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Twentieth Annual Report

Federal Reserve Bank
of New York
For the Year Ended December 31,1934

®
Federal Reserve Agent
Second Federal Reserve District




Twentieth Annual Report

Federal Reserve Bank
of New York
For the Year Ended December 31, 1934

Federal Reserve Agent
Second Federal Reserve District







CONTENTS
PAGE

Letter of Transmittal
The Money Market in 1934
_
Increase in the Monetary Gold Stock
Silver Purchases
~
Increase in Bank Reserves
Potential and Actual Expansion of the Money Supply
Credit Needs of Business
„.
New Capital Issues
Credit Policy and Operations of the Bank During 1934
Credit Policy
Fiscal Agency Operations
Supervision of Member Banks
Industrial Loans
Other Operations
Foreign Exchanges and Gold Movements
Silver Legislation
Foreign Exchange Control
Foreign Relations
Membership Changes in 1934
Financial Statement
Statement of Condition
Income and Disbursements
Changes in Directors and OflBcers
Member of Federal Advisory Council
Changes in Officers
List of Directors and OflBcers




4
5
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8
10
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46

FEDERAL RESERVE BANK
OF NEW YORK

New York, February 19, 1935

SIRS:

I have the honor to submit herewith the twentieth annual report of
the Federal Reserve Bank of New York,
covering the year 1934.
Respectfully yours,
J. HERBERT CASE,

Chairman and Federal Reserve Agent.

FEDERAL RESERVE BOARD,

Washington, D. C.




Twentieth Annual Report
Federal Reserve Bank of New York
The Money Market in 1934
The principal developments in the money market during 1934
arose largely out of new monetary legislation and the financing
of the Government relief and recovery program. Probably the
most important banking development of the year was the unparalleled expansion of the metallic base for the currency and
credit supply of the country, the major element in which was
the increase in the dollar amount of the monetary gold stock
of the United States, following the passage of the Gold Reserve
Act of 1934 near the end of January. The dollar value of this
country's gold stock at the end of each year since 1914 is shown
in round amounts in the following table.
1914
1915
1916
1917
1918
1919
1920
1921
1922
1923
1924
1925
1926
1927
1928
1929
1930
1931
1932
1933
1934

$1,813,000,000
2,312,000,000
2,843,000,000
3,155,000,000
3,160,000,000
2,994,000,000
2,926,000,000
3,660,000,000
3,929,000,000
4,244,000,000
4,499,000,000
4,399,000,000
4,492,000,000
4,379,000,000
4,141,000,000
4,284,000,000
4,593,000,000
4,460,000,000
4,513,000,000
4,323,000,000
8,238,000,000

As the figures in this table indicate, the dollar value of the
gold stock at the end of 1934 was nearly double the average
amount in preceding years since the World War, and was about
4!/2 times as large as at the end of 1914. The largest factor in the
increase during 1934 was the revaluation of existing supplies of
gold held by the Treasury at $35 an ounce instead of $20.67 an
ounce, which resulted in a write-up of approximately $2,800,000,000 in the gold stock held at the end of January. In addition
a very large increase in the gold stock resulted from an inflow
of gold from other countries following the resumption of purchases and sales of gold by the United States Treasury at the
beginning of February.



5

6

TWENTIETH ANNUAL REPORT

At the end of January the cost of gold abroad, in terms of
dollars, was the equivalent of approximately $33 an ounce.
The offer of $35 an ounce for gold by the United States Treasury under the Gold Reserve Act of 1934 immediately resulted
in a heavy inflow of gold at New York from abroad until the
quotations for the foreign exchanges of countries that were still
on the gold standard rose approximately to their new parities
with the dollar so that gold imports no longer were profitable.
Several weeks elapsed, however, before the gold exchanges rose
to that level, and during February and March receipts of gold
at New York reached an aggregate of more than $600,000,000,
the largest inflow of gold on record for a comparable period.
The funds transferred to New York from abroad in the
weeks immediately following the devaluation of the dollar
apparently reflected to some extent a return flow of domestic
capital which had been accumulated abroad during the preceding
period of approximately nine months in which the value of the
dollar in terms of gold had fluctuated considerably. A larger
element in the gold inflow appears to have been a movement of
capital to this country, representing in part the repayment of
short term foreign indebtedness and the repurchase at low cost
of foreign dollar securities outstanding in this country, and in
part an increase in foreign deposits in the United States and
foreign investment in American securities.
The change in the gold value of the dollar also tended to increase the balance of payments due this country by other countries, as it had the effect of increasing the cost to the citizens of
the United States of everything purchased abroad and of reducing the cost to foreigners of goods purchased in this country,
thus tending to restrict imports and to stimulate exports. The
effect on the foreign trade of the United States was to a considerable extent counteracted by higher tariffs abroad or exchange
restrictions, but nevertheless the excess of merchandise exports
from the United States over imports during 1934 increased to
$478,000,000, as compared with $225,000,000 in 1933.
The increase in exports, as the accompanying diagram indicates, was chiefly in products other than agricultural commodities, especially automobiles, machinery, and petroleum products.
In the case of agricultural products, the great reduction in 1934
crops resulting from the drought together with the croj) restriction program of the Agricultural Adjustment Administration in
some cases eliminated exportable surpluses, and in some cases



FEDERAL RESERVE BANK OF NEW YORK
PLR CENT

150
125

100

75

50

NONAGRICULTURAL
25
0

1932

1933

1934

Quantity Exports of Agricultural and Non-Agricultural Commodities (Department of Agriculture index for agricultural exports; non-agricultural index
derived from Department of Commerce index of total exports. Unadjusted
for seasonal variation; 1923-25 average = 100 per cent)

caused prices of agricultural products in the United States to
rise to such an extent that some shift of foreign demands to
other exporting countries occurred, despite the reduced cost of
dollars abroad.
In addition to the increase in the balance of payments due
this country on merchandise transactions, expenditures abroad
by American tourists are reported to have been reduced materially, due at least in part to the reduced purchasing power of the
dollar abroad. There were some offsetting transactions such as
the purchases of silver abroad for the United States Government,
but the net balance of payments to be settled by shipments of
gold to this country was materially increased in 1934 as compared with 1933.
Apparently reflecting such payments, and also some renewal
of the movement of capital to this country, there was another
large movement of gold to the United States in November and
December, which brought the total gold imports for the year to
more than $1,100,000,000. Most of the imported gold was received



8

TWENTIETH ANNUAL REPORT

at New York, but there were smaller imports at San Francisco
and in other districts.
The substantial increase in the price of gold also tended to
stimulate the mining of new gold in this country and produced
an active market for old gold. The dollar value of new gold
produced in the United States during 1934 is reported to have
been about $108,000,000, the largest amount since 1915, and the
amount of scrap gold purchased by United States assay offices
and mints appears to have been close to $100,000,000.
SILVER PURCHASES

Another piece of monetary legislation which was a factor of
some importance in the money market position in 1934 was the
enactment on June 19, 1934 of the Silver Purchase Act of 1934,
providing for the purchase of silver at home or abroad until the
aggregate silver holdings of the Government are equal in value
to one-third of the monetary gold holdings of the United States.
Under authority of this Act, the Secretary of the Treasury has
made substantial purchases of silver during the year. The
amount of these purchases has not been reported currently by
the Treasury, but the silver holdings of the Government shown
by published Treasury statements have increased substantially.
At the end of 1934 the statement showed $720,000,000 of silver,
held chiefly against silver certificates outstanding, as compared
with $507,000,000 at the end of 1933; also $87,000,000 cost value,
and $11,000,000 recoinage value, of silver in the general fund of
the Treasury, as compared with $36,000,000 at the end of 1933.
Since the Treasury is authorized to issue silver certificates
against silver purchased, the acquisitions of silver during 1934
also tended to increase the metallic base for the currency and
credit system of this country. The issue of silver certificates
against silver acquired by the Government was begun promptly,
and at the end of the year the volume of silver coin and silver
certificates in circulation showed an increase of $210,000,000
over a year previous.
Changes in the amounts of currency of various kinds outstanding outside of the Treasury and the Eeserve Banks at the
end of 1933 and 1934 are shown in the following table.



FEDERAL RESERVE BANK OF NEW YORK
(In millions of dollars)
Dec. 31, 1933

Dec. 31, 1934

213
407
301
117
1
286
3,044
208
918

130

5,495*

Gold certificates
Silver certificates
Silver coin
Minor coin
Treasury notes of 1890
United States notes
Federal Reserve notes
Federal Reserve Bank notes
National bank notes

Change
— 83

592
326
125
1

+185
+ 25
+ 8

265

3,176
101
820

— 21
-I-132
—107
— 98

5,536

+ 41

* Excluding $310,000,000 of gold coin nominally in circulation at the end of 1933;
gold coin subsequently omitted from the reports.

The small reduction in United States notes in circulation
may reflect some displacement of such notes by silver certificates, but the reduction in gold certificates outstanding probably
reflects chiefly the retirement of currency that came out of
hoards during the year, and there was a reduction also in the
amount of large denomination bills of other kinds outstanding,
probably due to the same cause. Holders of gold certificates
were required to turn in their certificates in exchange for other
currency early in 1933, but it appears that in some cases the
holders of hoarded money were not aware of the fact that the
currency they held included some gold certificates. National
banks in some cases have retired substantial amounts of their
notes, due to the low yields obtainable on new investments relative to the costs of maintaining their notes in circulation. Federal Reserve Bank notes, which were issued as emergency
currency in 1933, were retired in considerable volume in 1934,
but the reduction in such notes outstanding was more than
offset by an increase in the amount of Federal Reserve notes in
circulation.
In general, the circulation of currency of denominations up
to $20, which is used largely in ordinary business and personal
transactions, has increased considerably during the past year,
while currency of denominations ranging from $50 to $10,000,
changes in which reflect largely the extent of hoarding, has been
retired in moderate amount. It is probable, therefore, that the
indicated net increase of $41,000,000 in the total amount of currency outstanding does not adequately reflect the actual increase
during the year in the amount of currency in use. Not all of the
increase in the volume of currency of the smaller denominations
outstanding represented an increase in circulation, however, as
part of the increase was accounted for by larger holdings of
currency in bank vaults.



10

TWENTIETH ANNUAL REPORT
INCREASE IN BANK RESERVES

The great increase in the monetary base during the past year
has been reflected chiefly in a growth in bank reserves. The increment of about $2,800,000,000 in the value of the monetary gold
stock of the United States, which accrued to the Government,
was set aside by the Treasury to establish a Stabilization Fund
and for other purposes, and consequently had no immediate
effect on bank reserves, but the proceeds of the heavy inflow of
gold from abroad were largely added to member bank reserves.
In the first instance most of the funds from this source were
received by New York City banks, but not all of the funds
remained in New York, as there were very large movements of
funds between New York and other districts. Sales of new
Treasury securities and Federal tax collections in this district
continued greatly to exceed Government expenditures in the
district, and for the year as a whole net withdrawals of funds
from this district by the Government were close to $1,100,000000. On the other hand there were almost equally large transfers of private funds to New York from other parts of the
country.
The approximate amounts of the more important transactions that affected the reserves of member banks in this district during 1934 are shown in the following table.
(In millions of dollars)'
Gain through gold receipts
Loss through Government withdrawals
Gain through commercial and banking transfers
Net gain through all transactions

+1,019
—1,093
+1,018
— 231
+

713

As these data indicate, there was an increase of over $700,000000 in the reserves of member banks in this district during the
year as the net result of all transactions. Most of this increase
was in the reserves of the large New York City banks. Although
nearly $200,000,000 of the additional reserves was absorbed by
an increase in reserve requirements, the excess reserves of New
York City banks were increased about $500,000,000, and in the
latter part of 1934 were far larger than ever before.
The accumulation of excess reserves was not limited to
New York City, but occurred in almost equally large volume in
other parts of the country. The increase in excess reserves in



FEDERAL RESERVE BANK OF NEW YORK

11

other localities appears to have been due chiefly to Government
expenditures of funds raised in New York and transferred to
other parts of the country and of free gold held by the Treasury,
which at one time in February amounted to about $380,000,000
(in addition to the profit resulting from the revaluation of the
monetary gold stock at the end of January). Other factors were
new gold production and recoveries of scrap gold, and issues
of silver certificates against silver bullion purchased by the
Treasury.
The data on excess reserves of member banks other than
New York City banks do not fully reflect the surplus funds of
banks in other parts of the country, as many nonmember banks
and probably member banks also deposited a part of their surplus funds with their New York City correspondent banks.
Deposits of this character apparently account for about half
of the total movement of commercial and banking funds to this
district that are indicated in the preceding table, as the balances of out of town banks with the large New York City banks
increased more than $500,000,000 during the year. The increase
in excess reserves in New York, therefore, was counterbalanced
by an increase in the deposit liability of the New York banks to
their correspondent banks in other localities.
BILLIONS
O(L DOLLARS

.5

1929

1930

1931

1932

1933
• BANK HOLIDAY

Reserve Position of New York City Member Banks
(Monthly averages of daily figures)



1934

12

TWENTIETH ANNUAL REPORT
POTENTIAL AND ACTUAL EXPANSION OF THE MONEY SUPPLY

Some idea of the potential expansion of bank credit and
deposits that could be based on the large reserves now held by
member banks may be obtained from the diagrams on pages 11
and 12 which show, both for New York City banks and for the
country as a whole, a comparison of the actual volume of
reserves with required reserves since 1929. In December 1934
the deposits of New York City member banks, exclusive of Government deposits which are specifically secured and require no
reserve, averaged around $7,000,000,000, which is approximately
the same amount as in December 1929. Yet, at the end of 1934
these banks had excess reserves equal to about two-thirds of
their legal reserve requirements. In other words, their total
reserves at the end of 1934, assuming the same ratio of deposits
to reserves as at present, would support an expansion of credit
which would raise their deposits to more than $11,500,000,000, an
amount far larger than ever before. For the district as a whole
the potential expansion of credit that could be based on the
reserves held by member banks at the end of 1934 would raise
deposits from about $10,000,000,000 to about $15,000,000,000, as
compared with less than $10,500,000,000 in 1929.

1929




1930

1931

1932

1933
* BANK HOLIDAY

Reserve Position of AH Member Banks
(Monthly averages of daily figures)

1934

13

FEDERAL RESERVE BANK OF NEW YORK

Recent data for all banks throughout the country are not
available, but on the basis of member bank data it seems likely
that total deposits of all banks at the end of 1934 were in the
neighborhood of $44,000,000,000, exclusive of interbank deposits. In view of the fact that all member banks have excess reserves averaging around 85 per cent of their required
reserves, the present volume of bank reserves presumably would
support an expansion of credit which would raise deposits to
something like $80,000,000,000, as compared with an average of
about $55,000,000,000 of deposits in 1929.
Although the actual expansion of bank credit and deposits
during the past year may seem small in comparison with the
potential expansion indicated above, it has, nevertheless, been
substantial. In fact, the increase both in total loans and investments and in demand and time deposits of member banks in 1934
was larger than in any preceding year since 1919. The data for
member banks in the New York District and elsewhere are indicated in the following table.
(In millions of dollars)
Dec. 30, 1933

Dec. 31, 1934

Change

Second District
Total loans and investments....
Demand and time deposits*....

9,415
7,572

10,216
8,681

+ 801
+1,109

All Other Districts
Total loans and investments....
Demand and time deposits*....

15,805
14,9%

17,934
18,001

+2,129
+3,005

Total United States
Total loans and investments....
Demand and time deposits*....

25,220
22,568

28,150
26,682

+2,930
+4,114

* Exclusive of Government deposits, interbank deposits, certified checks outstanding, etc.

As these data indicate, the percentage increase in the deposits
of member banks in this district during the past year, while
unusually large, was not as much as in all other districts combined. A considerable part of the increase in New York was
accounted for by the gold inflow, whereas in other districts a
substantial part of the increase in deposits appears to have been
due to Government disbursements of funds raised elsewhere.
Most of the increase in deposits was in demand deposits.
The extent to which potential expansion of bank credit and
deposits, represented by excess bank reserves, is followed by



14

TWENTIETH ANNUAL REPORT

actual expansion is dependent upon the development of effective demands for credit. The principal channel for credit expansion in 1934, as in 1933, was Treasuryfinancingto provide funds
for the Government relief and recovery program. During the
year the principal New York City banks increased their holdings
of Government securities and Government guaranteed securities
by approximately $1,100,000,000, or nearly 50 per cent. At the
same time the reporting member banks in other principal cities
throughout the country increased their holdings of Government
securities and Government guaranteed securities by approximately $1,400,000,000, which represents an increase of about 46
per cent during the year. At the end of 1934 holdings of such
securities represented 46 per cent of the total loans and investments of the New York City banks, and 40 per cent of the total
loans and investments of reporting banks in other principal
cities, as compared with 14^ per cent in New York and 12 per
cent in other principal cities at the end of 1930.
Except for a substantial seasonal expansion of loans during
the autumn period of crop moving and seasonal business activities, there was little evidence during 1934 of an increase in bank
credit in forms other than investments in Government securities.
In fact, the total loans of the principal New York City banks
were about $380,000,000 less at the end of 1934 than at the end
of 1933, and the total loans of the reporting banks in other
principal cities were approximately $370,000,000 less than at the
end of 1933, due chiefly to the continued liquidation of security
loans accompanying irregular security markets throughout the
year. Toward the end of 1934 security loans in the reporting
member banks were at levels about as low as at any time since
1919. There appears to have been some further decline also in
foreign loans, but the volume of domestic commercial loans outstanding in the reporting banks apparently was not materially
changed, further liquidation or writing off of old loans being
offset in the total by new loans made during the year, including
loans made indirectly through the commercial paper and
acceptance markets.
The conditions which would make for a large expansion of
bank loans, however, did not yet appear to be present at the end
of 1934. There was still no material revival of security flotations to provide capital for business enterprises, which during
the recovery from some of the earlier periods of depression has
caused a considerable expansion of security loans; no increase



FEDERAL RESERVE BANK OF NEW YORK

15

occurred in speculative borrowing on securities; and there has
been little evidence of any tendency on the part of business
organizations to borrow funds with which to expand their stocks
of merchandise or materials.
Furthermore, the deposits now available have not thus far
been used to anything like their full capacity. This is reflected
in the accompanying diagram, which shows that the average
rate of turnover of demand deposits diminished during 1934 to
approximately the lowest point of the depression.
PER CENT

200

150

100

\

50

1919'20 '21 '22 '23 '24 ^25 '26 '27 '28 '29 '30 f31 '32 f33 '34
Rate of Turnover of Demand Deposits in Principal Cities in Per Cent of the
1919-1925 Average (Adjusted for seasonal variation)

CREDIT NEEDS OF BUSINESS

Business needs for credit in 1934 again appeared to be largely
for loans of more distant maturity than the ordinary commercial
loans made for the purpose of financing seasonal activities. The
prolonged and severe depression made it necessary for many
business concerns to draw on their accumulated surpluses during the past few years to meet operating deficits and interest
requirements, and in some cases depleted their working capital.
Many other concerns appear to have greatly reduced their expenditures on maintenance of plants and equipment, in order
to maintain a strong cash position. For efficient handling of a
larger volume of business, therefore, some concerns need addi


16

TWENTIETH ANNUAL REPORT

tional working capital, and others need substantial additions to
their fixed capital investments.
In order to meet the need for working capital, especially on
the part of small concerns, and thus to enable them to maintain
or to increase their employment, legislation was enacted by
Congress in June 1934 which authorized the Federal Reserve
Banks in exceptional circumstances, when the requisite funds
were not available from the usual sources on a reasonable basis,
to make loans of working capital to established commercial and
industrial enterprises. The Act also authorized the Reserve
Banks to discount loans of this character for member banks,
and to assume up to 80 per cent of the liability for the repayment of loans so discounted. Another section of the Act authorized the Reconstruction Finance Corporation to make direct
working capital loans under somewhat similar conditions.
In this district every effort was made to bring this legislation
to the attention of prospective borrowers, and as a result a
large number of inquiries were received by this bank concerning
the possibility of obtaining loans. Many of the inquiries were
for loans of a character which plainly would not be eligible
under the industrial loan act, such as mortgage loans on homes
and various other types not contemplated by this legislation, but
wherever there appeared to be a possibility of making an eligible
loan on a reasonably sound basis the inquirer was encouraged
to file a formal application. These applications were received
in moderate number throughout the latter half of the year.
In some cases investigation of these applications by the
Industrial Advisory Committee appointed to consider applications in this district did not indicate the possibility of making
loans on a sound basis, but a considerable number were recommended favorably by the Committee and approved by the Federal Reserve Bank. The number of loans approved up to the end
of December 1934, including commitments to discount loans
made in the first instance by banks of the district and to assume
liability for a substantial part of the risk involved, totaled 159,
and the aggregate amount involved was about $11,000,000.
While the amount of loans approved by the Federal Reserve
Bank of New York under this new legislation is not large relative
to the total volume of bank credit outstanding in this district,
the loans are of substantial benefit to a number of communities
in the district, as they enable business concerns to maintain



FEDERAL RESERVE BANK OF NEW YORK

17

or increase their operations and thus provide employment
which otherwise would presumably not be available in those
communities.
A more detailed account of the organization created in this
district to handle applications for loans of working capital and
of the results up to the end of December 1934 is contained in a
subsequent section of this report.
NEW CAPITAL ISSUES

The 1934 record of new capital supplied to business organizations of the country, through the security markets, is largely a
repetition of the record for 1933. The amount of new capital
raised by domestic corporations through the sale of securities in
1934 totaled about $160,000,000, which is the same amount as in
1933, and compares with $324,000,000 in 1932, about $1,500,000,000
in 1931, and from $3,600,000,000 to $4,500,000,000 in the years
1926 to 1930, exclusive of 1929 when the volume was much larger.
Eefunding issues sold by corporations were in larger volume in
1934 than in 1933, but were not sufficient to offset all maturities
during the year, and altogether it appears that the amount of
capital available to business in this country diminished somewhat further during the past year.
The following table shows the volume of new securities sold
during 1934 in comparison with the preceding eight years.
Domestic Capital Issues
(In millions of dollars)
New Capital

Year
1926
1927
1928
1929
1930
1931
1932
1933
1934

Refunding

Corporate
Issues*

State and
Municipal* *

Total

Corporate
Issues*

3,626
4,393
4,490
5,716
4,150
1,536
324
160
160

1,435
1,562
1,443
1,418
1,498
1,309
827
541
909

5,061
5,955
5,933
7,134
5,648
2,845
1,151
701
1,069

820
1,842
1,580
1,373
474
820
318
219
312

State and
Municipal* *
62
127

36
13
76

72
193
69

452

Total
882
1,969
1,616
1,386

550
892
511
288
764

* Excludes investment trust issues, etc. ** Includes Federal Land Bank and Federal Intermediate Credit Bank issues.
Source: Commercial and Financial Chronicle (adjusted)".




TWENTIETH ANNUAL REPORT

18

The principal change in the volume of newfinancingthrough
the security markets in 1934 was a moderate increase in sales
of securities by States and municipalities, both for refunding
purposes and to provide additional funds. The credit standing
of many local governmental organizations showed material improvement in 1934, apparently due partly to better collections of
taxes, partly to some reduction in ordinary expenditures, and
partly to the assumption by the Federal Government of a larger
part of the burden of relief expenditures. The improvement in
the credit standing of municipalities is reflected in the accompanying diagram, which shows the changes in the average yield
on a number of high grade municipal securities at market prices
during the past few years. The reduction in the average yield
on such securities from nearly 5 per cent toward the end of 1933
PER CENT
YIELD
12

10
CORPORATE
Baa BONDS

CORPORATE
A a a " BOUNDS

MUNICIPAL
BONDS

1928

1929

1930

1931

1932

1933

1934

Average Yield on Domestic Corporate Bonds and Municipal Bonds (Moody's
Investors Service yields for Aaa and Baa bonds; Standard Statistics Company
yield for municipal bonds)



FEDERAL RESERVE BANK OF NEW YORK

19

to about 3y2 per cent at the end of 1934 reflected a readier market for such securities, and resulted in a considerable reduction
in the cost of municipal borrowing.
The market for the highest grade corporation securities
showed further improvement during the year accompanying the
improvement in the market for high grade municipal securities,
but, in general, the corporations that are heavily in arrears in
their expenditures on plant and equipment and are therefore
most in need of additional capital are not those whose securities
are given the highest ratings in the security markets, and they
are, therefore, unable to obtain additional capital at rates anywhere near the yields on the highest grade securities. For
securities rated as of medium grade, the market during 1934
showed no such improvement as in the case of the highest grade
securities. Prices of medium grade securities fluctuated irregularly, and, on the whole, showed no great progress during the
year. Yields on industrial bonds declined further during the
year, but yields on medium grade public utility and railroad
bonds, although far below the levels prevailing from the autumn
of 1931 to the middle of 1932, showed no appreciable further
reduction after January 1934, and, as the diagram shows, the
interest cost involved in borrowing through the sale of medium
grade securities in general was still high relative to years prior
to 1931.
In addition to a fairly high rate of interest, borrowers
through the sale of medium grade securities would have to pay
the cost of distributing the securities, as well as the cost of preparing and filing registration statements with the Securities Exchange Commission, so that the actual cost of the borrowing
would be substantially above the nominal interest rate. Consequently, there is little incentive to such borrowing until there
appears to be a reasonably good prospect that the profits of the
borrower will be more than adequate to cover the cost of the
funds borrowed. Furthermore, the continued relatively high
yields on medium grade securities reflect a limited market for
such securities, due to continued reluctance on the part of
investors to assume any appreciable degree of risk in investing
their funds. This continued reluctance of investors to participate in the risks of business has been made more apparent during the past year, as the elimination of interest on demand
deposits and reduction of interest on time deposits has increased



20

TWENTIETH ANNUAL REPORT

the spread between the return obtained from bank deposits and
the return offered by medium grade securities.
Despite the lack of a renewed flow of capital into business
enterprise of various kinds on a large scale during the past
year, there was some further recovery in the activity of the
capital goods industries, due very largely to projects financed
by the Government, but the general level of activity in these
industries remained far below that of the years preceding 1931.
The following table contains representative data to indicate
the comparative volume of business in capital goods industries
during 1934 and the preceding eleven years.
Shipments of Railroad and Industrial Equipment and Construction Contracts
(In percentages of 1923-1925 averages)

Freight Cars Locomotives
1923
1924
1925
1926
1927
1928
1929
1930
1931
1932
1933
1934

(1)
144
80
76
78
53
39

71
63
7

1
1
11

(2)
166
77
58
82
49
26
44
41
8
8
6
11

Wood
Working
Machinery

Foundry
Equipment*

Machine
Tools*

Construction
Contracts

(3)
120
90
90
96
81
79
89
47
29
12
13
13

(4)
107
85
108
114
101
141
160
85
42
16
30
47

(5)
106
75
119
128
109
187
223
101
59
28
39
66

(6)
84
94
122
130
128
135
117
92
63
27
26
31

* Orders.
Sources:
(1) Interstate Commerce Commission.
(2); U. S. Dept. of Commerce, Bureau of Census.
(3) Association of Manufacturers of Wood Working Machinery.
(4) Foundry Equipment Manufacturers' Association.
(5) National Machine Tool Builders' Association.
(6) F. W. Dodge Corporation.

As these data indicate, orders for railroad equipment, which
had declined almost to the vanishing point, showed a modest
upturn in 1934, due largely to orders for new equipment
financed by loans obtained from the Public Works Administration. Building contracts also rose somewhat from 26 per cent
of the 1923-25 average in 1933, to 31 per cent in 1934. As the
accompanying diagram indicates, however, the revival of construction activities was almost exclusively due to publicly




FEDERAL RESERVE BANK OF NEW YORK
THOUSANDS
OF DOLLARS
6250

THOUSANDS
OF DOLLARS
6250

5000

5000

3750

3750

2500

2500

21

V 33
V

1250

r

0 s/
is 33

>\

A

y •>

1250 >

PUBLICLY
FINANCED

p
FN

J F M A M J J A S O N

J F M . A M J J A S .

T EL.Y
ED
O N O

Daily Average Value of Building and Engineering Contracts Awarded, Classified
as to Publicly or Privately Financed Construction (F. W. Dodge Corporation
data for 37 States)

financed projects which were initiated under the Public Works
Administration, and the volume of new projects was diminishing
in the latter part of the year, although expenditures under contracts previously awarded continued in large volume. The housing renovation program was reported to have produced a fairly
substantial volume of business in the later months of 1934, but
much of the work undertaken was of kinds that are not covered
by the reported data on construction contracts, such as painting,
plumbing and heating work, and other minor repairs. Machine
tool orders also showed a further moderate increase, due partly
to domestic business and partly to an increase in foreign business, and in this case the greater part of the expenditure probably was financed privately.
In the aggregate, however, industrial expenditures on plant
and equipment during the past year have remained very low
relative to most of the post-war years, and recent estimates of
the volume of deferred maintenance indicate that very large
expenditures would be required to eliminate obsolescence that
has developed during the depression. Thus far only a beginning has been made in privately financed expenditures of this
character.



TWENTIETH ANNUAL REPORT

22

Credit Policy and Operations of the Bank During 1934
The policy of this bank during the past year has continued
to favor the maintenance of easy money conditions, with the
aim of facilitating the financing of business recovery. In view
of the very large addition to member bank reserves that resulted
chiefly from the gold inflow, further purchases of Government
securities in the open market were unnecessary. The credit
policy of the bank was therefore reflected mainly in the maintenance of Government security holdings at the previous high
level, in cooperation with the Federal Reserve System as a
whole, and in a reduction in the rediscount rate of this bank
from 2 per cent to iy2 per cent, effective February 2. The latter
rate is the same as that which prevailed for a few months in
1931, and is the lowest rate ever established by a Reserve Bank.
The following table summarizes the factors that led to the
large increase in member bank reserves during the past year.
Dec. 27, 1933
to Dec. 26, 1934
(In millions of dollars)]
Sources of additional reserve funds:
Increase in gold stock (1)
Increase in Treasury currency (2)
All other
Total

1,384
200
58
1,642

Uses of reserve funds:
To
To
To
To

meet outflow of currency
retire discounts at Federal Reserve Banks
retire bills held by Federal Reserve Banks
meet Treasury withdrawals
Total

Net addition to reserves

91
102
105

58
356
1,286

(1) Exclusive of increase resulting from revaluation of the dollar. (2) Reflecting
increase in silver currency outstanding partly offset by decrease in National bank notes
outstanding.

Under the conditions prevailing in the money market during
1934 as a result of the further large accumulation of idle bank
reserves which resulted from gold imports and Treasury expen


23

FEDEEAL RESERVE BANK OP NEW YORK

ditures, open market money rates declined somewhat further to
new low levels. Eates charged by banks on direct loans to customers declined slightly further in conformity with open market
rates, and at the end of 1934 were also at the lowest levels on
record.
Money Rates at New York
Dec. 31, 1934
Stock Exchange call loans
Stock Exchange 90 day loans
Prime commercial paper—4 to 6 months
Bills—90 day unindorsed
Customers' rates on commercial loans
Treasury securities
Maturing March (yield)
Maturing June (yield)
Maturing December (yield)
Average rate on latest Treasury bill sales
91 day issue
182 day issue
Federal Reserve Bank of New York rediscount
rate
Federal Reserve Bank of New York buying
rate for 90 day indorsed bills

tl.96
No yield
No yield
No yield

6.10

• Nominal, tAverage rate of leading banks at middle of month.

The extremely low levels to which short term money rates fell
increased the pressure on investors and investing institutions to
employ their funds for longer periods, and thus tended to some
extent at least to overcome the strong inclination, which developed during the period of rapidly declining bond prices and the
freezing of less marketable long term investments, to limit the
employment of additional funds to the most liquid types of loans
and investments. The reluctance to invest funds for extended
periods has been broken down only gradually, however, and new
long term investment still is largely confined to the highest grade
securities, as the preceding section of this report indicated.
FISCAL AGENCY OPEBATIONS

The activities of the bank during the past year were devoted
more largely than at any time since the war to operations incident to its duties as fiscal agent for the United States Government in the Second Federal Eeserve District. One of the most
important duties of the bank in this connection was to assist the



24

TWENTIETH ANNUAL REPORT

Treasury in planning new Government financing, and to handle
for the Treasury the mechanics of selling new Government
securities and redeeming maturing securities. The bank kept the
Treasury informed constantly of conditions in the market for
Government securities and of investment tendencies, and endeavored in every way to help the Treasury to adjust its offerings of new Government securities to market conditions. The
success of the Government financing program is indicated by
the fact that, despite an increase of about $4,500,000,000 in the
National debt, long term Government securities sold at prices
that yielded an average of about 2.80 per cent in December 1934,
as compared with about 3.50 per cent in December 1933.
During 1934 the Federal Reserve Bank of New York sold
for the United States Treasury in this district a total of about
$8,500,000,000 of Government securities. This huge volume of
securities included nearly $3,000,000,000 of new securities the
proceeds of which contributed to the funds required by the Government for emergency expenditures for the relief and recovery
program. In addition, over $5,500,000,000 of securities were
issued in exchange for or to replace maturing Government obligations of various kinds.
The work of the Securities Department of the bank was
devoted more largely than in a number of years to the handling
of subscriptions to and allotments of these new issues of Government securities, and a huge volume of work was also involved
in the handling by the Government Bond and Safekeeping Department of the issue of new securities, the redemption of maturing securities, denominational exchanges of outstanding
securities, and the maintenance of records of the liabilities to
the Government of depositary institutions for deposits arising
out of payments for Government securities purchased by such
institutions. Redemptions and exchanges of maturing Government securities during the year amounted to about $5,500,000,000,
and the volume of denominational exchanges reached a total of
$5,000,000,000. These amounts, together with the issue of
$8,500,000,000 of new securities, brought the total of Government securities handled to more than $19,000,000,000.
Another function of the Federal Reserve Bank of New York
as fiscal agent for the Government which reached huge volume



FEDERAL RESERVE BANK OF NEW YORK

25

in 1934 was the custody of collateral for loans made by the
various Government agencies and subsidiary corporations, especially the Eeconstruction Finance Corporation and the Farm
Credit Administration. The work done in this connection involved the receipt and checking of collateral deposited by borrowers with these corporations, the receipt and crediting of
interest, substitutions of collateral, and the maintenance of complete records on all such transactions. At the end of 1934 the
volume of collateral in the custody of the Government Bond and
Safekeeping Department of the bank which was held for the
various Government agencies reached a total of more than
$3,000,000,000.
Another department of the bank whose activities were largely devoted in 1934 to operations conducted for the United States
Government was the Foreign Department. Through this department the bank acted as agent of the Treasury in the purchase and sale of gold and the purchase of silver at New York
and abroad and in other transactions reviewed in a later section
of this report under the heading of " Foreign Exchange
Control." The Foreign Department kept the Treasury informed
of conditions in the foreign exchange market, and, in connection
with the regulations issued by the Secretary of the Treasury on
November 12, developed a new system of reports on foreign
exchange operations to be submitted by banks, security dealers,
and exporters and importers, for the purpose of keeping the
Government informed of movements of capital between this and
other countries, and of other transactions that affect the foreign
exchanges.
SUPERVISION OF MEMBER BANKS

During the past year there has also been a great expansion
in the work of the bank in connection with the supervision of
member banks in the district. In past years it was the practice
of this bank to leave the work of examining member banks
largely to National and State examiners, especially in view of
the fact that the Comptroller of the Currency and the heads of
the State banking departments had powers to enforce compliance
with banking laws which were not held by the Reserve Bank.
The Banking Act of 1933 and other recent banking legislation



26

TWENTIETH ANNUAL REPORT

greatly enlarged the responsibilities of the Federal Eeserve
System for supervision of member banks, and also increased the
powers of the System with respect to such supervision, especially in the case of State member banks. It has, therefore, become necessary for the Federal Keserve Banks in executing
these responsibilities to strengthen greatly their examination
staffs. During the past year the Federal Keserve Bank of New
York nearly doubled its staff assigned to the Bank Examinations
Department following a considerable increase in 1933, and assigned two additional officers to the direction of the work of
supervising and examining State member banks in this district
and of assisting such banks to strengthen their position.
In addition it was necessary to assign one or more of the
bank's Assistant Counsel to work of the Bank Examinations
Department, especially in connection with applications under the
Clayton Act for permits whereby bank directors could serve on
the boards of two or more banking institutions, applications
under section 32 of the Banking Act of 1933 for permits to serve
at the same time as directors or officers of member banks and
as officers, directors, or managers of organizations engaged in
the security business, and applications of holding company
affiliates for permits to vote the stock of member banks which
they owned or controlled.
One of the important functions of the department during the
past year has been to assist member banks in rearranging and
strengthening their capital structures. The capital of many
banks had been materially reduced during the past few years
by losses on loans and depreciation of investments caused by the
depression, and, in order that there might be no question as to
the strength of the banks, it became desirable to increase the
capital of such banks. Some of the additional bank capital was
obtained by local subscription, but in many cases it was not
found possible to obtain adequate amounts of new capital in
that wayf and a large part of the new capital was provided by
the Reconstruction Finance Corporation through the purchase
of preferred stock or capital notes of the banks. By the end of
1934 arrangements had been made whereby 63 State member
banks in this district obtained a total of nearly $59,000,000 of
additional capital largely from the Corporation, and 262 Na


FEDERAL RESERVE BANK OF NEW YORK

27

tional banks obtained $143,000,000 of new capital. At the close
of the year this work was nearing completion.
INDUSTRIAL LOANS

Another new activity for the Federal Reserve Bank of New
York, as well as for other Federal Reserve Banks, resulted from
the passage on June 19, 1934, of an Act of Congress which
authorized the Reserve Banks to lend working capital to established industrial or commercial businesses which are unable to
obtain the requisite funds from the usual sources at reasonable
rates, provided such industries are able to offer a reasonably
secure basis for credit. In accordance with this law an Industrial Advisory Committee was appointed promptly to consider
applications for working capital, and to make recommendations
to the Federal Reserve Bank. The Committee for this district
at the end of 1934 was as follows:
Mr. William H. Pouch (Chairman),
President, Concrete Steel Company, New York, N. Y.
Mr. John A. Hartford (Vice Chairman),
President, Great Atlantic & Pacific Tea Company,
New York, N. Y.
Mr. John B. Clark,
President, Clark Thread Company, Newark, N. J.
Mr. Albert A. Hopeman,
President, A. W. Hopeman & Sons Co., Rochester, N. Y.
Mr. Arthur G Nelson,
L
Treasurer, A. Gr. Nelson Paper Company, New York, N. Y.
Mr. Selden O. Martin was appointed to direct the Committee's investigation of the applications received. A staff was
assembled to assist in this work, largely from the Credit and
Discount Departments of the bank, supplemented where necessary by the employment of additional employees having special
qualifications for industrial loan work.
In order to inform the banks of the district more fully as to
the purpose of the legislation and the procedure to be followed



28

TWENTIETH ANNUAL REPORT

in making loans, a series of meetings was arranged in cooperation with the New York and New Jersey State Bankers Associations, at which all banks in the district were invited to be
represented. These meetings were followed by visits of representatives of this bank to banks throughout the district to discuss needs for working capital by the industries of the various
localities, and ways of supplying those needs. In this connection, the services of Mr. Frederick E. Worden, Vice President
of The National Bank of Auburn, N. Y., were obtained to assist
in informing the banks concerning the industrial loan legislation and advising the banks concerning the procedure to be
followed in order to supply needs for working capital in their
respective communities.
At the end of 1934 the Industrial Advisory Committee in this
district had received 531 formal applications for loans, amounting in the aggregate to approximately $37,000,000, and applications were continuing to be received in moderate number. These
applications covered a wide range of manufacturing, construction, and service industries, as well as various forms of commercial activities. The amounts applied for ranged from $300
to $6,000,000.
The status of applications that had been received by the
Federal Reserve Bank of New York from the Industrial Advisory Committee and acted upon by the Bank up to the end of
the year was as follows:
Amount
Approved
Conditionally approved and under considera
tion by applicants
Conditionally approved and nonacceptance indicated by applicants
Rejected
Total

$8,202,440
1,428,500
1,407,000
13,743,035
$24,780,975

As these figures indicate, the applications approved, conditionally or finally, represented 35 per cent of the total number and 45




FEDERAL RESERVE BANK OF NEW YORK

29

per cent of the total amount of all applications that had been
passed upon at the end of the year.
Each application was reviewed with great care, and every
effort was made to arrange loans, either directly or in conjunction with member banks or other lending institutions, wherever
it appeared possible to extend credit on a sound basis. The
banks of the district cooperated in the investigation of these
applications and in many cases participated in the credits
extended.
A number of applicants were assisted in effecting reorganizations or readjustments of their affairs, which were of considerable benefit to them quite apart from the loans. In other
cases the steps taken in connection with the consideration of
applications enabled prospective borrowers to obtain credit from
sources other than the Keserve Bank.
In a number of cases, however, no arrangements appeared
to be feasible under which loans could be made on a sound basis.
The records of many applicants gave no reasonable basis for
the expectation that loans, if made, could be used profitably, as
the operations of the applicants had been conducted at a loss for
periods extending further back than the beginning of the depression. Under such conditions it appeared likely that further
loans would only increase the eventual difficulties of the borrowers. Usually more than one unfavorable condition entered
into the rejection of an application, however. A classification
of applications rejected, showing the reasons for rejection, is
given in the following table.
Reasons for Rejection of Applications
Number
Ineligible
(a) Not established industrial or commercial enterprise
(b) Not for working capital
Unsatisfactory financial condition
Unsatisfactory business prospects
Unsatisfactory management
Insufficient security
Total, excluding duplications




21
14
288
223
175
272
292

30

TWENTIETH ANNUAL REPORT
OTHER OPERATIONS

The total personnel of the bank was not materially enlarged
during the year despite the great increase in the activities discussed up to this point. The volume of work in operating departments, such as the Check Department, which ordinarily
account for a large percentage of the total staff of the bank,
although somewhat larger in 1934 than in 1933, remained substantially below the volume in prosperous years. The decline
in the volume of work of such departments has made possible
a moderate reduction in their personnel through transfers and
by permitting vacancies resulting from resignations to go unfilled, which to a considerable extent has offset the increased
staffs required to handle fiscal agency operations, bank examinations work, and the industrial loan work.
Data on the volume of work of types that can be measured
readily are contained in the following table.
1933
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 paid..
All other
United States Government direct obligations—
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..
All other
.
_
United States Government direct obligations—
issues, redemptions, and exchanges by fiscal agency department
Transfers of funds




1934

18,459
55,416
39,799
596,588,000
940,727,000
143,372,000

6,046
17,719
4,016
596,026,000
991,453,000
157,703,000

4,121,000
2,641,000

5,033,000
2,364,000

1,160,000
307,000

1,275,000
271,000

$4,753,386,000
387,051,000
3,709,098,000
207,095,000
57,739,743,000

$416,046,000
17,770,000
3,043,595,000
107,597,000
56,048,590,000

286,418,000
1,682,712,000

351,076,000
1,843,785,000

16,115,993,000
37,289,786,000

19,421,691,000
28,642,418,000

FEDERAL RESERVE BANK OP NEW YORK

31

Foreign Exchanges and Gold Movements
The value of the dollar in the foreign exchange market fluctuated during January 1934 within a range of 61 to a little over
64 per cent of its old parity, measured by quotations for the
French franc, being influenced to some extent by the buying rate
for gold fixed by the Eeconstruction Finance Corporation during
the first half of the month and by the United States Treasury
during the second half of the month, although a free movement
of gold between this and other countries was still prohibited.
The cost of gold in the London market, in terms of dollars,
ranged during the month between $32 and a little over $33 an
ounce, as compared with a price of $34.06 fixed by the Reconstruction Finance Corporation during the first half of January,
and a Treasury price of $34.45 from January 16 to 30.
On January 31, following the approval of the Gold Reserve
Act of 1934 on the preceding day, a Presidential proclamation
was issued under which the weight of the gold dollar, which had
been 25.8 grains nine-tenths fine since January 18, 1837, was
fixed at 15 5/21 grains nine-tenths fine, or 59.06 per cent of the
earlier gold content. On the same day the Secretary of the
Treasury announced that beginning February 1 and "until
further notice" he would "sell gold for export to foreign central
banks whenever our exchange rates with gold standard currencies reach gold export point. . . . all such sales of gold will
be made through the Federal Reserve Bank of New York
as fiscal agent of the United States . . . at $35 per fine ounce
plus one-quarter per cent handling charge." On February 1,
the Secretary of the Treasury declared that "until further notice" he would "buy imported fine gold bars through the Federal
Reserve Bank of New York . . . and other gold, foreign and
domestic, through any United States mint or the United States
assay offices at New York or Seattle . . . at the rate of $35
per fine troy ounce, less the usual mint charges and less onequarter of one per cent for handling charges."
Under the Gold Reserve Act of 1934 private holding of
monetary gold was prohibited, and the Federal Reserve Banks,
which up to that point had retained their gold reserves, were
required to deposit all gold coin and bullion which they held
with the Treasury, in payment for which the Reserve Banks
were given credits in the Treasury payable in gold certificates.
Payment was made at the old rate of $20.67 an ounce, so that,



TWENTIETH ANNUAL REPOET

32

following the revaluation of the dollar, the increment in the
value of gold previously held by the Federal Eeserve Banks
accrued to the Treasury.
The fixing of the new weight of the gold dollar automatically
established new parities between the dollar and foreign currencies, the new par for the French franc becoming 6.6335 cents.
The theoretical gold import point from Paris to New York—
that is, the point at or below which it is more advantageous to
ship gold than to buy dollars in the foreign exchange market for
the settlement of balances outstanding in favor of this country
—subsequently has been slightly above 6.59 cents. On January
31 the closing cable rate for the French franc in New York rose
to 6.42^ cents, as compared with 6.28y2 cents on January 30,
and on February 1 the rate rose slightly further. The limited
steamship facilities for the transfer of gold from France to the
United States prevented a prompt rise in French franc quotations to the new parity value, however; in fact, following political disturbances in France, the franc quotation declined for a
few days, reaching a low point of 6.181/2 cents on February 5,
and it was not until March 21 that the franc reached the point
at which gold shipments from Paris ceased to be profitable.
DOLLARS

.0620 "
.0630
.0640
.0650

n
•I
GOLDI vrfPORTf >OINT

.0660
PAR

.0670

"W

JOLD E> PORT F'OINT

.0680
MILLIONS OF DOLLARS
200
150
GOL 3 IMP0 RTS

100
50

1

0

,1..

I.M

1 1 • 1

II- 11

. I I I I11I1

'

GOL JEXPOI?TS

50
FEB

MAR

APR

MAY

JUN

JUL

AUG

SEP

OCT

NOV

DEC

Daily Fluctuations of Dollar Exchange (Measured in Terms of the French Franc)
and Weekly Gold Movements at New York



FEDERAL RESERVE BANK OF NEW YORK

33

The course of the other major gold currencies was substantially the same as that of the French franc, and none of them
rose above its theoretical gold import point until early April.
As a result of the foreign exchange position a very heavy
gold movement into the United States took place, bringing in
during the two months of February and March approximately
$363,000,000 of gold from England, $125,000,000 from France,
$67,000,000 from Holland, and $10,000,000 from Switzerland, or
a round total of $565,000,000 from these four countries. In addition, there were shipments of dishoarded gold from India and
China, and of newly mined gold from Canada and Mexico, which
brought the total imports during February and March to an
aggregate of more than $600,000,000. The predominant part
played by England in this movement appears to have been due
to two factors: first, a large amount of gold moved from France
to England and was immediately re-exported to New York; and
second, it was profitable to buy gold in the open market in London for sale to the United States Treasury. The fixing of the
price of gold in the United States at $35 an ounce also caused a
revival in Indian exports of gold in February and brought about
a rerouting of Canadian gold to New York, its most convenient
market, from London, to which it had been temporarily diverted
by the absence of a ready market for gold in the United States.
Discussion of proposals for silver legislation in the United
States caused a flurry in the exchange markets in April, and
in the course of trading on April 21 the gold exchanges crossed
or were close to the theoretical export points from New York.
As soon as it became known that the Secretary of the Treasury
stood ready to deliver gold for export to specific countries that
are still on the gold standard, however, the dollar strengthened
without the aid of gold shipments, and by the end of the day the
exchanges were again within the gold points.
The European gold currencies continued relatively weak subsequently until August, and gold continued to flow to the United
States, although in considerably smaller amounts than in February and March. Altogether, the additions to the United
States monetary gold stock resulting from gold imports from
February to August reached a total of approximately
$886,000,000.
During August, the nationalization of private silver holdings
in the United States and silver purchases abroad, combined with
some renewal of discussions concerning currency inflation in the



34

TWENTIETH ANNUAL REPORT

United States, brought about a sudden weakening of the dollar in
the foreign exchange markets. The leading gold exchanges rose
so suddenly in mid-August that several shipments of gold arriving at New York on arbitrage account were immediately reexported to Europe. The gold exchanges crossed their respective
export points from New York on August 22, and initiated an outward movement of gold in the course of which $29,000,000 was
shipped to France, $4,000,000 to Belgium, and $500,000 to Holland. This movement ended on September 5, although the
Belgian and the Swiss currencies continued intermittently above
the theoretical gold export points for the next two weeks.
The gold exchanges then fluctuated within the gold export
and import points until the last week of October, when first the
belga and then the French franc dropped below their respective
import points, followed by the guilder in the second week of
November and the Swiss franc in the last week of that month.
This gave rise to the second major import movement of the year
which brought to the United States, during November and December, $92,000,000 of gold from France, $27,000,000 from Holland, $13,000,000 from Belgium, and $20,000,000 from the open
market in London, and also substantial shipments from India
and Canada. In the aggregate about $200,000,000 of gold was
received from abroad in these two months. At the close of the
year the gold exchanges were above the gold import points, but
were still at a discount from parity with the dollar.
The first of the accompanying tables shows the sources and
destinations of exports and imports of gold from February to
February 1—December 31, 1934
(In thousands of dollars)
Country
Belgium
Canat'a
China and Hongkong
Colombia
England
France
Holland
India
Mexico
Philippines
Switzerland
All Other
Total




Exports to
$4,049
155

Imports from

Net

+ $8,852
+ 86,802
+ 18,326
+ 16,897
+484,451
+254,506

1,893

$12,901
86,957
18,326
16,905
486,230
284,037
101,727
78,313
30,104
11,256
10,157
16,890

$38,117

$1,153,803

+$1,115,686

8
1,779
29,531
500
' *202

-101,227
- 78,313
- 29,902
- 11,256
- 10,157
- 14,997

FEDERAL RESERVE BANK OF NEW YORK

35

December, inclusive, and the second table summarizes the additions to the monetary gold stock of the United States during
1934.
(In millions of dollars),
Jan. 1—31, 1934
(old value)
Shipments:
Imports
Exports

Feb. 1—Dec. 31,1934
(new value)

1.9
4.7
*2.8

1,153.8
38.1

0.2
12.4

18.6
89.0

12.2

70.4

Other factors, including; newly mined domestic
gold and scrap goM

12.0

213.7

Total addition of new gold to monetary stock..

21.4

1,399.8

Net imports
Gold earmarked here for foreign account:
New earmarkings
Releases from earmark
Net release

Increment resulting from reduction in weight
of gold dollar on Jan. 31, 1934
Total increase in dollar value of United States
monetary gold stock

1,115.7

2,805.5
21.4

4,205.3

*Net exports.

The non-gold currencies fluctuated irregularly during 1934,
and, in general, their quotations in the New York market showed
no such rise for the year as a whole as did the quotations for
the gold currencies. The pound sterling opened the year at
$5.17% but several times during January was quoted under $5.
Following the devaluation of the dollar, sterling advanced in
February and showed continued strength in the next two
months, being quoted at $5,131/2 at the end of April. However,
except for a temporary recovery in October and November, the
trend of sterling throughout the last eight months of 1934 was
downward, and the cable quotation at the end of the year was
$4.941/4. The so-called''sterling area" currencies followed much
the same course as sterling, as did also the Japanese yen.
The official reichsmark, which is only one of several types of
marks employed in the settlement of Germany's international
transactions, followed the gold currencies quite closely. The
Italian lira did not at any time touch parity with the dollar after
January 31, remaining well below the point at which gold shipments from Rome to New York would have been profitable if
gold exports from Italy on arbitrage account had been allowed.



TWENTIETH ANNUAL REPORT

36

The Chinese dollar moved steadily downward from a high of
$0.3588 on February 18 to $0.3175 on May 2, accompanying a
decline in the market price of silver. Thereafter, as the price
of silver advanced, the Chinese dollar rose, touching a high of
$0.39 on October 11. However, beginning in the second week of
May the Chinese dollar was constantly at a discount from its
theoretical silver parity, despite supporting shipments of silver
from Shanghai which rose to unprecedented amounts in August
and September. On August 10, following nationalization of silver in the United States, the Chinese dollar exchange stood at
a discount of 5 per cent from its theoretical parity; on October
15, when the Chinese Government adopted an export tax on
silver and an equalization charge designed to bring up the Chinese price to the London market quotation of the day, the discount from silver parity was 10.8 per cent, and this discount
increased to a peak of 19.9 per cent on October 18, In the last
business week of December the discount averaged 15.69 per cent,
and the average quotation of the Shanghai dollar in New York
was $0.3411 as against a theoretical parity of $0.4046.
The official rate of the Argentine peso, which is the rate at
which the Argentine foreign exchange control will buy exporters' bills, was pegged to the pound sterling at 15 pesos to the
pound beginning January 20, 1934. Quotation here on the peso
(Closing Cable Rates at New York)
1934
Exchange on
Belgium
Denmark
England
France
Germany
Holland
Italy
Norway
Spain
Sweden
Switzerland
Canada
Argentina*
Brazil*
Uruguay
Japan
India
Shanghai

Par**

High

$.2354
.4537
8.2397
.0663
.4033
.6806
.0891
.4537
.3267
.4537
.3267
1.6931
.7187
.2026
1.7511
.8440
.6180

$.2386
.2320
5.1888
.06700
.4073
.6882
.0873
.2610
.1388
.2677
.3317
1.0369
.3477
.0880
.8000
.3113
.3912
.3900

Low

December 31

$.2165
.2189
4.8825
.06090
.3697
.6260
.0817
.2460
.1270
.2525
.3013
.9837
.3255
.0818
.7500
.2845
.3695
.3175

$.2352
.2207
4.9425
.06618
.4032
.6782
.0857
.2485
.1373
.2550
.3250
1.0075
.3296
.0845
.8000
.2880
.3725
.3475

*Official rates. **New parities established January 31, 1934.



FEDERAL RESERVE BANK OF NEW YORK

37

therefore followed closely the course of the pound sterling. The
official milreis rate, that is, the rate at which the Bank of Brazil
furnished cover for imports up to 60 per cent of the drafts approved for collection (the other 40 per cent having to be acquired
in the free market) touched a high for the year in April at
$0,088, ruled during the summer at $0,085 and above, and declined to slightly under $0,082 in the closing months of the year.
Canadian exchange held at a premium over its former parity
with the dollar throughout most of the year. It was strongest
in September at $1.03 11/16, and closed the year at $1.00%.
Silver Legislation
In a message to Congress dated May 22, 1934 the President
declared that "we should move forward as rapidly as conditions
permit in broadening the metallic base of our monetary system,"
and he recommended "legislation at the present session declaring it to be the policy of the United States to increase the amount
of silver in our monetary stocks with the ultimate objective of
having and maintaining one-quarter of their monetary value in
silver and three-quarters in gold." He recommended further
that authority should be given him to make the purchases of
silver necessary to attain this ultimate objective, that he receive
authority to purchase accumulated silver in the United States at
a maximum price of fifty cents an ounce and to regulate trading
in and imports and exports of silver, and that a tax of at least
50 per cent be levied on the profits accruing from dealings in
silver. These recommendations were embodied in the Silver
Purchase Act of 1934, approved June 19, 1934.
Provision for the regulation of trading in silver was made
in the Secretary of the Treasury's Order relating to silver, approved June 28, and an Executive Order requiring the delivery
of silver to the United States mints was promulgated on August
9, 1934. The Executive Order directed that, with certain specified exceptions (including coin, newly mined silver, industrial
or fabricated silver, and silver held for a foreign government
or central bank or for the Bank for International Settlements),
all silver situated in the United States should be delivered to
the United States mints within ninety days after date of the
Order, to be paid for at the monetary value of the silver
($1.2929+ a fine troy ounce) less a deduction of 61 8/25 per cent
thereof for seigniorage and other mint charges, the rate working
out at 50.01 cents. The disposition of newly mined silver recov


38

TWENTIETH ANNUAL REPORT

ered "from natural deposits in the United States" had already
been regulated by the President's Proclamation of December 21,
1933 which required that such silver be sold to the United States
mints and paid for at its monetary value less seigniorage of 50
per cent, or approximately 64.6 cents a fine ounce.
The substance of the Executive Order of August 9, 1934 was
announced in the President's Proclamation of the same date,
and regulations governing the delivery of silver, settlement
therefor, and licensing of silver holding thereunder, were issued
by the Secretary of the Treasury under date of August 17, 1934.
Under these regulations the Federal Reserve Banks were designated to receive, investigate, and transmit to the Secretary of
the Treasury applications for licenses to withhold, acquire and
withhold, or export silver within the purposes of the Silver Purchase Act of 1934 and the Executive Order of August 9, 1934.
Foreign Exchange Control
The President's Executive Order of January 15, 1934, continued the prohibition against foreign exchange transactions
except such as may be undertaken "for normal commercial or
business requirements, reasonable traveling and other personal
requirements, or the fulfillment of legally enforceable obligations
incurred prior to March 9, 1933," except under license issued
therefor, and continued the requirement that the Federal Reserve Banks shall keep themselves currently informed as to
foreign exchange transactions entered into in their districts.
This Executive Order increased the prohibitions to include the
exportation of United States currency or coin without a license.
Throughout most of 1934 the foreign exchange office of this
bank operated within the provisions of the pertinent sections
of that Executive Order in receiving applications for licenses
authorizing transactions in foreign exchange, transfers of credit,
and exports of currency (other than gold certificates) or silver
coin in specific cases, otherwise considered prohibited, and in
issuing such licenses as the Secretary of the Treasury approved.
Under date of November 12,1934, the Secretary of the Treasury, with the approval of the President, made public "Regulations relating to transactions in foreign exchange, transfers of
credit, and the export of coin and currency," which in substance
lifted the restrictions on foreign exchange transactions which
had been imposed by the President's Executive Orders of



FEDERAL RESERVE BANK OF NEW YORK

39

March 10, 1933, and January 15, 1934. Article 2 of the Regulations of November 12, 1934 provides that "Licenses may be
granted, and a general license is hereby granted, to all individuals, partnerships, associations, and corporations, authorizing any and all transactions in foreign exchange, transfers of
credit, and exports of currency (other than gold certificates)
and silver coin." Article 3 directs that every person engaging
in foreign exchange transactions "shall furnish to the Federal
Reserve Bank of the district in which such person has his principal place of business in the United States complete information
relative thereto upon report forms prescribed by the Secretary
of the Treasury, except that reports are not required to be furnished by (1) persons not carrying during any part of the
reporting period, accounts abroad or accounts in the United
States for non-residents thereof, or (2) persons whose aggregate
transactions, transfers, exports, or withdrawals for their own
account and the account of others do not exceed $5,000 during
any seven-day period."
Returns in this district, as required by the Secretary of the
Treasury, were called for by the Federal Reserve Bank of New
York on a weekly schedule beginning with the week ended December 5,1934, from banks and bankers, and brokers and dealers
in securities; from other persons subject to Article 3 of the
Regulations, on a monthly schedule beginning December 26,1934.
Foreign Relations
During 1934 accounts were opened at this bank, with the
approval of the Federal Reserve Board, for the Banco Central
de Guatemala and the Banco de Mexico. This raised from
thirty-three to thirty-five the number of foreign banks of issue
(and the Bank for International Settlements) with which relations are maintained by the Federal Reserve Bank of New York
on behalf of all twelve Federal Reserve Banks. Balances maintained by foreign correspondents with this bank rose from
$4,233,000 at the close of 1933 to $19,394,000 at the end of 1934.
No new credits were extended to foreign central banks in
1934 by the Federal Reserve Banks. The principal amount of
the credit outstanding in favor of the National Bank of Hungary, described in the Nineteenth Annual Report of this bank,
was reduced to $3,140,000 by the repayment of $417,000 during
the past year.



TWENTIETH ANNUAL REPORT

40

Membership Changes in 1934
The number of member banks in this district again showed a
decrease in 1934 but the membership in per cent of all banks was
the same as at the end of 1933. Mergers of member banks
accounted for most of the reduction in the number of member
banks. Five unlicensed banks were declared insolvent during
the year, one bank was placed voluntarily in liquidation, and one
trust company withdrew from membership, but there were 12
State banks and trust companies admitted to membership.
The tables below show the number of member and nonmember banks classified according to their charters and indicate
the changes in membership during the year.
Number of Member and Nonmember Banks in Second Federal Reserve
District at End of Year
DECEMBER 31,

TYPE OF BANK

National Banks
State Banks*
Trust Companies
Total

1934

DECEMBER 31,

1933

NonPer Cent
Per Cent
NonMembers Members Members Members Members Members
627**
52
112

0
137
153

100
28
42

650
49
108

0
142
158

100
26
41

791

290

73

807

300

73

* Excludes Savings banks. ** Excludes one unlicensed National bank whose Federal
Reserve Bank stock was canceled before the end of the year but which was still included
in the Comptroller of the Currency's records of National banks.
Changes in Federal Reserve Membership in Second District During 1934
Total membership beginning of year.
Increases: (a)
National banks organized (b)
Admission of State banks and Trust companies.
Total increases
Decreases:
Member banks combined with other members
Member banks combined with nonmembers . .
Insolvencies
Voluntary liquidation
Withdrawal
Succeeded by newly chartered members
Total decreases
Net decrease
Total membership end of year.

807
22
12
34
14
2
5
1
1
27
50
16
791

(a) In addition to figures shown on this table, one nonmember was absorbed by a
member during the year.
(b) Organized to succeed 27 banks under conservators.



FEDERAL RESERVE BANK OF NEW YORK

41

Financial Statement
As complete operating statistics of each Federal Reserve
Bank are published in the annual report of the Federal Reserve
Board, only the statement of condition and the statement of
income and disbursements are given in the following pages.
STATEMENT OF CONDITION
ASSETS

DEC.

31, 1934

DEC.

31, 1933

Gold certificates on hand and due from U. S.
$1,836,675,210.83
Treasury
Gold
1,499,448.30
Redemption fund—Federal Reserve notes
56,764,189.82
Other cash

$266,839,000.00
660,856,377.59
10,706,936.10

$1,894,938,848.95

$988,505,690.78

Redemption fund—Federal Reserve Bank notes..

$1,427,250.00

$2,870,550.00

Bills discounted:
Secured by U. S. Government obligations, direct and/or fully guaranteed
Other bills discounted

$1,538,400.00
2,689,936.86

$14,511,406.58
26,179,152.29

$4,228,336.86

$40,690,558.87

$1,982,388.31
812,958.11

$22,257,269.41

$141,017,850.00
475,234,100.00
161,566,000.00

$170,046,450.00
361,239,500.00
305,469,500.00

$777,817,950.00

$836,755,450.00

Total bills and securities

$784,841,633.28

$900,606,428.28

Due from foreign banks
Federal Reserve notes of other banks
Uncollected items
Bank premises
All other assets

$299,486.84
6,949,800.00
126,518,561.18
11,437,469.61
30,001,455.67

$1,228,386.94
3,726,200.00
126,521,195.83
11,066,289.25
25,103,167.10

$2,856,414,505.53

$2,059,627,908.18

Total reserves

Total bills discounted
Bills bought in open market
Industrial advances

50,103,377.09

U. S. Government securities:
Treasury notes
Certificates and bills
Total U. S. Government securities
Other securities

Total assets




$903,150.00

TWENTIETH ANNUAL REPORT

42

LIABILITIES

Federal Reserve Bank note circulation—net
Deposits:
Member bank—reserve account
U. S. Treasurer—general account
Foreign bank
Special deposits:
Member bank
Nonmember bank
Other deposits
Total deposits
Deferred availability items
Capital paid in
Surplus (Section 7)
Surplus (Section 13b)
Reserve for contingencies
All other liabilities
Total liabilities

DEC

31, 1934

DEC

31, 1933

$680,934,670.00
25,468,250.00

$651,086,245.00
54,007,550.00

$1,749,711,107.75
29,697,150.03
6,847,881.50

$1,036,523,489.48
742,071.89
1,459,770.32

123,495,275.92

3,801,703.08
1314,350.93
34,313,038.99

$1,909,751,415.20

$1,078,154,424.69

$120,722,942.88
59,606,300.00
• 49,964,201.68
772,864.32
7,509,990.26
1,683,871.19

$119,762,308.72
58,279,550.00
* 87,746,274.81

$2,856,414,505.53

$2,059,627,908.18

4,737,209.12
5,854,345.84

Ratio of total reserves to deposit and Federal
73.1%
Contingent liability on bills purchased for foreign
correspondents
Commitments to make industrial advances

$246,540.97
3,891,798.34

57.2%
$1,272,394.68

•Under Section 12B of the Federal Reserve Act, each Federal Reserve Bank was
required to subscribe to Class B stock in the Federal Deposit Insurance Corporation in
an amount equal to one-half of such bank's surplus as of January 1, 1933. The subscriptions were paid during 1934 and the amounts so paid were charged to the surplus
accounts of the Federal Reserve Banks.




43

FEDERAL RESERVE BANK OF NEW YORK
INCOME AND DISBURSEMENTS

Items of income and disbursements for the year 1934 are
shown with data for the year 1933 in the following statement.
Total earnings in 1934 were $1,442,000 less than in 1933, due to
a smaller volume of loans and investments and a lower level of
interest rates in 1934. Current expenses for operation were
slightly larger than in the previous year chiefly as a result of
the increased volume of work in connection with the granting of
loans to industry, the additional activities of the Bank Examinations Department, and a larger assessment to cover the expenses
of the Federal Reserve Board. Current net earnings were increased, however, by a profit of $2,481,437 on United States
Government securities sold, and after provision for depreciation
and reserves net earnings were over $2,000,000 larger than in
1933.
Regular dividends of $3,567,690 were paid to member banks
and $4,747,138 was added to surplus.
1934
Earnings
Current net earnings
Additions to current net earnings:
Profit on U. S. Government securities s o l d . . . .
All other
Total additions
Deductions from current net earnings:
Bank premises—depreciation
Furniture and equipment
Reserve for possible losses
Reserve for self-insurance
All other

1933

$16,081,934.73
7,335,989.80

$17,523,930.26
7,052,351.44

$8,745,944.93

$10,471,578.82

$2,481,437.11
239,947.40

$426,822.07
319,794.71

$2,721,384.51

$746,616.78

$186,426.99
75,848.76
2,836,227.96
57,105.41
4,586.93

$1,751,494.95
41,319.38
3,011,181.28
66^98.20
150,075.44

Withdrawn from surplus (Section 13b)

Dividends paid
Transferred to surplus (Section 7)




$3,160,196.05

$5,020,469.25

$438,811.54

$4,273,852.47

$8,307,133.39
7,693.79

$6,197,726.35

$8,314,827.18

Total deductions
Net deductions from current net earnings

$6,197,726.35

$3,567,689.66
4,747,137.52

$3,509,872.84
2,687,853.51

44

TWENTIETH ANNUAL REPORT

Changes in Directors and Officers
At a regular election during the autumn of 1934, George W.
Davison, Chairman of the Board of Trustees, Central Hanover
Bank and Trust Company, New York, N. Y., was reelected by
member banks in Group 1 as a Class A director for a term of
three years beginning January 1, 1935; Thomas J. Watson,
President, International Business Machines Corporation, New
York, N. Y., was reelected by member banks in Group 1 as a
Class B director for a term of three years, beginning January
1, 1935.
The Federal Reserve Board reappointed J. Herbert Case as
a Class C director for a term of three years, beginning January
1, 1935, and redesignated him as Chairman of the Board and as
Federal Reserve Agent for the year 1935. The Federal Reserve
Board also reappointed Owen D. Young as Deputy Chairman of
the Board of Directors for the year 1935.
The Federal Reserve Board appointed Howard Kellogg,
President, Spencer Kellogg & Sons, Inc., Buffalo, N. Y., as a
director of the Buffalo Branch for a term of three years ending
December 31, 1937, to succeed George G. Kleindinst, of Buffalo,
whose term expired December 31, 1934.
The Board of Directors of this bank appointed Edward B.
Vreeland, President, Salamanca Trust Company, Salamanca,
N. Y., as a director of the Buffalo Branch for a term of three
years ending December 31, 1937, to succeed Raymond N. Ball,
of Rochester, N. Y., whose term expired December 31, 1934.
The Board of Directors of this bank also reappointed Robert
M. 0 'Hara as Managing Director of the Buffalo Branch for the
year 1935.
MEMBER OF FEDERAL. ADVISORY COUNCIL

The Board of Directors of this bank designated James H.
Perkins, Chairman, The National City Bank of New York,
New York, N. Y., as a member of the Federal Advisory Council
for the Second Federal Reserve District for the year 1935, to
succeed Walter E. Frew, Chairman of the Board of Directors of
the Corn Exchange Bank Trust Company, New York, N. Y.,
whose term expired December 31, 1934.




FEDERAL RESERVE BANK OF NEW YORK

45

CHANGES IN OFFICEKS

On January 3, 1934, Harold V. Roelse, Manager of the Reports Department and Assistant Secretary, was appointed
Assistant Federal Reserve Agent, in addition to his other duties.
On January 5, 1934, Ray M. Gidney was appointed Deputy
Governor. On September 1, he resigned as Deputy Governor
and was appointed Assistant Federal Reserve Agent to act in
the capacity of senior assistant in the general work of the
Agent's function.
On January 5,1934, Allan Sproul, formerly Assistant Deputy
Governor and Secretary, was appointed Assistant to the Governor, and continued as Secretary; Myles C. McCahill was
appointed a Manager of the Administration Department.
On June 30,1934, Rufus J. Trimble was appointed Assistant
Counsel, and assigned to assist in the new activity of the bank
in making industrial loans under Section 13b of the Federal
Reserve Act as added by the Act of June 19,1934.
On September 21, 1934, Charles H. Coe, formerly Assistant
Deputy Governor, was appointed Deputy Governor; Herbert H.
Kimball, formerly Assistant Counsel, was appointed Assistant
Deputy Governor; Charles N. Van Houten, Jr., formerly Chief
of Loan Collection Division, was appointed Manager of the
newly created Security Custody Department; I. Ward Waters,
formerly Manager of the Check Department, which was consolidated with the Collection Department, was made Manager of the
newly created Cash Custody Department; and the former Check
Department was consolidated with the Collection Department,
under Valentine Willis, Manager of the Collection Department.
On September 24, 1934, William F. Sheehan was appointed
Chief Examiner (Bank Examinations Department).
On September 28, 1934, William F. Treiber was appointed
Assistant Counsel.




46

TWENTIETH ANNUAL REPORT

DIRECTORS AND OFFICERS
January 1, 1935
DIRECTORS
Class

Term
Expires
Dec. 31

Group

A

1

GEORGE W. DAVISON, Greenwich, Conn

1937

Chairman, Board of Trustees, Central Hanover Bank and Trust
Company, New York, N. Y.
A

2

EDWARD K. MILLS, Morristown, N. J

1935

President, Morristown Trust Company
A

3

CECIL R. BERRY, Waverly, N. Y

1936

President, The Citizens National Bank of Waverly
B

1

THOMAS J. WATSON, Short Hills, N. J

1937

President, International Business Machines Corporation, New
York, N. Y.
B

2

WALTER C. TEACLE, Port Chester, N. Y

1935

President, Standard Oil Company (New Jersey) New York,
N. Y.
B

3

ROBERT T. STEVENS, Plainfield, N. J

1936

President, J. P. Stevens & Company, Inc., New York, N. Y.
C

J. HERBERT CASE, New York, N. Y., Chairman

1937

C

OWEN D. YOUNC, New York, N. Y., Deputy Chairman
Chairman, General Electric Company

1935

C

CLARENCE M. WOOLLEY, Greenwich, Conn

1936

Chairman, American Radiator and Standard Sanitary Corporation, New York, N. Y.

MEMBER OF FEDERAL ADVISORY COUNCIL
JAMES H. PERKINS

Chairman, The National Gty Bank of New York, New York, N. Y.

OFFICERS OF FEDERAL RESERVE AGENTS FUNCTION
J. HERBERT CASE, Federal Reserve Agent
WILLIAM H. DILLISTIN, Assistant Federal
Reserve Agent and Manager, Bank
Examinations Department

RAY M. GIDNEY, Assistant Federal Reserve
Agent

HERBERT

HAROLD

S.

DOWNS,

Assistant

Reserve Agent and Manager,
Relations Department

Federal

Bank

CARL SNYDER, General

serve

V

"

ROELSE

'

Assistant

Statistician

EDWARD L. DODGE, General Auditor

GEORGE W. FERGUSON, Assistant General Auditor



Feder

^

* *

Agent, Manager, Reports Department, and Assistant Secretary

FEDERAL RESERVE BANK OF NEW YORK

47

OFFICERS
GEORGE L. HARRISON, Governor

W. RANDOLPH BURGESS, Deputy Governor

WALTER S. LOGAN, Deputy

Governor and

CHARLES H. COE, Deputy Governor
General Counsel
LESL
JAY E. CRANE, Deputy Governor
« R- ROUNDS, Deputy Governor
Louis F. SAILER, Deputy Governor
JOHN H. WILLIAMS, Economist

ALLAN SPROUL, Assistant to the Governor and Secretary
J. WILSON JONES,

L. WERNER KNOKE,

Assistant Deputy Governor

Assistant Deputy Governor

HERBERT H. KIMBALL,

WALTER B. MATTESON,

Assistant Deputy Governor

Assistant Deputy

Governor

JAMES M. RICE,

Assistant Deputy Governor
DUDLEY H. BARROWS,

ARTHUR PHELAN,

Manager, Administration Department
WESLEY W. BURT,

Manager, Discount

Manager, Accounting Department

Manager, Government Bond and Safe-

DONALD J. CAMERON,

_

Department

WILLIAM A. SCOTT,

_

Manager, Foreign Department
T r»

kee

PinJ

Department

WILLIAM F. SHEEHAN,
Chief Examiner {Bank

FELIX T. DAVIS,

Examinations

Department)

Assistant Counsel
EDWARD 0 . DOUCLAS,

TODD G. TIEBOUT,
Assistant Counsel

Manager, Bill Department

WILLIAM F. TREIBER,

EDWIN C. FRENCH,

Assistant

Manager, Cash Department

Counsel

RUFUS J. TRIMBLE,

MYLES C. MCCAHILL,

Assistant

Counsel

Manager, Administration Department
ROBERT F. MCMURRAY,
Manager, Government Bond and Safekeeping Department

CHARLES N. VAN HOUTEN, JR.,
Manager, Security Custody Department
I. WARD WATERS,
Manager, Cash Custody Department

JACQUES A. MITCHELL,

VALENTINE WILLIS,

Manager, Credit Department

Manager, Collection

Department

BUFFALO BRANCH
Term
DIRECTORS

Expires
Dec. 31

FREDERICK B. COOLEY, Buffalo

1935

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

1935

President, Manufacturers and Traders Trust Company
HOWARD KELLOGG, Buffalo

1937

President, Spencer Kellogg & Sons, Inc.
EDWARD G. MINER, Rochester

1936

Chairman, Pfaudler Company
GEORGE F. RAND, Buffalo

1936

President, The Marine Trust Company of Buffalo
EDWARD B. VREELAND, Salamanca, N. Y

1937

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

1935

OFFICERS
ROBERT M. O'HARA,

Managing Director
R. B. WILTSE,

Assistant Manager



HALSEY W. SNOW,

Cashier
CLIFFORD L. BLAKESLEE,

Assistant

Cashier

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