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SIXTEENTH ANNUAL REPORT
of the

FEDERAL RESERVE BANK
OF KANSAS CITY
FOR THE YEAR ENDED DECEMBER 31, 1930

TENTH FEDERAL RESERVE DISTRICT




SIXTEENTH ANNUAL REPORT
of the

FEDERAL RESERVE BANK
OF KANSAS CITY
FOR THE YEAR ENDED DECEMBER 31, 1930

TENTH FEDERAL RESERVE DISTRICT




LETTER OF TRANSMITTAL
February 20, 1931
Sir:
I have the honor to transmit herewith the sixteenth annual report
of the Federal Reserve Bank of Kansas City, covering the year 1930.
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 1931

DIRECTORS

CLASS A
FRANK W. SPONABLE (193 0 , Paola, Kans.
E. E. MULLANEY (1932), Hill City, Kans.
C. C. PARKS (1933), Denver, Colo.

CLASS B

J. M. BERNARDIN (1931), Kansas City, Mo.
L. E. PHILLIPS (1932), Bartlesville, Okla.
WILLARD D. HOSFORD (1933), Omaha, Nebraska
CLASS C

WM. L. PETRIKIN (1931), Deputy Chairman, Denver, Colo.
M. L. MCCLURE (1932), Chairman, Kansas City, Mo.
WAYLAND W. MAGEE (1933), Bennington, Nebraska
MEMBER FEDERAL ADVISORY COUNCIL
WALTER S. MCLUCAS, Kansas City, Missouri
OFFICERS
M. L. MCCLURE, Chairman Board of Directors
and Federal Reserve Agent
WM. L. PETRIKIN, Deputy Chairman
A. M. MCADAMS, Assistant Federal Reserve
Agent and Secretary
S. A. WARDELL, Auditor
H. G. LEEDY, Counsel

W. I. BAILEY, Governor
C. A. WORTHINGTON, Deputy Governor
J. W. HELM, Deputy Governor and Cashier
JOHN PHILLIPS, JR., 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
A. H. MARBLE (1931), Cheyenne, Wyo.
WM. DIESING (1931), Omaha, Nebr.
W. E. HARDY (1932), Lincoln Nebr.
T. L. DAVIS (1932), Omaha, Nebr.
R. O. MARNELL (1933), Nebraska City, Nebr.
DANIEL M. HILDERRAND (1933), Seward, Nebraska
L. H. EARHART (1931), Managing Director
G. A. GREGORY, Cashier
WM. PHILLIPS, Assistant Cashier
O. P. CORDILL, Assistant Cashier

DENVER BRANCH
DIRECTORS AND OFFICERS
H. W.FARR (1931), Greeley, Colo.
MURDO MACKENZIE (1931), Denver, Colo.
R. H . DAVIS (1932), Denver, Colo.
HENRY SWAN (1932), Denver, Colo.
HAROLD KOUNTZE (1933), Denver, Colo.
MERRITT W. GANO (1933), Denver, Colo.
J . E. OLSON (1931), Managing Director
S. A. BROWN, Cashier
JOHN A. CRONAN, Assistant Cashier

OKLAHOMA CITY BRANCH
DIRECTORS AND OFFICERS
N E D HOLMAN (1931), Guthrie, Okla.
W. F. NICHOLS (1931), Tulsa, Okla.
AUSTIN MILLER (1932), Oklahoma City, Okla.
H. H. OCDEN (1932), Muskogee, Okla.
WM. M E E (1933), Oklahoma City, Okla.
J. B. DOOLIN (1933), Alva, Okla.
C. E. DANIEL (1931), Managing Director
R. O. WUNDERLICH, Cashier
R. L. MATHES, Assistant Cashier







SIXTEENTH ANNUAL REPORT
FEDERAL RESERVE BANK OF KANSAS CITY
ONDITIONS contributing to and resulting from the existing worldwide business depression have had a decidedly adverse effect on the
general economic situation in the Tenth Federal Reserve District.
In this section of the country, however, the influence of unsatisfactory
conditions has been exerted to a much greater extent through low prices
for agricultural products and other raw materials than through curtailment
of production, lessened business activity, and unemployment.

C

Harvested acreage of farm crops in the District was slightly larger in
1930 than in 1929, and estimates indicate that actual production was slightly
greater during the past year than in 1929. Production of wheat, oats, rye,
barley, dry beans, and sugar beets exceeded or compared favorably with
average yields, but drought damage, largely confined to Kansas, Missouri,
and Oklahoma, resulted in short production of corn, cotton, grain sorghums,
and hay. In contrast with the generally satisfactory record of production,
however, the farm value of 1930 crops is estimated at a figure 31.7 per cent
under the corresponding figure for the previous year.
Estimates by the United States Department of Agriculture show the
following comparisons of volume of the District's 1930 production of five
of the more important crops, with 1929 and the ten year average figures,
and of 1930 and 1929 farm value of all crops in each of the seven States
whose areas or parts thereof comprise the Tenth District:
VOLUME OF PRODUCTION
1930
296,197,000
404,168,000
167,547,000
11,678,000
847,000

All wheat, bushels
Corn, bushels
Oats, bushels
Tame hay, tons
Cotton, bales..-

Per cent
of 1929
110.7
90.9
110.3
94.1
72.5

FARM VALUE OF CROPS

Per cent
of ten year
average
111.6
87.6
101.3
77.9
78.2

1930
$121,453,000
203,840,000
164,104,000
257,020,000
19,539,000
132,248,000
28,571,000

1929
$ 135,950,000
305,187,000
253,176,000
343,827,000
38,741,000
243,678,000
36,301,000

Percentage
of decrease
10.7
33.2
35.2
25.3
49.6
45.7
21.3

$926,775,000

Colorado
Kansas
Missouri
Nebraska
New Mexico
OklahomaWyoming

$1,356,860,000

31.7

The live stock industry in the District has suffered from declining prices
during the year. Prices for beef cattle declined $2.00 to $3.00 a hundredweight, or 25 per cent to 30 per cent, and prices for sheep and lambs dropped
35 per cent or more from levels considered low at the beginning of the year,
Hog prices were maintained at fairly satisfactory levels until late in the
year, but declined rapidly until at the close of the year they were lower
than at any time since 1924. Summer pastures on farms and ranges were
reasonably good in most sections, and feed supplies have been adequate
for fall and winter needs. There was very little forced selling of live stock because of feed shortage during the summer drought, but forced selling from



5

SIXTEENTH

ANNUAL

REPORT

other drought stricken regions, and reduction of the usual demand from
those sections for stock cattle, lambs, and hogs, to be fattened for market,
were important factors in the price declines.
The total number of live stock sold through the six principal primary
markets of the District was about 4 per cent under the corresponding
figure for 1929, calves and sheep being the only classes showing increased
marketings over the previous year. Animals purchased for slaughter by
packers at the six markets were fewer in number for all classes except sheep,
in which the unusually large slaughter reflects a demand created by abnormally low prices for mutton.
The following comparison of number and value of livestock on farms
and ranges in the seven States whose areas or parts thereof comprise the
Tenth District is based on the annual live stock survey of the United
States Department of Agriculture:
All cattle and calves
Milk cows and heifersSheep and lambs
Swine (including pigs)
Horses and colts
Mules and colts

NUMBER
Jan. 1, 1930 Jan. 1, 1931
13,180,000
13,624,000
3,225,000
3,316,000
12,717,000
12,700,000
13,415,000
13,003,000
3,147,000
3,015,000
943,000
908,000

Change
3.4
2.8
—0.1
—3.1
—4.2
—3.7

VALUE
Jan. 1, 1930
Jan. 1, 1931
$659,696,000
$466,837,000
228,434,000
155,777,000
110,979,000
67,118,000
182,915,000
148,951,000
154,280,000
125,298,000
62,442,000
50,288,000

Change
—29.2
—31.8
—39.5
—18.6
—19.0
—19.5

Abnormally low prices for mineral products throughout the year resulted
in substantial curtailment of production of oil and oil products, and of coal,
zinc, lead, and silver. Production of cement was also less than in the
previous year, the reduction being due to slackening demand rather than
to unprofitable price levels.
Flour mills in the District produced 25,815,000 barrels of flour during
the year, a volume which has been exceeded in only two years, 1928 and
1929. Flour and mill feed prices declined during the year in sympathy
with grain prices.
Reports show a marked decline throughout the District in the volume of
residential construction, but the total value of all types of construction,
as reported by the F. W. Dodge Corporation, was 20.6 per cent greater
in 1930 than in 1929.
The dollar volume of both wholesale and retail trade was smaller throughout the District in 1930 than in 1929, the reduction in wholesale trade being 11.4 per cent, as indicated by combined totals for all reporting lines,
and in retail trade 4.8 per cent, as indicated by combined totals of reporting department stores. It seems worthy of comment that after giving
consideration to price reductions in many articles of merchandise, the
declines stated above, in the dollar volume of trade, indicate but little if
any decline in the volume of goods consumed. Stocks of both wholesale
and retail merchandising establishments were reduced during the year,
the average reduction being approximately 10 per cent.
The banking and credit situation in the District has been directly concerned with and affected by the low prices for farm crops and live stock.
Many banks suffered substantial declines in deposits during the year, and
total deposits, based on comparisons of net demand and time deposits
as reported by member banks, averaged about 3.6 per cent under the average for 1929. The level of total deposits changed little during the first
6



FEDERAL

RESERVE

BANK

OF

KANSAS

CITY

ten months of the year but dropped noticeably during November and
December. Investments of member banks increased about 5 per cent during the year, a slight decline in investments of country banks being more
than offset by larger holdings by reserve city banks. Loans and discounts
were reduced substantially, both in reserve city and country banks, and both
as to loans secured by stocks and bonds and other loans. The total reduction in loans and discounts was approximately 11 per cent. Generally
speaking, the amount of loanable funds in the banks of the District was
sufficient to care for all legitimate credit needs. The banks, however,
have pursued a cautious policy in their loaning operations.
Bank suspensions in the District were confined almost entirely to small
institutions, as was true of prior years, but a larger number of banks failed
than in any previous year except 1929, when failures recorded included
many banks in Nebraska which had practically failed in earlier years but
which were kept open until that vear by the Nebraska Guarantee Fund
Commission. The inability of banks with a small amount of deposits to
earn enough to meet their operating expenses and provide reserves for
losses which may occur was an important factor in a large proportion of
the suspensions, and it was also the controlling factor in influencing a
good many banks to voluntarily quit business, either through liquidation
or through consolidation with other banks.
The number of banks in this District increased rapidly in the years from
1915 to 1921, and many of the banks permitted to organize during that
time were located in communities whose resources would not support a
bank or whose patronage was necessary to the successful operation of
existing banks. The high point in the number of banks in this District was
reached in the middle of 1921, with 4,503 operating banks, but before the
end of that year the trend turned downward and each succeeding year
brought a reduction as the number of suspensions, liquidations, and consolidations exceeded the number of new organizations and reopenings of
suspended banks, until the number of active banks at the end of 1930 stood
at 2,977. The net reduction in the number of banks in the District during the past year was 205. The various changes which accounted for this
reduction are shown in the following table:
Member Banks
National
Number of active banks on December 31, 1929
Changes effected during the year 1930:
Suspension
Voluntary liquidation
Consolidation
Opening of new bank
Reopening of suspended bank
Conversion:
National bank to State bank
State bank to national bank
Withdrawal of State bank from membership
Admission of State bank to membership

State

872

21

—15
0

0
0
0
0
0

(2) —23

2
1

(j
19

Nonmember
Banks
(1) 2,289

(1)

3,182

— 122
— 17
(3) — 63

— 137
— 17
— 86

6

8
24

10
25

1

— 1

0
0
0
0

0

—183

—205

Number of active banks on December 31 ,1930
850
21
2,106
(1) Adjusted.
(2) 4 national banks consolidated with State banks, and 19 with other national bank:
(3) 21 State banks consolidated with national banks, and 42 with other State banks.

2,977

Net Change




0
0

—1
—22

— 19

1

SIXTEENTH

ANNUAL REPORT

OPERATIONS OF FEDERAL RESERVE BANK OF KANSAS CITY
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, the distribution of loans to member banks, and comparative tables of earning assets, income and disbursements, and volume of
operations.
COMPARATIVE STATEMENT OF CONDITION
Resources

Dec. 31, 1929

Dec 31, 1930

Cash reserves held by this bank against its deposits and
note circulation:
Gold held by the Federal Reserve Agent as part of the collateral
deposited by the bank when it obtains Federal reserve notes.
This gold is lodged with the Treasurer of the United States.

$ 70,000,000.00

$ 62.000,000.00

Gold redemption fund in the hands of the Treasurer of the
United States to be used to redeem such Federal reserve notes
as are presented to the Treasury for redemption.

3,240,805.69

1,449,261.50

Gold and gold certificates in vault

6,476,159.87

7,371,058.47

52,001,896.42

21.551,233 15

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

6,172,445.00

7,199,856.00

$137,891,306.98

$ 99,571,409 12

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

$

2,867,004.26

$

2,344,986.95

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:

$ 12,996,129.39

$

1,298,364.10

Total cash reserves

To member banks
To Federal Intermediate Credit Banks
Acceptances bought in the open market

333,150.44

0

8,195,165.54

United States Government bonds, notes, and certificates of
indebtedness
Total loans and investments

13,743,383.04

16,319,828.38

12,970,649.15

3,063,000.00

31,611,500.00

$ 40,907,273.75

$ 59,623,896.29

$

$

Miscellaneous Resources:
Bank premises, less reserves

3,971,583.04

3,803,394.68

40,636,234.86

33.472.735.56

Due from suspended banks

103,693.87

179,520.20

All other miscellaneous resources

84,879.26

82,150.13

Total miscellaneous resources

$ 44,796,391.03

$ 37,537,800.57

Total resources

$226,461,976.02

$199,078,092.93

Checks and other items in process of collection




FEDERAL

RESERVE

BANK

OF

KANSAS

CITY

COMPARATIVE STATEMENT OF CONDITION
Liabilities

Dec 31, 1930

Dec. 31, 1929

Currency in Circulation:
Federal reserve notes in actual circulation, payable on demand.
These notes are secured in full by gold and discounted and
purchased paper.

$ 89,434,280.00

$ 68,424,180.00

$ 89,434,280.00

$ 68,424,180.00

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

$ 86,407,876.06

$ 87,705,066.26

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

1,554,661.30

1,597,225.82

Total currency in circulation
Deposits:

326,446.52

226,663.51

$ 88,288,983.88

$ 89,528,955.59

$ 34,803,993.51

$ 27,711,522.03

Other deposits
Total deposits
Miscellaneous Liabilities:
Deferred items, composed mostly of uncollected checks on banks
in ail 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.

486,636.63

401,026.20

$ 35,290,630.14

$ 28,112,548.23

$

$

All other miscellaneous liabilities
Total miscellaneous liabilities
Capital and S u r p l u s :
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

4,286,050.00

4,310,750.00

9,162,032.00

8,701,659.11

Total capital and surplus

$ 13,448,082.00

$ 13,012,409.11

Total liabilities

$226,461,976.02

$199,078,092.93

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

Year

Bills
Discounted

Bills
Purchased

United States
Government
Securities

Daily
average
holdings

1926
1927
1928
1929
1930

$16,075,773
13,064,641
24,034,188
40,823,097
14,816,919

$14,306,927
10,713,383
12,994,944
8,688,491
7,880,069

$33,035,187
31,549,966
21,006,968
4,980,199
18,909,064

$182,007

Earnings

1926
1927
1928
1929
1930

643,032
500,769
1,034,216
1,985,508
624,945

507,513
375,715
521,901
447,700
204,411

1,213,542
1,106,482
778,027
198,424
530,153

8,077

1926
1927
1928
1929
1930

4.00
3.83
4.30
4.86
4.22

3.55
3.51
4.02
5.15
2.59

3.67
3.51
3.70
3.98
2.80

Average
rates of
earnings
(per cent)




Other
Earning
Assets
0

69,672
963,893
0

0

2,975
44,060
0
4.44
0

4.27
4.57
0

Total
$63,599,894
55,327,990
58,105,772
55,455,680
41,606,052
2,372,164
1,982,966
2,337,119
2,675,692
1,359,509
3.73
3.58
4.02
4.82
3.27

SIXTEENTH

ANNUAL

REPORT

INCOME AND DISBURSEMENTS
1929

1930

$1,985,507.94
447,700.60
198,424.18
22,361.27
249,245.24
73,336.56

$ 624,944.93
204,411.23
530,153.40
11,382.42
276,028.75
20,746.48

$2,976,575.79

$1,667,667.21

$

71,728.25
5,663.29

$

85,439.02
8,892.76

$

77,391.54

$

94,331.78

Earnings:
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

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

$1,715,036.91

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

$1,698,289.63

115,795.85

86,319.61

168,188.36

Depreciation and replacement reserves on buildings, fixed
machinery and equipment

168,188.36

40,911.02

5,270.87

449.75

4,906.74

$2,040,381.89

$1,962,975 21

$1,013,585.44

$ *200,976.22

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

$ 256,549.25

$ 259,396.67

In addition to surplus—The bank is required 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.

75,703.62

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

681,332.57

0

Furniture and equipment purchased
AH other deductions
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
*

0

460,372.89

$1,013,585.44

Total net income
Deficit

$ *200,976 22

DISTRIBUTION OF LOANS
Number of
banks
served

Number of
offerings
accepted

Average amount of
loans outstanding
during 1929

Average amount of
loans outstanding
during 1930

$ 3,543,379.13
6,849,376.27
11,458,320.19
11,191,393.23
192,373.49
7,100,378.18
487,876.76

$ 1,999,937.43
3,471,623.84
1,424,041.49
3,645,066.52
151,968.85
3,649,178.65
475,102.49

Totals
4,860
$40,823,097.25
7,169
*420
*450
Within District No. 10.
Includes 2 Federal Intermediate Credit Banks and 1 nonmember bank.

$14,816,919.27

State

1929
Colorado
Kansas
*Missouri
Nebraska
*New Mexico
*Oklahoma
Wyoming

1930

1929

1930

64
109
22
103
7
101
14

68
121
25
102
4
115
15

1,153
1,521
1,114
2,036

1,559




74

705
365

1,117

91
927
96

1,151

120

10

FEDERAL

RESERVE

BANK

OF KANSAS

CITY

GROSS AND N E T EARNINGS, AND DISTRIBUTION OF NET EARNINGS
SINCE ORGANIZATION
Transferred

Period

Gross

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

$ 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

$ 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

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

$ 6,116,033
3,042,781
486,918
(1)
157,432
7,240
(3)
518,879
2,449
50,370
16,197
40,651
75,704
(3)
460,373

$45,907,568

$19,486,555

$3,845,796

$8,701,659

Totals
(1)
(2)
(3)

Dividends

Net

to

Surplus

Franchise Tax
Paid to United
States Government
$ 2,240,228
2,300,558
664,813
65.158
0

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

$6,939,100

Net reduction in surplus account after charging surplus and crediting franchise tax with $208,170.00
paid as an additional franchise tax for 1921.
Deficit in earnings before payment of dividends.
Deficit in earnings after payment of dividends, charged to surplus account.

VOLUME OF OPERATIONS IN PRINCIPAL DEPARTMENTS

Year

Number of
pieces

Notes discounted or
rediscounted for
member banks

1928
1929
1930

23,714
30,643
29,742

$ 1,359,337,423
1,673,244.950
290,628,489

Currency received
and counted

1928
1929
1930

59,698,468
66,691,598
66,563,635

279,128,200
315,847,389
314,560,708

Coin received
and counted

1928
1929
1930

72,308,170
67,038,107
66,617,533

13,165,119
12,966,024
12,286,876

Checks handled

1928
1929
1930

69,570,000
72,155,000
69,881,000

11,523,602,000
12,091,899,000
10,430,350,000

Collection items
handled

1928
1929
1930

323,695
326,828
316,593

300,200,071
298,309,928
257,938,231

United States Government
coupons paid

1928
1929
1930

1,481,296
1,152,151
1,064,176

18,115,606
19,919,320
17,132,331

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

1928
1929
1930

440,412
139,347
86,645

289,561,083
246,938,160
142,561,396

Transfers of funds

1928
1929
1930

139,879
149,439
134,275

6,501,914,845
6,974,730,654
7,486,269,834




11

Amount

SIXTEENTH

ANNUAL

REPORT

COMMENTS ON OPERATIONS

T

HE principal variations in the important items of resources and liabilities of the bank during 1930, as compared with 1929, consisted
of a reduction from $55,456,000 to $41,606,000 in the average total
of earning assets, an increase from $113,570,000 to $123,623,000 in average cash reserves, and decreases in the average amounts of Federal reserve
notes in circulation and member banks' reserve deposits, the first from
$74,304,000 to $72,950,000, and the latter from $90,643,000 to $87,741,000.
The large decline in average earning assets was due to a reduction of about
$26,000,000 in loans to member banks and small reductions in holdings of
bills purchased and other earning assets, partly offset by an increase of
nearly $14,000,000 in average holdings of United States Government
securities.
Reductions in both loans and acceptances during the first month of the
year reduced the total of earning assets from about $40,000,000 to below
$30,000,000. The next three months of the year brought only small changes
in totals, as further reductions in loans were offset by increased holdings
of bills. Purchases of Government securities in May and June increased
the total substantially, and a gradual increase in the total of loans and
acceptances during the last half of the year brought the total of earning
assets up to nearly $60,000,000 on December 31. The average amount of
member bank reserve deposits from month to month varied only slightly
until November and December, when substantial declines occurred, the
average for December, $85,408,000, being nearly $3,500,000 under the
average for July, the high month of the year. Cash reserves declined
steadily during the year from average amounts in excess of $140,000,000
in January and February to an average of about $104,000,000 in December.
This decline reflected the changes in earning assets and deposits referred
to above, and a substitution of other types of currency for Federal reserve
notes, as reflected in a reduction in Federal reserve notes outstanding from
a January average of $85,405,000 to a December average of $69,097,000,
while total demand for currency decreased by only $2,000,000.
Advances on member banks' bills payable or on rediscounts were made
during the year to more than 50 per cent of the member banks of the District, as against about 45 per cent during 1929. Loans totaling $15,042,000
were outstanding to 195 banks at the end of the year. On December 31,
1929, 194 banks were borrowing $29,649,000, and on the corresponding date in
1928, 156 banks were borrowing $31,143,000. The reduced volume of borrowing, as compared with the previous year, was due almost entirely to
reduction of loans to the larger banks located in the reserve cities of the
Dirtrict.
The average rate of earnings on total earning assets during the year was
3.27 per cent, as compared with 4.82 per cent in 1929. This reduction of
nearly one-third in the earning rate, coupled with a reduction of nearly
one-fourth in the volume of earning assets, is reflected in the difference
between net earnings of $1,013,586 in 1929 and a 1930 deficit in earnings
12




FEDERAL

RESERVE

BANK

OF

KANSAS

CITY

of $200,976. The total deficit in earnings for the past year was made up
of an operating loss of $32,787.86, plus the usual reserves for replacement
of bank buildings and' fixed machinery and equipment, amounting to
$168,188.36. The deficit, plus $259,396.67 paid during the year in dividends
to member banks, reduced the surplus account to $8,701,659.11, an amount
slightly in excess of the bank's subscribed capital stock.
The past year, the year 1924, and the year 1915, which was the first full
year of the bank's operation, are the only years in which earnings have
been less than current operating expenses, plus reserves and furniture and
equipment purchases. In 1920 the surplus account of the bank was built
up to 100 per cent of the subscribed capital stock, and in that year and each
succeeding year except 1924 and 1930 net earnings were sufficiently in
excess of dividend requirements to permit payment of a franchise tax to
the United States Government and additions to the bank's surplus account.
Franchise tax payments made by the bank since its organization aggregate $6,939,099.60.
The volume of work done by the bank and its branches at Omaha,
Denver, and Oklahoma City, as measured by transactions in those departments where volume is comparable to the number of pieces handled, was
only slightly less during the past year than in 1929, but there were substantial declines in the dollar values represented by certain transactions.
Notable declines in dollar volume were 82 per cent in face value of notes
discounted or rediscounted for member banks, 13 per cent in face value
of checks handled for collection, and 31 per cent in the amount of securities handled in safekeeping transactions. At the end of the year securities
aggregating $137,285,000 were held for safekeeping for 682 member banks,
a decline, as compared to the previous year, of $41,000,000 in the amount
of securites held, and of 23 in the number of member banks availing themselves of this service.
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 $2,998,900, or approximately 1 per cent of the amount of all paper offered, and consisted of 2,084
individual notes, or approximately 6}4 per cent of the total number of
notes handled.
The discount rate of A}4 per cent, for all classes of paper and all maturities, which was made effective in the District on December 20, 1929, was
maintained until February 15, 1930, at which time the rate was changed
to 4 per cent. A further reduction to a 3 ^ per cent rate was made on August
15, 1930, and that rate was maintained throughout the balance of the year.




13

SIXTEENTH

ANNUAL

REPORT

MOVEMENT OF MEMBERSHIP
The number of active member banks in the Tenth Federal Reserve District decreased from 893 on December 31, 1929, to 871 on December 31,
1930. The distribution of member banks by States, at the end of 1929
and 1930, and the various changes during 1930 which effected a net reduction of 22 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
x

Active
Member Banks
December 31, 1929

State

x

to

Natl.
Colorado
Kansas
*Missouri
Nebraska
*New Mexico
•Oklahoma
Wyoming

Gains

State

Total

120
246
39
157
9
276
25

3
6
4
3
1
1
3

Losses

123
252
43
160
10
277
28

Active
Member Banks
December 31, 1930

to

Member- Membership
ship
0
l

0
20
0
0
1

Natl.

State

Total

116
244
35
167
8
255
25

4
5
4
10
1
21
0

3
5
4
3
1
1
4

119
249
39

170

9
256
29

23
872
21
893
850
871
45
21
Totals
Within District No. 10
Gains and losses to membership were all national banks except as follows: 1 Kansas State member
bank withdrew from membership and 1 Wyoming State bank was admitted to membership.

Additions t o M e m b e r s h i p :
Organization of national bank
Conversion of nonmember bank to national
Admission of State bank
Resumption of national bank after suspension
Total additions
Losses t o M e m b e r s h i p :
Suspension and insolvency
Merger between national banks
Absorption of national bank by nonmember
Conversion of national bank to nonmember
Withdrawal of State bank
Total losses
Net decrease in membership
*Within District No. 10

Number of member banks, end of 1929
Number of member banks, end of 1930
^Number of nonmenber banks, end of 1929
Number of nonmember banks, end of 1930
^Adjusted




2
18

1

1

1

1

Total

Wyoming

•Oklahoma

•New Mexico

Nebraska

•Missouri

Kansas

Procedure effecting changes in membership
during 1930

Colorado

CHANGES IN MEMBERSHIP DURING 1930

2
19
1
1

0

2

0

20

0

1
2
1

3

2
2

4
4
2

1

4

5

4

10

1

21

0

45

4

3

4

-10

1

21

-1

22

123
119
153
145

252
249
817
764

43
39
262
234

160
170
664
600

10
9
15
13

277
256
320
296

28
29
58
54

1
1

14

0

5
10
1
5

23

15
19
4
6
1

893
871
2,289
2,106

FEDERAL

RESERVE

BANK

OF

KANSAS

CITY

PERSONNEL
ELECTION AND APPOINTMENT OF DIRECTORS

C. C. Parks, Vice President of the First National Bank, Denver, Colorado, was reelected Class A Director by member banks of Group 1, for the
term expiring December 31, 1933.
Willard D. Hosford, Vice President of the John Deere Plow Company,
Omaha, Nebraska, was elected on April 1, 1930, by member banks of Group
2, as Class B Director for the unexpired portion of the term ended December 31, 1930, to fill the vacancy brought about by the resignation of
Thomas C. Bryne, and was reelected Class B Director, by member banks
of Group 2, for the term expiring December 31, 1933.
Wayland W. Magee, farmer and stockman, Bennington, Nebraska, was
appointed by the Federal Reserve Board, on May 15, 1930, as Class C
Director for the unexpired portion of the term ended December 31, 1930,
to fill the vacancy made by the death of Edward M. Brass, and was reappointed by the Federal Reserve Board, as Class C Director, for the term
expiring December 31, 1933.
The following were appointed as directors of the Omaha, Denver, and
Oklahoma City Branches, to succeed directors whose terms expired December 31, 1930. These appointments were for terms expiring on December
31 of the years indicated.
Omaha Branch—L. H. Earhart, Managing Director of Omaha Branch,
1931; R. O. Marnell, Cashier of the Merchants National Bank, Nebraska
City, Nebraska, 1933; and Daniel M. Hildebrand, farmer and stockman,
Seward, Nebraska, 1933. Mr. Hildebrand was appointed on May 15,
1930, succeeding Wayland W. Magee, resigned, to serve the unexpired
portion of the term ended December 31, 1930.
Denver Branch—J. E. Olson, Managing Director of Denver Branch,
1931; Harold Kountze, President of the Colorado National Bank, Denver,
Colorado, 1933; and Merritt W. Gano, merchant, Denver, Colorado, 1933.
Oklahoma City Branch—C. E. Daniel, Managing Director of Oklahoma
City Branch, 1931; Wm. Mee, Oklahoma City, Oklahoma, of the firm of
Wm. Mee and Sons, Investments, 1933; and J. B. Doolin, Alva, Oklahoma,
engaged in the farm mortgage and investment business, 1933.

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 1931.



15

SIXTEENTH

ANNUAL

REPORT

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 Wm. L. Petrikin
as Deputy Chairman of the Board of Directors, and re-designated A. M.
McAdams as Assistant Federal Reserve Agent, all for the year 1931. All
other officers of the bank and branches were reappointed by the Board of
Directors for the year 1931.
At the close of the year the bank and branches had a total of 22 officers
and 577 other employees, as compared with 22 officers and 592 other employees at the close of 1929.




16