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Eleventh Annual Report of
the Federal Reserve Bank
of Boston for the year ended
°% December 31, 1925 °%
'Boston, zJxCassachusetts
ELEVENTH ANNUAL REPORT
— OF THE —
Federal Reserve Bank
of Boston
For the year ended
December 31, 1925
BOSTON, MASSACHUSETTS
LETTER OF T R A N S M I T T A L
BOSTON, MASS., January 31, 1926.
HON. D. R. CRISSINGER,
Governor, Federal Reserve Board,
Washington, D. C.
SIR:
I have the honor to submit herewith the Eleventh Annual Report of the
Federal Reserve Bank of Boston, covering industrial conditions and credit conditions in New England, and the operations of that bank for the period January
1, 1925, to December 31, 1925.
Respectfully yours,
FREDERIC H. CURTISS,
Chairman and Federal Reserve Agent.
FEDERAL RESERVE BANK OF BOSTON
OFFICERS AND DIRECTORS
December 31, 1925
OFFICERS
W. P. G. HARDING, Governor.
FREDERIC H. CURTISS, Federal Reserve
Agent.
WILLIAM W. PADDOCK, Deputy Governor.
CHARLES F. GETTEMY, Assistant Federal
WILLIAM WILLETT, Cashier.
Reserve Agent.
KRICKEL K. CARRICK, Secretary.
HARRY F. CURRIER, Auditor.
ELLIS G. HULT, Assistant Cashier.
ERNEST M. LEAVITT, Assistant Cashier.
L. WALLACE SWEETSER, Assistant Cashier.
DIRECTORS
Class and
Group
Term
Expires
A 1 ALFRED L. RIPLEY, President, Merchants National Bank,
A 2 F. S. CHAMBERLAIN, Vice-President and Cashier,
New Britain National Bank,
Boston, Mass.
1926
New Britain, Ct. 1928
A 3 EDWARD S. KENNARD, Vice-President and Cashier,
Rumford National Bank,
Rumford, Me.
1927
B 1 PHILIP R. ALLEN,
Vice-President, Bird & Sons,
E. Walpole, Mass. 1926
B 2 ALBERT C. BOWMAN, President, The John T. Slack Corporation, Springfield, Vt. 1928
B 3 CHAS. G. WASHBURN, President, The Washburn Co.,
Worcester, Mass. 1927
C FREDERIC H. CURTISS, Chairman,
Boston, Mass.
1926
C ALLEN HOLLIS,
Deputy-Chairman, Lawyer,
Concord, N. H. 1927
C CHAS. H. MANCHESTER, President, Providence Gas Co.,
Providence, R. I. 1928
GENERAL COUNSEL
ARTHUR H. WEED, Boston, Mass.
MEMBER OF FEDERAL ADVISORY COUNCIL
CHARLES A. MORSS,
Vice-President, Simplex Wire & Cable Co.,
Boston, Mass.
ANNUAL REPORT OF FEDERAL RESERVE BANK OF BOSTON
NEW
ENGLAND
1920
1921
BUSINESS
1922
A C T I V I T Y
1923
1924
1925
' . • ; • • • •
Business activity in New England during 1925 was at a much higher average level than in 1924. Activity was higher in December than in any other month of the year. There was a closer approach to
stabilization than at any time since before the War. The index was compiled by the Federal Reserve
Bank of Boston, and represents activity in terms of amounts rather than of values.
DEPARTMENT
TWENTY-FOUR
Feb
Mar Apr
NEW
STORE
NUMBER
SALES
ENGLAND
May Jne July
STORES
Aua Sept. Oct
?nn
200
iso
c/
N
ino
OF C O M M E R C I A L
NEW ENGLAND
FAILURES
Nov Dec
rJ
f
\
1925
S 150
//
y
1924'^
o 100
*~S 19 24
^ 50
0
0
Department store sales were larger in 1925 than in 1924, especially during the latter part of the year.
Christmas trade was the largest on record. Notwithstanding the high rate of business activity, there
were more commercial failures in New England during 1925 than in 1924. The number of failures in
each month of the year, in fact, was larger than in the corresponding month of 1924. The number of
failures is computed from an average of the statistics reported by R. G. Dun & Co. and Bradstreet's.
ELEVENTH ANNUAL REPORT OF THE FEDERAL
RESERVE BANK OF BOSTON
BUSINESS AND CREDIT CONDITIONS IN NEW ENGLAND DURING 1925
Business activity in New England was much greater in 1925 than in
1924 and conditions on the whole were probably better than in any period
during the past five years, except possibly in the year 1923, although it
would appear that activity was steadier than in that year, not reaching
excessive stages in any month or, on the other hand, falling appreciably
below the average. While the textile and shoe industries, both important
in the New England district, had been going through trying reorganization of selling methods and change of output, even in those lines many
concerns have shown increased production and earnings and probably all
have experienced improvement in one form or another. Business profits
for the most part were fairly good. Efficiency of labor was relatively high
and, while there was little unemployment, the aggregate labor turnover
was small. Building construction throughout the year was maintained at
a much higher level than in 1924 and new contracts awarded were in
larger volume at the end than at the beginning of the year.
Retail trade was in such large volume that manufacturing output was
readily distributed to consumers, and therefore manufacturers' and jobbers' inventories of finished material were not built up to a noticeable
extent. The retail merchants maintained a relatively small volume of
goods on hand, which, coupled with the large volume of sales, resulted in a
high rate of turnover. Retail trade was not only good during most of the
year, being maintained at about the volume in 1924, but the year ended
with an unprecedented holiday trade in December which brought the average above that of 1924.
Instalment sales in the department stores in the larger cities increased
rapidly in 1925, although the total amount of such sales apparently
amounted to less than five per cent of total business. The rate of collections in instalment accounts improved throughout the year, with the result that at the close of the year only about five months were required in
which to collect the average instalment account. On the other hand, there
is little" doubt that the easy terms of payment encouraged the buying of
6
ANNUAL REPORT OF FEDERAL RESERVE BANK OF BOSTON
unnecessary goods or of unnecessarily expensive goods. That the payments on instalments have thus far been so satisfactory is, no doubt, due
to the large purchasing power of the wage earner brought about by the
great business activity and, should this activity fall off, the real test of
the soundness of instalment selling will come.
Wholesale commodity prices duplicated the record of business activity
by remaining relatively constant throughout the year. In fact, during the
early months they were higher than at any time since the period after the
post-war business boom. The relative stability of commodity prices was
an important factor in making 1925 a prosperous business year. An interesting phase of the commodity price situation is that, while production
was increasing the latter part of the year, commodity prices showed
an actual decline.
While agriculture cannot be considered as an outstanding feature of
New England industry, nevertheless it is an important factor in certain
sections of the district. Crop production, with the conspicuous exception
of potatoes, was larger in volume in 1925 than in 1924, though the value
of some crops was less, due to lower prices. The potato crop in 1925 was
approximately 25% less than in 1924, but because of high prices the total
value was over three times as great.
The increase in total deposits of member banks in the New England
Federal Reserve District which had been so prominent a feature of the
banking situation of 1924 was even more pronounced in 1925, the weekly
average deposits being approximately equal to the absolute peak of 1924.
Although demand deposits of these banks were higher, more than onehalf of the total increase was in time or savings deposits. With the larger
volume of production, naturally there was an increase in the average volume of commercial loans, but the greater part of the gain in total resources of member banks was the result of the increase in collateral loans.
Investments in securities also were larger. The general improvement in
commercial business has been reflected in the business of the member
banks, and the year for most member banks has been a profitable one.
A comparison of the condition of the Federal Reserve Bank of Boston
on the last day of the calendar year 1924 and the last day of the calendar
year 1925 (see p. 12) shows that during the year 1925 the cash reserves of
the Federal Reserve Bank were reduced by approximately $55,000,000.
This was chiefly due to the retirement of $30,000,000 of Federal Reserve
notes presented for redemption and to an increase of $22,000,000 in loans
to member banks and investments in bankers' acceptances. While the total
reserve deposits of the member banks in the Federal Reserve Bank were
substantially the same on the above dates compared, the average of these
deposits for the year was slightly higher in 1925 than in 1924. The reserve
ANNUAL REPORT OF FEDERAL RESERVE BANK OF BOSTON
7
ratio, however, due to the loss of gold, declined from 66.5% on December
31, 1924, to 56.2% on December 31, 1925, the lowest reserve ratio shown
by the Federal Reserve Bank of Boston since 1920.
The average of loans and rediscounts to member banks was $33,000,000
in 1925, as compared with $18,000,000 in 1924, the increase being gradual
to the end of the year, about 60% of the borrowings coming from banks
outside of Boston. There have been very few instances of member banks
having continuous loans with the Reserve Bank throughout the year,
banks that have rediscounted usually liquidating their loans and rediscounting again as occasion demanded. In certain of the agricultural districts, owing to the successful outcome of the potato crop, member banks
which have had continuous loans for several years with the Federal
Reserve Bank have been able to liquidate entirely their indebtedness to the
Reserve Bank. From reports received at this bank, it would appear that
the general condition of the member banks at the year's end was most
satisfactory.
Open market operations, that is, operations where the initiative may
come from the Federal Reserve Bank, as distinguished from rediscount
operations originating with the member banks, have been, as in previous
years, of two kinds and follow a policy outlined by a committee of governors and members of the Federal Reserve Board and approved by the
Boards of Directors,—the purchase and sale of Government securities
and the purchase of bankers' acceptances, transactions in the former being
in certain specified amounts and in the latter in amounts limited by rates
adjusted from time to time with a view of maintaining a reasonably stable
market fairly comparable with current market rates. Government securities were sold to the market or allowed to mature and holdings were not
large. The average for the year was $13,000,000, as compared with $28,000,000 in 1924. The Boston acceptance market is second only to New
York, both as to the volume of acceptances originating locally and in the
volume carried by banks and other institutions in the district.
Acceptance holdings declined by nearly one-half between the first of
the year and the middle of May. This decline was not brought about by
selling acceptances, but occurred from a falling off of satisfactory offerings, the volume of new purchases thus being less than that of maturing
bills. The average volume of bankers' acceptances carried in the Reserve
Bank's portfolio was $46,000,000 in 1925 as against $18,000,000 in 1924.
Acceptance holdings of the Federal Reserve Bank of Boston were at their
minimum for the year 1925 late in August, just before the usual seasonal
increase in business. More acceptances are made in the autumn than at
any other season, in order to finance the movements of staple crops such
as cotton. The acceptance holdings of the Federal Reserve Bank of Bos
8
ANNUAL REPORT OF FEDERAL RESERVE BANK OF BOSTON
MEMBER
BANK
REPRESENTATIVE
1700
923
BANKS
CREDIT
IN 9 NEW
SITUATION
ENGLAND
92 4
CITIES
9 25
1600
1500
LOANS
AND INVESTMENTS
1400
1300
1200
NET DEMAND DEPOSITS
900
800
COMMERCIAL LOANS ..
700
600
500
400
300
COLLATERAL
LOANS
200
00
.BORROWINGS FROM FR.B.-BOSTON
ANNUAL REPORT OF FEDERAL RESERVE BANK OF BOSTON
ton increased rapidly between the first of September and the end of November to the largest amount held at any time in a number of years. The
higher ratio of acceptance holdings to member banks' discounts in District 1 was in direct contrast to the situation in the reserve system as a
whole, for in other districts, excepting for a few weeks at the beginning of
1925, discounts for member banks exceeded acceptance holdings of reserve
banks by a wide margin.
BOSTON
NINETY
1917
1 9 1 8
1920
1919
MONEY
DAY
MARKET
MATURITIES
1921
1922
1923
1924
1925
/
,-'' * " '
IV
N
>
\
v
V""
*•_'
/
i
\
/
-
1
o-o-o-o
FEDE RAL RESERVE BANK OF B 1ST0N REDISCOUNT RATE
C
BROh ERS' COMMEP CIAL PAPER
BANK
U N I T ED STATES TREASURY CERTIFICATES OF INDEBTEDNESS
®CY ELD AT PAR PREVIOUS TO DEVELOPMENT OF OPEN MARKET IN M VI
/ ••—'
[
vi
1920)
During the year 1925 there was a steady advance in money rates in the
New England market, due in part to the increased demands on the banks
for commercial accommodation on account of greater activity in production. Brokers' commercial paper rates, which stood at 3}/2% at the opening of the year, stiffened to 4 ^ % at the close. Rates for unendorsed 90day bankers' acceptances rose from 3% to 3%% and short-time United
States Certificates of Indebtedness from 2%% to 3}4% during the year.
Call money ranged in the Boston market from 4% to 6%. The rate on
prime bankers' acceptances at the beginning of the year was 3%, gradually increasing to 3}/2% m September, a rate which continued during
the remainder of the year. While New England is largely an industrial
section, its close proximity to New York makes the local money market
sensitive to the influence of that money center in the matter of rates. It
will be recalled that, although the New York Federal Reserve Bank reduced its discount rate to 3 % on August 8, 1924, the Boston Reserve
Bank continued to maintain its rate at 3 ^ % . On February 27, 1925, the
New York Reserve Bank increased its discount rate to 33^%, but at that
10
ANNUAL REPORT OF FEDERAL RESERVE BANK OF BOSTON
time there was apparently nothing in the Boston credit situation that
warranted any change in the Boston Bank's rate; in fact, local business
activity was declining. A 3 ^ % discount rate was, therefore, maintained
throughout a good part of the year. Early in the summer business activity began to increase and showed a steady increase well towards the end
of the year, with a corresponding augmented demand for credit on the
Reserve Bank. By September 23 the directors of the Federal Reserve
Bank of Boston felt that the situation, so far as New England was concerned, warranted an increase in the discount rate to 4%, which they accordingly voted. Credit conditions elsewhere in other districts, however,
evidently did not warrant such an increase at that time and therefore the
Federal Reserve Board did not approve this rate until some time later,
the 4% rate becoming effective November 10, 1925. There was no other
change in the discount rate by this bank during the year.
During the year there were four (4) issues of Treasury Certificates and
one (1) Bond Issue (additional offering of 4% Treasury Bonds at 100.50
plus accrued interest); total value of new securities allotted to this District, $89,350,900.
FEDERAL RESERVE NOTE CIRCULATION
The average volume of Federal Reserve notes of the Federal Reserve
Bank of Boston in circulation in 1925 was $184,000,000, or about $18,000,000 less than the average of 1924. The volume of notes showed much
wider fluctuations than last year. The amount of notes in circulation increased rather rapidly from late in January until early in May, during
the period of active retail trade which occurs each Spring, but the increase
was accentuated probably by the reduction of National Bank note circulation of from six to seven million dollars in this district and by the continued high rate of production. From the first of June to the end of the year
the volume of notes in circulation was affected by the bank's policy in paying out gold certificates. With the high volume of production shown during the year, with trade in New England more active in 1925 than in
1924, it might have been expected that the volume of Federal Reserve
notes in circulation would have increased, while the reverse is true. The
additional amount of gold and gold certificates put into circulation must
therefore be regarded as the chief factor in the reduction.
The volume of gold circulation in any one Federal reserve district cannot be directly determined, but indirect calculation shows that, as far as
New England is concerned, gold circulation is large. At the close of 1925,
gold reserves of the Federal Reserve Bank of Boston had declined until
they were about 10 per cent lower than the notes in circulation, whereas
at the same time the gold reserves of the entire system were 47 per cent
ANNUAL REPORT OF FEDERAL RESERVE BANK OF BOSTON
11
higher than the notes in circulation. In fact, throughout 1925 there was a
smaller excess of gold reserves over notes in circulation in the First Federal Reserve District than in other districts.
The reserve ratio, sometimes considered a good single index of the
banking situation, in the case of a Federal Reserve Bank is really the net
result of three variable factors, namely, the total gold or cash reserve of
the bank, the volume of its Federal Reserve notes in circulation, and the
amount of its deposit liability. The Federal Reserve Act requires a Federal Reserve bank to carry gold or cash reserves of at least 35% of its
deposit liability plus 40% of its Federal reserve notes in circulation. At
the close of 1924 the reserve ratio of the Federal Reserve Bank of Boston
was 66.5% or at its lowest point for that entire year. During 1925 this
ratio was 81% in midsummer, but declined gradually during the last
quarter of the year, with the result that the reserve ratio at the end of
December was 56%. This decline was brought about by a reduction in the
gold reserves, due to the policy of paying out gold certificates in lieu of
Federal Reserve notes, the increased volume of earning assets, and a
slight increase in deposit liability.
FEDERAL
RESERVE
FLUCTUATION
9 2I
19 2 2
OF
BANK
PRINCIPLE
19 2 3
OF
BOSTON
ITEMS
19 2 4
19 2 5
The following statement presents a summary of the resources and
liabilities of the Federal Reserve Bank of Boston on December 31 of the
past three years:—
12
ANNUAL REPORT OF FEDERAL RESERVE BANK OF BOSTON
COMPARATIVE STATEMENT OF CONDITION
(000 omitted)
RESOURCES
IQ25
1924
1923
$21,541
$15,217
$21,744
31,573
53,114
84,714
13,777
45,957
28,994
63,889
67,701
38,802
553
1,846
10,336
2,472
23,727
10,461
529
6,697
2,636
12,735
577
36,660
9,862
151,140
129,543
116.365
78,505
164,365
168,271
6,289
5,038
13,527
84,794
169,403
181,798
32,809
32,275
32,882
40,402
158,005
18,422
220,100
20,078
234,758
I. EARNING ASSETS:—
1. Loans to Member Banks:—
(a) On the security of obligations of
the United States
(b) By the discount of commercial or
agricultural paper or acceptances
Total loans to member banks. . .
2. Acceptances bought in the open market.
3. United States Government securities
bought in the open market:—
(a) Bonds
(b) Treasury Notes
(c) Certificates of Indebtedness
Total U. S. Government Securities
Bought
4. Foreign loans on gold
TOTAL EARNING ASSETS
II. CASH RESERVES held by this bank
against its deposits and circulation:—
1. Gold held by the Federal Reserve Agent
'as part of the collateral deposited by the Bank to secure Federal
Reserve Notes as issued by the Agent
partly in his own vaults at the bank
and partly with the Treasurer of the
United States at Washington
2. Gold Redemption Fund in the hands of
the Treasurer of the United States for
use in redeeming such Federal Reserve Notes as are presented to the
Treasury for redemption
Total Gold held exclusively as security for Federal Reserve Notes
3. Gold in the Gold Settlement Fund
maintained by the Federal Reserve
Board and lodged with the Treasurer
of the United States for the purpose
of settling current transactions between Federal Reserve districts
4. Gold and Gold Certificates in the
bank's own vaults
Total gold reserves
5. Legal tender notes, silver, and silver
certificates in the vaults of the bank,
and available as reserves only against
deposits
III.
TOTAL CASH RESERVES
NON-RESERVE CASH (National
Notes, Federal Reserve Bank
and minor coin)
IV.
20,698
13,740
178,703
233,840
8,266
243J024
6,733
5,543
3,520
71,770
4,068
102
60,635
4,190
180
Bank
Notes
MISCELLANEOUS:—
Checks and other items in process of
collection
Bank premises
All other resources
TOTAL MISCELLANEOUS
TOTAL RESOURCES
75,940
65,005
412,516
433,931
ANNUAL REPORT OF FEDERAL RESERVE BANK OF BOSTON
13
COMPARATIVE STATEMENT OF CONDITION
(000 omitted)
LIABILITIES
IQ25
1924
I923
$7,980
$7,890
16,382
24,362
16,390
24,280
I. CAPITAL AND SURPLUS:—
1. Capital paid in, equal to 3 per cent of
the capital and surplus of member banks
$8,611
2. Surplus—that portion of accumulated net
earnings which the bank is legally permitted to retain
17,020
Total Capital and Surplus
~ 25,631
II.
DEPOSITS:—
1. Deposits maintained by member banks
as legal reserves against the deposits of
their customers
140,102
123,637
895
3,856
2,356
3. All other deposits (including foreign
deposits, deposits of non-member banks,
etc.)
Total Deposits
III.
141,802
2. U. S. Government deposits carried at
the Reserve bank for current requirements of the U. S. Treasury
809
143,506
84
144,042
117
126,110
174,559
207,389
220,115
68,373
57,905
51,609
447
68,820
412,516
233
58,138
433,931
272
51,881
422,386
CURRENCY IN CIRCULATION:—
Federal Reserve Notes in actual circulation, payable in gold on demand; these
notes are secured in full by gold and discounted and purchased commercial paper
and acceptances
IV.
MISCELLANEOUS LIABILITIES:—
1. 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
2. All other liabilities
Total Miscellaneous Liabilities
TOTAL LIABILITIES
The principal changes as between December 31 of 1925, compared
with December 31, 1924, reflected by this statement of condition, are as
follows:—
1. An increase of loans to member banks of $25,000,000.
2. An increase in the holdings of acceptances bought in the open market of $21,000,000.
14
ANNUAL REPORT OF FEDERAL RESERVE BANK OF BOSTON
3. A decrease of $24,000,000 in holdings of government securities.
4. A decrease of $62,000,000 in the gold reserve.
5. An increase of $1,300,000 in capital and surplus.
6. A decrease of $33,000,000 in Federal Reserve Notes in actual circulation.
The following table shows the income and disbursements of the Federal
Reserve Bank of Boston for the years 1924 and 1925:—•
INCOME AND DISBURSEMENTS
1925
1924
1923
$783,450
599,172
1,049,841
$2,320,839
741,384
419,739
126,553
2,559,016
20,556
24,721
3,506,683
25,849
2,579,572
3,532,532
2,025,855
1,973,500
2,134.254
125,317
2,151,172
135,650
2,109,150
146,143
2,280,397
1,140,581
470,422
1,252,135
502,648
477,798
480,267
EARNINGS:—
From loans to member banks and paper
discounted for them
$1,197,662
From acceptances owned
1,493,284
From U. S. Government obligations owned
455,055
Other earnings (including deficient reserve
penalties)
'
142,545
Total earnings
3,288,546
Additions to earnings
3,207
Total applicable to expenses and other
deductions
3,291,753
DEDUCTIONS:—
For the expense of current bank operation,
including the non-reimbursable expense
incurred as Fiscal Agent of the U. S. and
for printing of Federal Reserve Notes...
All other deductions, including those on
account of depreciation on bank premises, machinery and equipment, cost of
new furniture and equipment, and miscellaneous small items
Total deductions
NET INCOME available for Dividends, Surplus
and Franchise Tax to the U. S. Government
DISTRIBUTION OF NET INCOME:—
Dividends paid member banks at rate of
6 per cent on paid-in capital
Additions to Surplus (the bank is permitted
by law to accumulate out of net earnings,
after payment of dividends, a surplus
amounting to 100 per cent of the subscribed capital; and, after such surplus
has been accumulated, to pay into surplus
each year 10 per cent of the net income
remaining after paying dividends)
Franchise tax paid U. S. Government (representing the entire net income of the
bank after paying dividends and making
additions to surplus; Federal Reserve
notes are not taxed, and this payment
is in lieu of taxes on notes and other
Federal taxes)
Deficit of net income after dividend payments charged to Surplus account
Total
637,933
....
77,187
None
....
694,681
None
1,140,581
7,376
470,422
... .
1,252,135
ANNUAL REPORT OF FEDERAL RESERVE BANK OF BOSTON
15
The earnings in 1925, it will be noted, were $729,530 more than in 1924,
the increase being due to the large volume of earning assets held during
the year. While the aggregate expenses of bank operations show an increase of $52,355 more than last year, this was occasioned entirely by an
increase of $88,752 in so-called uncontrollable expenses (cost of redemption and shipping of currency and coin, postage, etc.); there was therefore a decrease in actual operating costs of $36,397, notwithstanding the
much larger volume of items handled. The six per cent dividend provided
for by the Federal Reserve Act was paid to member banks and, after
setting aside $125,317 for depreciation on building and other reserves,
$637,933 was added to the surplus account.
VOLUME OF OPERATIONS
The increase in the volume of operations above referred to is brought
out clearly in the appended tabular statement, which shows an increase in
1925 over 1924 in the average number of pieces of currency received and
counted of 39,000; of coin received and counted, 7,000; and of checks
handled, 8,000.
DAILY AVERAGE VOLUME OF OPERATIONS IN PRINCIPAL DEPARTMENTS
Increase(-\-) or Deerease {—)
for year
NUMBER OF PIECES HANDLED:—
1925
Bills discounted:—
Applications
Notes discounted
Bills purchased in open market for
own account
Currency received and counted
Coin received and counted
Checks handled
Collection Items handled:—
U. S. Government coupons paid..
Allother
U. S. Securities:—
Issues, redemptions, and exchanges by Fiscal Agency Department
Transfers of funds
Envelopes received and dispatched.
AMOUNTS HANDLED:—
26
154
Volume
23 +
101 +
91
752,000
601,000
232,000
54
713,000
594,000
224,000
+
+
+
+
13,800
1,400
14,600 —
1,800 —
1,800
174
7,900
3,900 —
168 +
7,800 +
*
Bills discounted
6,796,000
Bills purchased in open market for
own account
1,304,000
Currency received and c o u n t e d . . . . 4,620,000
Coins received and counted
69,000
Checks handled
59,898,000
Collection Items handled:—
U . S . Government coupons paid. .
194,000
All other
2,320,000
U. S. Securities:—
Issues, redemptions, and exchanges by Fiscal Agency Department
1,049,000
Transfers of funds
20,820,000
1924
*
2,705,000
854,000
4,352,000
67,000
54,473,000
Percentage
3 + 13.0%
53 + 5 2 . 5
37
39,000
7,000
8,000
+ 68.5
+ 5.5
+ 1.2
+ 3.6
1,800 —12.3
400—22.2
2,100 — 53.8
6 + 3.6
100 + 1.3
*
+4,091,000 +151.2%
+ 450,000
+ 268,000
+
2,000
+5,425,000
+52.7
+ 6.2
+ 3.0
+ 10.0
208,000 — 14,000 — 6.7
1,949,000 + 371,000 + 19.0
1,607,000 — 558,000 — 34.7
18,443,000 +2,377,000 + 12.9
16
ANNUAL REPORT OF FEDERAL RESERVE BANK OF BOSTON
RELATION WITH FOREIGN BANKS OF ISSUE
During 1925 the Federal Reserve Bank of Boston participated in the
arrangements made by the Federal Reserve Bank of New York with foreign banks of issue. The Foreign loans on gold shown in the statement of
condition of the bank as of December 31, 1925, and "other deposits" represent these foreign transactions.
BANK ORGANIZATION AND PERSONNEL
Directors:—During the year there was one change in the Board of
Directors. Mr. E. R. Morse of Proctor, Vermont, who had been a Class
B director of the bank ever since its organization, died on May 26, 1925.
A special election was held to choose a director for the remainder of Mr.
Morse's term, or until December 31, 1925, polls in that election closing
on July 16, 1925, and Mr. Albert C. Bowman, President of the John T.
Slack Corporation, Springfield, Vermont, being chosen. On December
31, 1925, the terms of Mr. Frederick S. Chamberlain, Class A, Mr. Albert
C. Bowman, Class B, and Mr. Charles H. Manchester, Class C, expired.
Mr. Chamberlain and Mr. Bowman were re-elected for three-year terms
by the member banks in Group 2—banks having a combined capital and
surplus of not less than $300,000 and not more than $999,000—and Mr.
Manchester was reappointed by the Federal Reserve Board for a similar
term of three years. The Federal Reserve Board also redesignated Mr.
Frederic H. Curtiss as Chairman and Federal Reserve Agent, and Mr.
Allen Hollis as Deputy Chairman, for the year 1926.
Advisory Council:—At a meeting of the Board of Directors held on January 14, 1925, Mr. Charles A. Morss, Vice-President of the Simplex Wire
and Cable Company, formerly Governor of the Federal Reserve Bank of
Boston, was reappointed as member of the Federal Advisory Council to
represent the First Federal Reserve District for the year 1925.
Personnel:—In May, 1925, Mr. William N. Kenyon resigned as Assistant Cashier of the bank in order to become a vice-president of the National
Rockland Bank of Boston, his resignation taking effect at the end of the
month. Mr. Kenyon had been an assistant cashier of this bank since
February 1, 1918, having charge of the Discount and Collateral Departments. The vacancy caused by his resignation from the official staff was
not filled, his particular duties being distributed among the other officers
of the bank.
The increased volume of items handled daily by the bank during the
year has necessitated an increase in the clerical staff from 685 to 697, the
increase coming largely in the Transit and Money departments.
ANNUAL REPORT OF FEDERAL RESERVE BANK OF BOSTON
17
CHANGES IN MEMBERSHIP AND STOCKHOLDERS' MEETING
Changes in Membership:—The actual total number of member banks,
420, remained the same at the end of the year as on December 31, 1924,
seven having discontinued membership through consolidation or liquidation, while an equal number, namely, three trust companies and four
new national banks, became members. The actual capital subscription of
the Federal Reserve Bank was increased, since all of the banks that withdrew on account of consolidation consolidated with member banks. There
was no withdrawal of State bank members. The three state banks which
joined are the B. M. C. Durfee Trust Company of Fall River, Mass., the
Quincy Trust Company of Quincy, Mass., and the Carroll County Trust
Company of Conway, N. H.; the new national banks are the City
National Bank of New Britain, Conn., the Plantsville National Bank of
Plantsville, Conn., the Methuen National Bank of Methuen, Mass., and
the Massachusetts National Bank of Boston, Mass.
Stockholders' Meeting:—On October 21, 1925, there was held in the
banking rooms of the Reserve Bank the third annual meeting of its stockholders. There were in attendance approximately 300 persons, representing over 200 member banks from the district. Addresses were made by
the Chairman and the Governor of the bank, the former discussing the
reserve requirements of the Federal Reserve Act and the latter analyzing
the effect of recent suggestions, if enacted, calling for changes in the
powers of national banks and in the note issue powers of Federal Reserve
Banks. The remainder of the meeting was given over to an open forum,
at which several resolutions were presented and referred to a committee
on resolutions appointed by the meeting. In the afternoon the committee
on resolutions submitted its report and the meeting adopted several resolutions, one authorizing the creation of a standing committee on nominations for directors of the Federal Reserve Bank, one opposing the repeal
of the so-called War Amendments to the Federal Reserve Act, and one
approving and advocating the passage of the pending McFadden Bill.
HAVANA AGENCY
The Agency maintained by the Federal Reserve Bank of Boston in
Havana has operated efficiently and successfully during the year and reports come to the bank of the satisfactory service which the Agency offers to the banks in Cuba. During the year the volume of cable transfers,
the only operations which the Agency performs, was somewhat less than
1924, because of lower prices for sugar,—cable transfers of 1925 being
$43,746,000 as against $47,601,000 of 1924.
@FedFRASER