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FEDERAL RESERVE BANK OF NEW YORK ["Circular No. 586*1 Accounting Department [_ January 19, 1924.J Ninth Annual Statement To the Stockholders of the Federal Reserve Bank of New York: We hand you herewith a condensed statement of the condition of this bank at the close of its fiscal year, December 31, 1923, and of the Profit and Loss account for that year, showing the disposition of net profits. For convenient comparison, the relative items for the previous year, 1922, are also shown. Supplementing the Profit and Loss account is a statement showing the size and approximate cost of the various operations conducted by the bank in 1923. We trust that you will find these various statements of interest, pending receipt of the more extended report of the year's operations contained in the report of the Chairman to the Federal Reserve Board, now in process of publication, a copy of which we shall send you shortly. Very truly yours, BENJ. STRONG, Governor. Statement of Condition RESOURCES Dec. 31, 1923 Dec. 31, 1922 the collateral deposited by the bank when it obtains Federal Reserve notes. This gold is lodged partly in the vaults of the bank and partly with the Treasurer of the United States $583,625,240.61 $658,970,228.28 GOLD REDEMPTION FUND in the hands of the Treasurer of the United States to be used to redeem such Federal Reserve notes as are presented to the Treasury for redemption 9,441,006.21 10,308,820.39 168,615,033.36 118,126,581.76 109,813,734.55 169,378,439.83 24,437,091.00 31,313,929.70 $895,932,105.73 $988,097,999.96 C A S H R E S E R V E S held by this bank against its deposits and note circulation: GOLD HELD BY THE FEDERAL RESERVE AGENT as part of GOLD AND GOLD CERTIFICATES in vault GOLD IN THE GOLD SETTLEMENT FUND lodged with the Treasurer of the United States for the purpose of settling current transactions between Federal Reserve districts LEGAL T E N D E R NOTES, SILVER, AND SILVER CERTIFICATES in the vaults of the bank (available as reserve only against deposits) TOTAL CASH RESERVES NON-RESERVE CASH consisting of National Bank Notes, Federal Reserve Bank Notes and minor coin (included in 1922 largely under checks and other items in process of collection) $11,845,810.23 LOANS AND INVESTMENTS LOANS TO M E M B E R B A N K S : $136,174,500.00 $168,235,591.11 28,360,300.73 16,053,362.30 93,151,232.70 60,863,602.89 46,755,950.00 167,252,450.00 $304,441,983.43 $412,405,006.30 BANK PREMISES $14,671,614.78 $10,238,178.58 CHECKS AND OTHER ITEMS IN PROCESS OF COLLECTION. . . . 115,064,470.49 134,303,106.41 ALL OTHER MISCELLANEOUS RESOURCES 1,067,449.28 1,892,589.25 TOTAL MISCELLANEOUS RESOURCES $130,803,534.55 $146,433,874.24 On the security of obligations of the United States By the discount of commercial or agricultural acceptances paper or ACCEPTANCES bought in the open market UNITED STATES GOVERNMENT bonds, notes, and certificates of indebtedness TOTAL LOANS AND INVESTMENTS (or Earning Assets). MISCELLANEOUS RESOURCES TOTAL RESOURCES $1,343,023,433.94 $1,546,936,880.50 Federal Reserve Bank of New York L I A B I L I T I E S Dec. 31, 1923 Dec. 31, 1922 $420,371,240.00 $597,071,293.50 $420,371,240.00 $597,071,293.50 $712,857,792.81 $749,005,902.75 9,562,383.00 517,656.11 12,405,744.27 11,439,182.74 $734,825,920.08 $760,962,741.60 $95,341,849.44 $98,100,885.92 3,116,157.21 2,313,986.23 $98,458,006.65 $100,414,872.15 CAPITAL PAID I N , equal to 3 per cent, of the capital and surplus of member banks $29,439,300.00 $28,688,450.00 SURPLUS—That portion of accumulated net earnings which the bank is legally permitted to retain 59,928,967.21 59,799,523.25 $89,368,267.21 $88,487,973.25 CURRENCY IN CIRCULATION FEDERAL R E S E R V E N O T E S in actual circulation, payable on demand. These notes are secured in full by gold and discounted and purchased paper TOTAL CURRENCY IN CIRCULATION DEPOSITS RESERVE DEPOSITS maintained by member banks as legal reserves against the deposits of their customers UNITED STATES GOVERNMENT D E P O S I T S carried at the Reserve Bank for current requirements of the Treasury OTHER DEPOSITS including foreign non-member banks, etc deposits, deposits of TOTAL DEPOSITS MISCELLANEOUS LIABILITIES D E F E R R E D ITEMS, composed mostly of uncollected checks on banks in all parts of the country. Such items are credited as deposits after the average time needed to collect them elapses, ranging from 1 to 8 days A L L O T H E R MISCELLANEOUS LIABILITIES TOTAL MISCELLANEOUS LIABILITIES CAPITAL AND SURPLUS TOTAL CAPITAL AND SURPLUS TOTAL LIABILITIES $1,343,023,433.94 $1,546,936,880.50 Profit and Loss Account For the calendar years 1923 and 1922 1923 1922 EARNINGS FROM LOANS TO M E M B E R BANKS and paper discounted for $8,255,645.84 $3,970,209.76 FROM ACCEPTANCES O W N E D 1,969,837.16 1,619,512.13 FROM U N I T E D STATES GOVERNMENT OBLIGATIONS owned... 1,087,250.95 5,643,385.44 100,448.81 108,211.44 $11,413,182.76 $11,341,318.77 $6,382,159.20 $6,223,404.61 497,976.97 553,124.78 1,489,367.49 843,196.31 $8,369,503.66 $7,619,725.70 $3,043,679.10 $3,721,593.07 I N DIVIDENDS paid to member banks, at the rate of 6 per cent, on paid-in capital $1,749,239.47 $1,652,138.30 IN ADDITIONS TO SURPLUS—The bank is permitted by law to accumulate out of net earnings, after payment of dividends, a surplus amounting to 100 per cent, of the subscribed capital; and after such surplus has been accumulated to pay into surplus each year 10 per cent, of the net income remaining after paying dividends. 129,443.96 206,945.48 1,164,995.67 1,862,509.29 $3,043,679.10 $3,721,593.07 them OTHER EARNINGS TOTAL EARNINGS DEDUCTIONS FROM EARNINGS F O R CURRENT BANK OPERATION. (Thesefiguresinclude the greater portion of expenses incurred as fiscal agent of the United States) FOR FEDERAL RESERVE CURRENCY, mainly the cost of printing new notes to replace worn notes in circulation, and to maintain supplies unissued and on hand F O R DEPRECIATION, SELF-INSURANCE, AND OTHER R E SERVES, ETC TOTAL DEDUCTIONS FROM EARNINGS N E T I N C O M E available for dividends, additions to surplus, and payment to the United States Government DISTRIBUTION OF NET INCOME I N PAYMENT TO THE U N I T E D STATES GOVERMENT, represent- ing the entire net income of the bank after paying dividends and making additions to surplus. (Federal Reserve notes are not taxed, and this payment is in lieu of taxes on notes and other Federal taxes.) TOTAL N E T INCOME DISTRIBUTED Gross Earnings by Months The following figures show in comparison the gross earnings of the bank by months for the years 1923 and 1922: 1923 1922 January.. $1,140,852.65 $984,407.49 February. 997,794.40 886,241.10 March. . . 978,235.89 973,938.13 April 890,673.93 881,586.90 May 928,004.73 1,027,701.56 June 895,873.77 890,161.83 July 985,718.48 964,385.25 August... 919,201.97 849,052.29 September 882,311.28 910,386.31 October. . 899,078.26 974,884.30 November 884,234.02 907,626.40 December 1,011,203.38 1,090,947.21 $11,413,182.76 $11,341,318.77 Ratio of Net Earnings 1923 1922 10.4 13.6 Per Cent, earned on capital and surplus 3.4 4.3 Per Cent, earned on capital, surplus, and deposits 0.4 0.5 Per Cent, earned on capital paid in EXPENSES OF OPERATION DURING 1923 The principal expenses of the Federal Reserve Bank are incurred in carrying out functions prescribed by law, or in performing services to member banks and through them to the whole business, agricultural, and industrial community, which the legally prescribed functions imply. About one-third of all the banking resources of the country are within this Federal Reserve district, and the New York Reserve Bank conducts about one-third of the business of the entire Federal Reserve System. At the close of business on December 31, the total personnel of the New York Reserve Bank, including the Buffalo Branch, numbered 2,738 persons. The expenses for carrying on the work of the bank, divided as nearly as possible according to functions, and with miscellaneous items of overhead similarly apportioned among the various functions, were as follows: 1. MAINTAINING THE ACCOUNTS OF THE BANK This work includes making about 9,000,000 entries a year in the accounts maintained with member and other banks, and the current determination of reserve balances which are required by law 2. $211,363 SUPPLYING CURRENCY AND COIN PAYING OUT, EECEIVING, AND REDEEMING CURRENCY, involving the count of about 775,000,000 individual notes during the year $896,934 PAYING OUT AND RECEIVING COIN. This service was formerly performed largely by the Subtreasury, and is now entirely in the hands of the Federal Reserve Bank. Receipts and issues amounted to $228,798,000 for the year 172,025 CURRENCY AND COIN SHIPMENTS to and from out-of-town banks. There were 234,621 such shipments in and out during the year 429,038 PRINTING NEW FEDERAL RESERVE CURRENCY to replace worn notes in circulation and to maintain supplies unissued and on hand, including cost of transportation. Currency is printed by the Government but the cost is borne by the bank 421,229 SUPPLYING CURRENCY AND COIN 3. $1,919,226 MAKING LOANS AND INVESTMENTS MAKING DISCOUNTS AND ADVANCES TO MEMBER BANKS. The number of items handled during the year was 72,177, aggregating $17,952,000,000 $275,110 PURCHASING ACCEPTANCES AND GOVERNMENT OBLIGATIONS for the ac- count of this bank and other Federal Reserve Banks. The items purchased during the year aggregated $3,528,000,000 142,907 MAKING LOANS AND INVESTMENTS 4. $418,017 COLLECTING CHECKS, DRAFTS, NOTES, AND COUPONS COLLECTION or CASH ITEMS, mostly checks. The average number col- lected was 425,151 a day, or 128,400,000 for the year, aggregating $65,518,000,000 $1,705,245 COLLECTION OF NON-CASH ITEMS, including drafts, notes, and coupons. The number of items handled during the year was about 2,177,000, aggregating $1,921,000,000 COLLECTING C H E C K S , ETC 501,816 $2,207,061 5. SUPPLEMENTARY SERVICES CUSTODY OF SECURITIES. This service involved holding in safekeeping on the average about $700,000,000 of securities for the United States Government, $50,000,000 for the War Finance Corporation, and $260,000,000 from other sources $186,129 PURCHASE AND SALE OF BANKERS ACCEPTANCES and other securities for member banks and foreign banks, amounting for the year to $237,712,000, and receiving and delivering securities for the account of member banks, amounting for the year to about $500,000,000. In addition the bank has acted for the Treasury Department in the purchase and sale of Government securities TELEGRAPHIC TRANSFER OF FUNDS. 145,638 This service is performed over the telegraph wires of the Federal Eeserve System, and is used by the Treasury Department and member banks. It involved making an average of 939 transfers of funds to all parts of the country each day, amounting to about $92,820,000 and aggregating for the year $28,031,500,000 115,440 $447,207 SUPPLEMENTARY SERVICES . 6. SERVICES I N CONNECTION WITH GOVERNMENT LOANS This work included during 1923 the receipt or delivery of 1,345,000 individual Government bonds, notes, and certificates, amounting to $2,622,000,000, which were exchanged or converted or handled in connection with registration; and the payment of 17,683,617 individual coupons on Government bonds, notes, and certificates. It also involved the sale and issue of 124,846 pieces amounting to $851,583,000, and the redemption of 788,758 pieces amounting to $807,929,000, of Government bonds, notes, and certificates. Aside from amounts received from the Treasury in partial reimbursement, the cost of such operations to the bank was $648,310 (In addition to these operations for the Treasury, the bank performed other work for the Government connected with the currency, the collection of checks, the custody, purchase and sale of securities, the transfer of funds, etc., which have been referred to under their respective headings.) 7. GENERAL OR SUPERVISORY EXPENSES, not apportioned among the functions specified above: EXECUTIVE SALARIES (Chairman, governor, four deputy governors, and secretary of the bank, and manager and cashier of the Buffalo Branch) $203,640 WORK OF THE FEDERAL RESERVE AGENT'S FUNCTION, including note issues, examination of member banks, visits to member banks, statistical and information services, such as the preparation of weekly bank statements and the publication of the Monthly Review 352,575 MAINTAINING THE GENERAL AUDIT, including the daily checking of transactions and records, together with periodical verifications of securities, cash, and cash items DIRECTORS' FEES AND TRAVELING EXPENSES THIS BANK'S SHARE OF THE EXPENSES OF THE FEDERAL RESERVE BOARD ^ 260,226 21,664 190,847 GENERAL OR SUPERVISORY EXPENSES $1,028,952 TOTAL $6,880,136 DIRECTORS AND OFFICERS, JANUARY 1,1924 § 2 a^ I ^ A 1 DIRECTORS Term Expires Dec. SI GATES W. MCGARRAH, New York City Chairman, The Mechanics National Bank A 2 THEODORE F. WHITMARSH, New York City 1925 3 FRANK L. STEVENS, North Hoosick, N. Y. ROBERT H. TREMAN, Ithaca, N. Y. President, Stevens and Thompson, Inc. PIERRE JAY, New York City, Chairman 1926 WILLIAM CHARLES SMITH, Oneonta, N. Y. 1 OWEN D. YOUNG, New York City L. SAUNDERS, Plainfield, 1924 J., 1925 1926 City 1924 N. Deputy Chairman Chairman, Ingersoll-Rand Company 1924 President, The Citizens National Bank B 1926 President, Francis H. Leggett & Company and Metals President, The Tompkins County National Bank A Term Expires Dec. 31 CLARENCE 1925 M. WOOLLEY, Chairman, American Chairman, General Electric Company New York Radiator Company MEMBER OF FEDERAL ADVISORY COUNCIL PAUL M. WARBURG, New York City OFFICERS GENERAL OFFICERS BENJ. STRONG, Governor J. HERBERT CASE, Deputy Governor Louis F . SAILER, Deputy Governor GEORGE L. HARRISON, Deputy Governor EDWIN R. KENZEL, Deputy Governor DUDLEY H. BARROWS, Secretary JAY E. CRANE, Assistant Secretary L. RANDOLPH MASON, General Counsel JESSE HOLLADAY PHILBIN, Assistant General Counsel SENIOR OFFICERS JOSEPH D. HIGGINS, J. WILSON JONES, EDWIN R. KENZEL, Controller of Loans Controller of Cash and Controller of Collections LAURENCE H. HENDRICKS, Controller of Fiscal Agency Functions GILBERT E. CHAPIN, ARTHUR W. GILBART, Controller at Large Controller of Administration Controller of Investments, Pro tern. JUNIOR OFFICERS CHARLES H. COB, JAY E. CRANE, EDWIN C. FRENCH, BETHUNE M. GRANT, Manager, Manager, Manager, Manager, Collection Department Foreign Department Cash Department Government Bond WILLIAM A. HAMILTON, Manager, Building Maintenance Department Manager, Personnel Development ADOLPH J. LINS, WALTER B. MATTESON, Department HOWARD M. JEFFERSON, JOSEPH L. MORRIS, HENRY R. MURRAY, ROBERT M. O 'HARA, Department JAMES M. RICE, Manager, Check Department Manager, Certificates of Indebtedness Department and Manager, Securities Department Manager, Credit Department Manager, Securities Custody Department Manager, Bill Department Manager, Accounting Department Manager, Discount Department Manager, Methods and Supplies STEPHEN S. VANSANT, Department I. WARD WATERS, Manager, Office Service Department and Manager, Personnel Service Department ALAN K. LAUCKNER, AUDITOR EDWARD L. DODGE, Manager, Auditing Department LESLIE R. ROUNDS, General Auditor FEDERAL RESERVE AGENT PIERRE JAY, Federal Reserve Agent SHEPARD MORGAN, Assistant Federal Beserve Agent CARL SNYDER, General Statistician W. R&NDOLPH BURGESS, Assistant Federal Beserve Agent WILLIAM H. DILLISTIN, Assistant Federal Beserve Agent and Manager, Bank Examinations Department GEORGE B. ROBERTS, Manager, Bcports Department BUFFALO BRANCH DIRECTORS FRED J. COE, ELLIOTT C. MCDOUGAL, President, Power City Bank, Niagara Falls WOLCOTT J. HUMPHREY, President, Wyoming County National Bank, Warsaw JOHN A. KLOEPFER, President, Liberty Bank of Buffalo President, Marine Trust Company, Buffalo HARRY T. RAMSDELL, President, Mfrs. and Traders National Bank, Buffalo CARLTON M. SMITH, President, Smith, Fassett & Company, Buffalo WALTER W. SCHNECKENBURGER, Manager WALTER W. SCHNECKENBURGER, Manager CLIFFORD L. BLAKESLEE, Assistant Cashier OFFICERS HALSEY W. SNOW, J R . , Cashier ELMER L. THEOBALD, Assistant Cashier
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