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THIRTEENTH ANNUAL REPORT
of the

Federal Reserve Bank
of Dallas

FOR THE YEAR ENDED
DECEMBER 31,

1927

ELEVENTH FEDERAL RESERVE DISTRICT




THIRTEENTH ANNUAL REPORT
of the

Federal Reserve Bank
of Dallas

FOR THE YEAR ENDED
DECEMBER 31,

1927

-

ELEVENTH FEDERAL RESERVE DISTRICT




LETTER OF TRANSMITTAL

February 4, 1928
Gentlemen:
I have the honor to submit herewith the Thirteenth Annual
Report of the Federal Reserve Bank of Dallas covering the year
ended December 31,1927.
Respectfully,
C. C. WALSH,
Federal Reserve Agent
Federal Reserve Board,
Washington, D. C.




DIRECTORS AND OFFICERS
OF THE
FEDERAL RESERVE BANK OF DALLAS
1928
DIRECTORS
CLASS A
J. H. FROST, San Antonio, Texas
HOWELL E. SMITH, McKinney, Texas
W. H. PATRICK, Clarendon, Texas

CLASS B
J. H. NAIL, Fort Worth, Texas
J. R. MILAM, Waco, Texas
J. J. CULBERTSON, Paris, Texas

CLASS C
C. C. WALSH, Dallas, Texas
S. B. PERKINS, Dallas, Texas
CLARENCE E. LINZ, Dallas, Texas

MEMBER FEDERAL ADVISORY COUNCIL
B. A. McKINNEY, Dallas, Texas

OFFICERS
C. C. WALSH, Chairman and Federal ReLYNN P. TALLEY, Governor
R
~TS*r£UA&e£tT, T TWT T
X
- R - GILBERT, Deputy Governor
RE
C
IN
Z
^^
^ ^fv^
* ' P«P»ty Ch»>rm«n
R. B. COLEMAN, Deputy Governor
CHAS. C. HALL, Assistant Federal Rewv-n
MATJTJTC -»--•% serve Agent and Secretary
*LRE*> r H p A ™ 5 ' A! ^ " n * • r „ „,
W
D l
P
W. J. EVANS, Assistant Federal Reserve
\
J ^ J A Jxr * •
P v°
Agent
J. L. HERMANN, Assistant Cashier
W. P. CLARKE, General Auditor
E. B. AUSTIN, Assistant Cashier
C. C. TRUE, Assistant Auditor
R. O. WEBB, Assistant Cashier
CHAS. C. HUFF, General Counsel
LOCKE, LOCKE, STROUD & RANDOLPH, Counsel

EL PASO BRANCH
DIRECTORS
C. M. NEWMAN, El Paso, Texas, Chairman
E. A. CAHOON, Roswell, N. M.
W. O. FORD, El Paso, Texas
A. P. COLES, El Paso, Texas
G. D. FLORY, El Paso, Texas
A. J. CRAWFORD, Carlsbad, N. M.
E M. HURD, El Paso, Texas

OFFICERS
W. O. FORD, Managing Director
ALLEN SAYLES, Cashier

HOUSTON BRANCH
DIRECTORS
R. M. FARRAR, Houston, Texas, Chairman
GUY M. BRYAN, Houston, Texas
E. A. PEDEN, Houston, Texas
FRED W. CATTERALL, Galveston, Texas
DWIGHT P. REORDAN, Houston, Texas
E. F. GOSSETT, Houston, Texas
J. C. WILSON, Beaumont, Texas

OFFICERS
DWIGHT P. REORDAN, Managing Director
L. G. PONDROM, Cashier
H. R. DeMOSS, Assistant Cashier

SAN ANTONIO BRANCH
DIRECTORS
REAGAN HOUSTON, San Antonio, Texas, Chairman
M. CRUMP, San Antonio, Texas
H. H. ROGERS, San Antonio, Texas
FRANZ C. GROOS, San Antonio, Texas
F. E. SCOBEY, San Antonio, Texas
R. T. HUNNICUTT, Del Rio, Texas
ERNEST STEVES, San Antonio, Texas




OFFICERS
M. CRUMP, Managing Director
C. B. MENDEL, Cashier

FEDERAL RESERVE BANK OF DALLAS
COMPARATIVE STATEMENT OF CONDITION
fin Thousands of Dollars)
RESOURCES

Dec. 31,
1927
35,804
1,839
37,643
14,742
7,427

Dec. 31,
1926
38,488
2,609
41,097
19,090
8,448

Dec. 31,
1925
24.269
2,351
26,620
12,102
11,398

Total gold reserves ...
Reserves other than gold..

59,812
9,391

68,635
8,137

50,120
5,749

Total reserves
Non-reserve cash ...

69,203
3,189

76,772
2,548

55,869
2,593

611
267

1,594
3,178

1,924
2,083

Total bills discounted
Bills bought in open market.
U. S. Government securities:

878
22,811

4,772
15,927

4,007
28,871

Bonds
Treasury Notes
Certificates of indebtedness ...

18,107
2,671
11,211

3,738
3,813
15,788

6,949
17,236
7,644

31,989

23,339

31,829
273

55,678

44,038

64,980

17
29,964
1,785
501

28,215
1,755
358

27,906
1,793
1,192

160,337

153,686

154,333

47,472

48,803

47,437

70,970

62,898
1,257

66,203

Gold with Federal Reserve Agent
Gold redemption fund with U. S. Treasury
Gold held exclusively against F. R. Notes.
Gold settlement fund with F. R. Board
Gold and gold certificates held by bank.

Bills discounted:
Sec. by U. S. Government obligations
Other bills discounted

Total U. S. Government securities
Foreign loans on gold
Total bills and securities.
Due from Foreign Banks..
Uncollected items —
Bank premises
All other resources
Total resources
LIABILITIES
F. R. notes in actual circulation—
Deposits:
Member bank—reserve account..
Government
Foreign banks
Other deposits
Total deposits .
Deferred availability items..
Capital paid in
Surplus
All other liabilities
Total liabilities
Ratio of total reserves to deposit and Federal reserve note
liabilities combined (per cent)
Contingent liability on bills purchased for foreign correspondents



774
162
103

985
61

776
289
95

72,009

65,201

67,363

27,798
4,263
8,527

26,781
4,302
8,215

268

384

26,616
4,267
7,615
1,035

160.337
160.337

1M.685

154.333

57.9

67.3

48.7

8,007

1,976

2,462

THIRTEENTH ANNUAL REPORT
OF THE

FEDERAL RESERVE BANK OF DALLAS

Business activity in the Eleventh Federal Reserve District
during the first eight months of 1927 fell considerably below
that during the corresponding period of 1926, but as soon as
fairly accurate information became available regarding the outturn of crops, business became more active and showed a steady
improvement during the remainder of the year. While the
volume of business during the fall months of the year was not
so large as was generally expected, it must be borne in mind
that early returns from crops were reflected in the heavy liquidation of indebtedness rather than in greatly increased buying.
At the close of the year, business was in a much stronger position than a year earlier and prospects point toward a gradually
expanding volume of trade during the early part of 1928. Building operations reflected a substantial reduction from the previous year, showing the natural reaction to the heavy building
programs carried out during the previous years. The production of petroleum reached a new high record, yet operations in
this industry were generally unprofitable, due to the sharp
decline in the price of crude oil.
The volume of agricultural production, due to adverse
weather conditions at the critical periods of growth, was smaller than a year earlier, yet the value of crops was considerably
larger than in the previous year. Furthermore, the increase in
the gross value of crops does not fully measure the gain in the
farmer's net return, as the cost of production of principal crops
in 1927 was the lowest in several years. Due to the fact that
farmers generally raised their living at home, practiced greater
diversification, and did a substantial portion of their own work,
the demand for agricultural credit was on a much smaller scale
than usual. The heavy production of feed crops will again
serve to lighten the costs of 1928 crops and tend to hold down
the demand for agricultural credit.
The livestock industry witnessed a further improvement
during the year. The physical condition of the ranges and
livestock, with few exceptions, were generally good during the
greater portion of the year.* The calf and lamb crops were
large and due to the favorable weather during the late spring,
losses were light. Cattle prices reflected a steady improvement
throughout the year, and during the closing weeks, reached the
highest level in several years.
The volume of transactions handled by the Federal Reserve
Bank of Dallas during 1927 again exceeded that of the previous
year, yet, due to a further increase in the efficiency of the personnel, the departments of the bank as a whole functioned with
practically the same number of employees as during 1926.



5

FEATURES OF OPERATIONS, YEARS 1927 AND 1923

Loans, Rediscounts, and Investments:
Notes discounted and rediscounted for member banks
Bills bought for our own account
Bills bought for other than our own account
Purchase and sale of securities for own account
Purchase and sale of securities other than own account
Currency and Coin:
Bills received and counted
Coin received and counted
Check Collections:
Checks collected .
o
>
Collection items handled
Return items
U. S. Government checks paid
U. S. Government coupons paid

_

-

Transfers:
Transfer of funds other than five per cent fund of national
banks
:
Transfer of funds for five per cent fund of national banks
Fiscal Agency:
U. S. Securities issued, converted, redeemed, canceled, and
exchanged
Custody of Securities:
Number of pieces received from outside sources..
Number of pieces received inter-departmental transactions.
Number of pieces delivered other than inter-departmental...
Number of pieces delivered inter-departmental transactions



1927
Number
of Items
Amount
19,275 $281,580,673
8,773
119,970,775
2,822
29,521,278
1,102
171,555,550
696
30,107,791

-1926
Number
of Items
39,201
7,464
1215
965
704

Amount
$223,653,238
75,979,251
9,494,827
168,129,450
32,904,219

43,952,161
33,981,452

201,982,801
9,419,690

7,751,047,967 34,804,452
116,357
194,864,160
960,835
38,998,296
795,795
100,412,540
603,544
4,750,750

7,443,727,908
205,246,296
39,752,432
86,807,218
5,017,339

93,380
16,334

4,191,300,603
40,430,472

86,356
17,773

3,863,928,544
38,936,039

118,831

221,513,174

57,534

96,042,089

47,449,190
34,854,533
36,097,295
122,814
995,146
901,015
598,390

29,650
26.757
32,364
26,818

215,433,525
7,067,104

Not
Not
Not
Not

available
available
available
available

30,048
28,555
33,820
28,950

Not
Not
Not
Not

available
available
available
available

EARNINGS AND EXPENSES
The gross earnings of the bank in 1927 were $1,741,921, as
compared with $2,127,049 in 1926, a decrease of $385,128 or
18.1 per cent. Of this amount $430,353 or 24.7 per cent, resulted from the purchase of bills, as compared with $462,841
or 21.7 per cent in 1926; $254,984 or 14.6 per cent resulted
from the discount and rediscount of paper, as compared with
$525,993 or 24.7 per cent in 1926.
Current net earnings in 1927 were $474,584, as compared
with $948,318 in 1926, a decrease of $473,734 or approximately
50 per cent. The average rate on bills discounted was 3.8 per
cent, compared with 4 per cent in 1926; and on purchased paper
3.5 per cent, as compared with 3.55 per cent in 1926. The
annual rate of net earnings to paid-in capital was 11.1 per cent
in 1927, compared with 22 per cent in 1926.
Current expenses in 1927 were $1,267,337, as compared
with $1,178,730 in 1926, an increase of $88,607 or 7.5 per cent.
On December 31, 1926, after adjustments necessary in closing the books for the year had been made, the bank's capital
was $4,302,000 and surplus $8,215,000. Semi-annual dividends
were paid to member banks on June 30 and December 31, 1927,
at the rate of 6 per cent per annum. After making provision
for the usual depreciation allowances and sundry adjustments,
the balance in current net earnings of $311,899 was transferred
to surplus, making that account $8,526,900 on December 31,
1927.
OPEN MARKET OPERATIONS

At the beginning of the year 1927 holdings of United States
Government securities were $23,339,350, of which $19,603,000
consisted of participation in purchases made by the Open Market Investment Committee.
During the year United States Government securities
amounting to $152,640,000 were purchased in the open market,
or from other Federal Reserve Banks and member banks, while
securities aggregating $143,990,000 matured or were sold,
representing an increase in holdings of securities of $8,650,000,
and leaving total holdings of $31,989,000 on December 31, 1927.




7

Of the increase in holdings $3,356,500 is represented by participation in purchases of the Open Market Investment Committee, while $5,293,150 represents independent purchases.
The yield on Government securities averaged about Sy2 per
cent for the year.
At the beginning of the year holdings of bankers acceptances amounted to $15,926,500. This amount was gradually
reduced to the minimum of $5,109,683 on August 15, due to
maturities during that period regularly exceeding purchases.
From this figure holdings were increased to $23,427,935 on
December 3, which was the maximum for the year.
Bankers' acceptances amounting to $120,785,758 were purchased in the Open Market, from other Federal Reserve Banks
and member banks during the year, while bills amounting to
$113,901,493 matured or were sold. Holdings amounted to
$22,810,773, on December 31, 1927.
At the beginning of the year discount rates on banker's
acceptances ranged from 3% per cent to 4 per cent, changing
slightly from time to time, the range at the close of the year
being from 3 per cent to 3% per cent. The average yield on
banker's acceptances for the year was 3.51 per cent.
DISCOUNT OPERATIONS

The volume of paper discounted and rediscounted for member banks in 1927 was $281,580,000, compared with $223,653,000 in 1926, an increase of $57,927,000 or 26 per cent.
Of the total advances to member banks in 1927, 96 per cent
was to National bank members and 4 per cent was to State
bank members, as compared with 94 per cent to National bank
members and 6 per cent to State bank members in 1926.
The maximum borrowings for the year of $16,079,000 was
reached on September 2 and the minimum borrowings was
$877,792 on December 31.
Of the total paper discounted in 1927, $201,782,000 or 71
per cent consisted of notes secured by United States Government obligations, as compared with $96,053,000 or 43 per cent
in 1926.
The accompanying schedule shows classification and disposition of notes submitted by member banks in 1927, reasons
for return of paper, average daily borrowings from the Federal
Reserve Bank of Dallas, contribution of member banks to the
bank's capital stock and percentage of total average daily
borrowings from the bank by member banks, by groups.



CLASSIFICATION AND DISPOSITION OF NOTES SUBMITTED BY MEMBER BANKS DURING 1927
Number
31,442

Number and amount of items received

Amount
$66,932,943.76

CLASSIFICATION
Farming
Commercial
Miscellaneous

$26,699,893.73
39,561,341.60
671,708.43

$66,932,943.76

REASONS FOR RETURN OF PAPER SHOWING PERCENTAGE
RETURNED TO TOTAL RECEIVED
Amount Percentage Items Percentage
Ineligibility
$ 676,479.15
1.01
199
.63
Technical Defects
880,066.96
1.31
583
1.85
Insufficient Cr. Information
846,749.35
1.26
589
1.87
Credit Showing
4,110,216.59
6.14
5,217
16.59
Miscellaneous
114,019.70
.21
205
.65
Total Returned
Total Accepted

9.93
90.07

6,793
24,649

21.59
78.41

$66,932,943.76

Total

$ 6,657,531.75
60,275,412.01

100.00

31,442

100.00

AVERAGE DAILY OUTSTANDING BORROWINGS FROM THE FEDERAL RESERVE BANK DURING 1927, SEGREGATED AS
TO BANKS IN GROUPS 1, 2 AND 3
M. B. C. Notes Secured
by Gov't Securities
$1,447,788
665,546
126,785

Group 1
Group 2
Group 3

M. B. C. Notes and Rediscounts Otherwise Secured Total
$1,590,808
$3,038,596
1,384,831
2,050,377
1,143,703
1,270,488

$2,240,119

$4,119,342

$6,359,461

CONTRIBUTION OF MEMBER BANKS TO THE CAPITAL STOCK
OF THE FEDERAL BANK, SEGREGATED AS
TO BANKS IN GROUPS 1, 2 AND 3
Group 1
Group 2
Group 3
Total

-

_._

$2,051,650
1,496,350
715,450
$4,263,450

PERCENTAGES OF THE TOTAL AVERAGE DAILY BORROWINGS
FROM THE FEDERAL RESERVE BANK OF EACH GROUP
TO ITS CAPITAL STOCK PAYMENT
Group 1
Group 2
Group 3




148%
137%
177%
9

RESERVE POSITION

The reserve position of the bank during 1927 reflected the
usual seasonal changes in demand for credit, volume of earning
assets, circulation of Federal Reserve notes, extent of participation in the open market and fluctuations in deposits.
For the first six months of the year the ratio ranged between a maximum of 76.4 per cent on March 16 (the highest
of the year as of weekly reporting periods) when total cash
reserves were $79,071,000, to a minimum of 59.8 per cent on
June 8, when total cash reserves were $56,307,000.
During the latter half of the year the ratio fluctuated between a maximum of 66.4 per cent on October 5, when total
cash reserves were $74,882,000, to a minimum of 53.5 per cent
on November 2, when total cash reserves were $63,132,000.
CLEARING OPERATIONS

The volume of checks handled during the year 1927 totaled
36,998,000, amounting to $7,851,460,000, an increase of 1,398,000 in number and value of $320,925,000 over 1926. The volume during the last three months of 1927 was exceptionally
heavy which is the seasonal trend due to utilization of funds
realized through the marketing of fall crops. The daily average number of checks handled during this period was 139,000
as compared with 125,000 during 1926 and 123,000 during 1925.
The maximum number of items handled at the Head Office in
any one day was 141,383 on June 6, 1927.
The privilege of routing checks direct to other Federal
Reserve Banks for credit on the books of this bank was availed
of by 161 member banks in 1927. Notwithstanding the number
of banks availing themselves of the direct routing privilege
which eliminates the handling of items in our office, and in
many instances enables the direct sending member to receive
quicker credit, the year just ended witnessed a large increase
in the number of checks which actually passed through our
Transit Department.
During the year 995,000 checks were returned for various
reasons, a ratio of one check returned for every 37 items
handled. During 1926 the ratio was also one to 37.




10

Clearings through the Reserve City Clearing House during
the year aggregated $1,146,943,900 as compared with $1,131,641,000 in 1926.
Non-cash collection items handled in 1927 totaled 122,814
amounting to $194,864,000 as compared with 116,357, amounting to $205,246,000 in 1926.
The salary expense of the Transit Department was reduced
three per cent in 1927 over 1926.
MOVEMENT OF MEMBERSHIP

On January 1, 1927, the total number of national banks in
the district was 728. During the year five national banks were
chartered; 27 were dropped through liquidation, mergers and
other causes, making a net decrease of 22, or a total on December 31, 1927 of 706.
On January 1, 1927, the total state bank membership was
113. During the year one state bank was admitted to membership. The membership of 13 state banks was terminated
through liquidation, consolidations and other causes, making
a net reduction of 12, or a total state bank membership on
December 31, 1927 of 101.
The total membership, by states, on December 31, 1927,
was:
Arizona —
Louisiana
New Mexico
Oklahoma
Texas

_

National
5
15
20
19
647

State

706

101

Total

1
1
1
97

Total
1
6
16
21
20
744
807

FEDERAL RESERVE NOTES
The amount of Federal reserve notes in circulation during
1927 was only slightly greater than in 1926, the average being
$192,000 more than the previous year.




ll

The following table shows the average, maximum and minimum circulation for 1927, as compared with 1926 and 1925:
1927
1926
1925
Average _
$42,320,000 $42,128,000 $44,698,000
Maximum
51,596,000 51,970,000 54,020,000
Minimum
34,194,000 34,981,000 37,471,000
The minimum circulation in 1927 of $34,194,000 was reached
in June, while the minimum in 1926, $34,981,000, was reached
in May. The maximum circulation in 1927 of $51,596,000 was
reached on November 5, and was $374,000 less than the maximum in 1926 of $51,970,000, reached on November 6.
Weather conditions were a contributing factor in the movement of Federal reserve notes during the fall season when the
heaviest demand is experienced. The picking of cotton was
almost continuous and open weather permitted the crop being
gathered with but few interruptions. As a result currency
forwarded to those sections where the crop was early served
its purpose and was returned for credit in time to be re-forwarded to other sections where the movement of the crop was
later. If this condition had not existed the maximum circulation in 1927 would have unquestionably been higher than in
1926.
BANK EXAMINATIONS

In 1927 the Examination Department made 104 credit investigations in conjunction with regular examinations by the
State authorities. Two non-member institutions were examined incident to application for membership. Two independent credit investigations were made by our examiners, involving one state and one national bank. A total of 108 visits were
made during the year, as compared with 118 in 1926. The
falling off in examination work was due in part to a decrease
in the district's state bank membership, and, in some degree,
to better banking and business conditions.
Cooperative relations with the State Banking Department
in this district were maintained, as usual, particularly in Texas,
where the most of the state bank members are located. The
State Banking Department of this state participates with us
each year in a series of continuous examinations which is car-




12

ried on until all member state banks have been examined.
Under this plan the majority of our credit investigations in
Texas are made early in the year, in advance of the seasonal
peak demand for rediscount accommodations.
BANK RELATIONS

During the past year the Bank Relations Department conducted a total of 1,089 bank visitations, as against 1,117 in
1926. The field work in 1927 consisted of 819 regular visits
to member banks, 256 to non-member institutions, and 14
special missions for other departments of the bank.
Speakers were furnished for 32 gatherings during the year,
and approximately 1,000 visitors were conducted through the
bank building.
All bankers' conventions, group meetings, and a number of
formal bank openings in this district were attended either by
field representatives or officers of this bank.
STOCKHOLDERS MEETING

The first meeting of the bank's stockholders was held at the
Baker Hotel on June 15, 1927. It was attended by 416 member
bankers, representing 329 member banks. Officers and directors of the bank and its branches were also present. A Stockholders' Association was formed and by-laws were adopted
providing for a President, Secretary, and a Stockholders' Advisory Committee, consisting of seven members from Texas
and one each from Arizona, New Mexico, Oklahoma and Louisiana. W. W. Woodson, of Waco, Texas, was elected president
and A. R. Davis, Garland, Texas, chosen as secretary. The
by-laws provide for annual meetings of the association. Addresses were delivered by C. C. Walsh, Chairman and Federal
Reserve Agent, Lynn P. Talley, Governor, and E. B. Stroud of
the bank's counsel. The afternoon session was given over to a
discussion by the delegates of the operations of the bank and
other matters of interest to the stockholders. Resolutions
were adopted commending the influence of the Federal Reserve
System upon banking and economic conditions, and a special
resolution was adopted petitioning Congress to amend Section
13 of the Federal Reserve Act for the purpose of broadening



13

the present provisions of the Act relating to the eligibility of
commodity drafts for rediscount.
INSOLVENT BANKS DEPARTMENT

Nine member banks (seven national and two state) in this
district suspended business in 1927, of which three were indebted to this bank. During the year the indebtedness of six
was liquidated without any loss to this bank. On December
31, 1927, there were seventeen banks indebted to us still in
process of liquidation with a net liability of $862,177.77, all of
which had been previously charged to funds reserved for losses,
with the exception of $20,162.00, which is carried as an asset
on our books.
The personnel of the department consists of two regular
employees and two field men. The service of the latter is expected to be terminated during the next sixty days as the liquidation will have reached a point where it can be handled from
the office without additional expense.

INTERNAL ORGANIZATION AND PERSONNEL
The Board of Directors held twelve meetings in 1927, with
an average attendance of eight.
There was no change in the personnel of the Board in 1927.
At its meeting on January 7, 1927, the Board re-elected
B. A. McKinney, Vice-President of the American Exchange
National Bank of Dallas, as a member of the Federal Advisory
Council to represent the Eleventh Federal Reserve district
during 1927.
Following the announcement by the Federal Reserve Board
on February 25 of the approval of the application of the San
Antonio Clearing House Association to establish a branch at
San Antonio, Texas, steps were taken to provide a working
organization for the branch, and several changes in official
personnel necessarily resulted. On March 7 the Board of Directors elected M. Crump, Managing Director of the El Paso
Branch, as Managing Director of the San Antonio Branch,
C. B. Mendel of San Antonio as Cashier of the San Antonio
Branch and W. 0. Ford, senior Assistant Cashier at the head



14

office, as Managing Director of the El Paso Branch, to succeed
Mr. Crump. The transfer of Mr. Ford to El Paso resulted in
the re-assignment of functions at the head office and R. 0.
Webb, Manager of the Service Department, was elected Assistant Cashier to fill the vacancy caused by Mr. Ford's transfer.
While Messrs. Ford and Webb assumed their new duties May
23, Messrs. Crump and Mendel for several weeks prior to the
opening of the San Antonio Branch on July 5 were engaged in
providing a working staff and assembling equipment and supplies necessary for the successful operation of the branch.
On September 8, R. L. Foulks tendered his resignation as
General Auditor; W. P. Clarke, Assistant Auditor was designated Acting General Auditor to succeed Mr. Foulks, and C. C.
True, Manager of the Auditing Department, was designated
Acting Assistant Auditor to succeed Mr. Clarke.
The terms of J. H. Frost, Class A director, Group 1, and
Frank Kell, Class B director, Group 2, expired on December 31,
1927. The annual election, conducted in November, resulted in
the re-election of Mr. Frost, and election of J. R. Milam, of
Waco, Texas, as Class B director, Group 2, for three year terms
beginning January 1, 1928.
On December 8, the Federal Reserve Board announced the
redesignation of C. C. Walsh, as Chairman of the Board and
Federal Reserve Agent for 1928.
On December 14, the Federal Reserve Board announced the
redesignation of Clarence E. Linz as Deputy Chairman of the
Board for 1928, and the re-appointment of S. B. Perkins as
Class C director for the three year term beginning January 1,
1928.
On December 31, 1927, the total number of officers and employees at the head office and branches was 438, an increase of
15 from the number on December 31, 1926.
FISCAL AGENCY OPERATIONS

The volume of business handled as fiscal agent of the United
States in 1927 showed a substantial increase over the year
1926. During the year eight issues of Government securities
were floated, as compared to three issues in 1926, and there




15

were six maturing issues as compared to five in 1926. The
volume of interest coupons handled for payment was slightly
less than in 1926, while there was a substantial increase in the
number of Government checks and warrants.
The personnel of the department has remained the same as
it was on December 31, 1926, with eighteen employees on that
date at an annual salary rate of $34,620. Increases in salary
were granted during the year, bringing the salary rate up to
$35,700.
OPERATION OF BRANCHES

The volume of business handled at the El Paso Branch in
1927, compared with that handled in 1926, is reflected in the
following table:
imuci

1927

1926

Notes discounted and
349
1,055
rediscounted
Currency and coin
4,114
shipmenis received4,232
Currency and coin
3,791
3,820
shipments forwarded
9,294
9,825
Transfer of funds
2,488,592 2,539,076
Check collections
152,545
158,757
Treasury Warrants
14,182
Collection items handled 12,774
47,607
50,984
Return items

am

1927

1926

$ 11,070,937

$ 25,968,869

36,733,607

38,621,232

38,392,805
188,686,408
356,970,038
16,878,938
9,353,078
2,766,839

37,626,971
164,887,764
347,626,720
16,432,592
11,525,360
2,983,043

At the beginning of the year 44 member banks (41 national
and three state) were attached to the branch. Three national
banks were transferred to the San Antonio Branch upon its
opening, July 5, and the membership of one national bank was
terminated by absorption, leaving total membership of 40 on
December 31, 1927.
The expense of operation, excluding furniture and equipment, was $115,432 as against $120,486 in 1926.
The personnel of the branch on December 31, 1927, comprised two officers and 35 employees, compared with two officers and 45 employees at the close of 1926.




16

The volume of business handled at the Houston Branch in
1927, compared with 1926, is shown in the following table:
——AH

1927

1926

1926
Notes discounted and
rediscounted
2,335 $ 23,722,299 $ 27,297,163
771
Currency and coin
4,939
68,557,000
70,655,029
4,716
shipments received
Currency and coin
5,555
6,285
68,797,063
68,144,678
shipments forwarded
24,638
22,293 1,541,488,267 1,288,539,690
Transfer of funds
6,654,526 7,138,043 1,714,008,937 1,809,802,410
Check collections
171,063
18,683,171
17,415,512
Treasury Warrants _ 171,991
35,442
32,527
71,778,878
79,369,298
Collection items handled
156,113
153,376
6,728,490
8,210,906
Return items
1927

At the beginning of the year 143 member banks (123 national and 20 state) were attached to the branch. Two national
banks were added by the transfer of Sabine, San Augustine
and Shelby counties from the head office; the membership of
two state banks was terminated during the year, one being succeeded by a non-member bank and one by withdrawal from the
System. Fifty-four members (47 national and 7 state) were
transferred to the San Antonio Branch (53 on date of opening,
July 5, and one later) leaving total membership of 89 on December 31,1927.
At the end of the year the branch had three officers and 52
employees, compared with three officers and 60 employees on
December 31, 1926.
The San Antonio Branch was authorized by the Federal Reserve Board on February 25, and opened July 5 in quarters in
the Frost National Bank building. On May 7, 1927, the Board
of Directors of the head office approved the purchase of a lot
100 feet square at the corner of Garden and Villetta streets as
a site for permanent quarters for the branch. An architect
was employed and plans and specifications prepared. Bids on
the building, which will be of two stories and basement, and
80x60 in dimensions, were received and opened by the Building Committee on December 27, after which they were referred
to a sub-committee for tabulation and analysis. It is expected
that the contract will be let early in 1928, and the building
ready for occupancy about August 1.




17

The territory allocated to the San Antonio Branch embraces
55 counties in Southwest Texas.
The volume of business handled at the San Antonio Branch
from date of opening to close of the year is shown in the following table:
Number
Notes discounted and rediscounted
Currency and coin shipments received
Currency and coin shipments forwarded
Transfer of funds
Check collections
Treasury Warrants
Collection items handled
Return items

313
3,256
2,014
6,371
2,454,855
66,952
_
8,236
51,088

Amount
$ 7,606,196
29,051,661
23,798,459
190,879,634
490,844,269
12,433,023
8,036.090
2,748,215

At the date of opening 99 member banks (88 national and
11 state) were attached to the branch. Of this number 43 were
transferred from the head office territory, three from the El
Paso Branch territory, and 53 from the Houston Branch territory. Since opening one state bank was admitted to membership; one national bank was later transferred from the Houston Branch territory, and one national bank consolidated with
another, leaving total membership of 100 on December 31, 1927.
The expense of operation, excluding furniture and equipment, was $79,019.
At the end of the year the branch had two officers and 46
employees.




18

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