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7
TWENTY-FIRST
ANNUAL REPORT
FEDERAL RESERVE BANK
OF CHICAGO
FOR THE YEAR ENDED DECEMBER 31,
1935
FEDERAL RESERVE AGENT
SEVENTH FEDERAL RESERVE DISTRICT
FEDERAL RESERVE BANK
OF CHICAGO
Chicago, January 30, 1936.
Sir:
I have the honor to submit herewith, in accordance
with the usual custom, the twenty-first annual report
of the Federal Reserve Bank of Chicago, covering the
year 1935.
Respectfully,
EUGENE M. STEVENS,
Chairman of the Board and
Federal Reserve Agent.
H O N . MARRINER S. ECCLES,
Chairman, Board of Governors of the
Federal Reserve System,
Washington, D. C.
FEDERAL RESERVE BANK OF CHICAGO
Directors and Officers for 1936*
CLASS A—DIRECTORS
GEORGE J. SCHALLER, Governor
JAMES R. LEAVELL, Lake Forest, Illinois
(1936)
President, Continental Illinois National Bank
and Trust Company of Chicago
EDWARD R. ESTBERG, Waukesha, Wiscon-
sin (1937)
President, The Waukesha National Bank
FRANK D. WILLIAMS, Iowa City, Iowa
(1938)
WTILLIAM C. BACH MAN, Assistant Deputy
Governor
EUGENE A. DELAXEY, Assistant
Vice-President and Cashier, The First Capital National Bank of Iowa City
CLASS
B—DIRECTORS
MAX W. BABB, Milwaukee, Wisconsin
(1936)
President, Allis - Chalmers Manufacturing
Company
STANFORD T. CRAPO, Detroit, Michigan
(1937)
Vice-President and Treasurer, Huron Portland Cement Company
NICHOLAS H. NOYES, Indianapolis, In-
diana (1938)
Secretary and Treasurer, Eli Lilly and Company
CLASS C—DIRECTORS
EUGENE M. STEVENS, Evanston, Illinois
(1936)
Deputy
Governor
OTTO J. NETTERSTROM, Assistant Deputy
Governor
ARTHUR
L.
OLSON,
Assistant
Deputy
SIIILER,
Assistant
Deputy
Governor
ALFRED
T.
Governor
FRED BATEMAN, Manager, Securities De-
partment
ALLAN
M. BLACK, Manager, Planning
Department
JOSEPH C. CALLAHAN, Manager, Member
Bank Accounts Department
NEIL
B. DAWES, Manager,
Investment
Department
ROBERT J. HARGREAVES, Manager, Per-
sonnel Department
Chairman
EDWARD
CHARLES R. MCKAY, Deputy Governor
HOWARD P. PRESTON, Deputy Governor
JAMES H. DILLARD, Deputy
E.
BROWN,
Chicago,
Illinois,
Member Federal Advisory- Council
OFFICERS
EUGENE M. STEVENS, Chairman of the
Board and Federal Reserve Agent
CLIFFORD S. YOUNG, Assistant
FRANK A. LINDSTEN, Manager, Disburs-
ing Department
Louis G. MEYER, Assistant
Fiscal Agency Department
Manager,
FRANKLIN L. PURRINGTON, Manager, Re-
construction Finance Corporation, Custody Division
Federal
JESSE G. ROBERTS, Manager, Cash De-
GEORGE A. PRUGH, Assistant Federal Re-
CARL M. SALTNES, Manager, Check De-
Reserve Agent
partment
serve Agent
partment
HARRIS G. PETT, Manager, Division of
Research and Statistics
WILLIAM H. SNYDER, Controller
JOHN J. ENDRES, General Auditor
WILLIAM W. TURNER, Manager, Loans
CHARLES B. DUNN, General Counsel
DETROIT BRANCH
Directors and Officers
JAMES E. DAVIDSON, Bay City, Michigan
President, Peoples Commercial and Savings
Bank
DAVID MCMORRAN, Port Huron, Michigan
President, Heinr. Franck Sons, Inc.
JAMES INGLIS, Detroit, Michigan
Chairman of Board, National Bank of Detroit
ALFRED C. MARSHALL, Detroit, Michigan
Vice-President and General Manager, Detroit
Edison Company
JOHN BALLANTYNE, Detroit, Michigan
President, The Manufacturers National Bank
of Detroit
RALPH H. BUSS, Managing Director
JOHN H. MARTIN, Assistant Federal Re-
serve Agent
HARLAN J. CHALFONT, Cashier
ARTHUR H. VOGT, Assistant Cashier
HAROLD L. DIEHL, Assistant Cashier
' Because of changes in certain titles under the Banking Act of 1935, which become effective
on March 1, 1936, the officers of the bank and its Detroit Branch as listed above, have been
elected as such by the Board of Directors for the period ending February 29, 1936.
TWENTY-FIRST ANNUAL REPORT
OF THE
FEDERAL RESERVE BANK OF CHICAGO
O
F GREAT importance to banking was the passage of new
Federal legislation known as the Banking Act of 1935,
which became law on August 23, 1935. This act has the
effect of a concentration of responsibility for national credit
policy and gives to the Board of Governors of the Federal Reserve System enlarged authority. A Federal Open Market Committee consisting of seven members of the Board of Governors
and five representatives of the Federal Reserve banks will, on
March 1, 1936, be given mandatory authority over the openmarket operations of the Federal Reserve banks. The Board of
Governors is also given enhanced authority over other major
instruments of credit and control, including changes in discount
rates, member bank reserve requirements, and margins to be
prescribed on loans on securities.
Another important change in the law broadens the loaning
powers of the Federal Reserve banks. In addition to their previous powers, they may now make advances to their member banks
on any sound assets at a rate of interest at least \ of 1 per cent
per annum higher than the regular discount rate.
Under the new Act, the present Board of Governors of the
Federal Reserve System, which consists of six appointive members together with the Secretary of the Treasury and the Comptroller of the Currency, goes out of office on February 1, 1936.
In its stead, a new board, consisting of seven members (not including the Secretary of the Treasury and the Comptroller of the
Currency), will be appointed by the President, subject to ratification by the Senate.
The Banking Act of 1935 also provides that the titles of Governor and Deputy Governors of the Federal Reserve banks shall
be changed to President and Vice-Presidents. Under the previous law, there had been no expressed provision for the administrative officers of the several banks. The President and the
First Vice-President of each bank shall be elected by the Board
of Directors for terms of five years, subject to approval by the
Board of Governors of the Federal Reserve System. This
change is to take effect on March 1, 1936. The Act made no
changes in the status or duties of the Board of Directors of the
Reserve banks, the Chairman and Federal Reserve Agent, and
the assistant Federal Reserve Agents.
Under the provisions of the new law which, as stated, constitutes the Federal Open Market Committee, consisting of the
Board of Governors of the Federal Reserve System and five
representatives of the Federal Reserve banks, the Chicago and
St. Louis banks jointly will be entitled to one representative on
TWENTY-FIRST
ANNUAL
REPORT
this committee, and such representative will be elected by the
Boards of Directors of the Chicago and St. Louis Federal Reserve banks to take office March 1, 1936.
In addition to these changes, the Banking Act of 1935 made
a number of clarifying changes in technical provisions of the old
law and also continued the deposit insurance plan under a permanent basis. The assessment rate for such insurance is fixed
at 1/12 of 1 per cent per annum, based on the total deposits;
whereas, under the temporary act, insured banks would have
been subject to an unlimited assessment liability. The Act also
simplified many provisions relating to directors' permits, holding
company affiliates, and otherwise. It also gave the Board of
Governors of the Federal Reserve System authority to define
demand, time, and savings deposits.
Improved farm income in 1935, combined with accelerated activity in several of the district's major industries, notably automobile manufacturing and iron and steel, resulted in substantial
improvement in economic conditions in the Seventh district in
the year. The operations of the Federal Reserve Bank of Chicago in the main followed the lines laid down in 1934, with some
departments experiencing a somewhat heavier volume of work,
such as the Fiscal Agency, Cash, and Safekeeping, while others,
such as Discount and Investment, performed operations little
changed in volume from the prior year.
During 1935, as well as in the preceding year, considerable
progress was made in the reduction of the bank's operating expenses. The inauguration in March 1934 of the Federal Reserve
Retirement System, enabled many of the employes who had
reached the retirement age in the bank's service, to take advantage of the benefits available under the plan and retire from
active service. Coincident with this development, careful appraisal was made of all operating departments and through reassignment of the duties of many employes, combination and
rearrangement of departmental functions, and otherwise, many
operating economies have been effected, with no impairment of
efficiency. As shown elsewhere in this report, the number of
employes at the head office and Detroit branch combined, on
December 31, 1935, showed a reduction of 119 from the number
on December 31, 1934.
The extension of direct loans to industry continued in the past
year, during which period applications with an aggregate of
$4,727,700 were approved. Details regarding these activities are
given elsewhere in this report. The volume of commitments
with respect to direct loans to industry was considerably heavier
in 1935, and every effort has been made to bring about the
widest possible use of the facilities available for this kind of loan
to industry.
The work of the Federal Reserve Agent's Department for the
FEDERAL
RESERVE
BANK
OF
CHICAGO
year 1935 has continued without diminution, although some of
its activities vary somewhat from year to year in their relative
importance. The Federal Reserve Agent's Department, as the
direct representative of the Board of Governors of the Federal
Reserve System in its particular functions, is charged with the
duty of the administration of the Federal Reserve Act and the
regulations issued thereunder with the member banks in this
district, in cooperation with the office of the Comptroller of the
Currency as to national banks. Through its own examiners, it
makes periodic examinations of all State member banks, and for
its confidential information it has access to the examination
reports of the national banks.
In addition to certain definite responsibilities relating to the
conduct of member banks, which are specifically delegated to it
by the provisions of the Act, the Federal Reserve Agent's Department is directly concerned in its activities with the development of the broader and more general relationships of the member banks to the System, which are conducive to the best interests of the banking system and its relation to the public welfare.
These duties have entailed extensive correspondence and many
interviews with member banks relative to the Banking Acts of
1933 and 1935, and interpretations of the Federal Reserve Act
and Regulations of the Board of Governors of the Federal Reserve System. They have also included large numbers of interviews and correspondence with member banks with relation to
their individual problems, and many calls have been made on the
banks at their own offices.
The enactment of the Banking Act of 1935 made it necessary
to revise the regulations concerning the administration of the
Act and the Board of Governors with the cooperation of the
Federal Reserve Agents of the various banks, gave much time
and consideration to such revisions. During the year, final
drafts and issuance of regulations were made as follows:
Regulation D, Reserves of Member Banks.
Regulation H, Membership of State Banking Institutions
in the Federal Reserve System.
Regulation I, Increase or Decrease of Capital Stock of
Federal Reserve Banks and Cancelation
of Old and Issue of New Stock Certificates.
Regulation O, Loans to Executive Officers of Member
Banks.
Regulation P, Holding Company Affiliates—Voting Permits.
Regulation O, Payment of Interest on Deposits.
Others have either been issued since the first of this year or are
in process of revision at this time.
TWENTY-FIRST
ANNUAL
REPORT
In addition to the administration of the law and the regulations with the member banks, as was noted in the annual report
of this bank for 1934, this Department has the responsibility for
the administration of the regulations of the Board of Governors
under Sections 7 and 8(a) of the Securities Exchange Act of
1934, under which the Board of Governors is charged with the
duty of regulating the amount of credit advanced by stock exchange brokers in connection with the purchase and carrying of
securities. A special section of the Federal Reserve Agent's
Department has been organized to carry on this phase of activity, and during the past year numerous special investigations
have been made on behalf of the Board, and the collection and
review of reports and specific data from brokers and dealers,
and the supervision of their operations in their margin accounts
have been continued.
The Division of Research and Statistics during the past year
has made available to officers and directors of this bank as well
as to member banks of the district, a considerably greater volume of economic and statistical information. Much of this material has been in the form of charts and special studies, including
a compilation of earnings and expenses of all Iowa banks for
1934, the completion of which study provided a comparable
series for that State extending back to 1924. The preparation of
the bank's monthly review of business conditions, of which approximately 10,000 copies are mailed each month to banks, firms,
and corporations throughout the country and abroad, is carried
on in this division, as is the administration of the library. Some
8,000 books, pamphlets, and periodicals on economic and financial subjects comprise the library's collection, which thus furnishes this bank as well as member banks and the public with
access to a wide range of information in the economic field.
The Bank Examination Division, during the calendar year
1935 conducted 193 regular examinations of State member banks,
17 examinations in connection with applications for membership,
and 6 examinations of private banks which, under Section 21 of
the Banking Act of 1933, submitted themselves to examination
by this bank. With the amendment of Section 21 of the Banking
Act of 1933, however, the Comptroller of the Currency and the
Federal Reserve banks have been relieved' of examining atid
obtaining reports of private banks. The Bank Examination
Division also examined one holding company affiliate of a State
member bank, bringing the total number of examinations made
during the year to 217. In the annual report of 1934, considerable comment was made upon the activities of a Trust Examiner
on the Federal Reserve Agent's staff. During 1935 the Trust Departments of all State member banks were examined, and in
addition, investigations were made in connection with 14 applications of national banks for fiduciary powers.
FEDERAL
RESERVE
BANK
OF
CHICAGO
During the year, 20 investigations in connection with applications for permission to organize national banks were made in
accordance with the request of the Comptroller of the Currency.
Recommendations with respect to these applications were duly
submitted.
Numerous applications of directors and officers of member
banks were reviewed under Sections 8 and 8(a) of the Clayton
Anti-Trust Act as amended and under Section 32 of the Banking
Act of 1933, together with a number of applications of holding
company affiliates for permission to vote the member bank stock
which they own or control, as required under Section 5144 of the
United States Revised Statutes as amended.
Rehabilitation of the capital structure of member banks, which
was instituted in 1933 and discussed at considerable length in
the annual report for 1934, was practically completed during the
year just closed. This bank is informed, furthermore, by the
various supervisory agencies of this district, that rehabilitation
of non-member banks is practically complete. The banks of the
district, therefore, are in excellent condition to meet any demands which may be made upon them with the recovery of
general business and increased borrowing.
During the year 20 applications for membership were received,
as compared with 51 in 1934. During the later months of 1935,
representatives of the Agent's Department devoted a considerable portion of their time to visiting non-member banks with a
view to interesting them in membership or answering specific
inquiries. As shown elsewhere, the total number of member
banks at the end of the year was 706 as compared with 691 at
the end of 1934.
Banks in the Seventh district were in an unusually liquid condition during 1935, the result in large measure of the greatly increased volume of deposits coincident with continued small demand for loans. The deposits of the member banks of the
Seventh Federal Reserve district on December 31, 1934, were
$4,169,762,000 and on December 31, 1935, were $5,064,695,000, an
increase of $894,933,000. At the same time, investments in securities of the United States Government, as of the same date,
both direct and guaranteed, were $1,564,122,000 at the close of
1934. and $2,054,093,000 at the close of 1935, an increase of
$489,971,000. Loans and discounts on December 31, 1934, were
$1,074,421,000 and on December 31, 1935, were $1,027,937,000, a
decrease of $46,484,000. Due, therefore, to the relatively small
amount of loans and discounts and to the low interest rates
prevailing on Government bonds and otherwise, the earning
capacity of the member banks continued at comparatively low
levels. Notwithstanding that the banks are making earnest
efforts to make sound loans, the demand for them has continued
abnormally low, and the excess reserves of the member banks
TWENTY-FIRST
ANNUAL
REPORT
in the Seventh Federal Reserve district with the Federal Reserve
Bank of Chicago stood on December 31, 1935, at approximately
$411,000,000 as compared with about $316,000,000 on December
31, 1934.
As an outgrowth of improved conditions with the accompanying advancement in the values of securities, the loan portfolios
of banks showed a marked improvement in 1935. This factor is
becoming increasingly important in strengthening the entire
banking structure of the district. A number of banks, also, while
as stated above the general level of earnings has remained low,
have nevertheless been able to declare dividends for the first
time in several years and in some cases have retired portions of
the preferred stock and debentures sold the Reconstruction
Finance Corporation during the rehabilitation program mentioned above. Furthermore, the banks have been able to continue in larger volume the paying-off of waived deposits, which
was evident in smaller degree in 1934.
BANKING DEVELOPMENTS
Member bank reserve balances were 157 million dollars greater
at the close of 1935 than a year previous, the result of a net
inflow of funds to the district through inter-district commercial
and financial transactions totaling over 406 millions. However,
this gain in the supply of Seventh district banking reserves was
offset to a great extent by net payments to the Treasury totaling
almost 223 millions—due for the most part to retirement of national bank notes—and an increase of 25^ millions in demand
for currency. On December 31, 1935, the total volume of credit
extended by the Chicago Reserve bank amounted to $358,982,000
as compared with $429,339,000 on the corresponding date in 1934.
The accompanying tabulation gives detailed changes in the uses
and sources of Seventh district banking reserves during the year.
CHANGES BETWEEN DECEMBER 31, 1934 A N D DECEMBER 31. 1935 I N FACTORS
AFFECTING USE OF F E D E R A L RESERVE BANK F U N D S
SEVENTH DISTRICT
(Amounts in thousands of dollars)
Reserve bank credit extended (exclusive of amounts to other districts)
Commercial operations through inter-district settlements
Treasury and National bank currency
Total supply
Demand for currency
Member bank reserve balances
Treasury cash and deposits at Federal Reserve Bank of Chicago
Special and "all other" deposits
Other Federal Reserve accounts
Total demand
+1,519
+406,408
—323,941
+83,986
+25,643
+156,951
—101,171
—341
+2,904
+83,986
During the year 1935, all of the banks closed in the Seventh
district were non-member institutions, with the exception of one
FEDERAL
RESERVE
BANK
OF
CHICAGO
non-licensed State member bank which withdrew from the System prior to closing. In the accompanying tabulation it will be
noted that only 8 licensed banks were suspended—all non-members—involving deposits of $1,461,000 and including 5 insured
institutions with deposits of $1,211,000. Non-licensed banks
placed in liquidation or receivership in the past year numbered
16 with deposits amounting to $2,907,000. This latter group
comprised 9 private banks and 7 State institutions which had
failed to qualify for a license to reopen on an unrestricted basis
since their enforced closing- in the Moratorium of March 1933.
Several of these closed banks were succeeded by new organizations. There were 12 reopenings of closed banks during 1935,
of which 2 had been licensed subsequent to the Moratorium.
Of the reopened banks, 11 were suspended during the four years
prior to 1935.
BANKS SUSPENDED AND NON-LICENSED BANKS PLACED IN LIQUIDATION OR
RECEIVERSHIP, JANUARY 1 TO DECEMBER 31, 1935
SEVENTH FEDERAL RESERVE DISTRICT
Licensed banks suspended
National banks . . .
State bank members
Non-member banks
1
2
3
Non-licensed banks placed
in liquidation 1or
receivership
Number of
banks
Deposits 2
(in thousands
of dollars)
Number of
banks
8
1.461
I3
15
Deposits 2
(in thousands
of dollars)
2223
2 685
Total
8
16
2.907
1.461
Includes non-licensed banks absorbed or succeeded by other banks.
Deposits are as of date of closing or of the nearest call date prior to closing.
Withdrew from the Federal Reserve System (March 24, 1933) before being placed in liquidation.
Mergers and absorptions in 1935 were considerably less than
a year previous in both number and amount of funds represented, and thereby continued the declining trend in effect since
1931—the 12 banks thus eliminated in 1935 comparing with 38
in 1934, 30 in 1933, 60 in 1932, and 209 in 1931. Loans and investments involved in the consolidations during the past year
aggregated 38 millions and capital totaled 5 millions, as compared with 160 and 15 millions, respectively, in the 1934 mergers.
INDUSTRIAL, AGRICULTURAL, AND TRADE CONDITIONS
Business activity in the Seventh Federal Reserve district
showed continued recovery in 1935 from the low levels reached
in 1932 and 1933. The volume of both production and trade with
few exceptions—notably certain food-producing industries—rose
over that of 1934, substantially so in manufacturing phases, and
TWENTY-FIRST
ANNUAL
REPORT
industrial employment and payrolls were noticeably higher. The
early months of 1935 recorded an expanding rate of activity,
followed by some seasonal slackening, although the usual midsummer dullness was not experienced by all industries, and business in the closing months of the year rose to well above the
level of the same months a year previous. The 1935 production
of most major crops in the district was above that of 1934, and
many crops were heavier than the 1928-32 average; farm income
expanded further in 1935.
Production of automobiles in 1935 totaled the heaviest of any
year since 1929, which year, however, it failed to equal by 29
per cent. Passenger cars and taxicabs produced in 1935, numbering 3,285,836, exceeded those of 1934 by 51 per cent, were
more than double the 1933 output, and almost triple that of
1932; truck production showed a similar trend as compared with
1933 and 1932, and totaled 26 per cent above that of 1934. Advanced showing of 1936 models was responsible for sharp acceleration in output during October and November of 1935,
whereas curtailed schedules are usually in effect at that season.
The steel industry of the Chicago district experienced
a substantial gain in business during the year, to wrhich the automotive industry contributed considerable, although miscellaneous
users of steel also were active buyers. Steel ingot production
was at its peak of the year toward the close of January when
operations averaged 67 per cent of capacity as against a peak
for 1934 of 69 per cent in June. However, the rate of operations
was much steadier through 1935 than a year previous, at no
time falling below 40 per cent and averaging above 60 per cent
in the first half of December as compared with around 35 per
cent at the same time in 1934. Pig iron production in the Illinois-Indiana district was the heaviest of any year since 1930
and more than 45 per cent above that of the preceding year.
Shipments of steel castings by foundries in the Seventh district
gained moderately in 1935 over 1934, the tonnage shipped increasing 11 per cent and the dollar value 18 per cent. Malleable
casting shipments gained more substantially—close to 40 per
cent in both tonnage and value. Output of stoves and furnaces
by reporting firms was fully 40 per cent larger in 1935 than a
year previous. Continued improvement took place in the building industry during the past year, total construction as reflected
in contracts awarded expanding 30 per cent over 1934, while
residential building gained 119 per cent. The most substantial
gains in this industry were shown in the latter half of the year.
Most building materials moved more rapidly in 1935 than a year
earlier, although the movement of cement was little changed in
volume. Furniture manufacturers shipped more goods in 1935
than during any of the previous four years, and at the end of the
year shipments were close to average for the season. Seventh
10
FEDERAL
RESERVE
BANK
OF
CHICAGO
district production of shoes was 10 per cent greater in 1935 than
in 1934.
Production of packing-house commodities dropped considerably further—by 30 per cent—in 1935 from total production of
the preceding year, and the sales tonnage decreased 19 per cent.
Because of higher prices, however, the dollar value of sales
recorded an increase of 22| per cent in 1935 over 1934. Production and volume sales of butter likewise declined in 1935 from a
year earlier, by 7\ and 10 per cent, respectively. On the other
hand, the manufacture of American cheese in Wisconsin expanded 7 per cent during the year and its distribution gained
llf per cent, although the volume of this latter item was slightly
smaller than that of the former.
Manufacturing industries contributed proportionately more
than did the non-manufacturing groups to the average gains of
9 per cent in employment and 18 per cent in payrolls shown by
all reporting groups in the Seventh district for the year 1935
over 1934. Increases in the former classification amounted to
10 and 20 per cent, respectively, in number employed and wage
payments, while in the latter classification the corresponding
gains were but 3 and 7 per cent. Metals other than vehicles
recorded a rise of 14^ per cent in employment and of 27 per cent
in payrolls. The vehicles group alone raised its employment
volume 21 per cent and payroll amounts 24 per cent. The only
group in which both items showed a recession for the year was
food products where the losses amounted to 7 and 4 per cent,
respectively. The number of workers employed in all reporting
industries at the close of 1935 was at a level approximately 13
per cent higher than at the end of 1934 and 30 per cent above
the level two years previous. Wage payments advanced even
more sharply, the increase over a year earlier totaling 27 per
cent and over the close of 1933, 64 per cent.
The merchandising of commodities in this district expanded
further in 1935, although the gains over the preceding year in
general were lesser in extent than those recorded in 1934 over
1933. In wholesale trade electrical supply sales expanded 30
per cent, hardware sales 21 per cent, drug sales 10 per cent, and
grocery sales only fractionally over the 1934 level. In most
groups the largest gains took place in the latter part of the year.
Seventh district department store trade increased 8 per cent in
the aggregate over a year previous, as against an 18 per cent
gain for 1934 over 1933. Detroit stores experienced the greatest
expansion, sales in that city rising 12 per cent over a year
earlier; gains amounted to 10 per cent in Indianapolis, 8 per cent
in Milwaukee, 5 per cent in Chicago, and to 10 per cent in the
total for stores in smaller cities. Sales of shoes by reporting
dealers and department stores in the Seventh district were 9 per
li
TWENTY-FIRST
ANNUAL
REPORT
cent larger in 1935 than in 1934. The dollar volume of furniture
and house furnishings sold by dealers and department stores increased 18 per cent over the preceding year, with dealers showing a somewhat larger gain than did department stores, whereas
in 1934 the opposite trend prevailed.
The production of most Seventh district crops increased sharply in 1935 over a year earlier. Noteworthy exceptions to this
general improvement, however, were a marked decrease in potatoes, sugar beets, celery, cabbage, cowpeas, and a few of the less
important truck crops; a small decline in buckwheat, onions,
pears, and grapes; and a small gain in cucumbers and cherries.
Output of corn, wheat, oats, barley, and flaxseed was under the
1928-32 average, but that of rye, buckwheat, soybeans, and hay
was above this average as was that of most fruit with the exception of grapes. The major portion of garden truck production
also exceeded this five-year average, although a decline was
shown for onions, celery, cucumbers, and a few other lines of
lesser importance. Reports from county agricultural agents to
this bank indicate that the 1935 spring crop of pigs in the
Seventh Federal Reserve district fell 12 to 17 per cent below
that of a year earlier and that the fall crop increased at least 15
to 20 per cent over the autumn of 1934. Attractive prices of
beef and an intensive campaign for eradication of Bang's disease
reduced dairy herds of the Seventh district somewhat under the
December 1, 1934 level, but culling was expected to be less extensive this winter than last. The Seventh district supply of
hogs available on December 1, 1935. for winter and spring marketing, was reported to have declined 8 per cent from a year
earlier and that of beef cattle to have increased 7 per cent. In
common with most other parts of the United States, Seventh
district agriculture experienced a further expansion in cash income during the year, the upturn for this industry being indicated as somewhat greater than that for Seventh district income
from all sources.
DETAILS OF OPERATION OF THE FEDERAL RESERVE BANK
OF CHICAGO IN
1935
Financial Results—Current net earnings of this bank in 1935,
after deducting expenses, were $2,480,075, to which sundry additions in the amount of $951,304 were made. Deductions for depreciation, other charge-offs, and reserves totaled $2,660,159, so
that net earnings for the year aggregated $771,220. Dividends
in the amount of $753,583 were paid and $17,637 was disbursed
to the United States Secretary of the Treasury under Section
13(b) of the Federal Reserve Act. Therefore, surplus (sec. 7)
remained unchanged from a year earlier. Advances by the
12
F E D E R A L R E S E R V E B A N K OF
CHICAGO
United States Treasury in the amount of $684,667 increased
surplus under Section 13 (b) from $706,713 at the close of 1934
to $1,391,380 on December 31, 1935.
Loan and Discount Operations—Generally speaking, the member banks found themselves with excess reserves throughout the
year 1935, with the result that borrowings from the Federal
Reserve bank for either seasonal or temporary requirements
were negligible. Forty-five applications involving an aggregate
amount of $11,753,405 were approved, and sixteen banks were
accommodated. Such borrowings were for temporary periods.
The provisions of Section 13(b) of the Federal Reserve Act
permit participation with local financing institutions in loans to
established commercial and industrial enterprises for the purpose
of supplying working capital, and in exceptional circumstances
permit direct advances for such purposes when neither adequate
credit nor participation is available from local financing institutions. Commitments with respect to such loans or advances are
also authorized. During the year, 178 applications were received
under this section in an aggregate amount of $10,076,250. This
number of applications, together with four applications amounting to $63,200 received but not acted upon during the preceding
year, were dealt with as follows:
Approved unconditionally—36
Approved conditionally —40
Disapproved
—98
Under consideration
— 8
$3,131,500
1,596,200
4,810,750
601,000
The following tabulation indicates outstanding loans and commitments under Section 13b as of December 31, 1934, and the
aggregate loans disbursed and commitments entered into during
the year 1935, as well as liquidation in loans and expiration of
commitments during that year:
Outstanding as of December 31, 1934
During 1935
Loans
$ 921,223
1,840,508
Commitments
$ 30,000
544,000
$ 2,761,731
$ 574,000
Loans and
Commitments
$ 951,223
2,384,508
S 3,335,731
Repayments of Loans and Expiration of Commitments during 1935
$ 908,764
$ 417,972
S 1,326,736
Outstanding as of December 31, 1935
$ 1,852,967
8 156,028
$ 2,008,995
Of the loans disbursed, nine were made in participation with
other banks, the portion advanced by the Federal Reserve bank
under such participations aggregating $331,778, and sixteen were
made direct without bank participation in an aggregate of
$1,508,730. In addition, two renewals aggregating $186,466 were
made. Commitments were entered into with six banks provid13
TWENTY-FIRST
ANNUAL
REPORT
ing for the purchase by the Federal Reserve bank at any time
within one year of notes aggregating $544,000, exclusive of two
renewal commitments of $40,029.
Open-Market Operations—The volume of Government securities handled by the Investment Department during 1935, including participation in transactions for the System's Special Investment Account, showed a further reduction from the levels of
1934 and 1933, reflecting relative stability in this bank's investment account and a somewhat decreased volume of participation
in the System's Special Investment Account. The volume of
purchases and sales for the account of member banks decreased
approximately 35 per cent from 1934, and the number of transactions handled for such accounts declined for the first time in
recent years—about 10 per cent from 1934. Some increase was
noted in the purchase and sale of securities other than Governments for the account of member banks.
The bankers' acceptance market in general was very quiet, this
bank's buying rates being above the market during the entire
year and transactions in 1935 being confined entirely to System
participation in bills payable in foreign currency. Total holdings
of this class of investments amounted to only $577,442 on December 31, 1935.
Member Bank Reserves: Reserve Ratio—As had been the case
in the preceding year, reserve balances of member banks in 1935
were greatly in excess of legal requirements. The volume of
excess reserves ranged from a low of 97.04 per cent in March
to a high of 168.71 per cent in June. In 1934 the low was recorded in February—101.39 per cent—and the high point of
141.49 per cent was shown in July. The ratio of this bank's
total reserves to deposit and Federal Reserve note liabilities
combined was at its lowest for the year—72.6 per cent—on
January 30, and at its highest on December 18 when 81.9 per
cent was recorded.
Membership, Fiduciary Powers, and Bank Relations—The following figures reflect changes during 1935 and the two preceding
years in status of banks, affecting membership:
1935
Total losses to membership through consolidations, conversions, 1 quidations, successions, suspensions, and voluntary withdrawals
13
Total additions to membership through admissions, conversions, primary
organizations, reopenings, and successions
28
Net additions during the year
15
Net losses during the year
Total withdrawals pending at close of the year due to consolidations,
suspensions, etc
4
14
1934
1933
147
172
93
106
54
66
7
54
FEDERAL RESERVE BANK OF CHI CAGO
The following banks were authorized and approved in 1935 to
exercise fiduciary powers:
Indiana:
Butler, The Knisely National Bank of Butler
Greensburg, Decatur County National Bank of
Greensburg
Lafayette, Lafayette National Bank
Iowa:
Michigan:
*Keokuk, Keokuk National Bank
LeMars, First National Bank in LeMars
Battle Creek, The Central National Bank at Battle
Creek
Battle Creek, Security National Bank of Battle
Creek
*Bay City, The National Bank of Bay City
* Specific trusts only.
All others limited powers.
Illinois:
Trust Powers Canceled
Amboy, The First National Bank of Amboy
Visits to banks totaling 1,143 were made during 1935 by representatives of the Bank Relations Department, of which number
920 were to member banks and 223 to non-member banks.
Addresses to the number of fifteen were made by officers of the
bank during the year.
Fiscal Agency—The activities of the Fiscal Agency Department for the year 1935 show a 47.6 per cent increase in the
number of pieces, and a decrease of 1.3 per cent in the dollar
value of securities handled.
P I E C E S A N D DOLLAR VALUE OF S E C U R I T I E S H A N D L E D
1935
Dollar value
Pieces handled
$3,878,939,130
2,005,408
Per Cent
Change from
1934
—1 3
+47.6
S U B S C R I P T I O N S F O R NEW ISSUES ( I N C L U D I N G T R E A S U R Y B I L L S
A N D C O R P O R A T I O N BONDS)
Subscriptions received
$2,482,328,125
—42.1
Number of subscriptions
51,480
+35.9
Subscriptions allotted
1,208,186,625
—13.0
Number of shipments
50,331
+26.1
Number of pieces shipped
345,073
+27.6
Dollar value of shipments
1,100,710,125
—19.0
The difference between dollar value of shipments and subscriptions allotted represents transfers of allotments to and from
other Federal Reserve banks minus incomplete delivery of
$22,500 on 1943-45 additional bond issue.
15
TWENTY-FIRST
ANNUAL
REPORT
PAYMENT FOR SECURITIES ALLOTTED WAS MADE AS FOLLOWS
Per Cent
1935
change from 1934
By surrender of other U. S. Government, Federal Land Bank,
and Home Owners' Loan Corporation securities
$ 733,770,925
+25.0
By credit in War Loan Deposit Account
133,103,000
—27.5
By cash
344,164,015
—44.5
By discount on Treasury bills, and miscellaneous corporation
bonds
470,813
—4.4
$1,211,508,753
—12.9
3,322,128
+331.0
$1,208,186,625
—13.1
Less premiums and accrued interest
EXCHANGES (OTHER THAN FOR NEW ISSUES)
Pieces received
790,276
+24.6
Amount received
$1,364,273,850
—8.9
Pieces delivered
240,579
—30.7
Amount delivered
$1,898,326,300
+12.8
RECEIPTS AGAINST DELIVERIES BY O T H E R F E D E R A L RESERVE BANKS
(INCLUDED I N E X C H A N G E S ABOVE)
Pieces received
44,892
—10.6
Amounts received
$ 705,841,650
—25.7
DELIVERIES AGAINST R E C E I P T S BY O T H E R F E D E R A L RESERVE BANKS
(INCLUDED IN E X C H A N G E S ABOVE)
Pieces delivered
28,526
—21.9
Amount delivered
$1,248,206,000
+9.2
SECURITIES REDEEMED
Pieces
870,059
+91.5
Amount
$1,413,955,155
+31.6
Pieces
Amount
COUPONS R E D E E M E D
$
4,433,920
84,373,890
+10.6
+4.2
During the year, this bank continued to perform Custodian
and Fiscal Agency functions for the following:
Federal Emergency Administration of Public Works—
At the close of the year this bank was carrying $13,442,200
in securities, representing various bond issues purchased and
paid for by this bank during the year as Fiscal Agent for
the PWA.
Home Owners' Loan Corporation
Farm Credit Administration
Federal Farm Mortgage Corporation
Activities in connection with these agencies included the
issuance of new securities and the exchange of outstanding
securities.
Custody Division—Reconstruction Finance Corporation—As
custodian for the Reconstruction Finance Corporation, this bank
performed a large volume of work in 1935. Collateral and securities aggregating $481,699,396 represented by 436,531 pieces
were received, and 420,432 pieces totaling $591,222,776 were
released. In addition to the foregoing, collateral coupons numbering 159,693 were detached and released. In this division
(head office and Detroit branch, combined) there were also
handled during the year 358 advances for the account of the
Reconstruction Finance Corporation aggregating $111,338,740,
and repayments during the year amounted to $103,292,112.
16
FEDERAL RESERVE BANK
OF
CHICAGO
Gold Settlement Fund—A gain of $10,020,000 accrued to this
bank in 1935 in transactions in the Gold Settlement Fund between this and other Federal Reserve districts. In the year
preceding, a gain of $49,341,000 was recorded. Receipts from
other districts totaled $13,677,563,000 and payments $13,667,543,000, representing gains over 1934 of about $2,000,000,000 in
both items. This bank's balance in the Gold Settlement Fund
on December 31, 1935, was $431,261,403, as against $206,228,067
on the corresponding date in 1934.
Clearings and Collections—The total volume of checks handled
during the year 1935 by the Head Office and the Detroit Branch
combined was 9,499,647 items greater than in 1934, notwithstanding the fact that the number of Government checks handled
decreased 5,797,240.
The total number of checks increased 8.1 per cent; those payable in Chicago and Detroit gained 13.5 per cent; those payable
outside of these cities increased 15.6 per cent; while Government
checks decreased 37.2 per cent. This decrease took place as the
result of the discontinuance of the Civil Works program and
despite the handling by the Emergency Relief Check Department of 1,562,730 items with a value of $38,233,452, since its
inception in August 1935.
The total number of items handled during the year by both
offices was 126,604,084 (including duplications), amounting to
$26,815,028,000, of which number 84.5 per cent were drawn on
banks in the Seventh district, 7.7 per cent on banks in other
districts, and 7.8 per cent on the United States Treasurer.
On December 31, 1935, there were 515 banks using the Federal
Reserve Check Collection facilities, as compared with 512 on
December 31, 1934.
The total number of non-cash letters handled by the Federal
Reserve Bank of Chicago and its Detroit branch during the year
was 839,067, an increase of 3,189 over a year previous. The
aggregate value of these non-cash collections was $2,130,530,587
as compared with $1,531,440,891 in 1934. Of the foregoing totals,
Detroit handled 155,217 items valued at $191,892,006, as against
157,658 items and $138,778,643 a year earlier.
The amount of funds transferred by Chicago and Detroit for
member banks increased in 1935, totaling $15,451,111,626 as
compared with only $12,519,172,837 in 1934. Of the 1935 total,
$10,323,148,102 was transmitted over leased wires and $1,805,714,820 over commercial wires. All other transfers comprised
the remaining $3,322,248,704.
Cash Department—The demand for paper currency during
1935 was greater than in the preceding year. Payments of paper
currency aggregated $1,905,402,000 as compared with $1,827,906,000 in 1934. Currency received amounted to $1,847,495,000
17
TWENTY-FIRST
ANNUAL
REPORT
as compared with $1,866,933,000 in 1934. Although the dollar
amount was smaller, approximately 8,000,000 more pieces were
received.
Federal Reserve note circulation of this bank increased
$97,410,350 from the 1935 low point of $762,094,520 on January
29 to the high point of the year of $859,504,870 on December 24.
Gold coin received amounted to $274,000 as compared with
$5,043,000 in 1934. Gold certificates received amounted to
$4,410,000 as compared with $16,717,000 during the preceding
year. There was considerable demand for silver and minor coin,
although total payments of $22,348,000 were approximately
$3,000,000 less than in 1934. This decrease, however, was more
than offset by a reduction in receipts. The entire reserve stock
of circulated coin in all denominations was exhausted, making
it necessary to secure $3,240,000 in new coin from the mint.
The number of paper currency shipments to country banks
was 34,736 as compared with 33,628 in 1934. The number of
coin shipments to country banks was 9,711 in 1935 and 9,547 a
year previous.
Collateral and Safekeeping Operations—The amount of securities and paper held by the bank as collateral for bills discounted in 1935 ranged from a maximum of $272,151,664 on
March 4, to a minimum of $2,926,480 on July 30. On December
31. the volume amounted to $3,175,105 as compared with
$214,256,293 at the close of 1934.
The safekeeping service rendered to member banks by this
bank in 1935 showed a heavy increase over the preceding year.
On December 31, there were 707 banks availing themselves of
this service, with an aggregate of $1,149,559,215 in securities
held, representing a gain of 6 per cent in number of banks and
of 78.5 per cent in the amount held over December 31, 1934.
Tabulated below are comparative data on safekeeping operations
in 1935 as compared with 1934:
Per Cent
1935*
change from 1934
Number of pieces received
314,607
+14.7
Number of pieces released
252,803
+24.9
Number of receipts issued
43,442
+22.2
Number of receipts released
34,442
+34.6
Amount received
$1,864,314,848
+44.2
Amount released
$1,348,642,998
+33.2
•Inclusive of activity onja limited scale for the Investment Department of the Federal Reserve
Bank of Chicago.
Internal Organization—At the regular annual election, Frank
D. Williams was re-elected a Class A director for the term expiring December 31, 1938, and Nicholas H. Noyes was re-elected
a Class B director for the term expiring December 31, 1938.
The term of James Simpson, a Class C director, expired
December 31, 1935.
18
F E D E R A L R E S E R V E B A N K OF
CHICAGO
The directors and other officers are shown on page 2.
The Executive Committee for 1936 will consist of the following: Chairman, George J. Schaller, Governor; Eugene M.
Stevens, Chairman of the Board and Federal Reserve Agent;
Messrs. James R. Leavell, Edward R. Estberg, Frank D.
Williams, Max W. Babb ; alternate, Nicholas H. Noyes.
The Committee on Admission for 1936 will consist of the
following: Eugene M. Stevens, Chairman of the Board and
Federal Reserve Agent; George J. Schaller, Governor; Edward
R. Estberg, Director; alternates, Clifford S. Young, Assistant
Federal Reserve Agent, Howard P. Preston, Deputy Governor,
and James R. Leavell, Director.
There was one appointment to the official staff during the
year 1935: Carl M. Saltnes, Manager, Check Department, April
1, 1935.
There were two resignations from the official staff during the
year 1935: Robert E. Coulter, Manager, Cash Custody Department. August 31, 1935; Louis G. Pavey, Manager, Collection
Department, March 31, 1935; and one death, Irving Fischer,
Manager, Check Department, died March 20, 1935.
There was one change of title in the official staff during the
year 1935: John J. Endres from Assistant Auditor to General
Auditor, January 11, 1935.
The following is a comparison of the total number of employes, exclusive of officials at the Chicago office:
December 31, 1934
1,294
December 31, 1935
.1,205
Decrease
89
In addition to the above, there Avere 5 temporary employes
on December 31, 1934, and 3 on December 31, 1935.
John Ballantyne was re-appointed a Director of the Detroit
Branch by the Federal Reserve Bank of Chicago for a term of
three years, beginning January 1, 1936. James E. Davidson,
President, Peoples Commercial and Savings Bank, Bay City,
Michigan, was appointed a Director of the Detroit Branch to
fill the unexpired term of George B. Morley who died December
20, 1935, which term expires December 31, 1936.
Ralph H. Buss was re-appointed Managing Director of the
Detroit Branch.
There was one resignation from the official staff of the Detroit
Branch during the year 1935: William A. Eubank, Assistant
Auditor, resigned December 31, 1935.
The following is a comparison of the total number of employes, exclusive of officials, at the Detroit Branch:
December 31, 1934
278
December 31, 1935
..250
Decrease
28
19
TWENTY-FIRST
ANNUAL
REPORT
Earnings and Expenses
EARNINGS
1935
Discounted bills
Purchased bills
Industrial advances
United States Government securities
Commitments to make industrial advances .
Deficient reserve penalties
Miscellaneous
Total earnings.
1934
1933
1,879
4,240
99,107
5,837,040
8,501
824
226,024
48,227 $
618,806
17,069
234,060
9,422
7,843,286
5,667',50i
2
717
20,554
233,648
223,633
6,177,615
8,152,371 $ 6,764,554
327,816
1,326,400
378,277
475,400
607
354,298
1,440,274
463,886
170,660
263
370
924
9,212
976
32,104
323,355
1,437,279
489,475
164,711
4,117
34,256
27,317
135,822
44,543
19,428
101,295
14,107
51,191
39,673
96,109
48,568
15,152
1,079
47,488
71,535
29,709
34,519
323,666
64,448
89,104
CURRENT EXPENSES
Salaries:
Officers
Clerical employes
Other employes
Contributions—Retirement System
Governors' conferences
Federal Reserve agents' conferences
Federal Advisory Council
Directors' meetings
Industrial Advisory Committee
Traveling expenses*
Assessments for expenses of Board of Governors of the
Federal Reserve System
Legal fees
Insurance on currency and security shipments
Other insurance
Taxes on banking house
Light, heat, power, and water
Repairs and alterations, banking house
Rent.
Office and other supplies.
Printing and stationery..
Telephone
Telegraph
Postage
Expressage
Miscellaneous expenses...
Total, exclusive of cost of currency
Federal Reserve currency:
Original cost
Cost of redemption
Taxes on Federal Reserve bank note circulation.
Total current expenses.
P R O F I T A N D LOSS A C C O U N T
1,135
8,113
820
27,853
161,587
502
28,612
20,800
154,354
40,107
14,398
15,338
27,539
38,316
15,106
24,610
276,222
60,439
66,564
34,837
43,960
18,872
25,000
264,568
54,029
252
1,281
13,098
37,070
$ 3,490,915 $ 3,427,125 $ 3,329,804
184,192
22,433
72,310
23,949
28,454
397,865
30,185
96,155
8 3,697,540 $ 3,551,838
3,854,009
1935
1934
1933
$ 6,177,615 $ 8,152,371 $ 6,764,554
3,854,009
3,697,540
3,551,838
Earnings
Current expenses.
$ 2,480,075 $ 4,600,533 $ 2,910,545
Current net earnings.
Additions to current net earnings:
Profit on United States Government securities sold.
All other
Total additions.
Deductions from current net earnings:
Bank premises—depreciation
Furniture and equipment
Reserve for losses
Reserve for self-insurance
Assessment for building for Board of Governors.
Allother
901,875 8 1,498,266
113,724
49,429
140,466
232,779
951,304 8 1,611,990
373,245
140,624 $ 2,434,800
16,506
26,516
1,352,519
902,868
1,000,000
116,194
1,473,957
4,207
233,940
24,545
717,260
500,000
17,552
$ 2,660,159 8 4,808,032 S 1,493,297
Total deductions
Net deductions from current net earnings.
$ 1,708,855 $ 3,196,042 $ 1,120,052
Net earnings
771,220 $ 1,404,491 $ 1,790,493
Dividends paid
Transferred to surplus ((sec. 7)
Withdrawn from surplus (sec. 13b)
Paid to United States Treasurer (sec. 13b).
753,583
761,334
669,479
26,322
858,127
932,366
' 17,637
•Other than those connected with governors' and agents' conferences and meetings of directors,
the Federal Advisory Council, and the Industrial Advisory Committee.
20
FEDERAL RESERVE BANK OF CHICAGO
Earnings and Expenses—Continued
SURPLUS ACCOUNT (SEC. 7)
1934
1935
1933
Surplus, beginning of year
S 21,350,361 $ 40,429,399 $ 39,497,033
Additions to surplus:
Transferred from net earnings
669,479
932,366
Charges to surplus:
Purchase of Federal Deposit Insurance Corporation Stock...
19,748,517
$ 21,350,361 $ 21,350,361 $ 40,429,399
Surplus, end of year
SURPLUS ACCOUNT (SEC. 13b)
1934
1935
Surplus, beginning of year
Additions t o surplus:
Advances b y U n i t e d S t a t e s T r e a s u r y
Charges t o surplus:
U n i t e d States T r e a s u r y portion of Industrial Loan Expense.
$
Surplus, end of year
$ 1,391,380 {
1933
706,713
684,667
733,035
26,322
706,713
Comparative Volume of Operations in Principal Departments
193S, 1984 and 1938
1935
N u m b e r of Pieces H a n d l e d
Bills discounted:
Applications
N o t e s discounted
Bills purchased in open m a r k e t a n d from other
F e d e r a l Reserve b a n k s for own account
Currency received and counted
Coin received a n d counted
Checks handled
Collection items handled:
U n i t e d States G o v e r n m e n t coupons p a i d t . . . .
Allotherft
United States securities—issues, redemptions, and
exchanges by Fiscal Agency departmentf
Transfers of funds
Envelopes received and dispatched
Amounts H a n d l e d
1934
72*
105*
1933
225*
543*
4,839*
27,853*
376,426,000
218,886,000
126,604,000
509
368,708,000
286,505,000
117,104,000
8,090
362,955,000
287,877,000
92,358,000
4,434,000
839,000
4,007,000
836,000
3,331,000
829,000
2,005,000
160,000
3,510,000
1935
1,359,000
173,000
4,140,000
1934
708,000
189,000
4,743,000
1933
435,932,000*
Bills discounted
I
13,780,000*
Bills purchased in open m a r k e t a n d from other
F e d e r a l Reserve b a n k s for own account
3,715,000
Currency received a n d counted
1,845,906,000
Coin received a n d counted
18,654,000
Checks handled
26,815,028,000
Collection i t e m s handled:
U n i t e d States Government coupons p a i d t
84,374,000
All otherff
2,130,531,000
U n i t e d States securities—issues, redemptions, a n d
3,878,939,000
exchanges b y Fiscal Agency d e p a r t m e n t t
Transfers of funds
15,451,112,000
J
15,307,000* $
7,560,000
1,878,222,000
26,670,000
22,744,114,000
137,062,000
2,495,284,000
136,750,000
16,928,240,000
80,985,000
1,531,441,000
66,969,000
996,521,000
3,931,535,000
12,519,173,000
3,560,499,000
13,194,453,000
*Includes industrial advances covered b y 27 applications and 40 notes, valued a t $2,026,974 in 1935;
and b y 19 applications a n d 20 notes, valued a t $924,400 in 1934; but excludes applications for industrial
advances which were not disbursed.
**Includes 1 application a n d 6 notes covering $150,000,000 rediscounted for other Federal Reserve
banks.
tincludes obligations of U n i t e d States Government agencies.
tflncludes collection i t e m s handled for United States Government agencies.
Government Security Transactions 1935, 1934, and 1933
(Inclusive of transactions with member banks and with other Federal Reserve banks)
(Amounts in Thousands of Dollars)
1935
Number
of T r a n s - Amount
actions
Certificates of Indebtedness, Treasury Notes, and U. S. Bonds:
'Market Purchases .
•Market Sales . .
#Bought with Agreement
#Sold under Agreement
Total
1934
Number
of Trans- Amount
actions
8,987
24,765
382,324
450,874
12,745
24,646
614,806
558,110
33,752
833,198
3*7.391
1,172,916
1933
Number
of T r a n s - Amount
actions
12,141
20,741
3
2
32,887
925,178
714,323
505
505
1,640,511
•These figures include special Certificates of Indebtedness to cover overdrafts amounting to none
in 1935, none in 1934, and $14,000,000 in 1933.
#Inclusive of Agreements purchased through other Federal Reserve banks.
21
TWENTY-FIRST
ANNUAL
REPORT
Comparative Statement of Condition
(In Thousands of Dollars)
Dec. 31
1933
Dec. 31
1935
Dec. 31
1934
Gold certificates on hand and due from United States Treasury
Redemption fund—Federal Reserve notes
Other cash
1,342,261
522
30,342
1,025,816
1,311
33,384
874,129*
6,841
33,316
Total reserves
Redemption fund—Federal Reserve bank notes
1,373,125
1,060,511
914,286
1,879
ASSETS
Bills discounted:
Secured b y United States Government obligations, direct
and /or fully guaranteed
Other bills discounted
Total bills discounted
Bills bought in open market
Industrial advances
United States Government securities:
Bonds
Treasury notes
Certificates and bills
Total United States Government securities
Total bills and securities
Due from foreign banks
Federal Reserve notes of other banks.
Uncollected items
Bank premises
All other assets
911
3,142
41
577
1,853
2
707
4,053
14,091
25,623
242,064
88,002
62,144
273,102
93,097
76,950
177,161
183,232
355,689
428,343
437,343
358,160
80
4,978
80,345
4,826
405
429,973
105
4,776
58,140
4,955
768
455,487
455
4,238
54,510
7,375
1,549
1,821,919
1,559,228
1,439,779
LIABILITIES
Federal Reserve notes in actual circulation..
Federal Reserve bank note circulation—net.
851,080
788,933
784,759
28,737
Deposits:
Member bank—reserve account
United States Treasurer—general account.
Foreign bank
Other deposits
790,266
52,388
3,376
2,340
633,316
32,551
2,417
2,685
494,813
76
541
18,243
848,370
670,969
513,673
79,603
12,048
21,350
1,391
7,576
501
58,879
12,723
21,350
707
5,325
342
55,689
12,790
40,429
1,821,919
1,559,228
1,439,779
72. (i
70.4
Total assets.
Total deposits.
Deferred availability items
Capital paid in
Surplus (sec. 7)
Surplus (sec. 13b)
Reserve for contingencies. . .
All other liabilities
Total liabilities.
Ratio of total reserves t o deposit and Federal Reserve note
liabilities combined (per cent)
Contingent liability on bills purchased for foreign correspondents
Commitments to make industrial advances
2,969
733
495
156
'Inclusive of gold.
Member Banks—Seventh Federal Reserve District
December 31, 1935
National
Illinois
Indiana
Iowa
Michigan
Wisconsin
192
85
121
56
71
Total
525
December 31, 1934
December 31, 1933
State
Total
State
Total
National
State
Total
50
8
26
84*
13*
242
93
147
140
84
187
85
127
57
71
50
6
25
72
11
237
91
152
129
82
204
91
139
65
77
48
6
24
82
9
252
97
163
147
86
706
527
164
691
576
169
745
181
National
'Inclusive of one bank admitted to membership on December 31, 1935 and licensed as of January
2, 1936.
22
MOVEMENT
OF RESOURCES
FEDERAL RESERVE BANK OF CHICAGO 1925 TO 1935 INCLUSIVE
M I L L I O N S OF D0LLAR5
M I L L I O N S OF DOLLARS
1500
kA
A/
1400
1300
1200
AA
1100
1
1400
1300
1200
1100
1000
1000
900
900
y
BOO
100
TOTA L RESER\
600
500
T V
/
/
500
U.5 SECURITI ES
\
•
300
j
200
^TOTAL BILL5 ON HAND
W \
700
600
A
400
600
A. 1
400
/
500
200
100
100
o
1925
11111111111
II11111111 1
M i 11111M i
1926
1927
1928
i rPFnvrn i l i p
1929
II
1930
iff! 1 1 1 11
11111
1931
i^W *l V
1932
1933
•
0
1934
1935
DATA AS OF THE LAST REPORTING DATE IN EACH MONTH
MOVEMENT
FEDERAL
OF D O L L A R S
MILLIONS
1500
RE9ERVE
BANK
OF
OF
LIABILITIES
CHICAGO
1 9 2 5 TO
1935
INCLUSIVE
MILLIONS
OF
DOLLARS
ibUU
1400
1400
150D
1300
1200
1200
1100
1100
1000
1000
900
k
800
\
700
600
500
v
300 ••«•••••« • . . • • • • ' • • •
200
100
/
TOTAL D EPOSITS
400
^
-
r
J
hi
M
*
700
600
J
500
400
300
I
'
200
FED ERAL RES ERVE NO'r E s ^ ^ /
/
900
800
100
0
0
1925
1926
1927
1928
1929
1930
DATA AS OF THE LAST REPORTING DATE IN EACH MONTH
23
1931
1932
1933
1934
1935
COMPARATIVE TREND OF TOTAL INCOHE, FARN INCOME AND SIGNIFICANT BUSINESS INDKIS
SEVENTH FEDERAL RESERVE
BASE
PER CENT
220
DISTRICT
19Z3-1925 AVERAGE = 100
19E3 TO 1955 INCLUSIVE
LARS
B I L L I O N S OF DOL
22
20
1
200
180
18
tSSHATEn
160
1
fl
DEPARTMEKTI
5T0RE t "
14O
j
12O
1
K
r
tm^ /) I\ A, L.
II
J
/'I
~H
. J\
f\
/
\ K\/« 1 *
A
1
V V—
Xj-jrv / ^ r V r ""
100
60
16
II ^s.
J
,_
J
1
P ^
10
a
6
4
2
O
60
40
2O
O
PER
P AYROLL!
—;— "E5TIMATED
FARM MCOME -DOLLARS
22O
200
ISO
1— 1——\ 1
1
1
ENT
;
TOTAL BUILDIN ;
i
CONTRACTS AWAR )ED|
140
•
: ':
• •
••
.
220
200
180
160
140
120
i: A
1 " !
f \ }Null
:•
!-*
!I
n
N :\
rill
PER CENT
i
k f
^n
t.
•\
•
ifl[ *.
1BO
1
^
•
120
100
60
60
]
\
V
2O
0
\ ^
:• \ •
\
\
CASTINGS
-SHIPNEN T 5 (TONS
40
1OO
f \y
*M \K
f fl. 1
f \
~f ^ ~
*
\F
1924
1925
1926
1927
1928
1929
1930
/
\ /
,
1923
ACCOUNTS —
1931
/vVA
...T^TTT
193Z
/tiro.
1933
^
Ai
7 V
80
BO
40
20
0
1934 1935
Data on income are in billions of dollars and all other series are index relatives to the 1923-1925 base.
GRAIN
AND LIVESTOCK
1931
CENTS
TO
PRICES
1935 INCLUSIVE
CENTS
130
PRICE PER BUSHEL
PRICE PER 100 POUNDS
J F M A M J J A S O
1931
ND J F M A M J J A 5 0 N D J F M A M J J A S Q N
1932
1933
24
D J F M A M J J A S O N
1934
• J F M A M J J A 5 0 N D
1935
@FedFRASER