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EIGHTEENTH ANNUAL REPORT OF THE

FEDERAL RESERVE BANK
OF BOSTON
FOR THE YEAR ENDED
DECEMBER 31, 1932

BOSTON • MASSACHUSETTS




EIGHTEENTH ANNUAL REPORT
OF THE FEDERAL RESERVE BANK
OF BOSTON

FOR THE YEAR ENDED
DECEMBER 31, 1932

BOSTON, MASSACHUSETTS







CONTENTS
PAGE

Letter of Transmittal
4
Introductory
5
New England Business Conditions
6
Business Indices — New England
10-11
Member Bank Credit
12
Federal Reserve Bank Credit
12
Bankers' Acceptances
16
Acceptance Liability
16
Open Market Operations
16
Member Bank Reserve Deposits
IT
Money Rates and Discount Rates
18
Discounts for Individuals, Partnerships, and Corporations . 19
Boston Money Market, 1932
20
Federal Reserve Notes
20
Reserve Position
21
Banking Indices — New England
22—23
Operating Statistics
Statement of Condition
24—26
Income and Disbursements
26—27
Membership
28
Bank Organization and Personnel
28
Stockholders' Meeting
29
Fiduciary Powers
30
Volume of Operations
30
Banking and Industrial Committee
31
List of Officers and Directors
35




LETTER OF TRANSMITTAL

BOSTON, MASS.,

February 14, 1933.

HON. EUGENE MEYER,
Governor, Federal Reserve Board,
Washington, D. C.
Sir:
I have the honor to submit herewith the Eighteenth Annual
Report of the Federal Reserve Bank of Boston, covering industrial
and credit conditions in New England, and the operations of the
bank for the period January 1, 1932, to December 31, 1932.




Respectfully yours,
FREDERIC H. CURTISS,

Chairman and Federal Reserve Agent

EIGHTEENTH ANNUAL REPORT
OF THE FEDERAL RESERVE BANK
OF BOSTON
INTRODUCTORY
The year 1932 from the economic and financial point of view
may be regarded as divided into two substantially separate periods.
The first half of the year was one of marked disturbances. Gold
was leaving the United States in unprecedented quantities, some
$1,100,000,000 having been exported between September, 1931,
and June, 1932. The precipitous decline in bank deposits which
had developed in the last months of 1931 continued with unabated
rapidity during the early months of 1932. Bank failures, which
had become numerous in the latter part of 1931, continued in large
volume in January and again in June and July. Coincident with
the withdrawal of gold and apprehension as to the banking situation, large quantities of currency were being hoarded. Meanwhile,
commodity prices continued the downward trend, reaching pre-war
levels, production and payrolls reached new low levels, deposits of
member banks dropped to the lowest point since 1924, and by July
5 the amount of money in circulation reached the highest level in
the history of the country, at $5,804,000,000. Meanwhile emergency measures had been tak°n to relieve pressure onfinancialinstitutions. In February the Reconstruction Finance Corporation
began operations, and the Glass-Steagall Act was passed. In midsummer, there was a reversal of gold movement, and a return of
currency from hoarding. Commodity prices turned upwards, currency was withdrawn from hoarding, member bank deposits once
more began to expand, and industrial and commercial activities
began to improve.
The various indices reached their highest points for the movement in October or early in November, thereafter reverting to a
declining trend. Commodity prices led the downward path, reaching the lowest levels since 1906 at the close of the year 1932.
Nevertheless, although the year closed with commodity prices at
levels lower than in midsummer, most of the other indices, although
declining, maintained a substantial part of the early fall improvement. I t may, therefore, be said that at the close of 1932 many
of these indices were in a more favorable position than they were
in midsummer, although they were again declining rather than
rising. In New England there were no bank closings after July
13, while one bank previously closed was reopened.



A N N U A L

R E P O R T

O F T H E

F E D E R A L

R E S E R V E

B A N K

N E W ENGLAND BUSINESS CONDITIONS

During the year 1932 the level of general business activity in
New England was approximately 25 per cent lower than in 1931,
but, in contrast to the continuing decrease in the final half of
1931, some measure of stability was evident during the last six
months of 1932. In aggregate activity, when allowances had been
made for seasonal changes, the lowest single month was May, and
the second quarter marked the lowest three-month period. Some
increase occurred between the second and third quarters of 1932,
with a minor decline during the final quarter.
One important manufacturing activity in New England operated at a greater volume than in 1931, but most business activities were at lower levels than in the preceding year. Boot and
shoe production in this district during 1932 actually increased
more than one per cent over the 1931 volume, but the building industry, cotton mills, woolen and worsted mills, and silk mills operated at levels considerably less, employment in manufacturing
plants, as well as in distributing organizations, was materially reduced, and the number of business failures increased sharply.
Building: With a decrease of more than 61 per cent in the
total value of new construction contracts awarded in the New
England states during 1932, all branches of the building and
construction industry showed a considerably reduced value of new
contracts let. Thus the year 1932 differed from the preceding
year, not only in the magnitude of the shrinkage in the activity
of the industry, but also in the fact that no stabilizing influence
was present in 1932, as there had been in 1931, namely, the 19.4
per cent increase in the value of new public works and utilities
contracts awarded which occurred during that year. A survey
of the three major branches of the industry and their subdivisions
reveals that certain types of construction evidenced a greater
resistance toward the abnormal contraction in the value of new
contracts awarded than have other classes of building.
The value of new residential building in 1932 declined almost
56 per cent, compared with a decrease of 21 per cent in 1931.
In 1931, however, the value of residential contracts amounted to
only 29.6 per cent of the total value for all construction contracts, while in 1932 it represented 34 per cent of the total. The
principal strength in residential building was in single-family
dwellings for either owner or tenant occupancy, this type of building decreasing only 52 per cent during the past 12 months, and
[ 6 ]


A N N U A L

R E P O R T

O F T H E

F E D E R A L

R E S E R V E

B A N K

now comprising 72 per cent of all residential contracts awarded,
compared with 66 per cent in 1931. The next largest division of
residential building is apartment house construction, which reported a decrease of over 84 per cent in the value of new contracts
awarded in 1932.
The second major classification of the building industry, nonresidential types of construction, declined 63.8 per cent during
1932,
compared with a 29.8 per cent reduction in contracts
awarded during 1931. The value of 1932 contracts represented
62.3 per cent of the entire industry, while in the preceding year
non-residential contracts comprised 59.8 per cent of the total.
Commercial building, which in 1931 made up 22.1 per cent of the
value of non-residential construction, was about 25 per cent of the
1932 value, and showed a reduction of 59.5 per cent during 1932.
Educational building, which has been the largest division of nonresidential construction during the past two years, decreased 61.2
per cent during 1932, with school and college contracts awarded
declining only 57.7 per cent.
Public works and utilities construction awards for 1932 were
63.7 per cent lower than in 1931. In public utilities there was a
shrinkage of 87.7 per cent, attributable to the virtual cessation
of new railroad construction. Public works decreased 46 per cent
in the past year, this division of construction being almost entirely sustained by the value of new highway contracts awarded,
which during 1932 declined only 40 per cent.
Employment: Still further reduction was recorded in the average number employed per establishment and average weekly wages
per person during 1932, as reported by identical New England
manufacturing establishments. The average number employed per
establishment in 1931 declined 15 per cent from the preceding
year, while in 1932 the unemployment situation was accentuated
by a reduction of 24.2 per cent in the average number employed,
an increase of almost 70 per cent in the rate of decrease of the
average number employed. The average weekly payroll disbursements in these same establishments showed that the average weekly
wage paid per person was $21.04 in 1931, as compared with $17.56
in 1932, a decline of 16.4 per cent, against a decrease of 8.5 per
cent in 1931.
Thus, with the average number employed per establishment 24.2
per cent lower in 1932, and with a reduction of 16.4 per cent in
wages per person, there has been a reduction of 36.6 per cent in
the aggregate unit payroll disbursement. At the same time the net



[7]

A N N U A L

R E P O R T

O F T H E

F E D E R A L

R E S E R V E

B A N K

percentage increase in purchasing power, based on the cost of
living index compiled by the Massachusetts Department of Labor
and Industries, has been only 17.1 per cent. As a result, the average unit reduction of industrial purchasing power during 1932 was
approximately 20 per cent. This decrease in aggregate industrial
purchasing power has a close correlation to the decline of 21.9
per cent in the sales of New England department stores during the
past year.
Shoes: With the exceptions of July and December, the total output of boots and shoes in this district during the second half of
1932 exceeded the production of the corresponding months of
1931.
As a result of this strength during most of the third and
fourth quarters of 1932, combined with the large excess of output
during the first quarter compared with that period in 1931, the
record for the year 1932 was 1.4 per cent higher than for 1931.
This was the second successive year during which shoe production
increased, with the 1932 gain being the only increase recorded
among the available production series in this district. As the
records of shoe production in the present form extend over a
period of only 10 years, the 1932 total output, estimated at
112,558,000 pairs, was exceeded in only four years, 1923, and
1927 through 1929. The month-to-month changes, as shown by
the seasonally adjusted index of shoe production, indicate that
the 1932 output varied more than in 1931, which apparently
followed a regular movement of gradual increase and decline.
The year 1932 closed at a slightly lower level of production than
that recorded in December, 1931.
Textiles: The activity of the textile establishments in this
district during 1932 was characterized by similar movements in
the three principal branches, cotton, woolen and worsted, and
silk goods manufacture. The year 1931 closed with all classes of
textiles showing lower operating schedules than at the beginning
of the year. Early in 1932 decidedly curtailed monthly production was evident in all three branches of the industry. This weakness continued throughout the first half of the year, with new
low records for the seasonally adjusted indices being established
in May for wool consumption, in June for cotton consumption,
and in July for broad silk loom activity. Thereafter improvement
occurred in the various production schedules, continuing through
the second half of 1932 until the closing months, when some retrenchment was apparent.
 [ 8 ]


A N N U A L

R E P O R T

O F T H E

F E D E R A L

R E S E R V E

B A N K

The number of bales of raw cotton consumed during 1932 was
680,022, compared with 920,612 in 1931, a decrease of 26.1 per
cent. This curtailment was accompanied by a reduction of 7.2
per cent in the average number of cotton spindles in place and a
corresponding shrinkage in the average number of spindles active,
which showed a decline during 1932 of 23.1 per cent.
The volume of wool consumption decreased 23.7 per cent in the
number of pounds, grease equivalent, used by New England woolen
and worsted mills during 1932. This decline more than offset the
rise of 21.8 per cent in wool consumption during 1931. With the
reduction of 12.1 per cent in woolen spindle activity, compared
with over 19 per cent in worsted spindle activity, on the basis of
single-shift capacity, the two classes of spindles are now operating
on a more nearly comparable basis than in 1931, when the large
increase in wool consumption was accompanied by greater worsted
spindle activity.
The rate of silk machinery activity, based on the operation of
broad silk looms in percentage of available machine hours, showed
the largest contraction of output in the textile group, with a
decline of 33 per cent during 1932 compared with the 1931 average.
Trade: Sales of new automobiles (new car registrations) in New
England during 1932 were 43 per cent less than in 1931, and
between 1930 and 1931 had decreased more than 17 per cent. Total
registrations of automobiles in this district also declined, but not
as sharply as new car sales.
The number of commercial failures in New England in 1932
exceeded the number in 1931 by 20.6 per cent, but total liabilities
were 15.5 per cent smaller.
Sales of reporting New England retail establishments during
193'2 decreased approximately 22 per cent from 1931. In a group
of Boston department stores the proportion of cash sales to total
sales in 1932 was more than 50 per cent, which is the highest percentage annually since 1927. Regular 30-day charge sales during
1932 dropped to the smallest annual proportion since 1927. The
ratio of instalment sales to total sales decreased from 8.3 per cent
in 1931 to 7.4 per cent in 1932.




[9]

BUSINESS INDICES — NEW ENGLAND
GENERAL BUSINESS
1. New Incorporations—Mass. (Year Ending
Nov. 30)
.
2. Life Insurance Sales . .
3. Carloadings—Mdse., l.c.l., and Misc.
4. N. E. Railroads Net Operating Income
5. Residential Building Contracts Awarded .
6. Non-residential Building Contracts Awarded
7. Public Works and Utilities Contracts Awarded
8. Total Construction Contracts Awarded
INDUSTRIAL PRODUCTION
1. Industrial Activity—Electric Power Consumed
(1923-25 Average) .
2. Cotton Consumption (Bales)
3. Average Cotton Spindles in Place
. . . .
4. Average Cotton Spindles Active
. . . .
5. Wool Consumption (Pounds, grease equivalent)
6. Woolen Spindle Activity (Percent of single
shift capacity)
7. Worsted Spindle Activity (Percent of single
shift capacity)
8. Silk Machinery Activity (Broad looms)
9. Shoe Production (Pairs)
10. Shoe Shipments—Brockton (Pairs)
11. Orders—Paper Mills—Mass. (Per cent of 1926
monthly average)
12. Orders—Metal Trades—Mass. (Per cent of
1926 monthly average)



Per Cent Change

19S1

1932

2,498
$522,509,000
1,188,923
$21,503,410
$38,771,000
$43,010,800
$32,271,300
$114,053,100

78.3%
680,022
11,429,000
5,979,000
213,641,880

1932-1931

2,413
$645,474,000
1,541,192
$31,268,424
$87,548,200
$118,729,000
$88,742,100
$295,019,300

96.5%
920,612
12,308,000
7,778,000
280,003,100

1931-19.10

+ 3.5
—18.9
—22.8
—31.2
—55.7
—63.8
—63.7
—61.4

— 5.0
— 6.2
— 9.9
—28.6
—21.1
—29.8
+ 19.4
—16.7

—18.9
—26.1
— 7.2
—23.1

— 2.3
— 4.0
— 9.2
—11.5

—23.7

4-21.6
4- 3.2

47.6%

54.2%

—12.1

51.0%
46.7%
112,558,000
5,085,000

63.2%
70.0%
111,060,000
8,473,000

—19.2
—40.0

—25.1

46.1%

62.0%

—25.6

—22.6

32.1%

51.5%

—37.6

—32.9

+ 15.2
— 7.3

+ 1.4

+ «-7

BUSINESS INDICES — NEW ENGLAND (continued)
EMPLOYMENT
1. Average Number of Manufacturing E s t a b lishments Reporting
2. Average Number Employed in Identical E s tablishments (Monthly)
3. Average Number Employed per Unit E s t a b lishment
4. Average Weekly Payroll—Identical E s t a b lishments
5. Average Weekly Wage per Person—Identical
Establishments
TRADE
1. Department Store Sales ( P e r cent of 1923-2425 monthly average)
2. Sales of New Motor Cars
3. Number of Commercial Failures (R. G. Dun
& Co.)
4. Liabilities of Commercial Failures (R. G.
Dun & Co.)
PRICES—(1926 = 100)
1. Wholesale Prices (Bureau of Labor Statistics)
2. Retail Food Prices (Bureau of Labor Statistics)
3. Cost of Living—Massachusetts
AGRICULTURE
1. Average Level of F a r m Prices (Bureau of
Labor Statistics)
. . . .
. . . .
2. Production of Potatoes (White—Bushels) . .
3. Value of Potato Crop—(Dec. 15) . . .
4. Production of Tobacco (Pounds)
. . . .
5. Value of Tobacco Crop—(Dec. 15) . . . .
6. Production of Apples (Bushels)
7. Value of Apple Crop—(Dec. 15)
. . .




2,386

1931
1,775

358,760

Per Cent Change
1932-1931
1931-1930

+34.4

+15.8

351,810

+ 1.7

—11.2

150

198

—24.2

—15.0

$6,201,060

$7,402,635

—15.1

—19.1

—16.4

— 8.5

—21.9
—43.1

—11.9
—17.2

$17.56

69.9%
93,743

$21.04

89.5%
164,172

3,305

2,688

+45.7

— 4.6

$73,826,852

$83,413,779

—11.4

—38.1

64.9%

73.0%

—11.1

—15.3

63.9%
71.7%

75.7%
86.5%

—15.6
—17.1

—17.4
— 9.1

48.2%
47,370,000
$16,582,000
28,153,000
$5,528,657
9,601,000
$7,813,550

64.8%
58,190,000
$17,165,500
39,335,000
$8,419,735
4,959,000
$5,538,150

—25.6
—18.6
— 3.3
—28.5
—84.3

—26.6

+ 9.4
+41.2

+ 7.7

—57.9
—11.2
—30.3
—51.7
—10.0

A N N U A L

R E P O R T

O F T H E

F E D E R A L

R E S E R V E

B A N K

MEMBER BANK CREDIT
The financial disturbances that had started in New England
in September, 1931, continued through the first half of 1932.
While the deposits of member banks in the district continued to
decline until the middle of July, the decline during that period
was not as precipitous as during the last few months of 1931.
The continued fall in industrial activity and the decline in commodity prices, the decline in the security markets, and the continued bank disturbances throughout the country reacted on banks
of all classes in the district. While during the first half of the
year there were some bank failures in New England, these were
localized, due to the co-operation of the Federal reserve bank,
the Reconstruction Finance Corporation, the National Credit
Corporation, and the local Clearing House Associations.
During the last six months of the year two distinct trends were
noticeable in total deposits. Between the middle of the year and
the latter part of September total deposits in New England member banks increased quite steadily, but after September 28 this upward movement ceased, and a steady decline occurred during the
final quarter. On December 28 net demand deposits were $745,000
larger than on July 13, time deposits were $3,941,000 larger, and
Government deposits were $10,858,000 larger. During the last
half of 1932 the member banks used a part of their accumulated
excess reserves in purchasing Government securities, and between
July 13 and December 28 an increase of nearly $73,000,000 occurred in holdings of security investments in the New England reporting member banks. Total reserves during the last half of the
year continued the declining trend at about the same rate as during
the first half. Commercial loans declined more rapidly during the
latter part of 1932 than earlier in the year, while collateral loans
declined at a less rapid rate than during the first six months. The
changes in condition of member banks indicated that the banks
endeavored to maintain a highly liquid position.
FEDERAL RESERVE BANK CREDIT
While the total average volume of Federal reserve credit in
use in the First Federal Reserve District during 1932 was larger
than in any year during the past decade, the character of that
credit differed materially from that of the intermediate years.
Whereas in years past, discounts to member banks and bankers'
acceptances have represented the major part of such credit, in
[12]



A N N U A L

R E P O R T

O F T H E

MEMBER
REPORTING

BANK

MEMBER

F E D E R A L

CREDIT

BANKS IN FEDERAL

R E S E R V E

B A N K

SITUATION
RESERVE DISTRICT 1

1932

1900

NET




DEMAND DEPOSITS

BORROWINGS FROM FR.B.

[13]

A N N U A L

R E P O R T

O F T H E

F E D E R A L

R E S E R V E

B A N K

1932, and more especially during the last half of the year, the
United States Government securities represented the major part
of the reserve bank's earning assets. The export movement of
gold from the United States to Europe began again about the
middle of January and extended to the end of June, some $548,000,000 being withdrawn. This was accompanied by hoarding of
currency in this country. While there had been evidence of hoarding of currency in some sections of the United States since the
autumn of 1930, there was little evidence of hoarding in this
district until the banking disturbances in the fall of 1931, and
there had been a return flow of currency with the establishment
of the Reconstruction Finance Corporation in February, 1932.
This heavy loss of gold and the renewal of banking disturbances
in this district and elsewhere once more led to increased hoarding
of currency, which reached its peak in July. During the spring,
following the passage of the Glass-Steagall Act, the reserve banks
began to purchase United States Government securities in large
amounts. Between April 13 and July 13 the total earning assets
of the Federal Reserve Bank of Boston increased from $91,000,000
to $149,000,000, which includes an increase of holdings of United
States Government securities from $56,000,000 to $119,000,000,
and meanwhile, the rediscounts of member banks decreased. After
July, gold began toflowagain into the United States, and currency
was being withdrawn from hoarding. In October the holdings of
United States Government securities were reduced to approximately the same level as in May, and as rediscounts and acceptance
holdings had declined, the total earning assets of the bank stood
at $112,000,000.
Deposits of the member banks in this district began to increase
about the middle of June, due to the return flow of gold from
Europe, and the return of currency from hoarding, enabling the
New England banks to reduce their rediscounts at the reserve
bank. Although this increase in member bank deposits was reversed in October, there was only a slight increase in rediscounts
at the Federal reserve bank. Boston member banks were completely out of debt with the Federal reserve bank after June 22,
and other New England member banks reduced their borrowings
from $37,000,000 on January 1, 1932, to $12,000,000 on December 31, 1932, the demands for rediscounts coming almost entirely
from banks in agricultural sections. The decline in rediscounts
was continuous throughout the year, even the customary autumn
expansion of rediscounts being almost entirely absent this year.
[14]



A N N U A L

R E P O R T

FEDERAL

O F T H E

RESERVE

FLUCTUATION
325

928

1929

OF

F E D E R A L

R E S E R V E

B A N K

BANK OF BOSTON
PRINCIPAL

ITEMS

930

1931

1932

300

275

250

225

200

8

NOTES IN
\J CIRCULATION
175

is
125




TOTAL EARNING ASSETS-v

S.m«i L „., „,

[15]

A N N U A L

R E P O R T

O F T H E

F E D E R A L

R E S E R V E

B A N K

BANKERS' ACCEPTANCES
The lower level of commodity prices prevailing throughout the
year and the general falling off in industrial production resulted
in a decrease in the volume of bankers' acceptances made in the
New England district. The withdrawal from acceptance business
by certain local private banking houses was undoubtedly another
factor for this decrease in volume. It will be noted from the following table that a decrease in the volume of acceptances created in
this district, — a decrease which began in January, 1930, — continued during each month of 1932 until October, when there was
a slight increase which continued into November. The December
volume, nevertheless, was considerably below that of a year ago.
This decrease in the volume of acceptances on the market was
reflected in the purchase of acceptances made by the Federal
Reserve Bank of Boston. During the year the daily average of
bankers' acceptances carried was only $5,000,000, as compared
with the daily average of $23,000,000 in 1931. This volume was
the smallest carried by the bank for many years, and a large
portion of the bank's portfolio consisted of acceptances purchased
on foreign account. Inasmuch as it was felt that the open market,
with the prevailing low rates, should absorb such bankers' acceptances as would be created, the directors adopted a policy of
making no change in the reserve bank's purchasing rates, and rates
were maintained in line with the Federal reserve bank's discount
rate.
ACCEPTANCE LIABILITY
Of All Banks iind Acceptance <Corporations in Federal Reserve District I
January
February
March
April

31
29
31
30
May
31
30
June
31
July
31
August
September 30
31
October
November SO
December 31

1932
$60,000,000
58,000,000
54,000,000
54,000,000
46,000,000
43,000,000
43,000,000
42,000,000
40,000,000
41,000,000
43,000,000
42,000,000

1931
$133,000,000
125,000,000
113,000,000
102,000,000
106,000,000
104,000,000
98,000,000
91,000,000
81,000,000
71,000,000
66,000,000
62,000,000

1930

$166,000,000
157,000,000
151,000,000
145,000,000
145,000,000
136,000,000
134,000,000
129,000,000
122,000,000
137,000,000
145,000,000
145,000,000

1929
$143,000,000
131,000,000
127,000,000
123,000,000
116,000,000
115,000,000
111,000,000
117,000,000
118,000,000
146,000,000
163,000,000
171,000,000

OPEN MARKET OPERATIONS
The principal open market operations of the Federal Reserve
Bank of Boston during 1932 were in connection with United States
Government securities. Apart from bankers' acceptances, referred
[16]



A N N U A L

R E P O R T

O F T H E

F E D E R A L

R E S E R V E

B A N K

to elsewhere in this report, and the sale on January 6 of $5,000,000
of United States Government securities purchased at the end of
the year 1931 to relieve the local market, other transactions in
United States Government securities were made through participations in System account with other Federal reserve banks.
Purchases of United States securities in the System account were
made on April 14-15 of $10,000,000, and on May 25 of $30,000,000, from June 29 to July 20, $30,000,000 were taken temporarily, which were resold by October 26. On December 31, 1931,
the Federal Reserve Bank of Boston held $61,000,000 of Unfted
States Government securities, which had increased through the
transactions referred to above to $97,000,000 on December 31,
1932.
During the year the Federal Reserve Bank of Boston
participated with other Federal reserve banks in transactions
with foreign central banks. The amount of this participation on
December 31, 1932, was $2,486,000, as compared with $3,200,000
on December 31, 1931.
MEMBER BANK RESERVE DEPOSITS
The reserve deposits of member banks in the Federal Reserve
Bank of Boston averaged $16,000,000 less during 1932 than in
1931, reflecting the continued decline in deposits of member banks
and loss of deposits from member banks that had closed. This loss
in reserve balances would have been larger were it not for the fact
that during most of this time many of the member banks carried
heavy excess reserves, at times being $30,000,000 or $40,000,000
over the required reserves. In fact, though member bank deposits
declined rapidly throughout the first half of the year, their reserve
deposits increased steadily between March and July when local
bank disturbances were at their height. In the case of the Boston
banks, on December 31, 1932, the percentage was 8.5 per cent of
their total deposits, as compared with 11.6 per cent on December
31, 1931, and the banks outside of Boston were carrying only 4.9
per cent of their total deposits on December 31,1932, as compared
with 5.1 per cent on December 31, 1931. It must also be taken
into consideration that these changes in percentages do not reflect
substantial changes in the proportion of time to demand deposits
carried by the member banks, as the relationship of these two
classes of deposits remained substantially the same throughout
1932.
On December 31, 1932, the member banks' reserve deposits
were $119,000,000, as compared with $149,000,000 on December
31, 1931.
[17]



A N N U A L

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MONEY RATES AND DISCOUNT RATES
The proportion of loans and discounts to deposits of member
banks in the New England district declined rapidly and practically
without interruption from the first to the end of the year. The
unsettlement of prices in the long-term security market and the
general disturbances in the banking situation developed a heavy
demand for short-term investments from the banks, which was
accentuated during the period of increasing deposits. Money
rates, therefore, declined rapidly and steadily throughout the
year. In December practically every type of short-dated investment security was selling at yields never before experienced in
the history of the country. Brokers' prime commercial paper,
which opened the year at 3^/2 P e r cent, dropped to 1^4 P e r cent in
December. Similarly, the asking rate for 90-day prime bankers'
acceptances fell from three per cent in January to three-eighths
of 1 per cent in December. Brokers' quick call money in the Boston
market dropped from 4^2 per cent at the opening of the year to
two per cent at its close. But most conspicuous of all open market
money rates was the yield on short-dated United States Government obligations. During the closing months of the year it was
customary for United States Treasury Certificates of Indebtedness, Treasury notes, and Treasury bills having maturities up to
six months, to sell at premium above the interest yield. Member
banks and the Federal reserve banks purchased large amounts of
United States Government obligations, and the combined holdings
increased by $2,400,000,000 during 1932. It is estimated that
all banks in the United States, — member, non-member, mutual
savings and Federal reserve,—held approximately $9,000,000,000
of United States Government securities at the end of 1932.
This represented 44 per cent of the entire Federal Government debt.
The usual seasonal strengthening in money rates during November
and December was almost entirely absent. In fact, the last issue
of United States Treasury bills, which were dated December 28,
1932, were sold at the average yield of .09 per cent.
In view of the extremely low money rates prevailing throughout
the year and the surplus of loanable funds carried by member
banks, the directors of the Federal Reserve Bank of Boston made
no change in the established rate of discount during the entire year
of 1932, continuing the rate of 3^/2 per cent which had been effective since October 17, 1931. Similarly, no changes were made
throughout the year in the buying rate for acceptances, which re[18]



A N N U A L

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B A N K

mained at 3 % per cent for the 90-day maturity. As this purchasing rate was far above the market, it was not availed of by brokers,
who were able to sell all the acceptances which came on the market
at a continuing downward rate of return, and, as a consequence,
holdings of acceptances of the Federal Reserve Bank of Boston
were negligible for a large part of the year.
BOSTON

MONEY

MARKET

NINETY DAY MATURIT ES

1924

1925

1926

1927

1928

1929

1930

1931

1932

FEDERAL RESERVE BANK OF BOSTON REDISCOUNT RATE
BROKERS' COMMERCIAL PAPER
BANKERS" ACCEPTANCES
UNITED STATES TREASURY CERTfFICATES OF INDEBTEDNESS

The first advance to a member bank under section 10(b) of
the Federal Reserve Act, as amended by the Glass-Steagall Act
approved February 27, 1932, was made on April 29 at an interest
rate of 5^> P e r cent, approved by the Federal Reserve Board and
ratified by the Board of Directors on May 4. The same rate was
made on each subsequent advance under that section and was
approved by the Federal Reserve Board. On August 10 the Board
of Directors established a rate of six per cent in connection with
direct discounts to individuals, partnerships, and corporations,
which was approved by the Federal Reserve Board effective
August 11.
DISCOUNTS FOR INDIVIDUALS, PARTNERSHIPS, AND
CORPORATIONS
Under the amendment of Section 13 to the Federal Reserve Act,
approved on July 21, 1932, providing for direct discounts by
Federal reserve banks for individuals, partnerships, and corporations, the Federal Reserve Board authorized the Federal reserve
banks to make such discounts for a period of six months, beginning
August 1, 1932. After this law became effective, there were 332



[19]

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B A N K

personal interviews and inquiries by mail from that date to the
end of the year. Inquiries received from all sections of New England represented practically every line of business activity, and
the loans requested ranged in amounts from $100 to $200,000,
of which, however, 75 per cent were for loans under $5000. All
but twelve of the applicants for these loans were unable to meet
the requirements of the law and regulations, and of these only
two were approved by the committee of officers as of a character
that should be granted, but since in both cases the applicants
were able to get banking accommodation, the reserve bank made
no direct loans. On the other hand, a number of applicants were
able to get banking accommodation which previously had been
refused, and there is no doubt that the effect of this amendment
was widely felt throughout the district, influencing the member
banks to grant loans somewhat more freely, and thus assisting and
relieving a credit condition that had developed.
BOSTON MONEY MARKET, 1932
Prevailing Rates on 90-Day Maturities as of 15th of Each Month
Month

January
February
March
April
May

June
July
August
September
October
November
December

Time Loans Customers'
Loans to
U. S. Treasury
„ , ,
Secured by
Commercial Correspondent Certificates oj rA/c,e.^ta^c".
Brokers•
Indebtedness <•" SKing naiej
Banks
Bonds and Stocks Loans

44-54
5-54
5-54
44-54
41-54
41-54
44-54
5-6

44-54
44-5
4-54

4-5

4-5
4-5
4-5

44-54
44-6

44-5

5-54
5-54
5-54

4-5
4-5

4-44
4-44
34-14
34-44
34-5

3-4

5

5
5

44-5
4-^.4
4-44
4-44

2i

24

14

i
4
4
4
i

0
0
0
0

21
21
24

14
I
i
1
I
1
4
4
g

31
33
34
34
3

21

24
2
2

11
14

n

FEDERAL RESERVE NOTES
While the volume of Federal reserve notes of the Federal Reserve
Bank of Boston outstanding on December 31, 1932, was only
$2,000,000 greater than on December 31, 1931, the daily average
outstanding was $53,000,000 more than in 1931, and the volume
outstanding did not reflect the normal currency needs of the
district. With the decrease in business activities and the lower
price levels prevailing, this volume should have been considerably
smaller, and besides, since the passage of the Home Loan Bank
Act on July 22, the increase in national bank note circulation
in this district, which amounted to something under $5,000,000
had replaced Federal reserve notes. It will be recalled that dur[2
 0 ]


A N N U A L

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ing 1930, the trend of the volume of Federal reserve notes outstanding of the Federal Reserve Bank of Boston also declined,
following the trend of industrial activity and prices. This trend,
however, was checked during 1931 with the banking difficulties
throughout the country, and the volume of reserve notes increased
sharply in November and December of that year, due to the local
banking disturbances. The downward trend, to a large extent
seasonal, began again, however, after the first of January, 1932,
but with the renewal of local bank disturbances in March, rose
fairly rapidly to a peak on July 7 of $211,000,000. From then
until November there was a steady but gradual decline; then the
usual holiday expansion began, which was smaller than in previous
years. In meeting this demand for currency, the Federal Reserve
Bank of Boston made use of that provision of the Glass-Steagall
Act by which the United States Government obligations were made
eligible for collateral for Federal reserve notes. That provision
of the Glass-Steagall Act was utilized by the Federal Reserve
Bank of Boston from May 25 to the end of the year.
In connection with the banking disturbances at Hartford in
January and at New Haven in June, temporary currency depots
were established by the Federal reserve bank in those cities under
the immediate supervision and control of the officers of the reserve
bank to facilitate the handling of currency transactions with the
local member banks.
RESERVE POSITION
Between late in 1931 and May, 1932, total cash reserves of
the Federal Reserve Bank of Boston rose some $100,000,000.
Immediately after May 18, however, due in part to the heavy
purchasing of United States Government securities, total cash
reserves declined rapidly, and on September 21 reached their
lowest point for the year, the reserve percentage being 63. A
sharp rise occurred during the next six weeks, followed by a
further contraction. On December 31 the Federal Reserve Bank
of Boston had total cash reserves of $228,000,000, as compared
with $231,000,000 on the same date a year ago. Changes in the
reserve ratio followed fairly closely the movements in the volume
of the reserves themselves, being influenced rather less than usual
by the movements in Federal reserve note and deposit liabilities.
Throughout the year, the daily average reserve ratio was 68.9
per cent. It closed the year somewhat above this at 71.8 per cent
as compared with 65.5 per cent on December 31, 1931.



[21]

A N N U A L

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B A N K

BANKING INDICES — NEW ENGLAND
Data as of last reporting date each year
(Amounts in millions of dollars)
REPORTING MEMBER BANKS
In
1.
2.
3.
4.
5.
6.
7.

Boston:
Commercial Loans
. . .
Real Estate Loans
. . .
Collateral Loans
. . .
Total Loans .
U . S. Securities
All o t h e r Securities O w n e d
Total Bonds a n d Stocks

.
.
.

.

8.

Total Loans and Investments

9.
10.
11.
12.
13.
14.

Net Demand Deposits .
U. S. Government Deposits
Time Deposits
Total Deposits
. . . .
% of Reserve to Total Deposits
% of Loans and Discounts to
Total Deposits
. . . .

1932
$216
46
195
457
231
95
326

1931
$280
73
241
594
117
137
254

Changtj in One Year
Amount
Percentage
— 22.9%
—$64
— 37.0
— 27
— 19.1
— 46
— 23.1
—137

+ 114

+ 97.4

— 42

— 30.7

+ 72

+ 28.3

783
544
15
196
755
8.5%

848
568
5
211
784
11.6%

— 7.7
— 4.2
+ 10 +200.0
— 15
— 7.1
- 29
3.7
—3.1 points

60.5%

75.8%

—15.1i points

$107
84
105
296
109
116
225

$142
86
141
369

—$35
g
— 36
— 73

— 65
— 24

Outside of Boston:
15.
16.
17.
18.
19.
20.
21.
22.
23.
24.
25.
26.
27.
28.

Commercial Loans
. . . .
Real E s t a t e Loans
. . . .
Collateral Loans
. . . .
Total Loans
U . S. Securities
All O t h e r Securities O w n e d
Total Bonds a n d Stocks .
Total Loans a n d Investments
N e t D e m a n d Deposits .
U . S. G o v e r n m e n t D e p o s i t s
T i m e Deposits
Total Deposits
. . . .
% of Reserve t o T o t a l D e p o s i t s
% of L o a n s a n d D i s c o u n t s t o
T o t a l Deposits
. . . .

[2
 2 ]


99
140

239

— 24
14

—
—
—
—
+
—
—

— 87
— 22

— 14.3
— 8.5

+ 1.5

+ 41.7

+ 10

24.6%
2.3
25.5
19.8
10.1
17.1
5.9

521
238
5.1
245
488
4.9%

608
260
3.6
268
532
5.1%

— 23
— 8.6
— 44
8.3
—0.2 points

60.6%

69.4%

—8.8 points

A N N U A L

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O F T H E

F E D E R A L

R E S E R V E

B A N K

BANKING INDICES — NEW ENGLAND (continued)
MONEY RATES (Boston)
Open Market:
29. Brokers' Prime Commercial
Paper
30. Bankers' Prime 90-day Acceptances
31. Treasury Certificates of Indebtedness (June 15 maturity)
32. Call Money (Boston) . . .
At Member Banks:
33. Prime Commercial Loan Rate .
34. Time Collateral Loan Rate.

19S2

19S1

n%
I

3

0
2

2.74

3-4%
4-5

4-5%
4,^-5

Change in One Year
Amount Percentage

—i\

points

—2f points
—2.74 points
—2§ points

—1 point
—i point

At Federal Reserve Bank of Boston:
35. Discount Rate
36. Buying Rate on Acceptances .
MISCELLANEOUS
37.

Acceptance Liabilities (F. R.
District 1)

Mutual Savings Banks:
38. Deposits in 62 Reporting Banks
in 6 New England States . . $1,676
Check Transactions (year's
39.
40.
41.

$1,704

— 32.3%

—$28

—

1.6%

totals):

Boston
$12,603
Outside New England Cities . 6,650
Total—16 Cities
. . . .
19,253




—$20

$42

$17,346
8,822
26,168

—4,743 — 27.3%
—2,172 — 24.6
—6,915 — 26.4

[23]

A N N U A L

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O FT H E F E D E R A L

R E S E R V E

B A N K

COMPARATIVE STATEMENT OF CONDITION
RESOURCES
Dec. SI, 19S2

CASH RESERVES held by this bank
against its deposits and note circulation:
Gold held by the Federal Reserve Agent
as part of the collateral deposited by
the bank when it obtains Federal Reserve notes. This gold is lodged partly
in the vaults of the bank and partly
with the Treasurer of the United States $181,027,080.00
Gold redemption fund in the hands of the
Treasurer of the United States to be
used to redeem such Federal Reserve
notes as are presented to the Treasury
for redemption
2,123,112.85
13,807,705.90
Gold and gold certificates in vault
Gold in the gold settlement fund lodged
with the Treasurer of the United States
for the purpose of settling current
transactions between Federal Reserve
districts
14,425,725.46
Legal tender notes, silver and silver certificates in the vaults of the bank
(available as reserve only against
deposits)
16,560,854.00
TOTAL CASH RESERVES

.

.

.

Dec. SI, 19S1

$147,627,080.00

4,743,868.58
20,791,883.82

40,281,601.83

17,355,044.00

.

$227,944,478.21

$230,799,478.23

Non-reserve cash, consisting largely of
National bank notes and subsidiary
silver

$4,925,880.63

$7,807,603.88

$3,085,746.60

$23,493,318.40

8,727,212.71
2,248,510.82

19,711,952.98
33,431,461.18

96,667,500.00

61,001,700.00

00

2,130,000.00

$110,728,970.13

$139,768,432.56

$3,280,009.25

$3,335,841.25

45,141,385.12
1,182,487.26'

58,808,310.63
2,733,207.79

LOANS AND INVESTMENTS
Loans to member banks:
On the security of obligations of the
United States
By the discount of commercial or agricultural paper or acceptances .
Acceptances bought in the open market
United States Government bonds, notes,
certificates of indebtedness and bills
Federal Intermediate Credit Bank (debentures)
TOTAL LOANS AND INVESTMENTS

MISCELLANEOUS RESOURCES
Bank premises
Checks and other items in process of collection
All other miscellaneous resources .
TOTAL MISCELLANEOUS RESOURCES
TOTAL RESOURCES

2 4 ]
[


$49,603,881.63

$64,877,359.67

$393,203,210.60

$443,252,874.34

A N N U A L

R E P O R T

O FT H E

F E D E R A L

R E S E R V E

B A N K

COMPARATIVE STATEMENT OF CONDITION
LIABILITIES
Dec. SI, 19S2

Dec. SI, 19S1

CURRENCY I N CIRCULATION
Federal Reserve notes in actual circulation, payable on demand. These notes
are secured in full by gold and discounted and purchased paper . . . $195,960,340.00
TOTAL CURRENCY I N CIRCULATION

$195,960,340.00

$194,460,480.00
$194,460,480.00

DEPOSITS
Reserve deposits maintained by member
banks as legal reserves against the
deposits of their customers . . . . $119,419,579.38
United States Government deposits carried at the Reserve Bank for current
requirements of the Treasury . . .
667,886.99
Other deposits, including foreign deposits,
deposits of non-member banks, etc.
.
1,629,754.48
TOTAL DEPOSITS

$149,287,196.86

2,538,090.41
6,003,715.25

$121,717,220.85

$157,829,002.52

Deferred items, composed mostly of uncollected checks on banks in all parts
of the country. Such items are credited
as deposits after the average time
needed to collect them elapses, ranging
from 1 to 8 days
All other miscellaneous liabilities . . .

$43,754,393.46
454,882.52

$57,993,276.59
1,182,902.92

TOTAL MISCELLANEOUS LIABILITIES

$44,209,275.98

$59,176,179.51

$10,855,900.00

$11,748,650.00

20,460,473.77

20,038,562.31

MISCELLANEOUS L I A B I L I T I E S

CAPITAL AND SURPLUS
Capital paid-in, equal to 3 percent of
the capital and surplus of member
banks
Surplus — that portion of accumulated
net earnings which the bank is legally
required to retain
TOTAL CAPITAL AND SURPLUS .

.

TOTAL LIABILITIES

Reserve percentage against combined Federal Reserve note and deposit liabilities




$31,316,373.77

$31,787,212.31

$393,203,210.60

$443,252,874.34

71.8%

65.6%

[25]

A N N U A L

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F E D E R A L

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B A N K

COMPARATIVE STATEMENT OF CONDITION
The foregoing statements of the Federal Reserve Bank of
Boston as of December 31, 1932, and of December 31, 1931, show
the following outstanding changes for 1932:
1. Loans to member banks show a decrease of $31,000,000.
2. Bankers' acceptances bought in the open market show a decrease of $31,000,000.
3. United States Government securities bought in the open
market show an increase of $36,000,000.
4. Total earning assets have decreased $29,000,000.
5. Total gold reserves show a decrease of $2,000,000.
6. Total member bank reserves have decreased $30,000,000.
7. Total deposits decreased $36,000,000.
8. Reserve percentage against combined Federal reserve notes
and deposit liabilities increased from 65.6 per cent to 71.8 per
cent.

ANALYSIS OF INCOME AND DISBURSEMENTS
On the following page will be found the report of income and
disbursements for the years 1931 and 1932. Although there was
no change in the discount and acceptance rates during the year
and the yield on United States Government securities was lower,
the increase in the volume of rediscounts for member banks and
the increased volume of United States Government securities held
were so much greater that the gross increase for the year 1932
was $1,026,000 more than for the year 1931. Current expense
of operation was reduced about $41,000 and the cost of Federal
reserve currency by $27,000.
After setting up reserves for depreciation of bank building,
losses, and self insurance, a net operating profit was shown of
$686,638 in 1932, as compared with a deficit of $140,230 in 1931.
The six per cent dividend provided for by the Federal Reserve
Act was paid on the capital stock to member banks, and the
surplus account was increased $11,128.

 26


A N N U A L

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O

FT

H

EF E D E R A L

R E S E R V E

B A N K

INCOME AND DISBURSEMENTS
EARNINGS
From loans to member banks and paper discounted for them
From acceptances owned
From U. S. Government obligations owned .
Other earnings
Total earnings
Additions to earnings

1982
$931,538.88
204,593.79
1,546,769.08
91,401.52

19S1

$416,255.33
460,503.65
825,951.98
97,908.28

$2,774,303.27 $1,800,619.24
206,330.08
154,035.59

Total income applicable to expenses and
other deductions
$2,980,633.35 $1,954,654.83
DEDUCTIONS FROM TOTAL INCOME
For the expense of current bank operations
(including the non-reimbursable expense
incurred as Fiscal Agent of the United
States)
$1,773,168.44 $1,814,480.56
For Federal Reserve currency, mainly the
cost of printing new notes to replace worn
notes in circulation, and to maintain supplies unissued and on hand, and the cost of
redemption
107,014.96
133,999.44
For depreciation, reserves, losses, etc. .
413,810.99
146,405.20
Total deductions
Net income available for dividends, additions
to surplus, and payments to the U. S. Government
DISTRIBUTION OF NET INCOME
Dividends paid to member banks at the rate
of 6 percent on paid-in capital
. . . .
Additions to surplus (the bank is required by
law to accumulate out of net earnings,
after payment of dividends, a surplus
amounting to 100 percent of the subscribed
capital; and, after such surplus has been
accumulated to pay, into surplus each year
10 percent of the net income remaining after
paying dividends)
Any net income remaining after paying dividends and making additions to surplus (as
above) is paid to the U. S. Government as
a franchise tax. No balance remained for
such payments in 1932 or 1931.
Total net income distributed

$2,293,994.39

$2,094,885.20

$686,638.96

$140,230.37*

$675,510.57

$709,139.12

11,128.39

$686,638.96

849,369.49*

$140,230.37**

•Deficit—deduction from surplus.
••Minus.




27

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F E D E R A L

R E S E R V E

B A N K

MEMBERSHIP
On January 1, 1932, there were 373 member banks. During
the year one new national bank was organized to succeed a closed
bank, one national bank reopened after having been closed, and
one member state bank was added. There was a loss of seven national bank members, four through consolidation and merger, two
through suspension and insolvency, and one by voluntary liquidation. There was a loss of two state member banks, one by suspension, and one through consolidation. On December 31, 1932,
there were 367 members, a net loss of six for the year.
The various changes in membership are classified in detail in
the following table:
National Banks State Banks Total
Members J a n u a r y 1, 1932
GAINS
New national bank
National bank reopened
New member trust company

343

373

1

2
1

31

376

2

9

29

367

1
1
345

LOSSES
Consolidation of national banks . . .
Liquidation and consolidation with nonmember bank
Suspension and insolvency
Voluntary liquidation
Suspension and insolvency
Consolidation of state bank members
Members, December 31, 1932

30

. . . .

3
1
2
1

7

1
. 1
338

BANK ORGANIZATION AND PERSONNEL
Directors: On December 31, 1932, the terms of Mr. Alfred L.
Ripley, as Class A director, Mr. Philip R. Allen, as Class B
director, and Mr. Frederic H. Curtiss, as Class C director, expired.
Mr. Ripley and Mr. Allen were re-elected as Class A and Class B
directors, respectively, by member banks in Group 1 for three
year terms, Group 1 being composed of banks having a combined
capital and surplus of more than $999,000. Mr. Curtiss was
re-appointed by the Federal Reserve Board for a similar term
of three years, and was also re-designated by the Board as
Chairman and Federal Reserve Agent for the year 1933. Mr. Allen
Hollis was re-designated by the Federal Reserve Board as Deputy
Chairman for the year 1933. Mr. A. Farwell Bemis having tendered his resignation as Class B director to take effect December
[28]




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31, 1932, a special election to choose his successor was conducted
in November, 1932, the banks participating in the special election
being banks in Group 3 ; those having a combined capital and
surplus of less than $300,000, and Mr. Edward J. Frost, VicePresident and director of William Filene's Sons Company of
Boston, Massachusetts, was elected Class B director to serve for
the unexpired portion of Mr. Bemis' term, or from January 1,
1933, to December 31, 1933.
Personnel: The number of employees on December 31, 1932,
other than officers, was 648 compared with 662 on December 31,
1931.
Advisory Council: At a meeting of the Board of Directors held
on January 27, 1932, Mr. Thomas M. Steele, President of The
First National Bank and Trust Company of New Haven, Connecticut, was appointed member of the Federal Advisory Council
to represent the First Federal Reserve District for the year 1932.
STOCKHOLDERS' MEETING
The tenth annual meeting of representatives of member banks
was held at the Federal Reserve Bank of Boston on October 20,
1932,
with 256 delegates and other representatives from 201
member banks attending, and with the Chairman of the Stockholders' Advisory Committee, Hon. Channing H. Cox, Vice-President of The First National Bank of Boston, Massachusetts, presiding. The principal address was delivered by Mr. Carl P.
Dennett, Chairman of the Banking and Industrial Committee of
the First Federal Reserve District. His subject was "How Governmental Agencies are Working for Recovery." Other speakers
were: Mr. Frederic H. Curtiss, Chairman of the Board of Directors, Governor Roy A. Young, and Hon. Charles S. Hamlin and
Hon. Wayland W. Magee, members of the Federal Reserve Board.
At the conclusion of the meeting, Mr. Cox announced that the
Stockholders' Advisory Committee had elected Mr. Henry G.
Smith, President of the Clement National Bank of Rutland,
Vermont, as Chairman of the Committee for the ensuing year.




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FIDUCIARY POWERS
Two permits were issued to national banks to exercise fiduciary
powers under authority of Section 11 (k) of the Federal Reserve
Act as amended, during 1932. Both permits were issued to banks
which had never exercised trust powers.
MASSACHUSETTS
Concord National Bank
Rockport National Bank

Concord
Rockport

VOLUME OF OPERATIONS
The following table shows the volume of operations in the
principal departments of the bank during the year compared
with the similar items for the preceding year:
NUMBER OF PIECES HANDLED
Bills Discounted;
Applications . . .
xNotes discounted
Bills purchased in open market for own account
Currency received and counted
Coin received and counted
Checks handled

19S2
9,235
48,666

19S1
5,381
37,158

2,089
210,237,000
326,430,000
79,644,000

19,000
240,021,000
356,212,000
91,448,000

1,145,000
451,000

1,122,000
432,000

103,000
44,000

83,000
51,000

Collection Items Handled:
U . S. G o v e r n m e n t c o u p o n s p a i d
All other

.

.

.

.

U. 8. Securities:
Issues, redemptions and exchanges by Fiscal
Agency Department
Transfers of funds

AMOUNTS HANDLED
Bills discounted
$667,765,000
$563,629,000
Bills purchased in open market for own account
49,907,000
302,606,000
Currency received and counted
1,264,411,000
1,460,844,000
Coins received and counted . .
.
30,586,000
34,179,000
Checks handled
.
. 11,192,741,000 17,448,185,000
Collection Items Handled:
U . S. G o v e r n m e n t c o u p o n s p a i d .
All other

. . .

U. 8. Securities:
Issues, Redemptions and exchanges
Fiscal Agency Department
Transfer of funds

[
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34,478,000
642,642,000

29,3x7,000
1,029,120,000

914,955,000
8,661,681,000

563,668,000
9,713,626,000

by

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BANKING AND INDUSTRIAL COMMITTEE
Following an invitation extended by the bank, at the suggestion
of the Federal Reserve Board, a group of representative bankers
and business men met at the bank on June 14, to discuss whether
and to what extent a lack of credit might be holding back improvement in the general business and economic situation in this
district. In addition to the officers of the bank, Governor Meyer
of the Federal Reserve Board was present at the meeting and
led in the discussion. As a result of views expressed at the meeting that it might be helpful to have a committee whose function
should be to assist in co-ordinating the activities of the various
governmental agencies and making their credit facilities known
and available to the business interests, Governor Young appointed
the Banking and Industrial Committee of the First Federal Reserve District, with Mr. Carl P. Dennett of Boston as its chairman.
The committee held its first meeting on June 20. The other
members of the committee were: Mr. Nathaniel F. Ayer, Treasurer
of the Cabot Manufacturing Company; Mr. Walter S. Bucklin,
President of the National Shawmut Bank of Boston; Mr. George
H. Clough, President of The Russell Company; Mr. Frank D.
Comerford, President of the New England Power Association;
Mr. Wilmot R. Evans, President of The Boston Five Cents Savings Bank; Dr. Arthur W. Gilbert, Commissioner of Agriculture
of the State of Massachusetts; Mr. Louis E. Kirstein, of William
Filene's Sons Company; Mr. Harry K. Noyes, President of the
Noyes Buick Company; Mr. P. A. O'Connell, President of E. T.
Slattery Company; Mr. Thomas Nelson Perkins, Chairman of
the Board of the Boston and Maine Railroad; and Mr. Philip
Stockton, President of The First National Bank of Boston. Mr.
K. K. Carrick, Secretary of the Federal Reserve Bank of Boston,
was appointed Secretary of the Committee. Subsequently, as a
means of increasing the effectiveness of the committee's activities,
and in order to have all parts of the district represented, the
following Vice-Chairmen for the individual States in the district
were appointed: For Maine, Mr. W. B. Skelton, President of the
First National Bank, Lewiston; for New Hampshire, Mr. Winthrop L. Carter, President of the Nashua Gummed & Coated
Paper Company, Nashua; for Vermont, Mr. Redfield Proctor,
Vice-President of the Vermont Marble Company, Proctor; for
Massachusetts, Mr. John F. Tinsley, Vice-President of the Crompton & Knowles Loom Works, Worcester; for Rhode Island, Mr.



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G. Edward Buxton, President of the B. B. & R. Knight Corporation, Providence; for Connecticut, Mr. L. Edmund Zacher, President of the Travelers' Insurance Company, Hartford.
In conducting its investigation of the credit needs of the district,
the committee not only considered the situation with respect to
the business, the manufacturing, the agricultural, and the real
estate interests, but also endeavored by various means to determine
whether there was any legitimate unserved credit need. Among
the means adopted were a questionnaire sent through the New
England Council to about 350 Chambers of Commerce, a questionnaire sent by the Committee to all co-operative banks and
building and loan associations, an inquiry directed to those who
were in close touch with the agricultural requirements of the
district, several meetings with groups of representative leaders
in the cotton and the woolen textile industries and in the shoe and
leather industries, and almost 8,000 questionnaires which were
sent to various trade, business, and credit associations for mailing by them to their members, individual business and manufacturing concerns.
Replies to the inquiry conducted through Chambers of Commerce and statements made by representatives of the textile and
the shoe and leather industries at the various group meetings
indicated that there was no lack of credit for sound business
loans, and this conclusion was confirmed by the replies of business and manufacturing concerns to the questionnaire distributed
through the various associations. Out of 1913 concerns which
replied, up to December, to the question: "Do you now require
credit for use in your business which you are unable to obtain at
your bank?", 1734 firms or corporations answered "No", while
179 answered "Yes", or gave an indefinite reply. Similarly, out
of 1913 replies to the question "Do you know of others now in
need of credit for legitimate business purposes which cannot be
obtained from banking institutions?", 1760 answers were "No",
while 153 were "Yes" or indefinite. All answers indicating a lack
of credit and all complaints received by the committee were carefully investigated and disposed of either by co-operation in helping to secure the credit needed or by definitely establishing the
fact that credit was not warranted. While the committee encountered cases where additional working capital was required,
it found a comparatively small number of cases where commercial
banking credit was warranted, and in all of those it was able to
assist in procuring the credit.
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The most serious credit need developed, in the opinion of the
committee, was in the real estate credit field, where there was
much difficulty, aggravated to a great extent by the large amount
of real estate mortgages held by closed banks, the liquidation of
which tends, under existing conditions, to impose a hardship upon
home owners. As a means of dealing with this situation, the committee appointed a sub-committee known as the Real Estate Advisory Committee, with Mr. Wilmot R. Evans as Chairman. Under
the latter's direction a sub-committee was appointed for Metropolitan Boston composed of fifteen bankers, lawyers and business men, who were familiar with real estate values and mortgages.
Pursuant to announcement made to the public through the newspapers, the Boston committee has met one afternoon each week to
receive and to advise home owners who have mortgage problems,
and, up to the end of December interviewed almost 1500 persons.
In more than two-thirds of the cases in which aid was required and
which have been disposed of, the committee has been able to help
the home owners either through locating new loans, arranging for
temporary suspension of payments and postponement of actions,
or by helpful advice with respect to their mortgage problems. The
results of the Boston committee's activities have been so valuable
that similar local committees have been or will be organized in other
sections of the district.
A careful survey of the credit requirements of agriculture was
made under the direction of Dr. Arthur W. Gilbert, as chairman
of a sub-committee on agricultural credit for New England, local
sub-committees being appointed in all the New England States
and numerous conferences being held with them. The agricultural
situation in New England appears to be somewhat better than
in other sections of the country, with the possible exception of
Aroostook County, Maine, where the low price of potatoes has
raised a problem. This sub-committee was largely instrumental
in securing the location of a branch of the Regional Agricultural
Credit Corporation in Bangor, Maine.
Among numerous other matters in which the committee has
interested itself are: the credit requirements of the needle trades
or the so-called cutting-up trades; possible liberalization of the
Federal Home Loan Bank Act and dissemination of information
regarding credit under the Act, in connection with which group
conferences were held with executive officers of representative
savings banks and co-operative banks from the different New
England States; the possibility of obtaining legislation to enable



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textile manufacturers to enter into agreements not to sell their
products for less than the cost of manufacturing; several projects
which were investigated with reference to their being able to obtain
loans from the Reconstruction Finance Corporation as self-liquidating projects; municipal credit requirements; an effort made in
September to get retail dealers to place orders then for their
holiday requirements of merchandise; an investigation of the effect
of depreciated currencies on the importation of foreign goods in
competition with the products of the First Federal Reserve District ; an effort to bring about the wider use of trade acceptances,
in connection with which informative circulars were mailed to
2500 of the leading business and manufacturing concerns of the
district; and the large amount of real estate mortgages held by
closed banks in five of the New England States.
In addition to the sub-committee mentioned, the committee has
appointed sub-committees in connection with the following matters :—Trade Acceptances, Mr. Charles E. Spencer, Jr., VicePresident of The First National Bank of Boston, Chairman;
Credit, Mr. P. A. O'Connell, Chairman; the Share-the-Work Movement, Mr. Winthrop L. Carter, Chairman; Industrial Rehabilitation, Mr. Harry C. Knight, President of the Southern New England Telephone Company, New Haven, Connecticut, Chairman.
Under the direction of Mr. Carter and Mr. Knight, local subcommittees on job-sharing and industrial rehabilitation were
organized in the different states in the district.
The various activities of the committee have imposed a vast
amount of work upon the committee, its chairman, and the members of the numerous sub-committees, and their conscientious and
painstaking efforts have proved of great value during a period
of extraordinary business and economic unsettlement.




FEDERAL RESERVE BANK OF BOSTON
OFFICERS AND DIRECTORS

1932
OFFICERS
ROT A. YOUNG, Governor

FREDERIC H. CURTISS, Federal Reserve Agent

WILLIAM W. PADDOCK, Deputy

CHARLES F. GETTEMY, Assistant

Federal

Reserve Agent.

Governor
WILLIAM WILLETT, Cashier
RRICKEL K. CARRICK, Secretary

HARRY F. CURRIER, Auditor.

ELLIS G. HULT, Assistant Cashier
ERNEST M. LEAVITT, Assistant Cashier
CARL B. PITMAN, Assistant Cashier
L. WALLACE SWEETSER, Assistant Cashier

Term Expires
December 31

DIRECTORS
Class and Group
Chairman of the Board,
The Merchants National Bank
A 2 F. S. CHAMBERLAIN,
President,
New Britain National Bank
A 3 EDWARD S. KENNARD,
Vice-President and Cashier,
The Rumford National Bank
B 1 PHILIP R. ALLEN,
President, Bird & Son, Inc.
B 2 EDWARD S. FRENCH,
President, Boston & Maine
Railroad
B 3 A. FARWELL BEMIS,*
C
FREDERIC H. CURTISS, Chairman, Bemis Bro. Bag Co.
Chairman
C
ALLEN HOLLIS,
C
CHAS. H. MERRIMAN, Deputy-Chairman, Lawyer
President, Lippitt Woolen Co.
A 1 ALFRED L. RIPLEY,

Boston, Mass.

1935

New Britain, Ct. 1934
Rumford, Me. 1933
E. Walpole, Mass. 1935
Springfield, Vt.
Boston, Mass.
Boston, Mass.
Concord, N. H.
Providence, R. I.

1934
1933
1935
1933
1934

GENERAL COUNSEL
PHILLIPS KETCHUM, Boston, Mass.

MEMBER OF FEDERAL ADVISORY COUNCIL
THOMAS M. STEELE

President of the First National Bank and Trust Company
New Haven, Conn.
'MR. BEMIS resigned, effective December 31, 1932. In a special election held in November 1932, MR. EDWARD J. FROST, Vice-President and Director of William Filene's
Sons' Company, Boston, Mass., was elected for the unexpired term of office.




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