View original document

The full text on this page is automatically extracted from the file linked above and may contain errors and inconsistencies.

EIGHTEENTH ANNUAL REPORT

of the

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

TENTH FEDERAL RESERVE DISTRICT




EIGHTEENTH ANNUAL REPORT
of the

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

TENTH FEDERAL RESERVE DISTRICT




LETTER OF TRANSMITTAL
March 15, 1933.
Sir:
I have the honor to transmit herewith the eighteenth annual report
of the Federal Reserve Bank of Kansas City, covering the year 1932.
Respectfully yours,
M. L. McCLURE,
Chairman and Federal Reserve Agent.
Hon. Eugene Meyer
Governor, Federal Reserve Board,
Washington, D. C.




DIRECTORS AND OFFICERS
OF THE
FEDERAL RESERVE BANK OF KANSAS CITY
FOR 1933

DIRECTORS

CLASS A
C. C. PARKS (1933), Denver, Colo.
FRANK W. SPONABLE (1934), Paola, Kans.
E. E. MULLANEY (1935), Hill City, Kans.

CLASS B

WILLARD D. HOSFORD (1933), Omaha, Nebraska
J. M. BERNARDIN (1934), Kansas City, Mo.
L. E. PHILLIPS (1935), Bartlesville, Okla.
CLASS C

E. P. BROWN (1933), Davey, Nebraska
H. M. LANGWORTHY (1934), Deputy Chairman, Kansas City, Mo.
M. L. MCCLURE (1935), Chairman, Kansas City, Mo.
M E M B E R FEDERAL ADVISORY COUNCIL
*W. T. KEMPER, Kansas City. Missouri
OFFICERS
M. L. MCCLURE, Chairman Board of Directors
and Federal Reserve Agent
H. M. LANGWORTHY, Deputy Chairman
A. M. MCADAMS, Assistant Federal Reserve
Agent and Secretary
S. A. WARDELL, Auditor
H. G. LEEDY, Counsel

GEORGE H HAMILTON, Governor
C. A. WORTHINGTON, Deputy Governor
J. W. HELM, Deputy Governor and Cashier
JOHN PHILLIPS, J R . , Assistant Cashier
E. P. TYNER, Assistant Cashier
G. E. BARLEY, Assistant Cashier
M. W. E. PARK, Assistant Cashier
G. H. PIPKIN, Assistant Cashier
N. R. OBERWORTMANN, Assistant Cashier

OMAHA BRANCH
DIRECTORS AND OFFICERS
fW. DALE CLARK (1933), Omaha, Nebraska
DANIEL M. HILDEBRAND (1933), Seward, Nebraska
A. H. MARBLE (1934), Cheyenne, Wyo.
WM. DIESING (1934), Omaha, Nebr.
W. E. HARDY (1935), Lincoln, Nebr.
T. L. DAVIS (1935), Omaha, Nebr.
L. H. EARHART (1933), Managing Director
G. A. GREGORY, Cashier
W M . PHILLIPS, Assistant Cashier
O. P. CORDILL, Assistant Cashier

DENVER BRANCH
DIRECTORS AND OFFICERS
HAROLD KOUNTZE (1933), Denver, Colo.
MERRITT W. GANO (1933), Denver, Colo.
H . W. FARR (1934), Greeley, Colo.
MURDO MACKENZIE (1934), Denver, Colo.
R. H. DAVIS (1935), Denver, Colo.
HENRY SWAN (1935), Denver, Colo.
J . E. OLSON (1933), Managing Director
S. A. BROWN, Cashier
JOHN A. CRONAN, Assistant Cashier

OKLAHOMA CITY BRANCH
DIRECTORS AND OFFICERS
F. T. CHANDLER (1933), Chickasha, Okla.
J. B. DOOLIN (1933), Alva. Okla,
N E D HOLMAN (1934), Guthrie, Okla.
L E E CLINTON (1934), Tulsa, Okla.
AUSTIN MILLER (1935), Oklahoma City, Okla.
H. H. OGDEN (1935), Muskogee, Okla.
C. E. DANIEL (1933), Managing Director
R. O. WUNDERLICH, Cashier
R. L. MATHES, Assistant Cashier
* Appointed April 12, 1933, to succeed Walter S. McLucas, resigned,
t Appointed April 1 3, 1933, to succeed R. O. Marnell, deceased.







EIGHTEENTH ANNUAL REPORT
FEDERAL RESERVE BANK OF KANSAS CITY
The world-wide economic conditions which prevailed throughout
1930 and 1931 were continued and accentuated during the past year,
and the situation in the Tenth Federal Reserve District has, of course,
reflected national and world conditions. During the early part of the
depression its influence in this section of the country was exerted for the
most part through low prices for agricultural products and other raw
materials and there was relatively little curtailment of production, unemployment, or slackening of business activity. These other phases of
depression, however, have developed rapidly during the past year or
eighteen months, as continued low prices have drastically cut buying
power and forced curtailment of operations. Such favorable adjustments
as were made during 1932 were largely negative in character. The further
substantial decline in prices of farm and live stock products and the continued low prices for most other commodities should act as a curb on
further price recessions; wholesale and retail inventories and cold storage
holdings of meats and poultry products are at abnormally low levels;
replacements and improvements of plants and equipment have not kept
pace with essential requirements; reduced acreage and poor crop prospects promise a substantial cut in production of winter wheat and rye;
and adjustments have been made toward lower operating costs on farms
and in other industries.
Farming operations during 1932 were on about the same scale as in
prior years, although the acreage of field crops harvested in the District
was 4.8 per cent under the 1931 acreage and the value of production declined sharply for the third successive year. The most important changes
in crop production were in winter wheat, which dropped 54 per cent from
the record harvest of 1931, and in corn, which increased substantially
over 1931 and was greater than in any year since 1927. The reduction
in the wheat crop was due to drought and other unfavorable growing
conditions, following a reduction from the previous year of 13.2 percent
in the fall sown acreage. The United States Department of Agriculture
estimates a further reduction of 4.8 per cent in the acreage of winter wheat
sown in this District last fall, and states that this reduced acreage and the
abnormally poor condition of the crop at this time promise a 1933 winter
wheat harvest substantially smaller than any crop for many years. Feed
grains other than corn were produced in about normal volume, as was
true of cotton, tame and wild hay, forage crops, and white potatoes and
most other vegetables. The yields of sugar beets and fruits were substantially below average. All grain prices at the close of the year were
at the lowest levels of the present century, with wheat the lowest in the
history of the American grain trade. On December 28, No. 2 hard and
dark wheat at Kansas City was quoted at 36}4; No. 2 mixed corn, 2 0 £




5

EIGHTEENTH

ANNUAL

REPORT

No. 2 white oats, 17; No. 2 kafir, 41; No. 2 rye, 30>^; and No. 2 barley,
2 2 ^ cents per bushel. The 1931 closing prices were wheat, 50; corn, 36;
oats, 29; kafir, 61; rye, 40; and barley, 36 cents per bushel. In 1929 wheat
closed at $1.27; corn, 90; and oats, 46 cents per bushel.
The following table, showing four years' production of selected crops
in the seven States whose areas or parts thereof comprise the Tenth Federal Reserve District, is prepared from reports of the United States Department of Agriculture. The figures stated are in thousands of units of measure:
Winter wheat, bu
Spring wheat, bu
All wheat, bu
Corn, bu
Oats, bu
Barley, bu
Grain sorghums, bu
White potatoes, bu
Cotton, bales
Tame hay, tons
Wild hay, tons
Sugar beets, short tons
Dry beans, bags
Apples, bu
Peaches, bu
Pears, bu

1929
271,017
12,539
283,556
548,990
180,262
49,991
48,731
36,356
1,453
16,931
5,198
4,153
4,832
9,142
3,908
1,622

1930
310,440
10,531
320,971
488,040
187,036
45,091
25,006
44,157
1,205
10,702
4,021
5,094
3,775
4,042
987
648

1931
424,382
4,504
428,886
531,480
193,287
34,528
42,979
30,931
1,651
9,836
3,260
3,975
1,952
11,306
3,471
1,426

1932
196,278
6,340
202,618
676,625
174,410
39,702
39,231
35,391
1,441
10,878
4,248
3,184
1,016
5,561
1,676
643

The live stock industry of the District has suffered severely from
three successive years of declining prices, and operations of both raisers
and feeders of live stock have been generally unprofitable. The number
of animals handled through the public markets of the District has declined
substantially, reflecting an increase in direct movements from farm to
feed lot, gradual growth of sales direct to packers, and the unwillingness
of growers to offer animals for sale at present prices. The year's receipts
of cattle, calves, and sheep, at the six principal markets in the District,
were the lightest since 1914, 1918, and 1927, respectively. Swine receipts
were slightly larger than in 1931 but were smaller than in any other year
since 1927.
At various times during the year all species of live stock sold at the
lowest levels in twenty years or more, and end-of-year prices were, in
most instances, near the bottom. The December top at Kansas City
for beef steers was §6.75 per hundredweight, as compared to the year's
best price of $9.75. Top prices in recent years have ranged from $18
in 1927 and 1928 to $12 in 1931. Prices of stocker and feeder steers held
up better than other classes, with net losses varying from 50 cents to $1
per hundredweight. Hogs seldom sold above $4 per hundredweight
during the year and closed at $2.80, the lowest in fifty-three years. The
1931 top was $8 and the best closing price $4.30. The highest post-war
top was $15 in 1925. Sheep and lamb values were more in accord with
those of the preceding year than either pork or beef. Best lambs sold
up to $10 per hundredweight in March and down to $5.55 in October,
as against $5.45 the year before, and closed the year at $5.85. The 1929
top for lambs was $20.50, 1930 top $13.75, and the 1931 top $12 per hun-




FEDERAL

RESERVE

BANK

OF

KANSAS

CITY

dred pounds. Wool prices, the lowest in thirty-five years, ranged from
17 cents a pound for top grades early in the season to 5 cents for low grades
in the summer, with the yearly average in the neighborhood of 10 cents
a pound.
The confusion and uncertainty that existed in the petroleum industry
in 1931 was clarified somewhat in 1932. Proration restrictions and agreements continued to curtail production and Tenth District output for the
year totaled but 214,141,000 barrels, the smallest for any year since 1922
and equivalent to 80 per cent of the ten-year average. Mid-continent
crude oil prices were maintained at higher levels than prevailed in 1931.
Quotations which ranged from 61 to 85 cents per barrel, depending on
gravity grade, at the beginning of the year, advanced 15 cents per barrel
March 24, where they remained until December 15, when reductions
carrying closing prices to 45 to 77 cents per barrel were announced by
numerous purchasing companies. Field operations, as measured by the
number of completions and rigs up and wells drilling, although somewhat
more active than in the preceding year, were otherwise the lightest in
years. Year-end stocks of crude oil held in Oklahoma and Kansas were
the lightest since the forepart of 1927.
The District's production of coal for the year is estimated at eighteen
million tons, a decrease of 13.3 per cent as compared to 1931 and of 36
per cent as compared to the ten-year average. Cement production declined
39.3 per cent for the year. Output exceeded shipments, and stocks at the
close of the year were 7.5 per cent heavier than on December 31, 1931.
Shipments of zinc ore and lead ore from mines in Missouri, Kansas, and
Oklahoma were 22.1 and 11 per cent, respectively, less than in 1931, and
their combined value was the smallest recorded in over thirty-five years.
The dollar volume of department store sales, which makes no allowance for price changes, declined 22.3 per cent for the year. In 1931 sales
declined 13.3 per cent and in 1930 4.8 per cent, as compared to the preceding year. Dollar sales of five representative wholesale lines combined
declined 21.8 per cent as compared to declines of 21.1 per cent and 11.4
per cent one and two years ago. Stocks at both wholesale and retail were
reduced during the year, the five wholesale lines reporting a combined
reduction of 17.4 per cent and the reporting department stores a reduction
of 20.5 per cent.
Building activity declined to the lowest levels in many years. The
total value of building contracts awarded in the District, as reported by
the F. W. Dodge Corporation, declined 46.8 per cent, and of residential
contracts 62.7 per cent, as compared to 1931, and 66.7 and 84.9 per cent,
respectively, as compared to the five-year average.
Banking and credit conditions during the year reflected the long
continued low prices and the resultant drain on reserve funds of the depositors and the inability of many borrowers to meet their commitments.
In some communities and in individual banks withdrawal of deposits




7

EIGHTEENTH

ANNUAL

REPORT

has reached serious proportions. In many cases, however, the disinclination of solvent customers to extend their operations through the use of
borrowed money, and the unwillingness of banks to make other than
thoroughly liquid loans, have created an unusually high degree of bank
liquidity. The lack of demand for acceptable loans, the low interest
return on high grade investment securities, and the development of losses
in loan and security accounts combined to make the year an unsatisfactory
one for most banks, from the standpoint of earnings.
Reports of condition of all member banks in the District, as of December 31, 1932, show a decline in total deposits of about 6.5 per cent from
the same date in 1931, and a reduction in total loans and investments
over the same period of about 14.4 per cent. The reduction in total loans
was about 23.1 per cent, made up of a 26.3 per cent reduction in the item
"all other loans" (mostly agricultural and commercial loans), a reduction
of 16.5 per cent in loans on securities, and minor changes in the other
loan classifications. An increase of 4.4 per cent in United States Government securities and a reduction of 9.6 per cent in other bonds, stocks,
and securities combined for a net reduction of 3 per cent in total investments. The 6.5 per cent drop in deposits was considerably less severe
than the deposit loss in 1931, and occurred during the first half of the
year, the total on June 30 having been somewhat less than on December 31.
There was a net reduction of 243 banks during the year, bringing
the number of operating banks in the District down to 2,430 on December 31, a reduction of 46 per cent from the 4,503 operating banks at the
high point in 1921. There were 205 bank suspensions in the District
during 1932, of which 28 were national banks, 2 were State bank'members
of the Federal Reserve System, and 175 were nonmember State banks.
There were 24 banks, all nonmember State banks, reopened during the
year. The failures were confined for the most part to the smaller institutions, deposits averaging about $151,000 for each suspension.
OPERATIONS OF FEDERAL RESERVE BANK OF KANSAS CITY
Member bank reserve deposits declined further during the year,
averaging $67,135,000, as compared with averages of $80,156,000 in
1931 and $87,741,000 in 1930. The average figures by months ranged
from a high of $70,987,000 in January to a low of $65,257,000 in October.
Slight increases occurred in November and December, the average for
the latter month being $65,833,000.
Federal reserve notes of this bank in actual circulation increased
substantially, averaging $87,266,000 as against averages of $69,100,000
in 1931 and $72,950,000 in 1930. Notes in circulation averaged $82,233,000 in January, fluctuated narrowly to a June average of $81,821,000,
increased sharply to a July average of $91,105,000 and an August high
average of $95,027,000. Succeeding months showed reductions to an
average of $90,635,000 in November, followed by a less than usual seasonal increase to a December average of $91,822,000.
Credit extended during the year by the Federal Reserve Bank of
Kansas City was in the daily average amount of $70,261,000, as com-




F E D E R A L

RESERVE

BANK

OF

KANSAS

CITY

pared to $60,010,000 in 1931 and $41,606,000 in 1930. Two thirds of this
amount was represented by holdings of United States Government securities, which averaged $42,817,000 for the year. Average holdings of such
securities were about $20,000,000 in January and February, with gradual
increases thereafter to an average amount of $57,000,000 in August and
the succeeding months of the year. Bills discounted for member banks,
including a small volume of discounts of adjusted service certificates
for nonmember banks, minor direct loans, and advances to Federal Intermediate Credit Banks, averaged $24,780,000 for the year. Bills discounted
averaged $33,237,000 in January, increased to an average of $38,566,000
in February, and thereafter declined each month to an average of $12,818,000 in December. There was no demand for advances under the
provisions of Sections 10-(a) and 10-(b) of the Federal Reserve Act, and
very little demand for advances which could be made direct to individuals,
partnerships, and corporations, as authorized in the amendment to Section 13 of the Act, approved February 27, 1932. Such direct loans did
not exceed $60,000 at any time. Holdings of acceptances averaged
$2,563,000 for the year, the average amount of $9,379,000 for January
having been reduced sharply to about $2,000,000 in April and to less
than $1,000,000 during the last five months of the year. Federal Intermediate Credit Bank debentures were held during January and February,
in amounts averaging $626,000 and $359,000 respectively.
Demands from member banks for Federal reserve bank credit were
not heavy and this bank was in a position to care for such requests for
credit as were made of it by the Federal Intermediate Credit Banks
and to participate to a considerable extent in Federal Reserve System
purchases of bills and United States Government securities. An aggregate
amount of $346,617,000 was loaned at various times during the year
to 474 different banks. At the end of the year 253 banks and one corporation were borrowing $11,511,000. At the end of 1931, 245 banks
were borrowing $27,725,000.
The distribution of loans and the number of borrowing banks, by
States, are shown in the following table:
DISTRIBUTION OF LOANS
Number of
banks
served
State
Colorado
Kansas
^Missouri
Nebraska
*New Mexico
•Oklahoma
Wyoming
Totals

Number of
offerings
accepted

Average amount of loans outstanding
during

1931

1932

1931

1932

66
118
18
102
7
107
18

78
123
18
108
7
115
25

641
1,369
240
1,392
140
1,307
135

1,146
2,193
397
2,278
194
1,647
361

$ 1,624,494.92
2,858,205.23
1,389,423.28
5,348,560.82
240,706.04
4,216,275.73
645,277.98

$ 3,348,903.70
5,015,977.01
3,215,794.11
6,746,000.23
t
477,121.42
4,125,099.38
1,870,770.85

x 436

x 474

5,224

8,216

$16,322,944.00

$24,799,666.70

1931

* Within District No. 10
t Includes loans made direct to 1 private corporation.
x Includes 2 Federal Intermediate Credit Banks and 2 nonmember banks.




1932

EIGHTEENTH

ANNUAL

REPORT

Notes offered for discount by member banks which were not accepted
because of ineligibility, technical irregularities, insufficiency of collateral,
unsatisfactory credit showing, etc., amounted to $8,065,000, or about
2.3 per cent of the amount of all paper offered, and consisted of 4,487
notes, or approximately 7.5 per cent of the total number of notes handled.
The classification of eligible collateral and rediscounts supporting loans
outstanding at the end of the year was substantially as follows: Agricultural and live stock paper, 85 per cent; commercial and business paper,
11 per cent; and United States Government securities and Adjusted
Service Certificates, 4 per cent.
Total current earnings for the year were about $466,000 greater
than in 1931, reflecting substantially larger holdings of earning assets
and an increase in the average earning rate from 2.12 per cent in 1931
to 2.49 per cent in 1932, and current net earnings for the year were $408,753.55, as compared to an operating deficit of $109,198.08 for 1931. After
adjustment to account for miscellaneous additions to and deductions
from earnings, including a substantial profit on United States Government securities sold during the year, and reserves for replacement of
bank buildings and fixed machinery and equipment, and after payment
of the usual dividends to member banks, the sum of $160,280.32 remained
in profit and loss account. This amount was used to create a reserve for
self insurance of $100,000, and to add to the existing reserve for possible
losses. Surplus account was credited $138,274.26 at the end of the year,
being the return of the amount charged direct to surplus at the end of
1931, to permit the establishment of a reserve for depreciation in United
States Government securities. This year was the third successive year,
and the fourth year since 1919, in which this bank paid no franchise tax to
to the United States Government. Franchise tax payments made by
the bank since its organization aggregate $6,939,099.60.
There were substantial changes from the previous year in the volume
of work handled by certain of the departments of the bank and its branches
at Omaha, Denver, and Oklahoma City. The notable variations were
reductions in the number of checks handled and in the numbers of pieces
of currency and coin received and counted, and increases in the number
of notes discounted, the numbers of purchases and sales of United States
Government securities for other than own account, and in the number
of securities handled in connection with safekeeping transactions for
member banks. Securities aggregating $154,301,000 were held in safekeeping at the end of the year. These securities were held for account
of 732 member banks, or about 96 per cent of the total membership.
The bank and each of its branches opened new departments during the
year, to handle the work incident to acting as custodian and fiscal agent
for the Reconstruction Finance Corporation. This work was carried on,
to a large extent, by employees transferred from other departments in
which the reduction in the volume of work had resulted in a surplus of help.
The discount rate of 3 ^ per cent, for all classes of paper and all
maturities, which was established for this bank on October 23, 1931, was
maintained throughout the year 1932.




10

FEDERAL

RESERVE

BANK

OF

KANSAS

CITY

MOVEMENT OF MEMBERSHIP
The number of active member banks in the Tenth Federal Reserve
District decreased from 824 on December 31, 1931, to 785 on December
31, 1932. The distribution of member banks by States, at the end of
1931 and 1932, and the various changes during 1932 which effected a net
reduction of 39 in the number of member banks, are shown in the following tables. The number of nonmember banks in each State is shown
also, for purposes of comparison:
MEMBER BANKS — TENTH FEDERAL RESERVE DISTRICT
Active
Member Banks
December 31, 1931
State

Active
Member Banks
December 31, 1932

tGains
fLosses
to
to
Member- Membership
ship

Totals

Natl

State

Total

Natl

State

Total

105
232
33
158
8
240
25

3
5
5
3
1
1
5

108
237
38
161
9
241
30

1
0
0
4
0
0
0

7
13
1
6
0
16
1

98
219
32
156
8
224
25

4
5
5
3
1
1
4

102
224
37
159
9
225
29

801

Colorado
Kansas
•Missouri
Nebraska
*New Mexico
•Oklahoma
Wyoming

23

824

5

44

762

23

785

* Within District No. 10
t Gains and losses to membership were all national banks except as follows: 1 Colorado State bank and
2 Nebraska State banks were admitted to membership, 2 Nebraska State member banks suspended,
and 1 Wyoming State member bank was absorbed by a national bank.

Organization of national bank
Conversion of nonmember bank to national
Admission of State bank
Total additions

Losses to membership:

Suspension and insolvency
Merger between national banks
Absorption of State member by national bank
Absorption of national bank by nonmember
Conversion of national bank to nonmember
Voluntary liquidation

1
1

0

0

4

6
1

9

1

5
1

2

Total

Wyoming

•Oklahoma

•New Mexico

1
1
3

to — —

Additions to membership:

Nebraska

•Missouri

Kansas

Procedure effecting changes in membership
during 1932

Colorado

CHANGES IN MEMBERSHIP DURING 1932

0

0

5

9
2
2
2
1

1

0

1

30
6
1
3
2
2

7

1
13

1

6

0

16

1

44

Net change in membership
•Within District No. 10

—6

— 13

—1

—2

0

—16

—1

—39

Number
Number
Number
Number

108
102
128
105

237
224
694
619

38
37
203
173

161
159
494
452

9
9
12
11

241
225
269
242

30
29
49
43

824
785
1,849
1,645

Total losses

of member banks, end of 1931
of member banks, end of 1932
of nonmember banks, end of 1931
of nonmember banks, end of 1932




11

EIGHTEENTH

ANNUAL REPORT

Complete statistics of each Federal reserve bank are published in
the annual report of the Federal Reserve Board and detailed figures of
the operations of this bank are omitted from this report, except that on
the following pages are shown the statement of condition at the beginning and end of the year, and comparative tables of earning assets, income and disbursements, and volume of operations.
COMPARATIVE STATEMENT OF CONDITION
Resources

Dec. 31, 1931

Dec. 31, 1932

$ 66,680,000.00

$ 61,480,000.00

Cash reserves held by this bank against its deposits and
n o t e circulation:

Gold held by the Federal Reserve Agent as part of the collateral
deposited by the bank when it obtains Federal reserve notes.
This gold is lodged with the Treasurer of the United States or
held in the vaults of the Federal Reserve Bank
Gold redemption fund in the hands of the Treasurer of the United
States to be used to redeem such Federal reserve notes as are
presented to the Treasury for redemption

3,125,610.30

2,100,525.11

Gold and gold certificates in vault

12,227,954.50

9,601,152.00

Gold in the gold settlement fund lodged with the Treasurer of
the United States for the purpose of settling current transactions between Federal reserve districts

15,737,573.18

13,876,248.53

Legal tender notes, silver, and silver certificates in the vaults
of the bank (available as reserve only against deposits)

Non-reserve cash, consisting largely of national bank notes
and minor coin

7,665,279.00

6,762,029.00

$105,436,416.98

Total cash reserves

$ 93,819,954.64

$

2,653,496.81

$

3,224,359.89

$

4,568,283.00

$

464,176.50

Loans and Investments:

Loans:
On the security of obligations of the United States (including
adjusted service certificates)
On the security of or by the discount of commercial or agricultural paper or acceptances

11,047,299.32

23,157,552.67

Acceptances bought in the open market

11,666,125.72

855,195.39

United States Government securities

18,707,600.00

57,252,100.00

400,000.00

0

$ 58,499,561.39

$ 69,618,771.21

$

$

Federal Intermediate Credit Bank Debentures
Total loans and investments

Miscellaneous Resources:
Bank premises, less reserves

3,649,065.89
22,872,601.41

Checks and other items in process of collection

3,558,674.15
19,107,904.57

1,305,020.43

904,321.31

Total miscellaneous resources

$ 27,826,687.73

$ 23,570,900.03

Total resources

$194,416,162.91

$190,233,985.77

All other miscellaneous resources




12

FEDERAL

RESERVE

BANK

OF

KANSAS

CITY

COMPARATIVE STATEMENT OF CONDITION
Liabilities

Dec. 31, 1931

Dec. 31, 1932

Currency in Circulation:
Federal reserve notes in actual circulation, payable on demand.
These notes are secured in full by discounted and purchased
paper, United States Government securities, or gold. Gold
held as collateral and / o r as reserves must be not less than
forty per centum of Federal reserve notes in actual circulation.

$ 82,711,485.00

$ 90,490,215.00

$ 82,711,485.00

Total currency in circulation

$ 90,490,215.00

Deposits:
Reserve deposits maintained by member banks as legal reserves
against the deposits of their customers

$ 75,228,701.09

$ 68,490,304.39

United States Government deposits carried at the reserve bank
for current requirements of the Treasury

1,510,133.26

268,485.73

Other deposits

2,289,090.26

765,555.51

$ 79,027,924.61

$ 69,524,345.63

$ 19,674,173.87

$ 16,631,179.53

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, ranging
from 1 to 7 days

693,501.08

1,273,843.00

$ 20,367,674.95

$ 17,905,022.53

$

$

All other miscellaneous liabilities
Total miscellaneous liabilities
Capital and Surplus:
Capital paid in, equal to 3 per cent of the capital and surplus of
member banks
Surplus—that portion of accumulated net earnings which the
bank is legally permitted to retain

4,184,800.00

4,051,850.00

8,124,278.35

8,262,552.61

Total capital and surplus

$ 12,309,078.3 5

$ 12,314,402.61

Total liabilities

$194,416,162.91

$190,233,985.77

HOLDINGS OF EARNING ASSETS, EARNINGS THEREFROM, AND
ANNUAL RATES OF EARNINGS

Year

Bills
Discounted

Bills
Purchased

United States
Government
Securities

Daily
average
foldings

1928
1929
1930
1931
1932

$24,034,188
40,823,097
14,816,919
16,322,944
24,799,667

$12,994,944
8,688,491
7,880,069
12,608,768
2,562,927

$21,006,968
4,980,199
18,909,064
30,895,477
42,816,951

Earnings

1928
1929
1930
1931
1932

1,034,216
1,985,508
624,945
544,242
873,477

521,901
447,700
204,411
221,531
97,208

778,027
198,424
530,153
499,884
772,554

2,975
44,060

1928
1929
1930
1931
1932

4.30
4.86
4.22
3.33
3.52

4.02
5.15
2.59
1.76
3.79

3.70
3.98
2.80
1.62
1.80

4.27
4.57

Average
rates of
earnings
(per cent)




13

Other
Earning
Assets
$

Total

69,672
963,893
0

182,336
81,544

0

4,267
3,652
0

2.34
4.48

$58,105,772
55,455,680
41,606,052
60,009,525
70,261,089
2,337,119
2,675,692
1,359,509
1,269,924
1,746,891
4.02
4.82
3.27
2.12
2.49

EIGHTEENTH

ANNUAL

REPORT

INCOME AND DISBURSEMENTS
1931

1932

Earnings:
$ 544,242.16
221,530.40
499,884.08
6,947.58
261,649.00
20,830.56

$ 873,477.46
97,208.07
772,554.05
13,655.52
237,862 40
26,710.63

$1,555,083.78

$2,021,468.13

$

92,551.71
3,585,27

$

$

96,136.98

$ 103,475.90

For current bank operation, exclusive of cost of currency. These
figures include most of the expenses incurred as fiscal agent
of the United States

$1,614,412.71

$1,562,372.15

For Federal reserve currency, mainly the cost of printing newnotes to replace worn notes in circulation, and to maintain
supplies unissued and on hand

49,869.15

50,342.43

From loans and rediscounts
From acceptances owned
From United States Government obligations owned
From penalties for deficient reserves
Income from rented space
Other earnings
Total current earnings
Additions to Earnings:
Profit on United States Government securities sold
All other additions
Total additions

98,454.84
5,021.06

Deductions from Earnings:

Depreciation and replacement reserves Jon buildings, fixed machinery and equipment

'i

160,510.91

91,081.49

0

Reserve for self insurance

100,000.00

0

60,280.32

Furniture and equipment purchased

5,203.68

14,848.94

All other deductions

6,710.41

663.07

$1,836,706.86

$1,879,588.40

$* 185,486.10

$ 245,355.63

In dividends paid to member banks, at the rate of 6 per cent
on paid-in capital

$ 253,620.40

$ 245,355.63

In addition to surplus—The bank is authorized 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

0

0

In franchise tax—Any net income remaining after paying dividends and making additions to surplus (as above) is paid to
the United States Government as a franchise tax

0

0

Reserve for possible losses

Total deductions
Net income available for dividends, additions to surplus, and
payment to the United States Government
Distribution:

Charged to surplus—The deficit in earnings, plus the amount
paid out in dividends

439,106.50

0

$* 185,486.10

Total net income

$ 245,355.63

t

* Deficit.
t Surplus was also charged $138,274.26 to create a reserve for depreciation in United States Government
securities held. This amount was credited back to surplus account December 31, 1932.




14

FEDERAL

RESERVE

BANK

OF K A N S A S

CITY

GROSS AND NET EARNINGS, AND DISTRIBUTION OF NET EARNINGS
SINCE ORGANIZATION
Franchise Tax
Paid to United
States Government

Transferred
to

Period

Gross

Net

1914 to 1919
1920
1921
1922
1923
1924
1925
1926
1927
1928
1929
1930
1931
1932

$ 9,898,760
7,409,987
5,712,858
3,094,660
2,993,919
2,262,910
2,309,985
2,677,340
2,304,938
2,597,968
2,976,576
1,667,667
1,555,084
2,021,468

$ 7,085,727
5,540,681
3,056,096
783,036
347,711
(2)
253,182
282,921
756,469
414,726
659,760
1,013,586
(2)
200,976
(2)
185,486
245,355

$49,484,120

$19,546,424

Totals

Dividends
$

969,694
257,672
268,620
275,655
275,313
265,697
258,427
252,764
252,754
253,254
256,549
259,397
253,620
245,355

$ 4,344,771

Surplus

(1)
(3)

O)
(4)
(5)

$ 6,116,033
3,042,781
486,918
157,432
7,240
518,879
2,449
50,370
16,197
40,651
75,704
460,373
577,381
138,275
$ 8,262,553

$

0
2,240,228
2,300,558
664,813
65,158
0

22,045
453,335
145,775
365,855
681,333
0
0
0

$ 6,939,100

(1) Net reduction in surplus account after charging surplus and crediting franchise tax with $208,170.00
paid as an additional franchise tax for 1921.
(2) Deficit in earnings before payment of dividends.
(3) Deficit in earnings after payment of dividends, charged to surplus account.
(4) Deficit in earnings after payment of dividends, $439,106.50, and reserve for depreciation in United States
Government securities, $138,274.26, charged to surplus account.
(5) Credited to surplus from reserve for depreciation in United States Government securities.

VOLUME OF OPERATIONS IN PRINCIPAL DEPARTMENTS
Year

Number of
pieces

Amount

Notes discounted or
rediscounted

1930
1931
1932

29,742
40,624
54,776

Currency received
and counted

1930
1931
1932

66,563,635
58,563,679
53,935,549

314,560,708
260,343,100
238,200,565

Coin received
and counted

1930
1931
1932

66,617,533
75,763,380
63,342,579

12,286,876
11,643,681
10,669,202

Checks handled

1930
1931
1932

69,881,000
64,412,000
51,085,000

10,430,350,000
8,461,469,000
6,326,036 000

Collection items
handled

1930
1931
1932

316,593
353,272
353,827

257,938,231
239,015,625
192,431,000

United States Government
coupons paid

1930
1931
1932

1,064,176
980,610
956,372

17,132,331
15,156,663
15,649,926

United States securities—
Issues, redemptions, and
exchanges by Fiscal Agency
Department

1930
1931
1932

86,645
107,047
89,953

142,561,396
259,026,243
248,523,474

Transfers of funds

1930
1931
1932

134,275
123,408
109,122

7,486,269,834
5,376,060,431
3,580,168,722




15

$

290,628,489
266,449,895
346,617,137

EIGHTEENTH

ANNUAL

REPORT

PERSONNEL
ELECTION AND APPOINTMENT OF DIRECTORS
E. E. Mullaney, Hill City, Kansas, President of the First National
Bank, Collyer, Kansas, was reelected as Class A director by member
banks of Group 3, for the term expiring December 31, 1935.
L. E. Phillips, Bartlesville, Oklahoma, Chairman of the Executive
Committee of the Phillips Petroleum Company, was reelected as Class
B director by member banks of Group 3, for the term expiring December
31, 1935.
M. L. McClure, Kansas City, Missouri, was reappointed by the
Federal Reserve Board as Class C director for the term expiring December 31, 1935.
The following were appointed as directors of the Omaha, Denver,
and Oklahoma City Branches, to succeed directors whose terms expired
December 31, 1932. These appointments were for terms expiring on
December 31 of the years indicated:
Omaha Branch — L. H. Earhart, Managing Director of Omaha
Branch, 1933; T. L. Davis, Vice President, First National Bank, Omaha,
Nebraska, 1935; and W. E. Hardy, merchant, Lincoln, Nebraska, 1935.
Denver Branch — J. E. Olson, Managing Director of Denver Branch,
1933; Henry Swan, Vice President, United States National Bank, Denver,
Colorado, 1935; and R. H. Davis, President, Denver National Bank,
Denver, Colorado, 1935.
Oklahoma City Branch — C. E. Daniel, Managing Director of Oklahoma City Branch, 1933; H. H. Ogden, President, First National Bank
and Trust Company, Muskogee, Oklahoma, 1935; and Austin Miller,
manufacturer, Oklahoma City, Oklahoma, 1935. F. T. Chandler, Vice
President of the Oklahoma National Bank, Chickasha, Oklahoma, was
appointed to serve the unexpired portion of the term ending December
31, 1933, succeeding Wm. Mee, deceased.
MEMBER OF ADVISORY COUNCIL
Walter S. McLucas, Chairman of the Board of Directors of the Commerce Trust Company, Kansas City, Missouri, was appointed by the
Board of Directors to serve as member of the Federal Advisory Council
from the Tenth Federal Reserve District for the year 1933.
OFFICERS AND EMPLOYEES OF THE BANK AND BRANCHES
The Federal Reserve Board reappointed M. L. McClure as Federal
Reserve Agent and Chairman of the Board of Directors and H. M.
Langworthy as Deputy Chairman of the Board of Directors, and redesignated A. M. McAdams as Assistant Federal Reserve Agent, all for
the year 1933. All other officers of the bank and branches were reappointed by the Board of Directors for the year 1933.
At the close of the year the bank and branches had a total of 22
officers and 555 other employees, as compared with 22 officers and 548
other employees at the close of 1931.




16