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ANNUAL REPORT
FmKBAL RJSSERVS -BANK O f MINNEAPOLIS
19Uj




Board of Directors,
Federal Reserve Bank of Minneapolis.

This report, revealing the results of
our operations during I9H1 . is respectfully sub­
mitted.,

January 1, 19^2.




INDEX

Comments............... .........

1

Assets and Liabilities.......... . *

3

Bank and Public Relations
Departmental Comments
Earnings . . . . . . . .

. 0 . . , . .

27

.........

26

. . . ........

11

Expenses

12

Profit and Loss, Surplus and Eeserves. .

2^

COMMENTS

The year 19^1 marks the beginning of another period of emergency in
our country and these abnormal times are reflected in the additional expendi­
tures this Bank was obliged to make in order to carry out new duties imposed
and brought about by war time conditions„

While the activities of the Bank

during 19^1 are presented in detail in a subjoined section of this report,
a very brief resume is made a part of these opening remarks*
In addition to the regular and routine duties performed by the fiscal
agency department, the sale of defense bonds was added in April 19UI requir­
ing an enlarged staff and more space,

It is expected that the financing of

this war will greatly increase the volume of activity in this department
A new department - the Installment Credit Department - was created
in August for the purpose of administering the new Regulation W and this de­
partment has been employing from l4 to 19 persons since it was organized,,
The problem of finding space in the building for these and other in­
creased activities is becoming acute,
The policy of the management of the Bank is to develop and maintain an
aggressive bank and public relations program, and thiB policy is reflected in
the increased activities during 19UI0
Member banks have not found it necessary to make use of our discount
facilities to any great extent and, therefore, loans to member banks have
been at a low ebb throughout the year.
creased.

Outstanding industrial advances in­

The new advances were few in number and were made principally to

finance war industries*
The check collection department handled more items in 19^1 than dur­
ing any previous year*

The volume of Twin City clearings, checks on member

and nonmember banks and direct sent items increased, while items drawn on
Montana banks, the Treasurer of the United States and work relief checks dev

creased in number,
The volume of items handled in the noncash collection department
remained practically unchanged from 19U0 .
The number and amount of currency and coin delivered to member banks
increased while incoming shipments and dollar volume decreased*




No unusual activities were engaged in by the bank examination depart­
ment during the year.

The number of State banks remains unchanged from one

year ago at 88, while the number of member banks declined from U6U to U53 *
No material change occurred in the volume of work handled in the safe­
keeping department although the dollar volume was somewhat larger than during

1^0

o

The activities of the custodian for the Reconstruction Finance Corp­
oration during 19^1 were mostly administering and liquidating loans previ­
ously made, coupled with a continuation of the duties performed for the
Commodity Credit Corporation

The custody of notes and warehouse receipts

for the Commodity Credit Corporation constituted the major part of the work
in the department in 19U1 , as was true also in I9U0 ,
Considerable administrative work was carried* on in connection with
foreign funds control during the year*

Specifically, this work was the

distribution of Treasury Department circulars to banks, interpreting Treas­
ury Department instructions for interested parties and licensing certain
transactions*




V

CHANGES IN OUR BALANCE SHEET FIGURES
The following comparative statement of condition shows the changes
which have occurred in our balance sheet figures since December 31, I9UO;
COMPARATIVE STATEMENT OP ASSETS
FEDERAL RESERVE

HELENA BRANCH
Increase or De­
crease since
December 31 , 19U1
(OOO’s "omitted)

Cash Reserv
Interdistric? ^ettle^en^ f
Gold certificates with F.R
Redemption Fund - F.R. Notes

180 , ^ 696*95
66
2lU,000 ,
000.00
Uoi,l9U„8U

Total gold certificate reserves ........ .

$ 395 .
395«065,S9lj>79 ^
065 , .79
891

Other cash ........................... .. *
,

5,UlS,238.49
U00 ,U8U.13G „28

Total cash reserves ...... ...............
Bills and Securities?
Bills secured by U.S. Government obligations,
direct or fully guaranteed ...........
Bills otherwise secured and unsecured... .
Foreign loans on gold ....... ,....... «...
Industrial advances *...... .............
U.S. Government securities
....
Total bills and securities ..............

$ +
+
+
+
-

+

50 .
000,00
•

$

513.99U.,01
66.509,000*00 ^
" s.
"
67,072.99^01 v -

+

35.069
us,500
69

0 3 .6 3 3 ...
1 .15.8
82.U80

59
86
21
295
U.262
^391'

Due from Foreign banks ...........
FoR« Notes of other Federal reserve banks

459.65
651 ,
000,00

Uncollected Items;
/
Transit items ...... .;
v
:
........
Exchanges for clearing house... .
Other cash items .,......... ........

24.829.8U2.79
983 ,782*UU
_ _ _ _ _757.05^.22

+

..

26 ,570 ,
679.“
+5

+

7,016

2.1
*5°.579-39
1.112,Ul7..82

+

1

Total uncollected items... ..... ......* $
Bank premises
Less reserve
Bank premises - Net

.......... .

Miscellaneous Assets?
Industrial advances past due three months*...
Less reserve .................. .........
Industrial advances past due 3 months -Net
Misc, assets acquired in settlement of
claims account failed banks,,........... .
F.D.I.C. stock........ ....... ........
Less reserve «......... ............
Difference account .................... .
.
^Premium on securities ....... .......««•«,«
Interest accrued .... ..............
Reimbursable expenditures ..............
Deferred charges .............. ........
All other asset*... ............... .♦...
Total miscellaneous assets
TOTAL ASSETS ................ .........



$

1 .338 .161.57
175.301.00

863

**

6,909
uu

+

J

S

-

29

mm

35

-

35

73 , 000.00

102 ,301.00
1.00
3.509.^7.65
3 . 509 . U 67.65

37.31
*
829 .
900.91
S6U. 71+
7.87
89 .
661.35
I8 . H.28
92
____ 3,53^.77

1 .309 .108.52
U9 7 , ,533 .
426
1*8
$ U97.U26,533*U8

+

125
22
Us
2
1

-

87

+

‘

92,908

o
O

f

COMPARATIVE STATEMENT OF LIABILITIES
FEDERAL RESERVE BANK Of MINNEAPOLIS AND HELENA BRANCH

December 31» 19^1
FoR.. Notes in actual circulaUon^^/^.i^.. « $
..

|\

Deposits*
^Members - Reserve a c c o u n t ^ if*:........ .
Uo f> Treasurer^- General account 0.,.... '. .
cc
7T
Foreign "balances ............. ..........
Nonmembers - Clearing account .............
Officers5 checks ... ......... ..... .
Other deposits ............... ..... .

206,509,760°00

Increase or De­
crease since
D C . 31 . 19^0
et
(000*8 omitted)
$ +

±

* 178«535il52«29
“ $2,¥60,.366002
““
16 ,796»hUc*13
I,305»718„l6
7«183,537®9&
2,324,628.3**

+

U7.801

JLQSa.
29.603

252
133
3,792

+
+

+

38, SU/

•f

6,211

+

13

M
l

11

83 *955*53

+

2

Capital stock paid in
.♦__ __3 *
_
003 *^5®*-00
Surplus Fund - Section 7
... .
3*152.*+20.27
Surplus Fund - Section 13 b ............... .
.
l„000t298..8J
Reserves for contingencies .... .
2 ,5l6 « U7 1 7
6

+

29

+

18

Total Deposits .... ...................

$

Deferred availability items ................

258,605 ,8^2,92
22,55^*^58°72

Miscellaneous Liabilities;
Accrued taxes unpaid
......... 65,040.00
Sundry items payable ....... .......... .
18eU05«07
Unearned discount 0....... .... .................. 168.19
Discount on securities........ ............
166*97
Suspense account ................... ........... 175*30
Total Miscellaneous Liabilities ........

TOTAL LIABILITIES..... ..... ...........

$

$ ^97.^26,533.^8

92,90s

Gold certificate reserves against F.R. Notes
in actual circulation after setting aside
35# legal reserve against deposits

150.1#

1 .8$

Reserve ratio against combined net deposits
and note liabilities

86.1 #

2a %

Commitments to make industrial advances

$

28 ,
053,00

Float absorbed........ .................

$

4,016,221.00

22
$ +

Total assets increased 92,9 million dollars during the year.
an increase of about 23 per cent in the twelve month period.

1,017

This is

All but about

10 million dollars of this Increase occurred in our “gold funds'* balances (gold
certificates pledged with the Federal Reserve Agent, interdistrict settlement
fund and redemption fund) which totaled 395 million dollars on December 31 ,
19^1 - &n increase of 83°^ million dollars as compared to December 31 e 19}
40&
Increases or decreases in our “gold funds" balances (after allowing for unex­
pended transfers of funds in and out of the district) may be regarded as indica­
tions of the trend of trad8 between this District and other districts in the
System.

The sale of goods and services outside this District ie eventually




4

paid for by increases in our balance in the interdistrict settlement fund.,

The

Bale of securitise outside the District would be reflected in the same manner.

Spending of government funds in this District obtained from outside the District
is also a purchase of goods and services and our interest in the settlement
fund is increased as these new funds come into this District.

On the other

hand, purchases of goods, services and securities from outside the District
and payments of Federal taxes reduce our credit balance in the fund as final
payments are made and serve to reduce our so called trade balance.
other factors of importance which result in

There are

increases or decreases in our

“
gald funds'*, but those mentioned seem to be the most important»

We might con­

clude then that incrsases in our gold certificate reserves reflect a balance of
trade in favor of this District and decreases in these reserves reflect unfavor­
able trade balance, and as we gained 87„9 million dollars of gold reserves
(out of which funds our participation in Government securities was increased
U„3 million dollars) it is evident that the trade balance was favorable to the
District during 1 * 1
94,

This represents an increase over 19U0 of about 28 per

cnfe
e'c
Cash Reserves, Total cash reserves on December 3 1 , 19U1 were U0Q„5
million dollars as compared to 3^8 millions on December 31 , 19*40 - an increase
of 82 ,5 million dollars.

These reserves reached the highest total at the

close of 19^1 experienced in the history of the bank.

Gold certificate re­

serves Increased 83*6 million dollars while vault cash was reduced 1*1 million
dollars.

Of the 395 million dollars of gold certificate reserves, 2 * million
14

dollars was pledged with the Federal Reserve Agent as collateral for Federal
reserve note issues and these pledged gold certificates also reached an all
time high total.

One year ago 165,5 million dollars of certificates were

Vault cash was reduced to 5 * million dollars,, as compared to 6,5
*4

pledged,

million dollars one year ago,

Our supply of U S , notes was reduced from
«<

$700,000 to $550,000 (a decrease of $150 * )j the supply of silver certifi­
000
cates from U «9 million dollars to

million dollars (a decrease of $700 , )
000

and other currency and coin from $900,000 to $650,000 (a decrease of $250 , )
000 ,
Bills and Securities, Even though reserve requirements have been in­
,
creased, defense bonds are being sold and the demand for currency on the part
of the public has increased, member banks still have excess funds and do not



o

need to avail themselves of the discount facilities of the Bank.

We held

$50t
000 of member bank paper on December 3 1 * 19^1. a decrease of $1^6,000 since
December 3 1 , 19 J *
*O

The-volume of bills held at the close of the year was

lower than at an/ month end since March I9H0 „ when member banks were borrowing
$25*OOOo

Industrial advances totaled $51^,000 and were $295,000 greater than

on December 3 1 , 19UO0
purposes.

The new advances were made mostly for defense and war

Our participation in investments in Government securities through

the System account increased from 62c3 million dollars in December 19UO to

66 „5 million dollars in December 19^1. an increase of H , million dollars•
.2
This account» however, fluctuated above and below those figures during the year.
In January 19 HO our participation was adjusted upward to 66 *S million dollars
and was maintained at that point during February and March0

In April the ac­

count was reduced to 65*9 million dollars and remained there through the quarter
ending in June,,

During the quarter ending in September the account was further

reduced to 6l06 million dollars.

In October and November our participation was

raised to 65 million dollars and in December to 66*5 million dollars.
Uncollected Iterns,

Changes in the asset account "uncollected items*’

and the liability account “deferred availability items'1 originate principally
in the check collection department,

These accounts are so interrelated that

they have become known as "twin items" in check collection accounting.

Under

ideal circumstances one account would offset the other, but due to the fact
that our outgoing transit letters may be paid before or after the date to which
those items were deferred and that noncash collections and transfers of funds
also have a bearing on the net uncollected items outstanding on any day* these
accounts do not offset each other*

When total uncollected items exceeds total

deferred availability items, the difference represents “float" which the Reserve
bank carries for member hanks.

Very rarely do we experience the opposite con­

dition of a float in our favor, as the check collection time schedule (as revised)
was designed to favor member banks and in those rare instances where the float
favors the Reserve bank, it is usually due to a transfer of funds or a noncash
collection credit*

Uncollected items totaled 26,6 million dollars on December

31 , 19 U1 * an increase of 7 million dollars over December 31 , 19^0,
»
crease

This in­

is due to an expansion in the number of items and dollar volume of items

handledo



For the same reason total deferred availability items increased 6,2

million dollars to 22*6 million dollars„

The total uncollected items at the

close of the year exceeded total deferred availability itemB by 1 million
*
dollars, which represents the amount of float our bank was cariying for member
banks.

This is an increase of 1 million dollars in float absorbed, as com­

pared to December 31 , 19UO when the total waB 3 million dollars.
Bank Premises, The book value of bank premises was increased $731 in
November 19^1, representing the cost of installing “electric eye" protective
equipment on the roof of the bank buildingo

Reserve for depreciation was in­

creased in a like amount in addition to normal depreciation charges of $28,8U6,
The detail of changes in bank premises account is as follows1
LAND
Head Office
Book value January 1„ 19M
(No change during year)

$

1*00,$20.66

Helena Branch
10,000,00

Total
Ul0,520.66

BANK BUILDING
Book value January lt 19UI
Less; Reserve for depreciation
Net book value December 31 , 19U1

$ 1,283,281,50
75,000.00
1,358,281,50
**36,315«>56
5,250*00
M*1p565q56
$ 84b,9&5.91 '” 97750.00“ ' 9lk,71$<91
*
*

MACHINERY AND EQUIPMENT
Book value January 1, 19UI
Increase during 19^1

$

Lesss Reserve for depreciation
Net Book Value Dec, 31, 19U1

66^,238 ,3 $
l6,S07»88
68lr
0U6e83
______ T£L*QQ
731oGO
3577969.35
10,807t88
^817777723
664, , 3 _____ 5P882,9l____ 670 ,852,26
969 , 5
-

10.92M7

10,92U,97

BANK PREMISES COMBINED
(Land, Buildings, Machinery and Equipment)
Book value January 1, 1911
*
Less* Reserve for depreciation

$ 2,31+8,771.$!
1,101,28**,91

101,807.88
11,132,91

2,^50,579-39
l,112,Ul7,82

Net Book Value December 31, 19U1

$ 1,247,1*86,60

90.67M7

1 ,338 ,161,57

Miscellaneous Assets, Premium on our participation in Government securi­
ties through the System account dropped from $95^»6$0 on December 3 1 , 19^0 to
$829,900 on December 3 1 * 19^1 “ & reduction of $12**,750»

though the System's

holdings of Governments remained unchanged during the year until December 8 when
additional securities were purchased..

The premium account was reduced by amortiza

tion and the sale# on several occasions, of short term securities carrying a premi
um and the purchase of longer term securities at or near par.

Interest accrued on

bills and securities held is $22,176 greater than on December 31 , 191* .
0

Total

earning assets have increased during the last two months and with the slight




stiffening in our earning >rate the interest accrued account is somewhat larger„
Reimbursable expenditures is really an accounts receivable and the total of
$89,700 in this account at the close of the year is the amount of current sal­
aries and expenses the Bank has advanced in performing services for the Treas­
ury Department and governmental agencies for which reimbursement has not "been
received*

This total exceeds the December 31 e 19*40 total by $4S,2l6, due to

the greatly expanded fiscal agency services this bank is performing.

Past due

industrial advances were reduced $34,792 during the yeart either^ through vol­
untary reductions, foreclosures or the sale of our interest to other creditors.
Federal Reserve Notes in Actual Circulation.

Our note circulation has

increased from 158 *7 million dollars on December 3 1 , 19^0 to 206,5 million
dollars on December 3 1 , 19^1o
30 per cent0

This is an increase of U7*8 million dollars or

Circulation expanded more than twice as fast as in 19^0 when

notes outstanding rose 20 million dollars*.

There was not a single month in

19^1, except January * when circulation did not exceed the previous month*

It

is too early in the year to learn whether our circulation will be reduced sub­
stantially by a return of currency following the Christmas Holiday shopping
periode

If our experience is to be the same as during January of last year,

circulation will not be greatly reduced.

Some concern is being manifested

regarding the phenominal increase in money in circulation and the trend in the
next three or four months is being watched with deep interest,,

Money in circu­

lation in the United States totaled ll# 6 l million dollars on December 31 , 19 UI
l
- an increase of 2,^29 million dollars in the past year.

If money in circula­

tion should rise as much in 19^2 as in 19U1 , member banks' excess reserves might
be reduced to a point where many banks may be forced to borrow to maintain re­
serves at the required level and be without funds to meet the private demand
for loans and assist in financing the Nation’ war effort0
s
Member Bank Reserve Accounts,

Member hank reserve balances in this

District did not expand as rapidly in I9 U1 as in 19^0.

During 19UO these

balances increased from l^Uog million dollars at the beginning of the year to

17 Ur million dollars at the close of the year - an increase of 19*7 million
.5
dollarsc

Between January 1, 19U1 and December 31 * 19I I member bank balances
+

rose from 17^.5 million dollare to 178*5 million dollars - an increase of only
k million dollars,

Although no accurate information is available pertaining

to money in circulation in this district alone, other than the abrupt rise of



our notes outstanding, the increase in money in circulation and the larger
balances carried with the Treasurer of the United States are probably the
principal reasons for the smaller increase in member bank reserve balances
in I9 U1 as compared to 19 *0 «
+
Daily average excess reserves of member banks in this district during
the first half of December 19^0 totaled 73°^ million dollars,

Excess reserves

dropped to 45*1 million dollars by December 19U1 - a reduction o . 28„3 million
f
dollars in excess reserves.

The most pronounced decrease occurred when the

increased reserve requirements became effective on November 1, 194l„
that time excess reserves decreased 15-5 million dollars.,

At

The following

comparative analysis of excess reserves gives the detail of the changes by
groups of banks and the District as a whole.
Ninth District Member Bank Reserves
" (Daily’
averages')
Country Banks
Ninth District____
Reserve Cities____ >
December Change since December Change since December Change Since
1 to 15 m m rnm Dec0 1940
1 to 15
Dec* 1940 •tin u nmmx m v immmmw ffw m mm umDec. 1940m m
1 to 15
m m tm m m imitmwm iuli u tmrm+imur
mmmwmmai
mm mm m m
mmmmmm
(000*s omitted)
Reserve carried $ 103,988
- 11,449
$84,572 - 20,985$ 188,560
t
+
9,536
Reserve required
85,972
+ 19,237
57,^37 + 18,644
143,409 +
37,881
Excess reserves
18,016
- 30,686
27,135 +
2>3^l
**5.151 28,345
— h ■iM
i inr.Mj 1
—

u ftn w

« tiw —»'■irm im w— ■ tfwmi .

w m i^ jw im i

im

i— i

During the period under analysis, reserves carried by Reserve city banks
decreased 11<>4 million dollars and reserves carried by country banks increased
20,9 million dollarst or an increase in the District of 9*5 million dollars,.
Required reserves increased 19*2 million dollars in Reserve cities;

1806 million

dollars in country banks and 37»S million dollars in the District,

While

Reserve city banks lost 3O 06 million dollars in excess reserves, country banks
gained 2„3 million dollars of excess funds with a net loss to the District of
28*3 millions of dollars.,

In addition to the increase in reserve requirements,

the two most important factors contributing to the decline in excess reserves
in this District are the same as those mentioned in connection with the discus­
sion of member bank reserve balances, namelyj the increase in money in circula­
tion and funds withdrawn from member bank reserve accounts and placed to the
credit of the Treasurer of the United States,
Daring 1940 balances to the credit of the U.S0 Treasurer’s general
account ranged between a high of 33*2 million dollars in March, to a low of
l6.1 million dollars in November*

These balances were higher in 1941, with

a low of 21*1 million dollars in September and a high of 52,4 million dollar^



9

at the close of the year.
The increase of
was at Helena Branch,,

million dollars in officers5 checks outstanding
As has been stated before,, Montana banks pledge our

cashier’s checks with public officials in lieu of securities as collateral
for public deposits*

The Branch had 7°1 million dollars of officers1 checks

outstanding on December 31 , 19*41, compared to $25*280 at Head Office,
Miscellaneous or “Other Deposits*' increased 1„5 million dollars*.

Of

the 2«3 million dollars in this account on December 3 1 , 2 million dollars
were payments received for subscriptions to United States Defense Savings
Bonds end not credited to the Treasurer of the United States pending issuance
of the bonds«
Reserves for Contingencies*

Other than an increase of $17.9$^ *n re­

serves for contingencies, no changes occurred in our capital account except
an increase of $28,650 in shares of stock issued to member bankso

The in­

crease in reserves for contingencies represents the net earnings (after divi­
dends) of the bank for the year 19U1 , after remitting $*49001 4
*

Treasurer

of the United States as net profits from industrial advances during 19*41c
The following comparative statement shows the changes which occurred in our
income and disbursements, as compared to 19 4 «
*0
19 4
*1
Current earnings
Current expenses
Net current earnings

$ 1 , ,236.78
223
1♦
07*51* 2 *52
46
$ 147,808,26

Additions to earnings from profit
and loss transactions'
Net earnings

$

Increase or Decrease
as compared to 19 U0
$

+

$

“

*42,266
. 9,4*
0*94
132,760

-

363.227
1495.987

50, *456005
193,26*4*31

Disposition of Net Warnings
Dividends paid
Paid Uc Sc Treasurer
Transferred to reserves for con­
tingencies
Withdrawn from Surplus (Sec- 13 b)




$

179.789-68
* .1*4
490

$

17.98*4, * 9
+
$ ‘ 193 ,2614,31

$

2.389
*490

+
+
+
-

*499 >251
. . .

,., m

* , ?
495 98

EARNINGS
Compared to 19 U0

19Hi
$ 1 , ,195=91
223
Ho087

$ ~

$ 1,223,236.7s

$ -

'

42,210
56

42 , 2b£

The source of earnings did not change materially in 19UI0

Income

from our participation in investments in Government securities through the
About 98 per cent came

System account contributed 97 per cent of earnings.
from that source in 19^0 and 9^ per cent in 1939 >

-9^1 these investments

provided us with $1,191,000 of earnings,, which was $46,000 less than in 19UO
when this income totaled $1,237*000.
gated $1,070,000c

In 1939 income from Governments aggre­

During 19 UI we held a monthly average of 65 million

dollars of Government securities yielding 1*8 per cento
average was 71 million dollars, yielding 1,7 VeT cent.
source of income was from industrial advances.

In 19^0 the monthly
The next important

During I9H1 we obtained

$20,500 of earnings from these advances which was $5»500 more than in 1940*
In 19 U1 these advances averaged $404,6008 yielding 5 per cent, while in 19 U0
we held $253,000 yielding 6 per cent.

Earnings from discounted bills of

$2,650 were slightly under 19^0 earnings, which totaled $2 ,760.
,

Earnings

from foreign loans on gold are included in these figuresa and these earnings
were $44 in 1941 and $344 in 1940,

During 1941 the volume of bills discounted

for member banks averaged $173*000 and in 1940 $152v 0 «
00,
not vary greatly from 1940 figures and were as follows*

Other earnings did
commitments to make

industrial advances, $4l6* deficient reserve penalties, $677» sale of waste
paper, bags, etc.* $135 * monthly letters sold, $llj clearinghouse fines,
$56 , and savings in registration fees on mail shipmentse $1 , *
058
All of the earnings reported by Helena Branch for the year 19UI were
from assessments for deficient reserve penalties.

For 1940 the Branch re­

ported $38 earnings from discounted bills and $60 from penalties for defici­
ent reserves.
Average total earning assets has declined year by year since 1937.
while the earning rate has strengthened slightly.

Adjustments in our partici­

pation in Government securities is the cause for the lessening total of all
earning assets.

The slight firming in the yield on Governments is the reason

for the very slight increase in the yield rate on all earning assets*




The

EARNINGS - Cont«d
following comparison presents these changes in a rough manners
Total Earning
Assets
1937

Includes
Governments Totaling;

$ 84,1Hi,000

1938
1939
19U0
1941

83 , H t000
02
75.413.000
75.281.000
70 ,
961.000
64,905,000

$

76.6U7.000
76.36)4,000
7 1 .^ * 0 0 0
65.518.000

Yield on All
Earning Assets
U 65&

1,4
1,5
1..8
lc9

EXPENSES
X3bl

Head Office
•
Helena Branch

$ ' 972*537-^3
102,891 < 0
>9
$ 1,075,1*28.52

Gross expenses during 194l were $1,470,500 and exceeded gross expenses
in 19UO by $233,700 when expenses totaled $lf236,800o

Reimbursable expenses,

however* totaled $395,100 and were $143,200 more than in I9U0 when these ex­
penses aggregated $251,900-,

As a result the net expenses of the Bank in 19U1

were $1 , ,^00 , as compared to $984,900 in 19UQ - an increase of $90 ,500 *
075
.
The budget for 1941 contemplated expenditures of $1,328,200, of which it was
estimated $298,400 would be expended for the Treasury Department, the Commodity
Credit Corporation, the Reconstruction Finance Corporation and other govern^
mental and semi-governmental agencies in our capacity as fiscal agent, leaving
a net expense of $1,029,800 to be absorbed by the Bank.,

According to these

estimates the oost of performing fiscal agency functions would exceed 1940
costs by $46r500 and the net expense absorbed by the Bank would exceed 1940
expenses by $44,800«

As it turned out reimbursable expenses incurred as

fiscal agent exceeded budget estimates by $96,700 and expensee absorbed by
the Bank exceeded estimates by $45,600*

When the budget for the year 1941

was prepared, estimated expenses were based on what was then, thought to be
the requirements for the ensuing twelve months,

The Bank operated within

gross budget estimates for the first three-quarters of the year* although our
activities began to accelerate rapidly in the third quarter*

Although our

activities have expanded quite generally, we can point to two items of expense
which were not contemplated when the budget was prepared and the costs in­
curred in these instances account

for the greater portion of excess expendi­

tures over budget estimates, namely*

the cost of operating the new install-

rnent credit department, requiring expenditures of $20 , ; and the purchase
100




EXPENSES - Cont*d

of additional furniture and equipment needed with our larger staff and en­
larged duties, $13 , .
000

Additional postage costs of considerable amount

were also absorbed in connection with the installment credit department,
_

J

^0

,

SALARIES
Head Office
Helena Branch

$ U67,l*05o20
59,839-J &
$ 527,2^.96

Net salary costs in 19 UI exceeded 19^0 costs by $23,500*
this expense aggregated $503,700,

During 19^0

Salaries were $16,000 greater at Head

Office and $7,500 more at the Branch,

The combined net cost of salaries of

officers at Head Office and Helena Branch was $99,000, as compared to $100,000
in 19U0 - a decrease of $1,000-.

The combined salaries of employees at Head

Office and Helena Branch was $^28,000 in 19^1 - an increase of $25,000 over
19^0 costs* when the total was $U03«000o
ing reimbursable expenditures.

Those costs were net after deduct­

The combined gross salaries of officers was

$110,700 in 19^1 , as compared to $111,200 in 19 U0 - a decrease of $500 and the
combined gross salaries of employees was $711,200 in 19^1 - an increase of
$129,600 over 19 UO costs when employees* salaries aggregated $581,U00*

Certain

officers* salaries have been increased during the year and all employees, other
than officers, received a flat increase of $10 per month beginning November 1,
19Ul*

The staff of the bank has been considerably expanded also.

Daring

the past twelve months the combined staff at Head Office and Helena Branch
has increased from UU2 on January I9U1 to 592 on January 1, 19U2 - an increase
of 150 employees.

The following comparative figures show which departments

absorbed the additional employees.
January 1,
19^2
Head Office Officers
General staff
Transit and mail departments
Installment credit department
Industrial coordination department
Fiscal agency department
R„F„C, Custody division
Contract Division of 0 8P 6M>
<

10
19U
105

Increase or Decrease s i
i
Jan„

Helena Branch -

122
109
1
555
J7

+
+
+
+
+
+
+
+'

15
91
10
1
lUg
2

Head Office and Helena Branch combined ...

592

+

150




Ik

22
25
Ik

18

EXPENSES - Cont’ d

RETIREMENT SYSTEM CONTRIBUTIONS
$ 23 .S63 .lO
„ g.9f5,05
$ 26 . W 8 .T5

Head Office
Helena Branch

Ihese contribution® were $2,100 more than in 19 UO.

The amount absorbed

by the Bank is in direct relation to increases and decreases in salary costs,
For the first six months the rate was 5*15# of employees’ salaries and during
the last six months 5°66$*

These payments are made directly to the Retirement

System of the Federal Reserve Banks*
LEGAL FEES
Head Office
Helena Branch'

$ 9.
665,37
$ ~9V^5 3? '

Legal fees were $ 4 0 more than in 1940c
*0
paid to our counsel as a retainer fee*

These fees include $9*000

Of the $700 remainingc $400 was spent

in connection with the suit instituted in Billings, Montana against the bank;
$100 was counsel‘ expenses attending a foreign funds control meeting in Wash­
s
ington, and the balance was for miscellaneous expenses*
DIRECTORS1 FEES AND EXPENSES
Head Office
Helena Branch

$ 7.79^26
2,272.69
$ 10 . &6.95
0

These fees were $1,600 less than in 1940*

The various items contribut­

ing to this expense were*

19^1
Head Office Directors® meetings
Executive committee meetings
Discount committee meetings
Audit committee meetings
Chairmen*s meeting at Washington
Directors8 luncheons
Incidentals

$ 5,600
500
500
600
200
100
300

Helena Branch Fees and expenses

2,300
$ 10,100

Increase or
Decrease com­
pared to 1940
$ -

900
200
200
100
200
100

300

400
$-

1,600

FEDERAL ADVISORY COUNSEL
Fees and Expenses
Head Office

$ 1,397*15

This item includes fees and expenses of our representatives attending




EXPANSES - Oont*d

Federal

Advisory

Committee meetings at Washington, During the past three years

the expense has amounted to about $1,300 or $ltU0Q per year„
TRAVELING EXPENSE
Head Office
Helena Branch

$ 21,35^63
1 , ^2.52
6
$ 22,997.15

The following table compares travel expense in 19U1 with 19^0c

The

plus and minus signs indicate increases or decreases in 19^1 , as compared to
1 *K
9 >.

19^0

19^1
Head Office Bank examinations
$
7»117*5^
Visiting banks in our district
3*7^0.78
Bank relations (Preston)
639*35
Industrial loan investigations
1 ,19^96
Industrial advisory committee expense
512*89
Failed banks" expenss
3U6eSl
Presidents' conferences
57^°75
Open market committee meetings
95«00
Retirement system committee meetings
182..U8
Planning transit operations for new member banks
32*30
Bank Examiners" conference at Washington
0
Showing bank movie
20,53
Graduate School of Banking
105*65
Obtaining statistical information
72*U0
Visiting newspaper publishers
6 3 =51
5Wagner committee meeting
0
Conference on National Defense
282*22
Auditors' conference
2U8„27
Employees attending A,I,B. convention
650^05
Planning operations at Helena Branch
155«60
Group meetings, conventions and conferences
2,018*8^
Talks before various groups
128.1+6
Michigan meeting of Board of Directors
217.29
1 , ^8.88
9
Installment loan meetings____ .
Defense bond liaison office, St* Paul
213*96
Picture book plans ~ Washington
108„il5
Miscellaneous
93*66
$ 21 . M 3
35
Helena Branch Attending member bank conference at
Minneapoli s
Officers attending bankers' conference at
Seattle and Pullman, Washington
Montana Bankers* Association
Conference National Defense, Washington
Bank relatione and membership contacts
Travel expense of Head Office auditors
Per diem expense of auditor’s representative
Pacific Northwest Banking school
Talks before various groups
Conventions and conferences
Training employees at Head Office
Transfer Head Office employees to Branch

TOTAL




$+
+
+
-+

+
-

-

+
+
+

+
+
+
+
+

300
i,5oo
600
Uoo
300
0
200
100
0
200
200
100
100/
600
100
100
100
200
200.
0
0
0
200
2,000
200
100
0
1,500

110 05

0

8Uc20
88 ,
Ok
0
277.ou

0
0
200
300
200200
0
200
0
100
200

c

-

-

120.00
U7o>40
158.11
32^3
12Uo
05
15M6
l',M2.52
$ 22 ,
997.15

+
+
+
— —

$ +

10
*0
1.100

EXPENSES - Cont'd

POSTAGE AMD EXPRESSAGE
Head Office
Helena Branch

$ 121,679,74
17,662,37

$“13973ESF.il

Postage and expressage costs were $12,100 greater in 1941 than in 1940,
The cost of ordinary mail is the largest single item in this expense group.

The

transit department uses more ordinary postage than any other function in the
bank and ordinary postage costs have been considerably expanded as a result of
the larger number of circulars, letters and mail leaving the bank during the
past four months,

The cost of postage in the installment credit department

was the most important factor resulting in increased postage costs this year0
Postage used on incoming and outgoing currency and coin shipments totaled
$60,000 - an increase of $6,400 over 1940 costs*

Currency shipments to

country banks increased from 19,200 in 1940 to 20,700 in 194l; coin shipments
increased from 8,500 to 10 , i while shipments of currency received from
100
country banks dropped from 12,000 to 11,700,

Express charges did not change

materially except that the cost of expressing checks to member banks for col­
lection increased $le
600,

A continuing effort is being made to use express

services rather than mail services in forwarding cash letters to member banks
for collection, as that is more economical-

The detail of postage and express

costs is as follows;

19^0

1*1
9*
Postage (Head Office) Absorbed on incoming currency shipments
Placed on outgoing currency shipments
Placed on outgoing coin shipments
Net amount used on ordinary mail
Postage used on security shipments

30,417,21
20.44l.l6
9.239.90
46,727=61
202*63
$ 106 ,b23 o25

$

Expressage (Head Office) Absorbed on incoming currency shipments
Absorbed on incoming coin shipments
Government checks sent by express
Checks sent to member banks by express
Paid to Brink*s Inc. for express service
Expense incident to operating our mail car
Head Office postage and expressage costs
Helena Branch postage and expressage costs

$+
+
+
+

143.14
6,242*17
605,82
4,
444,39
3 ,300.00
.320.97
$ 15.055.49

+
-

$ 121 , .7 ^
679

+
+

$

$ 139 .3 ^2*11

-

+

1*500
2,900
2.000
4,000
700
9.700
0
300
0
1,600
300
0
1,000
10,700
1,400
12,100

TELEPHONE AND TELEGRAPH
Head Office
Helena Branch

$ 10,880c95
4, 331*05
$ 15, 212,00

This expense in I94l exceeded 1940 telephone and telegraph charges by $3,500,



EXPENSES - Cont’ d

During December about 8*300 telegrams were sent to dealers in installment
credit* advising them of the necessity of applying for permits to do business
after December 31 , 19^1* at a cost of about $2*700«

This accounts for the

major portion of the increased cost*
PRINTING, STATIONERY AND SUPPLIES
Head Office
Helena Branch

>

$ 36,UU6026
2,631 ,,96
$ 39,078o22

The cost of printing and supplies was $13,300 more than in I9U0 ,

A

multitude of items used in all the departments of the bank are included in
this expense, such as paper stock* printing, letterheads, envelopes, circulars,
small office equipment items, Bmall tools* etc.

The new installment credit

department used $3 t
900 of supplies in the last four months which contributed
to the increased cost.

Most of the other departments of the bank used more

supplies this year and the purchasing agent did some forward buying of items
which might be more difficult to get later o ,
n.
INSURANCE ON CURRENCY AND COIN SHIPMENTS
Head Office
Helena Branch

$ 7. ,
638 1*7
1,103.12
$ 8*>1„59

This cost is $1*300 more than in 19HO. The greatsr volume of outgoing
currency shipments explains this increase.
OTHER INSURANCE
Head Office
Helena Branch

$ 12*591.35
971,50
$ 137562*85

Insurance other than, on currency and securities shipments was $1*000 less
than in I9UO0

The type of coverage carried, premium cost and changes in premi­

um cost, as compared to 19^0 , is shown below;

Head Office Group life insurance
Bankers1 blanket bond
Workmen’s compensation
Premises and elevator liability insurance
Fire insurance on building and contents
Steam boiler insurance
Burglary - securities
Collision insurance - Officers and employees
Public liability - bank owned cars^fwO
Public liability - (auto) Non-ownership



jaia*
1.607*97
9.075® 53
1,0U4.16
276,90
750<>00
108.28
70,U0
130.86
213o25
123ol7

Increase or
Decrease compared to 19^0

EXPENSES - C an t'd

Increase or
Decrease compared to 3 9 * ^
»*0

i2iH
Special police bonds
Riot and civil commotion
Fidelity bonds (FoR* Agent, Asst, S\R. Agent,
and Alternate Asst*
R. A*ent)
Notarial bond
Camera property floater and insurance on bank
movie film

I

26.00
50,00

200

U0.00
21.00
$ ft,294,33

600

0
1 *702*98

+
+

<
V

1*00
600

-

Lessx Unearned premium - fire insurance
on building and contents
Dividend on group life insurance

$ -

soo

-

$ 1 3 ,562,85

$ -

0
0o
t

971.50

\V0 rT

1,100

LIGHT, HEAT, WATER AND POWER
Head Office
Helena Branch

$ 18,275*69
1 ,530->68
$ “1978017ff

The cost of light, heat and power has not changed much during the past three
In 1939 this cost was $19,600 and in 19^0, $19,600*

years*

REPAIRS AND ALTERATIONS
Head Office
Helena Branch

$ 13,552.93
1,816,19
$ 1 5 . 3^9-12

Repair and alterations to Head Office and Branch buildings during 19U1
were?
Head Office Elevator service contract
Moving wash bowls
Redecorating executive offices and reception room
Manifold door in lunch room
Alterations on basement floor
Sidewalk repairs
Installing women’s washroom on bank floor
Laying floor in sub-basement (coal room)
Miscellaneous
Helena Branch Bronze entrance doors
Mi scellaneous

$

2,800
300
900
500
1,200
500
1,500
2,700
3,200

$

1,100
700
1 5 .W O

$

During 1 * 0 repaire aud altarations cost $13,600 which included $6,300
9+,
for cleaning the outside of the bank building.

The heavier expenditures in

19^1 were due to providing space for a larger number of clerks and additional
activity.




18

EXPENSES - Coat'd

FURNITURE AND EQUIPMENT
Head Office

$ 25.536.51
$ •257963:60

The cost of furniture and equipment during 19U1 was $14,900 greater
than in 19U0 when $11,100 was used for this purpose *

Rapidly expanding ac­

tivities required much additional equipment and our near future needs were con­
sidered alsoo

The more expensive items purchased during the year were*

Head Office Chairs
Desks
Typewriters
Files
Mimoograph
Lookers
Light fixtures for bank floor
Calculator
Addressograph
Adding machines
Graphotype
Bookkeeping machine
Carpets - officers’ lunch room
Multigraph
Electric formwriters for typewriters (4)
Miscellaneous

$ 2^000
900
Ji.500
1,400
600
900
1,900
600
600
5*
500
* 300
—
1,600
1,000
500
1*500
2,200

Helena Branch Addressograph

UOO
$ 25*900
ALL OTHER EXPENSES
Head Office
Helena Branch

$ U3 ,829c31
2,119.17

These expenses were about $7,300 more than in 19^0,

For comparative

purposes all items exceeding $500 are listed b8low«

19^1
Rental, repairs and maintenance of
furniture and equipment
Outside protection, vault inspection, etc*
(Includes $1,400 cost of installing "electric
eye” on roof of building)
Outside laundry and cleaning charges
Postage meter rental
Newspapers, periodicals, books,, etc*
Supplies furnished member banks
Copies of bank examination reports
Commercial agency credit reports and services
Medical services, supplies and physical examinations
Cafeteria * net expense
Entertainment of bankers and others not in bank’s
employ
Employees education? A^I^B.
Federal Reserve Club
Bankers’ association dues




Increase or
Decrease compared to 1940

2,800
1.900

$+

200
1.300

100
700
2,400
700
3*700
900
1,000
3.100

-

800
0
200
1,100
400
100
400
500

2,300
1.700
1,900
500

+
+
-

400
900
100
0

EXPENSES - Cont“d

Incre&e© or
Decrease compared to 19^0

lf H
fl
Member bank conference - Head Office
Helena Branch
Foreign Department
Preparation and presentation of radio material
Study of official compensation
"TSducational picture book story
"TTonference - National Assn, of State Bank Super­
visors
^Jransit Manual of Instruction
^l[tudy of career system for executive personnel
Not classified

Moo
0
2,300
0
1,100
8,900

$+
+

1,U00
500
900
2,200
Tfs.sfoo
$

+

$

+

+
$+

200
1,700
Uoo

1,800
1,100\
8,900 !
l.too^
500
900^
600
7,300

It can be seen that the usual miscellaneous expenses compared favorably
with 19)40 expenses and that the unusual expenses, such as special studies and
the cost of the education picture book, are the items which increased “all
other" expense during 19UI0
JBQABP ASSESSMENT
$ U0,61^.36

Head Office

The assessment in 19^1 was $2,200 more than in 19^0 when this expense
totaled $3S.U00»

In 1939 the assessment was $36,S00o

These assessments are

made to defray the cost of maintaining the Board’s staff and Board building at
Washington*
COST O f FEDERAL RESERVE CURRENCY
f
Original cost (including shipping charges)
Coat of redemption

$ UU,lUl035
5t26Uo90
$ 1 9 606.25
*,

Although the cost of our currency in I9 U1 was $15,500 more than in I9U0 ,
currency costs have been larger in years past.

During the past five years

1939

iijo

J2 ! i
t

$ 35.700
2,800
U .100
1,000

39,^00
2,500
3,600
.900

23,000
2,500
900

18,000
3 r*+00
5.500
1,200

26.000
5.900
10 *200
1,500

200
$ 1+3,800
6 ,Uoo

300
30,900
6.100

200
28,300
5,600

E
o -r
i -l
f

$ 50,200

51,^00

37.000

33*900

1 9 U00
*,

i221
Printing coats
^Postage
, Surcharges
Insurance
Salaries of issue and redemp­
tion division
Cost of redemption

b.SOO

888

1938

*1
=
~J —Jk4
.
*
OOO
0 ojo

these costa were as follows;

When we examine these figures we see that although printing costs wei
higher than in 19* , the increase in this cost does not eaqplain the greater
10




EXPENSES - Cont’ d

total cost during the year,,

While printing coata increased $8,000, postage,

surcharge and insurance costs also rose $2 ,500, $4,700 and $300 , respectively,
and these increased costs were due to the hea?y demand for currency this year
requiring more shipments of new currency from Washington.
REIMBURSABLE EXPENDITURES
Earlier in the report it was stated that reimbursable expenses in

19^1 were $143,000 greater than in 1940<,

The comparative figures which fol­

low classify the expenses which were reimbursed and show what governmental
departments or agencies absorbed those expenses.,

This comparison indicates

the rapidly expanding activities the Bank is performing for the government in
various ways.
1941
Classification of Expense;
Salaries? Officers
Enployees
Retirement System contributions
Traveling expense
Postage and expresaage
Telephone and telegraph
Printing, Stationery and supplies
Rent
Furniture and equipment
Space maintenance
Rental of furniture and equipment
All other

$ 12,000
283,000
13.000
3,000
23,000
8,000
18,000
1,000
1,000
27,000
6,000
1,000
$ 396,000

Increase or De­
crease as compared to 1940
$+
+
+
+
+
+
+
+
+
+
$ +

1,000
105,000
4,000
3,000
10,000
1,000
10,000
1,000
1,000
6,000
1,000
0
1^3,000

Departments or agencies for which these expenses were incurred?
Treasury Department;
U. S, Government issues
U« So Savings and Defense bonds
Works relief checks
Foreign Exchange
Reconstruction Finance Corporation
Commodity Credit Corporation
Federal Farm Mortgage Corporation
Federal Land Banks
Federal Houeing Authority
Federal Emergency Adm« of Public Works
Home Loan Banks and Home Owners Loan
Corporation
Leased wire service charges
Defense contract service




$ 38,000
96,000
12,000
13.000
63,000
138,000
4,000
1,000
1,000
1,000

+
+

3,000
2,000
24,000
$ 396 .OOO

-

+
-

+
-

$

+

12,000
60,000
3,000
5,000
3.000
52,000
1,000
0
1,000
0
1,000
1,000
24,000
ll+3,000

COMPARATIVE STATEMENT OF EARNINGS
FEDERAL RESERVE BANK OF MINNEAPOLIS AND HELENA BRANCH
Minneapolis
Earnings from*

_____

Discounted bills........................ . . . . . .
Industrial advances . . . . ..............
Commitments to make industrial advances . . . . . . . . .
UoSo Government securities ....... . . . . . . . . . . .
Deficient reserve penalties ............... . . . . .
Interest received on advances to protect collateral « . .
Interest on past due industrial advances....... .
Sale of vaste paperc money bags, etc*
Service chargee on collection items returned unpaid . . .
Interest on Hungarian Credits . . . . ....... . . . . .
Clearing house fines . . ............................
Interest received on personal loans to employees . » . . .
Monthly letters sold ................... . . . . . . .
Savings in registration fees, etc. on registered mail ship­
ments for member banks ....................... . .
All other . . . . . . . . . ......... . . . .........

TOTAL EARNINGS . ......... 1.223,195.91




$

2 .649.35
i > 790.46
£,
4i 6c03
l,l9l,36lo92

636*44

Helena Branch
____ i2 >SL

$
Uo.87

Combined
19^1

2,649.-35
20,790.46
416.03
1,191,361.92
677.31

Increase or Decrease since
Dec._31*19^0
■ ii m m — i- 1fcwi ■
iw
mn V

$ +
-

6t
o4g.44
135*05

6 , 0*
16.44
135o05

-

-

86*00
11.00

86.00
*66
11,00

1,
058*21
2 o35

1,058021
2«35

M

*40.87

$ 1,223,236*78

+
-

+
-

$ -

107
5.526
157
*5.977
*
13
10
625
48
14
443
48
21
11
476
57

42,267

02
COMPARATIVE STATEMENT
NET CURRENT EXPENSES OF TH11 FEDERAL RESERVE BANK OF MINNEAPOLIS AND HELENA BRANCH
Increase or De­
crease since
Dec. ,31. 19U0

Minneapolis
19^1
Officers

Combined
1941

81, *#9,59
385 ,
915,61
23 .863.10
9.
665.37
7 ,794.26
1 .397.15
21 .354.63
121 .
679,74
10,880.95
36 ,446.26
7 .638.47
12,591-35
65,040.00
26,396.60
18,275.69
13.552.93
25.536.51
43 ,829.31

17.W.72
U2 ,3U5 .oU
2,985.05

1.6U2.52
17,662*37
M3l*05
2 ,631.96
1 ,103.12
97U50
1 ,682.60
3,180*8**
1,530*68
1 ,816.19
U27.09
2 ,119.17

98,984.31
428,260.65
26,848.15
9.665.37
10 ,
066.95
1,397.15
22,997.15
139 .342 .II
15 ,212.00
39,078.22
8,741.59
13.562.85
66 ,
922.60
29.577.44
19 ,806.37
15 ,369.12
25 ,
963,60
45 ,
9118.48

0
0
+
+
+
—
+
+

+
+

1 .26U
2U.79U
2,099
U22
l,6lU
16
1,128
12,119
3 .U58
13,279
1.328
1 ,0*18
832
731
232
1 r790
lU,86l
7.328

$ 913.347.52

Salaries*

Helena Branch
.... . 19M _

10U,396.59

1,017.744.11

+

78,827

26,
912.25

+
+

5.7H6
376

$

Retirement System contributions for current service . ,
Federal Mvisory Council fees and expenses

Insurance on currency and security shipments

. . . . . „

<,*0 . 0

Received from Government Agencies for;
Rental of space

25*0^7’
$ 882,516*82

2f 272069

l,ib; 56 ■
s
3.02,891.09

+
+
+
»
f
+
+

72,705

985eli07c
Ql

A




UO, 61*
1.36

+

2,217

UU.1U105
5 f26H „90

$
Federal Reserve Currency;
Original cost, including shipping charges . . . . . .
Cost of redemption, including shipping charges . . .

* 0 6 1^ 3 6
4,

UU.1 U1.35
5 .26^,90

+
-

15.926
35 U

lt075.H28.52

+

90,U9U

$ 972.537 <^3

102,891.09

PROFIT AND LOSS ACOOUKP
Current earnings
Carrenfc Sxpensas
Current Net Earnings

$ 1,221,236,78
1,075,428„52
~

l4|e808^26

PR > m s s
Profit on sal© of Uo So securities

$

1*0*889*24

■ from sale, liquidation or income from assets
e
acqiiired through failed bankas
First National Bank
First National Sank
Birst National Bank
’
First National Bank
Merchants National Bank
First National. Bank
First National Bank
First National Bank
First National Bank
Kenmare National Bank
First National Bank

White Lake,
Pollock
Poplar
Golva
Wimbledon
Scobey
Van Hook
Ryder
Sisseton
Kenmare,
Plentyvood

So D0
S„ D,
Montc
N. Do
No D„
Mont,
N, D„
N 0 D„
S„ D„
N„ Do
Mont,

5 ,56l*48
3,2k}aJ2

U01*8U
1 ^3,,31
44b <,97
500„80
65 ,00
,
285,00
5* 782*09
100,00
7,,98

Dividend #9 of 2$ received on our transit claim filed
against Pondera Valley State Bank, Conrad, Mont*

20*00

Profit on redeemed mutilated coin

29,62

Sale of one~quarter interest in deep sewer to Farmers
and Mechanics Savings Bank

U25*71

Sale of miscellaneous scrap iron and metal

76*25

Sale of two wooden doors by Helena Branch

35*00

Recovery on personal loan made to a former employee (pre­
viously charged off)

105*00

Recoveries on industrial advances previously charged off?
Minn,
Minn,

IO0I5
291*38

Profit on replacement of securities for member bank wire instructions misinterpreted

22,41

Gianares & Thompson
Cook, Inc,

Minneapolis
Minneapolis

LOSSES;
Industrial advances charged off as not collectibles
__ St Cloud Brewery Company
,
St, Cloud, Minn*
Ward Owsley Company
Aberdeen,
S, D,
,
Goldammer, Cranna, Weaver Co., Lakota,
N„ D,
Counterfeit currency and coin found in our cash
Discount on foreign coin
Interest paid to a member bank as an adjustment on
ties collection handled in error



$

3r5^3«>82
1,645„49
366,3 H

85*53
3 „07
a securi­
4,44

24

PROFIT AND LOSS ACCOUNT - C ont«d

'Expenditures incurred in connection with National Defense
Contract service in excess of reimbursement

$

Shortage in shipment of new currency to a member bank

1,184*74
13*00

Unadjusted Differences - Year igUl

1,011*30

Lcsa on securities sold for a member bank

129«17

TOTAL DEDUCTIONS................................. . * $

7,9S6„90

Net additions to current net earnings

$

50,456,05

Net earnings

$ 198,264,31

Dividends paid
Paid Uo S„ Treasury
Transferred to Surplus (Section 7)

$ 179,789*68
490*14
17,984*49

Surplus (Section 7) January 1, 1941
Addition as above
Transferred to reserves for contingencies

3,152.420,27
17,984*49
17,984*49

Surplus (Section 7 ) December 31 , 1940

3,152,420.,27

SURPLUS (SECTION 7)
Surplus (Section 7) December 3 1 , 1940
Change during year
Surplus (Section 7) December 31 , 19U1

$ 3 •152»420*27
None
3,152,420.27

SURPLUS (SECTION 13b)
Surplus (Section 13b) December 3 1 , 1940
Change during year
Surplus (Section 13 b) December 31 , 194l

$ 1,000,298„87
None
1*000,298*87

RESERVES
(Other than for F,D0I,C0 Stock and Depreciation on Bank Premises)
Reserves for contingencies December 31 , 1940
Other reserves (December 3 1 , 1940)1
Losses on past due industrial advances
Total reserves December 31 , 1940
Debits during year*
Credits during years
Added to Reserves for Contingencies
Reserves December 3 1 , 1941 <
Reserves for Contingencies
Reserves for losses on past due industrial advance®
TOTAL RESERVES DECEMBER




31, 1941

$ 2,498,662.68
73*000*00
27571,662*65
None
17.984t49

$ 2,5l6t-6^7'>17
73»000»00

. ........... ......... $ 2,589.647,17




DEPARTMENTAL COMMENTS

Bank and Public Relations

* .

27

Fiscal Agency . „ . „ . . „ 0 . . . . « * •

29

Installment Credit

30

Loans and Discounts . . . « ......... . „

31

Check Collection

.............

32

••••••••••••

}k

Currency and Coin ....... . . . . . . . .

34

Bank Examination

35

Noncash Collection

. . . . . ....... , . .

Safekeeping * . . ..........................................37

REPOET OF B A M AND PUBLIC RELATIONS ACTIVITIES
AT TEE FEDERAL RESERVE BANK OF MINNEAPOLIS
_ _ _ ______ PURINS 1941_________
Bank officers and representatives attended 217 meetings, delivered l4l
addresses to an estimated audience of 16,672 people, and made 732 visits at
member banks and 971 viBits at nonraember banks in the district*

The number of

public addresses was greatly increased this year owing to the campaign to ex­
plain installment credit control, the defense bond sales promotion program, and
the explanation of foreign funds control*
The attendance at showings of the Federal Reserve Bank movie during
1941 was 16 , *
689

The bank continued its cooperation with the Wisconsin Bankers'

Association with regard to showings of the Federal Reserve movie*
A copy of the booklet “The Federal Reserve System, Its Purposes and
Functions* was sent to all employees of the Head Office and Branch at their home
1
addresses with a letter signed by the President0
A comparative statement of operating ratios for 193^» 1939 and I9U0 was
sent to each member bank in the district.

In addition, operating ratios were

computed for the State banks of North Dakota at the request of the North Dakota
Banking Commissioner.
On March 8 , we held our Fourth Member Bank Conference with a registra­
tion of bank officers and directors numbering 1 , °
005
in our bank lobby between 9<00 and 11;30 A.M,

bankers registered

A luncheon was served at noon,

The speaking program began with an economics panel comprising three agricultural
economists*

Dr. Louis H. Bean, Counselor of the United States Department of

Agriculture; Dr. Joseph S Davis, Professor of Economic Research at Stanford
.
University; and Dr. 0« B„ Jesness, Professor and Chief of the Division of Agri­
cultural Economics of the Department of Agriculture of the University of Minne­
sota.

The panel was followed by a talk “I Knew Hitler” by Bernard H. Ridder,

Publisher of the St, Paul Dispatch and Pioneer Press in St. Paul.

A banquet

was held in the evening and the group was later entertained at a hockey game.
In April the Chippewa Valley Bond Club, a group of Wisconsin Bankers
who meet monthly for the purpose of reviewing their bank holdings of securities,
met at our bank.

They had lunch with our directors and after lunch they listened

to an address by Dr. Simeon Ee Leland, Chairman of the Department of Economics
at the University of Chicago and Class C director of the Federal Reserve Bank of
Chicago.,




27

The directors' meeting was held at Mackinac Island in June.

En route

our directors had lunch at Rice Lake8 Wisconsin with a group of Wisconsin
bankers in that vicinity and dinner at Land of Lakes, Wisconsin with another
group of Wisconsin and Michigan bankers•

The bankers and directors were guests

of this banko
On September 25, this bank held a party for the delegates attending
the convention of the National Association of Supervisors of State Banks in
St0 Paulo

The program consisted of golf at the Interlacben Club, a tour of

the Twin Cities in the afternoon, and a reception, dinner and entertainment at
the Interlachen Club in the evening.

There were 184 guests present*

In October, the book "Banking Studies" published by the Board of
Governors was mailed to all colleges and universities in this district.
Twelve issues of the Monthly Review were printed and distributed to a
mailing list which in December consisted of 5,6Gk names,
Daring the past year* editors of papers in upper Michigan, Northern
Wisconsin, Minnesota and South Dakota with a circulation of 2,000 or over were
visited by representatives of this bank*

The greater proportion of these men

had been receiving our releases for some time and when visited were apprecia­
tive and cordial.

Three of these men later made trips of some hundreds of

miles to pay a friendly visit here at the bank*
were contacted initially during these trips.

Approximately fifty editors
These men were responsive and

interested and as a result of the calls about thirty-five new papers were added
to our mailing lists,,

Acting on the suggestion of several editors, releases

of local business news are prepared specially for the newspapers each montho
Through use of a clipping service, we have measured the ratio of use on our
releases and found that during the past six months it has ranged from 35 to 47
per cent0

During the coming year, those papers which appear to be finding no

opportunity to use our stories will be removed from our listsc
A catalog of the 107 ABA Graduate School theses in our library was sent

to all banks in the district with a letter from the Presidents
year 1,073 requests for these theses were received,

During the

The activities of all

sections of the bank library have been multiplied several fold during the past
year.

During 1941, 1,966 books and theses were circulated to bankers and

others outside of this bank as compared with 299 in 1940 and 335 in 1939,
similar increase has occurred in the circulation of books and theses among




A

employees Inside the bank*

The inside circulation was 1*733

pared with 506 in I9U0 and 142 in 1939 ,

J- 1 &8 com­
9^

In addition to the increase in book

circulation* there has also been a large increase in the circulation of clip­
pings, pamphlets and marked copies of magazines,

FISCAL AGENCY FUNCTIONS
Volume of Operations
New issues, redemptions and exchanges of various United States Govern­
ment securities, including United States Savings bonds and Adjusted Service
bonds aggregated 1 15 , l6 pieces and amounted to $456 , ,
* 0
286 413,50 as compared
with 152,061 pieces amounting to $239 ,450,OS5
**75 in 19*+0,

In addition, on

exchange transactions, such as denominational exchanges, exchanges of coupon
for registered securities, etc,, 12,284 pieces were delivered, amounting to
$82 , 96 ,700 , as compared with 16*562 pieces amounting to $69 ,
O
128,550 in 19HO0
Purchases of Government securities numbering 485 BDd sales numbering
2,390, valued at $14,327 ,250, were handled,,

In addition, we handled for banks

and trust companies S6l transactions in Government securities amounting to
$173 »773 * , also 7l6 transactions of miscellaneous general market securities
950
amounting to $5 »* 7 »510 , the purchases or sales of which were arranged by banks
*9
direct with brokerso

Altogether, of these various transactions8 there were

U.U68 , totaling $193*59st710 , as compared with 5»030 totaling $165,024,810,46
Deliveries of 13*206 pieces totaling $9 1 t f251.50 were made on
051

in 1940,

purchases and resale transactions for other than our own account, as compared
with 12,195 pieces totaling $86 ,525,065 in I9UQ,
The total number of individual securities received and delivered by
the Fiscal Agency Department (including securities of Governmental Agencies)
during 19^1 was 769 »
436 totaling $698 , ,340, as compared to 196,430 totaling
640
$408,72^,519,75 in 19 ^0 ,
Other Services
During 1941 we received 38,830 individual orders for United States
Savings bonds, as compared to 19,484 during 1940*

We issued 7^*330 pieces of

United States Savings bonds amounting to $50,576*525* as compared to 40,257 pieces
amounting to $l6 r
890,225 during 19*0 <
* >
We received for redemption 21,802 Adjusted Service bonds amounting to
$1 ,
090 , , as compared to 29 ,7^2 pieces amounting to $1,487,100 during I9I )
100
K,



also 58,228 United States Savings bonds amounting to $13,824,725 as compared
to 49,77*4 pieces amounting to $11,000,350 during 1940«
On May 1, 1941, the Treasury Department announced the sale of Defense
Savings Bonds of Series E, F, and G«

Under Department circular No0 657 , as

amended, banks and other agencies may qualify as issuing agents for the sale
of Series E bonds*
At the close of business December 3 1 , 1941, we had qualified 1,359
issuing agents* of which 1,272 were banks, 99^ of all the banks in the district,
Since May 1, 1941, qualified issuing agents have sold and issued 201,93^
pieces of Series E bonds, maturity value $25,5S8,825<>

Of this 100,805 pieces,

maturity value $10,446,300, were issued during the month of December0
On August I, 1941, the Treasury Department offered for sale United
States Treasury Notes of Tax Series A-I943 and Tax Series B-1943*

At the close

of business December 3 1 , 19^1. 2,374 orders of both series for 14,091 pieces
aggregating $35 *
325*975 were filled.
During the year we issued 25.020 United States Treasury checks in pay­
ment of Adjusted Service bonds, United States Savings bonds„ and other Public
Debt redemptions, as compared with 26,098 checks during 1940»

1941 ANNUAL REPORT OF THE INSTALLMENT CREDIT DEPARTMENT
The Installment Credit Department was created during August to adminis­
ter Regulation W relating to Consumer Installment Credit issued by the Board of
Governors,,

This department has varied in size from a peak of nineteen em­

ployees in September to a level of fourteen on December 31 *

Extra help has

been used extensively, however, for mailing, sorting, and typing purposes«
The first task was to diseminate the Regulation and educate lenders,
dealers, and the public on

itB

purposes and requirements,,

A mailing list of

approximately 18,000 names was compiled, including sales finance companies ,
small loan companies* credit unions, auto dealers, hardware stores, depart­
ment stores, appliance stores, etc*

In addition, a special mailing list of

approximately 2,200 names including banks, chambers of commerce, credit bureaus
and trade associations was compiled,

Addressograph plates were made for both

lists o
Copies of Regulation W, the two amendments, two sets of printed rulings,




30

a letter announcing the series of discussion meetings on Regulation W, as well
as registration "blanks and the statements of the borrower and necessity were
mailed to both mailing lists*

In addition the special mailing list received

mimeographed copies of the Board of Governors' interpretations twice weekly
while the rulings were being issued rapidly and later at weekly and bi-weekly
intervals*

Also during this period five press releases were issued to the

lUOO newspapers in the Ninth District, several press conferences were held and
many special releases prepared for trade journals,
During September, October, November and December members of the Install­
ment Credit staff traveled 18,000 miles to discuss the regulation at 66 meet­
ings which were attended by 9»500 lenders and venders.
Business firms were slow in filing thsir registration statements and on
December 22 only H,000 had registered in spite of the issuance of two letters,
a press release and a red lettered tab on one of the printed compilations of
the Board’s interpretations. Therefore,on December 23 . 8,600 prospective regis­
trants were sent a telegram reminding them that they must register by January 1
if they extended installment credit,,

By January 1 more than 12,000 firms had

registered and it appeared that the remaining 1,500 or 2,000 would be in within
a few days.

,vv
/;

Registration certificates were sent to all of these registrants and
follow ups on about 1,300 that had not correctly completed the registration
statement were made.

Also, a large part of the registration statements were

classified and all mathematical computations completed preliminary to a statis­
tical tabulation of all of the registrants* sales and receivables which is to
be completed by February 15. 19^2,
DISCOUNT DEPARTMENT
During the year 19^1. l6 banks took advantage of the rediscount and
loan privileges, borrowing an aggregate amount of $2 ,6^5 ,
819«^2 for a total of

191 items,

One loan in the amount of $350 was made to an individual.

In I9U0

25 banks were accommodated for an aggregate amount of $2 ,310 ,355 *78 , for a
total 255 items.

One Twin City tank was accommodated to the extent of

$300,000 for two days in 19U1 ,
tirely out of our debt.

At no time during the year 19U1 were banks en­

The discount rate has remained at 1^6 during the

entire year„



31

The volume of activity in industrial loans increased in 19^1, during
which year 17 U advances were made in the aggregate amount of $3 ,130 , ,43 ,
476
with participating institutions taking $1 ,721,000 of this amount at time of
disbursements leaving a net amount of $1,409*476,43 disbursed by the Federal
Reserve Bank*

Of this net amount $l43»706,01, being 80$ of balance of prin­

cipal of three loans to the Northern Pump Company* was sold to participating
banks after disbursement.

With the exception of two loans amounting to $9*000,

all of the 174 advances made were loans to aix different borrowers on accounts
receivable, government contracts and warehouse receipts»

The total of

$3 , ,^760^3 includes $1 ,
130
026,000 to one borrower and $1 ,520,000 to another*
Repayments on advances during the year rcduced the balance $l,l4s,851*60 , leav­
ing a net balance of $689.295°01 on December 31 ,

Repayment of seven loans in

the amount of $913,000 (our share) appears to have been through refinancing,,
The balances of principal of four loans amounting to $5«365*3** were charged off
to Profit and Loss during the year 194l„

Of this amount S291«38 was recovered

during the year on one loan and repayments are to continue at the rate of $15
per month*

Commitments made in accordance with the provisions of Section 13 b

amounted to $88 ,
826<,69 in I94l, and the contingent liability resulting from
such commitments at the end of the year was $28 , »35 «
053
In addition to advances made and commitments given during 1941, two
loans totaling $220,000 were recommended favorably by the Industrial Advisory
Committee and approved by the Discount Committee*

One loan for $25,000 was

recommended favorably by the Industrial Advisory Committee with Discount Com­
mittee action deferred.
Interest charged by the Federal Reserve Bank of Minneapolis on indus­
trial loans remains on the sliding scale of 3
as of October 30» 1940,

P er

cent

to

6

per cent in effect

At the close of December 3 1 , 1941, our unpaid balance

of 6 per cent industrial loane amounted to $429,379«**9 and 4 per cent $259 , *52,
915
CHECK COLLECTION DEPARTMENT
The Check Collection Department handled 31,840,902 cash items totaling
$6 ,
418 , ,298,92 during the year 1941* which was 987,989 items more than the
266
number handled during 1940 and an all-time high total.

The figures given below

are the number and amount of items handled, the average number of employees and
the total expense of the Check Collection Department, which includes Government



and Work Relief checks for the years 1936 through 19I I
+:
Average Humher
of Employees

Year

Number of
Itsms

Amount

1941
19^0
1939
1938
1937
1936

31,840,902
30,852,913
30 ,
351.227
30 .
013.593
28,778,033
28.859,625

$ 6 ,1 18 ,266,
+
298,92
5 , , ,107 .3 !
091 698 *
+
i , i,580,798.96
* 36
i , ,18! , . *
+ 673 + + 397 1 9
i,902 ,* ,
+
109 983.53
H.75^.957.277.09

75-22
66.61*
6U.85
63.98
62.12
60.91

Total
Expense
* 102,288,98
93,197.65
92 ,
990.90
91.969.80
*
97.
835.16
92 , .1+
961 9

The following table indicates the number of items handled by the sub)

divisions of the Check Collection Department for the years 19^0 and 1941;
Items Handled on

19 *
*0

Twin City Banks (Clearings)
Member and Nonmember banks
Other Federal Reserve Districts
Direct to member banks other Fc H. Districts
To Helena Branch, Helena, Montana
Treasurer of the United States
UoSB Government work relief checks

^,667*093
17*320,642
3»320,5S7
70*371
151,676
2,926,29U
2 ,396,250

19^1
5*25^,075
18,782,057
3*019*876
7^,108
133*958
2,725*923
1,850,905

The cost of handling 100 items in three units of this department for the
years 19^0 and 19U1 follows;
Year

City Checks
(Clearings)

Country Checks
(Outgoing)

19^1
1940

l6 „l cents
l6»3 cents

23»02 cents
18.10 cents

Heturn
Items
$ 1 =3 ^
lAl6

The average number of items handled per person per day in these three
units during the years 19^0 and 19^1 followss
1941
1940

1,613
1,814

2,7^6
2,780

389
404

The number of banks reported closedt number voluntarily liquidated,
number reopened, and the number added to or removed from our par list during
the years I9U0 and 19U1 is given below;
____ _ _ _ _ _ ___ Ninth Federal Heserve District______________
Banks
Banks volun
Banks
Banks added
Banks refleported
tarily liquireported
to our par moved from
closed____ dated______ reopened
list____
par list

Year

0
3

1941
1940

4
20

0
0

0
1

13
14

In July 19^1 we discontinued the single-run plan whereby the first proof
on 70$ of the incoming checks was eliminated,.

Due to the numerous errors in

listing on incoming cash letters we adopted the practice of proving all incom­
ing checkso

This change in procedure increased our cost and the number of

employees to a slight degree*



However, this increase in cost and the number

of employees have been offset to some extent by the increased volume of checks
handled and also as we ondeavor to carry on our staff in the Check Collection
Department an extra three or four clerks for training purposes to keep ahead
of the turn-over in help in this department*
NOSGASH COLLECTION DEPARTMENT
The number of city collections handled increased slightly over 191*0
while the volume of country collections, coupon and country security collec­
tions and direct sent collections was just under 19HO figures<
>
city grain drafts collected increased quite substantially*

The number of

The following

figures compare the activity in this department during 1941 with 1940o
Amount

Number of Items.
City Collections
jpi
191*0
-Country

35.170
32,832

$ 106,230,000

56.911
57 . U
60

26.646.000
31.892.000

807,366
639,479

236 ,361,000
15* .
1 159.000

30.607
33.28H

39.316.000
33.445.000

6,608
6.961

20 B270,000
15.847,000

79.92S,000

Collections

19^0
City Grain Drafts

19U0
Coupon and Country
Security Collections
ipr
191*0
Direct sent Collections

191*0

CURRENCY AND COIN DEPARTMENT
Outgoing Currency shipments and deliveries?
.• .
.
1941
Number .
Amount
Local Banks
Country members
Nonmembers - others

1,864
20,707
147
22,718

$

98 , 278,000
85.737.000
2,401,000
$ 186 ,¥16,000

1240
Amount

Number
1*755
19.179

$ 85,258.000

___ JjO

$

21,104

70, 208,000
2,
216,000
157, 682,000

Outgoing Coin shipments to local and country banks and others?
10,100

$

4,621,000

8,
1+86

$ 3 ,551*,000

3.090

17.719

$ 66 ,
912,000
73.310.000
3.091.000
$143 ,
313,000

2,117

$ 3,294,000

Incoming currency shipments and deposits:
Local Banka
Country members
Nonmembers - others

2,95*5
11,723
3,055
17.736

$ 65 .517.000
76 ,*
1 52,000
8,
606,000
$ 150 .
575.000

12,001
2,628

Incoming coin shipments and deposits;




1.976

?

3,
201,000

34

BANK EXAMINATION DEPARTMENT
There were on December 3 1 , igUl* eighty-eight State member banks*

Bach

State member bank in this district received at least one examination by exami­
ners for the Federal Reserve Bank of Minneapolis during the calendar year 19^1 c
As of the end of the yeare fourteen State member banks were exercising
trust powers, including three having only escrow and custodianship accounts.
Thirteen regular examinations of trust departments of State member banks and
two examinations in connection with membership were made*

Eighty-three

national bankB held permits to exercise full or limited trust powersv and dur­
ing the past year forty-four of them were exercising certain of these powers.
The trust examiner reviewed twenty-six reports of examination made by the
Comptroller of the Currency,
Activity with respect to fiduciary powers included the receipt and ap­
proval of two applications of national banks during 194l«

Membership of one

national bank which had been granted fiduciary powers was cancelled*
The examinations by this Department in the various States were as fol­
lows?
State
Banks
Michigan
Minnesota
Montana
North Dakota
South Dakota
Wisconsin

National
Banks

Holding Company
Affiliates

lb

25
25
22
6
92

1
1
1

2

_
_
1

Examination of Holding Company Affiliates
An examination of the Northwest Bancorporation, a holding company affil­
iate, was commenced as of the close of business December 8U 19^15 the examina­
tion was not completed as of December 31 .
An examination of the First Bank Stock Corporation, which commenced as
of the close of business November 22, 19^0, was completed during 19^1
State Bank Applications for Membership
Sight applications for membership in the Federal Reserve System were
received from State banks during the year.,

Applications of the following

banks were approved by the Board at Washington and membership in the System
completed?

The Gwinn State Savings Bank, Gwinn, Michigan, and The Onida Bank,

Onida, South Dakota»




The application for membership of the American State Bank of Moorhead,
Moorhead, Minnesota, received in 1938* and that of the Flint Creek Valley Bank,
Philipsburg, Montana, received in 19^0. are being held in abeyance-

The ap­

plications of the Olmsted County Bank & Trust Company, Rochester, Minnesota,
The First Bank of Oakes, Oakes, North Dakota, and The Security State Bank,
Minocqua, Wisconsin, the latter submitted in 1940, were withdrawn*

Applica­

tions submitted by the State Bank of Northfield, Northfield, Minnesota, the
Austin State Bank, Austin, Minnesota, and the State Bank of Virginia, Virginia,
Minnesota have been forwarded to the Board of Governors at Washington and
action thereon is pending.

Analysis of the application of the Bank of Menom-

onie0 Menomonie, Wisconsin is incomplete.
Applications for permission to exercise Fiduciary Powers Received, etc.
Applications of the following banks for trust powers were approved by
the Board at Washington;
Name of Bank

Location

The First National Bank of Austin
The Superior National Bank of Hancock
in behalf of The Superior National
Bank and Trust Company of Hancock

Powers

Austin, Minnesota

1 to S

Hancock, Michigan

Full

Date
Approved
11-21-41
11-14-41
effective
12-6-41

Applications for National Charters
Two applications for national bank charters wsre referred to this office
for recommendation during the year, and the charters were granted by the Comp­
troller of the Currency,
B A M CHANGES IN 1941
(per Stock Book Records)
Total number of member banks in the district January 1 , 19U1
National banks organized
State banks admitted
National banks succeeded by nonmember State institutions
National banks absorbed by other national banks
National banks absorbed by member State institutions
National banks absorbed by nonmember State institutions
National banks liquidated
State member banks withdrawn
State member banks converted to national banks

460
2
,
2

5
1
1
1
1
1
1

Total number of member banks holding stock in the Federal
Reserve Bank of Minneapolis at the end of the year ............... ... „
»




11
453

State Bank Membership According to States

Ho* of State
Bank Members

l- l- U l

State
Michigan
Minnesota
Montana
North Dakota
South Dakota
Wisconsin

Ik

21
25
0
23

No of State
Banks Withdraw­
ing from Membership in 19 U1

N . of State
o,
No® of State
Banks Admitted Bank Members
in 19*11_______ 12-31-**!

1
0
0
0
1
JO
2

1
0
0
0
1
-2
2

lU
21
25

0
23
—5
88

SAFEKEEPING DEPARTMENT
Securities held in our custody for safekeeping and for collateral pur­
poses, exclusive of unissued stock held for the Treasury Department and other
governmental agencies, increased $26,05^.1^5.37 over 19^0<

The total govern­

ment and miscellaneous securities held free in safekeeping for member banks
increased $20,363,69sA 3, while the total of pledged securities increased
$^259,099.51.
During 19*H« the total lh So Savings Bonds of all the series held for
individuals, firms, corporations* and nonmember banks increased $1 ,
631*925 C*
( mpared with an increase of $3 ,582,925 the previous year, and U ,207 safekeeping
receipts covering U* S, Savings Bonds were issued as compared with 3,112 issued
in 19UO0

U« S Savings Bonds deposited for safekeeping have shown a steady
.

Increase since the service was inaugurated in 1935 * a total of 795 receipts were
issued for the years 1935 &&& 193^5 817 receipts in 1937 * 1123 receipts in

1938 ; 1927 receipts in 1939-

At the close of business December 3 1 * 332 non-

member banks and 2322 individuals and firms availed themselves of the safe­
keeping service in connection with U, S Savings Bonds„
.

The latter figure

includes J82 individuals and firms who have deposited U„ S. Savings Bonds,
Defense Series, with us.

In 19^1. we received ^3*99® pieces compared to U2.562 pieces in 19 K)
* »
and delivered 39 *7^8 pieces compared to 4U.31** the previous year.

The number

of coupons clipped last year was 201 , , as compared with 2l6 ,Ul9 the prev­
982
ious year a
RECONSTRUCTION FINANCE CORPORATION - CUSTODIAN
The activities of the Custodian for the Reconstruction Finance Corpora­
tion for 19^1 were mostly the administration and liquidation of loans previous­
ly made*



3 7

During the year the following notee were purchased in behalf of the
Commodity Credit Corporation;
19UQ Crop
Jo, of
i«
Notes
Amount

194l Crop
No* of
Notes
Amount

Farm stored wheat8.963
$ 5.248,245.83 1,419
$
Warehouse stored wheat
101.276
62,608,4l4.77
Farm stored barley
1,828
379»960„98
Warehouse stored barley
Farm stored flax
Warehouse stored flax
Farm stored rye
4,674
952.276*68

606,397-39
5.728
249
4
44
32
86

1.304,467.11
56 *436,02
l,406o
05
14,063*39
10,559>93
18.789-33

Warehouse receipts covering the 1940 crops securing notes purchased both
in 1940 and 1941 and which notes were not repaid at maturity were pooled and
subsequently large portions released, all in accordance with Regional Director's
instructions*

During 1941 we transferred from loan status to wheat pool the

following;
•
tfieat
Kye
Barley

1939 Crop '
Bushel8
1,132.519:38
103.^95*53
-

1940 Crop
Bushels
75.064,598 ;40
276,575^3
15,767:00

PUBLIC WORKS AIM INISTRATION
During the year all of the bonds owned by P* W„ A* were either liquidated
or sold to the Reconstruction Finance Corporation,

UNITED STATES HOUSING AUTHORITY
The Federal Reserve Bank as fiscal agent of United States Housing Author­
ity handled eight transactions during 1941 aggregating $2,257.000„

These trans­

actions were principally refinancing of the $1 ,
965,000 handled during 1940*
Included in the $2,257,000 are bonds totaling $1,755»000 which were exchanged
for advance loans made largely during 1940«

Advances totaling $369,000 and

interest totaling $27,094*51 were paid during 1941,




38

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