
Potter
Schuylkill
Snyder
Sullivan
Susquehanna
Tioga
Union
Wayne
Wyoming
York
17,614

Lawrence
Lee
Leslie
Letcher
Lewis
Lincoln
McCreary
Madison
Magoffin
Martin
Mason

Nicholas
Owsley
Pendleton
Perry
Pike
Powell
Pulaski
Robertson
Rockcastle
Rowan
Scott

101

FEDERAL RESERVE SYSTEM
FEDERAL RESERVE DISTRICTS-Continued
Land area
(square
miles)

Federa Reserve district
DISTRICT NO. 4—CLEVELAND—Continued
K e n t u c k y (eastern p a r t )
C o u n t i e s of—-Continued
Knott
Menifee
Elliott
Estill
Knox
Montgomery
Fayette
Laurel
Morgan
Ohio
P e n n s y l v a n i a (western nart,')
C o u n t i e s of—
Allegheny
Crawford
Indiana
Armstrong
Erie
Jefferson
Beaver
Fayette
Lawrence
Butler
Forest
Mercer
Greene
Somerset
Clarion
W e s t Virginia ( n o r t h e r n r>a,rt)
C o u n t i e s of—
Marshall
Tyler
Brooke
Hancock
Ohio
Wetzel

Whitley
Wolfe
Woodford
40,740
13,864

1,206




216,000

152,316 ~ 12,028,000
627,000
62
1,679,000
9,941
3,492,000
48,740
1,875,000
30,495
2,706,000
40,262
1,649,000
22,816
Mingo
Monongalia
Monroe
Morgan
Nicholas
Pendleton
Pleasants
Pocahontas
Preston
Putnam
Raleigh
Randolph
Ritchie

Roane
Summers
Taylor
Tucker
Upshur
Wayne
Webster
Wirt
Wood
Wyoming

DISTRICT NO. 6—ATLA NTA
Florida
Georgia
Louisiana (southern narfi .
P a r i s h e s of—
Aeadia
Evangeline
Allen
Iberia
Ascension
Iberville
Jefferson
Assumption
Jefferson Davis
Avoyelles
Beauregard
Lafayette
Calcasieu
La Fourche
Cameron
Livingston
East
B a t o n Orleans
Rouge
Plaquemines
E a s t Feliciana
P o i n t e Coupee
Mississippi (southern n a r t ) .
C o u n t i e s ofHarrison
Adams
Hinds
Amite
Claiborne
Issaquena
Jackson
Clarke
Copiah
Jasper
Covington
Jefferson
Forrest
Jefferson Davis
Jones
Franklin
George
Kemper
Greene
Lamar
Hancock
Lauderdale
Tennessee (eastern p a r t )
C o u n t i e s ofGiles
Anderson
Bedford
Grainger
Bledsoe
Greene
Grundy
Blount
Bradley
Hamblen
Hamilton
Campbell
Hancock
Cannon
Carter
Hawkins
Cheatham
Hickman
Houston
Claiborne

6,733,000
3,393,000

Venango
Warren
Washington
Westmoreland

DISTRICT NO. 5—RICH]V10ND
District of C o l u m b i a
Maryland
North Carolina
Virginia
W e s t Virginia (southern n a r t )
C o u n t i e s of—
Hardy
Barbour
Harrison
Berkeley
Boone
Jackson
Braxton
Jefferson
Cabell
Kanawha
Calhoun
Lewis
Lincoln
Clay
Logan
Doddridge
Fayette
McDowell
Gilmer
Marion
Grant
Mason
Greenbrier
Mercer
Hampshire
Mineral

Population
July 1, 1937
(estimated)

248^226"
51,279
54,861
58,725
26,891
Rapides
St. B e r n a r d
St. Cha r le s
St. H e l e n a
St. J a m e s
St. J o h n t h e B a p tist
St. L a n d r y
St. M a r t i n
St. M a r y
St. T a m m a n y

Tangipahoa
Terrebonne
Vermilion
Vernon
Washington
W e s t B a t o n
Rouge
W e s t Feliciana

Lawrence
Leake
Lincoln
Madison
Marion
Neshoba
Newton
P e a r l River
Perry
Pike
Rankin

Scott

Sharkey
Simpson
Smith
Stone
Walthall
Warren
Wayne
Wilkinson
Yazoo

McMinn
Macon
Marion
Marshall
Maury
Meigs
Monroe
Montgomery
Moore
Morgan

Scott
Sequatchie
Sevier
Smith
Stewart
Sullivan
Sumner
Trousdale
Unicoi
Union

12,085,000
2,895,000
1,670,000
3,085,000
1,444,000

25,519

969,000

30,951

2,022,000

102

ANNUAL REPORT OF BOARD OF GOVERNORS
FEDERAL RESERVE DISTRICTS—Continued
Land area
(square
miles)

Federal Reserve district
DISTRICT NO. 6—ATLANTA—Continued
Tennessee (eastern part)
Counties of--Continued
Clay
Humphreys
Cocke
Jackson
Coffee •
Jefferson
Cumberland
Johnson
Davidson
Knox
De Kalb
Lawrence
Dickson
Lewis
Fentress
Lincoln
Franklin
Loudon

Overton
Perry
Pickett
Polk
Putnam
Rhea
Roane
Robertson
Rutherford

Van Buren
Warren
Washington
Wayne
White
Williamson
Wilson
190,513

Counties ofAdams
Green Lake
Brown
Iowa
Calumet
Jackson
Clark
Jefferson
Columbia
Juneau
Crawford
Kenosha
Dane
Kewaunee
Dodge
Lafayette




Ripley
Rush
St. Joseph
Shelby
Starke
Steuben
Tippecanoe
Tipton
Union
Vermillion
Vigo
Wabash
Warren
Wayne
Wells
White
Whitley

2,821,000

55,586
40,789

2,552,000
4,512,000

31,983

2,381,000

Rock Island
Sangamon
Schuyler
Shelby
Stark
Stephenson
Tazewell
Vermilion
Warren
Whiteside
Will
Winnebago
Woodford

La Porte
Madison
Marion
Marshall
Miami
Monroe
Montgomery
Morgan
Newton
Noble
Ohio
Owen
Parke
Porter
Pulaski
Putnam
Randolph

6,597,000

26,707

Livingston
Logan
McDonough
McHenry
McLean
Macon
Marshall
Mason
Menard
Mercer
Moultrie
Ogle
Peoria
Piatt
Putnam

18,863,000

35,448

DISTRICT NO. 7.—CHICAGO
Illinois (northern pa rt)
Counties ofBoone
Ford
Bureau
Fulton
Carroll
Grundy
Cass
Hancock
Champaign
Henderson
Christian
Henry
Clark •
Iroquois
Coles
Jo Daviess
Cook
Kane
Cumberland
Kankakee
DeKalb
Kendall
DeWitt
Knox
Douglas
Lake
DuPage
La Salle
Edgar
Lee
Indiana (northern pairt)
Counties ofAdams
Fountain
Allen
Franklin
Bartholomew
Fulton
Benton
Grant
Blackford
Hamilton
Boone
Hancock
Brown
Hendricks
Carroll
Henry
Cass
Howard
Clay
Huntington
Clinton
Jasper
Dearborn
Jay
Decatur
Jennings
DeKalb
Johnson
Delaware
Kosciusko
Elkhart
Lagrange
Fayette
Lake
Iowa
Michigan (southern nart)
Counties ofAlcona
Eaton
Allegan
Emmet
Alpena
Genesee
Antrim
Gladwin
Arenac
Grand Traverse
Barry
Gratiot
Bay
Hillsdale
Benzie
Huron
Berrien
Ingham
Branch
Ionia
Calhoun
Iosco
Cass
Isabella
Charlevoix
Jackson
Cheboygan
Kalamazoo
Clare
Kalkaska
Clinton
Kent
Crawford
Lake

Population
July 1,1937
(estimated)

Lapeer
Leelanau
Lenawee
Livingston
Macomb
Manistee
Mason
Mecosta
Midland
Missaukee
Monroe
Montcalm
Montmorency
Muskegon
Newaygo
Oakland
Oceana

Ogemaw
Osceola
Oscoda
Otsego
Ottawa
Presque Isle
Roscommon
Saginaw
St. Clair
St. Joseph
Sanilac
Shiawassee
Tuscola
Van Buren
Washtenaw
Wayne
Wexford

Marquette
Milwaukee
Monroe
Oconto
Outagamie
Ozaukee
Portage
Racine

Sheboygan
Vernon
Walworth
Washington
Waukesha
Waupaca
Waushara
Winnebago

103

FEDERAL RESERVE SYSTEM
FEDERAL RESERVE DISTRICTS—Continued
Land area
(square
miles)

Federal Reserve district
DISTRICT NO. 7—CHICAGO—Continued
Wisconsin (southern part)
Counties of--Continued
Door
Langlade
Fond du Lac
Manitowoc
Grant
Marathon
Green
Marinette

Richland
Rock
Sauk
Shawano

Wood

DISTRICT NO. 8.—ST. LOUIS
Arkansas
Illinois (southern oart)
Counties o—
f
Adams
Franklin
Alexander
Gallatin
Bond
Greene
Brown
Hamilton
Calhoun
Hardin
Clay
Jackson
Clinton
Jasper
Crawford
Jefferson
Edwards
Jersey
Effingham
Johnson
Fayette
Lawrence
Counties o—
f
Clark
Greene
Crawford
Harrison
Daviess
Jackson
Dubois
Jefferson
Floyd
Knox
Gibson
Lawrence
Kentucky (western parM
Counties ofAdair
Crittenden
Allen
Cumberland
Anderson
Daviess
Ballard
Edmonson
Barren
Franklin
Boyle
Fulton
Breckinridge
Gallatin
Bullitt
Graves
Butler
Grayson
Caldwell
Green
Calloway
Hancock
Carlisle
Hardin
Carroll
Hart
Casey
Henderson
Christian
Henry
Clinton
Hickman
Counties ofAlcorn
De Soto
Attala
Grenada
Benton
Holmes
Bolivar
Humphreys
Calhoun
Itawamba
Carroll
Lafayette
Chickasaw
Lee
Choctaw
Leflore
Clay
Lowndes
Coahoma
Marshall
Missouri (eastern parf)
Counties ofAdair
Douglas
Dunklin
Audrain
Franklin
Barry
Gasconade
Benton
Greene
Bollinger
Boone
Grundy
Butler
Harrison
Caldwell
Henry
Callaway
Hickory
Camden
Howard
Cape Girardeau Howell
Carroll
Iron
Carter
Jefferson
Cedar
Johnson
Chariton
Knox
Christian
Laclede




Population
July 1,1937
(estimated)

194,810

Randolph
Richland
St. Clair
Saline
Scott
Union
Wabash
Washington
Wayne
White
Williamson

Martin
Orange
Perry
Pike
Posey
Scott

Spencer
Sullivan
Switzerland
Vanderburg
Warrick
Washington

Hopkins
Jefferson
Larue
Livingston
Logan
Lyon
McCracken
McLean
Marion
Marshall
Meade
Mercer
Metcalfe
Monroe
Muhlenberg
Nelson

Ohio
Oldham
Owen
Russell
Shelby
Simpson
Spencer
Taylor
Todd
Trigg
Trimble
Union
Warren
Washington
Wayne
Webster

Monroe
Montgomery
Noxubee
Oktibbeha
Panola
Pontotoc
Prentiss
Quitman
Sunflower
Tallahatchie

Reynolds
Ripley
St. Charles
St. Clair
St. Francois
St. Louis
St. Louis City
Ste. Genevieve
Saline
Schuyler
Scotland
Scott
Shannon
Shelby
Stoddard
Stone

9,338

653,000

22,567

1,525,000

20,843

1,054,000

2,981,000

Tate
Tippah
Tishomingo
Tunica
Union
Washington
Webster
Winston
Yalobusha

Maries
Marion
Mercer
Miller
Mississippi
Moniteau
Monroe
Montgomery
Morgan
New Madrid
Oregon
Osage
Ozark
Pemiscot
Perry
Pettis

2,048,000
1,281,000

58,206

Macoupin
Madison
Marion
Massac
Monroe
Montgomery
Morgan
Perry
Pike
Pope
Pulaski

10,413,000

52,525
20,595

104

ANNUAL REPORT OF BOARD OF GOVERNORS
FEDERAL RESERVE DISTRICTS—Continued
Land area
(square
miles)

Federal Reserve district

DISTRICT NO. 8.—ST. LOUIS-Continued.
Missouri (eastern part)
C o u n t i e s of—-Continued
Lafayette
Clark
Cole
Lawrence
Cooper
Lewis
Lincoln
Crawford
Linn
Dade
Livingston
Dallas
Daviess
Macon
Dent
Madison
T e n n e s s e e (western p a r t )
C o u n t i e s of—
Benton
Fayette
Carroll
Gibson
Hardeman
Chester
Crockett
Hardin
Decatur
Haywood
Henderson
Dyer

Phelps
Pike
Polk
Pulaski
Putnam
Ralls
Randolph
Ray

Sullivan
Taney
Texas
Warren
Washington
Wayne
Webster
Wright

Henry
Lake
Lauderdale
McNairy
Madison
Obion

Shelby
Tipton
Weakley

10,736

South Dakota
Wisconsin ( n o r t h e r n nart} _
C o u n t i e s ofDunn
Ashland
Barron
E a u Claire
Bayfield
Florence
Buffalo
Forest
Burnett
Iron
Chippewa
L a Crosse
Douglas
Lincoln

480,438

New Mexico ( n o r t h e r n part}
C o u n t i e s ofMora
Bernalillo
Colfax
Rio A r r i b a
Harding
Sandoval
McKinley
San J u a n
O k l a h o m a (northwestern r>art)
C o u n t i e s ofEllis
Adair
Garfield
Alfalfa
Beaver
Garvin
Beckham
Grady
Grant
Blaine
Greer
Caddo
Canadian
Harmon
Carter
Harper
Cherokee
Haskell
Cimarron
Hughes
Cleveland
Jackson
Comanche
Jefferson
Cotton
Kay
Craig
Kingfisher
Creek
Kiowa
Latimer
Custer
Le Flore
Delaware
Lincoln
Dewey
Wyoming




8,155,000

103,658
81,774
10,521

1,071,000
1,864,000
1,008.000

76,808
48,359

1,364,000
231,000

61,770

Holt
Jackson
Jasper
McDonald
Newton

2,652,000
539,000
706,000
692,000
545,000

2,382,000

97,548

235,000

Menominee
Ontonagon
Schoolcraft

Sawyer
Taylor
Trempealeau
Vilas
Washburn

DISTRICT NO. 10.—KA£JSAS CITY
Colorado
Kansas
Missouri (western part}
Counties ofCass
Andrew
Atchison
Clay
Clinton
Barton
Bates
DeKalb
Buchanan
Gentry

318,000

80,858
146,131
70,183
76,868
23,273
Oneida
Pepin
Pierce
Polk
Price
Rusk
S t . Croix

5,452,000

16,691
Keweenaw
Luce
Mackinac
Marquette

871,000

414,004

DISTRICT NO. 9.—MINI^EAPOLIS
M i c h i g a n ( n o r t h e r n part)
C o u n t i e s ofAlger
Dickinson
Baraga
Gogebic
Chippewa
Houghton
Delta
Iron
Minnesota
Montana

Population
July 1, 1937
(estimated)

Nodaway
Platte
Vernon
Worth
..

San Miguel
Santa Fe
Taos
Union

Valencia

Logan
Love
McClain
Mcintosh
Major
Mayes
Murray
Muskogee
Noble
Nowata
Okfuskee
Oklahoma
Okmulgee
Osage
Ottawa
Pawnee
Payne
Pittsburg

Pontotoc
Pottawatomie
Roger Mills
Rogers
Seminole
Sequoyah
Stephens
Texas
Tillman
Tulsa
Wagoner
Washington
Washita
Woods
Woodward

105

FEDERAL RESERVE SYSTEM
FEDERAL RESERVE DISTRICTS—Continued
Land area
(square
miles)

Federal Reserve district

DISTRICT NO. 11.—DALLAS
Arizona (southeastern part)
Counties of—
Cochise
Greenlee
Graham
Louisiana (northern part)
Parishes of—
Bienville
De Soto
Bossier
East Carroll
Caddo
Franklin
Caldwell
Grant
Catahoula
Jackson
Claiborne
La Salle
Concordia
Lincoln
New Mexico (southern part)
Counties of—
Catron
Eddy
Chaves
Grant
Curry
Guadalupe
De Baca
Hidalgo
Dona Ana
Lea
Oklahoma (southeastern part)
Counties of—
Atoka
Choctaw
Bryan
Coal
Texas

7,337,000

'.

23,412

74,144

7,644




166,000

Sierra
Socorro
Torrance

Johnston
McCurtain

191,000

Tensas
Union
Webster
West Carroll
Winn

Lincoln
Luna
Otero
Quay
Roosevelt

688,000

Santa Cruz

Madison
Morehouse
Natchitoches
Ouachita
Red River
Richland
Sabine

120,000

18,518

Pima

Marshall
Pushmataha
262,398

10,244,000

90,398

Navajo
Pinal

,172,000

683,852

DISTRICT NO. 12.—SAN FRANCISCO
Arizona (northwestern part)
Counties of—
Apache
Maricopa
Coconino
Mohave
Gila
California
Idaho
Nevada
Oregon
Utah
Washington

Population
July 1, 1937
(estimated)

292,000

155,652
83,354
109,821
95,607
82,184
66,836

6,154,000
493,000
101,000
1,027,000
519,000
1,658,000

Yavapai
Yuma

106

ANNUAL REPORT OF BOARD OF GOVERNORS

FEDERAL RESERVE BRANCH TERRITORIES
(December 30, 1939)
-The 10 most westerly counties of New York State, as follows:
Allegany
Wyoming
Chautauqua
Moiiroe
Orleans
Cattaraugus
Livingston
Niagara
Genesee
Erie
CINCINNATI BRANCH (district No. 4).—That part of Kentucky in Federal Reserve district No. 4, and
the following 25 counties in southern Ohio:
Adams
Clermont
Greene
Meigs
Ross
Hamilton
Miami
Clinton
Scioto
Athens
Brown
Darke
Highland
Montgomery
Vinton
Butler
Fayette
Jackson
Pike
Warren
Clark
Gallia
Lawrence
Preble
Washington
PITTSBURGH BRANCH (district No. 4).—Those portions of the States of Pennsylvania and West Virginia
included in Federal Reserve district No. 4.
BALTIMORE BRANCH (district No. 5).—The State of Maryland and the following 30 counties of West
Virginia:
Pendleton
Grant
Lewis
Taylor
Barbour
Berkeley
Hampshire
Marion
Pleasants
Tucker
Braxton
Hardy
Mineral
Preston
Upshur
Calhoun
Harrison
Monongalia
Randolph
Webster
Doddridge
Jackson
Morgan
Ritchie
Wirt
Gilmer
Jefferson
Nicholas
Roane
Wood
CHARLOTTE BRANCH (district No. 5).-—The following counties in the States of North Carolina ai
South Carolina:
BUFFALO BRANCH (district No.

2).-

NORTH CAROLINA

Alexander
Alleghany
Ashe
Avery
Buncombe
Burke
Cabarrus

Caldwell
Catawba
Cherokee
Clay
Cleveland
Gaston
Graham

Haywood
Henderson
Iredell
Jackson
Lincoln
Macon
Madison

McDowell
Mecklenburg
Mitchell
Polk
Rowan
Rutherford
Stanly

Swain
Transylvania
Union
Watauga
Wilkes
Yancey

SOUTH CAROLINA

Newberry
Edgefield
Lancaster
Saluda
Abbeville
Aiken
Fairfield
Laurens
Oconee
Spartanburg
Anderson
Greenville
Lexington
Pickens
Union
Cherokee
Greenwood
McCormick
Richland
York
Chester
BIRMINGHAM BRANCH (district No. 6).—The State of Alabama except the following counties: Mobile,
Baldwin, Russell, Pike, Barbour, Coffee, Dale, Henry, Covington, Geneva, and Houston, and towns
and cities in Lee and Chambers counties located on or south of the Atlanta & West Point Railroad
and the Western Railway of Alabama.
JACKSONVILLE BRANCH (district No. 6).—The entire State of Florida.
NASHVILLE BRANCH (district No. 6).—That part of the State of Tennessee included in Federal Reserve
district No. 6 with the exception of the city of Chattanooga.
NEW ORLEANS BRANCH (district No. 6).—Those parts of the States of Louisiana and Mississippi
located in Federal Reserve district No. 6, and the counties of Mobile and Baldwin in Alabama.
SAVANNAH AGENCY (district No. 6).—Savannah, Ga.
DETROIT BRANCH (district No. 7).—The following 19 counties in the State of Michigan:
Bay
Ingham
Livingston
Saginaw
Tuscola
Jackson
Macomb
Sanilac
Genesee
Washtenaw
Hillsdale
Lapeer
Monroe
St. Clair
Wayne
Huron
Lenawee
Oakland
Shiawassee
LITTLE ROCK BRANCH (district No. 8).—Ete State of Arkansas except the following counties:
Baxter
Craighead
Greene
Mississippi
Sebastian a
Benton*
Crawford
Lawrence
Phillips
Sharp
Boone
Crittenden
Lee
Poinsett
Washington
Carroll
Cross
Madison
Randolph
Woodruff
Clay
Fulton
Marion
St. Francis
and except also the towns of DeValls Bluff (Prairie County), Mena (Polk County), and Newport
(Jackson County).
1
8

Town of GentFy assigned to Little Rock Branch.
Town of Mansfield assigned to Little Rock Branch.
LOUISVILLE BRANCH (district No. 8).—That part of the State of Kentucky included in Federal
Reserve district No. 8, with the exception of the town of Morganfield (Union County), and the following 14 counties in the State of Indiana:
Clark
Floyd
Jefferson
Orange
Switzerland
Crawford
Harrison
Lawrence
Perry
Washington
1
2
Dubois
Jackson
Martin
Scott
1
8

Except the towns of Ferdinand and Holland.
Except the town of Loogootee.




FEDERAL RESERVE SYSTEM

107

MEMPHIS BRANCH (district No. 8).—Those parts of the States of Mississippi and Tennessee included in Federal Reserve district No. 8, with the exception of Union City (Obion County), Tennessee and Paris (Henry County), Tennessee, and the following 10 counties in the State of Arkansas:
Craighead
Cross
Lee
Phillips
St. Francis
Crittenden
Lawrence
Mississippi
Poinsett
Woodruff
also the town of DeValls Bluff (Prairie County), Arkansas.
HELENA BRANCH (district No. 9).—The entire State of Montana.
DBNVER BRANCH (district No. 10).—The entire State of Colorado and that part of the State of New
Mexico included in Federal Reserve district No. 10.
OKLAHOMA CITY BRANCH (district No. 10).—That part of the State of Oklahoma located in Federal
Reserve district No. 10.
OMAHA BRANCH (district No. 10).—The entire States of Nebraska and Wyoming.
EL PASO BRANCH (district No. 11).—That part of the States of Arizona and New Mexico located in
Federal Reserve district No. 11, and the following 14 counties in the State of Texas:
Andrews
Ector
Jeff Davis
Midland
Ward
Crane
El Paso
Loving
Pecos
Winkler
Culberson
Hudspeth
Martin
Reeves
HOUSTON BRANCH (district No. 11).—The following 43 counties in the southeastern part of the State of
Texas:
Anderson
Cherokee
Jackson
Shelby
Nacogdoches
Angelina
Jasper
Colorado
Newton
Trinity
Austin
Jefferson
Fayette
Orange
Tyler
Bastrop
Fort Bend
Lavaca
Polk
Victoria
Brazoria
Galveston
Lee
Refugio
Walker
Brazos
Grimes
Liberty
Sabine
Waller
Burleson
Hardin
Madison
San Augustine
Washington
Calhoun
Harris
Matagorda
San Jacinto
Wharton
Chambers
Houston
Montgomery
es in the State of Texas:
SAN ANTONIO BRANCH (district No. 11).—The following 52 c
Starr
Aransas
De Witt
Jim Hogg
Llano
Atascosa
Dimmit
Jim Wells
Live Oak
Terrell
Bandera
Duval
Karnes
Mason
Travis
Bee
Edwards
Kendall
Maverick
Uvalde
Bexar
Frio
Kenedy
McMullen
Val Verde
Blanco
Gillespie
Kerr
Medina
Webb
Brewster
Goliad
Kimble
Nueces
Willacy
Brooks
Gonzales
Kinney
Presidio
Wilson
Caldwell
Guadalupe
Kleberg
Real
Zapata
Cameron
Hays
La Salle
San Patricio
Zavalla
Comal
Hidalgo
Los ANGELES BRANCH (district No. 12).—That part of the State of Arizona located in Federal Reserve
district No. 12, and the following counties in California:
Imperial
Los Angeles
Riverside
San Diego
Ventura
Inyo
Orange
San Bernardino
Santa Barbara
PORTLAND BRANCH (district No. 12).—The entire State of Oregon, and the town of Ilwaco and the
following nine counties in the State of Washington:
Asotin
Columbia
Garfield
Skamania
Walla Walla
Clark
Cowlitz
Klickitat
Wahkiakum
Also, the following counties in the State of Idaho:
Idaho
Latah
Nez Perce
Boundary
Benewah
Kootenai
Lewis
Shoshone
Clearwater
Bonner
SALT LAKE CITY BRANCH (district No. 12). -The entire State of Utah and the following counties in
Idaho and Nevada:
IDAHO

Ada
Adams
Bannock
Bear Lake
Bingham
Blaine
Boise

Bonneville
Butte
Camas
Canyon
Caribou
Cassia
Clark

Custer
Elmore
Franklin
Fremont
Gem
Gooding
Jefferson

Jerome
Lemhi
Lincoln
Madison
Minidoka
Oneida
Owyhee

Payette
Power
Teton
Twin Falls
Valley
Washington

NBVADA

Lincoln
Elko
White Pine
Clark
SEATTLE BRANCH (district No. 12).—The entire State of Washington except the town of Ilwaco and
the following nine counties which are affiliated with the Portland Branch:
Asotin
Columbia
Garfield
Skamania
Walla Walla
Clark
Cowlitz
Klickitat
Wahikiakum




FEDERAL RESERVE DISTRICTS

^mmm
- H M

•
O

BOUNDARIES OF FEDERAL RESERVE DISTRICTS
BOUNDARIES OF FEDERAL RESERVE BRANCH TERRITORIES
{APPROXIMATE IN THE ST. LOUIS DISTRICT)
FEDERAL RESERVE BANK CITIES
FEDERAL RESERVE BRANCH CITIES
FEDERAL RESERVE BANK AGENCY




INDEX
Acceptances:
Page
Buying rates
' 46
Member bank holdings, December 30, 1939
50
Adjusted service certificates:
Policy action of Board of Governors on rediscounting of
60
Regulation G of Board of Governors repealed
23
Assets and liabilities. (See Condition statements.)
Bank credit. (See Credit, Bank.)
Bank directorates, Interlocking:
Federal Advisory Council recommendations
75
President's veto of S. 2150
22
Regulation L :
Amendments
24
Policy action of Board of Governors
63
Bank examinations:
Report on banks examined
25
Bank failures
54
Bank mergers
54
Bank premises:
Member banks, December 30, 1939
51
Bankers' acceptances. (See Acceptances.)
Banking and financial legislation:
Federal Reserve membership requirement for State-insured banks repealed. .
22
Federal Reserve notes, Direct obligations of United States as collateral for,
until June 30, 1941
22
Interlocking bank directorates bill vetoed by President
22
Loans to executive officers of member banks extended
22
Banking developments in 1939, Discussion of
13-15
Banking inquiry, Wagner resolution for
2
Banking offices:
Number of, 1933-1939
53
Banking structure:
Discussion of changes in
15
Bankruptcy:
Federal Advisory Council recommendations on amendments to Chandler
Act
76
Banks:
Branches:
Number of:
1933-1939 ..
53
1939, Analysis of changes in
54
Discussion of changes in 1939
15
Consolidations, absorptions, etc
54
Loans to, by member banks:
December 30, 1939
50
Number of:
1933-1939
53
1939, Analysis of changes in
54
Discussion of changes in 1939
15
Suspensions
54
(See also Federal Reserve banks; National member banks; Nonmember
banks; State banks; State member banks.)
Bills:
Bought in open market by Federal Reserve banks:
All banks combined:
1918-1939, E n d of year
figures
52
1939, End of month
figures
52
Each bank, end of year
figures
34
Earnings on:
Each bank
40
Volume of operations.. ,
,
39
109



110

INDEX

Bills—Continued.
Page
Discounted by Federal Reserve banks:
All banks combined:
1918-1939, End of year
figures
52
1939, End of month figures
52
December 30, 1939
32
Each bank, end of year figures
34
Earnings on:
Each bank
40
Volume of operations
39
Board of Governors of Federal Reserve System:
Currie, Lauchlin B., appointed Administrative Assistant to President
28
Expenses
28,44,56
Members and officers
81
Policy actions:
Advances by Federal Reserve banks on Government obligations
64
Regulation F . Trust powers of national banks
65
Regulation G. Noncash collections
66
Regulation G. Rediscount of notes secured by adjusted service certificates
60
Regulation H.. Membership of State banks
65
Regulation J. Check clearing and collection
62
Regulation L. Interlocking bank directorates
63
Regulation O. Loans to executive officers of member banks
61
Regulation T. Margin requirements for brokers
60
Press statements:
Advances by Federal Reserve banks on Government obligations
64
Check clearing and collection
63
Loans to executive officers of member banks
62
Noncash collections
,.
66
Receipts and disbursements
44
Bonds:
Prices:
Discussion of
4-9
United States Government. (See United States Government securities.)
Yields:
Chart
7
Monthly and yearly figures
56
Branch banks:
Foreign branches of member banks
27
Number of:
1933-1939
53
1939, Analysis of changes in
54
Discussion of changes in 1939
15
Brokers and dealers in securities:
Loans to, by member banks:
December 30, 1939
50
Business conditions, Discussion of
15-19
Canada:
Foreign exchange restrictions
12
Capital:
Federal Reserve banks:
All banks combined:
December 30, 1939
33
Each bank, end of year
figures
34
Member banks:
December 30, 1939
49, 51
Capital movements to United States:
Prewar
11
First months of war
12
Central reserve city member banks:
Assets and liabilities, December 30, 1939
48
Classification of loans, investments, real estate and capital:
December 30, 1939
50
Chandler Act:
Federal Advisoiy Council recommendations on amendments to
76



INDEX

111

Charts:
P»*e
Bond yields, excess reserves, and bank deposits
7
Member banks in 101 leading cities
14
Open-market operations and Treasury bond prices, August-December, 1939
8
Selected business series
16
United States Government obligations held by Federal Reserve b a n k s . . . .
10
Check clearing and collection:
Par list, Number of banks on:
Discussion of
21
Table
55
Regulation J :
Policy action of Board of Governors
,62
Press statement of Board of Governors
63
Revision
22
Volume of operations at Federal Reserve banks
'
39
Closed banks
54
Coins received and counted by Federal Reserve banks
39
Commercial loans:
Chart .
14
#
Discussion of increase in
14
Commercial paper:
Discount rates, open market
56
Member bank holdings:
December 30, 1939
50
Commitment rates:
Federal Reserve banks
46
Commodity prices. (See Prices.)
Condition statements:
Federal Reserve Banks:
All banks combined, December 30, 1939
32
Each bank, end of year figures
34
Member banks:
December 30, 1939
48, 50
Consolidations, absorptions, etc., of banks
54
Construction activity, Discussion of
17,18
Construction contracts awarded:
Indexes of value of
57
Corporate trusteeships:
Federal Advisory Council recommendations
75
Corporations, Foreign banking. (See Foreign banking corporations.)
Country member banks:
Assets and liabilities, December 30, 1939
48
Classification of loans, investments, real estate, and capital:
December 30, 1939
50
Credit, Bank:
Federal Reserve:
1918-1939, End of year
figures
52
1939, End of month
figures
52
Currency:
Circulation
52
Received and counted by Federal Reserve banks
39
Currie, Lauchlin B., appointed Administrative Assistant to President
28
Department store sales (value) index
57
Deposits:
All banks in United States:
Chart
7
Discussion of growth in
13
Federal Reserve banks:
All banks combined:
December 30, 1939
33
Each bank, end of year
figures
34
Insurance of:
Federal Reserve membership requirement for State banks repealed. . .
22
Member banks:
December 30, 1939
48



112

INDEX

Deposits—Continued.
Nonmember deposits in Federal Reserve banks:
1918-1939, E n d of year
figures
1939, E n d of month figures
Reserves required for member banks
Directorates, Interlocking. (See Bank directorates, Interlocking.)
Discount rates:
Federal Reserve banks
Discounts and advances:
Federal Reserve bank advances on Government obligations:
Policy actions by Board of Governors
Federal Reserve banks for member banks:
Policy action of Board of Governors on. repeal of Regulation G
Regulation G repealed
Dividends:
Federal Reserve Banks
Member banks
Durable goods production index
Earmarked gold. (See Gold: Earmarked.)
Earnings and expenses:
Federal Reserve banks:
All banks combined
Discussion of
Each bank
Easy money policy:
Federal Advisory Council recommendations:
February 14, 1939.
June 6, 1939
October 9, 1939
November 20, 1939
Edge Act corporations:
Examination of
List of
Employment, Factory:
Indexes
England:
War controls of foreign exchange, foreign assets
Examinations. (See Bank examinations.)
Executive officers of member banks:
Loans t o :
Public act, amended, extending period to June 16, 1944 . . .
Regulation O, amended:
Definition of "Executive Officer" changed
Policy action of Board of Governors
Press statement of Board of Governors
Expenses:
Board of Governors of Federal Reserve System
Federal Reserve banks
Exports and imports of United States:
Prewar
War effects on
Factory employment indexes
Failures, Bank
v
Federal Advisory Council:
Meetings
Members and officers
Recommendations to Board of Governors:
February 14, 1939, Easy money policy
February 14, 1939, Interlocking directorates
February 14, 1939, Corporate trusteeships (S. 477)
February 14, 1939, Chandler Act amendments
June 6, 1939, Easy money policy
June 6, 1939, Mead Bill (S. 2343)
October 9, 1939, Easy money policy
November 20, 1939, Easy money policy



Pa

£e
52
52
47
46
64
60
23

20,40, 42
49
57

42
19-21
40
75
77
80
80
25
27
57
12

22
23
61
62
28, 44
40, 42
11
12
57
54
28
82
75
75
75
76
77
78
80
80

INDEX

113

Federal Deposit Insurance Corporation:
Page
Federal Reserve membership requirement for State-insured banks repealed. .
22
Membership changes
54
Federal Open Market Committee:
Discussion of policies
2-10
Meetings
28
Members and officers
81
Policy actions
67-74
Press statements:
December 30, 1938, Liquidation of Treasury bills
3
June 30, 1939, Liquidation of Treasury bills
4
Federal Reserve Act:
Amendments, 76th Congress:
Direct obligations of United States as collateral for Federal Reserve
notes until June 30, 1941
22
Federal Reserve membership requirement for State-insured banks repealed
22
Loans to executive officers of member banks extended
22
Federal Reserve banks:
Assessment for expenses of Board of Governors
40
Branches:
Directors, List of
85-90
Chairmen and Deputy Chairmen
83
Directors, List of
85-90
Dividends paid:
All banks combined
42
Each bank
40
Earnings and expenses:
All banks combined
42
Discussion of
19-21
Each bank
40
Employees, number and salaries
43
Examination of
25
Officers and employees:
Number and salaries of
43
Senior officers, List of
84
Presidents and Vice Presidents, List of
84
Profit and loss account
41
Retirement system contributions
40
Salaries of officers and employees
40,43
Volume of operations
39
Federal Reserve Branch banks. (See Federal Reserve banks: Branches.)
Federal Reserve districts:
Area, square miles
100-105
Branch territories:
Counties comprising
106-107
Map showing outline
10S
Population
100-105
Federal Reserve notes:
Circulation
34
Collateral security:
Direct obligations of United States may be used as, until June 30, 1941. .
22
End of year figures
34
Issued
34
Redemption fund:
All banks combined:
December 30, 1939
32
Each bank, end of year figures
34
Federal Reserve policy:
Discussion of
, . 2-10
Federal Reserve System:
Membership:
Changes in
15, 52
State bank and trust company members
91-99



114

INDEX

Federal Reserve System—Continued.
Page
State bank membership:
Membership requirement for State insured banks r e p e a l e d . . . . . . . .
22
Regulation H :
Policy action of Board of Governors
65
Revision
24
Fiduciary powers of national banks. (See Trust powers of national banks.)
Financial legislation. (See Banking and financial legislation.)
Foreign banking corporations:
Examination of
25
List of
27
Foreign banks:
Central banks:
Credits to, by Federal Reserve banks
22
Deposits of, held by Federal Reserve banks:
All banks combined:
December 30, 1939
33
. Each bank, end of year figures
34
Foreign exchange:
Restrictions in England, France and Canada
12
Foreign trade of United States:
Prewar
11
War effects on
"!
12
France:
War controls of foreign exchange
12
Franchise tax paid by Federal Reserve banks to Government, 1917-1932
42
Freight-car loadings:
Indexes
,.
57
Gold:
Earmarked for foreign account
11
Foreign gold acquired by United States
10-13
Movement to United States, Discussion of
1,10-13
Stock, Monetary in United States:
1918-1939, End of year
figures
52
1939, End of month figures
52
Discussion of
1,13
Gold certificates:
Federal Reserve bank holdings:
All banks combined, December 30, 1939
32
Each bank, end of year
figures
34
Government bonds. (See United States Government securities.)
Holding company affiliates:
Permits granted
26
Hungary, National Bank of:
Loan from Federal Reserve banks reduced
22
Income payments:
Chart
16
Discussion of
17,18
Indexes
57
Industrial advances of Federal Reserve banks:
All banks combined, December 30, 1939
32
Commitments
34
Each bank, end of year
figures
34
Earnings on
40
Rates
46
Volume of operations
39
Industrial credit:
Federal Advisory Council recommendations on S. 2343
78
Industrial production. (See Production, Industrial.)
Insurance of deposits:
Federal Reserve membership requirement for State banks r e p e a l e d . . . .
22
Interdistrict collection system:
Membership in:
Discussion of
21
Table
55
Volume of operations at Federal Reserve banks
39



INDEX

115

Interest rates:
Page
Federal Reserve banks
46
Open market, in New York City
56
Time deposits
47
United States Government securities
38
Interlocking bank directorates. (See Bank directorates, Interlocking.)
Inventories, Discussion of
16
Investments:
Member banks:
December 30, 1939
50
Laws and legislation. (See Banking and financial legislation.)
Liabilities. {See Condition statements.)
Loans:
Brokers
50
Commercial:
Discussion of increase in
14
Executive officers of member banks:
Public act extending period
22
Industrial:
Federal Advisory Council recommendations on S. 2343
78
(See also Industrial advances of Federal Reserve banks.)
Real estate
50
Security
50
Total for member banks:
December 30, 1939
50
Loans and investments:
Member banks:
December 30, 1939
48,50
Margin requirements:
Brokers and dealers in securities. Regulation T :
Agreements of nonmember banks under Section 8(a) of Securities
Exchange Act of 1934
28
Cash transactions. (Amendment.)
23
Policy action of Board of Governors
60
Mead Bill (S. 2343):
Federal Advisory Council recommendations
78
Member banks:
Bills discounted for. (See Bills, Discounted by Federal Reserve banks.)
Branches, Foreign
27
Condition statements
48, 50
Deposits. (See Deposits.)
Loans and investments. (See Loans and investments.)
National banks. (See National member banks.)
Reserves. (See Reserves.)
State banks. (See State member banks.)
Suspensions. (See Banks: Suspensions.)
Merchandise exports of United States:
Prewar
11
War effects on
12
Minerals production index
57
Monetary gold stock. (See Gold: Stock, Monetary.)
Monetary legislation. (See Banking and financial legislation.)
Monetary policy, Wagner resolution for hearings on
2
Money in circulation:
1918-1939, E n d of year figures
52
1939, End of month figures
52
Money rates:
Open market in New York C i t y . . . .
56
Mutual savings banks:
Banking offices, 1933-1939...
53
Branches:
1933-1939
53
1939, Analysis of changes in
54
Number of:
1933-1939
53
1939, Analysis of changes in
54



116

INDEX

Pa e
National income. (See Income payments.)
s
National member banks:
Assets and liabilities:
December 30, 1939
48
Banking offices, 1933-1939
53
Branches:
Number of:
1933-1939
53
1939, Analysis of changes in
54
Classification of loans, investments, real estate, and capital:
December 30, 1939
50
Number of:
1933-1939
53
1939, Analysis of changes in
54
Trust powers. (See Trust powers of national banks.)
Noncash collections:
Regulation G :
New regulation issued by Board of Governors
24
Policy action of Board of Governors
66
Press statement of Board of Governors
66
Nondurable goods production index
57
Nonmember banks:
Deposits of, held by Federal Reserve banks:
1918-1939, End of year figures
52
1939, E n d of month
figures
52
Insured:
Banking offices, 1933-1939
53
Branches:
1933-1939
53
1939, Analysis of changes in
54
Number of:
1933-1939
53
1939, Analysis of changes in
54
Uninsured:
Banking offices, 1933-1939
53
Branches:
1933-1939
53
1939, Analysis of changes in
54
Number of:
1933-1939
53
1939, Analysis of changes in
54
Non-par banks:
Discussion of
21
Number of
55
Number of banks. (See Banks: Number of.)
Open Market Committee. (See Federal Open Market Committee.)
Open-market operations:
Chart
8
Discussion of
2-10
Federal Open Market Committee policy actions
67-74
Flexible open-market portfolio
2,9
Long-term obligations, Increase in holdings of
9
Treasury bills, Liquidation of
3
P a r list:
Number of banks on:
Discussion of
21
Table
55
Payrolls, Factory:
Index
57
Policy actions. (See Board of Governors of Federal Reserve System: Policy
actions; Federal Open Market Committee: Policy actions.)




INDEX

117

Prices:
Page
Wholesale commodity:
Chart
16
Discussion of
17,18
Index
57
Private banks:
Banking offices, 1933-1939
.
53
Branches:
1933-1939
53
1939, Analysis of changes in
54
Number of:
1933-1939
53
1939, Analysis of changes in
54
Production, Industrial:
Chart
16
Discussion of
17,18
Indexes
57
Real estate:
Loans on, by member banks:
December 30, 1939
,
50
Member bank holdings:
December 30, 1939
51
Redemption fund, Federal Reserve notes. (See Federal Reserve notes: Redemption fund.)
Reserve bank credit. (See Credit, Bank.)
Regulations of Board of Governors:
Regulation F . Trust powers of national banks:
Amendment
24
Policy action of Board
65
Regulation G. Noncash collections:
New regulation
24
Policy action of Board
66
Press statement of Board
66
Regulation G. Rediscount of notes secured by adjusted service certificates:
Policy action of Board of Governors on repeal of
60
Regulation repealed
23
Regulation H. Membership of State banks:
Policy action of Board
65
Revised
24
Regulation J. Check clearing and collection:
Policy action of Board
62
Press statement of Board
63
Revised
24
Regulation L. Interlocking bank directorates:
Amendments
24
Policy action of Board
63
Regulation O. Executive officers of member banks:
Amendment. Change in definition of "Executive Officer". . . .
23
Regulation O. Loans to executive officers of member banks:
Policy action of Board
61
Press statement of Board
62
Regulation T. Margin requirements for brokers:
Agreements of nonmember banks under Section 8(a) of Securities
Exchange Act of 1934
28
Amendment
23
Policy action of Board
60
Reserve city member banks:
Assets and liabilities:
December 30, 1939
48
Classification of loans, investments, real estate and capital:
December 30, 1939.
50
Reserve requirements for member banks
47
Reserves:
Federal Reserve banks:
All banks combined, December 30, 1939
33
Each bank, end of year
figures
34



118

INDEX

Reserves—Continued.
Page
Member banks:
Account in Federal Reserve banks:
All banks combined, December 30, 1939
33
Each bank, end of year figures
34
Chart
14
Discussion of growth in
13
Excess:
1918-1939, End of year
figures
52
1939, E n d of month figures
52
Chart
7
Discussion of
13
Total:
1918-1939, End of year
figures
52
1939, E n d of month
figures
52
Salaries:
Federal Reserve banks
40,43
Savings deposits:
Interest rate on
47
Securities:
Loans on, by member banks:
December 30, 1939
50
United States Government. (See United States Government securities.)
Securities Exchange Act of 1934:
Agreements of nonmember banks under
28
Short-term balances in United States:
Foreign holdings reduced
12
State banks:
Federal Reserve membership requirement for State-insured banks repealed. .
22
State member banks:
Assets and liabilities:
December 30, 1939
48
Banking offices, 1933-1939
53
Branches:
Number of:
1933-1939 ..
53
1939, Analysis of changes in
54
Classification of loans, investments, real estate, and capital:
December 30, 1939
50
Examinations of
25
List of, December 30, 1939
91-99
Number of:
1933-1939
53
1939, Analysis of changes in
54
Regulation H :
Policy action of Board of Governors
65
Revision
24
States and political subdivisions:
Obligations of, owned by member banks:
December 30, 1939
51
Stock prices:
Chart
16
Discussion of
17,18
Table
56
Surplus:
Federal Reserve banks
40, 42
Member banks
49
Suspensions, Bank
54
Treasury cash and deposits with Federal Reserve banks. (See United States
Government deposits: Federal Reserve banks.)
Treasury currency outstanding
52
Trust company member of Federal Reserve System
91-99
Trust indentures:
Federal Advisory Council recommendations on S. 477
75



INDEX

119

Trust powers of national banks:
Page
Permits granted
25
Regulation F :
Amended
24
Policy action of Board of Governors
65
United States Government deposits:
Federal Reserve banks:
All banks combined:
1918-1939, End of year figures
,
52
1939, E n d of month figures
52
December 30, 1939
33
Each bank, end of year
figures
34
United States Government securities:
Bank holdings of Government securities, Discussion of
14
Bonds:
Chart of open-market operations and Treasury bond prices, AugustDecember, 1939
8
Yields:
Chart
7
Table
56
Collateral security for Federal Reserve notes until June 30, 1941
22
Federal Open Market Committee policy actions on
67-74
Federal Reserve bank holdings:
All banks combined:
1918-1939, End of year
figures
52
December 31, 1937, 1938 and 1939, in detail
38
1939, End of month
figures
52
December 30, 1939
32
Chart
10
Each bank, end of year
figures
34
Earnings on
19,40
Maturity distribution:
Discussion of
9
Interest rate on
38
Member bank holdings:
December 30, 1939
48, 50
Chart
14
Open-market operations
2-10
Policy actions of Board of Governors on advances on
64
Treasury bills:
Discount rates on
56
Federal Open Market Committee statements on liquidation of
3-4
Treasury notes:
Yields
53
Volume handled by Federal Reserve banks
39
United States Treasurer:
General account on deposit in Federal Reserve banks. (See United States
Government deposits: Federal Reserve banks.)
Wagner resolution on monetary and banking policy
2
War:
Bond prices at outbreak of war
4-7
Capital movements to United States
10-12
Foreign exchange restrictions
12
Foreign trade of United States affected by war
12
Gold acquired abroad by United States
12-13
Industrial production of U. S. prior and subsequent to outbreak of war. .. . 17,18
Open-market operations at outbreak of war
4-7
Short-term balances in U. S. held by England, France, and Canada reduced
12
Wholesale commodity prices. (See Prices: Wholesale commodity.)





Federal Reserve Bank of St. Louis, One Federal Reserve Bank Plaza, St. Louis, MO 63102