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AUDITOR* S REPORT
ffEDKEtAL RISSJSRVB BA1JK OF MINNEAPOLIS
FOR THE YEAR
19 3 7
To the Directorsi
In presenting the results of our 193? operations, wo draw
attention to the fact that decreased expense rather than expanded in
cone has made possible a net Increase of approximately $37,000 in our
surplus.
This was accomplished after transferring to Reserve for
Losses and Contingencies the full amount of the profit on sales of
Government securities from System Account*
Nearly 96fo of our current
Incane lias been in the form of interest on Governments.
The reduction in expense of $90,000 covered many items, the
most important “being salaries and note costs.
.Amounts reserved for
taxes showed an increase which re hope to see reversed when our tax
suit is decided.
There has "been contraction in the volume of some of our services
compared to 1936, especially during the closing months of 1937.
Corrency
and collection volumes have been reduced with not much change in transit
volume*
Deposits averaged $14,000,000 higher in 1937 through increase
in the reserve requirement,
Member ^aiike wore reduced fourteen in
number during the year.
The auditing schedule presented covers the entire year and
confonas with the frequency approved at the last Auditors* Conference,
Respectfully submitted,
Auditor.
January 1, 19 S3.
M m
Auditing.................................................. ... 23-25
Bank Examinations...................... ................ ....... 44-45
Bank and Public Relations.................................. ... 43
Bank Premises........ ..................................... ... 26-28
Chock Collections - Transit Department ........ ............. ... 32-33
Closed B a n k s ........ ........... ........................ . •
31
Collections - Non?-Cash........................ ............. ... 34
Currency and C o i n ................... ...................... ... 36-37
Custodies .................. ..... ................ ......... ... 35
Deficient Reserve Penalties ...... .......................... ... 42
Discounts and Industrial L o a n s ...................... ..... ..... 29
Dividends...................................... ........... ... 18, 22
Earnings
Comparative statement 1937-1936 ............................. 3
Average rates on earning assets................ ..... ....... 30
Comments ........................... ....................... 4-5
Expenses
Comparative statement 1937-1936 ......................... .... 6
Comments........................... ......... ......... .... 7-16
Reimbursable Expenditures ................................ ... 16
Failed Bonks ...................... ......... ......... ......... 31
Federal Reserve Hotos .......................................... 38-41
Fiscal Agoncy Functions ........... ......................... ... 46-48
-•
Franchise Tax paid since organization....................... ... 18
Furniture and Equipment ........................................ 14
Liabilities..................... .......... ................ ... 2
Member Banks •» Changes in membership......... .......... ....... 34
Hon-Cash Collections .......................................♦
34
Profit and Loss ......... ............. ..................... ... 17-22
Reconstruction Finance Corporation................ ......... ... 48
Rein'bursable Expenditures.......... ........ .............. .... 16
Resources................................................. ... 1
Securities
Safekeeping............................................. ... 35
Investments...........................*....... ......... ... 5
Surplus..... .......... ................................... .... 18
Jax e s....................... ........... ......... ......... ... 12
Telegraph...........................*................. ....... 42
Transfer of F u n d s .......................................... ... 42
Transit Functions .......................... ................ ... 33-33
COMPARATIVE STATEMENT OF RESOURCES
FEDERAL RESERVE B A M OF MINNEAPOLIS AND HELENA BRANCH
(After closing entries)
December 31. 1937
December 31. 1936
Cash Reserves?
Gold certificates with F. R. Agent .......
Redemption fund - F. R. Notes ...........
Inter«di3trict settlement fund .......... .
$ 140,500,000.00
445,958.09
45,247.038.71
$ 128,000,000.00
914,568.48
47.995.044.65
Total gold certificate reserves ........
$ 186,192,996,80
$ 176,909,613.13
Other cash ................................
9,671,749.67
Total cash reserves...................
$ 195,864,746.47
Bills and Securities:
Bills secured by U. S. Government obliga
tions, direct or fully guaranteed .........
Bills otherwise secured and unsecured....
Bills bought in open market ..............
Industrial advances .....................
U. S. Government securities .............
Foreign loans on g o l d ...................
Total bills and securities ..............
7,301,328.40
$ 184,210,941.53
174,980.81
54,398.87
636,851.23
83,008,500.00
$
83,874,730.91
3,000.00
60,662.78
1,063,812.01
90,707,500.00
7,200.00
$
91,842,174.79
Due from Foreign b an k s ............. ......
F.R. Notes of other Federal Reserve Bmjks..
1,986.41
1,920,000.00
2,991.32
1,740,000.00
Uncollected Items:
Transit items ...........................
Exchanges for clearing h ou s e ............
Other cash items ........................
16,937,208.97
477,559.17
663,625.49
17,202,493.07
584,938.78
748,758.76
Total uncollected items ................
18,078,393.63
18,536,190.61
1,477,340.02
1,487,513.72
Bank premises - Les3 depreciation reserves .,
Miscellaneous Assets:
Premium on securities...................
Interest Accrued.................... ....
Reimbursable expenditures ..... ..........
Deferred charges ........................
Claims Account Closed B a n k s .......... .
Miscellaneous assets acquired in settle
ment of claims account closed banks ....
Industrial Advances past due three months ...
All other resources .......................
Total miscellaneous assets
TOTAL RESOURCES ..
689,975.19
264,360.74
26,416.29
14,567.15
14,605.53
13,567.73
18,346.21
15,722.22
93,601.67
102,094*57
203,551*11
22,284.96
$
1,337,855.54
$ 302,555,052.98
77,570.26
13,531.48
t>
232,339.57
$ 298,052,151,54
COMPARATIVE S T A T M M T OF LIABILITIES
FEDERAL RESfrlRVE BAIIK OF MIJTOAPOLIS AND HELENA BRANCH
(After closing entries)
Desember 31, 1936
F. R. notes in actual circulation .........
Deposits:
U. S. Treasurer - General account .........
Members - Reserve account .................
Due to foreign 'banks .......... ......... .
Other deposits ............................
$ 137,569,170.00
$ 136,096,365,00
4,339,424.48
126,011,198.87
3,990,198.57
3,227,235.08
5,470,909.59
120,530,139.28
2,376,383.54
5,445,070.43
Total deposits ............ ............
$ 137,568,057.00
$ 133,822,502.84
$
18,082,089.10
$
18,825,773.16
$
108,071.88
704.98
68,940.82
$
83,505.52
333.03
64,045.49
Total miscellaneous liabilities .........
$
177,717.68
$
147,884,04
Capital stock paid in ........ •....... .....
Surplus Fund - Section 7 ..................
Surplus Fund - Section 13-*b...............
Reserve for self insurance............ .
Reserve for prior service liability to
Retirement System .......................
Reserve for other losses and contingencies...
$
2,893,050.00
3,153,413.69
1,001,162.98
515,379.97
$
2,943,050.00
3,116,430.29
1,002,914.21
515,379.97
Deferred availability items .............. ..
Miscellaneous Liabilities:
Sundry itesas payable ....................
Unearned discount ........ ...............
All ot h e r ..............................
TOTAL LIABILITIES
166,088.00
1,428,924.56
249,128.00
1,332,724,03
$ 302,555,052.98
$ 298,052,151.54
COMPARATIVE STATEMENT OF GROSS EARNINGrS
FEDB3AL -RESERVE B A M OF ^IMNlilAPQLIS AND HSLENTA .BHANGH
M in n eap o lis
Earnings From
1937
Discounted M i l s ........................................... ..
Purchased bills . . ............... ....................... ..
Industrial advances „ ......................................
Commitments to make industrial advances
. . . . „ . „ „ . „
U« Sn Government securities
...............
Deficior.t reserve penalties
. „ . ............... ..
Interest received on past-due paper of closed banks . « . .
Interest on past-due industrial advances . . . ........ „ .
Sale of waste paper, money bags, etc,
. . . . ........... ..
Service charges on collection items returned unpaid. . . . .
Monthly letters sold . .......... ..
• ... .
C le a r in g house f i n e s
. . . . 0 . ........................................... . . „ .
All Other ......................... . ........................
Total Earnings
£
U,601.49
463.56
Helena Branch
Combined
Combined
1937
1937
1936
156.97
U.758.U6
463.56
**3 , 3 8 1 . 1 1
636.61
4 3 ,381.11
636.61
1 ,2 9 2 ,^b? „ 5 3
1 *530..93
339»11
6 ,1 7 8 . 6 8
381.42
1,912.35
339.11
6,178.6s
13 1.19
3 6 .60
57.00
1.5G
$ 1,3^9,820.31
1,292,462.53
560 . 76
79,125.14
979.46
1,265,518,86
350*29
13,962*20
1 3 I 0I 9
75*b5
36060
39 <>90
57«00
34.00
1,350,358-70
1 , 3 6 1 , 700.50
1.5 0
53So39
1,048.76
5M
EARNINGS
Earned at Minneapolis
Earned at Helena
$ 1*349,820c31
538,39
& 1,350,368*70
Current earnings for the year were $11,341.80 less than for 1936 principally
because of the falling off in Industrial advances.
Since 1933 over 90$ of our current
income has come from interest on Government holdings.
During the year just passed
95.71# of our earnings, or $1,292,462.53, m s obtained from such investments.
In no
year since 1929 has the volume of discounted pape? exceeded the amount invested in
United States securities.
During December the average amount of Governments held in System Account
increased $455,228 to $83,051,661 through additional purchases by the Open Market
Committee.
These purchases and exchanges resulted in a further lowering of the aver»
age rate on Governments.
From April to October, inclusive, the earning rate showed
gains each month, the rate of 1.58$ in December reflecting a slight downward trend
for the past two months.
For the year 1937 the average rate obtained on Governments
was 1.557$ compared to 1.539# in 1936.
During the year 1936 we held an average of
$82,203,000 in Governments, or $816,000 less than the average in 1937, with the income
from this source $26,943.67 greater in 1937,
♦
On December 31 our participation in
System Account amounted to $83,008,500 compared to $90,707,500 held at the close of
1936.
Each quarter holdings are revised based on the needs of each bank in relation
ship to the System as a whole.
$237,000.
Our allotment on January 1, 1938 has been increased
Daily earnings on Governments as of the same date are $3,573.69, compared
to $3,434.94 one year ago.
Industrial advances current on December 31, 1937 of $637,000 were $53,000 less
than at the close of November and $427,000 below the current advances on December 31,
1936.
1?e also have past due advances at this time of $203,551.11, with none un
current one year ago.
$1,315,000 in 1936.
For the year, current advances averaged $723,000, compared to
Earnings from current advances in 1937 were $43,381.11 to tdiich
must be added $636.61 for commitments and £6,178.68 for interest received on past due
advances, making a total of $50,196.40, compared to $80,104.60 in 1936.
Of the funds
used in making industrial advances, 97.753$ m s supplied by the Treasury Department.
All profit, expenoe and loss is allocated to the Treasury on the same basis*
After
providing for expense and estimated losses, Treasury funds as represented by Surplus,
Section 13-b, were reduced $1,751.23.
Member bank discounts were current at Head Office practically throughout the
year and also at Helena after the first four months.
The greatest average amount
4
BAHNINSS - Cont 9d
under discount m s during October, reaching $801,000.
For the year 1937 daily aver*
age of discounts to meabers m s $262,000, compared to $47,000 in 1936.
although greater than in 1935 and 1936 amounted to but $4,758.46.
Earnings
The discount rat©
Tihich had been 2$ since May 14, 1935, m s reduced to ihf? on August 24, 1937.
Earnings from purchased bills show a total of $463.56, practically all of
which came from our participation in investments made through foreign banks by the
Open Market Committee.
The only other purchased paper we had during 1937 was in the
nature of bankers * acceptances allotted us in the amount of $18,694.39 on May 13 and
maturing before June 15.
All earning assets held in 1937 averaged $84,141,000 compared to $83,732,000
held in the previous year.
Because of the greater amount of industrial advances in
1936, the average earning rate obtained m e 1.609$ in comparision with 1.595$ re
ceived in the year just closed.
Earnings in the miscellaneous classification, in addition to Interest on past
due industrial advances, amounted to $2,477.75.
deficient reserve penalties.
Of this total, $1,912.35 came from
Considering the fact that reserve requirements were
increased 100$ between August 15, 1936 and May 1, 1937, the amount of penalties assessed
is not large.
During 1936 penalties of $350.29 were charged.
In the process of
settling final claims at closed banks, rre collected $339.11 in past due interest on
such claims*
One year ago settlements resulted in crediting $13,962.20 collected
as past due interest.
Other minor receipts Included $131.19 from the sale of mst e
paper, money sacks, etc., $36.60 in service charges on collections returned unpaid,
and $57.00 imposed as fines in connection with the operation of the Twin City Clearing
House.
With further reference to our participation in the System holdings of United
States securities, our proportion of the total of $2,564,014,850 is 3.2374$, or
$83,003,500, made up as follows:
United States Bonds
United States Treasury Notes
United States Treasury Bills
$ 24,331,500
37,392,000
21.285.000
$ 83,008,500
In the classification of maturities, 49.51$ of the total matures within two
years; 72.67$ within five years; and 27.33$ over five years.
One year ago 82.2$
of all holdings matured within five years and we held 3.73$ of the $2,430,226,850
of securities making up the System Account.
COMPARATIVE STATEMENT
CURRENT EXPENSES OF THJal FEDERAL RESERVE BANK OF MINNEAPOLIS AND
HELENA BRANCH
Minneapolis
1937
Salaries^
Officers . . . . . . . . .
$
. .
Retirement System contributions for current service 0 „ „ „
T r a v e lin g expenres . . . „
0 . o o . . . . . . . . . . .
Telephone and telegraph
.
. . . . . . .
Insurance on currency and security shipments « . . • . . .
Other Insurance . . . . e . . . . . . . . . . . . . . . 0 «
. . . ........
Taxes on ’
bank: p r e m i s e s ........... .
Depreciation on hank "building 0 0 ................ .
.
Light, heatr cower* and water „ o . . . . . . . . . . . . .
Repairs and alterations to bank building
Furniture and equipment , . .......... ............. . . «
................... . . . . . . . . . . . . . . *
A l l Other
Total Operating Expense
...
.................
Received from Government agencies for
Rental of st)ace .................. ..................
Rental of Furniture and eauipment . . ...............
85*752., 69
39^8927-97
2U e222 ol6
9 „l60o6H
10,9^3*59
995«Q5
2le07S,73
98 #U0Xol6
13*358.07
23,327.53
7,521*3^
1 7 ,608*10
70 ,927*03
28,809.3>+
15*63503^
1 ^ 938.66
90,00
19 s25So05
23*335*93
$ B80,351,3S
10^75*95
2 ,2 ^ 2 .3 1
$ 867 ,6 33 .12
B o ard A ssessm en t ...........................................................................................
Federal Reserve Currency?
Original Cost, including shioping charges . . . . . .
T o t a l Current Exoenses
. . . . . . .
.........
*
Helena Branch
1937
1^ ,6 9 1 <>52
J42»1S7-1+1
2 ,790 c!!
35»oo
1 ,160.50
1 .551-70
1 5 .9 TO.u5
U»H57„28
3 ,1 9 1 o06
1 ,196.03
2 ,069.05
1 j.1 U.s9
!,5?5.38
212.07
520^51
2,098.07
9**, 7210 03
9U,7Slo03
Combined
1937
Combined
1936
100 ,W * . 21
’
437#!15032
27*0X2*27
9,X95o6H
12,X0Uo09
995*05
22 ,630.^3
1 1 M 8I 06X
17,815.35
26,518*59
Ss717.37
19.677.15
72,X01o92
28 ,809 .3^
1 7 ,160.72
1 5 , 150.73
9Q .00
1 2 0 ,661*68
^3*173*99
29P9Sio36
9 e926 o86
1 0 ,2 9 3 .1 5
1 ,20U , 57
29 ,279.10
1 1 9 ,912 A 9
20 ,028.82
31,700*17
9*338.83
20 ,9 ^7 ol6
66 ,8X 6076
29,232.59
20 , 067 c,21
6 ,8U0o52
—
975,132.^1
i b05H ,55M *
19,778.56
25,143,4.00
10SU75. 95
11,410.91
33,732o75
2 ,2 1* 2 * 3 1
12*317*22
2 ,U o i« 3 3
962 .HlU.i5
1 ,039 ,836 .U3
U0, 3^ 6o2^
-
Uo,3U 6 .2U
39,750.73
^3,739-82
6,359.07
-
**3.739.82
6,359*07
5 7 ,825.66
5^57.81
1 ,052 ,859.28
l,lU 2 , 87O 063
$ 958 ,072.25
9U,7Siu03
EXPENSES
Minneapolis
Helena
$ 958,078.35
..94,781.03
$ 1,052,859.28
The 1937 “budget placed Minneapolis coots at $924,883 r>nd thoso of Helena
at $98,871.
After the figures had "been submitted, we were advised by the Board
that depreciation on bank premises should be apportioned monthly and charged to
Expense.
This raised the Minneapolis budget figures to $953,692.34 and the com
bined figures to $1,052,563.34.
In comparison with the like costs of 1936, our
expenses of 1937 show a reduction of $90,000.
Other changes have been made in
tho method of reporting certain items under instructions from the Board, but in
making comparisons with previous years the necessary allowances have been made.
In addition to the change in method of handling normal depreciation, collection
of rent for space and equipment from fiscal agents is now deducted fron expense
rather than added to current earnings as in 1936*
Rental of space paid by fiscal departments in 1937 amounted to $10,475.95
with $2,242.31 collected for the use of our furniture nnd other equipment.
The
total amount of all sorvices in 1937 for which reimbursement is obtained was
$153,449.21, compared to $198,294.83 in 1936.
Servlcos performed for the Govern
ment, the expense of which was absorbed by the Bank, amounted to $36,305.65 at
Minneapolis and $5,537.14 at Helena.
Gross expenses of making industrial loans was $36,987.88 in 1937, with
income from advances $13,208.52 in excess of expenses.
It was estimated at the
beginning of the year there would be sufficient income to make it unnecessary for
the bank to absorb any expense or possible loss in connection with these loans.
The bank has assumed no expense and the proportion of funds set aside for possible
losses is $40.25.
SALARIES
Minneapolis
Helena
$ 480,680.66
56.878.93
$
537,559.59
Net Changes from 1936
Ket Decreases
In payments to officers
$ 20,217.47
In payments to all other employees 46,058.61
Total decrease for 1937.......$
Decrease at Minneapolis
Decrease at Helena
$
$
66,276.08
59,954.27
6.321.81
66,276.08
It was indicated at the beginning of 1937 that our salary payments, less
recoveries from fiscal agencies, would be approximately $533,000.
On thi3 basis
EXPENSES ~ Cont5d
the ejected reduction was $70,500 for the year.
Salary recoveries for fiscal
services were less in 1937, a total of $118,427,10 "being received, compared to
$127,533*95 in 1936,
The Bank pay roll was inflated $6,165 through the payment
of dismissal wages to ten fiscal employees*
These persons although hired tempor-
arily had boen with ua for an extended period and were treated the same as regular
tanking employees, but it is not permissible to recover a dismissal payment from
fiscal agencies.
Changes in the staff were few in 1937, compared to 1935 and 1936*
1937 the net change was thirteen persons*
During
At present there are fifty persons
regularly assigned to fiscal work compared to forty**five one year ago.
Other
Minneapolis employees have decreased fifteen with Helena having twenty«*nine
persons now and thirty-*two one year ago.
Transfer of Reconstruction Finance
Corporation duties to Minneapolis caused the reduction at the Branch,
In addi
tion to dismissal wages paid fiscal employees, we paid $1,897,50 to five employees
of banking departments during the year.
As of January 1, 1938, the total number
of employees at Minneapolis and Helena was 334,
The pay roll basis for 1938 is
approximately $25,000 less than in 1937,
jpiTIREMEHT SYSTEEi
CURRENT SERVIC3S CONTRIBUTIONS
Minneapolis
Helena
$ 24,222,16
2.790.11
$
27,012,27
The above payments are the monthly contributions during 1937 based on
the actual salaries paid during each month at a rate of 5,28$ of the pay roll.
No change was made in this percentage during the year.
Payments for service prior
to March 1, 1934 are also made monthly to the Retirement System from funds already
provided,
LEGAL FEES
Minneapolis
Helena
$
9,160,64
35«00
$
9,195,64
Payments at Minneapolis were $160,64 in addition to the regular retainer
paid Ueland and Ueland,
At Helena the small disbursement of $35,00 was for a
legal opinion in connection with the payment of State income taxes by Branch
employees.
6
DIRECTORS1 FEES M S EXPENSES
Minneapolis
Helena
$ 10,943.59
1.160.50
•
$
12,104.09
.Directors® expenses were $1,752.49 greater at Head Office and $58.45
grnater ^t Helena during the past year than in 1936.
These costs at Minneapolis
were distributed as follows:
Regular meetings
Executive Committee Meetings
Discount Committee Meetings
Audit Committee
Directors1 meeting at Rapid City, S.D.
Air-conditioning Committee
Luncheons
Football tickets
$
4,134.40
130.00
5,080.00
69.00
1,273.67
60.00
159.67
36.85
$ 10,943.59
Branch directors held ten regular Board meetings during the year, none
being held in April or December.
No other meetings were held.
FEDERAL ADVISORY COUNCIL
$
995.05
Three meetings were attended by our representative, with $350.00 also
paid as our portion of secretarial expense.
TRAVELING EXPENSES
Minneapolis
Helena
$ 21,078.73
1.551.70
$
22,630.43
Included in the above are expenses of the President attending conferences
in Washington ?nd Industrial Loan Committee expense formerly shown separately.
The items below which come in this classification have required approximately
$6,600 less of expense than in 1936:
Industrial Loan Committee expense
Industrial Loan investigations
Showing Bank movie
Bank examinations
Bank visitations
Closed bank representatives
Conferences
Conventions
Retirement System meetings
Presidents* Conferences
McConnell and Grangaard (Credit training)
Open Market Committee meetings
Attending Directors1 meeting in South Dakota
(Peyton and Powell)
Attendance of Directors at opening of Board
building in Washington
Miscellaneous
$
648.75
2,594.46
1,493.55
4,008-97
4,352.65
3,113.34
710.26
1,512.21
96.10
352.15
856.65
231.71
208.88
546.25
352.80
$ 21,078.73
Branch travel expense was $800 less than in 1936 r'nd consisted chiefly of visits
TRAVELING EXPENSES - Cont*d
to "banks and attending group meetings and conferences*
Any expense incurred in
making industrial loan investigations is assumed at Head Office*
Included in
Helena travel expense is $424.85 caused through, the examination of the Branch "by
Minneapolis auditors.
FO STAGE A-!ID BXPRESSAGE
Minneapolis
Helena
$ 98,401.16
15.980.45
$
114,381.61
Compared with 1936, Minneapolis and Helena show reductions of $4,744.12
and $786.76, respectively.
There was not much change at Minneapolis in the
total postage required for money shipments, but there was a change in the volume
received rnd shipped.
We absorbed $4,140.20 more on currency sent us than in
1936 and paid $3,832.66 less on money shipped by us than in 1936.
Total postage
required on money shipments at Minneapolis during the year was $49,251.98 compared
to $48,944.44 required in 1936.
Ordinary mail postage, including transit letters,
required $40,654.38, compared to $43,771.54 in the previous year.
One reason for
the lowered postage expense was the recovery of approximately $1,850 more than
tho cost of postage used on security shipments.
of $787.06 in this respect.
One year earlier we had a loss
Surcharges included in our postage expense amounted
to $14,430.48 in 1937 and $14,969.99 in 1936.
Express charges absorbed at Minneapolis amounted to $10,356.26, compared
to $9,642.24 in 1936.
Incoming coin shipments required $5,453.44, or approximately
$500 more than last year, and checks sent to member banks by express cost $3,423.25
which was $935 greater than the amount paid in 1936.
Shipment of Government
vouchers cost $459.43, or nearly $100 less than one year ago.
operating the bank truck and mall car cost $938.01.
All payments for
This expense is $600 less
than in 1936 irhen the truck was overhauled.
At Helena more expense was incurred through shipments of money to members
than was absorbed on Incoming shipments.
Of the total expense, $9,800 was used
in money shipments, the balance covering ordinary mail, checks sent by express,
and armored car maintenance.
TKL-TCPHOHE AND TEIjEG-RAPH
Minneapolis
Helena
$ 13,358.07
4.457.38
The above costs were formerly shown separately.
$
17,815.35
The reduction of approxi
mately $2,200 from 1936 expenses is mostly in telegraph costs*
At Head Office
the proportion of salary expense was $2,342.78 in 1937, compared to $2,105,74 in
1936.
Leased wire costs were lowered from $4,563.80 in 1936 to $3,449.90 for
the past year.
The cost of messages over outside wires was approximately $1,400
less than in 1936.
Payments to telephone operators have decreased from
$3,246.35 in 1936 to $1,971.54 with this reduction reflected in the salary payments.
At Helena the total telephone expense was $160 less thru in the previous
year.
The Branch uses the commercial wires entirely, with such messages costing
$4,262.54 in 1936 and $3,977.21 for 1937.
For messages relayed by Minneapolis,
the B rmch was charged $88.52 of our leased wire expense.
PRIIITINGi STATIONERY AND SUPPLIES
Minneapolis
Helena
$ 23,327.53
3.191.06
$
26,518.59
A very marked reduction is noted in these costs for 1937, being equiv
alent to 16.4$ of the 1936 total.
There has not been any important reduction
in prices nnd there was no marked decrease in the number of employees as in 1935
and 1936.
An analysis of expenditures shows that the following were the prin
cipal causes for reduced pnyments:
Changing of safekeeping methods and filing
equipment required $2,970.59 es^ense in 1936, with $1,199.51 needed during the
past year.
1937.
Publications sent member banks and others were reduced $552.13 in
Additional film, etc., in connection with bank movie required $1,116.74
in 1936 find $200.12 in 1937.
Changes in methods nnd supplies in connection
with currency shipments reduced these expenses nearly $1,500 from such costs in
1936.
Unifome costing $792.00 were purchased for the guards in 1937, with
none bought the previous year.
All purchases are carefully considered by a committee of officers nnd
employees before ordering and requirements over $500 are referred to the
Discount Committee for action.
11
INSURANCE OH CURRENCY
AMD SECURITY SHIPMENTS
Minneapolis
Helena
$
7,521.34
JU196.fia
$
8,717.37
The decrease of $621,46 compared to the previous year ie largely the
result of greater recoveries of expense from member banks for securities shipped
for their account.
There was a small net increase in the amount of insurance
absorbed on money shipments with incoming shipment costs increasing $300 and outgoing shipments costing $200 less.
OTHER INSURANCE
Minneapolis
Helena
$ 17,608.10
2.069.05
$
19,677.15
Insurance coverage of all kinds cost less in 1937 than for many years
previous.
Changes mnde in 1936 were more apparent during the past year.
The prem-
tom for blanket bond was reduced in August 1936 from $14,000 to $13,250, bringing
a saving of approximately $400 more in 1937.
Workmen* s Compensation and Group Life
premiums were lower because of further reduction in pay roll.
Various policies
covering the building cost more than in 1936, because of the fact that we received
credit in 1936 for cancelled policies which had several years to run.
Automobile
insurance expense, which, in addition to truck and mail car Includes one-half the
premivim for collision insurance on employees* cars used on bank work, was $370 less
than one year ago.
The higher payment in 1936 was due to the holding over of the
premium due on November 1935 for policy protecting the bank against contingent
liability for damage done by employees* cars.
Jhployees Fidelity
Bankers* Blanket Bond
Workmen* s Compensation
Fire on Building, Equipment, etc.
Contributory Group Life
Automobile
1937
250.00
12,290.44
1,387.56
1,367.24
1,562.64
750.22
$ 17,608.10
$
1£2£
241.70
12,676.34
1,502.65
1,332.52
1,823.93
1.129.12
$ 18,706.26
$
Helena expense is lower by $170 because of the reduction in Branch portion
of blanket bond and changes in staff and pay roll.
TAXKS ON BANK PREMISES
Minneapolis
Helena
$ 70,987.03
-1.114.89
$
72,101.93
Until December, r;e reserved at Minneapolis $6,487.78 each month based on
the valuation we had been given one year ago and a rate of 93 mills.
Late in
December we were advised the rate for 1937 would be .10025 mills, making it
TAX3S ON BATIK PREMISES - Cont’d
necessary for us to reserve $10,621.45 to provide the required amount.
The total
of our 1936 taxes is $65,853.30, of which 75$ has been paid under protest by our
counsel.
Our tax case will bo heard in Federal Court beginning Monday, January 17,
1938.
Taxes on the present quarters at Helena were paid during November, being
reserved monthly and paid in the tax year.
grentor than in 1936.
The payment for 1937 was $144.40
The Branch also paid taxes of $366.62 on the property ac
quired for a new building, but this amount was charged off at the close of the year
after having been added to the cost of tho land.
DEPRECIATION OH B A M BUILDING^
Minneapolis
Helena
$ 28,809.34
None
$
28,809.34
This item formerly was treated as a separate charge in profit and loss at
the close of each year.
proportion each month,
Since the first of 1937, we have reserved the required
Normal depreciation for many years has been $25,665.63,
r/hich is 2$ of estimated replacement value of our property.
The additional amount
of $3,143.71 represents depreciation allowances on protection equipment, deep well
and air-conditioning machinery recently installed.
No further depreciation of
this equipment will be required, because a special reserve providing for the bal~
ance of $35,264.58 was set up at the close of 1937.
LIGHT. HEAT, PO’M R AND WATER
Minneapolis
Helena
$ 15,635.34
1.525.38
$
17,160,72
All costs of the above character were lowered during the past year at
Minneapolis.
The number of gallons of fuel oil paid for in 1937 was 112,102 at a
cost of $5,959.57, compared to 151,401 gallons in 1936 at a cost of $8,265.18.
Our oil contract gives us the advantage of any price cut and protects from increases
over a price of $5.50 per 100 gallons.
Recent purchases rcere on a basis of $5.10
for 100 gallons, compared to $5.50 one year ago.
Electricity for power and light has shown further reduction in total cost
with the expense of $9,210.38 nearly $400 less than in 1936.
Usage of city water
has been less5 the 1937 cost of $430.59 being a reduction of $208.57 from 1936.
Helena costs for gas heat required $518.29 during the past year, compared
to $509.40 one year earlier.
excess of 1936.
Light and power expense of $942.19 was $59.21 in
The Branch paid $64.90 for city water during the year.
13
REPAIRS M U ALTERATIONS
Minneapolis
Helena
$ 14*928*66
212*07
$
15,150.73
A considerable amount of renovating was necessary during the past year, some
of the work "being carried over from the previous year*
costs at Minneapolis were as follows:
The more Important items ?nd
Plastering stock room, locker rooms and other
smaller rooms, $1,723*61; new ceilings on second and third floors, $6,144*40; new
sidewalk on Marquette Avenue and Fifth Street, $1,390; Otis elevator maintenance con
tract, yearly payment $2,166*00*
In addition to the above, we charged out of expense
$2,263, the estimated cost of alterations in the currency and coin department.
At Helena no expense w^s incurred since oarly in the year.
The amount spent
by the Branch was for labor and material used in making the walls safer after the
earth tremors*
SMS
Minneapolis
$
90*00
The bank car used in transportion of movie equipment is kept in a down town
garage, for which we pay a monthly rental*
FUBNITUKB AND EQUIPMENT
Minneapolis
Helena
$ 19,258*05
. 520*51
$
19,778*56
Beginning with 1937, all purchases of furniture and equipment are made direct
charges to expense and not placed in a separate accornt as heretofore to be written
off in profit and loss at the close of the year.
Buying of equipment has been held back until recently, because of the desire
to avoid replacements until necessary*
With income in excess of current needs, it
was deemed advisable to set aside sufficient funds in 1937 to purchase equipment
needed during the early months of 1938*
We, accordingly, charged expense in December
with $16,763*91 to be applied on the following purchases:
1
4
2
1
1
3
Q
2
1
1
Duplimat
Typewriters
Burroughs, portable
Hototyper
Pay roll machine
Remington-Rand chairs
Currency counting machines
Desks
Machine for Federal Reserve accounts
Do-Hore chair
$
325*00
314*20
455*40
705*60
900*55
81*55
12,800.00
127*64
1,031*47
22.50
$ 16,763*91
The balance of the 1937 purchases amounting to approximately $3,000 consisted
of steel shelving, Chevrolet coupe, typewriters, addressograph, paintings, rugs, etc*
Credits for equipment sold amounted to $817.19 mostly fans, not needed after the in
stallation of
air-conditioning*
FURNITURE AND EQUIPMEBTC* - Cont»d
As the Branch needs were taken care of one year ago* the only purchases In
1937 covered one adding machine, one typewriter and a few minor items making a
total of $520*51*
ASSESSurns FOR EXPENSES 0?
TKE BOARD OF GOTONORS OF
THE FEDERAL RESERVE.SYSTEM
'
$
40,346.24
The above assessment has no reference to funds used in providing a building
for the Board, but for all operating coats of the Board and its staff*
During the
first half of 1937 our portion of the assessment was less than in 1936*
With the
Board moving into its new quarters during the last half, assessments were increased
•
i,
■ ;
:■
i
' 1 : ' U: ! |
making the total for the year $595*51 greater than in 1936* For the first half of
1938 our payment to the Board will be $20,085*74, compared to $17,973*51 for the
like period of 1937*
FEDERAL RESERVE CURRENCY
Original cost and shipping charges
$
43,739*82
Although new currency costs showed an improvement of $14,000 when compared
with 1936, we were $11,700 over the amount estimated at the beginning of the year*
A part of this increase came from an upward adjustment in printing costs as of July 1
from $93.50 per 1000 sheets, to $96.00 per 1000 sheets*
was distributed as follows:
The note expense of 1937
$35,662*50 to the Bureau of Engraving for printing;
$2,779.19 for postage and $4,069.20 for surcharges; $1,035.00 for insuring shipments
to Minneapolis and Helena, and $193.93 as our share of salaries paid in the Issue
and Redemption Division*
The supply of new notes needed at Helena is shipped direct from Yfashington
to the Branch, with all expense paid by Minneapolis office.
FEDERAL RESERVE CURRENCY
Gost of redemption including shipping charges $
6,359*07
This charge is made up of several items and includes insurance coverage on
our notes returned to us by other Federal reserve bmks, postage on fit notes of other
Federal reserve banks returned to bank of issue, and the cost of shipping unfit notes
to Washington*
shipping*
Ho insurance is placed on unfit notes, because they are cut before
The Redemption Agency expense at Washington is borne by the banks and we
reserved $100 monthly in 1937 for this purpose*
Y/e paid $1,117.71 for Agency expense
during the fiscal year and in addition, charged expense $400*61 to cover salaries
of Treasury employees handling redemptions.
A further charge of $117.68 was made
15
FEDERAL RBSKRVE CURRENCY - Cont*d
later in the year which will provide for all redemption costs in connection with
any of our hank notes still outstanding*
At the close of the year ue had a balance
of $1,244,24 reserved for redemption of our notes and no further amounts will he set
aside until the beginning of the next fiscal year.
MISCELLANEOUS EXPENSES
Minneapolis
Helena
$ 23,335.93
2,098.07
25,434.00
Miscellaneous payments have shown a distinct downward trend during the past
two years6 with 1937 costs of this nature $8,300 less than in 1936 and $15,500
decrease compared to 1935.
cation are as follows:
$2,268.46;
Important items ($500 or over) given the above classifi
Rental, repairs and maintenance of furniture and equipment
outside protection, vault inspection, etc. $704.51;
cleaning charges $1,118.91;
outside laundry and
post office box and postage meter rental $554.86; news
papers, books, binding, etc., $1,986.18; copies of bank examination reports $4,038.50;
commercial agency credit reports and services $620.17;
$3,449.45;
cafeteria, net expense,
entertainment of bankors and others not in bank*s employ, $1,061.19;
employees education - American Institute of Banking, $2,098.00;
Reserve Club $1,500.00;
donation to Federal
membership dues and donations $1,460.50;
our share of net
loss Foreign Department, Federal Reserve Bank, New York, $2,157.99;
miscellaneous
expenses in connection with closed banks, $683.08.
EEIMBURSABLE EXPENDITURES
$
153,449.21
The current expenses previously described are the actual costs assumed by
the Bank.
Approximately $45,000 more was recovered from fiscal agencies in 1936
than for the past year.
The 1937 recoveries wore apportioned to the following
agencies:
Treasury Department:
U. S. Government issues
Reporting foreign exchange transactions
Work Relief Checks
Adjusted Service Bonds
Reconstruction Finance Corporation
Farm Credit Administration:
Federal Farm Mortgage Corporation
Federal Land Banks
Federal Intermediate Credit Banks
Federal Emergency Administration of Public Works
Federal Home Loan Banks & Home Owners* Loan Corp.
Total
$
48,242.96
181.24
22,084.39
16,247.67
49,676.87
4,981.03
3,646.34
40.00
3,999.41
4.349.30
$ 153,449.21
PROFIT AND LOSS ACCOUNT OF
ytDOmtAL RSS.Kr.Vhi bank OF MINNEAPOLIS DURIt'G 1937
Head
£££i£&
Current earnings
Current expenses
Additions to Current Net Earnings
Profit on sales of United States Government
securities
Recoveries of expense in connection with
closed banks
Proceeds cf sale of other real estate
acquired for other than banking house
purposes
Recoveries on transit items previously
charged off
Sale of scrap metal
Profit on mutilated coin and torn and
mutilated currency
Difference account
Withdrawn from reserve for prior service
liability to Retirement System
Total Additions .......................
$
82,118.73
$
$
(~)
538.39
94,781.03
94,242.64
$ 1,350,358.70
1.052.859^28
297,499.42
$
$
82,118.73
1,904.90
1,904.90
150.00
150.00
8.64
107.02
8.64
107.02
181.36
34 ,13
.87
51.35
182.23
85.48
$
83.040.00
167,544.78
$
52.22
$
83.040.00
167,597.00
$
35,264.58
$
$
35,264.58
$
75.6Q7.22
159,672.32
Net additions to or deductions from
current net earnings
M
7,872.46
Net earnings
$
399,614.52
2tt$al
$ 1,349,820.SI
958,078.25
391,742.06
$
Deductions from Current Net taming's
Special reserve for depreciation on fixed
machinery and equipment
To reduce book value of land - old build
ing site at Helena
Incidental expense in connection with
purchase of land - new building site
at Helena
Preliminary expenses in connection with
new building at Helena
Assessment for building for Board of
Governors of Federal Reserve System
Reserve for losses on industrial advances
Counterfeits, and discount on foreign
currency
Net expense, other real estate acquired for
other than banking house purposos
Claim for reimbursement of fiscal agency
expenses disallowed
Loss on sale of francs through System Open
Market account
Contributions to Retirement System for
prior service liability
Total Deductions .....................
Dividends paid
Withdrawn from Surplus, Section 13-b
Transferred to Surplus, Section 7
Helena
4,999.00
4,999.00
681.92
681.92
891.89
891.89
33,087.60
15,000.00
33,087.60
15,000.00
11.00
157.70
168.70
263.67
263.67
34.58
34.58
256.27
256.27
$
7.432.08.
14,015.89
$
<-)
13,963.67
(--)
(-) 108,206.31
83.040.00
173,688.21
6,091.21
$
291,408.21
$
$
$
174,057.31
1,751.23
119,102.13
17
DIVIDENDS
Cumulative dividends at the rate of six per centum per
annum on paid in capital stock paid to December 319
1936
Dividends paid during 1937
Total dividends paid since organisation . . . . . .
$ 3{>9919475.20
$4,165,532.51
FRANCHISE TAX
Total of franchise tax paymenta to the United States
Government since organisation
These payments were made out of earnings during the
period 1918 to 1932. The Federal Reserve Act as
amended by Section 4 of the Banking Act of 1933 no
longer provides for payment of a franchise tax.
$ 5,202,898.50
SURPLUS. SECTION 7
Balance in Surplus Account, Section 7, Dec. 31* 1936
Dec. 31, 1937 Transferred
Surplus, net earnings
during 1937
$ 119,102*13
Dec. 31, 1937 Transferred from Surplus to Reserve for
Losses and Contingencies
82.118.73
Net Credit
Balance in Surplus, Section 7, January 1, 1933 , .................
$ 3,116,430.29
36«983.40
$ 3,153,413.69
SURPLUS. SECTION 13>B
Balance in Surplus, Section 13-b, December 31, 1936
December 31, 1937 Withdrawn - Net expense over income
on funds invested, after establishing a reserve of
$15,000 for possible losses on industrial loans
Balance in Surplus, Section 13-b, Jnnuary 1* 1938 . . . . . .
$ 1,002,914.21
1.751.23
$ 1,001,162.98
RESERVES
(Other than Bank Premises Depreciation Reserves)
Reserves at beginning of year
$ 2,097,232.00
Credits during years
Recovery of loss on discounted bills
$
Net profit on sales of U eS. Government securities thru
Federal Reserve System Open Market Account transferred
from Surplus? Section 7 to Eeserve for Losses and
Contingencies
Transferred from Profit & Loss to Reserve for losses
on Industrial Loans
Total Credits ............ ....................... $
Debits during year;
Loss on discounted bills
Payments of prior service liability to Retirement
System
Total Debits . . . . . . . . . . . . . . . . . . . .
Net Credit............... .....................
Reserves after closing entries for:
Self Insurance
Trior service liability to Retirement System
Losses and contingencies created from net profits
prior to 1937
Losses and contingencies created from surplus sub
sequent to January 1„ 1937
Losses on bills discounted
Losses on Hungarian credits
Looses on past due industrial advances
Total January 1, 1938 . . . . . .................
4.33
82,118.73
15,000.00
97,123.06
$
922.53
$
83*040.00
83,962.53
$
13,160.53
515,379.97
166,088.00
1,185,866.21
82,118.73
93,444.00
52,495.62
$ 2,110,392.53
.18
PROFIT AND LOSS
As indicated on preceding pages, our current earnings in 1937 were $1,350,358 „70
with current expenses $1,052,859.28,
Each year there are quite a number of items
credited or charged, direct to profit and loss which, ‘because of their character, are
not penaittedj under Board instructions, to he included with current income or expense*
Miscellaneous additions to net earnings in recent years have been helpful in covering
our needs.
For the first time since 1932, however, we have h^d sufficient current in
come to take c- re of all needs including dividends and depreciation.
In t-.iis respect
our current income has been sufficient only because of the fact that our operating
costs have been lower than in previous years.
The reduced expense has also come at a
time when collection of interest end expense at closed banks have ceased to be promi
nent items in our yearly calculations*
The only important addition to our current
earnings during 1937 was $82,118.73 obtained as the not profit on Bales of United
States securities from System Account.
This la the smallest proportion of profit we
have received in recent years and is $109,197*83 less than the amount received from
the some source in 1936.
ivith reference to the profit of $82,118.73 from System sales, it will be noted
that the sane amount was added to account “Reserve for Losses and Contingencies'* but
not as a direct charge to profit and loss as heretofore.
The Board has indicated
that reserves of this character should be sot aside only as a charge to Surplus Account.
Amounts collected by our representatives at closed banks to be applied on expense
created prior to 1935 amounted to only $1,904.90, in comparison with $18,705.01
collected during 1936.
The credit of $83,040 in profit and loss represents the transfer, from the
amount set aside at the close of 1935, of the 1937 portion of the bank*s contribution
to the Retirement System for service prior to March 1, 1934.
It will be noted that
the 1937 payment to the Retirement System was handled as a direct charge to profit
and loss.
In 1936 the payment was Included with current expenses.
For the first time since our organization the various difference accounts at
Minneapolis and Helena show a net credit.
There have beenmrmy small differences
with results for the year as follows:
MIHLKAPOLIS
Net Credit
General Accounts
Transit Department
Cash Department
$
1.35
$
$
2.31
33.17
HELENA
Transit Department
Cash Department
48.30
..,.3^5
$1.35
$ 86.83
$
85.48
PROFIT AMD LOSS - Cont'd
Other miscellaneous income included $150 paid us in connection with the sale
of other real estate taken to secure debt at closed banka; $8.64 representing recovery
of transit items previously charged off; $107,02 from the sale of metal scrap.
We also
received $182,23 from sale to the Mint of mutilated and worn coin which had been pur
chased by us in small lots at bullion value.
Including current earnings and the miscellaneous income previously describeds
total Income for 1937 was $1,517*955.70*
The distribution of these funds was made as
follows;
CURRENT EXPENSES
Minneapolis
Helena
$ 958,078,25
94.781,03
$ 1,052,859,28
The 1937 budget estimates placed total operating costs at $1,023,754,
After
we had prepared our estimates* we were advised by the Board that normal depreciation
on building and fixed machinery and equipment should be treated as an expense.
Such
depreciation charged expense in 1937 amounted to $28,809.34, which brings the final
results quite close to total estimates.
Compared to the actual costs of the previous
year the 1937 current expenses are $90,011,35 less* detail of which is given in the
Expense analysis.
SPECIAL RESERVE FOR DEPRECIATION ON FIXED
MACHHP3RY AND EQUIPMENT
Minneapolis only
$ 35*264.58
This amount represents the balance of $40,378.80 expended since 1934 on pro
tection equipment, water pump installation and new air-conditioning equipment.
At the
close of 1934 depreciation for all our original fixed machinery and equipment had been
provided.
The special reserve now approved by the Board eliminates any depredation
needs of this character at Minneapolis in 1938, unless some major change is later found
necessary.
jamUQTIQa^LJBQQK VALUE OF
PLD BUILDING SITE - HELENA
$
4,999.00
Since the close of 1936 the book value of Branch premises was $5,000* repre
senting the site only.
There had been no change in the book value of the land since
the Helena office was opened.
With the new premises to be occupied during 1937, the
old site is of questionable value.
The Board authorized reducing the book value to
the estimated market value which we will now show in our records as $1.
CHARGE-OFF OF INCIDENTAL EXPENSES
IN CONNECTION WITH LAUD ~ HSLSNA
$
681.92
These were items which in no way increased the value of the land and should
not appear in the book value.
They were as follows:
Fee for funds held in escrow
Cost examination of title
Quit claim deed re: replacement of sewer
City, County and State taxes
$
PRELIMINARY EXPENSES IN CONNECTION
WITH HEW BUILPIN& - EKLBKf
5.00
150.00
160.30
363.62
$
891.89
This total does not include architects fees tut does include fees paid
directors for attending "building committee meetings.
Items which we consider proper
charge-offs are listed below.
Travel expenses of Messrs Towle and Shanley in
connection with building matters
Published notice to contractors
Survey of property showing elevations
Incidental expense incurred at Head Office
$
748.31
15.00
30.00
98.58
ASSESSMENT FOR BUILDING FOR BOARD OF QOVERNORS
OF THE FEDERAL RESERVE SYSTEM
$
33,087.60
The above charge represents the final payment in connection with the Board
building and makes a total of $105,007.19 contributed by this bank during the past
three years.
RESJSRVE FOR LOSSES ON
INDUSTRIAL ADYANCES
$
15,000.00
It was estimated that our losses in connection with industrial loans would
reach the amount stated.
As the excess of profits from industrial loans over ex
penses was $13,208.52, we withdrew from surplus account, Section 13»b, $1,751.23, the
amount necessary to provide the Treasury proportion of the required reserve, the bal
ance of $40.25 being assumed by the bank.
The amount of funds originally made avail
able by the Treasury Department for industrial loans was $1,007,746.96 and this
amount has been reduced by $6,583.98 because of an excess in expenses during 1934
amounting to $4,832.75 and the additional amount just charged to provide the estimated
reserve.
COUNTERFEITS AND DISCOUNT
ON FOREIGN CURRENCY
Minneapolis
Helena
$
157.70
11.00
$
168.70
We continue to have more losses from counterfeit money than from shortages in
the count.
During the past year the amount charged off for counterfeits is less than
one-half the amount so absorbed in 1936.
JfBT MPEKSE - QTHKR RfclAL ESTATE
OTHERWISE ACQUXRBD
$
263.67
This charge represents the excess of expense over income in connection with
property we have taken over to protect our interests at closed banks.
The costs are
for taxes, insurance of various kinds, cost of seed, threshing expense, offset in part
by soil conservation payments, proceeds from crops, etc.
FISCAL AGENCY REIMBURSABLE
KXPENSK PISALLOY/ED
$
24.58
Payment of above amount refused by Treasury Department because originals of
telegrams presented for reimbursement in June, 1935, were reported missing.
Telegraph
company could not produce copies.
LOSS ON SALK OF FRAffCS
THROUGH SYSTEM ACCOUB?
$
256.27
This was an exchange loss on 2,100,000 francs converted into dollars in con
nection with Foreign investments made through System Open Market Account.
DIVIDENDS PAID
$
174,057.31
The average amount of capital stock necessary to produce above dividends is
$2,900,950, or a reduction of $83,250 in the average holdings of members during 1937.
Paid in capital stock on December 31, 1937 amounted to $2,893,050, compared to
$2,943,050 at the close of 1936.
Membership was made up of 404 national hanks and
66 state banks on December 31, 1937, a reduction of 13 national and 1 st^te member
during the year.
Total dividends paid since organization, $4,165,532.51.
TRANSFER TO SURPLUS. S5CTI0N 7
$
119,102.13
Under the Banking Act any profits remaining after providing for operating
costs, depreciation and dividends must he placed in Surplus Account.
possible losses may then he arranged for "by a charge to Surplus.
Provision for
Under this plan
we have charged Surplus $82,118.73 and transferred a like amount to "Reserve for
Losses and Contingencies” being the net profit on 3ales of Governments from System
Account during 1937.
The net credit of $36,983.40 increases Surplus, Section 7, to
$3,153,413.69 on December 31, 1937.
TRANSFER FROM SURPLUS. SECTION 13-3
$
1,751.23
Net earnings from Section 13-b funds used in making industrial advances were
$12,911.76.
M
the Treasury portion of estimated losses on such advances is $14,662.99,
the above charge to Surplus was necessary.
FEDERAL RESERVE B A M OF MINKEAPOLIS - HEAD OFFICE
RETORT OF AUDITS - YEAR 1937
Dr>tes of Audits
GASH
Cash in Vault - Bank Officers* Reserve
Cash with Tellers
F.R, Ho tea in Transit from Other Federal Reserve Banks
F.R. Notes forr/arded for Redemption
Other Cash in Transit
Redemption Fund - F. R. Notes
Inter-District Settlement Fund
F.R. Agent1s Gold Certificate Fund
Unissued F.R. Curre cy held by F.R. Agent
Currency Received account of Non-Member Banks
BARKING ASS STS
Bills Discounted
Industrial Advances
Bills Bought in Open Market
Participation in System Open Market Acct. U.S.Securities
Participation in Investments through Foreign Banks
Participation in Foreign Loans on Gold
2-15, 4-19,
2-15, 4-19,
Dally
Daily
M-15, 4-19,
Monthly
Weekly
2-15, 4-19,
2-15, 6-24,
Currently
6-24, 8-24, 12-8
6-24, 8-24, 12-8
6-24, 8-24, 12-8
6-24, 8-24, 12-8
8-24, 13-8
3-9, 6-2, 10-11
3-9, 6-2, 10-11
3—9, 6—2, 10—11
3-9, 6-2, 10-11
3—9, 6—2, 10—11
3—9, 6—2, 10—11
UNCOLLECTED ITEMS
Transit Items - F.R. Banks
Transit Items - District 9
Exchanges for Clearing House
Federal Returns and Other Deductions
Return Items - Member and Non-Member Banks
Government Suspense Account
Collection Items Debits - Misc. Vault Coupons
Coupons on H^nd
Due from Branch
Checks and Other Cash Items
3-30, 6-14, 7-24, 10-18
3-30, 6-14, 10-18
3-30, 5—20, 6-14, 10-18
3-30, 5-20, 6-14, 10-18
3-30, 5-20, 6-14, 10—18
3—30, 6-14, 10-18
1-20 to 2-3: 11-2 to 11-15
1-18, 4-27, 7-11, 10-25
Monthly
3-30, 5-20, 6-14, 10-18
MISCELLANEOUS ASSETS
Misc. Assets acquired acct. Industrial Advances
Industrial Advances past due Three Months
Other Bills and Securities pas t due Three Months
Misc. Assets acquired in Settlement of Claims
account Closed Banks
Claims account Closed Banks
Advances to protest Collateral
Other Real Estate
F.D.I.G. Stock
Fiscal Agency Expenses Reimbursable
Interest accrued on U.S. Securities
Interest accrued on Bills and Advances
Premium on Securities
Overdrafts
Coupons paid before Maturity
Deferred Charges
Difference Accounts
Sundry Items Receivable
Suspense Account - General
Cost of Federal Reserve Currency
Other Current Expenses
Dividends accrued since Closing Books
Profit and Loss
3-15
3-15
3-15
3—15
2-15, 6-24, 8-24, 13-8
Monthly
3-9, 6-2, 10-11
Monthly
3-9, 6-2, 10-11
Currently
2-20, 8-10
Semi-monthly
Currently
Monthly
Weekly
Currently
Currently
Monthly
Monthly
BANK PREMISES
Land
Buildings
Fixed Machinery and Equipment
Currently
Currently
Currently
3-9, 6-2, 10-11
3-9, 6-2, 10-11
3-9, 6-2, 10-11
FEDERAL RESERVE NOTES
Federal Reserve Notes Outstanding
DEPOSITS
Member Bank Reserve Accounts
Non-Member Clearing Accounts
U.S. Treasurer - General A.ccount
Foreign Banks
Officers* Checks
Federal Reserve Exchange Drafts
Other
Deposits
2-15, 4^19, 6-24, 8-24, 12-8
Monthly
Monthly
Monthly
3-9, 6-2, 10-11
Monthly
Monthly
Monthly
9
FEDERAL RESERVE BAKE OF MINNEAPOLIS - HEAD OFFICE
RE3 0RT OF AUDITS - YEAR 1937
Dates of Audits
Deferred
Deferred
Deferred
Deferred
Deferred
DEFERRED AVAILABILITY ITEMS
Credits - Member end Non-Member Banks
Credits - Other Federal Reserve Banks
Credits - Government Items
Credits - Misc. Vault Coupons
Credits - Non-Cash Collections
Monthly
3-30, 6-14, 10-11
3-30, 6-14, 10-11
1-20 to 2-3; 11-2 to 11-15
1-20 to 2-3: 11-2 to 11-15
CAPITAL STOCK AND SURPLUS
Capital Stock Paid in
Surplus Fund (Section 7)
Surplus Fund (Section 13-b)
10-31, 11-30, 12-31
2-6, 3-4, 4-15, 6-30, 7-31, 9«30e
Currently
Currently
RESERVES FOR:
Self-Insurance
Prior Service Liability to Retirement System
Losses not elsewhere provided for
Currently
Currently
Currently
EARNINGS FEfoM:
Bills Discounted
Bills Purchased
Industrial Advances
Commitments to make Industrial Advances
Participation in System Open Market Acct. U.S. Securities
Investments through Foreign Banks
Deficient Reserve Penalties
Miscellaneous
Daily
Daily
Daily
Monthly
3-9, 6-2, 10-11
3-9, 6—2, 10—11
Currently
Monthly
MISCELLANEOUS LIABILITIES
Unearned Discount - Bills Discounted
Unearned Discount - Bills Purchased
Unearned Commitment Fees
Discount on Securities
Accrued Dividends Unpaid
Sundry Items Payable
Suspense Account - General
Monthly
Monthly
Monthly
3-9, 6-2, 10-11
Monthly
Monthly
Weekly
MISCELLANEOUS OPERATIONS AND ACCOUNTS SUBJECT TO AUDIT
COLLATERAL AND CUSTODIES
Securities held as Collateral for:
Bills Discounted
Industrial Advances
War Loan Deposits
2-20
2-20
2-20
Securities held in Safekeeping
Cash Held in Custody for Treasury Department
2-20
2-15, 4-19, 6-24, 8-24, 12-8
FISCAL AGENCY OPERATIONS
Subscriptions to and Allotments of U.S. Securities
Balances due from Depositary Banks
Securities on Hand
Securities in Process of Redemption, Exchange* Transfer
of Registration, Etc., - Due from Treasury
Securities Delivered
Coupon Securities Redeemed
Reports to Treasury Department - Chocked
Purchase and Sale Transactions
2-8, 5-17, 8-10
Daily
Currently
Monthly
Monthly test checks
RECONSTRUCTION FINANCE CORPORATION
4-29
NON-CASH COLLECTIONS
1-20 to 2-3l
BALANCE SHEET AUDIT OF HELENA BRANCH
9-16
Currently
2-20
2-8, 5-17, 8-10
11-2 to 11-15
9
4
FEDERAL RESERVE BANK OF MINNEAPOLIS - HELENA BRANCH
REPORT OF AUDITS - YEAR 1937
CASH
Cash in Vault - Officers* Reserve
Cash \7ith Sellers
Dates of Audits
1-19, 2-6, 3-16, 4-12, 5-4, 6-7, 7-19, 8-24, 10-7, 12-6
1-19, 2-6, 3-16, 4-12, 5-4, 6-7, 7-19, 8-24, 10-7, 12~6
earning assets
Bills Discounted
10-5
UNCOLLECTED ITEMS
Transit Iteme-Federal Reserve BanJcs
Transit Iteme-Montana Division
Exchanges for Clearing House
Federal Returns rnd Other Deductions
Return Items-Member & Non-Member Bks
Government Suspense Account
Coupons on Hand
Checks and Other Cash Items
2-6, 3-24, 4-10, 5-20, 6-26, 7-19, 8-16, 10-11, 12-2
2-6, &-22, 4-26, 5-25, 7-7, 8-16, 10-11, 12-2
1-4, 2-6, 3-16, 4-10, 4-26, 5-28, 7-7, 8-16, 10-11,12-2
2-6, 3-22, 4-26, 5-25, 7-7, 8-16, 10-11, 12-2
2-6, 3-22, 4-26, 5-25, 7-7, 8-16, 10-11, 12-2
2-6, 4-19, 6-24, 8-16, 12-2
1-16, 2-6, 3-8, 4-13, 5-10, 6-11, 7-13, 8-9, 9-15,
10- 20 , 12®8
1-4, 2-6, 3-16, 4-10, 4-26, 5-28, 7-7, 8-16, 10-11,12-2
MISCELLANEOUS ASSETS
Fiscal Agency Expenses Reimbursable
Overdrafts
Deferred Charges
Difference Accounts
Suspense Account - General
Expenses
Monthly
Currently
Weekly
Weekly
Weekly
Currently
DEPOSITS
Member Bank Reserve Accounts
Non-Member Clearing Accounts
Officers* Checks
Monthly
Monthly
Monthly
DEFERRED AVAILABILITY ITEMS
Deferred Credits:
Member and Non-Member Banks
Other Federal Reserve Banks
Government Items
Non-Cash Collections
Monthly
2-6, 3-24, 4-10, 5-20, 6-26, 7-19, 8-16, 10-11, 12-2
2-6, 4-19, 6-24, 8-16, 12-2
2-6, 6-9, 31-2
EARNINGS FROM;
Bills Discounted
Deficient Reserve Penalties
Monthly
Currently
MISCELLANEOUS LIABILITIES
Unearned Discount - Bills Discounted
Sundry Items Payable
Suspense Account - General
Monthly
Monthly
Weekly
MISCELLANEOUS OPERATIONS AND
ACCOUNTS SUBJECT TO AUDIT
Non-Cash Collections
Non-Cash Collections - Test check
Cash Held In Custody for Treasury
Department
3-6 to 3-15: 6-9 to 6*22: 11-2 to 11-16
1-26, 3-6, 4-20, 5-19, 6-23, 7-16, 8-23, 9-13, 10-20,
11«2
1-19, 2-6, 3-16, 4-12, 5-4, 6-7, 7-19, 8-24, 10*7,12-6
25
BANK PRBKISBS - YMAR 1937
Helena Branch Helena Branch
Head
Present
Neu
Office_____ Property_______ Property
LAMP
Gross Book Value:
Beginning of year
Additions during year
Deductions during year
End of yenr
$ 500,520.66
5,000.00
$ 500,520.66
1.00
15,681.92
___ 681*32
15,000.00
515,521.66
BATIK BUILDING
Gross Book Value:
Beginning of year
Additions during year
Deductions during year
ICnd of year
$ 1,283,281.50
Reserve for Depreciation:
Beginning of year
Credits during year
Bnd of year
13,081.91
891.89
12,190.02
$ 1,283,281.50
135,000.00
135,000.00
«•
$
307,987.56
25*665.60
333,653.16
135,000.00
-
$
949,628.34
$
ITet “book value end of year
135,000.00
—
12,190.02
961,818.36
FIXED MACHINERY AMD EQUIPMBHT
Gross Book Value:
Beginning of year
Additions daring year
I5nd of year
$
$
Reserve for Depreciation:
Beginning of year
Credits during year a. Iloraal depreciation
1). Other
$
628,666.15
31.709.20
660,375.35
16,108.99
m
16,108.99
-
621,967.03
16,108.99
-
3,143.74
35.264.58
660,375.35
mk
16,108.99
Hot Book Value end of T e r r ...........................
Grand Total - Net Book Value of Bank Premises end of Year
#■»
-
None
$ 1,477,340.02
BAHK PRIfttlSKS
More repairs and alterations were carried out during the past year than
in any other year since our occupancy of tho building.
This work required an
expense of $14,938.66 in addition to the labor contributed by our own salaried
workmen.
A heavy item in the repair work was for plastering, a great deal of
this being necessary in the basement rooms and on the second and third floors.
New ceilings on the upper two floors, replacing the old sound-proof material,
cost $6,144.40.
Painting and renovating was done on all floors by our own men,
with considerable expenditure for materials.
A new sidewalk was constructed on
the Marquette Avenue and Fifth Street sides at a cost of $1,390.00.
The Otis
Elevator maintenance contract requiring yearly payment of $3,166.00 is .also in
cluded in the total for repairs and alterations.
Provision for rearranging the
Currency Department was made by a charge to Expense of $2,263.00 in December.
This work is now under way.
Expenditures during the year for the efficient operation of the building,
but charged against Fixed Machinery and Equipment Account, were as follows:
Air-
conditioning, $29,064.04; automatic sprinklers, $229.95; water cooling system,
$2,080.56; hot tsater herter, $334.65.
Because the amount of several items could not be foreseen, our building
operating costs were in excess of the budget.
This, as previously noted, was
especially true in connection with repairs and also in the hi$ior t^xes paid, com**
pared to 1936.
After deducting $10,475.95 received as rental income from fiscal
agencies, total operating cost of our building was $157,822.01, compared to
$117,309.71 in 1936.
Included in 1937 costs was depreciation of $28,809.34,
formerly treated as a direct charge to profit and loss.
The 1938 building operat
ing costs is estimated at about $10,000 less than in 1937, but a favorable decision
in our tax suit could bring a substantial credit in Expense for amounts reserved
in 1937 ^nd 1938, and a further credit in Profit and Loss based on the 1936 assess
ment which is being tested in Court.
Total salaries paid in connection with building work amounted to $30,817.75,
compared to $30,755.53 one year earlier.
Staployees, other than charwomen, numbered
15 on January 1, 1938, and two persons less than on January 1, 1937.
Fuel purchased
cost $5,994.37 during the past year, with $9,640.97 expended for power and li$it.
In 1936 tho fuel bill was $8,374.18, and light and power costs $10,248.20.
BANK PI&JMISKS — (Depreciation)
Beginning in 1937, we are required to charge in "Expense monthly, a proportion
ate amount of depreciation instead of m i ting until the close of the year and making
a direct chrrgo to Profit and Loss,
On the "building proper, we have, for the past
ten years, set aside $25,665.63 Tshich is 2$ on a gross hook value of $1,283,281,50.
The original cost of fixed machinery and equipment had ‘been provided through amounts
reserved to the close of 1934.
Partly in 1934 and since that time we have added
$40,378.80 to our fixed machinery and equipment, frith the air-conditioning equip
ment installed during 1937 making up most of the cost.
In view of the fact that
we had sufficient excess earnings to do so, re set aside a special reserve of
$35,264.58 at the close of 1937 to provide the full cost of all added machinery and
equipment.
With the special reserve and $3,143.74 normal depreciation provided
during the year, a total of $660,375.35 has "been accumulated for building equipment
depreciation, leaving no further charges needed in 1938.
The normal amount provided for building depreciation raises the total to
$333,653.16 and makes the net "book value of our building $949,628.34.
At Helena, the total depreciation for the building and equipment now in
use has already been provided.
The net book value of our Branch property had been
$5,000, represented by the land.
On December 31, 1937 we 'Charged profit and loss
$4,999.00 and wrote the book value down to $1.00.
ICT PROPERTY AT HELENA
In July 1937 a resolution was approved authorizing the Branch officers to
exercise the option held on the site located on the comer of Lawrence Street and
Park Avenue, Helena, at a total cost of $15,000.
Under the agreement, taxes of
$366.62 were paid on this property during 1937.
Other items amounting to $315.30
were added to the Land Account and written off at the close of the year.
The Land
Account is carried on the books at Minneapolis for $15,000.
Work done in connection with the building cost $13,081.91 during 1937.
Incidental expenses, mostly for traveling, amounting to $891.89, were written off
on December 31, 1937, leaving a net book value for the Helena building at the close
of the year of $12,190.02.
The Building Account will be carried on the books at
Helena until completed.
BANK PREMISES - (Taxes)
(See under Expense)
LOANS. REDISCOUNTS AND ACCEPTANCES
While the activity in this department has increased in 1937, it may
"be said that there is still very little demand from member banks for discount
accommodations*
During the past year 27 banks have availed themselves of the
rediscount and loan privileges, having borrowed an aggregate amount of $16,189,032.34,
Two hundred thirty-three items were received.
On December 31, 1937 loans and re
discounts amounted to $174,980,81 as compared with $3,000*00 at the end of the
previous year, aad $33,478,38 on December 31, 1935,
As reported a year ago,
there was a several month period in 1936 during which member banks were entirely
out of debt to the Federal Reserve Bank,
During 1937 the only period that member
banks were entirely out of debt to us was from April 1 to April 10,
Our discount
rate remained at 2$ until August 24, on which date it was reduced to li$.
The activities of the Industrial Loan Division commenced in August,
1934, advances for working capital being made to industrial and commercial enter
prises.
Under the Act such advances may be made for a period of not exceeding
five years.
Interest charged by the Federal Reserve Bank of Minneapolis on
such loans is six per cent.
The volume of activity in industrial loans showed a decrease for the
year 1937, during which 32 advances were made in the aggregate amount of $217,750.35
with participating institutions taking $53,411.00 of this amount, leaving a net
advanced by the Federal Reserve Bank of $164,339.35.
Repayments on advances
during the year reduced the balance $387,749.02, leaving a balance of $840,402.34
at the close of the year.
Repayment of 12 loans in the amount of $30,759.15 can
be traced to refinancing during 1937.
In this year commitments to make industrial
loans amounted to $25,000.00 and the contingent liability as a result of commitments
outstanding at the end of the year was $50,666.19.
In addition to advances made and commitments given during 1937, three
loans totaling $815,000.00 were recommended favorably by the Industrial Advisory
Committee and approved by the Discount Committee.
process of being closed at this time.
One of these loans is in the
Closing of the other two loans is delayed
pending compliance by the applicants with certain conditions imposed*
DAILY A VERAS S HOLDINGS OP JSARfllflGASSETS
B ills
Bills Dis
counted
1937
193<>
1935
193^
1933
1932
1931
1930
1929
$
26 lP9lU
47,206
US , 594
531,212
6 ,267 .577
ll,9 3 3 * gOl
M i s , 935
U,042,859
21.624,673
Industrial
Advances
Purchased
;
60.465
60,864
69.523
589 ,43 s
2 .936,456
1,649,414
■is
723.050
1.314,784
1.936.117
265,476
7.607,324
7.870.007
6.328,387
Uo S tt Se
curities
$
83,024,195
82.208,224
72.398.064
65.803,357
58.209,321
43.724,651
26,761,330
22,786,786
9.812.359
AVERa GU
Bills Dis
counted
1937
193°
1935
19^4
1933
1932
1931
1930
i- 755 *
2.008
2.090
2o 9^2
3.538
3«507
3.500
4,265
4CS45
Bills
Purchased
*7672
-921
.844
-5^7
1.2S0
3-961
1«.748
2.904
4.902
Industrial
Advances
6.G00$
6„000
6.000
6„000
.
Federal Into
Credit Bank
Debentures
hate
Up So Se
curities
J
0
0
0
0
0
6S,904
156,671
0
2 ,579 ,65s
Municipal
Warrants
$
$
2,5^5
64,520
152.197
97.671
34,220
140,326
Commitments to
make Industrial
Advances
$
1.635
6,308
1,469
1 H .093
0
0
6.275
0
2S.340
60,538
94.390
92.568
OF aARCINGS ON EARNING ASSETS
Federal Int.
Credit Bank
D eben tu res
0
0
0
G
0
2-773#
2.598
0
4.763
1-557*
1*539
1-785
2.046
2*027
2.107
2.233
3*280
3.960
Discount
Discount
Discount
Discount
Discount
Discount
Discount
Discount
Discount
Discount
Discount
Discount
Discount
Discount
Discount
Foreign
Loans on
Gold
rate
rate
rate
rate
rate
rat*
rate
rate
rate
rate
rate
rate
rate
rate
rate
effective
lowered
lowered
lowered
lowered
raised
raised
raised
lowered
lowered
lowered
lowered
lowered
lowered
lowered
Municipal
Warrants
0
0
0
3 .500$
3 c500
3.500
3.500
3*877
4„989
Foreign
Loans on
Gold
1 0463$
1.5 9 5
1.5 5 5
1.500
0
0
1.779
0
5.031
January 1, 1922
January 11, 1922 to
August 1 5 , 1922 to
October l4„ 1924 to
Seuternber 13,1927 to
February 8t 1928 to
April 25.. 1928 to
May 14, 1929 to
February S, 1930 to
April 1 5 . 1930 to
September 12. 1930 to
March lb, 1^3^ to
January 8, 1935 to
May 14, 1935 to
.August 24. 1937 to
Commitments to
make Industrial
Advances
I.052g
I.O38
1.009
9$
5 i
4 *
3^.
4 %
4|$
5 i
4£<
4 i
3 $
2&«
2 i
F A I L F, 3)
B A N K S
INDEBTEDNESS
No banks suspended during 1937 that were indebted to us*
Principal liability December 31, 1937 ...........................$
Estimated value of collateral to apply on this b a l a n c e .........
116,700*10
44.400.10
.Estimated Loss (Against a $93,440.00 reserve) ....................$
72,300.00
It is estimated that from the collateral held, we will collect,
in addition to the $44,400.10 above-mentioned, approximately
$29,000.00 which will be applied on expense incurred and in
terest accrued.
COLLECTIONS
Collections for 1937 in reduction of original liability......... $
In addition, overpayments of original liability which will
be applied on recovery of expense . .............. ............
53,901.63
Total collections for 1937 ................................... $
62,669.44
8.767.81
EXPENSE
Cost of field operations for year 1937 ..........................$
Recovery during 1937 ...........................................
6,581.97
1,904.90
CHARGES TO SPECIAL RESERVE
Aggregate charges to special reserve at close of 1936 ...........
Charges for 1937 ..............................................
$
Total charges to special r e s e r v e ........... ................. $
Probable future charges . . . . .
252,991.12
918.20
253,909.32
............................
73.?00.00
$
326,209.32
BSAL ESTATE
V/e own 21 pieces of real estate carried on our books at $21.00 consist
ing of 20 farms (improved and unimproved) and one small-town house, which proper
ties are situated in North and South Dakota and Montana.
Some ye^rs back in an
endeavor to protect our collateral, we obtained this real estate. Voluminous re
ports could be written regarding this real estate, but suffice to sajr that our
ultimate recovery will be exceedingly small.
For some considerable time, the
income derived from this real estate has been virtually negligible.
31
CHECK COLLECTION FUNCTION
(Head Office Only)
The Check Collection Department handled 28,778,033 cash items totaling
$4,902,409,983.53 during the year 1937, which was only 81,592 items less than the
number handled daring 1935.
V/e are giving below the number and amount of items
handled, the average number of employees and the total expense of the Check Collec
tion Function for the years 1936 m d 1937 nnd also for 1930 for comparison:
Isos
Number
sLJAsm
1937
1936
1930
28,778,033
28,859,625
21,139,178
Average
Number of
M z& ojs& si
$4,902,409,983.53
4,754,957,277.09
3,224,678,472.48
Total
3 s m mt
57.25
60.91
43.57
$ 90,839.75
92,961.49
77,873.79
tfe hcmdled approximately the some number of chock3 in 1937 as in 1936
with less employees and a reduction in expense.
The U. S. Government made a
lnrge reduction in the work relief pay roll during 1937 nnd consequently we
hnndled 1,626,429 less checks in 1937 than in 1936.
However, the volume of
city ~nd country checks increased which offset to a large extent the reduction
of work relief checks handled in 1937.
The following table indicates the number of items handled by the sub
divisions of the Check Collection Function for the years 1936 and 1937:
Items Handled on
1936
1,I5S,3S$
y 95-9 9* /
),
Llftx7 v
Twin City Banks (Clearings)
Member and non-member Banks (This district)
Other Federal Reserve Districts
Direct to Member banks other F. R. Districts
To Helena Branch, Helena, Montana
Z^.2^7 Trensurer of the United States
— U.S. Government Y/ork Relief Checks
4,094,207
15,627,522
2,139,902
49,382
53,647
2,690,227
4.204.738
28,859,625
1937
4,368,218
16,231,681
3,101,316
48,524
63,f77
2,385,108
2.573.309
28,778,033
The cost of handling 100 items in three units of this function for the
years 1930, 1936 and 1937 follows:
Year
City Checks
(Clearings)^
Country Chocks
(.Outgoing). .
1937
1936
1930
17.9 cents
18.0
"
20.1
21.6 cents
20.02 «
24.9
*
Return
Items _
$
1.22
1.28
1.36
9
CHSCK COLLECTION FUNCTION - Continued
The average number of Items handled per person per d*y in these three
units during tho years 1930, 1936 and 1937 follows:
Ye.ag
City Checks
tCleariiursl
Country Checks
(Outgoing)
1937
1938
1930
2,793
2,537
2,156
2,126
2,273
2,063
Return
Items
496
432
482
Daring 1937 we handled 260,032 return items totaling $26,951,732.58
as compared to 244,773 items totaling $22,545,802.82 in 1936.
Included in
these figures are nonpar items sent us in error, noncrsh items forrarded to
us as c-sh items, items returned by drawee banks for various reasons rnd other
items returned to depositors.
The daily average number of cosh letters received and sent, the number
of banks reported closed, number voluntarily liquidated, number reopened, and
the number added to or removed from our par list during the years 1936 and
1937 are given below.
lear
. Hoad office only___ ___________ _______________________________________
Letters
Letters
Banks
Banks vol~ Banks
Banks add- Banks rereceived
sent
reported untarily
reported ed to our moved from
daily______ drilly... closed___ llflflldfltefl..
list...
1937
1936
1,252
1,263
958
851
16
4
3
8
0
0
1
2
20
32
During the first part of June, 1937, we commenced operating on a 40 hour
per week basis in the Check Collection Department.
This change required addition
al employees and increased our expense in the second half of 1937 over our cost
for the first six months of the year.’
W1UQASE COLLECTIONS
(Head Office Only)
As a result of the drouth conditions of 1936 rrhich caused a sharp
decrease in the number of grain drafts, rm handled 110,954 fewer city collect
tions during the first seven months of 1937 as coopted to the same period of
the previous year.
Daring the last five months, tie handled 163,140 more city
collections, including grain drafts, than during the same period in 1936.
The number of country collection items handled during 1937 -eras 65,437.
There m s a decrease in the number of items handled in each of the first eleven
months of the year, compared to the same months in 1936, with a slight increase
during the month of December resulting in a net decrease of 7,394 Items.
The
value of the items handled, however, increased from $48,271,000 for the year
1936 to $52,397,000 in 1937.
Coupon and country security collections fell off each month in 1937,
showing a total decrease of 4,603 items for the year.
Most of this reduction
is due to a consolidation of records in our Safekeeping Department, resulting
in all coupons of like issues owned by a member bank being placed in a single
envelope.
Member banks forwarded 6,851 collections totaling $17,585,000 direct to
other Federal Reserve Banks for their credit with us during 1937, and 7,026
items totaling $16,245,000 during 1936.
C0?£PART SPIT OF MOMBISR OF ITEMS RECEIVED FOR COLLECTION
G&by..C-QJLlectioaa
1326_______ Xm .
632,713
684,839
1226__________ 1922
72,831
65,437
Secarlty Collections
1226___________ 1922
48,229
43,626
Amount (000) omitted
1936
1937
$255,632
260,083
$ 48,271
52,397
$ 47,326
32,974
BJ3P0RT OF SAFSKI3EPIHG’DKPARmSNT
______ FOR THE TOAR 1937_______
Securities held in our custody for safekeeping and for collateral purposes,
exclusive of unissued stock held for the Treasury Department and other governmental
agencies, reached a new high of $431,373,149.81 on March 1, 1937.
The figures at the
close of 1937 showed a decrease of $29,778,754.71 compared to the close of 1936, as
indicated in the statement shown at the bottom of this page.
The total government and miscellaneous securities held in safekeeping for
our member banks decreased $50,175,000, while the total of pledged securities increased
$14,616,162.32.
The increase of $3,705,750.00 over last year!s total of U. S. Savings
Bonds held for individuals, firms, corporations, and non-member banks indicates the
tremendous increased demand for this type of Investment.
During 1937, we issued 817
receipts ( of which 107 were issued in December), which is more than ne had the previous
twenty-two months.
Tho total as indicated below does not include U. S. Savings Bonds
hold for member banks.
The increase of $7,022,000 in tho total held for the Reconstruction Finance
Corporation was caused principally by transfer of the Helena Branch R.F.C. custodian
ship to Minneapolis.
The Reconstruction Finance Corporation also purchased a consider-
able amount of bonds from the Public Works Administration, a large part of which it
still holds.
The decrease of $1,798,000 of securities held for the Public Y/orks
Administration represents resale of holdings purchased from municipalities, school
districts, etc. to the Reconstruction Finance Corporation, who offered ^nd sold to
the highest bidders a large part of such take-ovor.
In 1937, we received 61,279 pieces compared to 109,720 in 1936, -~nd delivered
68,077 pioceB, compared to 90,865 delivered the previous year.
The number of coupons
clipped last year was 277,327, as compared to 278,916 the year before.
COMPARATIVE STATEMENT OF SECURITIES HELD
DECEMB15R 31, 1937 and 1936
Government and Miscellaneous securities held
in safekeeping for members:
$ 235,812,351.10
Securities pledged to secure public deposits:
U.S. Savings bonds held for individuals, firms,
corporations, and non-member banks:
Securities held for U.S. Govt, officials:
Securities held for Public Works Administration:
Securities held for Reconstruction Finance Corp.:
Collateral to War Loan Deposits:
Collateral to Discounts, Rediscounts and
Industrial advances:
Totals ....................................
Dec. 31. 1937
Dec. 31, 1936
$ 285,987,444.70
93,300,539.35
78,684,377.03
5,580,150.00
7,375,000.00
421,241.00
42,142,396.79
1,957,500.00
1,874,400.00
8,498,000.00
2,220,147.00
35,119,968.72
4,080,850.00
__
451.084.00
$ 387,040,262.24
353.829.50
$ 416,819,016.95
currency and coin
(Minneapolis Only)
THE TABLE GIVEN BELOW SHOWS THE VOLUME OF CURRENCY TRANSACTIONS AMD SHIPPING CHARGES
ABSORBED FOR THE YEAR 1937 AS COMPARED TO THE YEARS 1936 and 1935
TWIN CITY MEMBER B A M S :
5B5^c^(jceixeOZ-M:
1921
1936
1935
$ 88,575,862
3,299
$109,750,002
3,447
$107,885,645
3,429
95,174,600
1,482
119,627,300
1,513
109,709,600
1,480
Amount.......................
Number of their shipments.....
68,144,810
13,972
57,466,666
11,745
59,089,530
13,585
Shipping charges absorbed.....
30,409.13
25,711.60
24,820.09
Amount..................... .
Number of our shipments.......
78,823,888
20,852
94,906,022
23,311
77,313,796
21,796
Amount of our shipping C03ts...
19,681*73
22,063.81
19,760.39
Amount..*....................
Number of their shipments.....
Currency delivered by us;
Amount.......................
Number of our shipments.......
OTHER MEMBER AND NON-MEMBER BAIIKfo
Currency received by us;
Currency sliiTroed by us :
COIN RECEIVED BY US FROM MEMBER
AND N O V E M B E R BANKS:
Amount.......................
Number of shipments....... ...
3,445,070
2,698
2,471,279
1,850
2,596,055
1,927
Shipping charges absorbed......
5,453.44
4,938.11
5,013.60
COIN SHIPPED BY US TO MEMBER
AND N0&-MEMBER BANKS:
Amount.......................
Number of shijsaents.......
2,633,532
6,947
2,966,121
7,667
2,810,392
7,506
Shipping charges absorbed.....
5,903.28
6,499.25
6,809.96
THE FOLLOWING TABLE SHOV/S THE NUMBER OF NOTES RECEIVED AND SORTED, AND A COMPJ\RISOIT OF
____________________ THE EXPENSES FOR SPECIFIED. .PETlIQD______________ ______________ _
1237
1936
1935
Receiving and Sorting Costs
19,213.84
21,088,00
23,430.00
Average number of receiving
tellers and sorters
10.90
12.99
14.05
45,696,000
42,814,000
11,610
10,057
46#
55#
Number of notes received and counted
43,367,625
Average number of notes sorted daily
by each employee
13,131
Our average currency receiving and
sorting costs per each 1000 notes
44#
CURRENCY AMD COIN
(OTT*D)
THE FOLLOWING- SCHEDULE SHOWS THE AMOUHT OF COINS RECEIVED AND COMPARISON OF THE
_________ ___________
EXPENSES FOR THE SPECIFIED PERIODS__________ _________
igaz
Expenses
19ss
$ 3,167.69
6,359.99
$ 7,719.09
1.57
2.27
3.37
20,620,499
18,290,610
18,133,000
43,347
26,592
21,304
Average number of coin tellers
Number of coins received & sorted
Average number of coins handled by
each employee daily
Unit cost per 1000 coins
15£
$
35£
43£
The latest comparative operating expense figures of the Federal Reserve
Bank, Head Offices (first half of 1937) indicate that the average cost for the
System for sorting each 1,000 notes was 50(5, as compared to our cost of 44£ for
the year 1937, and that the System’s average notes sorted daily per employee was
11,449, compared to our average of 13,131.
The total cost of the Currency and Coin function for 1937 m s $99,240
as compared to the 1936 cost of $103,504.
The 1937 cost includes the absorption
by us of $62,077.37 in shipping charges on currency and coin as compared to
$61,225 in 1936.
The 1937 total espense includes $13,215 of costs incident to
retiring unfit currency from circulation and the expense of preparing currency
shipments to member banks, and in 1936 such costs were $13,252.
FEDERAL RESifllYS NOTJ^
The total of notes issued “by the .Agent to the Bank during 1937 was
$40,295,000 which is the smallest amount required by the “bank since 1930, and nearly
$18,000,000 below the 1936 payments*
Coupled with the decreased demand for note
issue m s the greater amount of our notes retired from circulation.
Notes actually
destroyed aggregated $33,818,000, which is also the hoariest destruction schedule
of any other year since 1930,
During the last half of 1937 the changes in circulation from month to month
were minor, but the amounts necessary to take care of demand from our district were
much smaller than during the sane months of 1934, 1935 and 1936,
We issued
$21,260,000 in notes during the last six months of 1937, compared to $3 1 ,7 3 5 ,0nn in
the came period of 1936.
inflow of unfit currency.
With the falling off in normal demand has cone a strong
The amount of unfit notes destroyed during the last half
of 1937 w^s over 43^ greater than during the first half.
On December 31, 1937 there was held, in the Bank*s cash, our own notes to the
emouut of $5,317,000.
$142,886,000.
The amount of outstanding notes shown by the Agent was
This indicated the amount of our notes held by banks and the public
to be $137,569,000, or an increase of $1,473,000 during the year.
For 1936 our
circulation showed an increase of $25,534,000.
Of tho new currency issued by the Agent during the year, $34,080,000 consisted
of 10*s and 20*s.
$200,000.
The only 5*s called for were fit notes reissued in the amount of
During the past 12 months the Treasury Department shipped us for credit
$14,700,000 in silver certificate 5*s, and $4,900,000 in legal 5*8.
This supply made
it unnecessary for us to use any of our own supply of new $5 Federal reserve notes.
The supple of new silver and legal 5*s on hand at the close of 1937 was $3,800,0^0,
besides which we also held $1,900,000 in new silver $1 bills.
Because of the steady
flow of 5®s from the Treasury and somewhat slackened demand, our note printing costs
are lower than might be indicated by the amount of our outstanding circulation.
Of
the total of $142,886,640 outstanding notes, as shown on the Agent's records,
$2,655,270 only represents $5 notes.
Outstanding 10fs and 20*s make up $116,nno#0n0
of the total.
At the close of 1937 our supply of 1934 Series notes in Washington, printed
and paid for, amounted to $99,220,0(0.
20*s.
Of the total $75,120,000 was in 5*s, 10's and
At Minneapolis our supply of 1934 Series notes amounts to $15,820,0^0 of which
$13,280,000 is in the smaller denominations.
Including $39,600,000 o^ 10*s pad 20*s
to be printed by June 30, 1938, our supply of new smnll bills is sufficient to last
approximately four ye^rs, based on the requirements of 1937.
FJSBERAL iliSSKRVK XJOTES Tl'KCEIViD AITl) ISSUED BY AGi£!T i)U':lDG 1937
Ilf HAI»D3 OF A G M ? UaC313:SH 31, 1936
Fives
Tens
Twenties
Fifties
Hundreds
Five Hundreds
Thousand3
Total
$ 10,400,000
4,680,000
5,440,000
12,950,000
10,240,000
6,700,000
6,400,000
$ 56,810,000
$
0
20,080,000
13,760,000
0
400,000
0
0
$ 34,240,000
0
0
0
1,900,000
4,350,000
615,000
725,000
7,590,000
$
iraCEIY-2) FROM
OOIiPTllOLLSR
Fives
Tens
Twenties
Fifties
Hundreds
Five Hundreds
Thousands
Total
TOTAL
FIT-FOH-USK
IIEW
$ 10,400,000
4,630,000
5,440,000
14,850,000
14,590,000
7,315,000
7,125,000
$ 64,400,000
TOTAL
RECEIV!©
ILJTUlCTilD BY
BAXJK
FIT-F0R-USI5
200,000
2,600,000
2,700,000
0
100,000
0
100,000
5,700,000
200,000
22,680,000
16,460,000
0
500,000
0
100,000
$ 39,940,000
M7
FIT-FOB-ITSIS
TOTAL
0
20,400,000
13,680,000
50,000
100,000
0
0
$ 34,230,000
200,000
2,100,000
1,000,000
500,000
1,550,000
215,000
500,000
6,065,000
$
ISSUKD TO BAHK
Fives
Tens
Twenties
Fifties
Himdreds
Five Hundreds
Thousands
Total
$
200,000
22,500,000
14,680,000
550,000
1,650,000
215,000
500,000
$ 40,295,000
IN HANDS OF AGI5NT DiSGhlIBKR 31, 1937
Fives
Tfctfi3
Tv/entios
Fifties
Hundreds
Five Hundreds
Thousands
Total
TOTAL
FIT-F0E-U5E
Ml
10,400,000
4,360,000
5, o20,000
12,900,000
10,540,000
6,700,000
6,400,000
$ 56,820,000
10,400,000
4,860,000
7,220,000
14,300,000
13,440,000
7,100,000
6,725,000
$ 64,045,000
0
500,000
1,700,000
' 1,400,000
2,900,000
400,000
325,000
$ 7,225,000
RA.TIO OF ISSUM BY M O ! llKATIOHS
Fives
Tens
Twenties
Fifties
Hundreds
Five Hundreds
Thousands
1937
1936
1935
1934
1933
.50
55.04
36.43
1.37
4 C09
.53
1.24
100.00$
4«09
49.63
37.69
2.28
4.67
.43
1.21
100.00#
1.47
51.66
38.76
2.02
3.79
.76
1.54
100.00#
25.27
40.25
32.31
.72
1.24
0
.21
100.00$
18,90
30.05
26.26
5.94
12.31
2.05
4.49
100.00$
F:ff)EHAL RESERVE NOTES ISSUED TO BANK
COMPARATIVE BY MONTHS 1957-1933
1936
1937
January
February
liarch.
April
May
June
July
August
September
October
November
December
Total for
Year
$
‘
865,000
$ 1,190,000
3,660,000
3,540,000
4,185,000
4,290,000 .
3,795,000
4,720,000
3,080,000
3,100,000
2,420,000
10,505,000
2,570,000
4,275,000
3,930,000
5,930,000
4,780,000
3,680,000
3,120,000
5,330,000
3,100,000
6,260,000
6,260,000
3,760,000
$40,295,000
$58,050,000
1934
3-935
1933
$ 1,000,000
3,770,000
1,984,000
2,688,000
2,550,000
2,300,000
1,625,000
4,470,000
6,380,000
4,660,000
4,325,000
5,110,000
$ 3,175,000
5,385,000
4,430,000
1,940,000
2,640,000
2,360,000
4,780,000
8,060,000
5,250,000
3,180,000
3,215,000
3,985,000
$ 3,980,000
12,590,000
35,185,000
1,680,000
1,170,000
2,160,000
4,730,000
4,100,000
7,205,000
1,940.000
1,700,000
5,165,000
$40,862,000
$48,400,000
$81,665,000
FEDERAL RESERVE NOTES DESTROYED AT WASHINGTON
COMPARATIVE BY !JOimiS 1937-1933
1937
January
February
March
April
May
June
July
August
September
October
November
December
Total for
Year
1936
1935
1933
1934
$ 2,449,950
1,923,970
2,147,635
2,089,050
2,594,450
2,678,935
2,650,500
2,978,200
3,764,450
3,676,450
3,070,200
3,794,585
$ 2,928,505
1,568,905
2,378,850
2,069,250
2,629,000
2,338,850
2,390,050
2,352,650
2,591,180
2,702,650
2,957,950
2,440,450
$ 2,920,050
2,038,050
2,357,250
2,326,850
2,640,200
2,237,650
2,894,800
2,282,275
2,754,400
2,833,050
2,671,650
2,321,550
$ 1,969,650
2,532,360
2,503,550
3,172,550
3,120,000
2,497,150
2,930,250
2,157,950
2,604,450
2,872,980
2,674,200
2,432,850
$ 1,763,650
1,178,300
1,107,100
1,540,410
2,451,100
1,513,050
1,990,250
2,769,400
1,854,350
2,598,500
2,463,800
2,129,550
^33,818,375
$29,348,290
$30,277,775
$31,467,940
$22,359,460
FEDERAL RESERVE NOTES ISSUED AND
DESTROYED SINCE ORGANIZATION
Issued to
Bank
1914
1915
1916
1917
1918
1919
1920
1921
1922
1923
1924
1925
1926
1927
1928
1929
1930
1931
1932
1933
1934
1935
1936
1937
TOTAL
$
260,000
13,742,000
9,880,000
42,230,000
57,140,000
39,990,000
39,450,000
39,265,000
43,360,000
40,205,000
52,030,000
44,330,500
46,702,000
36,694,500
40,015,000
73,754,000
39,052,000
42 *180,000
55,905,000
til,665,000
48,400,000
40,862,000
58,050,000
40,295,000
$1,025,457,000
Destroyed at
Washington
$
0
0
895,955
8,988,095
9,421,540
36,771,805
40,766,785
49,748,580
32,784,320
27,320,330
28,173,395
30,108,355
31,835,950
23,970,335
26,808,035
55,134,950
43,217,265
19,595,995
19,894,830
23,359,460
31,467,940
30,277,775
29,348,290
33,818,375
$633,708,360
ISSUE, REISSUE AND DESTRUCTION OF FEDERAL RESERVE NOTES
SINCE OPENING- OF BANK AS OF DECEIVER 51 > 1937.
Received from
Comptroller
Fives
Tens
Twenties
Fifties
Hundreds
Five Hundreds
Thousands
Total
Returned to
iW:ent fry Bank
Total
$201,400,000
287.640.000
254.400.000
23.800.000
43.800.000
11.400.000
14.200.000
t 42,000,000
82.750.000
85.400.000
9.985.000
18.035.000
2.944.000
7.768.000
$243,400,000
^70,390,000
339,800,000
38.765.000
60.835.000
14.344.000
21.968.000
$840,640,000
$248,862,000
$1,089,502,000
ISSUED TO BANK
Fives
Tons
Twenties
Fifties
Hundreds
Five Hundreds
Thousands
Total
New
Fit-For-Use
$191,000,000
283.280.000
248.880.000
15.900.000
32.260.000
4.700.000
7.800.000
$ 42,000,000
82.250.000
83.700.000
8.565.000
15.135.000
2.544.000
7.443.000
$
$783,820,000
$241,637,000
$1 ,025,457,000
Total
233,000,000
365.530.000
332.580.000
24.465.000
47.395.000
7,244,000
15.243.000
DESTROYED AT WASHINGTON
Returned lieturned fry Returned fry Returned fry Other
fry A/rent
Treasurer
Minneapolis
Fed.Res.Banks
Fives
Tens
Twenties
Fifties
HurrL reds
Five Hundreds
Thousands
Total
$4,260,000 $ 4,550,050
6,031,520
2.545.000
5,872,420
1.020.000
525,550
25.000
1 , 000,000
30.000
131,000
0
231,000
0
$ 98,643,900 $ 80,890,780
119,006,000 101,325,390
32,383,600
95,709,300
5.615.000
3,990,750
6,289,100
8.290.000
1,507,500
810,500
1,062,000
1.963.000
$188,344,730
228,907,910
184,985,320
10,156,300
15,609,100
2.449.000
3.256.000
$7,880,000 $18,341,540
$317,409,000 $290,077,820
$633,708,360
In Hands of Agent
December 31, 1937
F iv es .................................. $10,400,000
Tens ..................................
4,860,000
Twenties................................
7,220,000
Fifties ................................
14,300,000
Hundreds................................
13,440,000
Five Hundreds ...........................
7,100,000
Thousands . .............................
6,725,000
Total
Total
$64,045,000
Outstanding
December 31, 1937
$
2,655,270
53,872,090
62,194,680
4,343,700
13,750,900
1,851,000
4,219,000
$142,886,640
TBAITSFMR AliD COD33 D K P A R B U M
(Minneapolis Only)
The Transfer Deportment handled 21,525 transfers amounting to
$1,795,356,000 during 193?, compared to 20,306 transfers totaling $1,719,291,000
in 1936.
This represents an increase of 1,219 transactions, nnd an increase in
amount of $75,965,000.
The number and amount of incoming and outgoing wire transfers handled
during the past five years were as follows:
I§or
giitgolng Wire Transfers
M m &
Incoming V/ire Transfers
lumber
Mowti
1937
1936
1935
1934
1933
6,566
6,111
5,666
5,332
6,184
7,411
6,624
5,870
6,723
9,461
$ 360,148,000
370,723,000
344,724,000
268,776,000
420,027,000
$1,038,897,000
914,381,000
724,422,000
758,917,000
967,900,000
Messages coded and decoded during 1937, other than transfers, numbered
16,894, compared to 18,390 In 1936.
TELEGRAPH UNIT
(Minneapolis Only)
During 1937 ue sent 354,519 words over the Federal Reserve System
leased wires, in comparison with 468,939 in 1936.
COMPARISON OF MBMBHR AND N01MEEMB5R BA!JK BALANCES
(Thousands only 000 omitted)
Dec. 31,
. 1937
Michigan
Minnesota
Montana
North Dakota
South Dakota
v/isconsin
S
6,329
86,458
16,009
5,266
8,015
_ 4.729
$126,806
Dec. 31,
__1936
$
5,146
80,885
15,876
5,175
9,578
___ 3.-871
$120,531
Dec. 31,
1935 _
Dec. 31,
1934
Dec. 31,
_ 1933
$
3,485
$ 3,635
$ 3,403
43,404
58,772
68,750
11,121
7,160
17,068
6,137
3,398
3,893
7,297
6,869
3,613
3.469 ____3.385 .
3.120
$ 96,228
$ 97,421
$ 64,330
DSFICmiT KKS1OTE PKHALTIBS
Amount of Penalties
Ifumber of “banks penalized
Maximum penalty rate
Minneapolis
1937
Helena
1937
$ 1,530.93
92
4$
$ 381.42
14
4$
Combined
Combined
■ 1937________ 1936
$ 1,912.35
106
4$
$
350.29
51
4$
REPORT OF BANK ASTI> PUBLIC RELATIONS ACTIVITIES
AT THE FEDERAL RESERVE BASK OF MINNEAPOLIS
DURING- 193?
Thirteen bank officers and other representatives travelled 80,729
miles on public relations work during 1937 at a travel cost of $6,934,03*
They attended sis bankers * conventions and fifty other meetings, delivered
34 addresses (including two radio talks) to an estimated known audience of
2,470 people, and made 769 visits at member basics and 1,066 visits at nonmember banks in the district*
Practically every bank in the district was
visited at least once during the year.
The attendance at showings of the Federal Reserve Bank movie dur
ing 1937 was 130,450 people.
The bank continued its cooperation with the
Wisconsin Bankers Association with regard to showings of the Federal Reserve
movie.
The Board of Directors of this bank held their June meeting in
Rapid City, South Dakota, and attended the South Dakota Bankers Association
convention.
Enroute to Rapid City, the directors gave a dinner for bankers
at Mobridge and a luncheon at Faith.
A supplement to our library catalogue was mailed to all member and
non-member banks offering them the use of any book in our library without
cost, except that of the postage involved.
President Peyton wrote a personal letter to the executive officer
of every bank in the district enclosing a copy of an article which had appeared
in the Commercial West dealing with our industrial loans and renewing our offer
of service in this connection.
A program was begun of inviting officers of Twin City banks to have
lunch with our officers at this bank.
Early in December we began visiting eligible non-member banks on the
par list to discuss with them the advantages of membership in the Federal
Reserve System.
In May, 1937, Mr. Peyton wrote a letter to the executive officer of
each member bank in the district asking for the bank’s recent experience with
loans and investments and its current cash position.
Twelve Issues of the Monthly Review were printed and distributed to
a mailing list which, in December, consisted of 5,725 names.
REPORT FOR THE CALENDAR YEAR 1937
BANK EXAMINATION DEPARTMENT
FEDERAL RESERVE BANK OF MINNEAPOLIS
There were on December 31, 1937, sixty-six State member bonks*
Each St<>te
member bank in this district received at least one examination by examiners for the
Federal Reserve Bank of Minneapolis during the calendar year 1937*
Ten State member banks are exercising trust powers, and eleven examinations
were made of trust departments of State member banks during 1937, (nine by the trust
examiner r>nd two by other examiners).
Elghty-nino national banks have full or
limited trust powers, and fifty of those banks are exercising such powers.
The trust
examinor has made no examinations of trust departments of national banks during 1937.
The trust examinor reviewed during the year sixty reports of trust departments
attached to national bank examiners* reports.
One application by a national bank for additional fiduciary powers was re
ceived during 1937, which application is being investigated before being forwarded
to Washington.
Applications for surrender of trust powers of two national banks were
approved during the year.
The five of our men holding commissions, with six assistants, traveled 53,555
miles in examining 71 State banks, 11 trust departments, and making four special visits
Reports of Examination of State Member Banka
The number of reports of exr^nination received from the various St^te Banking
Departments in the Ninth District during 1937, of State member banks examined in
dependently by them, was as follows:
Michigan . .
Minnesota .
Montana . .
South Dakota
3
12
5
3
State Bank Arrnlic.-.tlons for Membership - 1957
Three applications were received from State banks in this district for
membership in the Federal Reserve System.
The applications were from the Stockmen* s
Bank, Cascade, Montana, The Citizens* Stato Bank of Chotean, Montana, Choteau, Montana,
and Merchants State Bank, Rhinelander, Wisconsin.
Tho Stockmen’s Bank, Cascade, was
examined as of October 11, 1937, the application was approved by the Board at Washing
ton on November 16, 1937, and membership was completed as of November 30, 1937.
The
Citizens1 State Bank of Choteau was examined as of October 23, 1937, the application
was approved by tho Board at Washington on November 17, 1937, and membership was com
pleted as of November 30, 1937.
Examination was made of the Merchants State Brink,
Rhinelander, but membership of that bank was not completed as of December 31, 1937.
.
RETORT o f M
PLBW U m
oB DEPARTT.UffTT - 1937
(Cont»d)
BANK CHANQBS XH 1937
(Per Stock Book Records)
Total inmbar of member banks in the district January 1, 1937 .............
New national banks organised.................................... .
State hanks admitted......... ................................. .
National banks absorbed by other national b a n k s ...............
National banks absorbed by nonmember State institutions ........
National banks succeeded by nonmember State institutions........
National banks l i quidated..................... ..............
State member bank withdrawals................................
State member banks absorbed by national banks ..................
484
0
...4
488
2
2
7
2
2
3
18
Total number of member banks holding stock in the Federal
Reserve Bank of Minneapolis at the end of the y e a r ............. .
470
Membership
At the closo of the year there were 470 member banks in this district, as
compared with 484 member bank3 at the beginning of the year.
There was a net loss
of thirteen national banks and a net loss of one State bank.
The total membership
at the close of the year was divided into 404 national banks and 66 Strte banks.
State Bank Membership According to States
State
Michigan
Minnesota
Montana
North Dakota
South Dakota
Vfisconsin
Totals..........
No. of State
Bank Members
1-1-37
7
14
21
0
23
2
67
No* of State
Banks Withdrawing from Membership During Year
0
2
0
0
3
0
5
No. of State
Banks Admitted
During Year
0
0
3
0
1
0
4
No. of State
Bank Members
12-31-37
7
12
24
0
21
___2
66
FISCAL ACSSNCY FUNCTIONS - 1937
VOLUME OF OPERATIONS
Issues, redemptions or exchange of various United States Government
securities, including United States Savings “bonds and Adjusted Service bonds
handled for the United States Government, numbered 186,502 pieces and amounted
to $216,905,702.50 as compared with 878,903 pieces amounting to $374,648,313,75
in 1936.
We handled 1,819 purchases and 3,8t<® sales of Government securities
totaling $23,237,400; for delivery or payment or both, we handled for banks and
trust companies 887 transactions in Government securities amounting to $145,960,300.
There were also 3,916 transactions of Government guaranteed and miscellaneous
general market securities aggregating $17,381,997.
Altogether, of these various
transactions there were 10,452 totaling $186,579,697, as compared to 15,401
totaling $306,536,824.25 in 1936.
Delivery of 25,558 pieces totaling $96,177,333.67 was made on purchase
and resale transactions for other than our own account.
In addition, on ex
change transactions, such as denominational exchange, the exchange of coupon
for registered securities, etc., 17,424 pieces were delivered, amounting to
$114,896,300.
The total number of pieces delivered was 42,982 amounting to
$211,073,633.67 in comparison with 55,591 totaling $315,669,697.50 during the
preceding year.
On exchanges and redemptions of bonds handled for the Federal Farm
Mortgage Corporation there were 6,012 pieces amounting to $2,602,100.
There
were also 5,824 pieces totaling $3,857,875 for the Home Owners* Loan Corporation
and 4,416 pieces aggregating $7,366,720 for the Federal Land Banks.
In addi
tion, 189 Federal Intermediate Credit Bank debentures amounting to $5,820,000
were redeemed.
Altogether, on issues, exchanges and redemptions of other than
direct United States Government securities, there were 16,441 pieces, contained
in 3,202 applications, totaling $19,646,695.
The total number of individual securities received and delivered by
the Fiscal Agency Department (including other than the direct United States
Government securities) during 1937 was 245,925 totaling $447,626,031.17, as
compared with 978,940 totaling $727,964,086.25 in 1936.
We redeemed 334,070 Government coupons amounting to $10,763,591.46
during the past year as compared to 334,528 coupons totaling $10,249,024.39
during 1936.
We also redeemed 307,725 Federal Land Bank, Federal Farm Mortgage
Corporation and Home Owners* Loan Corporation coupons amounting to $3,434,435*82
during 1937 as compared to 358,095 totaling $3,630,146.46 in 1936.
other
SERVICES
During 1937 we received 7,311 individual orders for United States
Savings bonds representing 16,835 pieces, amounting to $6,507,850, as compared
with 1,826 individual orders representing 5,706 pieces, amounting to $2,508,625
in nine months during 1936.
On January 16, 1937, we were designated agents for the redemption of
Adjusted Service bonds, and thereafter redeemed 127,558 individual bonds amount
ing to $6,377,900.
On May 12, 1937 we were designated agents for the redemption of United
States Savings bonds and thereafter we received for redemption 14,972 individual
bonds amounting to $3,950,750.
During the year we issued 48,070 United States Treasury checks in pay
ment of Adjusted Service bonds, United States Savings bonds end other Public
Debt redemptions.
Without inclusion of Treasury bills, there were seven offerings of
United States Government securities during 1937.
term and five short term.
Two of such issues were long
We received and handled 1,989 Individual subscrip
tions contained in 1,324 different applications aggregating $149,233,550.
amount allotted on these subscriptions was $30,093,600.
The
Daring 1936, 6,492
Individual subscriptions were submitted in 3,732 different applications cover
ing seven similar offerings and $117,832,550 was allotted.
During 1937, 168 tenders amounting to $23,140,000 wore received by
this -Agency on 75 offerings of Treasury bills*
Of these, 61 tenders on a dis
count basis ranging from .04 percent to .74 percent and amounting to $9,525,000
were accepted.
Daring 1936, 96 tenders amounting to $14,490,000 were received
and 22 tenders totaling $4,135,000 were accepted on the 69 offerings of Treasury
bills mpde that year.
At the close of 1937 there wore 132 banks and trust companies in this
district which were designated as special depositaries of public moneys, ns
compared to 184 banks and trust companies so designated in 1936.
Including the weekly circular giving current market quotations on the
outstanding Government issues, 109 circular letters were sent to banks and trust
companies in the district during 1937 in connection with Fiscal Agency operations
as compared to 110 circulars in 1936.
RECONSTRUCTION FINANCE CORPORATION
The volume of burliness which we handle for the Reconstruction
Finance Corporation continued fairly oven through the year, repayments about
offset by new business until the forepart of November, when the Helena Branch
custodianship was transferred to Minneapolis, which transfer increased our
Minneapolis figures considerably.
The Corporation has purchased a considerable amount of bonds from
the Public Works Administration, a largo part of which it still holds. The
largest reductions In holdings have been of preferred stock and debentures
issued by banks.
The Disaster Loan Corporation Is a new subsidiary of the Reconstruc
tion Finance Corporation and we have a number of such loans, made at Billings.
Yte received from the Helena Branch a number of loans made at Helena, account
of earthquake damage, rchich loans were made by the Reconstruction Finance
Corporation direct through a local organization known as the Capital City
Rehabilitation Corporation.
Another subsidiary, the Commodity Credit Corpor
ation, is again making loans on c o m secured by Farm V/arehouse receipts, ad
vancing 50-cents per bushel.
It appears there may be a considerable volume
of this during 1938.
LOAN BALANCES, ADVANCES, ETC., AS OF
______DECEMBER 31. 1937____________
Banks, trust companies, and Mortgage Loan
Companies
Industrial and commercial businesses
Repair and Reconstruction (Earthquakes)
Drainage, Levee and Irrigation
Preferred Stock of banks
Secured by preferred stock
Debentures of Banks
Bonds (from Public Works Administration)
Relief Advances
U.S. Treasury obligations (accepted account
preferred stock and debenture payments)
R. F. C. Mortgage Company (loans)
R. F. C. Mortgage Company (Federal Housing
loans purchased)
Disaster Loan Corporation
Miscellaneous
$
815, 648. 72
950,531. 20
77, 325.44
856, 167. 70
15,134, 880. 00
225, 966. 10
6,643, 210. 90
3,997, 553. 43
22,619, 161.,00
2,921, 600.,00
383, 290.,68
418, 723.,04
92, 314,,97
5,581,499.,64
T o t a l ...................................... $ 60,717,872.82
FEDERAL EMERGENCY ADMINISTRATION OF PUBLIC WORKS
The number of blocks of bonds purchased through us during 1937 was con
siderably less than previous thereto.
Most of its holdings were sold during
the year to the Reconstruction Finance Corporation and it now holds with us
an aggregate of only $421,200.00 of bonds.
@FedFRASER