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FEDERAL RESERVE BANK OF NEW YORK \ r Circular No. 7121 L January 12, 1926J Accounting Department Eleventh 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, 1925, and of the Profit and Loss account for that year. For convenient comparison, the relative items for the previous year, 1924, 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 1925. We trust that you will find these various statements of interest, pending the issuance of the annual report of the bank which you will receive shortly. Very truly yours, BENJ. STRONG, Governor. Statement of Condition RESOURCES Dec. 31, 1924 Dec. 31, 1925 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 $384,306,965.61 $329,996,016.59 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 11,557,070.44 13,516,129.74 277,262,589.82 331,225,691.40 286,475,438.52 254,226,803.87 21,867,394.00 27,256,282.00 $981,469,458.39 $956,220,926.60 $18,517,186.90 $16,966,978.42 $68,744,642.50 $197,709,000.00 12,577,441.02 35,234,620.12 101,823,154.40 42,019,937.59 169,898,350.00 57,199,050.00 1,746,000.00 2,106,000.00 $354,789,587.92 $334,268,607.71 BANK PREMISES $16,242,897.76 $16,617,060.69 CHECKS AND OTHER ITEMS IN PROCESS OF COLLECTION. . . 156,377,299.73 170,992,612.34 8,656,803.63 4,162,451.27 $181,277,001.12 $191,772,124.30 CASH R E S E R V E S held by this bank against its deposits and note circulation: GOLD H E L D BY T H E F E D E R A L R E S E R V E A G E N T as part of GOLD AND G O L D CERTIFICATES in vault GOLD I N T H E GOLD SETTLEMENT F U N D lodged with the Treasurer of the United States for the purpose of settling current transactions between Federal Reserve districts L E G A L T E N D E R N O T E S , SILVER, AND SILVER CERTIFICATES in the vaults of the bank (available as reserve only against deposits) TOTAL C A S H R E S E R V E S NON-RESERVE CASH consisting largely of National Bank Notes, and minor coin LOANS AND INVESTMENTS LOANS TO M E M B E R B A N K S : On the security of obligations of the United States By the discount of commercial or agricultural paper or acceptances ACCEPTANCES bought in the open market U N I T E D STATES GOVERNMENT bonds, notes, and certificates of indebtedness F O R E I G N LOANS on Gold TOTAL LOANS AND INVESTMENTS MISCELLANEOUS RESOURCES ALL OTHER MISCELLANEOUS RESOURCES TOTAL MISCELLANEOUS RESOURCES TOTAL RESOURCES $1,536,053,234.33 $1,499,228,637.03 Federal Reserve Bank of New York L I A B I L I T I E S Dec. 31, 1924 Dec. 31, 1925 $387,352,885.00 $393,036,812.50 $387,352,885.00 $393,036,812.50 $883,861,349.67 $847,248,505.07 16,904,418.11 3,183,106.57 28,194,141.08 11,282,630.44 $928,959,908,86 $861,714,242.08 $150,262,580.52 A L L O T H E R MISCELLANEOUS LIABILITIES $129,054,958.09 1,769,392.67 TOTAL MISCELLANEOUS LIABILITIES $130,824,350.76 $152,118,690.05 $30,166,800.00 $32,394,500.00 58,749,289.71 59,964,392.40 $88,916,089.71 $92,358,892.40 CURRENCY IN CIRCULATION FEDERAL RESERVE NOTES 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 U N I T E D 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 deposits, deposits of non-member banks, etc 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 1,856,109.53 CAPITAL AND SURPLUS CAPITAL P A I D I N , equal to 3 per cent, of the capital and surplus of member banks SURPLUS—rThat portion of accumulated net earnings which the bank is legally permitted to retain TOTAL CAPITAL AND SURPLUS TOTAL LIABILITIES s $1,536,053,234.33 $1,499,228,637.03 Profit and Loss Account For the calendar years 1924 and 1925 1924 1925 EARNINGS FROM LOANS TO MEMBER BANKS and paper discounted for them $2,613,565.96 $5,188,505.53 FROM ACCEPTANCES OWNED 1,446,693.25 1,469,858.04 FROM UNITED STATES GOVERNMENT OBLIGATIONS owned... 4,165,856.35 2,984,698.11 343,234.80 574,111.85 $8,569,350.36 $10,217,173.53 (These figures include most of the expenses incurred asfiscalagent of the United States) $6,155,270.43 $6,044,925.67 mainly the cost of printing new notes to replace worn notes in circulation, and to maintain supplies unissued and on hand 195,550.43 280,276.07 FOR DEPRECIATION, SELF-INSURANCE, AND OTHER R E SERVES, ETC 1,601,677.18 788,673.37 $7,952,498.04 $7,113,875.11 $616,852.32 $3,103,298.42 $1,796,529.82 $1,888,195.73 OTHER EARNINGS TOTAL EARNINGS DEDUCTIONS FROM EARNINGS FOR CURRENT BANK OPERATION. FOR FEDERAL RESERVE CURRENCY, TOTAL DEDUCTIONS FROM EARNINGS . NET INCOME available for dividends, additions to surplus, and payment to the United States Government DISTRIBUTION OF NET INCOME I N DIVIDENDS paid to member banks, at the rate of 6 per cent on paid-in capital 1N ADDITIONS TO SURPLUS—The bank is permitted bylaw 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. 1,215,102.69 Any net income remaining after paying dividends and making additions to surplus (as above) is paid to the United States Government as a franchise tax. No balance remained for such payments in 1924 or 1925. DEFICIT OF N E T INCOME AFTER DIVIDEND PAYMENTS, which has been charged to Surplus Account TOTAL N E T INCOME DISTRIBUTED . 1,179,677.50 $616,852.32 $3,103,298.42 Gross Earnings by Months The following figures show in comparison the gross earnings of the bank by months for the years 1924 and 1925: 1924 1925 January $718,395.69 $860,325.11 February 712,361.85 818,113.09 March 639,017.63 963,013.63 April... 666,883.12 845,435.45 May... 523,448.69 886.437.25 June 588,622.38 746,267,09 July 652,694.06 781,267.08 August.... 652,090.88 769,788.29 September. 747,929.62 868,521.71 October. . . 822,473.60 878,820.01 November. 802,295.96 769,208.59 December. 1,043,136.88 1,029,976.23 $8,569,350.36 $10,217,173.53 Ratio of Net Earnings 1924 1925 Per cent earned on capital paid in 2.1 9.8 Per cent earned on capital and surplus 0.7 3.4 Per cent earned on capital, surplus, and deposits 0.07 0.3 EXPENSES OF OPERATION DURING 1925 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 2,447 persons. The following statement shows the expenses of the bank divided among the functions and services referred to. In preparing this statement there have been apportioned and added to the actual expenses of the departments performing these functions and services all of the general or overhead expenses of the bank, including real estate taxes, maintenance of building, legal expenses, salaries of staff not working directly on these services or functions, and all other general expenses of every kind except those expressly listed under paragraph 7. 1. MAINTAINING THE ACCOUNTS OF THE BANK This work includes making about 10,703,000 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. $219,999 SUPPLYING CURRENCY AND COIN PAYING OUT, RECEIVING, AND REDEEMING CURRENCY, involving the count of about 788,000,000 individual notes during the year $870,357 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 $516,467,000 for the year 189,023 CURRENCY AND COIN SHIPMENTS to and from out-of-town banks. There were 274,076 such shipments in and out during the year 533,247 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 280,276 SUPPLYING CURRENCY AND COIN 3. $1,872,903 MAKING LOANS AND INVESTMENTS MAKING DISCOUNTS AND ADVANCES TO MEMBER BANKS. The number of items handled during the year was 36,272, aggregating $17,068,000,000 PURCHASING ACCEPTANCES AND GOVERNMENT OBLIGATIONS for $221,834 the account of this bank and other Federal Reserve Banks. The items purchased during the year aggregated $3,984,000,000 126,347 MAKING LOANS AND INVESTMENTS 4. $348,181 COLLECTING C H E C K S , DRAFTS, NOTES, AND COUPONS OoLLxenoN or CASH ITEMS, mostly checks. The average number collected was 470,369 a day, or 142,500,000 for the year, aggregating $88,013,000,000 $1,673,291 COLLECTION or NON-CASH ITEMS, including drafts, notes, and coupons. The number of items handled during the year was about 2,040,000, aggregating $2,085,000,000 COLLECTING C H E C K S , ETC 453,783 $2,127,074 ^ 5. SUPPLEMENTARY SERVICES CUSTODY or SECURITIES. This service involved holding in safekeeping on the average about $710,000,000 of securities for the United States Government, including securities held for the War Finance Corporation and the Alien Property Custodian, and $451,000,000 from other sources $116,086 PURCHASE AND SALE or BANKERS ACCEPTANCES and other securities for member banks and foreign banks, amounting for the year to $305,722,000, and receiving and delivering securities for the account of member banks, amounting for the year to about $2,779,000,000. In addition the bank has acted for the Treasury Department in the purchase and sale of Government securities 234,322 TELEGRAPHIC TRANSFER OF FUNDS. This service is performed over the telegraph wires of the Federal Reserve System, and is used by the Treasury Department and member banks. It involved making an average of 971 transfers of funds to all parts of the country each day, amounting to about $128,123,000 and aggregating for the year $38,821,300,000 -127,037 $477,445 SUPPLEMENTARY SERVICES. 6. SERVICES I N CONNECTION W I T H GOVERNMENT LOANS This work included during 1925 the receipt or delivery of 1,513,000 individual Government bonds, notes, and certificates, amounting to $2,085,000,000, which were exchanged or converted or handled in connection with registration; and the payment of 12,155,787 individual coupons on Government bonds, notes, and certificates. It also involved the sale and issue of 47,256 pieces amounting to $560,003,000, and the redemption of 135,724 pieces amounting to $1,361,554,000, 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 $293,384 (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. EXPENSES, not apportioned among the functions specified above: EXECUTIVE SALARIES (Chairman, governor, four deputy governors, and secretary of the bank, and managing director and cashier of the Buffalo Branch) $222,300 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 345,347 MAINTAINING THE GENERAL AUDIT, including the daily checking of transactions and records, together with periodical verifications of securities, cash, and cash items 208,848 DIRECTORS • FEES AND TRAVELING EXPENSES 17,992 THIS BANK 'S SHARE OF THE EXPENSES OF THE FEDERAL RESERVE BOARD 191,729 • EXPENSES NOT APPORTIONED TOTAL $986,216 $6,325,202 DIRECTORS AND OFFICERS, JANUARY 1, 1926 ( DIRECTORS Term Expires Dec. SI 2 1928 JACKSON E. KETNOLDS, New York City President, First National Bank President, The Tompkins County National Bank President, Francis H. Leggett & Company 3 1926 ROBERT H. TREMAN, Ithaca, N. Y. THEODORE F . WHITMARSH, New York City SAMUEL W. REYBURN, New York City President, Lord & Taylor PIERRE JAY, New York City, Chairman W. L. SAUNDERS, Plainfield, N. J., Deputy Chairman Chairman, Ingersoll-Rand Company 1927 DELMER RUNKLE, Hoosick Falls, N. Y. President, Peoples National Bank 1928 OWEN D. YOUNG, New York City Term Expires Dec. SI 1926 CLARENCE M. WOOLLEY, New York City 1927 1928 1926 1927 Chairman, American Radiator Company Chairman, General Electric Company MEMBER OF FEDERAL ADVISORY COUNCIL PAUL M. WABBTTBG, New York City OFFICERS GENERAL OFFICERS B E N J . STRONG, Governor Louis F. SAILER, Deputy Governor GEORGE L. HARRISON, Deputy Governor EDWIN R. KENZEL, Deputy Governor JESSE HOLLADAY PHILBIN, Secretary JAY E. CRANE, Assistant Secretary L. RANDOLPH MASON, General Counsel JESSE HOLLADAY PHILBIN, Assistant General Counsel J. HERBERT CASE, Deputy Governor SENIOR OFFICERS ARTHUR W. GILBABT, RAY M. GIDNEY, LAURENCE H. HENDRICKS, Controller of Fiscal Agency Function Controller of Cash and Controller of Collections Controller of Loans J. WILSON JONES, LESLIE R. ROUNDS, Controller of Administration Controller of Accounts JUNIOR OFFICERS DUDLEY H. BARROWS, CHARLES H. COE, JAY E. CRANE, EDAVIN C. FRENCH, HOWARD M. JEFFERSON, Manager, Credit and Discount Department ADOLPH J. LINS, Manager, Check Department WALTER B. MATTESON, Manager, Securities Department Manager, Foreign Department ROBERT M. O 'HARA, Manager, Bill Department Manager, Cash Department JAMES M. RICE, Manager, Accounting Department STEPHEN S. VANSANT, Manager, Safekeeping Department Manager, Personnel Department I. WARD WATERS, Manager, Collection Department Manager, Administration Department EDWARD L. DODGE, General Auditor FEDERAL RESERVE AGENT PIERRE JAY, Federal Beserve Agent W. RANDOLPH BURGESS, Assistant Federal Beserve Agent CARL SNYDER, General Statistician GEORGE B. ROBERTS, Manager, Reports Department BUFFALO BRANCH DIRECTORS FRANK W. CRANDALL, ELLIOTT C. MCDOUGAL, President, National Bank of Westfield, Westfield, N. Y. ARTHUR HOUGH, President, Marine Trust Company, Buffalo JAMES H. MCNULTY, Chairman, President, Wiard Plow Company, Batavia, N. Y. JOHN A. KLOEPFER, President, Pratt & Lambert, Inc., Buffalo, N. Y. HARRY T. RAMSDELL, President, Liberty Bank of Buffalo Chairman, Mfrs. and Traders Trust Co., Buffalo WALTER W. SCHNECKENBURGER, Managing Director OFFICERS WALTER W. SCHNECKENBURGER, Managing Director HALSEY W. SNOW, J R . , Cashier CLIFFORD L. BLAKESLEE, Assistant Cashier ELMER L. THEOBALD, Assistant Cashier ^ ' •
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