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EIGHTEENTH ANNUAL REPORT OF THE FEDERAL RESERVE BANK OF ATLANTA 1932 EIGHTEENTH ANNUAL REPORT OF THE FEDERAL RESERVE BANK OF ATLANTA 1932 ATLANTA, GEORGIA DIRECTORS AND OFFICERS FOR 1933 FEDERAL RESERVE BANK OF ATLANTA DIRECTORS OSCAR NEWTON, Chairman, E. C. MELVIN, Selma, Ala. G. G. WARE, Leesburg, Fla. Atlanta, Ga. W. H. KETTIG, Defray Chairman, Birmingham, Ala. LEON C. SIMON, New Orleans, La. GEO. S. HARRIS, Atlanta, Ga. J. B. HILL, Nashville, Tenn. J. A. MCCRARY, Decatur, Ga. H. LANE YOUNG, Atlanta, Ga. OFFICERS E. R. BLACK, Governor OSCAR NEWTON, Chairman of the W. S. JOHNS, Deputy Governor H. F. CONNIFF, Deputy Governor W. S. MCLARIN, JR., Assistant Deputy Governor M. W. BELL, Cashier R. A. SIMS, Assistant Cashier V. K. BOWMAN, Assistant Cashier C. R. CAMP, Assistant Cashier P. L. T. BEAVERS, Assistant Cashier S. P. SCHUESSLER, Assistant Cashier L. M. CLARK, Assistant Cashier Board and Federal Reserve Agent WARD ALBERTSON, Assistant Federal Reserve Agent and Secretary of the Board of Directors E. P. PARIS, General Auditor J. W. HONOUR, Assistant Auditor JOHN K. OTTLEY, Atlanta, Ga. Member Federal Advisory Council ROBERT S. PARKER, Atlanta, Ga. General Counsel NEW ORLEANS BRANCH DIRECTORS LEON C. SIMON, Chairman, New Orleans, La. OFFICERS MARCUS WALKER, Managing Director J. A. WALKER, Assistant Manager MARCUS WALKER, New Orleans, La. W. H. BLACK, Cashier R. S. HECHT, New Orleans, La. P. H. SAUNDERS, New Orleans, La. J. D. O'KEEFE, New Orleans, La. F. C. VASTERLING, Assistant Cashier W. E. MILLER, Assistant Auditor F. W. FOOTE, Hattiesburg, Miss. A. P. BUSH, Mobile, Ala. BIRMINGHAM BRANCH OFFICERS DIRECTORS J. H. FRYE, Managing Director W. H. KETTIG, Chairman, Birmingham, Ala. H. J. URQUHART, Cashier J. H. FRYE, Birmingham, Ala. T. N. KNOWLTON, Asssitant Cashier OSCAR WELLS, Birmingham, Ala. W. E. HENLEY, Birmingham, Ala. W. W. CRAWFORD, Birmingham, Ala. JOHN G. FARLEY, Birmingham, Ala. E. F. ALLISON, Bellamy, Ala. JACKSONVILLE BRANCH DIRECTORS S. O. CHASE, Chairman, Sanford, Fla. HUGH FOSTER, Jacksonville, Fla. JNO. C. COOPER, Jacksonville, Fla. EDW. W. LANE, Jacksonville, Fla. OFFICERS HUGH FOSTER, Managing Director GEO. S. VARDEMAN, JR., Cashier MARY E. MAHON, Assistant Cashier ARTHUR F. PERRY, Jacksonville, Fla. FULTON SAUSSY, Jacksonville, Fla. G. G. WARE, Leesburg, Fla. NASHVILLE BRANCH DIRECTORS OFFICERS J. B. HILL, Chairman, Nashville, Tenn. JOEL B. FORT, JR., Managing Director JOEL B. FORT, JR., Nashville, Tenn. E. R. HARRISON, Cashier C. A. CRAIG, Nashville, Tenn. L. W. STARR, Assistant Cashier PAUL M. DAVIS, Nashville, Tenn. FRANK J. HARLE, Cleveland, Tenn. W M . P. RIDLEY, Columbia, Tenn. C. W. BAILEY, Clarksville, Tenn. SAVANNAH AGENCY J. H. BOWDEN, Manager JAS. A. GOETHE, Assistant Manager HAVANA AGENCY H. C. FRAZER, Manager A. H. ALSTON, Assistant Manager LETTER OF TRANSMITTAL FEDERAL RESERVE BANK OF ATLANTA Atlanta, Ga., February 23, 1933. Sirs: I have the honor to submit herewith the Eighteenth Annual Report of the Federal Reserve Bank of Atlanta, covering the year 1932. Respectfully, OSCAR NEWTON, Chairman of the Board and Federal Reserve Agent Federal Reserve Board, Washington, D. C. GENERAL BUSINESS CONDITIONS The general decline in business and industrial activity which, at the beginning of 1932, had continued for more than two years, was interrupted during the third quarter of the year by a period of rising prices, particularly those of farm products and foods, and improvement in trade and in industrial activity and employment, but the year ended with business in this District at a low level, and all of the available series of business statistics for 1932 compare unfavorably with those for the year before. Agricultural production in the six states of the District declined substantially from 1931 to 1932. The cotton crop raised in these states in 1932 was the smallest since 1924, and while increases are shown in the production of sweet potatoes, oranges, sugar cane and sugar, and cowpeas, important declines are shown in other crops. Particularly large decreases are shown in the production of peaches, apples and pecans, compared with the large crops of 1931, and important declines are also shown in cotton, wheat, oats, white potatoes, tobacco and watermelons. The consumption of fertilizer in these six states, as reflected in the sales of fertilizer tax tags by state authorities, declined 41.1 per cent from 1931 to 1932. The total dollar volume of sales during 1932 by 3 8 reporting department stores located in 21 cities of the District was $42,042,000, a decline of 23.7 per cent compared with the year before, and smaller than for other recent years. The seasonally adjusted index of department store sales rose in July, August and September, but declined during the last quarter of the year. Sales during 1932 by 107 wholesale firms in eight lines of trade totaled $53,565,000, smaller by 24.7 per cent than in 1931, and also less than for other recent years. The decreases from 1931 in wholesale trade ranged from 17.1 per cent in dry goods to 41 per cent in electrical supplies. Part of these declines, in both retail and wholesale trade, are attributed to the lower price level in 1932 as compared with previous years. The number of business failures in the District declined 1.1 per cent, but liabilities of these firms increased 18.8 per cent, over 1931. Debits to individual accounts by banks in 26 clearing house centers of the District were 25.9 per cent less in 1932 than in 1931. Bank debits have been compiled for 15 of these cities since 1919, and the 1932 total is smaller than for any of the other years in the series. Daily average demand deposits of member banks in December 1932 were 15.8 per cent, and daily average time deposits were 7.3 per cent, less than for December a year earlier. Building and construction activities in the District, reflected in statistics of building permits issued at twenty reporting cities, and of contracts awarded in the District as a whole as reported by the F. W. Dodge Corporation, have declined each year since 1925. In 1932 building permits declined 34.4 per cent from 1931, and total contract awards decreased 49.8 per cent for the year. Residential contracts were 45.5 per cent, and other contracts 50.7 per cent, less in dollar value than in 1931. Consumption of cotton by mills in Georgia, Alabama and Tennessee combined was 3.5 per cent less in 1932 than in 1931. The number of spindles active in these states and Mississippi averaged 2.4 per cent less than in 1931, and active cotton spindle hours operated during 1932 were 1.7 per cent less than in 1931. Daily average consumption of cotton in the states indicated reached in July the lowest level for any month since August 1924. However, the average price of spot cotton at ten designated markets, as officially compiled and reported weekly by the United States Department of Agriculture, increased from a low of 4.76 cents per pound, middling, on June 9 to a high of 8.27 cents on August 26, and this resulted in the receipt by mills of a large volume of orders, and in their purchase of raw cotton, and the daily average consumption rose sharply in August and September, and by smaller amounts in October and November. Production of bituminous coal declined further in 1932, output in Alabama being 34.6 per cent, and in Tennessee 31.4 per cent, less than in 1931. Pig iron production in Alabama reached in August the lowest point in many years, but increased through November, and for the year was 60.6 per cent less than in 1931. Receipts for the year, and stocks at the end of the year, of both turpentine and rosin at the three principal naval stores markets of the District were materially smaller than for 1931. Production of electric current by public utility power plants declined 5.6 per cent from 1931 to 1932. Because of dry weather and low streams in the summer and fall of 1931, production by use of water power increased 3.5 per cent in 1932, but output by the use of fuels declined 18.9 per cent. Principal business indicators relating to the Sixth District are summarized in the table. (000 Omitted) 1930 1931 1932 Retail Trade—Sales of 3 8 Department Stores $ 42,042 Wholesale Trade—Sales of 107 firms $ 53,565 Life Insurance Sales (1) $ 299,012 Commercial Failures—Number (2) 1,679 Liabilities $ 37,149 Sales of Fertilizer Tax Tags, Short Tons (1) 1,141 Debits to Individual Accounts—26 Cities. $ 8,009,216 Deposits of All Member Banks (3): Demand $ 351,750 Time $ 344,157 Building Permits Issued at 20 Cities $ 19,294 Building and Construction Contracts Awarded in Sixth District—Total.. $ 86,75 5 Residential Contracts $ 15,825 All Others $ 70,93 0 Consumption of Cotton—Bales ( 5 ) . . . . 1,601 Cotton Spindles Active (4) (6) 5,090 Active Cotton Spindle Hours (6) 17,370,901 $ 1929 s $ 55,108 71,083 386,118 1,698 S ? 62,775 96,778 471,9%7 1,400 $ $ $ 66,608 118,320 521,228 1,205 $ 31,258 $ 49,809 $ 25,145 $ 1,936 2,805 2,616 $10,801,714 $13 ,175,783 $15 ,713,342 S $ $ 417,991 371,425 29,393 s $ $ 498,707 413,822 43,601 $ $ $ 172,862 29,047 143,815 1,659 5,215 17,664,125 $ $ $ 233,119 46,002 187,117 1,658 5,362 16,875,054 $ $ $ $ $ $ 5 50,424 427,978 72,322 328,594 76,461 252,133 2,058 5,424 2 0,500,233 Bituminous Coal Production—Tons: Alabama Tennessee Pig Iron Production—Alabama—Tons. . . Active Furnaces—Alabama—(4) ( 2 ) . . . Naval Stores: (7) Receipts: Turpentine. . Rosin Stocks ( 3 ) : Turpentine Rosin Production of Electric Power for Public Use (1) k. w. hours—Total By use of Water Power By use of Fuels 7,850 3,240 660 T 220 8 52 92 333 11,999 4,721 1,673 10 335 1,176 112 487 15,570 5,130 2,343 14 388 1,332 85 3 72 17,944 5,406 2,693 16 386 1,387 68 258 5,410,619 3,529,520 1,881,099 5,73 0,240 3 ,409,534 2 ,320,706 5,855,106 3,698,323 2,156,783 5,703,403 3,585,587 2,117,816 (1) Combined totals for six states: Alabama, Florida, Georgia, Louisiana, Mississippi and Tennessee. (Parts of Louisiana, Mississippi and Tennessee are situated in other Federal Reserve Districts.) (2) Actual number—000 not omitted. (3) December of each year. (4) Average of monthly figures. (5) Combined totals for Georgia, Alabama and Tennessee. (6) Combined totals for Georgia, Alabama, Tennessee and Mississippi. (7) Combined totals for Savannah, Jacksonville and Pensacola. Turpentine in barrels of 50 gallons, rosin in barrels of 500 pounds. RESULTS OF OPERATION OF THE FEDERAL RESERVE BANK OF ATLANTA Comparative Balance Sheets—Total resources of the Federal Reserve Bank of Atlanta at the close of the year 1932 amounted to $177,672,000, a decrease of $24,224,000 compared with the corresponding time a year earlier, and less than at the end of any other year since 1917. The amount of gold held by the Federal Reserve Agent to secure Federal reserve notes totaled on December 31, 1932, $62,000,000, a reduction of $29,800,000 compared with the amount so held a year earlier, and smaller than at the close of any year since 1921. Offsetting this decline in gold behind Federal reserve notes, however, the Federal Reserve Agent also held United States Government securities in the amount of $39,000,000 which were also pledged to secure Federal reserve notes under authority of an amendment to Section 16 of the Federal Reserve Act approved February 27, 1932 which provided that until March 3, 1933, under certain conditions United States Government obligations might be pledged, in addition to gold and discounted or purchased notes, drafts, or bills of exchange, as security for Federal reserve notes issued to the bank. The Gold Redemption Fund maintained with the United States Treasury by this bank for the purpose of redeeming such Federal reserve notes of this bank's issue as may be presented to the Treasury for redemption amounted on December 31, 1932, to $2,878,000, compared with $2,725,000 a year earlier. Gold held exclusively against Federal reserve notes, therefore, amounted at the close of the year to $64,878,000, as compared with $94,525,000 so held at the close of 1931. Total gold reserves at the end of 1932, consisting of this amount held exclusively against Federal reserve notes plus the gold settlement fund maintained with the Federal Reserve Board and gold coin and certificates held by the bank, amounted to $82,167,000, compared with $109,561,000 at the close of 1931. Reserves other than gold declined further in 1932, compared with previous years, and total reserves at the close of the year amounted to $87,227,000 as against $115,622,000 at the end of 1931. Holdings of bills discounted for member banks, both those secured by United States Government obligations and "All Others", were less at the end of 1932 than a year before, and total discounts were smaller than at the close of any other recent year. Holdings of bills bought in the open market were also smaller at the close of 1932 than at the end of any recent year, while holdings of United States Government securities were greater than for any other comparative date. Total holdings of bills and securities on December 31, 1932, amounting to $66,292,000 were the largest on that date since 1928. The volume of Federal reserve notes of this bank's issue which were in actual circulation on December 31 was $97,139,000, smaller by $23,487,000 than a year earlier, and the smallest year-end total since 1917. Member bank reserve deposits, and total deposits, at the close of 1932 were slightly larger than a year earlier. On page 19 of this report is a table setting out in detail the items in the balance sheet of the Federal Reserve Bank of Atlanta at the close of each of the past four years. 10 Earnings and Expenses—A table presented on page 20 of this report sets out in detail the various items of income and expenditures, together with profit and loss statements showing the disposition of earnings of the bank for the past four years. Total earnings during the year 1932 were 38.3 per cent greater than in 1931, and slightly larger than in 1930, but a little less than half those in 1929, when the volume of discounts was nearly double that for 1932. Earnings on discounted bills gained 5 5.7 per cent over 1931, and earnings on United States securities were more than double those in 1931 and the largest on record because of the larger purchases of Government securities. Earnings on purchased bills, however, were the smallest since 1917. The cost of current operations of the Federal Reserve Bank during 1932, including the cost of issue and redemption of its Federal reserve notes, amounted to $1,217,777, a decrease of 4 per cent from 1931, and smaller than expenses were for any other year since 1919. In 1932 there were decreases of 2.2 per cent in salary expense, 16.8 per cent in office and other supplies, 8.7 per cent in telegraph expense and 21.4 per cent in expressage, offset in part by increases of 11.6 per cent in postage expense because of the increase in postage rates on first class mail matter, 1.9 per cent in telephone expense, and other minor items. Current net earnings for 1932 (total earnings less total current expenses) amounted to $785,419, as against $180,059 in 1931 and $590,842 in 1930. There were miscellaneous additions to current net earnings amounting to $80,593, and deductions for depreciation, furniture and equipment, reserve for probable losses and other items totaling $573,827, and there remained $292,545, sufficient to pay dividends to stockholding member banks as provided by law. No franchise tax was paid to the United States Government for 1932, nor was any paid in 1931 or 1930. MOVEMENT OF PRINCIPAL ASSET AND LIABILITY ITEMS The average volume of reserve bank credit outstanding at the Federal Reserve Bank of Atlanta during the year 1932, indicated by its total holdings of bills discounted and bought and of United States securities purchased, was greater than in 1931 or in 1930. This was due to an increase in the volume of discounts, and to total purchases of United States securities greater than in any other year. The volume of acceptances bought in 1932 was the smallest since 1921. Total bills and securities held by this bank declined from 79 millions on January 13 to a low point for the year, at 44.8 millions, on May 4. Because of large purchases of Government securities in May and June and increased discounts early in July, total bills and securities rose to the year's peak, at 93.6 millions, on July 13, and at the close of the year had declined to 66.3 millions. From January through August the volume of bills actually discounted by this bank was larger than in those months of 1931, but in the last four months it was smaller. Holdings of discounted bills declined from 53.5 millions on ll January 13 to 27.8 millions on June 29, rose to 43.6 millions on July 20, and declined to 14.9 millions at the close of the year. Holdings of purchased bills declined from 11.8 millions on January 13 to a low for the year, at 1.2 millions on August 31, and at the end of the year were 3.4 millions. United States security holdings were constant, at 12.6 millions, from the beginning of the year through May 4. Purchases of Government securities largely through the System's Special Investment Committee, resulted in an increase in this bank's holdings to a high point, at 52.8 millions, on June 29, and after declining to 46.6 millions on August 10 they remained at approximately that amount during the remainder of the year. Cash reserves of this bank on January 6 were 112.9 millions, and after declining through January, rose to the high point for the year, at 126.8 millions, on May 4. As funds were invested in Government securities, reserves declined to 68.3 millions, the low point for the year, on July 27, and at the close of the year amounted to 87.2 millions. Member bank reserve deposits at the beginning of 1932 were 50.8 millions, declined to 40.5 millions, on September 21, but rose to 49.8 millions on December 31. Federal reserve notes of this bank in actual circulation are those which have been issued to the bank by the Federal Reserve Agent, less the amounts held by the bank, its branches and agencies. At the beginning of 1932, outstanding notes totaled 122.6 millions. There was a gradual decline during the first eleven months of the year to 96.3 millions, on November 30, and on December 31 the total was 97.1 millions. The reserve ratio is the percentage relation which total reserves bear to liabilities of the bank in the form of deposits and outstanding Federal reserve notes, combined. This ratio increased from 63.3 on January 6 to 76.7 on May 4, declined to 44.1 on July 13, and increased to 5 8.6 on December 31. On page 22 of this report will be found a table showing monthly averages of daily figures for the principal asset and liability items during 1932 and 1931. VOLUME OF DISCOUNTS AND INVESTMENTS The total volume of bills discounted, re-discounted, and purchased, and United States securities bought, and other investment operations of the Federal Reserve Bank of Atlanta during the year 1932 amounted to $835,895,000. This total is larger by $200,901,000 than the corresponding total for 1931, and is larger by $124,858,000 than for 1930, but is less than for 1929 or 1928. Discounts for member banks during 1932 amounted to $685,424,000, a total greater than for 1931 or 1930 but less than for the two years preceding 1930. Discounts for individuals, partnerships or corporations under an amendment to Section 13 of the Federal Reserve Act adopted July 21, 1932, amounted to only $206,500. Discounts for non-member banks secured by Adjusted Service Certificates were negligible, amounting to only $482.00 for the year, and bills discounted for Federal Intermediate Credit Banks totaled 12 $6,147,000. Total discounts during 1932, therefore, amounted to $691,777,000, and were 54 per cent greater than in 1931, and 34 per cent greater than in 1930, but less than in 1929 or 1928. The monthly average number of member banks accommodated by the discount of paper during 1932 was 166, compared with averages of 157 for 1931, 182 for 1930, and 214 for 1929. During the year 1932 the Federal Reserve Bank of Atlanta purchased directly in the open market and through other Federal reserve banks, paper amounting to $29,480,000, an amount smaller than for any other year since 1921. Purchases of United States Government securities directly in the open market, through the System's Special Investment Committee and from other Federal reserve banks during 1932 totaled $113,137,500, greater by 62 per cent than during 1931, and greater than during any other year. VOLUME OF OPERATIONS IN PRINCIPAL DEPARTMENTS During the year 1932 the Federal Reserve Bank of Atlanta received 12,924 applications for the discount or rediscount of paper, an increase of 13.6 per cent over the 11,378 applications received in 1931, and larger than for any other year since 1923. There were accepted during 1932 for discount or rediscount 60,615 notes amounting to $691,777,000, a decrease of 6 per cent in number of notes but an increase of 53.5 per cent in amount, compared with corresponding totals for 1931. Bills bought in the open market during 1932 numbered 1,569, and amounted to $29,480,000, representing decreases of 79.4 per cent in number and of 72.6 per cent in amount compared with 1931, and smaller than for any other recent year. During 1932 there were received and counted 101,855,000 pieces of currency amounting to $389,651,000, smaller by 13.4 per cent in number and 16.3 per cent in amount than during 1931, and coin received and counted numbered 70,817,445, and amounted to $8,293,000, larger in number by 6.9 per cent but 22 per cent less in amount, than in 1931. Checks handled during 1932 numbered 24,8 50,5 51, and amounted in value to $5,821,695,000, showing decreases of 14.1 per cent in number and of 29.2 per cent in amount compared with those handled during 1931, and less both in number and value than for any other recent year. The number of government security coupons paid during 1932 was 440,621, an increase of 12.8 per cent over the number paid in 1931, and the amount of these coupons was $7,099,000, larger by 33.2 per cent than in 1931 and larger than for any other year since 1926. Other collection items handled during 1932 numbered 188,080, and amounted to $128,452,000, showing an increase of 5.6 per cent in number but a decrease of 7.2 per cent in amount compared with those handled during 1931. Transactions in United States securities by the Fiscal Agency Department during 1932, involving issues, redemptions and exchanges, numbered 13 77,752, and amounted in value to $196,098,000, an increase of 42.7 per cent in number but a decrease of 33 per cent in amount, compared with those handled during 1931. Transfers of funds during 1932 numbered 68,556, and amounted to $1,589,238,000, smaller in number by 7.2 per cent and in amount by 24.7 per cent than in 1931. OPERATIONS OF THE FEDERAL RESERVE CLEARING SYSTEM Transit Operations—During the year 1932 the Federal Reserve Bank of Atlanta and its branches handled 23,958,000 collection items (not including duplications on account of items handled by both the parent bank and one of its branches, or by more than one branch), amounting to $5,746,688,000. The number of items handled was smaller by 13.8 per cent than in 1931, the amount was 29.3 per cent less, and both number and amount were smaller than for other recent years. Items drawn on member banks, and on par-remitting non-member banks, in the Sixth District numbered 18,265,000 and amounted to $3,620,922,000, and were smaller in number by 16.1 per cent and in amount by 2 5.1 per cent than those handled in 1931. Items drawn on the Federal Reserve Bank of Atlanta and its branches numbered 154,000 and amounted to $1,486,002,000, smaller by 0.6 per cent in number and 42.6 per cent in amount than in 1931. Items forwarded to other Federal reserve banks and their branches numbered 2,3 50,000 and amounted to $265,278,000, declines of 22.5 per cent in number and of 27.7 per cent in amount compared with 1931. The number of items handled during 1932 which were drawn on the United States Treasurer was 3,189,000, amounting to $374,486,000, greater in number by 12 per cent and in value by 10.9 per cent, than those handled in 1931, and larger than for any other recent year. Clearings and Transfers Through the Gold Settlement Fund—Each Federal reserve bank maintains with the Federal Reserve Board a Gold Settlement Fund for the purpose of expediting the settlement of current transactions between Federal reserve districts in the clearing of checks and in the transfer of funds for its member banks. Both payments and receipts through this Fund, for clearings and transfers of funds, were smaller in 1932 than in 1931, and payments were smaller than for any other year since 1922 and receipts were the smallest since 1921. Total payments during 1932 amounted to $2,611,867,793, a decrease of $826,985,255, or 24 per cent, compared with payments during 1931, and 1932 receipts totaled $2,563,368,403, smaller by $795,334,604, or 23.7 per cent, than during the year before. For the year payments exceeded receipts by $48,499,390, resulting in a net loss of this amount in this bank's balance in the Gold Settlement Fund. In 1931 there was a net loss of $80,650,000, and in 1930 a net loss of $45,218,000, while in 1929 there was a gain of $12,420,000. 14 CHANGES IN MEMBERSHIP The changes which occurred in national banks and state bank members during 1932 resulted in a net reduction of 26 in the number of member banks in the Sixth Federal Reserve District. At the beginning of the year there were 305 national banks and 44 state bank members, or a total membership in this District of 349 banks. During 1932 there was one new national bank organized, one national bank which had suspended resumed operation, and two state banks were admitted to membership. More than offsetting these gains in membership, however, were the changes which resulted in losses. Consolidation of two state bank members, and the conversion of a member bank to a non-member bank, together with the voluntary withdrawal of a state bank member reduced the membership by three, and suspension and insolvency accounted for the loss of 21 national banks and of 6 state bank members, so that at the close of the year there was a net reduction of 20 in the number of national banks and of 6 in the number of state bank members. These changes are set out in detail in the table. National State Total 305 44 349 -f- 2 -)- 1 + 2 -f- 1 — 1 — — 1 6 38 Active member banks on January 1 , 1 9 3 2 Additions to membership New national banks organized State banks admitted to membership Resumption following suspension -\- 1 -j- 1 Losses in membership Consolidation of member banks Conversion of member bank to non-member bank Voluntary withdrawal of state member bank Suspension and insolvency Active member banks on December 31, 1932 — 1 — 21 285 — 1 — 1 — 1 — 27 323 Membership in this District has declined in number during each year since 1922, when it was larger than in any other year. At the close of 1922 there were 393 national banks, and 143 state bank members, or a total membership of 536 banks, in this District. The year 1931 witnessed the largest decrease in membership, when there was a reduction of 41 members, 36 of these being national banks and 5 being state bank members. That was also the year of the largest decrease in the number of national banks. The largest reduction of state bank membership took place in 1926, when there was a decrease of 19. Although suspension of operations constitutes the cause of the larger part of these reductions, many were caused by consolidations and some by withdrawal from the System. BANK ORGANIZATION AND PERSONNEL G. G. Ware, whose term as a Class A Director expired December 31, 1932, was re-elected by member banks in Group 3 for the three-year term ending December 31, 1935. Leon C. Simon, whose term, as a Class B Director expired December 31, 1932, was re-elected by member banks in Group 1 for the three-year term ending December 31, 193 5. 15 Oscar Newton, whose term as a Class C Director expired December 31, 1932, was reappointed by the Federal Reserve Board for the three-year term ending December 31, 193 5. Mr. Newton was also designated by the Federal Reserve Board as Chairman of the Board of Directors and Federal Reserve Agent, and W. H. Kettig was designated Deputy Chairman. A. E. Walker, Managing Director of the Birmingham Branch, died on July 3, 1932, and John H. Frye, who was a Director of that Branch, was on July 8 elected Managing Director, to succeed Mr. Walker. On September 9 John G. Farley, of Birmingham, was elected a Director of the Birmingham Branch to fill the unexpired term;, ending December 31, 1934, of Mr. Frye. At the January meeting of the Board of Directors all of the officers were re-elected to serve during the year 1933. The number of officers and employees of the Federal Reserve Bank of Atlanta, including its branches and agencies, on January 1, 1932, was 401, and on December 31, 1932, was 390, not including 89 additional employees at the close of the year who were assigned to the Reconstruction Finance Corporation and the Cotton Stabilization Corporation. MEMBER BANK CREDIT All Member Banks in Sixth District Loans and Investments—The total volume of member bank credit outstanding at the close of 1932, indicated by the total loans, discounts and investments of all member banks in the Sixth District, was 6.7 per cent smaller than a year earlier, 14.6 per cent less than at the close of 1930 and 24.2 per cent smaller than at the end of 1929. Total loans and discounts, however, at the end of 1932 were 13.0 per cent less than a year earlier, 28.9 per cent smaller than at the end of 1930 and 39.6 per cent less than on December 31, 1929. Loans on securities declined 4.1 per cent from the end of 1931 to the close of 1932, and all other loans and discounts declined 16.0 per cent. Total investments at the end of 1932 were 5.1 per cent greater than at the close of the year before, and were also greater than on December 31, 1930 or 1929, because of larger holdings of United States Government securities. A comparison of loan and investment items at the close of 1932 with the three preceding years is set out in the table. Dec. 31, 1932 Number of member banks Loans and Investments—Total Loans—Total On Securities On Real Estate All Others Investments—Total U. S. Government Securities Other Securities 323 $844,929 516,292 143,037 72,092 301,163 $328,637 177,633 151,004 16 (000 Omitted) Dec. 31, Dec. 31, 1931 1930 349 $905,998 593,294 149,186 69,828 374,280 $312,704 153,550 159,154 390 $989,419 725,754 173,021 77,3 59 475,374 $263,665 112,276 151,389 Dec. 31, 1929 428 $1,114,730 854,781 204,099 81,465 569,217 $ 259,949 115,228 144,721 Deposits—Net demand and time deposits have been reported monthly to the Federal Reserve Bank of Atlanta by all member banks in the Sixth District since early in 1923. From July 1924 through November 192 5 demand deposits rose sharply to the highest level on record, but since that time each year has brought declines to new low levels, interrupted usually by an increase in the fall or winter months. From April 1931 daily average demand deposits declined each month except one (March 1932) to the lowest level on record in August 1932. There were slight gains in September, October and November, and an increase in December to the highest total since June. Time deposits increased more gradually, and in smaller volume, than did demand deposits, and reached their peak in July 1928. Since then time deposits have declined each fall and increased somewhat each spring through 1931, but in 1932 the more gradual decline throughout the year was interrupted only slightly by a small gain from July to August. In the table daily average demand and time deposits are shown monthly for the past four years. DEMAND AND TIME DEPOSITS OF ALL MEMBER BANKS —DAILY AVERAGE Demand Deposits 1932 (In Millions of Dollars) 1931 1930 1929 January February March April May June July August September October November December $412 398 399 396 379 366 350 342 343 344 344 352 $497 504 508 511 505 492 481 468 454 436 419 418 $571 575 570 564 550 519 513 504 511 511 512 499 $598 597 601 585 569 549 539 524 537 543 545 550 Time Deposits January February March April May June July August September October November December $370 3 61 360 3 58 355 3 51 349 3 52 349 349 347 344 $398 3 88 395 394 391 396 401 407 399 387 376 371 $434 443 443 440 450 447 440 439 441 43 8 43 5 414 $458 45 8 459 449 459 466 462 445 443 436 433 428 17 CONDITION OF WEEKLY REPORTING MEMBER BANKS Weekly condition reports of selected member banks in Atlanta and other principal cities of the District indicate lower averages of loans, both those on securities and "All Others", which are largely for commercial, industrial and agricultural purposes, and of demand and time deposits, but higher averages of investments and of borrowings, in 1932 than during 1931. Total loans and investments declined from 537.5 millions on January 6, the first weekly report date in 1932, to a low for the year, at 490.4 millions, on August 31, but increased to 507.7 millions on December 28. Loans on securities declined from 113 millions on January 6 to 104 millions on April 20, and closed the year at 107.2 millions, averaging about 11 per cent less than in 1931. All Other loans declined from 245.6 millions on January 6 to 213.5 millions on September 28, and were 214.3 millions on December 28, and averaged approximately 16 per cent lower than in 1931. Investments of these banks in securities increased materially in the first quarter of 1931, but have fluctuated within a narrow range since that time. Demand deposits declined from 249.7 millions on January 6 to a low for the year, at 209.2 millions, on August 3, but increased to 222.9 millions on December 28, and time deposits declined from 202.7 millions on January 6 to a low for the year, at 188.9 millions, on July 13, and after increasing through September 21, declined to 190.7 millions on December 28. Borrowings by these weekly reporting member banks were at their highest level, at 28.9 millions, on January 13, at their lowest point, at 6.1 millions, on September 28, and on the last report date of the year were 15.7 millions. On page 24 of this report is a table showing monthly averages of weekly figures for important items in the weekly report for the past two years. NOTE—More detailed statistics concerning the operations of the Federal Reserve Bank of Atlanta, and of member banks in the Sixth District, are carried in the Annual Report of the Federal Reserve Board which will be issued at a later date. 18 CONDITION OF FEDERAL RESERVE BANK OF ATLANTA ( I N THOUSANDS OF DOLLARS) Dec. 31, 1932 Dec. 31, 1931 Dec. 31, 1930 Dec. 31, 1929 Gold with Federal Reserve Agent $62,000 Gold redemption fund with United States Treasury.. 2,878 $91,800 2,725 $129,900 2,237 $126,880 2,669 Gold held exclusively against F. R. Notes Gold settlement fund with F. R. Board Gold and gold certificates held by bank $ 64,878 8,186 9,103 $ 94,52 5 7,416 7,620 $132,137 10,803 7,907 $129,549 5,604 4,438 Total gold reserve Reserves other than gold $82,167 5,060 $109,561 6,061 $150,847 8,578 $139,591 13,926 Total reserves Non-reserve cash $87,227 5,018 $115,622 4,368 $159,425 4,693 $153,517 5,559 Bills Discounted: Secured by U. S. Govt. Obligations Other bills discounted $ $ $ $ Total bills discounted Bills bought in open market $ 14,949 $ 3,439 $ 34,902 $ 13,235 $ 18,068 $ 15,756 $ 29,347 $ 19,196 U. S. Government Securities: Bonds Treasury Notes Certificates and Bills $ 10,281 8,110 29,013 $ $ 523 4,380 2,974 $ 1,173 3,377 5,395 Total U. S. Govt. Securities Other securities $47,404 500 $ 13,938 $ 8_5O 7,877 600 $ 9,945 $ 66,292 $ 62,925 $ 42,301 $ 58,488 Uncollected items Bank premises All other resources $ 11,199 $ 2,422 $ 5,514 $ 11,839 $ 2,489 $ 4,653 $ 12,846 $ 2,573 $ 6,263 $ 26,748 $ 2,658 $ 3,873 Total resources $177,672 $201,896 $228,102 $250,843 $97,139 $120,626 $133,854 $143,084 $ 49,760 159 775 1,056 $ 46,368 2,047 2,767 172 $ 61,014 1,211 207 479 $ 62,895 2,485 219 164 RESOURCES Total Bills and Securities LIABILITIES F. R. Notes in actual circulation Deposits: Member bank—reserve account Government Foreign banks Other deposits Total deposits 4,049 30,853 6,521 380 7,037 487 17,581 2,680 26,667 $51,750 $62,911 $65,763 $ 12,000 5,158 10,449 2,309 $ 13,130 5,346 10,857 2,004 $ 23,907 5,384 10,857 1,848 $177,672 Total liabilities $51,354 $ 10,747 4,679 10,544 2,813 Deferred availability items Capital paid in Surplus All other liabilities $201,896 $228,102 $250,843 67.2 81.0 73.5 8,947 $ 15,642 $ 21,320 Ratio of total reserves to deposit and Federal reserve note liability combined (per cent) Contingent liability on bills purchased for foreign correspondents $ 1,064 13,885 19 58.6 1,440 $ EARNINGS AND EXPENSES OF THE FEDERAL RESERVE BANK OF ATLANTA EARNINGS 1932 1930 1929 $1,087,248 417,294 315,989 24,139 119,054 $3,091,399 716,782 171,667 39,73 5 96,466 1931 Discounted bills Purchased bills United States securities Deficient reserve penalties Miscellaneous $1,186,612 127,554 602,3 66 28,572 5 8,092 762,143 238,179 298,942 32,746 116,825 Total earnings $2,003,196 $1,448,835 $1,963,724 $4,116,049 Salaries: Bank Officers $ 231,104 Clerical Staff 391,963 All other 78,998 Governors' Conferences 86 Federal Reserve Agents' Conferences 106 Federal Advisory Council 1,129 Directors' Meetings 23,281 Traveling expenses ( a ) . . . 22,319 Assessments for Federal Reserve Board expenses 27,019 Legal Fees 4,182 Insurance on currency and security shipments 16,886 Other insurance 27,361 Taxes on banking house 60,822 Light, heat and power 15,673 Repairs and alterations, banking house 4,182 Rent 4,572 Office and other supplies 13,508 Printing and stationery 18,546 Telephone 7,944 Telegraph 63,322 Postage 91,319 Expressage 28,789 Miscellaneous 30,121 $ 231,866 403,400 82,715 232 .. 853 22,741 23,438 26,127 3,061 30,734 27,052 60,515 15,697 2,846 5,288 16,236 18,466 7,793 69,365 81,794 36,619 36,840 $ 237,239 417,748 81,3 58 134 122 944 23,223 22,676 29,398 8,222 46,241 26,013 62,328 16,768 12,044 5,351 20,275 28,557 8,015 73,700 93,998 39,591 38,367 $ 231,917 419,257 83,463 280 102 1,438 24,358 19,006 30,499 8,186 42,624 24,758 64,152 15,393 8,501 5,379 26,317 29,511 7,878 70,674 113,970 42,505 36,219 $1,163,232 $1,203,678 $1,292,312 $1,306,387 $ $ $ 71,057 9,513 $ 199,393 7,459 CURRENT EXPENSES Total, exclusive of cost of currency Federal reserve currency, including shipping charges: Original cost Cost of redemption Total current expenses 48,895 5,650 59,741 5,357 $1,217,777 $1,268,776 $1,372,882 $1,513,239 $2,003,196 1,217,777 $1,448,835 1,268,776 $1,963,724 1,372,882 $4,116,049 1,513,239 $ 785,419 $ 180,059 $ 590,842 $2,602,810 $ $ $ $ PROFIT AND LOSS ACCOUNT Earnings Current expenses Current net earnings Additions to current net earnings 20 80,953 45,598 37,985 5,360 Deductions from current net earnings: Bank premises—depreciation Furniture and equipment Reserve for probable losses All other Total deductions $ 66,513 6,183 499,224 1,907 84,007 5,608 127,033 9,009 $ 573,827 $ 225,657 $ 305,520 $1,179,652 $ $ 313,247 $ $ 323,307 $ 323,307 $ $1,428,518 $ 321,696 $ 303,032 $ $ $ $ $ $ 803,790 Net earnings available for dividends, surplus and franchise tax $ 292,545 Dividends paid $ 292,545 Transferred to surplus $ Withdrawn from surplus: Account dividends paid $ Account depreciation on United States securities $ Franchise tax paid to the United States Govt.. $ $ $ 313,247 $ $ 95,405 b 85,828 11,934 194,990 12,768 $ 85,828 38,225 696,500 3 59,099 REIMBURSABLE FISCAL AGENCY EXPENSES Salaries All other Total $ s 58, 5S0 26, 505 s J ,280 3,549 S 5,280 1,962 $ 5,130 1,235 $ 85, 085 $ 8,829 $ 7,242 $ 6,365 (a) Other than those connected with governors' and agents' conferences and meetings of directors and of the advisory council. (b) Restored to surplus before closing books at the end of 1932. 21 FEDERAL RESERVE BANK OF ATLANTA Monthly averages of daily figures—in millions HOLDINGS OF BILLS AND SECURITIES Bills Discounted Bills Bought Total Bills U.S. and Securities F.R. Note Cash Reserves Circulation 1932 1931 1932 1931 108 108 121 122 116 122 121 121 118 116 134 131 131 132 130 113 113 110 124 118 114 107 102 113 117 121 122 Securities 1932 1931 Jan. Feb. March April May June July Aug. Sept. Oct. Nov. Dec. 50 49 38 37 32 34 40 34 27 20 21 22 1932 1931 25 38 11 8 6 3 2 2 2 1 1 2 51 52 3 4 23 22 13 11 11 13 14 20 1932 1931 1932 1931 12 6 12 12 7 7 8 8 13 13 23 49 8 8 11 74 71 56 8 y 50 47 53 56 85 92 81 7 35 32 20 47 47 47 13 19 21 22 22 22 47 22 17 16 75 69 71 72 43 35 31 30 39 42 44 47 55 95 101 88 159 162 167 83 73 81 171 158 148 140 136 84 86 79 79 127 90 84 96 99 98 Member Bank Reserve Deposits Reserve Ratio 1932 1931 1932 1931 49 48 48 47 46 44 58 59 59 60 58 57 43 42 42 42 42 57 54 54 43 51 49 49 61.4 62.5 70.7 72.2 69.6 51.1 46.0 51.7 55.2 57.8 54.9 54.6 80.9 84.1 87.4 87.8 83.1 80.8 78.8 77.3 73.0 50.9 47.1 54.4 VOLUME OF OPERATIONS IN PRINCIPAL DEPARTMENTS FEDERAL RESERVE BANK OF ATLANTA Number of Pieces Handled Bills discounted: Applications Notes discounted Bills purchased: In open market From other Federal Reserve Banks Currency received and counted Coin received and counted.. Checks handled 1932 1931 1930 1929 12,924 60,615 11,378 64,502 10,100 63,285 12,255 75,189 1,569 7,62 5 8,660 6,931 116 101,855,000 70,817,445 24,850,551 117,567,242 66,269,794 28,940,900 125,990,910 70,845,651 31,496,000 133 ,934,704 62 ,926,922 32 ,305,000 440,621 188,080 390,711 178,181 411,777 165,977 452,395 163,671 77,752 68,5 56 54,497 73,8 89 34,885 84,575 53,311 97,924 $ 691,777,000 $ 450,631,000 $ 515,993,000 $1,349,145,000 29,480,000 107,631,000 124,290,000 104,804,000 5,006,000 10,026,000 389,651,000 8,293,000 5,821,695,000 465,356,000 10,637,000 8,227,498,000 564,128,000 12,787,000 10,428,054,000 583,131,000 8,923,000 12,182,513,000 7,099,000 128,452,000 5,328,000 138,367,000 5,911,000 147,384,000 6,371,000 169,231,000 196,098,000 1,589,238,000 292,631,807 2,110,001,000 148,902,000 2,562,525,000 137,713,000 2,477,543,000 Collection items handled: U. S. Govt. coupons paid. All other U. S. Securities—issues, redemptions, and exchanges by Fiscal Agency Department Transfers of funds Amounts Handled Bills discounted Bills purchased: In open market From other Federal Reserve Banks Currency received and counted Coin received and counted.. Checks handled Collection items handled: U. S. Govt. coupons paid. All other U. S. Securities—issues, redemptions, and exchanges by Fiscal Agency Department Transfers of funds 23 CONDITION OF WEEKLY REPORTING MEMBER BANKS IN SELECTED CITIES Monthly averages of weekly figures—in millions Loans on Securities All Other Loans Investments Total Loans and Investments Borrowings Demand Deposits Time Deposits fro*™ F.R.Bank 1932 1931 1932 1931 1932 1931 1932 1931 1932 1931 1932 1931 1932 1931 138 132 246 241 238 291 289 283 278 272 179 179 178 176 142 148 160 178 534 528 244 238 238 305 306 201 223 221 28 27 18 10 9 177 176 170 175 178 571 569 576 583 563 559 559 550 558 October November 110 108 107 107 111 111 109 106 106 106 106 December 107 January February March April May June July August September 133 127 116 116 234 228 221 114 113 114 116 218 217 215 218 114 217 114 215 265 266 263 263 262 259 252 173 176 179 180 182 179 174 181 185 181 183 523 517 516 508 497 496 497 503 503 505 214 304 311 307 302 300 197 198 195 195 192 190 213 215 291 281 195 196 563 554 215 216 267 259 194 193 549 220 254 191 235 227 221 229 230 228 19 16 227 233 235 228 19 25 18 13 3 1 2 2 1 6 11 218 9 22 214 208 11 13 31 30
@FedFRASER