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FEDERAL RESERVE BANK OF CLEVELAND Twenty-fifth Annual Statement CLeveLand,Ohio, January 12, 1940 To the Nonmember Banks of the Fourth FederaL Reserve District: I am pleased to present a comparative statement of FederaL Reserve Bank of CLeveLand at the close of business December 30, 1939, and December 31, 1938, as made to the member banks of this district. This statement reflects the earnings and expenses for the year, and disposition of net profits. It is being sent to you because of my belief that aLLour banks are interested in the affairs of the FederaL reserve bank of this district. I am sure that the statement, and other included information, wiLL merit study by the directors and officers of your bank. Very truly yours, President. COMPARATIVE STATEMENT OF CONDITION ASSETS Dec. 31, 1938 Dec. 30, 1939 $ 457,000,000.00 $ 491,000,000.00 810,390.00 816,200.00 . 326,881,297.91 536,910,306.11 . 23,751,047.32 21,339,616.31 . 808,442,735.23 1,050,066,122.42 . 191,000.00 54,040.00 50,528.09 617,847.43 257,819,500.00 113,000.00 541,619.23 -0314,941.80 259,222,000.00 . 258,732,915.52 260,191,561.03 Federal Reserve notes of other banks . 2,136,500.00 97,537,751.59 5,547,260.11 6,527,538.81 Cash reserves held by this bank against deposits and note circula tion: Gold certificates (lodged with the Treasurer of the United States) for account of the Federal Reserve Agent as collateral deposited by this bank when it obtains Federal Reserve notes. . . . . . . . . .. Redemption fund in the hands of the Treasurer of the United States to be used to redeem such Federal Reserve notes of this bank as are presented to the Treasury for redemption . Gold certificates (lodged with the Treasurer of the United States) in the Interdistrict Settlement Fund for the purpose of settling transactions between Federal Reserve banks , Other cash Total cash reserves Bills and Securities: Bills discounted: Secured by United States Government securities, direct and guaran teed . Otherwise secured or unsecured . Bills bought in the open market . Industrial advances-working . capital loans United States Government securities Total bills and securities Miscellaneous Assets: Checks and other cash items in process of collection . Bank premises, less reserves . All other miscellaneous assets . 1,966,500.00 74,508,896.49 6,016,846.02 5,035,504.66 Total miscellaneous assets . 87,527,747.17 111,749,050.51 Total Assets . $1,154,703,397.92 $1,422,006,733.96 COMPARATIVE STATEMENT OF CONDITION Dec. 31, 1938 Dec. 30, 1939 $ 427,467,430.00 $ 463,123,130.00 477,880,351.72 680,193,790.00 . 116,295,676.59 113,236,335.65 . 25,577 ,440.74 45,971,903.99 . 619,753,469.05 839,402,029.64 . 75,046,512.26 86,695,504.40 . 133,518.52 126,454.24 . 75,180,030.78 86,821,958.64 13,546,000.00 13,829,700.00 14,322,789.59 14,322,789.59 1,007,416.00 1,007,126.09 LIABILITIES Federal Reserve notes in circulation: Federal Reserve notes in actual circulation, payable on demand. These notes are secured in full by discounted paper, United States Government securities, or gold certificates. . . . . . . . . . . .. Deposits: Reserve deposits maintained by member banks as legal reserves against the deposits of their customers . United States Government deposits carried at the Reserve bank for current requirements of the Treasury Other deposits Total deposits Miscellaneous Liabilities: 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 All other miscellaneous liabilities Total miscellaneous liabilities Capital and Surplus: Capital paid in, which is 50% of amount subscribed] and which represents 3% ofthe capital and surplus of member banks . Surplus: (Section 7)- That portion of accumulated net earnings which this bank is legally permitted to retain (Section 13b)-Net . amount paid by the Secretary of the Treas- ury to further the making of working capital loans .. . . . . ... 3,426,262.50 3,500,000.00 $1,154,703,397.92 $1,422,006,733.96 Reserves for contingencies. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Total Liabilities...................................... Commitments to make industrial advances. $ 2,233,628.22 $ 1,140,470.15 COMPARISON OF EARNINGS AND EXPENSES For the years 1938 and 1939 1939 1938 Current Earnings: $ Discounted bills. .. .. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .. 10,200.37 $ 4,067.70 216.27 Industrial advances . 240.08 38,489.46 Commitments to make industrial advances . 15,267.11 14,198.58 United States Government securities . 3,350,196.32 3,732,788.04 All other . 76,228.00 76,202.68 . 3,490,621.34 3,845,840.55 . 2,768,878.77 2,848,060.03 Less reimbursements for certain Fiscal Agency and other expenses 262,467.79 255,427.47 . 2,506,410.98 2,592,632.56 Assessments for expenses of Board of Governors . 159,503.41 150,737.44 Cost of Federal Reserve currency . 131,743.26 117,118.36 Total current expenses . 2,797,657.65 2,860,488.36 . 692,963.69 985,352.19 Profits on sales of United States Government securities . 816,488.17 432,876.02 All other . 22,459.41 24,926.42 . 838,947.58 457,802.44 Deductions from Current Net Earnings . 462,284.68 224,363.38 Net additions . 376,662.90 233,439.06 Net Earnings . $ Purchased bills . Total current earnings Total Operating Expenses (including depreciation 18,367.28 on bank premises) Net Operating Expenses Current Net Earnings Additions to Current Net Earnings: Total additions DISTRIBUTION 1,069,626.59 $ 1,218,791.25 OF NET EARNINGS $ Reserve for losses on industrial advances (Section 13b) . . . . . . . . . .. 20,000.00 $ -0- 227.04 -0- -0- 321,838.05 Paid United States Treasurer (Section 13b) . Reserve for depreciation on bank premises . Dividends paid . 799,145.05 823,215.70 Reserves for contingencies . 250,254.50 73,737.50 Total. $ " $===1~,0=6=9=,6=2=6.=5=9 1,218,791.25 FEDERAL RESERVE BANK OF CLEVELAND DIRECTORS AND OFFICERS-1940 DIRECTORS G. C. BRAINARD, Chairman R. E. KLAGES, Deputy Chairman Term Expires CLASS A H. B. McDOWELL, President, The McDowell National Bank of Sharon, Sharon, Pa F. F. BROOKS, President, First National Bank at Pittsburgh, Pittsburgh, Pa B. R. CONNER, President, The First National Bank of Ada, Ada, Ohio 1940 1941 1942 CLASS B R. P. WRIGHT, Secretary-Treasurer, Reed Manufacturing Co., Erie, Pa G. D. CRABBS, President, Philip Carey Manufacturing Co., Cincinnati, Ohio J. E. GALVIN, President, Ohio Steel Foundry Co., Lima, Ohio 1940 1941 1942 CLASS C G. C. BRAINARD, President, General Fireproofing Co., Youngstown, Ohio C. STONE, Leaf Tobacco Grower and Dealer, Lexington, Ky R. E. KLAGES, President, Columbus Auto Parts Co., Columbus, Ohio 1940 1941 1942 J. OFFICERS M. F. J. ZURLINDEN W. H. FLETCHER .. '" G. H. WAGNER W. F. TAYLOR R. B. HAYS J. FLEMING, President First Vice President Vice President Vice President Vice Pres. & Cashier Asst. Vice Pres. & Secy. C. W. ARNOLD E. A. CARTER A. G. FOSTER H. E. J. SMITH F. V. GRAYSON Assistant Vice Pres. Assistant Cashier Assistant Cashier Assistant Cashier Auditor MEMBER, FEDERAL ADVISORY COUNCIL B. G. HUNTINGTON, President, The Huntington National Bank of Columbus, Columbus, Ohio COUNSEL SQUIRE, INDUSTRIAL SANDERS & DEMPSEY ADVISORY COMMITTEE F. A. SMYTHE, (Chairman) President, Thew Shovel Co. Lorain, Ohio D. R. DAVIES, Chairman Acme Machinery Co. Cleveland, Ohio H. R. NEFF, President The Geo. S. Rider Co. Cleveland, Ohio D. C. SWANDER, President Columbian Vise and Mfg. Co. Cleveland, Ohio E. C. FOLSOM, President Ottawa River Paper Co. Toledo, Ohio FEDERAL RESERVE BANK OF CLEVELAND DIRECTORS AND OFFICERS-1940 (Continued) CINCINNATI BRANCH OF FEDERAL RESERVE BANK OF CLEVELAND DIRECTORS Term Expires F. A. BROWN (Chairman), Agriculturist, Chillicothe, Ohio Third Union Trust Company, Cincinnati, Ohio J. .T. ROWE, President, The Fifth B. J. LAZAR, Managing Director , W. H. COURTNEY, President, First National Bank and Trust Company of Lexington, Lexington, Ky S. B. SUTPHIN, President, I. V. Sutphin Co., Cincinnati, Ohio 1940 1940 1940 1941 1941 OFFICERS B. J. LAZAR H. N. OTT R. G. JOHNSON P. J. GEERS PITTSBURGH Managing Director Cashier Assistant Cashier Assistant Cashier BRANCH OF FEDERAL RESERVE BANK OF CLEVELAND DIRECTORS G. T. LADD (Chairman), President, United Engineering & Foundry Co., Pittsburgh, Pa S. W. HARPER, President, Wheeling Dollar Savings & Trust Co., Wheeling, W. Va 1940 1940 P. A. BROWN, Managing Director ····························· CLARANCE STANLEY, President, The Union Trust Company of Pittsburgh, Pittsburgh, Pa H. S. WHERRETT, .1940 1941 President, Pittsburgh Plate Glass Co., Pittsburgh, Pa 1941 OFFICERS P. A. BROWN Managing Director D. B. CLOUSER F. E. COBUN C. J. BOLTHOUSE MEMBER BANKS IN OPERATION ···· . Cashier Assistant Cashier Assistant Cashier IN FOURTH DISTRICT, DECEMBER 31, 1939 State Kentucky Ohio-Cincinnati Ohio-Cleveland Pennsylvania West Virginia ··········································· territory territory . . . . . National Total 7 17 83 25 52 92 152 200 3 8 59 109 235 225 11 135 504 639 FOURTH DISTRICT STATE BANKS ADMITTED TO MEMBERSHIP The Gnadenhutten Bank, Gnadenhutten, Ohio The Macedonia-Northfield Banking Company, Northfield, Ohio The City Trust and Savings Bank, Youngstown, Ohio The Central Bank Company, Lorain, Ohio The Ft. Recovery Banking Company, Fort Recovery, Ohio The Sylvania Savings Bank Company, Sylvania, Ohio The Antwerp Exchange Bank Company, Antwerp, Ohio The Waterville-State Savings Bank Company, Waterville, Ohio , The Citizens Bank of St. Bernard, Saint Bernard, Ohio , Bank of Elizabeth, Elizabeth, Pennsylvania , The Reading Bank, Reading, Ohio The Kipton Bank Company, Kipton, Ohio The Peoples Savings Bank Company, Mount Gilead, Ohio The Middle Point Banking Company, Middle Point, Ohio The Farmers & Merchants Bank Company, Sylvania, Ohio Iron & Glass Dollar Savings Bank of Birmingham, Pittsburgh, Pennsylvania Kentucky-Farmers Bank of Catlettsburg, Kentucky, Catlettsburg, Kentucky The State Savings Bank of Woodville, Woodville, Ohio The Farmers and Citizens Banking Company, Monroeville, Ohio , The Croton Bank Company, Croton, Ohio The State Savings Bank Company, Maumee, Ohio , The Citizens Banking Company, Sandusky, Ohio , The Vandalia State Bank, Vandalia, Ohio , ···················· , IN 1939 . . . . . . . . . . . . 3-9-39 6-6-39 7-18-39 8-7-39 8-8-39 8-10-39 8-15-39 8-22-39 8-26-39 9-2-39 9-9-39 9-13-39 9-27-39 10-5-39 10-3-39 10-11-39 10-14-39 10-23-39 10-27-39 11-1-39 11-17-39 11-17-39 11-17-39 SERVICES OF FEDERAL RESERVE BANK OF CLEVELAND AVAILABLE TO FOURTH DISTRICT MEMBER BANKS Facilities are provided for the discount of eligible paper owned by member banks having maturities not in excess of 90 days from date of discount; for advances not exceeding 90 days on member bank collateral notes secured by eligible paper or by direct obligations of the United States. Member banks may also obtain advances on their time or demand collateral notes having maturities of not more than four months which are secured to the satisfaction of the Federal reserve bank. All forms of United States currency and coin are received for credit, redemption, exchange, or replacement. This bank supplies all current denominations of currency and coin, subject to the rules of the bank and regulations of the Treasury Department. A nation-wide system for collecting cash items payable at par has been established by Federal reserve banks by means of which the proceeds of such items are available as reserve at the earliest possible time. Facilities are provided by this bank for the prompt collection of maturing notes, drafts, bills, and other noncash items payable within the continental United States. Facilities are provided for the transfer, by telegraph or mail, of collected funds on deposit at Federal reserve banks to the credit of any member or nonmember clearing bank. Member banks may issue special forms of drafts on their reserve accounts at this bank which will be received for immediate credit at par by any other Federal reserve bank or branch. This bank provides safekeeping for all investment securities owned by member banks, which service includes the cutting and presentation of maturing coupons, the presentation of maturing or called principal amounts of unpledged securities, and exchange of interim receipts or other obligations in temporary form for securities in permanent form. This service includes the acceptance of securities pledged by member banks to officials of States or political divisions thereof, to trust departments, or to Federal departments, agencies or officials. At the request of member banks, orders will be placed for the purchase or sale of securities in bearer form (except stocks) that have been issued and are outstanding. No charge will be made by this bank for its services in the purchase or sale of obli~ations of the United States or its agencies.