Full text of Annual Report to the Directors of the Federal Reserve Bank of Minneapolis : Auditor's Report for the Year 1939

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DO NOT REMOVE FROM
ACCOUNTING DEPARTMENT

AUDITOR'S REPORT

FEDERAL BES3RVE BANK OF MOTEAPOLIS

FOR THE TEAS,

a. S> 3 9

TO THE DIRECTORS;
Through the presentation of the following comparative tables and
scheduless with accompanying comments, we have attempted to inform the Directors
of the results of our 1939 operations and to indicate the probable trend of 19^0
earnings and expenses*
The marked improvement in the earning rate on Government securities
during the second half of 1939 enabled us to complete the year with better cur
rent earnings than for the previous year 0 but with a smaller profit from the
sale of Governments from System Account®

We were unable to provide anything this

year out of earnings for addition to "Reserve for Contingencies1* but did red\ice
the book value of our Land $1009000 0

With maintenance of the present rate on

the amount of Governments held during the first part of Januarys all our needs
in 19 HO would be comfortably covered*,

Our 19I4O Budgat estimates are approxi

mately $S 8000 higher than the actual costs of 1939 *
Fiscal duties for the Commodity Credit Corporation rapidly expanded
and contracted twice during the year.
$100*000 more than in 1938 °

Reimbursable expenses were approximately

Of the other larger functions8 the cash collections

had an increase in volume although there was a decrease in the number of WoPcA®
checks handled,,

Some expansion took place in currency transactions and safe

keeping volume was less*
The daily average of member bank balances increased $lHe576»000 to
$136c2UlfcOOO in 1939 with the Treasury average balance $3U6071»000 in 1938 and
$ ^ * 763*000 for the year just closed®

Our notes in circulation were $lUlcU27eOOO

on December 31 which was an increase of $Ue5700000 during the year,,
The “Frequency of Audits1' approved by our Board has been carried out
and the audits performed at Minneapolis and Helena indicate that our operations
are being efficiently conducted®

January 1 B 19^*0 <

INDEX

Auditing .............................. ......................... 27-23
Bank Examinations c............ ....... ................... ..
Bank and Public Relations ....................................... US
Bank Premises »0.... 0............ ..... ..................... ... 30*32
Check Collections - Transit Department »o...... .............. ... 3^-37
Currency and Coin »...... ...................•........... . 0.*

51~52

Deficient Heserve Penalties «...... ............................. U 7
Discounts and Industrial Advances ..... ..................... 0

Dividends ... ..... ............ •0..*........ •.... e...........

Earnings s
Comparative statement 1939-193s *...... ............ .......... 3
Average rates on earning assets ................... .......... 3^
Comments ..................................................... H-6
Expenses;
Comparative statement 1939“1938 «.... ........................ 7
Comments ........................................ ............ 8-21
Reimbursable Expendi tures ............ ................... 0
19-20
Failed Banks .............................ft............... ...... 35
Federal Reserve Notes ............. ........................ .... 43-H6
Fiscal Agency Functions....... .......................... ...... U9-51
Franchise Tax paid since organization ..................... ..... 23
Furniture and Equipment «,............... ............... ........ 18
Liabilities ............ .... .......

............. »****•

Member Banks ~ Changes in membership .................... «...

39-^1

Non-Cash Collections ................. ...............

37*33

Profit and Loss

......

..................... .................. ...... 22-26

Reconstruction Finance Corporation ..................... .53*5^
Resources ................. «.

* „. 0

........... *

Securities?
Safekeeping ...... ....... ..........................
„
42
Investments ....... ..... .................................... U-5
Surplus and Reserves ........... ........................... .... 23
Taxes ...... .................. ....... ......................... l6
Telephone and Telegraph ........... ..............

Transfer of Funds ......................... ...........

COMPARATIVE STATEMENT OF RESOURCES
FEDERAL RESERVE BANK OF MINNEAPOLIS Aim HELENA BRANCH
(After closing entries)

December Ji t I9^5g
Cash Reserves;
Gold certificates with F 0 H„ Agent
Redemption fund *»
lie Notes
.......
Inter-district settlement f u n d ......... ..

.December 31, 1938

$ 1^7*500,000o00
$ 1^3*500«000o00
219»21802l
605p5S2o12
111,066,127.-10________ 97^952,227,50

Total gold certificate reserves c..... . $ 258,735»3^5«31

$ 2^2*057*809*62

Other cash
.............................. .
9,267,700*13
Total cash reserves*................. .. $ 268*053,045«¥
Bills and Securities;
Bills secured by U0S0 Government obligations,
direct or fully guaranteed *........... .
50 s000 o00
Bills otherwise secured and unsecured oo.«.
215t837*19
Bills bought in open market ............. ..........Industrial advances
........... .
7^2,802,12
67cUUl fl0Q0,,QQ
U 0 So Government securities ............ ..

7,786.15S.2U
$ 2^9fS ^ ' ^ b C l

Total bills and securities ............

68 , ^ 9 ,639*31

^.OOOoOO
90p657«72
1,903*25
96^e090o22
56,815?500<,00
$

Due from Foreign banks «................. ......... US0o53
F,R0 Notes of other Federal Reserve Banks 00«
1*3^*6*500*00
Uncollected Items;
Transit items ........... ............... .
Exchanges for clearing house .............
Other cash items ..........................
Total uncollected items ...............

1*992<>6o
l rU27,900,00

19*71?.285*77

l6,007,617*60
350*699*77
53Qa6oUo2Q

565,122036
512^5550 37
$

l6 888S,921„57

20,7 9 M 6 3 « 5 0
1» 395 *85^ ^5

Bank premises a.............................

57*915»151«.19

1,52^,700*89

Miscellaneous Assets;
Premium on securities .............. ......
1»189-799°23
66l,906o^7
Interest Accrued »«................. ......
235 ,,773° 58
l69f,290*29
Reimbursable e-tpenditures «...............
2}t$'J208l
3^b3§^»59
Deferred charges <■................... .....
12*8120l6
18P351“>32
Miscellaneous assets acquired in settlement
of claims account failed banks..........
U„292o09
9 p521*38
Industrial Advances past due three months..
153»052olU
191»5^0o66
All other resources ........ ........ .... *
2 f6 7 3 ° 2 3 _____________ 10c970°Qk
Total miscellaneous assets ............

TOTAL RESOURCES .... ................ .

$ 361 .632 ,758 ***7

1,622*275*2^

lf>095»9^6ol5

$ 328c698 ,577*26

COMPARATIVE STATEMENT OF LIABILITIES
FEDERAL BESERVE BANK OF MINNEAPOLIS M D HELENA BRANCH

T a Fter closing entries)

December J L l 2 2 2 2

PggejrterJl, 1938

?„ B. notes in actual circulation ......... S lUl,Ua7 ,335*00
Deposits?
Uo S 0 Treasurer - General account .,...... .
2^,^^1 ,570106^
Members - Heserve account ............. ....
15^*7S7e739*93
Due to foreign banks ............... .......
9 ®3^6* 1 7 ^ 3 6,,iQ5,60QoI9
Other deposits ..................... .......

$ 136 ,856 ,725,00

Total deposits ...... ....... ....... . $ 191*,691 ,216,10

$ 165 227 ,950 ,,3 s

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

^3®29^ety57o^6
113*567?601c59
U 9587,l60.1&
3»776,731019

16 ,361 ,873*70

17.U79,9lU«81

Miscellejaeous Liabilities?
Sundry items p a y a b l e .... ................ $
73»722053
Unearned discount 0.,..... .
,....... •
76O 0O 5
____12.170.69
All other ...............----- ...........
Total miscellaneous liabilities ....... $
Capital stock paid in ................ .
$
Surplus Fund - Section 7 .............. * •
Surplus Fund - Section 13 -b .............. .
Reserves for contingencies ............. ...
total liabilities...... .

S6»653<>27

84,857*77
5^3«^7
9 9152c99
$

9,4»57^*23

2 t93i»15^°OQ
$
2*903*350”00
3fi52a^20627
3*^53* *13«^9
1*000,683*96
1,001,l62098
l ?981»^26c17______ 1 »9%1«^26.17

$ 361 *632 ,75 S 0U 7

$ 3283698 ,577.26

COMPASATXYa ST^SIffiKT OF GKOSS SARNIKGS
KSDuiHAL R&SSR7& BANK OF MINNEAPOLIS AND HiiLBNA BRANCH
Minneapolis
Karnings from

1939

Discounted bills . . . . . . . . .................... , . . .
Purchased “bills ...................... .......... .. . . . ,
Industrial advances .............................. ........
Commitments to make industrial advances
U« S„ Government securities. . . . . . . . . . . . . . . . . .
Deficient 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 . ........ . . . . . . . . . . . . . . .
Commissions on bills bought for foreign banks. . . . . . . . .
Interest on Hungarian Credits . . . . . . . . ........ . . .
Clearing house fines
. . . . . . . . . . . . . . . . . . . .
Interest received on personal loans to employees . . . . . . .
Interest on misc. assets acquired account Industrial adv.. . .
Savings in registration feesB etc. on registered
mail shipments for member banks . . . . . . . . . . . .
Ail other . . . . . . . . . . . . . . . . . . . . . . . . . .

Total Barningg

. . . . . . . . . .

1,^70*, Ui
11.08
50 , 206.13
1,29*1.52
1 , 069, 781.82
726.75

Helena Branch

1939
173*56

Combined

Comb ined

1939

1938

1 , 643.97
11.08

50 #206o13
1 .2 94 .5 2
l t 0699781 oS2
58.90

725.65

8 *312.02

8, 3 1 2 .0 2
75-97
25° 35

75,97
25*35

2 . 6 5 9 .3 5
6.54
5 2 .8 7 9 .3 6
1 .7 0 4 .3 3
1 , 018 ,5 4 0 . 1 9
566.42
1 5 .7 8 8 , 0 8
7 . 5 7 9 ,4 3
64.35

28.65

b„ 00
60 72
533.85
44.0 0

481.70
53° 00
50*80
57-64

481070

1. 8 0 5 .9 5
l4„04

1 ,8 05 .9 5
14.04

64 .35

1.13^.599.64

1 *100 *471062

1.1 3^. 367 .1 8

53.00
50oS0
57-64

232.46

Lv 1v

EABNINGS
Earned at Minneapolis
Earned at Helena

$
232o**6

$ l r13Uf599 *6U

The above total of our current earnings for 1339 represents an increase
of 3«1$£ over the 1938* total current earnings0

Up to the close of November our

earnings were less than for the corresponding 11 months of 1938c
quarter of 1939

During the last

interest received from Governments was nearly 5 &1> greater

than for the I93 S quarter0 with the result that our current earnings for the com
plete year exceeded those of 193 ^

$3^*128a02o

Since 1932 much the greater part of our income has come from interest
obtained on investments in United States securities*

For 1939 the gross amount

of interest received on Governments was $1»o69c7S1cS2 or 9**«3$ of the total earn
ings.,

In 193S this percentage was 92 06%*

The daily average of such securities

held in 1939 was $75 *2809616* compared to $75»^13»276 held one year earlier,,

The

proportion allotted us in System Account during the first half of 1939 vas considerably lower than for the like period of 193 &» but during the closing months the
daily average for the two years was nearly equalized*
We began the year 1939 with a participation of $80,^5^,500 in System
Account and of this amount $17,766,000 represented Treasury Bills, $26 ,385,500
Treasury Bonds and $36 ,303,000 Treasury Notes*
were not as severe as in the previous year 0

The quarterly System adjustments
During September bond holdings in

creased followed by some reduction in notes and the elimination of all Treasury
Bills in December,,
December 3^e 1939

Our participation in System Account on January 1 , 1939,
on January 1„ 19^0 after the recent allotments, was as

follows?
January 1, 1939
United States Bonds
United States Notes
U 0S 0 Treasury Bills

December 31 , 1939

January l f 19 U0

26,385.500
$ 36,677*000
$ 39,9^7*500
36,303,000
30,76^.000
33,508,500
17.766,000________
None_____ _________ None
80 ,45^,500
$ ~ T 7 , W booo
"
$ 7 3 *^56 ,000 ~

The System holdings on January 1 , 19 U0 were $2,^8^,270,000 and our portion
of the total holdings was 2*956$o

Prior to the close of the year our participa

tion v/as 2 o71 &>
With one exception (June), there was an improvement each month during 1939
in the earning rate on Government securities0

The rate improved more rapidly

during the closing months with the greater volume of longer term bonds and the
elimination of Treasury Bills,

In January the average earning rate had been l<,3l6$,

increasing to 1<>706$ in December and giving a daily average rate of 1*^21# in 1939c

DARNINGS - Coat5&

compared, to

in 1938o

With the readjustment of allotments on January 1 ,

19^0 the earning rate will be lo7 ^ 7 $°

This means we are earning $3 ,515 <>OU daily-

on our Government holdings, compared to $2,893*21 earned daily one year ago*

Before

the addition of $6,015*000 to our holdings on January 1» IjkO the amount earned
daily was $3 *227 d

The profit received from paper discounted for member hanks continued to
be a very small part of our earnings amounting to only $1 ,6^3*97 for the year and
the smallest amount received since 19360

At Minneapolis the dally average of

member discounts was $70*7^7o ^itk the Helena average §10,8580

We had some paper

under discount during each month at Head Office, hut Helena had none during the
first two months and the closing month of the yearc
the average rate was lo6U2$o

Because of some 10~b loans

There has been no change in the normal discount rate

of 1-J$ established August 2U, .1937*
On the small amount of purchased paper which we participated in through
New York, we had earnings of $llo08o

This represented income on investments made

through foreign banks,, our portion being $1 c903 »25 „ and since eliminatedc
Industrial advances were at the lowest point of the year in December
with outstanding current advances $7^ 3*000 on December 31 and a daily average of
$8 378000 in 1939 «

Warnings on current advances were $50 ,206,1 3 , compared to

$52 ,879*36 in 193 S when the daily average was $gg6*000<,

There was little change

during the year from the amount of advances shown past due at the beginning of

1939 °

0n December 3 1 » 193 ^

past due total was $2 31 »5^0 »06 p since reduced

to $22Sft052ol^ at the close of 1939®
amounted to $8r312o02o

Payments on account of past due interest

The commissions received on commitments to make indus

trial advances were reduced from $le70^°33 in 193 ^ to $1 929^„52 for the year just
closedo

We also obtained $57«61+ interest on a contract covering the sale of

assets acquired in connection with an industrial advance*
industrial advances amounted to $59»870°3i°
$62,209*97*

Gross earnings from

One year ago gross earnings were

Bank funds used in making industrial advances made up 13*060$ with

Treasury funds supplied by Surplus (13 b) making up 86„9*IO$f,

Our participation

in 193 ^ was 21 o102$o
Although total earning assets were lower during the last half of 1939,
the improved rate on Governments gave us better earnings0

For the complete year

earning assets showed a daily average of $76 *36^.000 and an average earning rate

EARNINGS - Cent5d

of iJ471$ 0

In the previous year the average of earning assets was $76 ,6^ 7*000

and the rate 1 0UoU§6.
Miscellaneous sources of revenvie added $ll,6l4„30 to our earnings in 1939.
the ffiost important being $89}12002 of past due interest on industrial advances®
Through consolidations of shipments of securities for member banks0 we were able
to effect a savings in registration fees of $lfi805 o95 » this savings being treated
as earnings®

Oth^r minor amounts making up the above total included deficient

reserve penalties $785065 ; sal© of waste paperc money bags, etc® $75 «9 7 ; service
charges on collection items returned unpaid $25®3 5 ; interest on Hungarian credits
$4Slo70; clearing house fines $53 *00 ; interest on personal loans to employees
$50 .80 ; all other $lH«0 U.

COMPARATIVE STATEMENT
CURBSST EXPENSES OF THE RSPBRAL RSSSRVB BANK OF MINNEAPOLIS AND HaiiBNA BRANCH
Minneapolis
1939
Officers . . . . . . . . . . . . .
Employees ....................... o . .
Retirement System contributions for current service
Legal fees
. . . . . . . . .
Directors’ fees and expenses * . . . • . . . « o a
Federal Advisory Council . „ . * . . * . . » . . o
Traveling axoenses . . . . . . . . . . . . .
. . .
Postage and exnreesage . . . . . . . . . . .
Telephone and telegraph „ .
.
Printing, stationery and supplies . . . . . . . o o
Insurance on currency and security shipments O o 0
Other Insurance » * . e . . . . . . . . . . . o o
Taxes on bank premises * . . . . .
« . . . . « . .
Depreciation on bank building » ............ . o o
Light, heat, po^er, and water e . « . . . . . o C 0
Repairs and alterations to bank building c «, ° o .
Rent . . . o . . . . . . . . o o . « . 0 o o
Furniture and equipment . o . . » . « . . . . u . .
AX 1 01 ner. o c o . o o . o . e o c
c o . . . o Qo
Salaries:

©v
. .
. .
a .
c o
o o
. o
o .
, o

O6
o c

OO
* 0
e e
• o
o c
o o

Total Operating Sxpenees

83,884.25
3§b^6k2.03
21,552-70
9,091*46
7,213.46
1*323° **5
19 .232 .U9
104,220.13
9,587.15
20 ,119*21
6 ,632,63
J- 6 , m 53
„ 6 7 .360 .qsl .
31£155»6q
18,108*04
1^.535*35

Helena Branch

1939
1 3 .^95 .^
38,400.47
2,575*7^

20 ,,00
1,959.40

2 .362o90
15*148.57
M55o7i
20825 o 6
8 55»80
1,142.63
2 6207.25
3 *180.84
1,514,18

‘Combined
1939
97.379-67
395,042.50 '
24,128.44
9,111.46
9 .172 o86
1.323^5
21.595.39
119 ,368,70
13,942.86
22.9^4.57
7,488.43
17.533-16
697567-25
3^.336.44
19 e622..22
1 5 .109 c62

Combined
1938
99.06?o53
4l2.480o?4
25s5 2 5 ^ 7
1 1 ,8 5 1.73
11,764.70
l f261.05
?3 c272.81
112,722.65
l6 p092 .9S
26 ,229-03
? s192.31

_ X*JSL3Q.

9 .679.20
29 ,743o10

5 ,658.09
3,l48o81

1 5 ,337.29
32 ,891.91

69.270.14
27.^23.99
16,981.30
1 1 ,855.30
375«00
11.537.95
33.138.67

826,470,78

99.425.44

925,896.22

936,795.45

18,268tH2
4 „536 v.43

i s659c.00
358.26

19 9927* 42
4,894,75

12E7oi,o4
2,893*21

803 ,665.87

97,408.IS

901*074.05

921 ,201.20

574.27

Received from Government agencies for
Rental of furniture and equipment . . . . . . . . . .

Net Operating Expenses

. . . . .

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

Total Current Expenses . . . . . .

36 c796066

36,796066

39^35. ^2

30„751-78
6 #116056

—
-

30,751078
6 ,ll6„56

46,6l9 c34
4,667.35

97^.739-05

1,011.9?3-3i

S77.33C.S7

97 ,>108.16

EXPENSES

Minneapolis
Selena

$ 877 d330°87
97,*108.18

$ 97^ =739-05

For the first year since 1932 our total current expenses have been below
$l9C00f000o

Compared to 193^ a reduction has been shown at Minneapolis of

$35*822*19 and at Helena of $1 ^362 *0 7 *

The Budget prepared at the beginning of

1939 estimated the Minneapolis costs would be $892*697 and those of Helena $97*079«
As in previous years salaries and note costs are the two items most likely
to upset estimates*

The rapid expansion and sudden contraction of fiscal duties

makes it difficult to determine the number of regular bank employees who may be
assigned to reimbursable work0

Demand for our notes is affected in several ways*

with volume of the issue of silver certificates and the destruction of our notes
exercising considerable control over the supply required,,

Our estimates for note

printing run for fiscal years which begin July 1* while Budget figures are for
calendar years*

Other items show variations from estimates and from the 1938 ex

penses a but the two items mentioned supplied most of the saving in comparison with
1938 costs©

Two other items had an important bearing on reduced expense,

These

are the rentals received from space used in fiscal work and the payments by fiscal
agencies for rent of bank owned equipment*

Formerly these payments were treated

as incomee but are now used to reduce the expense total*
At Helena it has been possible to estimate recoveries from fiscal agencies
more closely and no note costs are borne by the Branch®

As the old building was

occupied during part of 1938 * comparison may not be as accurate as will be possible
by the close of 19*+0»

Through officers and clerks6 all or partially reimbursed

by the Reconstruction Finance Corporation and the Commodity Credit Corporation and
charges for space and. equipment rental, the Branch was able to show a lower expense
total than in 193^o

The amounts reimbursed oa officers and employees salaries

were $3 ,65^ 0^6 greater than in the previous year*
In preparing our Budget figures for 1939 it was estimated that the various
fiscal agencies would make reimbursement to us for $182P831 of services at Minne
apolis and $19,625 at Helena*

The amounts paid and to be recovered were

$2^6 ,765 *1+7 at Minneapolis and $22,^35*29 at Helena*

While some of the additional

payments served to reduce our bank costs, the major portion of the added expense was
due to the employment of temporary help and had no bearing on our regular bank pay roll*

EXPANSES - Cont 5d
SALARIES
Minneapolis
Helena

44oe526a28
51^95*89

492 0422,17

Reduction from 1938 Payments
In payments to officers
$ 1 #682,86
In payments to employees
17»437q74
Total decrease for 1939..... •$ I9T 126T 0O
Decrease at Minneapolis '
$ lp*432*81
Decrease at Helena
3,687°79
Total decrease for 1939*«° ° $ 19>120«o0
The pay roll basis at the beginning of 1939# other than for reimbursable
fiscal works indicated a reduction of approximately $20*000 in salaries compared
to 1938 9 so that this estimate was fairly close*

On December 31 we had a total

of 418 employees* of which 377 were attached to Head Office.

Of this number 19

Minneapolis employees were released at the close of the year due to the falling
off of volume in the Commodity Credit Corporation division which had furnished
temporary work to a large number of persons for various periods during the year*
On January 1 * 1940 we had 222 men employees and 136 women employees at Minneapolis*
with 27 men and l4 women at Helena,,

Compared to one year ago changes in personnel

were as follows;
Minneapolis

i m

222
136
358

Men employees
Women employees

1938
215
-ill

328

Helena
Men employees
Women employees

........

27
l4
~TT

399

367

13
39

There has been an increase of 13 persons during the past year in the bank
ing departmentsat Minneapolis and 17 hare been added to fiscal departmentSr

The

expansion in fiscal duties is indicated from the fact that 191 persons at Minne
apolis were all or partially reimbursed by fiscal agents during December, 1939* com
pared to 155 similarly employed in December, 1938°

The Wage and Hour Law has

caused some rearranging of schedules and it was necessary to add a few transit em
ployees and make at least one addition to the guard force to avoid paying overtime,,
No dismissal payments were made in 1939•> tot in December a payment of

$966065 (4 months salary) was made to Joseph Person who had previously been removed
from our personnel,.

EXPENSES - Cont’d

RETIREMENT SYSTEM
Current Serv5.ce Contributions
Minneapolis
Helena

2i*552o70
2,575.74

$ 24,128*44

Above amounts are contributed by the Bank and the total is $1»397*03 ^e3E
than the payments in 1938«

For the first half of 193^ the rate of payment was

5„23$ of the monthly pay roll»

From July 1, 193& to June 30, 1939 this rate was

5„21$ and since has been at the rate of 5»13^°
effect since March 1, 193^o

Current payments have been in

All payments prior to that date have been made by

the Bank*
LEGAL FEES
Minneapolis
Helena

9n09i«46
2QoQ0

9,111*46

Salary of counsel at Minneapolis made up $9,000 of our payment, the bal
ance of $91o 46 being expended to protect our interests in several small matters
at closed banks*

At Helena $20 was paid for legal opinion in connection with

taxes on fixtures,,
DIRECTORS* FEES AND EXPENSES
Minneapolis
Helena

7?213»46
1,959*40

9,172.86

The curtailment of Discount Committee meetings in 1939 made possible a
substantial decrease in payments to directors, this one service costing $3*910
less than in 193^ at Minneapolis,.
decrease was $3rI09ol9<>

Some other items showed increases but the net

At Helena payments to directors were $517*35 greater

because of fuller attendance and heavier travel costs0
MINNEAPOLIS DIRECTORS% EXPENSE
Regular meetings
Attendance at Member Bank Conference
Executive Committee meeting
Audit Committee meetings
Discount Committee meetings
Meetings of Chairmen at Washington
Entertainment of Directors
Luncheons for Directors
Luncheons for Discount Committee
Luncheons for Executive Committee

4 ,503*35
228c45
760.15
403.00
740.00

373»9S
75 c 0 0
1230 I8
2*65
% T72ip^>

Helena Board meetings and luncheons
Total ......................

EXPENSES - Cont &
FEDERAL ADVISORY COUNCIL

i 6323<>^5

Four meetings were attended during the year by our representative,,

The

amount!also/includes meeting expense and our portion of the salary of the secretary of the Councilo

TRAVELING EXPENSES
Minneapolis

Helena

19 .232 .tf9
2 .362-90

$ 21. 535.39

Total travel expense is approximately $10?00 less than in 193s* such
costs being $2t569«6^ lower at Head Office and $892o22 greater at the Branch,,

One year ago expense of industrial loan investigations and payments made to the
Industrial Advisory Committee were $5s012o440

Lowering of these payments to

$2 *921*75 during the past year has mad© possible the reduction in total expense*
The annual visits of our officers to banks of the District have cost less than in

1938 with attendance at group meetings and conferences costing more*

Travel in

connection with memberships has also been heavier than in previous years 0
of showing the bank movie were reduced over $500 in 1939 °

Expenses of the year

for travel have been classified as follows*
MINNEAPOLIS TRAVEL EXPENSES
Showing Bank movie
Industrial loan investigations
Industrial Advisory Committee expense
Bank examinations
Visiting banks of the district
Group meetings and conventions
Closed Bank representatives
Presidents8 Conferences
Open Market Committee meetings
Retirement Committee meetings
Auditors9 Conference
Conventions outside our District
Employees attending AoI 0B 0 Convention
Graduate School of Banking (Lysen)
Talks before various groups
Arranging transit operations at banks
Obtaining statistical information
Miscellaneous

32*35
1*964o3S
957*37

1 . 530*77

890.47
600 <,QS
109„10

410*93
2S3 o25

422„34
254,46
150*15
339.61

118069
253c 46

HELENA TRAVEL EXPENSES
Attending member bank conference at Minneapolis $
117.50
Montana Bankers Convention
97«90
American Bankers5 Association Convention
106.15
Visiting banks and contacting prospective members
!•203057
Expense of Head Office auditors
477 ,7 s
Per diem allowed Branch auditor
360o00
im
wwfca
$ "~2T3^90

Costs

EXPENSES - Oont 8d
POSTAGE AND EXPHESSAGE
Minneapolis
Helena

104c220o13
15>1^S,57

119*368„70

Next to salaries our mail and shipping expenses require the heaviest ex~
penditures* with the 1939 total the highest yet experienced*
the increase at Minneapolis was $6,341*03°

Compared to 1938

The Minneapolis expense was incurred

for the following purposesi
Postage

jaa.

Absorbed on incoming currency shipments
Placed on outgoing currency shipments
Placed on outgoing coin shipments
Net amount used on ordinary mail
Postage used on security shipments

J33*.

26,603*1*7
17*353-15
5.9«M9
Ho, 5680 75
T O .88
91 .019 *2^

26 ,009 ,6^
15*767036
5»1OL7oOS
1+0 ,074.45

86 ,251018

1.017* V5

Expressage
Absorbed on incoming currency shipments
Absorbed on incoming coin shipments
Government checks sent by express
Checks to member banks by express
Paid Brink9s IncO0 for hauling (one year)
Auto expense and miscellaneous

8k 0 49
5,850*55

>192067

2,849*02
3 ,600 o00
324*16
1 3 «200089

807.69
... 639056
i 1 1 *627*92

Total Postage and Expressage ........... . ..00 $ 104,220*13

76 *68
6,048,21
4io 037
3,645.41

9 7 *879*10

Payment from October 10, 1938 to January 1* 1939°
The postage required on money shipments in 1939 was $49»9^1<>6l and

$2,747=53

than needed in 193S*

On ordinary mail $53 ,299*20 was needed, or

nearly $4,000 more than in 1938. hut more postage was used during the year just
closed in connection with fiscal matters and the reimbursement was $12r730o45P
compared to $9e37^«09

1938*

The excess of recoveries over postage used on

shipments of securities was credited to Miscellaneous Earnings in 1939 an^ used
to reduce expense in 1938®

The net credit amounted to $1 ,297-07 last year compared

to $1,017.35 in 1938o
Fewer checks were sent to member hanks by express than one year ago0
cost of hauling money and securities shows an increase of $2e800 over 19380

The

Our

arrangement with Brink’s Inc<> was continued throughout 1939 and had only been in
effect since October 10 during 19380

The change has worked satisfactorily, reduced

guard expense and eliminated the necessity for purchasing a new armored truck*
At Helena postage and expressage showed a net increase of $305 °02*

Money

costs v/ere $372o34 greater and ordinary mail $311038 greater*

Expressage charges

assumed on money were $694 compared to $822*39 one year ago,,

All other costs under

this classification were $835 ®13 in 1939 a*1** $lp073°05 in 1938 °

EXPKBSBS - Cont5d
TELEPHONE ASP TELEGRAPH
Minneapolis
Helena

9*587*15
**,355° 71

13*9**20S6

The further use of teletype machines by other Federal Reserve Bank© helped
the general cost of the private wire system and our payment for private wire ex-?
pense was $916 less than for I93 S 0

A larger percentage of messages sent over the

private wire reduced payments to the commercial companies $637 compared to the pre
vious year0

By arranging the handling of our Sts Paul telephone messages through

an outlying exchange, w© received reduced rates and refunds totaling $UU3«>9-2»
At Helena there has been some increase in telephone costs during past two
years because the Branch makes use of the local telephone company!s equipment for
internal calls*

Through elimination of a switchboard operator, and convenience of

the new plan, money has been saved,,

Telegraph expense has been closely watched

at Helena* the fluctuations of recent years depending on the demand for services
by our member banks®

Total telegraph and telephone expense was $96*1*8 greater

than the 193 & total*
PRINTING, STATIONERY AND SUPPLIES
Minneapolis
Helena

20*119o21
2,S25»36

22,9UU.57

Payments for the above items were $2*739*^6 less at Minneapolis than in
1938 and at Helena the reduction was $5^5°

has been customary for several years

to charge off in December substantial amounts for printing, stationery and supplies
ordered but for which bills will not be submitted until Januaryu

For 11 months

in 1939 there was small change from on8 year ago* but amounts charged in December
were $3*05^*23 compared to $5*883*08 charged in December one year ago®

There has

been an upward trend in stationery and printing prices for most of the year and
this seems likely to continue#

Fiscal agencies reimbursed us for $6 ,6s6 <,g6 of

supplies during the year compared to $5#2U4*10 in 1938*
Helena payments were norma! for banking department needs* but recoveries
from the Reconstruction Finance Corporation and Commodity Credit Corporation were
$5 ^ 7-72 compared to $365,07 one year earlier0
INSURANCE ON CURRENCY AMD SECURITY SHIPMENTS
Minneapolis
Helena

6,632063
855*80

iMZ.bj

There was little change in the insurance charges absorbed on money ship
ments from one year agQt the reduction in the amount charged on incoming shipments
being offset by the increase in the outgoing volume©

One year ago the insurance

EXPENSES - Coat’d
recoveries on security shipments exceeded the payments by $1 3 7 <>77 *

For the year

On August I, 1939 the cost of insur

just passed we had net charges of $153°6U*

ing currency and coin shipments was reduced from 4 3 /U cents per thousand to U l/U
cents per thousand*
At Helena $573*10 was paid for insuring money shipments in 1939» or
$1*0*19 less than last year,.

On securities there was a net credit of $17»30„ com

pared to a small net charge of $6 „lU in 193^6

OTHER INSURANCE
Minneapolis
Heiena

l6B390<53
1 ,1 ^2,63

1 7 *533 ol6

Our payments for insurance at Minneapolis during 1938 and 1939 are clas
sified belowo

These charges should show a further decrease in I9U0 because the

yearly premium on our Blanket Bond was lowered to $10,2S6o25 in October, 1939 >
The 1939 payment for this bond was $1„200 less than in 1938°

fire and tornado

policy which we have carried on our property for three years expired on January 1 »
I9U0 and we will be refunded approximately $1*300 of the original premium of $2 ,250 *
One-third of the amount refunded*, or $^33* will be credited to I9 U0 expense and
the balance credited to Profit and Loss*
The Branch payments for insurance of $1 ,lU2063 are $2760 25 greater than
in 1938o

A new burglary and robbery policy requiring payment of $192*88 accounts

for most of the increase,,
MINNEAPOLIS

_ 123i _
Special policebonds
Group Life
Workmen’s Compensation
Non-ownership Auto Liability
Collision insurance - Officers and employees
Bankers 8 Blanket Bond
Premises and Elevator Liability
Fire and Tornado
Steam Boiler
Burglary of Securities
Fidelity bonds (Agent and alternates)
Auto liability on bank owned cars
Camera Property Floater & Fire on Film
Les3 ; Dividend on Group Life for policy
year ending April l a 1939

130.00

125o00

1.^37.to

1 , 398, US

1^030*76

l,l6 lo 3 1
308*§8

381*35
127.1&

11.559-66
330-12
750.00
129*95

216*60
250*00
197*51

151.17

12 ,760*36
362*13
soUcQ 5
63*36
! 95o93
260*lU
299oUl

-,.-53.18

$ 16,593,71

$ 1 7 ,891*22

203 018
$ 16 ,396.53

$ 17.891.22

In order that the Directors may be informed as to the type and amount of
insurance carried at Minneapolis and Helena9 with the premiums and maturitiesP the
following table will show the coverage in effect at this timeD

SUMMARY OF INSURANCE POLICIES CARRIED BY BANK AT MINNEAPOLIS - 1939

INSURER

AMOUNT OF
POLICY

COVERAGE

St„ Paul-Mercury
Hartford
Travelers
Fidelity & Deposit
tt
11
11
it
it
n
Travelers

Hartford
Firemen’s Mutual
Hartford
Travelers
Travelers
Travelers
Travelers
Travelers

PREMIUM

Bankers blanket bond (covers Head Office and Branch)
$ 1,000,000
$ 10,2S6o 25
Burglary of securities (covers Head Office only)
9 ,oooflooo
518.60
Burglary of securities (covers Head Office only)
1,000,000
U3 06s
Fidelity bond - Walter C. Coffey* Federal Reserve Agent
100,000
100000
H
- HoGoMcConnell, Ass’t Federal Reserve Agent
50,000
50*00
M
- HoCoTimberlake, Alternate for Ass ’tF 0R„Agent
50,000
50 o00
”
- John Johnson,
M
"
“
11
50,000
50 o00
Public Liability - Premises, elevators, etc0
50 /100M
990 .U1
Public Liability - Cafeteria
10,000
135.13
Workmen’s Compensation
Statutory limits 1 ,261,71
Building & Contents - Fire etc<,( covers Head Office & Brc) *
500,000
2 ,250.00
Steam boiler
H
”
M
50,000
**9^2**
Property floater on motion picture camera and equipment
2,17S
**3®55
Fire insurance on bank film
H ,000
9063
Chevrolet automobile - Liabo, P„D0, Fire, Theft, etc„
5/50/100M
82. MU
Ford delivery sedan - "
n
M
11
M
5/50/100M
133*07
Automobile - Non-ownership liability
5/50/100M
381.35

DATE OF
POLICY

EXPIRATION
DATE

s-1-39
1-1-38
2- 7-39
12-22-39
7-13“ 39
7-22-39
9- 22=39
12- 1-38
5— 1=37
12- 31-38
1 - 1-37
5-1- 38
II-8-39
11 - 12-39
1-6-39
3-3-39
11 -2-39

S-l-Uo
1-1-Ul
1 - 1-M1
12-22-UO
7-13-*«0
7 - 22-UO
9- 22-UO
12- 1-Ul
5- 1-Uo
12-31-39
1- 1 -Uo
5-I-U1
11 - 8-U0
11 - 12-UO
1 -6-Uo
3 - 3-U0
11 - 2- 1*0

3-5-39
3-5-39
12- 16-37

3-5-40
3-5~Uo
1 - 1-Uo

1- 1 -MO
5- 1-UO

SUMMARY OF INSURANCE POLICIES CARRIED BY BASK AT HELENA - 1939
Standard Accident
Westchester
Firemen’s Mutual
ti
11
H

Globe & Republic
Travelers
U.S0Fid*& Guaranty
Hartford
UoS.Fido& Guaranty
Equitable Life

Non-ownership liability
$ 5/300M
Armored truck. Fire and theft
1,500
& Contents-Fire etc„ (Rider on H o0, policy)
100,000
- Sabotage, vandalism, malicious mischief
(Rider on Head Office policy)
2^,000
New Building & Contents-Earthquake (Rider on H o0 * policy)
50,000
Old Building - All direct loss or damage by fire,
Co»ins0
17.000
Burglary & Robbery (Securities only - excess over million
dollar Blanket Bond, held at Head Office)
500,000
Public Liability - Premises, elevators, etc<>
500,000
Steam Boiler (Rider on Head Office Policy)
50*000
Workmen’s Compensation
Statutory limits
Automobile Chevrolet New Building
New Building

7 SoS6
13 o93
600 o00

30*00

12-6-37

185°00
IOO0I3

U-25-3S
5-5-39

868.00

3-^39
1- 25-39
5-1-38
1-25-39

195*61
S3 o00

2k2M

Group life - Contributory (Insures each officer and employee in amount equal to one year’s salary
or $5*000, whichever is lower0 Expires at the 65 th birthdayo Includes total and
permanent disability prior to age 60* Premium rate 63# Per thousand per month of which
60# is paid by officers and employees and 23# by bank, Dividends* if any* go to the bank.)

* Includes sabotage, vandalism and malicious mischief.

5~5«U2

3»U„U2
1- 25-U 2
5-I-U1
1 - 25-Uo

EXPENSES - Cont 9d
MBS

013 BANK PREMISES

Minneapolis
Helena

$ 67»360oOO
$ 69,567025

2,201*25

The amount charged expense for 1939 taxes at Minneapolis to be paid in
19^0 is the same as in 193^

Appraised value of the land is $1*32,000 and build

ing $lc2520OOOt or a total of $1 568U,000,
100 mills*

Assessed value is $673s>600 and the rate

There will probably be a small amount of special taxes in addition*
At Helena the tax payment was on the new property only*

Taxes on the

old property amounted to #323°76 and were paid by a charge to Profit and Loss at
the Head Office*

In I93 S the payment for the portion of the building coapleted

at the time of the assessment was $812<,69» with $l,097*ll-5 assessed on the old
property,,
DEPRECIATION ON BANE BUILDINGMinneapolis
Helena

31e155«60
^tlSOoSU

31^ 336 ^

Normal depreciation at Minneapolis is $25 ,665.60 which is 2$ of estimated
replacement cost*
oil burnerso

The additional charge of $5,^90 represents the cost of two new
tio.^__— a*'Under Board ruling* we are permitted to charge off during the cur~

rent year the full amount of replacements if not in excess of 10 per cent of the
original cost of Fixed Machinery and Equipment„
Depreciation at Helena was double the amount charged in 193^? because
the premises were occupied but six months in 1938 °

LIGHT, HEAT, POWER AND WATER
Minneapolis
Helena

$ 18„108o0U
1,51**«18

19,622022

Compared to 1938 there has been an increase of $2,700 at Minneapolis.,
It was estimated earlier in the year that our lighting costs due to new equipment
and greater use of current would average $300 monthly higher in 1939 -

total

for light and power was $13,126069 during the past year compared to $9 ,5}i5<>09 in

19380

Fuel oil required in 1939 was 70*236 gallons for which we paid $3*321«59°

The amount purchased in the previous year was 96023O gallons at a cost of $U,922063 *
Through the installation of new oil burners in October we were able to burn a
lower grade of oil at a saving of approximately one-half cent per gallon*
low pressure boilers reduce the quantity of oil necessaryQ

The

Our oil expenditures

during the last quarter of 1939 were $1 »2^6»79 compared to $2,589 for the like period

EXPENSES - Cont5d
LIGHT, HEAT, POWER AND WATER - Cont3d
of 19380

Use of city water cost $819^56 in 1939 an(* $^9^°50 in 1938»

Sewage dis

posal which brought a new charge in the latter part of 1938 cost us $665*15 for all of

1939 , compared to a payment of $289*73 for approximately five months in 193 S«
A reliable comparison at Helena of heating and lighting costs with 1938
may not be made because both buildings were occupied for part of 193 ^ and light was
included in the rental expense paid for temporary quarters used prior to occupying
the new building*
in November*,

In December the heating expense was $77°77 compared to $6U*75

Cost of light was $i+3*’95 I*1 December and $51&82 for November,,

For

Light $700*67# heat $693 *23 ;

the full year 1939 these expenses were as follows;
power $51 o^3 ; water $63085 *

REPAIRS AND ALTERATIONS
Minneapolis
Helena

I***535* 35
57Uo27

15*109*62

The amount required at Minneapolis was substantially greater than in 193S
with over one-half the total used for labor and materials in changing and repair
ing the outside walls*

After occupying these premises for fifteen years we must

expect a moderate increase in the amounts needed each year for repairs,,

More items

make up the 1939 total which were classified as follows;
Elevator maintenance contract
$
Overhauling steam pump
Installing sink in duplicating room
Furnishing and installing boiler for hot
water plant
Acousti-Celotex ceiling for ground floor room
Lights on ground floor room
2 Filters for drinking water
Rewinding air-conditioning motor
Painting smoke-stack and flag pole
Connecting city water to compressor
Furnishing and installing 8 lavatories
Engineering service installing oil burners
Labor and material used in repairing outside walls
Labor and material used in air-conditioning changes
Cage work on 5 ^ level of vault
Light fixtures for recreation room
MisCo materials purchased for making repairs by
our own workmen
Less;

2*166*00
113*75
10U*00
U65*00
353-00
127cSO
l65P00
115 oS0
^7«00
73°00
302*00
I 5O 0OO
7«99^ol+3
l 0055->20
29O 0OO
51=35
1^182*jl

iU , 755.6!*

220029
'■1^53505

Unused portion of amount reserved
in December 193& for plastering

HELENA
Repainting vault
Construction of concrete retaining wall
Miscellaneous small items

206*29
238*00
___ 129 «9 S

57^.27

EXPENSES - Ocmt»d
FtlRNITUBE AND EQUIPMENT
Minneapolis
Helena

9 ,679.20
$

15 .337.29

Of the Head Office purchases $4,569«74 were paid for in December,, the
only important items being $2,864 for eight Monroe Adding machines not yet delivered,
One year ago the amount expended for furniture and equipment at Minneapolis was
$S»2l6 o89 e
Helena purchases i*ere $2 6337«03 greater than in 193®* with $2>46l022 of
the year’s purchases coming in December when $le924„37 wa8 needed for filing equip
ments
Classification of 1939 purchases is given balows
MINNEAPOLIS
National time card machine
Tables
Chairs
Desks
Cafeteria equipment
Shelvinge files and filing equipment
Coin counter
Speed attachment for bill counter
Scales
Ford truck
Venetian blinds
Endorsing machine
2 Remington Typewriters
S Monroe adding machines
MisCo items (None over $100)
Lessj
Articles sold
Balo of amounts reserved,, not used

l6l„52
128*68
l #037oll
589.57
357*00
1*809*97
5290II
175 o66

136052
485*64
319*87

47so47
19^052
2»864o00
532121
$ 9 »8b O l
$ 102 o46
84.96

187 t>4l
$ 9*679o20

HELENA
Files 9 filing cases and equipment
Monroe calculator
Electric time stamp
Tape-shooter for wrapping
2 Walnut desks and 2 chairs
Chevrolet truck and armored body
Mechanical equipment for shop
2 Burro\ighs adding machines
Miser, small items

$ 2 ,177*17
337c75

70,76
4s <,65
75*00
l»7*+5»50
169^95
782*55

2^26

$ T ^ > 5 8 o09
MISCELLANEOUS EXPENSES
Minneapolis
Helena

29 ,7 ^3.10
3.1U8.81

32 ,891.91

Miscellaneous items at Minneapolis were $1,253=02 higher than in I93 S 0
There are a number of miscellaneous costs for which we are partially reimbursed*
such as rental of furniture and equipment medical supplies and physical ezsininations,

EXPENSES - Cont d

MISCELLANEOUS EXPENSES - Coat'd

etCos, with the amounts shown below representing the net cost to the bank*
larger items were as follows;

The

.Rental, repairs and maintenance of furniture and

equipment $2 »871 o29 ; outside protections vault inspection $257 .66 ; outside laundry
and cleaning $1 *597-,22; local transportation $2S9„15; postage meter rental $308„2U;
copies of bank examination reports $3 >?00 ; commercial agency reports $882„2S;
medical services and physical examinations $l,080 o9 7 ; cafeteria, net expense
$3 o179 °23; entertainment of bankers and others not in bank8s employ $2 ,158063 ;
officers’ and employees' dinners $171*30; employees' education, American Institute
of Banking and other $2 *263 ; donation to Federal Reserve Club $l,5l6015; memberships
.American Bankers Association $250; State and other bankers* associations $3^0;
Credit Men’s Associations $205; donation Police and Firemen!s Benevolent Associ
ation $150; Christmas donations $117*50; Photographs for personnel records $1630 50;
Member Bank Conference $U,132o37» our 3 hare of the loss of operating Foreign Depart
ment

Federal Keserve Bankg New York, $2 8882*98; preparation and presentation of

material for radio broadcast $U49»lU; commissions on collection of closed bank
paper $206<.50«
Helena miscellaneous items in excess of $100 covered the following:
Rental, repairs and maintenance of furniture and equipment $718o08; outside protec
tion, vault inspection $H0 1 „2 7 » post office box and postage meter rental $208«8 7 ;
copies of bank examination reports $202*50 ; employees* education $223 *65 ; donation
to Federal Reserve Club $300*00; membership State Bankers' Association $210; photo
graphs of new building for member banks $U52 o08 «

REIMBURSABLE EXPENSES
Minneapolis
Helena

$ 2^6,765 *U 7 *
22,H35q29

$ 269 ,200o76

Amounts received from fiscal agencies were much higher at Minneapolis and
Helena than in 1938 when the totals were $l6l»3UU„7S and $6B81SoU2# respectively,
a total of $l68,l63c20 and over $100,000 less than the 1939 total*

Practically

all of the increase at Minneapolis resulted from expansion in services for the
Commodity Credit Corporation*

At Helena no duties were performed for the latter

corporation in 193*5 with $10<,882„05 the amount reimbursed in 1939„

Other fiscal

services were minor»
*

Includes $9^8037 of leased wire expense recovered from member banks«

EXPENSES - Gont °d

RECOVERIES FROM FISCAL AGEHCIES - MINNEAPOLIS
Treasury Departmenti
Uo So Government Issues
$ 2 1 ,787,.27
Ho So Savings Bonds
27*395*79
Work Relief Checks
20*011c57
Reconstruction Finance Corporation
50*5^9<,76
Commodity Credit Corporation
111,3960 77
Federal Farm Mortgage Corporation
4 B296«01
Federal Land Banks
1»7630^9
Federal Intermediate Credit Banks
'
2o20
U 0 So Housing Authority
l*Q07o5U
Federal Housing Administration
7*20
Federal Emergency Adm 0 of Public Works
6f2c2k
Federal Home Loan Banks and Home Owners’
Loan
Corpoi'ation
6 S791»3^
Fedex^al Crop Insurance Corporation
135^92
Recoveries from Member Banks - Leased wire service 948o37
Total ............................................ .. $“ 2^ 6 ,7650^7

RECOVERIES FROM FISCAL AGENCIES - HELENA
Reconstruction Finance Corporation
$ lle296o07
Commodity Credit Corporation
10 6882o05
Federal Farm Mortgage Corporation
153*^5
Federal Home Loan Banks and Home Owners8 Loan
Corporation
103*72
Total # o o . .................................... • $ ~22>35o29

ASSESSMENT FOR EXPENSES OF THE BOARD OF GOVERNORS OF THE
_____________ FEDERAL RESERVE SYSTEM
___ _
Minneapolis

36 ?796066

Our assessment for Board expenses was less than for 1937 or 1938 and on
the basis of assessment fixed for first half of 19 UO a further reduction is in
prospecto

The payment in 1939 was $2*638076 below that of 193^«

six months of 19^0 we will pay the Board $17*710*6Uo

Eor the first

During the like period of

1939 this payment was $1SbH91o77*
FEDERAL RESERVE CURRENCY
Original cost and shipping charges

$30«751°78

There was a very material saving in printing costs for our notes compared
to 193So

Such costs made up $23a000 of the above total with similar costs $39»3^

in the previous year0

Shipping expense to Minneapolis and Helena from Washington

amounted to $3,326o0S in 1939 and $3eU08o81 in 193s °
in the year just closed and $3*55^*20 in 1938*

Surcharges of $^,,156 were paid

Salaries of the Issue and Redemption

Division are also included in above total amounting to $269070 in 1939 and. $272*33
in 1933o

Total costs of Federal reserve currency were $1 5 ,867*56 less than in I93 S 0

EXPENSES ~ Coca d

FEDERAL RESERVE CURRENCY - Cont’d

Helena pays no part of the expense of printing or shipping our notes0

FEDERAL RESERVE CURRENCY
Cost of redemption including shipping charges

$6*ll6<,56

During 1939 we reserved $1.50 per month for nine months and $100 per month
the remainder of the year to pay Redemption Agency expense and at the close of the
year the balance was $S19°36*

Charges making up the complete redemption classifica

tion in 1939 covered the followings
Amount accrued during year for Redemption Division
(Paid for year ending June 30 , 1939 $l*103„9l)
Paid Federal Reserve Board our share expense Issue and Redemp
tion. Division
Insurance on our fit notes from other Federal Reserve Banks
Postage on fit Federal Reserve Notes to other Federal Reserve Banks
Express charges on our cancelled notes to Washington
Shipping charges on fit notes to other Federal Reserve Banks by
Helena

1 *650*00
l,207d5

59lM
2 , 105.79

276060

PROFIT MI) LOSS ACCOUNT OF
FEDERAL RESERVE BANK OF MINNEAPOLIS DURING 1939

Head
Office

Total
Current earnings
Current expenses
Current Net Earnings

599‘6k

$ I.13lt„367.is

97>4.739.05
lg9.S60.59

_____ i l h m - J S L
$
257 ,036.31

5*188*98

5*188,98

139r647*90
960 c.30
1380 U0
707 ,6s

139.61+7,90

Helena
Branch
$
232 .U6
— ail*08.18
$ 97.175-7?

Additions to Current Net Earnings
Withdrawn from reserves for losses on
Hungarian credits
$
Profit on U,Ss Government Securities
sold - Net
Profit on sale of other real estate
Net Income from other real estate
Profit on transactions in foreign exchange
Sale of fixed machinery and equipment
Sale of scrap material
Forfeiture of option to purchase old
Branch "building at Helena
Profit on mutilated currency and coin
Recovery on transit items previously charged
to profit and loss
TOTAL ADDITIONS , . ................ , , $

960,30
575*83

*37.*3

153,00

707*68
158,00

157.15

17.15

1 UO0OO

50,00
172 o21

156,117

50,00
15.7*1

1+6,56
TV/ *227 0is

11+7.^53*87

100,000,00

100,000c00

U6„$6

231.69

Deductions from Current Net Earnings
Charge-off on carrying value of hank
premises
$
Added to reserve for losses on indus
trial loans
Loss on counterfeit currency and coin
Discount on foreign currency and coin
Interest paid on account of adjustments not
connected with earning assets
Losses on personal loans to employees
Difference Account

33,000,00
129,31
33.^5

33,000,00
126,31

9.5^

9. 5^
31.35

31 ->35
|f5i. 11 ..

.
133.65^*82

Net additions to current net earnings

_ 13,572.36

Net Earnings „ . , « , ............

173 *^32.95

Dividends paid

17** *905*39

Withdrawn from Surplus (Section 7)

993°^2

Withdrawn from Surplus (Section 13 b)

**79°02

3c 00
,30

33.15

U91.28
133.591.Bi3

1*0*11
36*21

13B767c2l4

19lU8S

270,803,55

$ 97.370.6

DIVIDENDS
Cumulative dividends at the rate of six per centum pe.r
annum on paid in capital stock as of December 31fc
1938...................................... $ l^339*763*7S
Dividends paid during 1933
17U»905o39
Total dividends paid since organization ........................ .. $ ^,^1^6^9717

FRANCHISE TAX
Total of franchise tax payments to the United States
Government since organization
These payments were made out of earnings during the
period 191S to 1932*
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, (SSCTION 7)
Balance in Surplxis (Section 7 ) December 3 1 , 193 S
December 30a 1939 ” Withdrawn from Surplus;
Net Loss for the year 1939

$ 3.153?^13,69
______993^^2
$ 3,152t420o27

SURPLUS, (SECTION 13b)
Balance in Surplus (Section 13 b) December 31, 1938
December 30* 1939 ~ Withdrawn from Surplus;
Net Loss for the year 1939

$ l»OOl0l62<98
U790Qg
$ TT o o o TSs J oQ^

RBSSRYES
(Other than Reserve for Depreciation Bank Premises)
$ 2,1 U9 ,3696*67

Total reserves at beginning of year
Credits during year;
Added to reserve for losses on past due indus*
trial advances

Debits during years
Losses on miscellaneous assets acquired in
settlement of claims account failed banka
Withdrawn from reserve for losses on Hungar
ian credits and transferred to profit and
loss account

$ 33,000*00
$ 3 3 ,000*00

6 *906*39

5»lS8o98
$ 12*095*37

20 ,9 0 ^ 6 3

Net Credita to Reserves * . .

Total Reserves at End of Year

$ 2 *170 *601.30

Reserves at end of year for;
Contingencies created from, net profits prior
to 1937
Contingencies created from surplus during
1937
and thereafter
Total reserves for Contingencies ....................
Other Reserves at ftnd of Year for;
Losses on miscellaneous assets acquired in
settlement of claims account failed banks
Losses on past due industrial advances
Losses on Hungarian Credits

$ l t701*2H6o

« ..........

280,179*99
$ l»981»^2o017

7 U*093 »6 l
73»OO0oOO
H2,081,52

Total Reserves at End of Y e a r ................ .. .............. .. » $ 2 B170^601.30

PROFIT AND LOSS
There was an increase of $34,128*62 in current earnings for the past
year and a decrease in expenses of $37#184026 hut the current net earnings of
$159(860=59 were insufficient to cover all needs*

Although considerably less

than in 1938, the profit from System sales of United States securities amounted
to $13986 *17090*

One year ago this profit was $281,350*93 which permitted us,

after all other requirements were filled, to add $198 ,061*26 to "Reserve for Con
tingencies* H

No additions to such reserve were made at the close of 1939o the

preference being for a reduction of $100s000 in the carrying value of the land
at Minneapolis®
Apart from the profit on sales of Governments no important additions
were made to earnings* the largest item being $5#138o98 withdrawn from “Reserve
for Losses on Hungarian Credits” with sufficient remaining in the account to
provide for expected losses*

One year ago the amount reserved for ’’Losses on

Hungarian Credits’5 was reduced $5»225<>12 and the amount remaining in the account
on December 31c 1939 is $42e081*52*

From the sale of other real estate acquired

in settlement of claims account failed banks# v/e obtained $960*30 *

Income and

expense resulting from property taken over by the Bank gave a net credit of
$138 ,UO for the year.

Costs in connection with the Helena property were $437*43*

of which $323076 represented 1939 taxes*

Our share of the profit on conversion

of sterling exchange into dollars was $707«6S«

From the sale of scrap metal at

Minneapolis and window grilles at Helena we obtained $157°15» sales of fans and
other equipment $158 ; profit on mutilated coin sold for bullion $172 *21 ; forfeiture
of option to purchase old Branch building $50 ; recovery on transit items previously
charged off $46*560
With $1*134*599*64 of current earnings and $147,227*18 in credits direct
to Profit and Loss, we had $le281 0826*S2 of gross earnings*

These earnings were

applied as follows*
CURRENT EXPANSES
Minneapolis
Helena

$ 877•330*87
976408«18

97lU 739*05

Our estimates for 1939 costs were closer to the actual expenditures than
usual*

Payments at Minneapolis were $15*366*13 less than the estimates with

Helena payments exceeding estimates by only $329 *18*

The fluctuation in the

number of employees on fiscal work and the expansion and contraction in the space
required for carrying on fiscal operations make reimbursement difficult to estimates

PROFIT AND LOSS - Contjd
as will be realized in comparing fiscal costs for the past two years«

Subject

to final change* the 19^0 budget figures show an estimated net expense of $889*627
at Minneapolis and $93*505 at Kelena®

SPECIAL CHARGE-OFF OK LAND
Minneapolis

100,000

Under approval of the Board of Governors this reduction, the first in
twenty years,, was made at the close of the ye&r0

The land was purchased for

$600#000 in 1919 and at the close of that year the book value was reduced to
$500,000*.

The best opinion we can obtain gives our land an approximate value

of $*K30*000o

RESERVE FOR LOSSES ON INDUSTRIAL. ADVANCES

33,000

Including $15«000 reserved at the close of 1937 and $258000 reserved one
year ago» there is a total of $ 73»000 reserved for possible loss in connection
with advance made the Northwestern Oil Company, Superior, Wisconsin*

The orig

inal amount of $22^,000 had been reduced to $190 ,^82o22 at the close of 1938 *
On December 31f 1939 the balance of principal was $188,982*22c

Including past

due paper of the above company, the total of past due industrial advances was
$226 s052 olU at the close of 1939 „

LOSS ON COUNTERFEIT CURRENCY AND COIN
Minneapolis
Helena

126„31
3*00

129=31

Counterfeit notes not found on first handling at Minneapolis were eleven
in number and $100 in amount„

Counterfeit coin returned by banks and others

was $26*31 at Minneapolis and $3» at Helena.,

DISCOUNT ON CANADIAN CURRENCY
Minneapolis
Helena

33°*5
*30

33*^5

This amount was absorbed on small amounts of currencyc the discount on
which we preferred not to charge back to member banks0 or on bills which passed
our tellerSo

LOSSES ON PERSONAL LOANS TO EMPLOYEES
Minneapolis

3lo35

Between the period from April 15* 1923 to January 21, 1939 w® had losses

PROFIT AND LOSS - Cont8d

of $1 ,256.50 on loans to employees who could not be financed in any other way,,
During the same period the interest received on advances to employees totaled
$l 0225o15 and this was applied to reduce the loss to the above amount*

DIFFERENCE ACCOUNTS
Minneapolis
Helena

Debit $ 491*28
Credit
Uo.Il

Helena Overages

Minneapolis Shortages
Currency and Coin
Transit and clearings
General

$ U 5I 0I7 Net Debit

$ 1 31 ,6s
*28

Currency and coin
Transit and clearings

6„51
33°60

U60II

One year ago we had net overages at Minneapolis of $4U„30 and at Helena
of $23 ,62.

DIVIDENDS PAID

$ 17U,905«39

Capital stock holdings of member banks in this institution were
$2t931 o150 on December

3 1 * 1 9 3 9 Average daily amount of stock held during the

year brought payments to members of the above dividend.*

One year ago the divi

dend payment was $17U*231o27 from average holdings of $2 *903 *850*
stock at the close of

1939 numbered H68e an

Banks holding

increase of six banks for the year 0

Total dividends paid since organization $Ufl51^»669°17

TRANSFER FROM SURPLUS, (SECTION 13~b)
Gross earnings from industrial advances were $59*870*31 an^ gross expenses $27»U21c29o

After providing for the expense of handling these loans and

reserving $3 3 0QOQ for probable loss0 it was necessary to draw on Surplus for
$550*98*

As the Bank participated in 13'^ of these advances $71 *96 ot this

deficit was absorbed by the bank and $^79*02 was charged against funds provided
by the Treasury (Surplus 13“b ) 0

After this withdrawal Surplus 13~b on December

3 1 » 1939 amounted to $1 1000c68}<>960
TRANSFER FROM SURPLUS? (SECTION 7)
Net loss for the year to the Bank after providing for all costs, includ
ing depreciations and reserves amounted to $993°l*2 «

This covered $71*96 loss in

connection with industrial loans and $921 <>U6 loss in the total required for all other
purposes*

Surplus* Section 7* at the close of 1939 amounted to $3„152{)U20o27„

FEDERAL RESERVE B A M OF MINNEAPOLIS - HEAD OFFICE
REPORT OF AUDITS - YEAR I

939

Dates of Audita
CASH
Cash in Vault - Bank Officers11 Reserve
Cash with Tellers
F„Ro Notes in Transit from Other Federal Reserve Banks
F 0R 0 Notes forwarded for Redemption
Other Cash in Transit
Redemption Fund - F«Ro Notes
Inter-District Settlement Fund
F„R9 Agent 9& Gold Certificate Fund
Unissued FoR* Currency held by F0R 0 Agent
Currency Received account of Ron.-Member Banks

Currently
Currently
3«g, 5-24* «-3l* 11-9
Monthly
Weekly
3- 6 , 5- 21*. 8- 3 1 , 11-9
3-8, 5- 24, 8-31. 11-9
Currently

EARNING ASSETS
Bills Discounted
Industrial Advances
Participation in System Open Market Acct„ 0oS*Securo
Participation in Investments through Foreign Banks
Participation in Foreign Loans on Gold

3-11*
3-11,
3-11*
3-n*
3-11.

UNCOLLECTED ITEMS
Transit It eras*"- F«R® Banks
Transit Items - District 9
Exchangesfor Clearing House
Federal Returns and Other Deductions
Return Items - Member and Non-Member Banks
Government Suspense Account
Miaco Vault Coupons - In process of collection
Coupons on Hand
Due from Branch
Checks and Other Cash Items

2—28, 5*15 t, 8- 21 *
2-28, 5- 1.5 * 8- 21 ,
2-28, 5-15 , 6- 22 ,
2-28» 5-15 , 6- 22 ,
2-28, 5-15 , 6- 22 ,
2-28, 5-15 r 8-21 ,
2-6 , 5-26 , 9-11
10-9
>+-8 , 8-3 , :
2-28, 5-15 ■ 8-21«
2-28, 5- 15 , 6- 22 ,

MISCELLANEOUS ASSETS
Misc0 Assets acquired accto industrial Advances
Industrial Advances past due Three Months
Other Bills and Securities past due Three Months
Misce Assets acquired in Settlement of Claims
account Closed Banks
Claims account Closed Banks
Advances to protect Collateral
Other Heal Estate
Fiscal Agency Expenses Reimbursable
Interest accrued on U.S« Securities
Interest accrued on Bills and Advances
Premium on Securities
Overdraft s
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

3-8. 5-2U, *5-31. 11-9
3-8, 5- 21*, 8- 3 1 , 11-9

7*
S-7,
S-7,
8-7,
S-7*

11-14
11-14
11-14
11-14
11-1*4

12 -7
12 -7
8- 21 , 12-7
8—21 , 12-7
8- 21 , 12-7
12-12
12-7
8-21, 12-7

3-11* S~7r 11-14
3-11* s«7, 11-14
3-11* 8-7, 11-14

6 -2 ?
6-27
6-27

6-27
Currently
3-llt s-7, il-l4
Currently
3-11, g-7, n » i 4
Currently
7-11, 11-6
Currently
Currently
Currently
Currently
Currently
Currently
Currently
Currently

BANK PREMISES
Land
Buildings
Fixed Machinery and Equipment

Currently
Currently
Currently

FEDERAL RESERVE NOTES
Federal Reserve Notes Outstanding

3- 8 ,

DEPOSITS
Member Bank Reserve Accounts
Jion-membsr Clearing Accounts
UoSe Treasurer - General Account
Foreign Banks
Officers5 Checks
Federal Reserve Exchange Drafts
Other Deposits

Monthly
Monthly
Monthly
3-11, S-7, 11-14
Monthly
Monthly

5-2b, g- 3 1 , xi-9

Monthly

FEDERAL RESERVE BANK OF MINNEAPOLIS - HEAD OFFICE
REPORT OF AUDITS - YEAR

1939

Dates of Audits
Deferred
Deferred
Deferred
Deferred
Deferred

DEFERRED AVAILABILITY ITEMS
Credits - Member and Non-Member Banks
Credits - Other Federal Reserve Banks
Credits - Government Items
Credits - Misc* Vault Coupons
Credits - Non-Cash Collections

CAPITAL STOCK AND SURPLUS
.Capital Stock Paid in
Surplus Fund (Section 7)
Surplus Fund (Section 13 -b)

Monthly
2-2S, 5- 15 o 8- 21 , 12-7
2-28, 5- 1 5 , 5-21f 12-12
2-6 , 5- 26 , 9-11
2-6 , 5-26 . 9-11

Currently
Currently
Currently

RESERVES FOR;
Contingencies
Valuation Reserves;
Bank Premises
Hungarian Credits
Industrial Loans
Misc 0 Assets - Failed Banks

Currently
Currently
Currently
Currently

EARNINGS FROM;
Bills Discounted
Industrial Advances
Commitments to make Industrial Advances
Participation in System Open Market Acctn UoSc Secur0
Investments through foreign Banks
Deficient Reserve Penalties
Miscellaneous

Currently
Currently
Currently
3 - u , s- 7 , ii-iU
3 -1 1 , s- 7 , 11 -lH
Currently
Currently

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

Currently

Currently
Currently
Currently

3- 11, 8- 7 . 11-lU
Currently
Currently
Currently

MISCELLANEOUS OPERATIONS AND ACCOUNTS SUBJECT TO AUDIT
COLLATERAL AND CUSTODIES
Securities held as Collateral fors
Bills Discounted
Industrial Advances
War Loan Deposits
Securities held in Safekeeping
Cash Held in Custody for Treasury Department

3- 27* 5- 1 , 10-2
3-27 , 5-5*. 10-2
3 -27 , 5- 1 . 10-2

3- 27 , 5-1 , 10-2
3-8, 5-24, S-31

FISCAL AGENCY QPEhATlONS
Subscriptions to and Allotments of U*S 0 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 - Checked
Purchase and Sale Transactions

Currently
Currently
Monthly
Monthly

RECONSTRUCTION FINANCE CORPORATION

1-18

NON-CASH COLLECTIONS

2-6 , 5- 26 , 9-11

BALANCE SHEET AUDIT OF HELENA BRANCH

4-17

(11-9 none held)

Currently
3- 27 . 10-2
3-21, S-l4, 11-27

3- 2 7 , 10-2

FEDERAL RESERVE BANK OS’MINNEAPOLIS - HELENA BRANCH
REFORT OF AUDITS - YEAH

1939

GAS#
Gash in Vault - Officora5 Reserve
Cash with Tellers
Federal Reserve Notes in Transit

Dates of Audita
1-17. 2- 1 1 , 3- 9 *
10 - 26 f
1-17. 2- 1 1 , 3-9*
10 - 26 ,
Currently

5 -10 , 6-28, 7 - 2U, 8-16 # 9-27*
11 - 21 , 12-19
5-10, 6-28, 7 - 2U, 8- 16 , 9-27*
11 - 21 , 12-19

EARNING ASSETS
Bills Discounted

5-12. 6-17. 7-8. 8-25. 9-30. 10-17, 11-17

UNCOLLECTED ITEMS
Transit Items-Federal Reserve Banks
Transit Items-Montana Division
Exchanges for Clearing House
Federal Returns & Other Deductions
Return Items-Meraber & Nonmember Banks
Government Suspense Account
Coupons on Hand
Checks and Other Cash Items

1-1 1 ,
1- 1 1 ,
1- 1 1 ,
1- 1 1 ,
1- 1 1 ,
2- 1 1 ,
1- 20 ,

2- 1 1 ,
2- 1 1 ,
2- 1 1 ,
2- 1 1 ,
2- 1 1 ,

3- 1 3 .
3-1 3 ,
3- 1 3 ,
3- 1 3 ,
3 -1 3 ,

6- 1 3 ,
6- 1 3 ,
6- 1 3 ,
6- 1 3 ,
6- 1 3 ,

7-17*
7- 1 7 ,
7-17.
7- 17 .
7- 1 7 .

8-8 ,
8- 8 ,
8- 8 ,
8- 8 ,
8- 8 ,

10 - 19 , 12-11
10-19, 12-11
10-19. 12-11
10 - 19 , 12-11
10-19, 12-11

6-13, 11-25
2- 1 1 , 3 - 1 3 . 6- 1 3 , 7-13, 8-lU, 9-29. 10- 26 ,
11.-7» 12-12
1- 1 1 , 2- 1 1 , 3-1 3 . 6- 1 3 , 7-17* 8-8 , 10 - 19 , 12-11

MISCELLANEOUS ASSETS
Fiscal Agency Expenses Reimbursable
Overdrafts
Deferred Charges
Difference Accounts
Suspense Account - General
Expenses
DEPOSITS

Currently
Currently
Currently
Currently
Currently
Currently

Member Bank Reserve Accounts
Nonmember Clearing Accounts
Officers’ Checks

Monthly
Monthly
Monthly

DEFERRED AVAILABILITY I T M S
Deferred Credits;
Member and Nonmember Banks
Other Federal Reserve Banks
Government items
Non-Gash Collections

Monthly
2- 1 1 , 3 - 19 , 6- 21 , 8- 22 , 10- 19 , 12-11
2- 1 1 , 6-1 3 , 7 -2 7 , 6- 22 , 10- 18 , 11 -2 5 , 12-11
2- 1 1 , 5- 26 , 11-7

EARNINGS FROM;
Bills Discounted
Deficient Reserve Penalties

Currently
Currently

MISCELLANEOUS LIABILITIES
Unearned Discount - Bills Discounted
Sundry Items Payable
Suspense Account ~ General

Currently
Currently
Currently

MISCELLANEOUS OPERATIONS AND
ACCOUNTS SUBJECT TO AUDIT
Non-Cash Collections
Cash Held in Custody for Treasury
Department

2- 1 1 , 5- 26 , 11-7
1 - 1 7 . 3-15. 5-21*. 6-7. 7- 2H, 8- 2 , 9- 25 , 10-18
11 - 2I*. 12-13

BANK PR3£4iSES - YEAR 1939

Hsacl
Office

Total

Helena
Branch

Land
Gross Book Value?
Beginning of year
Additions during year
Deductions during year
Net book value end of
Year................

510 ,520 c66

10 ,000*00

10,000,00

$ 1 0283 ,281,50

7 5 .000 c00

$ 1 *283,2810 50

7 5 .000,00

359 .316.76

75 O 0OO

100 ,000 c00
$

*410,520 066

500 t520 c66
100 ?000 c00

U00fl520o66

Bank Building
Gross Book Value;
Beginning of year
Additions during year

$ l 9358e281o50

Deductions during year
End of Y e a r ........ ..
Reserve for Depreciation*:
Beginning of year
Credits to Reserve'
Normal Depreciation
Other

0 0 0$ l,35Sr2Slc50

360 f068o76

2 7 ,165^60

25 ,665,60

1 ,500,00

•

Debits to Reserve
End of Year

. . .$

3g7.234o36

384,984*36

2 ,250,00

Net book value end of year

0 0 e$

971e047ol4

S98P297olU

72 ,750.00

Fixed Machinery and Equipment
Grose Book Value;
Beginning of year
Additions during year

Deductions during yeex
End of Year » .................. $
Reserve for Depreciation;
Beginning of year
Credits to Reserve;
formal Depreciation
Other

Debits to Reserve
Knd of Year • • • • • • • • • • • $
Net book value end of year, , , ,$

676 B396*23

5,i+90o00

659,538,35
5 ,490*00

84q „o o
681,046,23

840000
664,238,35

660 ,428074

659e588o35

7 ,1700 84

5,490o00

840c00

840000

666,759*58

664 ,238035

14 ,286065

16 ,807*88

I 6 ,S0 7 o88

84o ,39
l«6S0e84

2 ,521023
$ l U 1286065

BANK PREMISES - MIMNKAP0L1S

Puri mg the year 1939 considerable work wae done through alterations and
repairs and new installations of equipment in our building,,
building was replastered and painted from top to bottoa0
cleaned and paintedo

Practically the whole
The boiler room was

A now hot water boiler and new oil burners were installed,,

Air conditioning changes required now ducts on the second floor,,

Filters were

installed to remove the taste from the water and have proven very satisfactory*
The top section of the outer wall was removed and covered with copper
sheeting*

The inner side of the wall was also cleaned and waterproofed®

The

kitchen and cafeteria were thoroughly cleaned and some additions Eads to the equip**
mento
Except for the painting of the smoke stack and the flag polee all redecor
ating was done by our own workmen^

Changes in electrical arrangements and installa

tions were carried out by our electricians and the making and repairing of all
wooden furniture was done in our basement workshop,,
tion at the present timeo

The building Is in good condi

Detail of the repairs end alterations and the cost As

shown in the expense classification

The expense of material and work required in

making repairs and alterations was $1 ^»535®35 compared to $ll9Ull*67 in 193 $*
light9 heat, power and water total cost ia higher than in 193^ because of the im
proved lighting arrangements and the increased usage of current*
higher because of the charge for sewage disposal„

Water costs are

Fuel oil costs were lower in

1939 and a further reduction will be in evidence in 19 *K) through the changing over
from a high to a low pressure heating system and a saving of 1/2 cent per gallon
in cost of fuel oilo
Total building operating costs at Minneapolis after deducting $18 »268SU2
for rent from fiscal agencies was $15 3 *971*27 compared to $l4S»370o52 in 193 $o

the reasons previously given for this increase should be added a larger deprecia
tion charge explained belowB
DEPRECIATION AT KIHNISAPOLIS
The normal depreciation on our building has been figured for 15 years at
2% on an estimated replacement value of $1*283*281*50* or $25 *665 o60 o

At the close

of 1939 depreciation of $38^*98^036 had been accumulated giving a net book value
of $898,297ol4 to our Bank building

Full cover for the original cost of fixed

machinery and equipment had been provided by the close of 193^«

During 1939 we

DEPRECIATION AT MINNEAPOLIS - Cont»d

added $5*^90 to Fixed Machinery covering the cost of two new oil burners and then
increased the depreciation account the full amount of the purchase "by a charge to
Expense*

The reservs for depreciation of Fixed Machinery and Equipment amounted

to $66U*238e35 on December 31e 1939°

DEPRECIATION AT HELENA
No changes were made in the gross book value of the Branch property since
December, 1938»

At that time the land value was reduced to $10,000 and the build

ing account reduced to an estimated replacement value of $7 5 tOOO with $l6 9807 o88
allocated to Fixed Machinery and Equipment
was provided at the end of 193 &

Depreciation for six months in 1938

the full year3s allowance of 2% on building

and 10/o on fixed machinery and equipment reserved at the close of 1939-

After

providing these reserves the net book value of the Helena property was as follows?

Land
Bank Building
Fixed Machinery and Equipment

$
$

10 , 000,00
72*750*00
lUp2S6o65
9 7 ,036,65

BANK PREMISES - TAXES
(See under Expense)

LOANS, REDISCOUNTS AND ACCEPTANCES

During the year 1939* 25 banks have taken advantage of the rediscount and
loan privileges,, borrowing an aggregate amount of $l 8129 fi710 o9U for a *ot;al of l6s
items*

The same number of banks were accommodated in 193$ ^°r an aggregate amount

of $2 b339 *025 o15 for a total number of 21U items*
those accommodated,,

No Twin City bank was among

On December 31 , 1939 loans and rediscounts amounted to

$150 a3 7 7 o19 as compared to $1 33 »^57»72 at the end of 193 ^* and $17 M 6980 „S1 at the
end of 1937»

There was no time during the yoar 1939 that banks were entirely out

of our debto

The discount rate has remained at 1

during the entire year*

The activities of the Industrial Loan Division commenced in August, 193^,
advances for working capital being made to industrial and commercial enterprises*
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 cento
The volume of activity in industrial loans decreased considerably in 1939,
during which year 25 advances were made in the aggregate amount of $308 *7 S0 «l6 6
with participating institutions taking $8 ,8^0*00 of this amount* leaving a net ad
vanced by the Federal Reserve Bank of $299»9^0ol6o

However, the number 25 includes

several advances to each of three borrowers, and the amount of $3O 8 078 O*l6 includes
disbursement of $118*500 and $86,2^0 in each of two loans*

Repayments on advances

during the year reduced the balance $526 *716 *18 „ leaving a net balance of $968085^^26
on December 3 I 0

Repayment of eight loans in the amount of $33p200„05 (our share)

appears to have been through refinancing*

Commitments made in accordance with the

provisions of Section 13 -b amounted to $15164HU075 in 1939e and the contingent lia*
bility resulting from such commitments at the end of the year was $62 e129 *1+8 o
In addition to advances made and commitments given during 1939*

loans

totaling $12g500*00 were recommended favorably by the Industrial Advisory Committee
and approved by the Discount Committee*

These loans will probably be disbursed in

the near future*
Included in the total of $96s985U026 in industrial advances is $2269052*lU
of past due paper, with a loan to the Northwestern Oil Company in the amount of
$1SSj,9S2«>22 the principal past due advance*
$225e000o

The original amount of this loan was

Against possible losses a reserve of $73eOOO has been set up during the

past three years*

3.3

DAILY AVJBBAGE HOLDINGS OF EARNING ASSSTS
Bills Dis
counted

1939

81.585

193&

166 ,

1937

271,071
**7*206
ks,59U

1936
1935
193^
1933

531.212
6 *267,577

1932

11,933*801

1931
1930

s i s , 935
4 ,0 4 2 ,8 5 9

Bills
Purchased
1.5X7
1*903
60,465
60 ,864
69.523
589,14-38
2 ,936,456
1,649,414
7 „607»324
7.870,007

836,798

896,491
723.050

1 ,3l.lt,784
1.936.117

265,476

Federal Int.
Credit Bank
Debentures

U« So Secur
ities

Industrial
Advances
$

75 ,2S0 t6lb
75,^13,276
3 3 *024,195
82 ,208 ,224
72,398,064
65,803,357
58 6209 s 321
^3.72^.651

Municipal
Warrants

63,904

26,761,330
22, 786,786

158 &671

Foreign
Loans on
Gold
36,7^7

2,5^5
64 ,520
152,197

206
1,635
6,308
l »^69
1^093

97,671
34 ,220

Commitments to
make Industrial
Advances

126.590
168,430
60 .53 s
94, 390
92.568

6 ,2/5

ATOEA&S HAS! OF EAHSIHGS OH JSARNIKG JlSSiiTS

Bills Dia*
daunted
1933
193S
1937
193^
1935
193^
1933
193?
1931
1930

1 .6 42 *
1*596
1*755
2 , 00S
2«. 090
2.942
3-50 7
3« 500
4. 265

Bills
Purchased

Industrial
Advances

.7 3 0 *
*344

60000*
60 000
60 000
60 coo
60 000
60 000

<.767
.921
.844
°54?
1.280
3-961
l „ 74s
2*904

U« S 0 ^scur*
it lee

Federal Ini,
Credit Bank
Debenture s

1*421$
1-351
1.557
1*539
1.785
2o046
2 o02?
2.107
2.233
3.280
Discount
Discount
Discount.
Discount
Discount
Discount
Discount
Discount

Municipal
Warrants

Foreign
Loans on
Gold
*008*
1.171
I 0U63
1.595

2.773%
2 c59^
rate
rate
rate
rate
rate
rate
rate
rate

3*500*
3o500
3000

1*555
1.500

3.500
3*877

raised
May lHs 1929
lowered February 8, 1930
lowered April 15, 1930
lowered September 12e1930
lowered March l6t 193^
lowered January 8>, 1935
lowered May iH, 1935
lowered August 2U# 1937

to
to
to
to
to
to
to
to

5*
U
3s

3
2^
2
1-|

Commitments to
make Industrial
Advances

1 .023*
1.012

1,052
1.03S
1.009

F A I L E D

B A N K S

INDEBTEDNESS
No tanks suspended during 1939 that were indebted to us*
Principal liability December 3 1 , 1939
Estimated value of collateral to apply on this balance

78 ,365,70

Estimated Loss (Against $7H,093°6l reserve) . . ..................

73sS65o70

Collections for 1939 ia reduction of original liability
In addition* overpayments of original liability which will
be applied on recovery of expense
Collections on real estate contracts

5 ,398*26

Total collections for 1939 , „ . ...................... „ 0 . . »

^,500o00

COLLECTIONS

3 »936<>35
1,152.30
10»Us6o91

EXPENSE
Cost of field operations for year 1939 . . „ .................... $

fGk0SS

CHARGES TO SPECIAL RESERVE
Aggregate charges to special reserve at close of 193^
Charges for 1939

$ 253,909e32
- 6.906.39

Total charges to special reserve » . ..............

$ 260 .815.71

Probable future charges

73.865.70
$ 33>*(6s i .Ui
CLASSIFIED WORTHLESS
TRANSFERRED TO SAFEKEEPING

Notes classified as worthless and transferred to safekeeping
during the year . .................... .........................$ 288 ,809 olJ3

REAL ESTATE
We own 19 pieces of real estate carried on our books at $19*00 consist
ing of 18 farms (improved and unimproved) end one small-town housed which prop
erties are situated in North and South Dakota and Montana,,
One farm has been
lost by foreclosure of the first mortgage6
Some years back in an endeavor to
protect our collateral* we acquired this real estate*, Collections on contracts
for sale of portions of this real estate were made as follows?
First National Bank, Pollock, S„ Dak»
First National Bank 9 Cutbank, Montana
Opheim State Bank,
Ophelia, Montana

a/c

S. SQ Olmstead
Paisley Land
W. Co Kahle

110,00

820.00
222,30
l*152o30

An interest in seven other farms is carried in "additional collateral", which were
acquired from the so-called Doty Trust in connection with the closing of the First
National Bank at Medina, N 0 Dak.
Title to these iB in the name of the Ajax Land
Company, in which corporation the Federal Reserve Benk holds 1U2.2 shares of a
total of 1 9000 outstandingo

CHECK COLLECTION FUNCTION
(Minneapolis only)

The Check Collection Department handled 30 ,351.227 cash items totaling
$U,36 1 ,58O ,793-,96 during the year 1939 * which was 3 3 7 *63 ^ items more than the
number handled during 1

The figures given below are the number and amount

of items handled* the average number of employees and the total expense of the
Check Collection Function, which includes Government and Work Belief Checks for
the years 193 ^ an(i 1939 ;

Year

Number of
Items

1939
1938

30 .351,227
30. 013,593

Average
Number of
Employees

Amount
$ 4 ,361 ,580 ,798.96

**.673>1»8i+( 397„i*9

Total
Expense

64.85

$ 92 .990.90

63.98

94,969.80

Last year we reported that the number of cash items handled during 1938
was the highest in the history of the Check Collection Department and in 1939
we established an all-time record by handling 3 3 7 •63 U items more than last yeare
The following table indicates the number of items handled by the sub
divisions of the Check Collection Function for the years 193s and ^9395
Items Handled on

1938

Twin City Banks (Clearings)
Member and Non-member Banks
Other Federal Reserve Districts
Direct to Member banks other F 0 R» Districts
To Helena Branch, Helena, Montana
Treasurer of the United States
Uo So Government Work Relief Checks

**.319*958
16*122,831
3*9^2*52^
56»77^
111,101
2*160*55^
3„2991>851
To,
013 ,593
__

IU'kj- rf ■< ••

1939
^*3^0,156
16,^78*225
3*^56*904

65,826
12)-',806
2 ,630,^85
2 985^,825
30 ,351,227

The cost of handling 100 items in three units of this function for the
years 193 ^ ai1^ 1939 follows:
City Checks
(Clearings)

Year

1939
1938

Country Checks
(Outgoing)

15*7 cents

20«5 cents
21 oU cents

IJck cents

Return
Items
$ 1*15
l„lU

The average number of items handled per person per day in these three
units during the years 193 ^ end 1939 follows?

Year
1939

1938

•

City Checks
(Clearings)

Country Checks
(Outgoing)

Return
Items

2,872

1,999
2*017

^60

2*815

^98

During 1939 we handled 2 6 2 ,^ 9 return items totaling $27,9 9 10837^15 com
pared to 282*95^ items totaling $26,02^,793*50

1938 °

Included in these figures

are non-par items sent us in error,* non-cash items forwarded to us as cash items*

CHECK COLLECTION FUNCTION - Cont*d

items returned by drawee ‘banks for various reasons and other items returned to
depositorso
The daily average number of cash letters received and sents 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 1938 and 1939 are
given belowo

Year

Head Office o n l y _____________Ninth Federal Reserve District___________
Letters
Letters
Banks
Banks vol^ BankST” Banks added Banks reReceived
sent
reported untarily
Reported to our par moved from
dally_____ daily_____closed
liquidated reopened
list_____ par list

1939

1,152

193S 1,235

907

913

0
0

1
0

7
12

During the year 1939 we reduced our total expense by $1 ,978*90 compared to

1938 o

NON-CASH COLLECTIONS
(Head Office Only)
During the year 1939 we handled

more grain drafts than in 1938*

In May and June, 1939» we handled 26,494 more grain drafts than for the same
months of 193&* whereas in August and September of 1939 the volume handled was
26,^99 less than for the same months in 193®°

Most of the increase for 1939

occurred during November and December when 25 8l66 more items were handled than
for the same period in 193 s®

A total of 7

5 1 city collections including

grain drafts were handled during 1939 *
Country Collections handled during 1939 numbered 62 *657 * as compared
to 66*507 for 193^°

January,, June, August, and October of 1939 we handled

more country items than in 19380

A decrease was noted in each of the remaining

months of 1939 •
Coupon and country security collections showed a total decrease of 125
items for the yearc
Member banks forwarded 7,001 collections totaling $15*760,936*37 direct
to other Federal Reserve Banks for their credit with us during 1939 and 5*933
items totaling $l4,620*080o48 during 193 ^o

NON-CASH COLLECTIONS - Cont'd

COMPARISON OF NUMBER OF ITEMS RECEIVED FOE COLLECTION

City Collections
123 1 ...... i m

728.H S

751.S3U

Country Collections

Security Collections

12J S _________ 3 2 1 2

i m ____________ 4232

66b507

38,912

62,657

38.787

1938

$ 225,310,000

$ HU,605,000

$ 22,628,000

1939

255.06^,000

39.575.000

27, 578,000

BAHK EXAMINATION D E P A R T M m 1

There were on December

31 , 19391 eighty-one State member banks.

Each State

member bank in this district received at least one examination by examiners for the
Federal Reserve Bank of Minneapolis during the calendar year 1939®
As of the end of the yearB eleven State member banks were exercising trust
powers*

Ten regular examinations and one membership examination were made. Eighty-

five national banks held permits to exercise full or limited trust powers, and
during the past year fifty of them were exercising certain of these powers0

The

trust examiner reviewed eighty-two reports of examination made by the Comptroller
of the Currency*
Two applications by national banks with respect to fiduciary powers were
received during 1939* ons ?or additional powerse which was approved by the Board
at Washington* and one for limited powers* which application was still pending on
December 31fl 1939*

Application for surrender of trust powers of one national bank

was received and forwarded to the Boardc and that application together with two
similar applications that were pending on December 3 1 *, 1938* was approved*
The examinations by this Department in the various States were as follows:

Michigan
Minnesota
Montana
South Dakota
Wisconsin

State Banks
12
19
25
24
4

Examination of Holding Company Affiliates
No examinations were made of holding company affiliates during the yearc

STATE BANK APPLICATIONS FOR MEMBERSHIP - 1939
Fourteen applications for membership in the Federal Reserve System were re«
ceived from State banks during the year 0

Applications of the following banks were

.38

BANK EXAMINATION DEPARTMENT - Contf;d
approved "by the Board at Washington and membership in the System completed:

The

Newberry State Bank8 Newberry, Michigan; South Range State Bank, South Range* Michi
gan; Farmers State Bank of Lakefield8 Lake field.,, Minnesota; Farmers State Bank of
Madeliae Incorporated* Medeliaa Minnesota; Fidelity State Bank* Minneapolis* Minne
sota; State Bank of Rockville, Rockville, Minnesota; Welcome State Banke Welcome,
Minnesota; Farmers Stats Bank of West ConcordB West Concord, Minnesota; Powder River
County Bank* Broadus* Montanas Citizens Bank, Vermillion, South Dakota; and Security
Bank., Webster9 South Dakota*
The application for membership of the American State Bank of Moorheadp Moor
head, Minnesota* received in 19.33a an(i that of the State Bank of Northfield* Northfields, Minnesota*, received in 1939* are being held in abeyance*

The application for

membership of the Bark River State Bank* Bark Rivere Michigan was approved by the
Board at Washington but membership was incomplete on December

31 * 1939°

Application

of the Union Savings Banke Sioux FallsB South Dakota was forwarded to Washington
but approval by the Board had not been received at the close of the year.
Status of Applications for Membership Which Were on Hand December 31e 1938
Total number on hand . . . . . . . . . . .
Held in abeyance 0 . « • . .......... .. ,
Status of Applications for Membership Received
Total number received

1
1

During 1939

» .......... .. • •

Admitted to membership
Held in abeyance . . . . . . . . . . . . .
Incomplete
............

lU
11
1
2

OFFICE WORK
Reoorts of Examination of National Banks
Number of reports received from the Chief National Bank Examiner0s Office
(The cost of these reports was $3»^3^ * Qr
calendar year„)

766

Eighty-nine (89) duplicate copies of the reports of examination of Montana
national banks were received from the Chief Examiner *3 Office# and the cost of
those additional copies was $200„25 for the year*,
Reports of Examination of State Member Banks
The number of reports of examination received from the various State Banking
Departments in the Ninth District during 1939 of State member banks examined independ
ently by them was as follows?
Minnesota ............ 11
Montana * . . . . * . •
9
South Dakota . . . • «,
U
Wisconsin
1
Reports of Earnings and Dividends,, Reports of Condition and Related Reports
Approximately 4,380 reports of earnings and dividends, reports of condition

BANK EXAMINATION DEPARTMENT - Cont»d
and related reports were received,. checked8 and recorded,,
Applications for Permission to Exercise Fiduciary Power a Received, etc0
Application of the following "bank for additional trust powers was approved
"by the Board at Washington;
Name of Bank

Location

Fergus Falls National Bank and
Trust Company

Fergus Falls8 Minnesota

Date
Approved

2-1-39

Application of the following bank for limited fiduciary powers was received
during 1939 s
$ame of Bank

Location

The Miners’ First National Bank

Ishpeming* Michigan

Date
Received
12-l6«39

Applications of the following hanks for surrender of trust pov/ers were for
warded to the Board at Washington and approved?
Name of Bank

Location

First National Bank
First Hational Bank of Alger County
Deuel County National Bank

Lake Lindena Michigan
MunisingB Michigan
Clear Lake*. South Dakota

Date
Approved

4- 20 -3 9
11-25-39
3*”1~39

Re Clayton Act
In consideration of Section 8 of the Clayton Act and the Board8s Regulation
L» examiners5 reports are analyzed and records maintained with a view of ascertain™
ing any relationships that are not in conformity with the law0

No apparent viola*

tions have been noted*
Applications for Adjustment of Holdingsa etc0 of Federal Reserve Bank Stock
During the year two hundred nineteen applications for adjustment of holdings
of Federal Reserve Bank stock v/ere received from member banks; stock was also issued
to eleven new State bank members^

Five applications for total surrender of stock

by member banks were received,, three from national banks in voluntary liquidation*
one from an insolvent national bankc and one from a State member bank withdrawing
from membership*

The Examination Department handles applications for adjustment,

for new stock9 and for cancellation of stocks
Applications for National Charters
Ho applications for national bank charters were referred to this office for
recommendation during the yearc

B A M EXAMINATION DEPARTMENT - Confd
BANK CHANGES IN 1939
(Per Stock Book Records)
Total number of member banks in the district January le 1939
New national banks organized
State banks admitted

462
0
11

m
National banks absorbed by other national banks
National banks absorbed by nonmember State institutions
National banks liquidated
State member banks withdrawn
Total number of member banks holding stock in the Federal
Reserve Bank of Minneapolis at the end of the year • . • ,

468

Membership
At the close of the year there were 468 member banks in this district, as
There wa 3 a net loss

compared with 462 member banks at the beginning of the year,,
of 4 national banks and a net gain of 10 State banks0

The total membership at the

close of the year was divided into 387 national banks and 81 State banks«
State Bank Membership According to States

Noo of State
Bank Members
State

_ J > ± 3 2 _

Michigan
Minnesota
Montana
North Dakota
South Dakota
Wisconsin

Noo of State
Banks Withdraw
ing from Membership During Year

Noo of State
Banks Admitted
During Year

Noo of State
Bank Members

li
18
25
0

0
1
0
0
0
0
1

9
13
24
0
21
Jjr

l
o

2
0
11

23
_4
81

MEMBER BANKS SEVERING CONNECTIONS WITH THIS FEDERAL RES:3iVE BANK DURING 1939
national banks absorbed b y other national banks

Name of Bank

Date

5- 25-39

Location

The Commercial National Bank of
Sturgis, South Dakota
(Absorbed by First National Bank of The Black Hills,
Rapid CityB Rapid City, South Dakota)

Noo of Shares
Surrendered
33

NATIONAL BANKS ABSORBED BY NONMEMBER STATS INSTITUTIONS
I-5-39

First National Bank in
Phillips, Wisconsin
(Absorbed by The State Bank of Phillips, Phillips, Wisconsin)

NATIONAL BANKS LIQUIDATED

2-23-39
IO-5-39

The First National Bank of
(Insolvency)
The Farmers National Bank of

Preston, Minnesota

Vienna, South Dakota

STATE MEMBER BANK WITHDRAWALS

2-6-39

State Bank of Aurora

Aurora, Minnesota

NUMBER OF MEMBER BANKS IN ACTUAL OPERATION DECEMBER 31, 1939

National banks
State Banks
Total o

386
81

REPOET Of SAFEKEEPING- DEPARTMENT FOR TEE

_______ ________ g g j a a _____________ Securities hold in our custody for safekeeping and for collateral purposes, exclusive of unissued stock held for the Treasury Department and other governmental agencies, dropped (substantially in 1938 and slightly in 1939 from an all
time high total in 1937 .

During 1937, our high total v/as $431,373 ,149 ,,SI; 1938

$398 ,0 13 ,765052 ; while during 1939* our high figure was $395*025,196o94*

The low

total for the year 193 S was $3 U 6 ,6908989 ®81 , while the low for 1939 W£s
$346*119*773°97 o*1 October 31 »

The figures at the close of 1939 showed a decrease

of $20*630*245*27 compared to the close of 1938 » as indicated in the statement at
the bottom of this page*
The total government and miscellaneous securities held free in safekeep
ing for our member banks decreased $38 ,93 ^*137*17 in 1939 » while the total of
pledged securities increased $21,242,275°20o

During 1939 the total United States

Savings Bonds held for individuals, firms, corporations* and non-member banks in
creased $3 *375 *650 # compared with an increase the previous year of $3 »552 *300 o
Approximately $6,000,000 was reduction of stocks held as sub-collateral account
Reconstruction Finance Corporation*

Balance was retirement by banks of preferred

stock which we held for Reconstruction Finance Corporation,,

During 1938, we

issued 1,123 safekeeping receipts covering Uo S, Savings Bonds, while during 1939
we issued 1,927®

This indicates quite an increase of U* S* Savings Bonds de

posited with us in the past two years compared to 817 during 1937 and only 795
total during the year 1935

1936 “

In 1939* we received 48,193 pieces compared to 48,911 in 1938* and de
livered 519105 pieces compared to 4S,1S4 the previous year*

The number of

coupons clipped last year was 236,621 as compared to 255,887 the year before„

COMPARATIVE STATEMENT OF SECURITIES HELD
______ DECEMBER 31, 1938 and 1939
(Minneapolis only)

Pec. 31, 1939
Government and miscellaneous securities
held in safekeeping for members
$ 181B835*8S5o47
Securities pledged to secure public deposits
128„ 191,70?<>73
U cSo Savings bonds held for individuals, firms,
corporations, and non-member banks
12 *508 ,100*00
Securities held for U<,S0 Govt* officials
6 , 034, 900*00
Securities held for Public Works Administration
1 , 778, 495*00
Securities held for Reconstruction Finance Corp, 22,040,498*97
Collateral to War Loan Deposits
1 *533, 850*00
Collateral to Discounts, Rediscounts and
Industrial Advances
523.737*33

$ 3 5 M47.174.50

P e g o Jk L J& g
$ 2200770 ,022*64
106s9^9***32o53

9 *132 .450*00
5 b507j>900*00
737, 242*00
29^353*996c82
If639*750*00
93^,625.78
$ 375*077.419-77

FSDEBAL HSSEKVE NOTES
The Agents records show the total of our outstanding notes to 1)9

$14698476275 on December 3 1 # 1933»

Our °wn tellers load $5*420,000 of our notes

on the same date* making the total notes in circulation at the close of the year
$l4l0427*000 which was a gain of $4*570*000 in 1939®
our circulation contracted $71200000

During the previous year

At the beginning of 1936 our circulation

was $110B500o000» increasing over $25»000*000 that year.,

In the next three years

the gain was $5 b300 »000o
The extent to which silver certificates and legal tender notes are
talcing the place of our own issue is shown from the fact that iour total circula
tion is higher now than in 193 ^« although)$58 »050*000 was issued to the Bank by
the Agent in 193& compared to $35*045,000 issued during 1939® I For three years no
9

5 6s have been issued by the Agent because the Government9a own issues have been
sufficient*

Our requirement of notes the past year was the lowest obtained from

the Agent since 19160

The curtailment of our own $5 notes and the heavy receipts

of silver certificate 5's from the Treasury brought about a further substantial
lowering in the amount of notes destroyed with $30 b899 b760 thus taken out of circulation compared to $3^o^34»605 in 193 S<>
Another result of the replacement of our $5 notes by Treasury issues is
in materially lower printing costs during 1938 and 1939*

Although the dollar value

of circulation has increased during the past year* the number of notes has decreased
Nearly $5 *000*000 less in 1 0 ’s were issued during 1939 than in 1938 o

The 10 ®s

destroyed in 1939 amounted to $17*500*000 or $l*l40,000 more than was issuedo
issue of 209s was $14*960*000,, or $3*300c000 more than the amount destroyed,,

The
The

percentages of all denominations of our notes higher than 1 0 8s showed increases in

1939 ,

Eeceipts of 5®s

to $1863604000 in 1938<!

1939 from the Treasury amounted to $20,400*000 compared
All receipts of Treasury issues including l ‘s were

$4 3 j,480 8000 last year and $39 *500*000 in 193 &”
At the close of 1939 the Agent had on hand at Minneapolis $55*850*000
in our Federal reserve notes of which $7*l609000 consisted of 10*s and 20 9so
*
supply held in Washington* printed and paid for* is $l4le4S0e000 compared to
$135 B620*000 held one year ago*

The

The amount of 109s and 20* a included in the

present supply is $97o680,000 which based on present demand is sufficient for three
yearSo

FED33RAL HES3RVB H0TI3S RECSITO) AND ISSUED BY AGENT IXJRING 1939
IN HANDS OF ASK13T DECEMBER 31, 1938

FIT-F0R~US1‘
]

NEW
Fives
Tons
Twenties
Fifties
Hundreds
Five Hundreds
Thousands
Total

$ 10,400,000
3.440.000
4.640.000
12.825.000
10.240.000
6.700.000
6 .200.000
$ 54,4457000

TX350,000

$ 10,400,000
3.440.000
4.640.000
13.475.000
11.790.000
6.850.000
6 .200.000
J 56,795,000

RETUHHBD BY
SXEfc
FIT-FOH-USE

TOTAL
RlSlXVKD

650.000
1,550,000
150.000
______________

RECEIVED PROM
TSw
Fives
i'ens
Twenties
Fifties
Hundreds
Five Hundreds
Thousands
Total

0
0
0

TOTAL

0 _____________

0
16,000,000
14,400,000

16,000,000
14.400.000

1 000,000
1 ,200,000
500,000
1 000,000
F347l00,000

1 000,000
1 200,000

,
,

500,000

1 000,000

34.100.000

ISSUED TO B A M
NSW
Fives
Tens
Twenties
Fifties
Hundreds
Five Hundreds
Thousands
Total

FIT-FOBJUSE

0
0
0

16.360.000
14.960.000
506000
5005000

100,000

5759000
1,550,000
150,000

800,000
770,000

$ 2,275,000

TOTAL

16.360.000
14.960.000
625.000
2,050,000
250.000
800.000
J 35,045,000

IN H M D S OF ASSHT DECEMBER 30, 1939
KBW
Fives
Tens
Twenties
Fifties
Hundreds
Five Hundreds
Thousands
Total

TOTAL

FIT-FO E-USE

0
0
0

10,400,000
3.080.000
4.080.000
13?775,000
10,940*000
7.100.000
6.400.000
F 5 5 , 775,000

10.400.000
3.080.000
4.080.000
13.850.000
10.940.000
7.100.000
6.400.000
$55,850,000

75,000

0
0
0

_______

T757000

RATIO OF ISSUES BY 3OT0MIMTIOHS
1939
Fives
Tess
Twenties
Fifties
Hundreds
Five Hundreds
Thousands

0.
46.68
42,69
lo 78
5o85
o?2
2.28
100 .00#

1936

0.
54.50
36.08
2.13
5,29
.65
Jlv «->«>
100 .00£

1937

1936

1,935

.50
55.84
36.43
1.37
4*09
#53

4.09
49.63
37.69
2.28
4,67
«43

1.47
51.66
38.76

JwVr>*
looloo^

1.2 1
100 .00$

2*02
3.79
*76
1*54
100.0055

F32DBBAL H3S3OTS N0TE3 ISSUED TO M S K
COMPAHAl’IVB BY MONTHS 1939-1935
1938

1939
$ 1,040,000
January
315,000
February
2,480,000
March
April
3,650,000
2,700,000
May
June
800,000
3,000,000
July
2,950,000
August
September
4,580,000
4,770,000
October
3,490,000
November
5,270,000
December
Total for
$35,045,000
Year

1937

1936

1935

$ 1#320,000
3,680,000
3,580,000
5,000,000
740,000
1,600,000
3,030,000
2,650,000
4,060,000
3,705,000
4,210,000
5,175,000

865,000
3,660,000
4,290,000
4,720,000
3#080,000
2,420,000
2,570,000
3,930,000
4,760,000
3,120,000
3,100,000
3,760,000

$ 1,190,000
3,540,000
4,185,000
3,795,000
3,100,000
10,505,000
4,275,000
5,930,000
3,680,000
5,330,000
6,260,000
6,260,000

$ 1 ,000,000
3,770,000
1,984,000
2 ,688,000
2,550,000
2,300,000
1,625,000
4,470, W O
6,380,000
4,660,000
4,325,000
5,110,000

$38,750,000

$40,295,000

$58,050,000

$40,862,000

m S K A L BESERVE HDT33S DESTHOYSD AT WASHINGTON
COMPARATIVE! BY MOHTHS 1939-1935
193S
$ 3,415,050
January
2,049,820
.February
2,741,840
March
April
2,572,650
3,024,450
May
3,337,950
June
July
2,567,350
2,470,250
August
1,903,100
September
2,924,400
October
1,903,150
November
1,984,750
December
Total for
$30,899,760
Year

1937

1938

1936

1935

$ 3,306,380
2,619,410
3,032,750
2,475,200
3,919,050
2,851,300
3,329,495
3,155,100
2,790,000
3,102,800
3,354,120
2,499,000

$ 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
3,070,330
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,^40,200
2,237,650
2,894,800
2,282,275
2,754,400
2,833,050
2,671,650
2,321,550

$36,434,605

$33,818,375

$29,348,290

$30,277,775

FEDSHAL KSSKRVE NOTES ISSUED AKD
DllOTOWDSTra b^MTzK^toT^
Issued to
Ban!':
1914
1915
1916
1917
1918
1919
1920
1921
1922
1923
1924
1925
1926
1927
1928
1929
1930
1931
1932
1933
1934
1935
1936
1937
1938
1939
TOTAL

Destroyed a*
Washington
$

0
0

$
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
81,665,000
48,400,000
40,862,000
58,050,000
40,295,000
38,750,000
35,045,000

895,955
8,988,095
9,4-21,540
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
36,434,605
30,899,760

$1,099,252,000

$701*042,725

ISSUE, HSISSUE AHD DESTRUCTION OF FBDKRAL RESERVE NOTES
IsiafegTICTilBrss
as o F n Ec m s R 30 , 1959

Received from
Comptroller
Fives
Tans
Twenties

F ifties
Hundreds
Five Hundreds
Thousands
Total

$201,400.000
321 e840.000
279 200.000
29 800,000
44, 400,COO
11 900.000
15, 300.000

Ip o if 740t000

Returned to
Agent by Bank

Total

$ 42,000,000
84.250.000
86.400.000
9.965.000
18.035.000
2.944.000
7.768.000
*$251,362,000

$2455,400,000
406.090.000
365.600.000
39.765.000
62.435.000
14.844.000
22.968.000
Ijl7l55,102, OCX)

$191,000,000
318.760.000
275.120.000
16.025.000
33.460.000
4.800.000
3.800.000
$847^965,000

Total

Fit-For-Use

$233,000,000
403.010.000
361.520.000
25.915.000
51.495.000
7,744,000
16.568.000
^17099,252,1)00

$ 42,000,000
84.250.000
86.400.000
9.890.000
18.035.000
2.944.000
75758.000
$251,237,000

DESTROYED AT WASHIBGTOK
Returned
by Agent
Fivei
Tens
Twenties
Fifties
Hundreds
Five Hundreds
Thousands
Total

$ 4 , 260,000
2 . 545.000
1 . 020.000
25,000
30D000
0
_ ° _ _
$7 , 880,000

Returned by
Treasurer

$ 4 , 588,235
6 , 310,310
6 , 259,160
557,300
1 , 066,400
136,500
248 , 000
$197165,905

Returned by
Minneapolis
$ 99,206,900
141,079,000
94,583,600

6 ,110,000

9.450.000
1,579,500
2.040.000
$354,0497000

Returned by
Other
Fed.Res* Banks

Total

$ 81,342,680
117,734,990
107,542,900
4,414,250
6.959.000
838,000
1.116.000
$319 947,820

$189,397,815
267,669,300
209,405,660
11,106,550
17,505,400
2.554.000
3.404.000
$701,042,725

In Hands of Agent
December 30, 1939
F i v e s ...................... .. • . o . „
TenS o o t o a c o e o a a s c i c p a o o
Twenties............. ............. .. •
Fifties
Hundreds*............ . ...............
Five Hundreds « • • • • • • • • • • • • *
Thousands « • • . • « « < > * • « • • • « •
Total

$10,400,000
3,030,000
4,080,000
13,850,000
10,940,000
7,100,000
6 p400, (300
158,680,000

Outstanding
December 30, 1 939
$

1,602,185
51,090,700,
65,714,340
4,843,450
15,954,600
2,246,000
5,396*000
$146,847,275

TRANSFER AND CODS DEPARTMENT
('Minneapolis Only)

The Transfer Department handled 19c520 transfers amounting to
$lp7 ^99997*000 during 1939» compared to 18,981 transfers totaling $ls508c642c000
in 19380

This represents increase of 539 transactions and an increase in amount

of $281 *355*0000
The number and amount of incoming and outgoing wire transfers handled
during the past five years were as follows;

Year

Outgoing Wire Transfers
dumber
Amount

1939

5.985

1938
1937
1936
1935

5,488
6,566
6,111
5.666

Incoming Wire Transfers
Number
Amount

5,930
6,029

399,640,000

310 ,498,000
360 ,148,000
370 ,723,000
344 ,724,000

966 ,115,000
830 ,279,000
1 ,038 ,897,000
914 ,381,000
724 ,422,000

7.411

6,624
5,870

Messages coded and decoded during 1939# other than transfers, numbered

120626 * compared to 13.627 in 1938 °
TELEGRAPH UNIT
(Minneapolis Only)
During 1939 we sent 234*977 words over the Federal Reserve System
leased wires* in comparison with 299*122 in 1938 *

COMPARISON OF MEMBER BANK BALANCES
(Thousands oniy9 000 omitted) ”
Decfl 31,
Dec 0 31 0
. 1939 ..._
1938
Michigan
Minnesota
Montana
North Dakota
South Dakota
Wisconsin

6,799
109.465

19,860

5.854
77.3^9
15.854

3.861
6.899

4,584

8,607

. 3.950
$113,767

..... 5,473.
$154,788

31r
1936

Decc 31 s

6,329

86,45s
16,009
5*266
8 e01?
U.729
^126,806

31
. 1935

Dec„

.1937

DeCo

$ 5,146
80,885
15.876

17,068

5.175
9,578

3*871
^ 120,531
_

3*485
58*772

6*137
7,297
3.^69
$ 9o ,228

AVERAGE BALANCES

i2 2 £

1222
Member Bank Balances
U„ S, Treasurer^ Balance

$ 136,241*000 $ 121j>6658000
44s763 >000
3*+»071»000
$ 1810 004,000 $ 155 ,73^ 0 0 0

DEFICIENT RESERVE PENALTIES
Minneapolis
Helena
Combined
Combined
1939_________1939,________ 1939 ______ 1938
Amount of Penalties
$
726,75
Number of banks penalized
83
Maximum penalty rate
3

58.90
® f
3§$

785-65
91 ^
3*3*^

566,42
133.

3$$

REPORT OF BANK. AKD PUBLIC RELATIONS ACTIVITIES
AT THE FEDERAL RESHRVF. BANK OF MINNEAPOLIS
DURING 1939 .. .. .. ......

Twelve bank officers and other representatives travelled 78*546 miles on
public relations work during 1939 at & travel cost of $6fl998c6g0

They attended

six state "bankers'1 association conventions* 70 other bankers5 meetings; delivered
42 addresses (including seven radio addresses) to an estimated known audience of
3,584 people; and made 771 visits at member Thanks and 972 visits at non-member
"banks in the district* every bank in the district having been visited at least
once by one of our officers..
The attendance at showings of the Federal Reserve Bank movie during 1939
was

1 3 *633 *

The bank continued its cooperation with the Wisconsin Bankers’

Association with regard to showings of the Federal Reserve movie0

A Member Bank Conference was held on March 2 5, 1939s
being Dr« Jo

principal speakers

Riddlec Economist* Bankers5 Trust Company, Mew York Cityr and

Dr0 William Jo HaleP Chemist and Research Consultant of the Dow Chemical Company*
Midland* Michigan,,

The entertainment features of the conference consisted of

luncheon8 dinnerP and complimentary tickets to the Ice Folliese Seven hundred
and thirty-two bank officers and directors attended the conference*
In December WCCO commenced a series of eleven weekly broadcasts featuring
dramatic incidents in connection with Federal Reserve activities0

The first

three broadcasts dramatized the wire transfer of funds, the destruction of wornout currencye and the supplying of an adequate volume of currency for Christmas
and holiday trade0
In October representatives of the Federal Reserve Bank took part in the
second annual Minnesota Bankers' Conference held at the University of Minnesota,
In August a weekly digest of news items of interest to bankers was inaugu
rated and mailed to all member banks in the district.-,
A comparative statement of operating ratios for 1937 and 1938 was sent to
each member bank in the districts.

In addition,? operating ratios were computed

for the State banks of Uorth Dakota at the request of the North Dakota Bankers’
Association and a number of other special tabulations of these 2'atios were fur
nished upon requesto
Twelve issues of the Monthly Review were printed and distributed to a
mailing list which, in December, consisted of 6250 nemes0

.FISCAL AGKNCY FUNCTIONS - 1939
Volume of Operations
New issues* redemptions and exchanges of various United States Govern
ment securities* including United States Savings bonds and Adjusted Service
bonds aggregated 136604s pieces and amount 3d to $274*176*S25o00 as compared with
149*395 pieces amounting to $257 ,797 *575*00 in 193g*
We handled 772 purchases and 3»7^2 sales of Government securities
totaling $24,786*100; for delivery or payment# or both; we handled for banks
and trust companies £09 transactions in Government securities amounting to
$136t4g80275o

There were also 1*675 transactions of miscellaneous general

market securities cleared through us aggregating $9 *613 ,072«33<>

Altogether* of

these various transactions* there were 7*0180 totaling $170#8S7o247«33» as com
pared to 8*893 totaling $198*625*575 in 1938 ,
Deliveries of 19*577 pieces totaling $96 0287 9126*00 were made on pur
chases and resale transactions for other than our own account..

In additionB

on exchange transact!cns8 such as denominational exchange* the exchange of
coupon for registered securities, etc,,
ing to $S0f9^3*400a00*

16 s617 pieces were delivered, amount

The total number of pieces delivered was 36,194 amount

ing to $1 7 7 *270.526000 in comparison with 45*384 totaling $204,295*508 c00
during the preceding yearp
New issues, redemptions and exchanges of securities of Governmental
Agencies during 1939 numbered }6tSS3 pieces amounting to $50,422*550,00 as com
pared with 9 B501 pieces amounting to $10,881f825000

^933o

In addition* on

exchange transactions such as denominational exchangese the exchange of coupon
for registered securities, etc* 4 f056 pieces of securities of Governmental
Agencies were delivered amounting to $6eS12P950o00 as compared with 3*996 pieces
amounting to $4*6870075 <>00 in 193S*
The total number of individual securities received and delivered by
the Fiscal Agency Department (including securities of Governmental Agencies)
during 1939 was 213*181 totaling $50 S B682 ftS51 o00 p as compared with 208*275
totaling $477*659P9S4oOO in 1938 ,
We redeemed 340*868 Government coupons amounting to $9 *923 *595,97
during the past yearc as compared to 3 ^3**57 coupons totaling $10 ,521 ,239,55
during 1938*

We also redeemed 242,421 Governmental Agency coupons amounting

to $2,841,414,85 during 1939 , as compared to 279*425 totaling $3 ,224 ,366,36
in 1938 ,

FISCAL AGENCY FUNCTIONS - Cont°d
Other Services
During

1939 we received 15,525 individual orders for United States

Savings bonds representing 31»657 pieces* amounting to $12,533 ,35O 0OO as com
pared with

10*725 individual orders representing 22,227 pieces* amounting to

$8i20UpU50o00 during 193^°

This increase is approximately ^5$, about the same

as for the entire country6

Incidentally, Minnesota holds sixth place in volume

of such bonds issued to date0
We received for redemption 37el3^ Adjusted Service bonds amounting
to $l,856,900«00f as compared with
ing 1938» also
compared with

59,969 pieces amounting to $2 0998 c^50 <>00 dur

36,307 United States Savings bonds amounting to $8,957o650s ?B
30*232 pieces amounting to $7 *027 »200000 during 1938 o

During the year we issued 26,121 United States Treasury checks in pay
ment of Adjusted Service bonds6 United States Savings bonds and other Public
Debt redemptionst as compared with 31*921 checks during 193®"
We are performing certain services as Fiscal Agent in connection with
securities for the followings
United States of America
Farm Credit Administration
Federal Farm Mortgage Corporation
Federal Land Banks
The 'Twelve Federal Intermediate Credit Banks
Home Owners3 Loan Corporation
Reconstruction Finance Corporation
Commodity Credit Corporation
Federal Home Loan Banks
Federal Housing Administration
United States Housing Authority
United States Maritime Commission
Without inclusion of Treasury bills there were eight offerings of
United States Government securities during 1939•
term and four short term*

Four of such issues were long

We received and handled 1,770 individual subscriptions,

contained in 1,052 different applications,) aggregating $121 c2l6eSOO»
allotted on these subscriptions was $51 ,123,200*

The amount

During 1938, ^#55® individual

subscriptions were submitted in 2,281 different applications covering eight
similar offerings and $69 ,867,100 was allotted„
Although there was the same number of offerings in
the decrease in the number of subscriptions and amount in

1939

1939 as

193^ j
to the

fact that there were seven exchange offerings and only one cash offering as
compered to four cash offerings in

193# in addition to the exchange offerings0

la addition to the above* there were eight offerings by the various

FISCAL AGENCY FUNCTIONS ~ Coat8d
government agencies on which we received 1*513 individual subscriptions con~
taiiied in 1,148 different applications*, aggregating $l64(15S8.850<>

The amount

luring 1938 & on similar

allotted on these subscriptions was $22,394,850D

offeringse 3^3 individual subscriptions were submitted in 264 different applications covering three offerings and $4*957*000 was allotted,.

During 1939& ^

tenders amounting to $31*750*000 were received by

this Agency on 52 offerings of Treasury bills*

Of these* 38 tenders ranging

from par to a discount of 0O3 per cent and amounting to $30 *3 5 3 *000* were
accepted®

During 1932* 53 tenders amounting to $25*083*000 were received9 and

19 tenders totaling $l489569000 were accepted on the 5? offerings of Treasury
bills made that year*,
At the close of 1939 there were 110 banks and trust companies in this

district which were designated as special depositaries of public moneys9 as com
pared with a like number in 19380
Including the weekly circular giving current market quotations on the
outstanding Government issues, 134 circular letters were sent to banks and trust
companies in the district during 1939 in connection with Fiscal Agency operationse as compared to 123 circulars in 193 S«

CURRENCY AMD COIN
(Minneapolis only)
VOLUME OF CURRENCY TRANSACTIONS AND SHIPPING
CHARGES ABSORBED
FOR THE YEARS 1939 , 1938 AND 1 9 3 7 _________ __
Twin City Member Banks
Currency received by us§
Amount
Number of their shipments
Currency delivered by us:
Amount
Number of our shipments

1939

$ 66fi24o*755*OC2„899

$ 81 ,375 ,700 .0c

I s 550

1.936

1937

69*087 ,U 3 o 0 0 88 *575 ,862,00
3*121

3 s>299

79 *13 7 .5^0.00

9 5 ,17 ^.600.00

1*523

1*482

OTHER MEMBER AND NON-MEMBER BANKS
Currency received by us;
■toount
Shipping charges absorbed
Number of their shipments
Currency shipped by us;
Amount
Amount of our shipping costs

Number of our shipments

$ 69 ,51+6,558000 65 .96 l.575 .OO
30a218o95
30,303o04

1 4, 5 24

$ 6 7 B4 2 9 ?354oOO

20*057*57
lQe288

6s,lUlt„810„00
30*409*13

14,300

13o972

63 , 34 7 *672«00

7 8 , 8 2 3 *8 88 ,0 0
1 9 86 s i 073

17,810*30
I S , 175

20,852

CURRENCY AND GOIK - Coat d
Coin Received by u b from Member
and Non-Member Banks

i222
Amount
$ 3,165,557.00
Shipping charges absorbed

i22L.

3,071,126.00
5»850»55

H-smber of shipments

3.UU5 ,070.00
5 »U53 “UU

6 ,0Us .21

1,955

m i

2,019

2.6J8

Coin Shipped by us to Member
and Non-Meaber Banks
Mount
Shipping charges absorbed

3.009*162*00
6 , 079c25

20479910Sc00
5*423*19

6*830

6s393

Number of shipments

28633 ,532,00
5 09^3*2S
6*94-7

COMPARATIVE NUMBER OF NOTES RECEIVED AND SORTED

Receiving and Sorting Costs

Average number of receiving
tellers and sorters
Number of notes received and
counted

15,;865*07

l6a329„4l

19e213oS4

9»32

9«2S

10*90

37, 778,300

Average number of notes sorted
daily by each employee

37. 32U. 50U

U3,367,625
13»131

13a422

Our average currency receiving
and sorting costs per each
1000 notes

42#

44#

46#

COMPARATIVE AMOUNT OF COINS RECEIVED

Expenses
Average number of coin tellers
Number of coins received and
sorted
Average number of coins handled
by each employee daily
Unit cost per 1000 coins

3.U08.US

3»63U„01

3» 167^69

1.67

i-78

1 >57

30 .2UU .252

28 .085 .US3

20 .620 .U99

59 ^9^8

52e246

43»347

11#

13#

15#

RECONSTRUCTION FINANCE CORPORATION

The Reconstruction Finance Corporation activities handled "by us were con
siderably increased this year, particularly sine© last springe at which time
liquidation of C0 Cc C0 loans on 193^ wheat began and continued for about four
monthso

These loans aggregated 3^*310 i*1 number and approximated $17*100*000

in amounts

The greater portion of these notes were taken up by the makers

through settlements based on market valuest which arrangement enabled the producers
of the wheat to redeem their obligations at less than the amounts borrowed and
realize a profit0

Those notes, which were not disposed of as outlined abovee were

either extended until March 3 1 * 19 I10, or canceled by delivery of the collateral
grain to the Commodity Credit Corporation,
Disbursement of wheat loans on the 1939 crop was begun this fall*,
loans now purchased aggregate *+{337
$le250,000,

Such

number and amount to approximately

In addition, we are holding 957 wheat notes in safe-keeping for

the account of various Lending Agencies which desire to receive the proceeds of
such notes some time prior to or not later than April 30 8 19^0*

The Minneapolis

Loan Agency estimates that in this district, Montana not included, at least
75,000 loans have been made on 1939 wheat*

Because of the recent advance in

wheat prices the Commodity Credit Corporation has called off the safe-keeping
program it had set up for 1939 wheat loans0 apparently expecting the producers
would pay off a considerable number of such loans in the Lending Agencies which
hold them,

If wheat pricese however„ do not remain high enough to permit the

producers to make a profit in excess of the loan values Eet by the Commodity
Credit Corporation8 we can expect a considerable volume of business when the
Corporation resumes its safe-keeping program©
During the year we disbursed Commodity Credit Corporation corn loanB on
the 193 S crop in the number of 3 1 *2^9 ai*i in
$llBS00«000o

approximate amount of

Liquidations and extensions of these loans are being handled here

instead of at Chicago, which handled the entire liquidation of loans made on

1937 corn.

The great majority of these notes are either being extended or re

newed until August 1, 19 ^ 0

The remainder are being canceled through delivery

of the pledged corn, in which cases we transfer to Chicago for disposition.

All

loans on corn raised in 1939 are to be handled through the Chicago Agency,
Loans are being made to eligible producers of rye raised during 1939,
Heretofore, Commodity Credit Corporation loans on grain were confined to wheat

RECONSTRUCTION FINANCE CORPORATION - Cont'd

and corn0

We had disbursed approximately $522,000 cn 2,537 rye notes as of tho

end of this year0
The number of employees working in this department reached a high of 172
last spring and on December

31 had decreased to 72®

LOAN BALANCES, ADVANCES, ETC* ON BOOKS AS OF
DECEMBER 31 . 1939

Banks, Trust Companies and Mortgage Loan Companies
Industrial and Commercial Businesses
Drainages Levee and Irrigation
Preferred Stock of Banks
Secured by Preferred Stock (Issued to Stockholders)
Debentures of Banks
Bonds (from Public Works Administration)
U*S0 Treasury Obligations (Accepted Account Preferred
stock and Debenture payments)
The RoFoCc Mortgage Company (Direct Loans)
The R 0F 0C 0 Mortgage Company (Federal Housing Loans
purchased)
Disaster Loan Corporation
Federal National Mortgage Association (F,H«A0 Loans
purchased)
Commodity Credit Corporation (193S Corn)
Commodity Credit Corporation ( 193^ Wheat)
Commodity Credit Corporation (1939 Wheat) *
Commodity Credit Corporation (1939
Miscellaneous
TOTAL . . . . . .

5718H 2o51
2 , 355. 857.49

836,2660OS

10, 446, 162,00

193. **07038
5*815,966031
4.350.635*21
3*135*100*00
304,163,44
65.657.23
69,955-79
759. 9*»5-*»6
7.9^1.513*69
1.675,79'+* 76
1 .1 7 M 5 7 .5 1
506,763.61
521,089.90

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

* Major portion of such loans still in hands of the Lending i!^enciesP not
included in this figureD

PUBLIC WORKS ADMINISTRATION
Comparatively few blocks of bonds were purchased through us during 1939°
The Reconstruction Finance Corporation has purchased most of this Agency’s hold
ings*,

Its balance of bonds now held with us total fl»778t400o00o

FEDERAL CROP INSURANCE CORPORATION
We are now acting as Custodian for this Government agency, which deposits
warehouse receipts for wheat with us for safekeeping*

During the year l*51g

receipts were placed in our custody and 296 receipts were withdrawn therefrom*

UNITED STATES HOUSING AUTHORITY
During the year we began to function as fiscal agent and custodian for
this Government agencye

The number of transactions handled during 1939 were

few in number and the total disbursement amounts to $225»000o00o
is part of three commitments totaling $1,250*000*00 made by the

This amount
United States

Housing Authority,

Full text of Annual Report to the Directors of the Federal Reserve Bank of Minneapolis : Auditor's Report for the Year 1939

FRASER