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SECOND ANNUAL REPORT

FEDERAL RESERVE BANK OF MINNEAPOLIS
Minneapolis, January 1, 1917.
MEMBERS OF DISTRICT NUMBER N INE:
W e respectfully submit herewith a report of the results of your bank’s operations for the
calendar year 1916. The statements and schedules accompanying speak for themselves and need
no special comment.
Money has been comparatively cheap throughout the district during the entire year, and
rediscounts of commercial and agricultural paper did not reach proportions of any consequence.
Gur facilities have been available, however, and the assurance which it has given resulted in
member banks loaning more closely and freely than they would have felt justified in doing had
we not been here prepared to assist them in case of need.
Appreciating the necessity of not only employing a sufficient proportion of our funds to pay
the deficiency incurred in our initial stages and our current operating expenses, but if possible, to
make some returns to our stockholders as contemplated by the Act, our funds in view of the lack
of demand at home, were employed so far as market conditions warranted, in Government bonds,
short time municipal warrants and bankers’ acceptances. This has resulted in our liquidating
the deficiency reported to you one year ago, in providing for the amortization of our furniture,
fixture and equipment account, and in making a payment to you on account of accrued dividends,
There was left a comfortable amount to carry over as undivided profits.
Section 16, providing for the collection and clearing of checks, was put into operation in July.
This necessitated an increase in our office and equipment, as well as clerical staff. The business
in this department has increased from month to month, which to us is evidence of satisfactory
service in that department. We are now handling about 15,C01checks each day, aside from the
checks handled on the Twin City banks through our own clearing house. The expense of main­
taining this department is borne by the banks using the facilities. A charge of l ^ c per item is
made to the bank depositing with us the items for collection, and the revenue thus obtained has
been sufficient to pay rent for space used, clerical help, postage, stationery and depreciation of
furniture and equipment used in that department. If these facilities were made general use of
by our members, the charge could be reduced to one cent per item.
Your Directors convene monthly, and all are kept in close touch with our operations by
report made to them weekly. Your Executive Committee holds daily meetings, the junior officers
and employees have been loyal and are doing their part, to the end that transactions with our
member banks have been efficiently and expeditiously handled.
The loans and investments of national banks, state banks and trust companies in the United
States have increased since the establishment of the Federal Reserve System by about $3,000,000,000. The loans and investments of banks in the Ninth Federal Reserve District during this
same period have increased about $200,000,000.
. W hether this increase is due to the increased price of all the necessaries of life, including the
price of labor, whether it is due to the increased population and corresponding development of busi­
ness, whether it is due to the inauguration of the Federal Reserve System, and a releasing of
reserves, whether it is due to large importations of gold, regardless as to what anyone may
attribute it, in view of existing conditions throughout the world, we believe the greatest care
should be exercised by bankers at this time, confining their extensions of credit so far as possible
for the financing of short time, self-liquidating transactions or those that may be liquidated
without distress to the borrower.
We again desire to express our appreciation for the friendly interest and co-operation of
our members, without which the progress made and results obtained would have been impossible.
THEODORE WOLD,
Governor.




STATEMENT OF CONDITION DECEMBER 31, 1916.
RESOURCES.

Condition
Dec. 31,1915.

$1,985,182.75
6,199,999.55
3,178,687.85
569,664.72
15,607.73
59,274.19
None
16,295.18
1,250.00
3,598,997.07
3,449,929.61
18,800.00
2,374,585.00
179,552.47
8,775,637.00
7,064,000.00

$1,244,615.71
477,806.40
1,328,820.00
910,513.28
6,473.42
54,159.64
32,341.71
19,932.85

$37,487,463.12

$16,466,407.16

$2,609,700.00
44,541.27
36,274.45
22,534.74
176.25
886,437.51
5,680.45
4,347,156.58
29,534,961.87

$2,546,850.00

$37,487,463.12

Bills Discounted and Collateral Loans to M em bers...............................................
Bankers* Acceptances ...................................................................................................
United States Bonds and N otes............................................................... ................
State and Municipal W arran ts....................................................................................
Accrued Interest on U. S. Securities.........................................................................
Furniture and Equipment (including new vault and safes) ..............................
Organization Expense ..................................................................................................
Cost of Federal Reserve Notes, Unissued..................................................................
Expenses paid in advance............................................................................................
Due from other Federal Reserve Banks .................................................................
Due from Banks and Bankers, also deferred debits to members .....................
National Bank Notes and Federal Reserve Notes, other b a n k s ......................
Federal Reserve Notes on hand...................................................................................
Other lawful m oney.......................................................................................................
Gold Certificates and Gold Coin...............................................................................
Gold in Settlement F u n d ...............................................................................................

Condition
Dec. 31,1916.

$16,466,407.16

$20,484,045.00

$14,000,000.00

4,390,694.20
*8,945.00
868,390.00
21,416.95
2,747,298.00
4,355,000.00

LIABILITIES.
Capital .............................................................................................................................
Profit and L o s s ...............................................................................................................
Discount and Interest U nearned.................................................................................
Discount and Premium on United States B onds.................................................... .
W ithheld for Federal Income T a x .............................................................................
Government Deposits ...................................................................................................
Cashier’s Checks ................................................................................................ .............
Due to other Federal Reserve B anks.........................................................................
Due to Member B anks........... ........................................................................................
Gold with Federal Reserve Agent to reduce liability for outstanding Federal
Reserve Notes .......................................................................................................

18,963.25
7,069.14
1,822.20
26,340.33
13,865,362.24

PROFIT AND LOSS ACCOUNT.
Gross earnings January 1, 1916, to December 31, 19 1 6 .....................................................................
Less:
Assessment for expenses Federal Reserve B oard...........................................
Cost of new Federal Reserve Notes issued during year ........................
Operating expenses — ..........................................................................................

$238,108.68

$8,962.07
9,866.06
79,877.70
98,705.83

Excess of earnings over current expenses.............................................................................. ..............
Less the following items charged off:
Organization expense ............................................................................................
Reduction of furniture and fixtures ...................................................................
Dividend, period Nov. 2, 1914, to July 1, 1915.................................................

$139,402.85

$32,341.71
4,800.00
57,719.87
94,861.58

Balance carried forward




$44,541.27

GROSS EARNINGS BY MONTHS 1915 AND 1916.
1915.
$4,269.52
4,014.08
4,932.92
5,109.33
5,942.45
6,741.82

1916.
$11,471.21
10,909.70
11,724.58
12,480.69
15,782.63
17,154.86

January .
February
March ..
April .. .
May
J u n e ---Total earnings 1916.

$238,108.68

1916.
$20,350.25
25,074.83
27,170.94
30,212.02
28,660.58
27,116.39

1915.
$9,038.91
10,766.40
10,966.71
13,371.14
12,333.42
12,122.61

Total earnings 1915...................

$99,609.31

July ........................
August ...................
September .............
October .................
November .............
December ...............

CLASSIFICATION OF EARNINGS.
1916.

FROM—

Bills Discounted—Member Banks......................................................................... .
Bankers’ Acceptances ................................................................................................
United States Bonds and N otes...............................................................................
State and Municipal W arran ts.................................................................................
Sundry Profits including interest on transfer drafts.......................................

1915.

$60,937.81
50,098.78
69,266.49
34,267.09
23,538.51

$50,488.75
5,247.90
18,793.25
20,930.82
4,148.59

$238,108.68

$99,609.31

VOLUME OF DISCOUNTS FOR 1916.
Minnesota
285
No. of member banks .................
88
No. of member banks served . . .
No. of applications made for re­
362
discount .......................................
1,903
No. pieces re-discounted .............
2,500
Average amount of each piece...
Total amounts of re-discounts... $4,824,590
Smallest i t e m .................................
500,000
Largest item .................................

North
Dakota
155
28

South
Dakota
125
30

79
447
1,200
$527,890

112
584
1,300
$768,393

Wisconsin Montana
89
78
7
19
21
88
1,800
$157,801

31
198
1,100
$215,893

Michigan
32
2

764
174

5
610
10
3,230
2,800
2,000
$27,501 $6,522,068

Distribution by Maturities of Paper and Short Term Investments Held by the Federal Reserve Bank at Close
of Business December 31, 1916.
W ithin
10 days
Bills Discounted, m em bers.... $596,315.93
Bankers' acceptances ...........
909,962.13
State and Municipal w arrants
81,282.19

After 10
but within
30 days

After 30
but within
60 days

After 60
but within
90 days

$426,319.53
757,607.55
35,000.00

$416,044.93
$139,967.66
1,552,864.19 2,979,565.68
90,550.71
337,831.82

90 days

After
Totals

$406,534.70 $1,985,182.75
....................
6,199,999.55
25,000.00
569,664.72

CLEARING STATISTICS.
Number of Items and Volume Handled Since Beginning of Collection System July 15, 1916.
No. of items
Total
No. of items on
Total on
Date
within district.
within district.other districts, other districts.
July 15 to July 31...........................................
36,030
$7,131,009.33
761
$2,579,516.37
August .............................................................. 129,004
24,435,164.27
5,331
9,567,653.43
September ........................................................ 244,546
37,896,114.75
10,099
15,514,249.85
October ............................................................ 330,883
53,954,654.88
13,521
20,467,890.62
November ........................................................ 351,088
58,919,187.47
13,019
24,135,306.35
December ........................................................ 380,642
55,940,040.66
14,483
19,285,616.48
T o t a l .......................................................... 1,472,193




$238,276,171.36
Attest:

57,214

$91,550,233.10

FRANK C. DUNLOP, Auditor.




FEDERAL RESERVE BANK OF MINNEAPOLIS
N IN T H D IS T R IC T

OFFICERS

THEODORE WOLD, G overnor
S. S. COOK, C ashier

FRANK C. DUNLOP, A u d ito r
GRAY WARREN, T ra n s it M a n ag er

DIRECTORS

JO H N H. R IC H , C h a irm a n a n d F ed eral R eserve A gent
W . H. LIG H TN ER , Vice C h a irm an a n d D ep u ty F ed eral R eserve
A gent.
J . C . BASSETT, A berdeen, S. D.
F. R . BIGELOW, S t. P au l, M in n .
JO H N W. BLACK, H o u g h to n , M ich.
E. W. DECKER, M in n eap o lis, M in n .
L. B. HANNA, F argo, N. D.
F . P. HIXON, L a C rosse, Wis.
N. B. HOLTER, H elen a, M o n t.

CURTIS L. M O SH ER,
A ssista n t
F ederal Reserve A gent

MEMBER ADVISORY CO U NCIL
V i.

A.

..... ..I. | ■ iim
r JK./L J. y W i l U U e B p O a W '

COUNSEL

A. UELAND

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