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Eighteenth Annual Report

Federal Reserve Bank
of New York
For the Year Ended December 31, 1932

m

Federal Reserve Agent
Second Federal Reserve District




Eighteenth Annual Report

Federal Reserve Bank
of New York
For the year Ended December 31, 1932

Federal Reserve Agent
Second Federal Reserve District







Contents
Page
Letter of Transmitted.

4

Banking Situation at Beginning of 1932

5

Open Market Operations
Banking Developments from July to December
The Situation at the End of 1932

6
9
12

Gold Movements
The Foreign Exchanges

16
18

Foreign Relations
Amendments to Federal Reserve Act Broadening Reserve
Bank Lending Powers
Direct Loans to Individuals, Partnerships, and Corporations
Banking and Industrial Committee

21
23
23
25

Membership Changes in 1932

27

Operating Statistics
Statement of Condition

28
28

Income and Disbursements
Volume of Operations
Participation in the Share-the-Work Plan
Changes in Directors and Officers
Member of Federal Advisory Council
Changes in Officers
List of Directors and Officers




29
31
-

32
32
33
33
34

FEDERAL RESERVE
BANK
OF N E W Y O RK

New York, February 10,1933

SIRS:

I have the honor to submit herewith the eighteenth annual report of
the Federal Reserve Bank of New York,
covering the year 1932.
Respectfully yours,
J. HERBERT CASE,

Chairman and Federal Reserve Agent.

FEDERAL RESERVE BOARD,

Washington, D. C.




Eighteenth Annual Report
Federal Reserve Bank of New York
At the beginning of the year 1932 the country was in the midst
of a severe contraction of credit. Heavy gold losses following the
suspension of gold payments by Great Britain, and large withdrawals of currency by domestic depositors had led banks throughout the country, including the largest New York City institutions,
to endeavor to strengthen their cash position by disposing of their
investments and by reducing their loans. The result was the most
rapid liquidation of bank credit in many years. It was apparent
as the year 1932 opened, however, that for the banking system of
the country as a whole the strengthening of the cash position of the
banks by this process was extremely slow, as a reduction of $2,500,000,000 in the loans and investments of all member banks in the
last three months of 1931 had released only $200,000,000 of cash
reserves through the reduction in reserve requirements due to diminished deposits. Meanwhile the process of liquidation was having
seriously adverse effects on business and on the price structure.
Withdrawals of funds from the banks by depositors continued
in sufficient volume during the first few weeks of 1932 to nullify the
efforts of the banks to make their position more liquid, and the indebtedness of member banks at the Reserve Banks remained in
excess of $800,000,000 during January and February. Although
the large city banks in general had high percentages of liquid assets,
they still had practically no cash reserves in excess of their immediate requirements, and many of the smaller banks throughout the
country were encountering difficulty in obtaining ready funds
against sound assets which were not eligible for rediscount at the
Reserve Banks and could be marketed only at a sacrifice.
The creation of the Reconstruction Finance Corporation early in
the year provided an organization through which the banks and
other institutions could obtain cash against assets that were ineligible
for discount at the Reserve Banks, without the necessity of selling
such assets at a sacrifice and thus depressing prices further. Loans
made by the Corporation relieved the situation of many banks and
the number of bank suspensions decreased markedly.
It was apparent, however, that if member banks were to attain
a more comfortable cash position, substantial assistance by the
Federal Reserve Banks was necessary. But the freedom of action
of the Reserve Banks was restricted at the opening of 1932 by



6

EIGHTEENTH ANNUAL REPORT

requirements concerning the collateral to be maintained against
Federal Reserve notes. The result of these requirements was that
a large part of the gold held by the Federal Reserve Banks in excess
of minimum reserve requirements was tied up as collateral for Federal Reserve notes, and the scope of action possible to the Reserve
Banks was limited.
This situation was remedied near the end of February by the
passage of the Glass-Steagall Bill, which authorized the Federal
Reserve Board, as an emergency measure, to permit Federal Reserve Banks to use Government securities as collateral for Federal
Reserve notes. This made it possible to release for other uses, as
the occasion required, up to about one billion dollars of the gold
held by the Reserve Banks in excess of the legal reserve requirements, which would otherwise have been tied up as collateral for
notes.

Open Market Operations
Following the passage of this Act, the Federal Reserve System
at once undertook to relieve the situation of member banks through
the purchase of United States Government securities. Purchases
were begun in the first week of March at the rate of $25,000,000
weekly, and were continued at that rate until the second week of
April, when the rate of purchases was increased to approximately
$100,000,000 a week. Purchases at the higher rate were continued
for five weeks, after which they were at a somewhat reduced but
still substantial rate until the end of June. Some further small
purchases were made in July and the early part of August. For
this whole period the Government security holdings of the Reserve
Banks showed a total increase of approximately $1,100,000,000.
During the period covered by these purchases an additional and
final outflow of foreign funds occurred, involving a further loss to
this country of nearly $500,000,000 of gold. In June, a new wave
of bank closings centering in the Middle West was accompanied
by renewed currency hoarding on a large scale. Nevertheless,
the funds issued by the Reserve Banks in payment for Government securities purchased were in sufficient volume not only to
offset in the aggregate the further losses of gold and currency sustained by member banks, but also to permit member banks to
reduce their indebtedness at the Reserve Banks by a substantial
amount, and in some cases to acquire a moderate amount of cash
reserves in excess of their immediate needs. Near the end of June,
the System's open market operations were supplemented by a
reversal of the gold movement. Gold previously taken from the



FEDERAL RESERVE BANK OF NEW YORK
BILLIONS
OF DOLLARS
6

MONEY IN CIRCULATION

GOLD STOCK

MEMBER BANK RESERVES

U.S.SECURITY HOLDINGS/
OF F. R. BANKS

F. R. DISCOUNTS
FOR MEMBER BANKS
1931

1932

Principal Factors Affecting Member Bank Reserves.



8

EIGHTEENTH ANNUAL REPORT

United States gold stock and earmarked for foreign account was
released in substantial volume and restored to the gold stock of this
country.
When the System's open market operations were initiated there
was some question as to the possibility of reaching the banks that
were in debt at the Reserve Banks. The greater part of the Government security purchases necessarily had to be made in the New
York market whereas most of the indebtedness of member banks
was outside of New York. As subsequent events proved, however, a large part of the funds paid out in New York was distributed
throughout the country, chiefly through Government disbursements,
including the operations of the Reconstruction Finance Corporation.
In fact, the excess funds that accumulated in New York during
1932 were largely the result of deposits made by banks in other
parts of the country.
The principal movements of funds affecting the cash position
of all member banks during the period of open market purchases
of Government securities by the Reserve Banks are summarized in
the following table.
Change from
February 24 to August 10
Funds obtained or released through

Reserve Bank purchases of U. S. securities
Reduction in required reserves
All other sources
Total
Disposition of funds
Used to meet gold losses (net)
Used to meet currency withdrawals (net)
Used to repay indebtedness at F. R. Banks
Used to retire acceptances held by F. R. Banks and other
Federal Reserve credit

(Millions of dollars)
1,110
39
21
1,170
345
115
383
104

Total

947

Balance added to excess reserves

223

As this indicates, the member banks as a whole emerged from
the acute difficulties involved in the final outflow of gold and midyear currency withdrawals with a greatly strengthened reserve
position.
Supplementing the purchases of Government securities, the
Federal Reserve Bank of New York also reduced its discount rate
from 33^ to 3 per cent, effective February 26, and from 3 to
per cent, effective June 24.



FEDERAL RESERVE BANK OF NEW YORK

9

Banking Developments from July to December
When the withdrawal of foreign funds came to an end and the
gold movement was reversed, a marked revival of public confidence
was evident. This improvement in public sentiment was reflected
in a strong recovery in bond prices and in stock prices from June
to September, and there was a moderate recovery also in the commodity markets. A further indication of greater confidence appeared in a return flow to the banks of currency previously hoarded.
The total volume of currency outstanding, instead of showing the
usual large increase during the autumn, declined gradually from
early July to the end of October, and thereafter showed less than
half of the usual seasonal increase.
The result was that, while the banks were gaining funds in substantial volume through the gold movement, they largely escaped
the usual seasonal drain on their cash reserves due to currency
withdrawals, so that their reserve position was steadily strengthened. Borrowings of member banks from the Reserve Banks, which
tend to increase during the autumn under ordinary circumstances,
declined substantially further and reached the lowest point of the
year at the end of December. Excess reserves of all member banks
rose above $500,000,000 by the end of the year. The principal
additions to and uses of member bank reserves from August to
December are shown in the following table.
Change from
August 10 to
December 28
Funds obtained through
Gain of gold
Increase in Treasury currency outstanding due to new
issues of National bank notes
Net return flow of currency of all kinds from circulation.
Total
Disposition of funds
Used to repay indebtedness at F. R. Banks
Used as reserve against increased deposits
Miscellaneous
Total
Balance added to excess reserves

(Millions of dollars)
500
99
20
619
185
117
14
316
303

Accompanying this strengthening of the reserve position of
member banks there was a marked reduction in the rate of contraction in member bank credit. Between the end of September 1931



EIGHTEENTH ANNUAL REPORT

10

and the early part of March 1932, the total loans and investments
of weekly reporting member banks in New York City declined at
an annual rate of approximately 43 per cent, and in all reporting
banks throughout the country the decline was at the rate of 29 per
cent per annum. As the reserve position of member banks was
strengthened through the Government security purchases of the
Reserve Banks, the rate of decline in member bank loans and investments gradually diminished. For a brief period in June and
July there was a renewal of the rapid shrinkage in member bank
loans and investments accompanying the new outbreak of banking
difficulties and currency hoarding at that time, but the decline in
member bank credit was checked in the early autumn.
From the end of July to the end of November the total loans
and investments of the principal New York City banks increased
approximately $850,000,000, and thereafter showed little change.
The New York City banks were continuously in possession of a
substantial amount of excess reserves, although, as in the preceding months, the excess funds in New York represented largely funds
deposited by correspondent banks in other parts of the country.
BILLIONS
OF DOLLARS
18T

LOANS &
INVESTMENTS

LOANS &
INVESTMENTS

NET DEMAND
TIME DEPOSITS

NET DEMAND &
TIME DEPOSITS
10

OTHER
LEADING CITIES
1931

1932

1931

1932

Total Loans and Investments and Net Demand and Time Deposits of Weekly Reporting Member Banks in New York City and in Other Leading Cities in United States.




FEDERAL RESERVE BANK OF NEW YORK

11

The greater part of the increase in loans and investments of the
New York banks was in their holdings of United States Government securities, although their holdings of other securities also increased moderately. The loans of these banks showed comparatively little change during the last five months of the year, after
declining rapidly during the preceding year and a half.
In the principal cities outside of New York there was no net
increase in the total loans and investments of reporting banks, but
the decline which had been in progress for many months appeared
to have been checked; in the smaller localities some further reduction occurred. Deposits of New York City banks at the end of
the year were $1,200,000,000 above the low point in March, including the increase in balances held for correspondent banks, and deposits of reporting member banks in other localities showed a small
net increase during the latter part of the year.
The check to credit liquidation that occurred during the last
five months of the year is indicated by the following table, which
compares changes in the loans and investments of weekly reporting
member banks during the first seven months of 1932 with changes
during the latter part of the year.
(In Millions of Dollars)
Dec. 30,
1931
New York City Banks
Loans
U. S. Government securities
Other securities
Total loans and investments
Banks in other principal cities
Loans
U. S. Government securities
Other securities
Total loans and investments
All reporting banks
Loans
U. S. Government securities..
Other securities
Total loans and investments




July 27, 1
1932

Dec. 28,
1932

4,492
1,712
943

3,492
1,870
955

3,450
2,481
1,089

7,147

6,317

7,020

8,612
2,348
2,425

7,500
2,266
2,251

6,847
2,726
2,211

13,385

12,017

11,784

13,104
.4,060
3,368

10,992
4,136
3,206

10,297
5,207
3,300

20,532

18,334

18,804

12

EIGHTEENTH ANNUAL REPORT

The Situation at the End of 1932
Although business activity remained at a very low level and
many difficult problems remained to be solved at the end of 1932,
the situation at that time showed some improvement over the
conditions which prevailed as the year opened. Member banks
which at the beginning of the year had no funds available with
which to supply additional credit, but rather were heavily in debt
and struggling to strengthen their position by reducing their loans
and investments, at the close of the year held a large amount of
cash reserves above their legal requirements, and had repaid a
large part of their indebtedness. They were therefore in a position
to supply a volume of credit sufficient to finance a substantial revival of business. Bank suspensions were about one-third less in
1932 than in 1931, and were fewer in the last half of the year than
in the first half.
The gold movement, which at the beginning of 1932 had been
viewed as a threat to the position of the banks, at the end of the
year was heavily in favor of the United States and was adding substantially to the available supply of cash reserves. Currency hoarding, which at two different periods during the year had assumed
serious proportions, was offset by subsequent redeposits of currency
in the banks and less than the usual withdrawals of currency for
seasonal uses, and at the close of the year the amount of money
outstanding was about the same as at the end of 1931. However,
there were indications that the public still held a large volume of
currency which may be expected to come into active use when
confidence is sufficiently restored.
In addition to the fact that there was a large supply of idle funds
available in member banks, and a large amount of hoarded currency
in the hands of the public at the close of the year, there was evidence
that the funds outstanding were not being used at anything like their
full efficiency, as the velocity or rate of turnover of bank deposits
was at an exceptionally low level. This low rate of turnover of
funds is more probably a result than a cause of reduced business
activity, but nevertheless indicates that with a return of confidence
a considerably larger volume of business could be transacted with
the available supply of funds than was in progress at the end of 1932.
Some progress in the restoration of confidence by the end of
1932 was reflected in the greater stability of the security markets
during the latter part of the year. Commodity prices also, though



FEDERAL RESERVE BANK OF NEW YORK

13

PERCENT

140
130

1919 *20

*27 '28 '29 '30 f31

32

Activity of Bank Deposits in 140 Centers Outside of New York City (Adjusted for
seasonal variation; 1919-1925 average = 100 per cent).

still at the lowest levels of the depression, showed greater stability
during the last seven months of the year than in any similar period
since the rapid decline began in 1929. Industrial activity, after a
further decline in the first half of the year, increased more than
seasonally in the autumn and held a considerable part of the gain
to the end of the year. Railroad freight car loadings also increased
more than is usual after July, and as the result of operating economies, the net income of the railroads showed a substantially greater
recovery in the latter part of the year than did the volume of traffic.
Depressed business conditions at the end of 1932 reflected largely
the extremely low level of activity of the so-called heavy industries,
including the iron and steel industry, the construction industry,
and the railroad and industrial equipment industries. As these
industries are to a considerable extent dependent upon the employment of new capital, the supply of funds for medium or long term
investment and the condition of the market for new securities have
an important bearing upon their activity. During the past year
the amount of new capital obtained through the security markets
by borrowers other than the United States Government was less
than one-fifth of the average for the years 1926 to 1930, and was the
smallest for any year since the war.




EIGHTEENTH ANNUAL REPORT

14
PER CENT
150

125

* if i

100

5\ ST

EEL

w
V\\

1

* 1

1

)INGl\_

BUILC

\
50

\

50

ii
Mi
-

25

25

0

1-323

1930 1931

1932

1928

1929

1930

1931

1932

Decline in Heavy Industries represented by Building Contracts and Steel Production
contrasted with the decline in Consumers' Goods represented by the Shoe and Textile Industries.
(Trend of past years = 100 per cent.)

New issues of corporation bonds were very small throughout
the year, consisting chiefly of occasional sales of public utility bonds.
State and municipal bonds were sold in considerable volume during
the early months of the year, but offerings decreased considerably
after March, and there was an accompanying decline in contracts
for the construction of public works, such as highways, bridges, and
public buildings, which had been the chief sustaining factor in the
construction industry.
The record of new capital issues during the past seven years, excluding refunding and investment trust issues, and also foreign
issues, is as follows:
(In Millions of Dollars)

Year
1926
1927
1928
1929
1930
1931
1932

Public
Utility
1,393
1,829
1,492
1,698
2,030
906
274




Railroad
299
431
318
382
697
226
13

Other
Corporate

State
and
Municipal

Total

1,934
2,153
2,674
3,680
1,424
410
37

1,435
1,562
1,443
1,418
1,521
1,309
838

5,061
5,975
5,927
7,178
5,672
2,851
1,162

FEDERAL RESERVE BANK OF NEW YORK

15

7.178

5.975

STATE &
MUNICIPAL
PUBLIC
UTILITY

OTHER
CORPORATE

U.S.GOVT.
DEBT
(NET CHANGE)
-1,137

-962

New Security Issues—State and Municipal, Public Utility, and Other Corporate
Issues, excluding Refunding, Foreign, and Investment Trust Issues, and Net Change
in Interest Bearing Debt of the United States, in millions of dollars (Commercial and
Financial Chronicle figures for domestic issues).

To some extent the decline in flotations of corporation and
municipal securities was accompanied by an increase in issues of
the United States Treasury, but including the funds obtained
through that source the amount of new capital invested in 1932 was
still far below any other recent year.




EIGHTEENTH ANNUAL REPORT

16

Gold Movements
Notwithstanding the unusually large movements of gold during
the past year, there was little net change in the monetary gold stock
of the United States for the year as a whole. Between the end of
1931 and the close of 1932 the gold stock increased, in round figures,
from $4,460,000,000 to $4,513,000,000. Of this increase $6,700,000
represented a net acquisition of gold from abroad, and $46,200,000
was derived from domestic production. The small net change in
gold holdings, due to international transactions, was the result of
unusually large losses of gold during the first half of the year,
and of equally large gains during the succeeding six months. The
year's gold movements are summarized in the following table.
(In Thousands of Dollars)
January to
June
Shipments:
Exports
Imports

July to
December

1932
Total

768,500
146,300

40,700
212,100

809,200
358,400

622,200

*171,400

450,800

479,300
543,400

73,500
394,300

552,800
937,700

64,100

320,800

384,900

95,500
22,900

95,500
22,900

72,600

72,600

+564,800

+6,700

16,600

29,600

46,200

Total Change in United States Monetary
Gold Stock
—541,500

+594,400

+52,900

Net exports
Gold earmarked for foreign account:
New earmarkings
Releases from earmark
Net release
Gold held abroad for Federal Reserve Bank
of New York:
New earmarkings
Releases from earmark
Net earmarking

Net Gain or Loss from Foreign Transactions —558,100
Net Amount of Domestic Production added
to Monetary Gold Stock

*Net imports.

As this table indicates, practically all of the year's export of gold
took place during the first six months of the year, and imports in
that period were less than one-fifth of exports. This movement
was reversed completely during the second half of the year. Exports during the latter period were small and represented chiefly
gold which had previously passed into foreign ownership and was
held under earmark at this bank. Imports were substantial
during this period and in addition there was a large reduction in
gold held under earmark for foreign account.



FEDERAL RESERVE BANK OF NEW YORK

17

The gold shipments received from abroad near the end of the
year included $22,900,000 imported from England out of $95,550,000
of gold earmarked abroad for the Federal Reserve Bank of New
York on December 15. The $95,550,000 earmarking of gold represented a payment by the Government of the United Kingdom to
the United States Treasury in settlement of the amount due December 15, 1932 under the war debt funding agreement of June 18,
1923. This transaction was effected through the Bank of England
and the Federal Reserve Bank of New York. At the request of
the Bank of England, the Federal Reserve Bank of New York placed
at the disposal of the Bank of England, on December 15, 1932 gold
to the value of $95,550,000 against an equivalent amount of gold
which was earmarked for the account of the Federal Reserve Bank
of New York at the Bank of England, pending shipment to New
York.
The sources and destinations of physical imports and exports
of gold during the year 1932 are shown in the following table. The
large exports indicated were partly offset, not only by the imports
shown, but also in some cases by substantial releases of gold previously earmarked at the Federal Reserve Bank of New York.
The net amount of gold so released as previously indicated was
$385,000,000.
Country
Argentina
Australia
Belgium
Canada
China and Hongkong.
Colombia
England
France
Germany
Holland
India
Japan
Mexico
Peru
Philippines
Portugal
Switzerland
Uruguay
All Other
Total.

*Exports to

^Imports from
$13,000,000
8,800,000
1,000,000
64,800,000
38,900,000
3,200,000
70,800,000
14,100,000
400,000
16,700,000
25,400,000

$82,700,000
200,000
11,300,000
450,700,000
5,400,000
131,900,000

49,700,000
20,400,000
3,200,000

300,000
100,000

7,100,000

2,400,000
121,400,000
2,800,000

350,000
4,400,000
16,150,000

$809,200,000

$358,400,000

'Net
+
+
—
+
+
+
+
—
—
—
+
+
+
+
+
—
—
+
+

$13,000,000
8,800,000
81,700,000
64,600,000
38,900,000
3,200,000
59,500,000
436,600,000
5,000,000
115,200,000
25,400,000
49,700,000
20,100,000
3,100,000
7,100,000
2,400,000
121,050,000
4,400,000
13,350,000

—$450,800,000

•These figures differ slightly from those published by the Department of Commerce for two
principal reasons: first, because the ultimate source or destination of shipments was ascertained
by this bank in cases where only the immediate source or destination was reported to the
Department of Commerce; second, because certain imports were received on December 31. 1932
too late for purchase by the assay office until January 1, 1933.

** + Excess of imports;



— excess of exports.

EIGHTEENTH ANNUAL REPORT

18

The monetary gold stock of the United States at the close of
the year 1932 was approximately $500,000,000 less than the peak
figure of $5,015,000,000 reached in September 1931. It is interesting to note, however, that since that date there has been a substantial reduction of foreign short term balances in this market
so that the country's gold stock, in relation to foreign and domestic
claims*, probably was larger on December 31, 1932, than at any
time in recent years. Comparative figures for this country's stock
of monetary gold and for foreign short term funds in this country
for the years since these latter figures have been available are as
follows:
United States Monetary
Gold Stock

1927
1928
1929
1930
1931
1932

Foreign Funds at Short Term
in United States**

(Billions of dollars)
4.4
4.1
4.3
4.6
4.6
4.6

End of Year

(Billions of dollars)
3.1
3.0
3.0
2.7
1.5
0.9

**As reported to Finance and Investment Division, Bureau of Foreign and Domestic
Commerce; 1932 figure estimated.

From the above figures it appears that during the past three
years this country has repaid $2,200,000,000 of short term debt
to foreign countries, which had accumulated during the previous
decade as foreigners sought safety or high interest rates in this
country. Despite this repayment, the monetary gold stock of the
country during the same period increased approximately $200,000,000. The recent heavy gold movements indicate clearly the
strength of the international balance of payments position of the
United States.
*No accurate data are available with respect to the total amount of foreign long
term funds (foreign holdings of dollar securities, etc.) in this country.

The Foreign Exchanges
The year 1932 was characterized by marked instability of the
foreign exchanges which served to impair confidence, added to the
hazards of international business transactions and, particularly in
cases of severe depreciation, exerted a downward pressure on commodity prices.
In the first half of the year the New York quotations of the
major foreign gold currencies were largely dominated by influences
unfavorable to the dollar. Except in January and for a brief time



FEDERAL RESERVE BANK OF NEW YORK

19

in March, the French and Swiss francs, the guilder, and the belga
not only stood above par, but were quoted for relatively long periods
above the theoretical gold export point from New York. An efflux
of gold to these countries reflected the state of the exchanges. By
mid-June, however, the dollar had fully demonstrated its strength,
and the short term balances owned by foreigners in this market
had been drawn down close to the minimum compatible with their
commercial and financial relations with this country. Thereafter,
a sharp downward movement took place in the quotations of the
exchanges of gold standard countries, and although there was a
brief upturn in early October, they generally were quoted below
par during the last four months of the year. One major currency,
the French franc, was almost constantly at or below the gold import point from France near the end of 1932.
Sterling oscillated in a wide range during the year. From a
quotation around $3.40 at the start of the year it rose irregularly
to $3.82^4 on March 28. Subsequently, however, it declined
gradually to $3.50J^ at the end of July. After holding around that
level for some time, it dipped suddenly in the last week of October
and again in the latter part of November, reaching a record low
of $3.14^ on November 29. During December it recovered irregularly to $3.33y% on the closing business day of the year. The Swedish crown tended to follow sterling. The reichsmark, being subject to official control, held a nominal quotation relatively close to
its parity, and the lira also moved in a relatively narrow range.
The Canadian dollar opened the year at a discount of 15}^ per
cent, and fluctuated widely during the course of the year. The
highest point of the year was reached in October when the discount
stood at 63^ P e r cent, but subsequently it declined to a discount
of around 16 per cent, and at the year-end was quoted 11^8 P e r
cent below par.
Open market quotations for the leading South American currencies showed small variations in 1932, being pegged at official
rates, well below par of exchange in most cases, under governmental
regulation.
The yen, par for which is $0.4985, declined rather steadily from
$0.35 at the beginning of the year to a low point of $0.20 on November 29, after which it recovered slightly. Paralleling the declining price of silver, the Chinese exchanges showed a substantial
depreciation and closed the year weak, Shanghai being quoted at
$0.2725 on December 31, as compared with $0.3350 at the beginning of the year.



20

EIGHTEENTH ANNUAL REPORT

Foreign exchange is freely available in relatively few of the trading nations of the world. Thirty countries now regulate their
exchanges, either explicitly under governmental decrees or implicitly
by arrangements between the monetary authorities and the commercial banks. In the majority of these countries the law requires that all foreign exchange standing in the name of a citizen
of the country be offered for sale, or sold within a specified lapse of
time, to the agency of control. In practically all of them, written
authority is necessary in order to acquire foreign exchange for most
general purposes, such as payment for imports or meeting of debt
service due abroad, save in small and expressly limited amounts.
In certain countries, foreign exchange required by importers will
be delivered only if payment is to be made for the import of commodities deemed necessary to the national economy and specified
in a list published by the governmental authority. Even in those
cases the amount delivered is in some countries limited to fixed
percentages of the normal import of such commodities in previous
years.
The classified list which follows gives an indication of the extent
of foreign exchange control around the world, but is subject to
frequent change. It is based upon information compiled by the
Finance and Investment Division of the United States Department
of Commerce, as of January 1, 1933.
1. Countries with no Foreign Exchange Restrictions
Australia
Belgium
Canada
China
Cuba
Danzig
Dominican Republic
Egypt
France
Guatemala
Haiti

Honduras
India
Irish Free State
Lithuania
Mexico
Netherlands
Netherlands East
Indies
New Zealand
Panama

Peru
Puerto Rico
El Salvador
Siam
Straits Settlements
Sweden
Switzerland
Union of South Africa
United Kingdom
Venezuela

2. Countries with "voluntary" Foreign Exchange Restrictions
Norway
Finland
Italy
Poland



FEDERAL RESERVE BANK OF NEW YORK

21

3. Countries with Legal Foreign Exchange Restrictions
Argentina
Austria
Bolivia
Brazil
Bulgaria
Chile
Colombia
Costa Rica
Czechoslovakia

Denmark
Ecuador
Estonia
Germany
Greece
Hungary
Japan
Latvia

Nicaragua
Paraguay
Persia
Portugal
Rumania
Spain
Turkey
Uruguay
Yugoslavia

Measures of exchange control have served in various ways to
choke the channels of international trade and to stop the international flow of capital. The restrictions which they have placed
upon foreign payments in countries contributing approximately
one-third of the world's commerce have played an important part
in contracting the total volume of trade carried on between the nations. The barriers which they have erected against the free flow
of funds have impaired confidence and made international lending
difficult if not impossible.

Foreign Relations
During 1932 the Federal Reserve Bank of New York, on behalf
of all twelve Federal Reserve Banks, maintained relations with
thirty-three foreign banks of issue and with the Bank for International Settlements. Included in this number are the new accounts
opened during the year, with the approval of the Federal Reserve
Board, for the banks of issue of Denmark, Bolivia, and Ecuador.
As in the past, the opening of these accounts resulted from steps
initially taken by the foreign banks concerned.
There was a considerable change in the character and volume
of the foreign central bank accounts at this bank during the year.
This was the result chiefly of a tendency on the part of many foreign
banks of issue which had held a substantial part of their legal or
actual reserves in foreign gold currencies, principally dollars and
sterling, to convert these foreign currency holdings into gold. The
movement began in the spring of 1931, was accelerated following
the suspension of gold payments by Great Britain in September,
and continued during the early months of 1932. First, there was
a wholesale transfer of the dollar holdings of these banks from in


22

EIGHTEENTH ANNUAL REPORT

vestment in acceptances and United States Government securities
to sight balances and gold held here under earmark. Subsequently,
the sight balances were used for the acquisition of further gold, and
a progressive repatriation of this gold and of gold previously earmarked took place. Ultimately, the dollar assets of a number of
central banks were depleted to the point where it became necessary
for them to resell some of the gold earmarked for their accounts, in
order to obtain the dollars required by the balance of payments
position of their respective countries vis-a-vis the United States.
No new credit facilities were extended to foreign banks of issue
by the Federal Reserve Banks during 1932. On January 3 1 , 1932,
the agreement to purchase prime commercial bills from the Bank of
England, entered into on August 1, 1931 and renewed on November
1 in the reduced amount of $75,000,000, expired; no transactions
took place under that renewal and no further renewal was requested.
The agreements governing the funds made available by the Federal
Reserve Banks, and other central banks, to the banks of issue of
Austria, Hungary, and Germany, described in the annual report
of this bank for 1931, were renewed at intervals during 1932 by
the participating creditor banks. The last renewals were as follows:
on October 17, 1932 the agreement with the Austrian National
Bank was renewed to January 16, 1933 in the total amount of
approximately $12,600,000, the Federal Reserve participation being
approximately $975,000; on October 18, 1932 two agreements in
favor of the National Bank of Hungary, covering a total sum of
$16,570,000, with Federal Reserve participation amounting to
$4,000,000, were renewed to January 18, 1933; on December 5,
1932, following repayments during the year aggregating $14,000,000,
the credit in favor of the Reichsbank was renewed to March 4, 1933
in the amount of $86,000,000 the Federal Reserve participation
being reduced from $25,000,000 to $21,500,000. Without exception, the Federal Reserve participation in these various undertakings is in the form of an agreement to purchase prime commercial
bills endorsed or guaranteed by the respective foreign banks of issue,
and all such agreements provide for ultimate repayment in gold, if
necessary.




FEDEEAL RESERVE BANK OF NEW YORK

23

Amendments to Federal Reserve Act Broadening
Reserve Bank Lending Powers
In addition to provisions of the Glass-Steagall Act, referred to
on page 6, which authorized the Reserve Banks to use Government
securities as collateral for Federal Reserve notes, there were two
other important changes in the Federal Reserve Act during the year.
One was contained in other provisions of the Glass-Steagall Act
which authorized the Reserve Banks in exigent circumstances to
lend to member banks on their promissory notes secured by collateral
that was previously ineligible, in cases where the borrowing banks
have no adequate amounts of eligible paper. Two ways were provided by which loans of this character could be made. The first
provision was for loans to groups of five or more banks; no loans were
made under this provision in the Second District by the end of 1932.
The second provision was for loans to individual banks having a
capital not in excess of $5,000,000. Loans made under this provision
by the Federal Reserve Bank of New York did not at any time attain
large volume during 1932, but a number of comparatively small
loans were made. The maximum amount of such loans outstanding in the Second District at any one time was $3,500,000, and at
the end of the year, the amount outstanding was $2,800,000, as
compared with a total of $50,300,000 of loans on eligible paper.
This authority for Federal Reserve Banks to discount member
bank notes secured by paper previously ineligible, although used to
a comparatively small extent in this district, has demonstrated its
usefulness in emergencies, in enabling the Reserve Bank to assist
a number of member banks in difficult circumstances.
DIRECT LOANS TO INDIVIDUALS, PARTNERSHIPS,
AND CORPORATIONS

Another amendment to the Federal Reserve Act was contained
in the Emergency Relief and Construction Act of 1932, by which
the Federal Reserve Board was permitted to authorize the Federal
Reserve Banks "in unusual and exigent circumstances" to discount
paper for any individual, partnership, or corporation, under certain
conditions. The principal conditions were the following:
(1) The paper discounted must be of the kinds and maturities
made eligible for discount for member banks under other
provisions of the Federal Reserve Act;
(2) The paper must not only be of a type that is eligible, but
must be indorsed and otherwise secured to the satisfaction
of the Federal Reserve Bank;



24

EIGHTEENTH ANNUAL REPORT
(3) Before discounting such p a p e r t h e Federal Reserve B a n k
must obtain evidence t h a t t h e borrower is unable t o secure
adequate credit accommodations from other banking institutions.

P a p e r eligible for discount a t t h e Reserve B a n k s is limited t o
notes, drafts, and bills of exchange d r a w n t o finance agriculture,
industry, or t r a d e , which have definite m a t u r i t y a t t h e time of discount n o t exceeding 90 days in t h e case of industrial and commercial
paper or 9 months in t h e case of agricultural p a p e r , and certain
types of sight obligations. P a p e r is n o t eligible if t h e proceeds
h a v e been used, or are t o be used, for p e r m a n e n t or fixed investm e n t s of any kind, such as land, buildings, or machinery, or for
any other capital purpose. T h e a m e n d m e n t authorizing Reserve
B a n k loans to individuals, p a r t n e r s h i p s , a n d corporations in n o way
broadened t h e provisions for eligibility, a n d required t h a t such
loans m u s t be well secured. I t authorized direct loans t o borrowers
having paper of t h e kind t h a t could be discounted b y t h e Reserve
Banks for member b a n k s , provided those borrowers are unable t o
obtain adequate credit from other sources.
Soon after t h e passage of this A c t t h e Federal Reserve Board
authorized the Reserve B a n k s t o m a k e such loans for a period of six
m o n t h s beginning August 1, 1932 (since extended for an additional
six m o n t h s ) . T h e Federal Reserve B a n k of N e w Y o r k a t once
received a large n u m b e r of applications from prospective borrowers
for direct loans. These applications were carefully examined, and
in all cases where the loans appeared t o be of a n eligible character
further investigation followed. T h e great majority, however,
proved a t once to be of an ineligible character, including m a n y
applications for mortgage loans a n d for funds for other capital
purposes. Wherever possible applicants for ineligible loans were
referred t o other possible sources of funds. I n general it was found
t h a t eligible borrowers who appeared t o be entitled t o b a n k credit
were being provided for b y t h e commercial b a n k s . There were a
few exceptions, however, and 13 direct loans t o business organizations were authorized b y the Federal Reserve B a n k of N e w Y o r k
by t h e end of 1932. T h e total a m o u n t of these commitments was
$1,292,500, against which advances of $531,500 h a d been requested
by t h e borrowers up to t h e end of t h e year, and of t h a t a m o u n t
$465,450 was outstanding on December 3 1 .
I n addition to receiving applications for loans u n d e r this a m e n d m e n t to the Federal Reserve A c t , t h e Federal Reserve B a n k of N e w
York, in cooperation with the B a n k i n g a n d Industrial C o m m i t t e e
in this district, undertook a survey of t h e needs for credit which



FEDERAL RESERVE BANK OF NEW YORK

25

were not being provided for by the existing banking facilities in the
Second Federal Reserve District. The most numerous needs that
were found were for mortgage loans either to refinance existing
mortgages, or to provide new funds. A number of cases were found
in which business concerns were in need of additional working
capital, due to the fact that in the course of the depression they had
largely exhausted their cash resources, and, with current operations
on an unprofitable basis, were unable to offer a secure basis for bank
loans. Many cases were also revealed in which personal loans
were needed for a variety of purposes, most of which were ineligible
for discount by the Reserve Bank. In a majority of cases the
needs were for intermediate or long term loans, rather than for
short term credit.

Banking and Industrial Committee
In furtherance of the program for making credit more freely
available, a committee composed of prominent bankers and industrialists was appointed in this district on May 19 to assist in bringing together the demands for credit and the supply of funds. The
announcement made at that time was as follows:
Governor Harrison of the Federal Reserve Bank of New York has called together a committee composed of bankers and industrialists for the purpose of considering methods of making the large funds now being released by the Federal Reserve Banks useful affirmatively in developing business. Its purpose also will be
generally to cooperate with the Reconstruction Finance Corporation and other
agencies to secure more coordinated and so more effective action on the part of
the banking and industrial interests.

The following were appointed to membership on this committee:
Owen D. Young, Chairman . Chairman, General Electric Company
Mortimer N. Buckner .Chairman, New York Trust Company
Floyd L. Carlisle . . . Chairman, Consolidated Gas Company
WalterS. Gifford . . .President, American Telephone and Telegraph Company
Charles E. Mitchell . .Chairman, National City Bank
William C. Potter . .President, Guaranty Trust Company
Jackson E. Reynolds .President, First National Bank
Alfred P. Sloan, Jr. . .President, General Motors Corporation
Walter C. Teagle . . .President, Standard Oil Company
(New Jersey)
A. A. Tilney
Chairman, Bankers Trust Company
Albert H. Wiggin . . .Director, Chase National Bank
Clarence M. Woolley .Chairman, American Radiator and Standard Sanitary Corporation
On January 16, 1933, Mr. George W. Davison, Chairman, Central Hanover Bank and Trust Company, was appointed as a member
of the committee.



26

EIGHTEENTH ANNUAL REPORT

Soon after formation of the Banking and Industrial Committee
of the Second Federal Reserve District, announcement was made
of the formation of the American Securities Investing Corporation.
This corporation was created for the purpose of facilitating coordinated action by the banks in the purchase of investment securities.
One of the first steps taken by the committee was to obtain an
agreement from a group of New York banks to underwrite an issue
of bonds by the Savings and Loan Bank of the State of New York,
which operates somewhat as a central bank for savings and loan
associations throughout the State. The proceeds of this issue of
bonds were made available to member institutions for the purpose
of providing additional mortgage funds.
The staff of the committee investigated the situation of particular
industries which were reported to be in need of credit, and cooperated with the Federal Reserve Bank of New York in making general
surveys of credit needs in the Second District. In this connection
at the request of the Chairman the National Industrial Conference
Board conducted an inquiry among industrial concerns throughout
the country to determine the extent to which they were not obtaining needed credit.
The committee also took steps to encourage and promote the
use of trade acceptances by business establishments, with the idea
of improving the quality of credit instruments available to banks
and thus facilitating the financing of business through bank credit.
Members of the committee and of its staff have cooperated with
public bodies interested in obtaining funds for construction purposes, especially those desiring to borrow on self-liquidating projects
from the Reconstruction Finance Corporation. In this connection
the committee has acted in a liaison capacity between borrowers
on the one hand and the Reconstruction Finance Corporation on
the other.
As a result of the activities of an organization set up by the
Banking and Industrial Committee, considerable progress has been
made in the promotion of the Share-the-Work Movement, the purpose of which is to reduce the number of unemployed workers by
reducing the working time of those employed and providing employment for additional people.
Finally, the committee has operated as a clearing house for programs in the economic field and has received and analyzed a large
number and variety of plans for dealing with the present economic
situation.



FEDERAL RESERVE BANK OF NEW YORK

27

Membership Changes in 1932
The membership of the Federal Reserve System in this district
decreased less during 1932 than in any year since 1929. The reduction was due entirely to a reduction in the number of National
banks in operation in the district. There were three State bank
and Trust companies admitted to membership and no withdrawals
from membership. During 1932 the number of insolvencies was
11, as compared with 44 during the previous year. Mergers and
consolidations among member banks continued to account for a
large part of the decrease in membership.
Number of Member11' and Nonmember Banks in Second Federal Reserve
District at End of Year
DECEMBER 31,

TYPE OF BANK

1932

DECEMBER 31,

1931

NonPer Cent
NonPer Cent
Members* Members Members Members* Members Members
National Banks
State Banks**
Trust Companies

Total

684
39
104

0
164
169

100
19
38

699
37
105

0
166
174

100
18
38

827

333

71

841

340

71

•In actual operation at end of year.
••Exclusive of savings banks.
Changes in Federal Reserve Membership in Second District During 1932
Total membership beginning of year

841

Increases:!
National bank organized
National banks reopened
Admission of State banks and Trust companies
Member Trust company reopened
Total increases
Decreases:
Member banks combined with other members.
Members absorbed by nonmembers
Withdrawals
Insolvencies
Voluntary liquidation

22

Total decreases
Net decrease
Total membership end of year

8
2
0
11
1

14

,

827

fin addition to figures shown in this table, 4 nonmember banks were absorbed by
members during the year.



28

EIGHTEENTH ANNUAL REPORT

Operating Statistics
Statistics of the operations of this bank are summarized briefly
on the following pages. Detailed statistics for each Federal
Reserve Bank are published in the annual report of the Federal
Reserve Board.
STATEMENT OF CONDITION
RESOURCES

CASH RESERVES held by this bank against its
deposits and note circulation:
Gold held by the Federal Reserve Agent as
part of 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
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
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... •.
Gold and gold certificates in vault
Legal tender notes, silver, and silver certificates in the vaults of the bank (available
as reserve only against deposits)
Total cash reserves
Non-reserve cash consisting largely of National bank notes, and minor coin

DEC.

31, 1932

DEC.

31, 1931

$616,630,213.92

$450,336,457.22

6,155,156.59

11,542,824.20

103,792,488.24
289,509,470.99

81,379,878.67
300,478,183.81

52,385,395.00

37,739,315.00

$1,068,472,724.74

$881,476,658.90

$21,158,222.18

$19,234,621.23

$25,332,250.00

$112,203,754.31

24,973,979.93

37,474,318.93

2,829,347.12
465,930.62
9,780,168.81

272,565.69
163,392,844.14

733,353,950.00
2,906,775.49

309,355,850.00
14,315,212.50

$799,642,401.97

$637,014,545.57

$72,637,893.28
118,169,814.77
14,393,300.69
25,545,469.28

$164,866,941.19
14,816,793.01
20,499,027.40

$230,746,478.02

$200,182,761.60

LOANS AND INVESTMENTS:

Loans to member banks:
On the security of obligations of the United
States
On the security of, or by the discount of,
commercial or agricultural paper or acceptances
On the security of other collateral under
Section 10 (b) of the Federal Reserve
Act, as amended
Other loans
Bills bought in the open market
United States Government bonds, notes,
bills, and certificates of indebtedness
Other securities
Total loans and investments
MISCELLANEOUS RESOURCES:

Gold held abroad
Checks and other items in process of collection
Bank premises
All other miscellaneous resources
Total miscellaneous resources
Total resources



$2,120,019,826.91 $1,737,908,587.30

FEDERAL RESERVE BANK OF NEW YORK

LIABILITIES

DEC.

31, 1932

DEC.

31, 1931

CURRENCY IN CIRCULATION:

Federal Reserve notes in actual circulation,
payable on demand. As required by law,
these notes are secured by gold; or notes,
drafts, bills of exchange or acceptances; or
obligations of the United States

$587,565,860.90

$574,185,857.40

Federal Reserve notes in circulation....

$587,565,860.90

$574,185,857.40

DEPOSITS:

Reserve deposits maintained by member
banks as legal reserves against the deposits
of their customers
$1,256,950,857.76
United States Government deposits carried at
the Reserve Bank for current requirements
of the Treasury
1,950,307.04
Other deposits including deposits of foreign
correspondents, nonmember banks, etc.. . .
12,965,444.15

$795,014,893.86
25,740,077.78
41,313,401.35

$1,271,866,608.95

Total deposits

$862,068,372.99

$114,499,314.57
2,410,521.19

$158,125,864.59
6,812,787.98

$116,909,835.76

$164,938,652.57

$58,619,100.00

$61,638,550.00

85,058,421.30

75,077,154.34

$143,677,521.30

$136,715,704.34

MISCELLANEOUS LIABILITIES:

Deferred items, composed mostly of uncollected checks on banks in all parts of the
country. Such items are credited as deposits after the periods specified in this
bank's time schedules, which periods range
from 1 to 7 days after receipt by this bank
and are based on the average time required
for collection
All other miscellaneous liabilities
Total miscellaneous liabilities
CAPITAL AND SURPLUS:

Capital paid in, equal to 3 per cent of the
capital and surplus of member banks
Surplus—That portion of accumulated net
earnings which the bank is legally required
to retain
Total capital and surplus
Total liabilities

$2,120,019,826.91 $1,737,908,587.30

INCOME AND DISBURSEMENTS

Income and disbursements for the year 1932 compared with
1931 are shown in the table on the following page. Total earnings
in 1932 were nearly 16 million dollars, which is a little more than
twice the amount of the previous year. This increase was due to a
considerable rise in the amount of Reserve Bank credit outstanding.
Most of the increase in income was from United States Government
security holdings, which were greatly enlarged. Income from loans
also was larger than in 1931, but income from acceptances was much



EIGHTEENTH ANNUAL REPORT

30

1932

1931

EARNINGS:

$1,661,804.55
1,638,210.41
3,613,854.20
641,344.16
$7,555,213.32

$1,362,375.51

$1,107,406.45

$6,190,061.12

$6,298,732.43

186,667.16

348,371.41

530,039.45

483,435.21

$6,906,767.73

Total earnings

$3,276,594.84
932,504.88
11,157,506.72
582,336.21
$15,948,942.65

From loans
From bills bought in the open market
From United States Government obligations
Other earnings

$7,130,539.05

$10,404,550.43

$1,532,080.72

$3,562,030.29

$3,891,598.91
2,359,518.19

ADDITIONS TO EARNINGS:

For sundry additions to earnings, including
income from Annex Building
DEDUCTIONS FROM EARNINGS:

For current bank operation. (These figures
include most of the 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, and the cost
of redemption
For depreciation, self-insurance, other reserves, losses, etc
Total deductions from earnings
Net income available for dividends, additions
to surplus, and franchise tax to the United
States Government
Dividends paid to member banks, at the rate
of 6 per cent per annum on paid-in capital..
Excess of dividends over net income
Additions to surplus—The bank is required
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
Franchise tax—Any balance of net income
remaining after paying dividends and making additions to surplus (as above) is required to be paid to the United States
Government as a franchise tax. No balance
remained for such payments in 1932 or 1931

6,842,520.14

ADDITIONS TO SURPLUS ACCOUNT:

Net earnings
Restoration of depreciation reserve on United
States Government securities

$6,842,520.14

Total additions to surplus account

$9,981,266.96

3,138,746.82

CHARGES TO SURPLUS ACCOUNT:

Excess of dividends over net income
Depreciation reserve on United
Government securities
Total charges to surplus account



States

$2,359,518.19
3,138,746.82
$5,498,265.01

FEDERAL RESERVE BANK OF NEW YORK

81

reduced. Expenses of current bank operation again were smaller
than the preceding year, notwithstanding an increase in the volume
of work in many departments of the bank. There was also a substantial reduction in the cost of new currency.
Regular dividends were paid and $9,981,266 was added to
surplus, of which $6,842,520 was from net earnings for 1932 and
$3,138,746 represented the restoration to surplus of a depreciation
reserve on United States Government securities set up in 1931.
VOLUME OF OPERATIONS

The following table shows the volume of operations in the principal operating departments of the bank. While there was a decrease in the work in some of the operating departments of the
bank, the volume of work in the bank as a whole was not reduced.
In addition to the Discount Department, the operations of which
are represented in the following table, there were several departments, in which the volume of work is difficult of precise measurement, that had an increase in activity in 1932. These included
the Credit, Foreign, Government Bond and Safekeeping, Reports,
and Securities Departments.
1932
Number of Pieces Handled
Bills discounted:
Applications
Notes discounted
Bills purchased in open market for own account.
Currency received and counted
Coin received and counted
Checks handled
Collection items handled:
United States Government coupons p a i d . . . .
All other
United States securities—issues, redemptions,
and exchanges by fiscal agency department...
Transfers of funds
Amounts Handled
Bills discounted
Bills purchased in open market for own account.
Currency received and counted
Coin received and counted
Checks handled
Collection items handled:
United States Government coupons paid
AH other
United States securities—issues, redemptions,
and exchanges by fiscal agency department...
Transfers of funds




1931

34,122
94,436
61,102
600,166,000
1,015,189,000
157,079,000

18,200
57,251
125,908
674,810,000
1,123,503,000
184,402,000

4,359,000
2,638,000

4,488,000
2,545,000

835,000
341,000

1,187,000
375,000

$4,912,325,000
356,347,000
3,545,484,000
165,048,000
70,642,227,000

$4,200,712,000
1,317,969,000
4,322,295,000
345,060,000
101,014,303,000

r
256,177,000
1,970,659,000

233,190,000
2,759,966,000

13,416,054,000
49,476,304,000

11,434,584,000
62,189,715,000

32

EIGHTEENTH ANNUAL REPORT
PARTICIPATION IN THE SHARE-THE-WORK PLAN

In order to assist in providing employment for those out of work,
the Federal Reserve Bank of New York is now participating in the
Share-the-Work plan. The bank's participation was effected by
placing all employees as far as possible on the equivalent of a five
day week and taking on new employees to substitute for regular
employees who are absent under this schedule. A total of about
145 new employees were thus placed in the various departments of
the bank. A uniform deduction from the salaries of all officers and
employees was made in an amount sufficient to cover the actual
salary cost of the additional employees.

Changes in Directors and Officers
At a regular election in the fall of 1932, Edward K. Mills, President of the Morristown Trust Company, Morristown, N. J., was
elected by member banks in Group 2 as a Class A director for a
term of three years, beginning January 1, 1933, to succeed Thomas
W. Stephens of Montclair, N. J., whose term expired December
31,1932.
Walter C. Teagle, President of the Standard Oil Company (New
Jersey), New York, N. Y., was elected by member banks in Group 2
as a Class B director to succeed Theodore F. Whitmarsh, New
York, N. Y., whose term expired December 31, 1932, to serve for
three years, beginning January 1, 1933.
The Federal Reserve Board redesignated J. Herbert Case as
Chairman of the Board of Directors and as Federal Reserve Agent
for the year 1933. The Federal Reserve Board also reappointed
Owen D. Young as a Class C director for a term of three years from
January 1, 1933 and as Deputy Chairman of the Board of Directors
for the year 1933.
The Federal Reserve Board reappointed Frederick B. Cooley,
President, New York Car Wheel Company, Buffalo, N. Y., as a
director of the Buffalo Branch for a term of three years from January 1,1933.
The Board of Directors of this bank reappointed Lewis G.
Harriman, President, Manufacturers and Traders Trust Company,
Buffalo, N. Y., as a director of the Buffalo Branch for a term of
three years beginning January 1, 1933. The Board of Directors
of this bank also reappointed Robert M. O'Hara as Managing
Director of the Buffalo Branch for the year 1933.



FEDERAL RESERVE BANK OF NEW YORK

33

MEMBER OF FEDERAL ADVISORY COUNCIL

The directors at their meeting January 5, 1933, selected George
W. Davison, Chairman, Central Hanover Bank and Trust Company, as the member of the Federal Advisory Council from the
Second Federal Reserve District for the year 1933 to succeed Robert
H. Treman, President of the Tompkins County National Bank,
Ithaca, N. Y., whose term expired December 31, 1932.
CHANGES IN OFFICERS

On February 5, 1932, the Loan and Discount Department was
divided into two departments; Arthur Phelan was appointed Manager of the Discount Department and Jacques A. Mitchell, formerly Manager of the Loan and Discount Department, was made
Manager of the Credit Department.
On January 3, 1933, Donald J. Cameron, formerly Chief of the
Foreign Accounts Division, was appointed Manager of the Foreign
Department; Edward O. Douglas, formerly Manager of the Foreign
Department, became Manager of the Collection Department; and
Robert F. MjcMurray, formerly Manager of the Collection Department, was placed in charge of the Reconstruction Finance Corporation Unit in the Government Bond and Safekeeping Department.
Theodore M. Crisp resigned as Assistant Counsel on April 30,
1932.




84

EIGHTEENTH ANNUAL REPORT

DIRECTORS AND OFFICERS
January 1, 1933

Term
Expires
Dec. 31

DIRECTORS
Class Group
A

1 ALBERT H. WIQGIN, New York City

1934

Director, The Chase National Bank of the City of New York
A

2

EDWARD K. MILLS, Morristown, N . J

1935

President, Morristown Trust Company
A

3

DAVID C. WARNER, Endicott, N. Y

1933

President, Endicott Trust Company
B

1 WILLIAM H. WOODIN, New York City

1934

President, American Car & Foundry Company
B

2 WALTER C. TEAGLE, New York City

1935

President, Standard Oil Company (New Jersey)
B

3 SAMUEL W. REYBURN, New York City

1933

President, Associated Dry Goods Corporation of New York
C

J. HERBERT CASE, New York City, Chairman

C

OWEN D. YOUNG, New York City, Deputy Chairman
Chairman, General Electric Company

C

1934

CLARENCE M. WOOLLEY, Greenwich, Conn

. . . .

1935
1933

Chairman, American Radiator and Standard Sanitary Corporation

MEMBER OF FEDERAL ADVISORY COUNCIL
GEORGE W. DAVISON

Chairman, Central Hanover Bank and Trust Company, New York, N. Y.

OFFICERS OF FEDERAL RESERVE AGENT'S FUNCTION
J. HERBERT CASE, Federal Reserve Agent
WILLIAM H. DILLISTIN, Assistant Federal

Reserve Agent

HAROLD V. ROELSE, Manager, Reports

Department and Assistant Secretary

HERBERT S. DOWNS, Assistant Federal

Reserve Agent and Manager, Bank
Relations Department

CARL SNTDER, General Statistician

EDWARD L. DODGE, General Auditor

GEORGE W. FERGUSON, Assistant General Auditor



FEDERAL RESERVE BANK OF NEW YORK

35

GENERAL OFFICERS
GEORGE L. HARRISON, Governor

W. RANDOLPH BURGESS, Deputy Governor

EDWIN R. KENZEL, Deputy Governor

JAY E . CRANE, Deputy Governor

WALTER S. LOGAN, Deputy Governor and
General Counsel

ARTHUR W. GILBART, Deputy Governor

LESLIE R. ROUNDS, Deputy Governor

Louis F . SAILER, Deputy Governor

CHARLES H. COE,

L. WERNER KNOKE,

Assistant Deputy Governor

Assistant Deputy Governor

R A T M. GIDNEY,

WALTER B. MATTESON,

Assistant Deputy Governor

Assistant Deputy Governor

J. WILSON JONES,

JAMES M. RICE,

Assistant Deputy Governor

Assistant Deputy Governor

ALLAN SPROTTL, Assistant Deputy

Governor and Secretary

JUNIOR OFFICERS
DUDLEY H. BARROWS,

ROBERT F . MCMURRAY,

Manager, Administration Department

Manager, Government Bond and Safe-

WESLEY W. BURT,

keeping Department

Manager, Accounting Department
DONALD J. CAMERON,
Manager, Foreign Department

JACQUES A. MITCHELL,
Manager, Credit Department
ROBERT M. MORGAN,

EDWARD O. DOUGLAS,

Manager, BUI Department

Manager, Collection Department
EDWIN C. FRENCH,
Manager, Cash Department
HERBERT H. KIMBALL,
Assistant Counsel

ARTHUR PHELAN,
Manager, Discount Department
WILLIAM A. SCOTT,
Manager, Government Bond and Safekeeping Department

I . WARD WATERS,

Manager, Check Department

BUFFALO BRANCH
Term
Expires
Dec. 31

DIRECTORS
RAYMOND N. BALL, Rochester

1934

President, Lincoln-Alliance Bank and Trust Company
FREDERICK B. COOLE-Y, Buffalo

1935

President, New York Car Wheel Company
LEWIS G. HARRIMAN, Buffalo

1935

President, Manufacturers and Traders Trust Company
GEORGE G. KLEINDINST, Buffalo

1934

President, Liberty Bank of Buffalo
EDWARD G. MINER, Rochester

1933

Chairman, Pfaudler Company
GEORGE F . RAND, Buffalo

1933

President, Marine Trust Company
ROBERT M. O'HARA, Managing Director

1933

OFFICERS
ROBERT M. O'HARA,

Managing Director
R. B. WILTSE,

Assistant Manager



HALSEY W. SNOW, J R . ,

Cashier
CLIFFORD L. BLAKESLEE,

Assistant Cashier


Federal Reserve Bank of St. Louis, One Federal Reserve Bank Plaza, St. Louis, MO 63102