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TWENTY-FIRST ANNUAL REPORT
of the

FEDERAL RESERVE BANK
of the

NINTH
F E D E R A L
RESERVE DISTRICT

Covering the Calendar Year




1935




Federal Reserve Bank of Minneapolis,
Minneapolis, Minnesota, April 9, 1936.
Board of Governors of the
Federal Reserve System
Washington, D. C.
Gentlemen:
I attach the twenty-first annual report of the Federal Reserve Agent of the Federal Reserve Bank of Minneapolis, relating to operations during the twelve months ending December
31, 1935.
Very truly yours,




W. B. GEERY,
Chairman of the Board.




REPORT
OF THE

FEDERAL RESERVE AGENT
AT MINNEAPOLIS

1935
A.

BUSINESS, AGRICULTURAL AND BANKING
CONDITIONS
Business

Business recovery in the district continued throughout
1935, and at the close of the year the general level of business
was half-way back to the level of 1929. Higher prices for live
stock and live-stock products, improvement in crops, and a continuation of government rental and benefit payments, together
with the increase in national business volume, were the principal factors in the business improvement in this district.
The rise in business volume was very uniform throughout
the district. All of the regional groups of cities reported bank
debits as the largest since 1930 or 1931. Total bank debits at
94 cities were $8,751,000,000 as compared with $7,685,000,000
in 1934; $6,887,000,000 in 1932, which was the lowest point of
the depression; and $13,697,000,000 in 1929. Country check
clearings in this district amounted to $1,285,000,000 in 1935 as
compared with $1,051,000,000 in 1934.
Retail trade in the district increased 7 per cent in 1935
over 1934, but the dollar volume was still about one-fifth below
the 1929 volume according to reports from five hundred and
eighteen stores in the district. Improvement during the past
year was about equally divided between city and country stores.
Subdividing the rural reports by regions, it appears that the
largest increases during the year occurred in eastern Montana,
central Minnesota, southern Minnesota, and northern Wisconsin and Michigan.
Other 1935 increases in northwestern business volume
over the volume in 1934 occurred in electric power consumption,
freight carloadings, building permits and contracts, linseed
product shipments, copper and iron ore output, grain marketings, country lumber sales, life insurance sales, and wholesale
trade. Decreases from the 1934 volume occurred in real estate
activity in Hennepin and Ramsey Counties, flour production
and shipments, butter production, and live-stock marketings.
Business failures, according to Dun and Bradstreet reports,
were only 252 in number as compared with 309 in 1934.
B.

Agriculture

Receipts from the sale of principal farm products and from
rental and benefit payments during 1935 in Minnesota, Mon


tana, North Dakota and South Dakota combined, as estimated
by the Bureau of Agricultural Economics of the United States
Department of Agriculture, totaled $575,000,000. This was an
increase of 16 per cent over the 1934 total of $495,000,000 and
was larger than in any year since 1931. Farmers' cash income
in these four states in 1935 was more than 80 per cent larger
than the 1932 income of $317,000,000, the low of the depression. Increases in receipts from the sale of live stock and livestock products accounted for most of the increase. Income
from these sources was $67,000,000 larger in 1935 than in 1934.
Income from the sale of crops was one-third larger in 1935 than
in the preceding year, but income from rental and benefit payments was only $64,000,000, one-third smaller than the $96,000,000 received in 1934.
Five of the eight important agricultural commodities for
which income estimates were prepared by the Federal Reserve
Bank produced larger amounts of income in 1935 than in 1934:
bread wheat, durum wheat, rye, flax, and dairy products. 1935
income from the sale of hogs, wool, and potatoes was estimated
to be a little less than in 1934.
Prices of all classes of live stock and of all important livestock products except eggs continued to increase during 1935.
As a result, hog prices were the highest since 1929, while prices
of both butcher and feeder cattle, calves, ewes, and lambs were
higher than in any year since 1930. Prices for butter, milk, and
hens were the highest in 1935 since 1931, 1930, and 1931 respectively. A smaller increase occurred in the price of wool.
The price of eggs during 1935 ranged higher than in 1934 but
the price at the end of the year was lower than at the end of
the preceding year.
On the other hand, prices for all of the principal crops
grown in the Ninth Federal Reserve District were lower in
1935 than in 1934 with the exception of bread wheat, which was
higher than in any year since 1929. Prices of oats, feed barley,
and rye were very much lower than in the preceding year and
were lower than for several years. Flax prices were a little
lower than in 1934, but with that exception were higher than
in any year since 1930.
The total harvested acreage of the eight principal crops
in this district in 1935 was much larger than the drouth reduced totals of 1933 and 1934. While wheat yields were
materially reduced by an unusually disastrous rust infestation
in 1935, wheat acreage was more than twice as large as in 1934.
Weather conditions were nearer normal than in the two preceding years although production was reduced by deficient
moisture in some sections. The 1935 harvested acreage was
about 8 per cent smaller than in 1932, the only year since 1930
when weather conditions and rainfall have been about normal.
Acreage reduction contracts were a factor in holding the total
to a lower figure in both 1934 and 1935. With the exception of
potatoes, 1935 production of the eight principal crops was from
two to seven times as large as in 1934. Potato acreage in 1935



6

was only slightly larger than in 1934 and the production less
than 50 per cent larger.
The rust plague again focused the attention of everyone
Interested in wheat raising on "rust resistant" varieties. Ceres,
a variety classed as rust resistant, proved somewhat of a disappointment, but a new variety, Thatcher, recently released by
the Minnesota experiment station, showed remarkable resistance, being of good milling quality and apparently quite rust
resistant. Thatcher wheat will probably assume a leading
place among wheat varieties in the Northwest. Hope wheat
again attracted attention because of its known high resistance
to rust, but Hope does not possess high enough milling quality
to merit widespread introduction into areas able to raise rust
resistant varieties with higher milling qualities.
The total number of live stock on farms increased a little
during 1935, owing to an increase in the number of swine of
700,000 head, an increase of nearly 25 per cent. Beginning the
year with the smallest hog inventories in the last fifty years,
through increases in the number of pigs saved per litter in both
the spring and fall pig crops and a 50 per cent decrease from
the preceding year in the number of hogs marketed, the total
number of hogs and pigs on farms at the end of the year was
increased to about 60 per cent of the preceding five-year average. The greatest increase occurred in South Dakota where
the reduction had been the most drastic in the preceding year.
The only other class of live stock to show an appreciable
gain in numbers during 1935 was beef cattle. The number of
stock sheep and lambs was almost identical with the number
a year earlier, but the number of sheep and lambs on feed in
the district was sharply reduced during the year, especially in
Minnesota. The number of producing dairy cows and heifers
continued to decline, and at twice as rapid a rate as that for
the entire United States, but there was a small increase in the
number of young heifers, indicating a probable increase in the
number of producing dairy cows for 1936.
The number of horses and the number of mules both continued to decrease during 1935 at a much more rapid rate than
the decrease for the entire United States, reflecting the unusually heavy shipment of farm horses to other farming sections during the year.
Stocks of grain on farms at the end of 1935 in this district
were larger than a year earlier, following the return to a more
nearly normal production. Grain stocks at terminal markets
were larger at the end of December, 1935, than a year earlier,
but wheat stocks at interior mills and elevators were smaller.
Cold storage holdings of farm products in the United States
declined during 1935 and at the end of the year were smaller
than the five-year average with the exception of cheese and
beef. Stocks of pork and lard declined more than 50 per cent
during the year. The decrease in pork holdings, together with
the smaller decrease in beef supplies during 1935 reduced the



total storage stocks of meat to about 70 per cent of the fiveyear average and to only one-half the available total at the end
of the preceding year. Butter stocks were only three-quarters
as large as stocks at the average year-end.
The farm real estate situation continued to improve in the
year ending March 15, 1935, except in drouth stricken sections.
The value per acre of farm land increased in Montana and Wisconsin and held the previous year's rise in Minnesota, but declined a little in North and South Dakota. The number of voluntary sales per 1000 farms increased and the number of involuntary sales decreased in each of the states in the district.
There was a decided decrease in the total "turnover" of farms
as shown by substantial declines in the number of farms changing ownership during the year.
Preliminary figures for the entire year of 1935 indicate
that the average sale price of farm real estate in five of the six
geographical divisions of Minnesota was higher than in 1934,
and that the number of sales in 1935 was much larger than in
1934 in the four most densely settled sections of the state.
C. Banking
During 1935 total deposits at all banks in this district continued to rise, gaining more than $100,000,000, and at the end
of the year exceeded $1,300,000,000 for the first time since
1931, according to records compiled from abstracts of state and
national bank called reports. In October, 1933, deposits at all
banks in the Ninth Federal Reserve District were at the low
of the depression and totaled less than one billion dollars, but
by the end of 1935 they had recovered nearly half the distance
to the sixteen-seventeen hundred million dollar level of the predepression years. Of the 312 million dollar increase since October, 1933, 187 million dollars was in country banks and 125
million dollars in city banks. Measured in percentages, the rate
of increase of deposits from October, 1933, to the end of 1934
was higher at city banks than at country banks, but in 1935
the rate of increase in deposits at country banks was higher
than at city banks.
Bank loans in this district during 1935 increased $57,000,000. 1935 was the first year since 1929 during which there was
an increase in the amount of loans held by banks in this district. Total loans on December 31, 1935, however, were less
than half as large as the volume held in 1929. During 1935
investments increased slightly and continued larger than loans,
as was the case in 1934. The last two years are the only years,
as shown by our records which begin with 1913, in which the
volume of investments held by banks in this district has exceeded the volume of loans.
While the increase in deposits at city banks was little
more than half as large as the increase at country banks, the
city bank increase was somewhat more spectacular in that it
raised the total deposit figure above the half billion dollar mark,



establishing a new all-time record at $503,000,000. More than
half of this deposit increase was used in expanding loans at the
city banks. The net increase in the amount of investments held
by city banks was smaller than the increase in loans, but this
small increase was also of special significance as the investment total on December 31, 1935, was an all-time high point.
Cash and balances due from banks increased to a new high on
June 30 but later declined and on December 31, 1935, were
practically the same as a year earlier. City banks remained
free of debt on call dates throughout 1935.
Deposits at country banks increased steadily throughout
the year as they have done in other recent years. On each successive call date since October, 1933, deposits at country banks
in this district have been higher than on any other call date
since the depression low. At the end of 1935, country bank
deposits were higher than on any other call date since 1931.
Country bank loans increased during 1935 by about $35,000,000. Country bank investment holdings fluctuated somewhat
during the year, but there was little net change. Cash and balances due from banks increased $25,000,000. Country bank
borrowings increased slightly during the first half of the year,
but were reduced during the last half to the smallest recorded
amount in our records, which start with 1913.
The number of banks in the Ninth District continued to
decrease during 1935, owing to consolidations, voluntary liquidations, and the inauguration of branch banking in South Dakota. The number of banks in operation December 31, 1935,
included 1,405 member and non-member banks compared with
1,407 one year earlier.
OPERATIONS OF THE MINNEAPOLIS FEDERAL
RESERVE BANK IN 1935
A. General Survey

The earning assets of this bank changed very little during
1935 except that holdings of United States government obligations increased about $10 million. Discounts for member banks
appeared on the bank's weekly statement for the first time in
1935 early in March, slowly increased to a total of $107,000 in
August, but by December 31 had declined to only $42,000. Industrial advances, inaugurated in 1934, slowly increased to a
high in September, but tapered off to a slightly lower level at
the end of 1935 than at the end of the preceding year. Federal
Reserve notes in circulation decreased rather steadily from
January through August and then gradually increased to the
year's high in December. Member bank reserve deposits
showed little change during the year and at the end of 1935
were slightly smaller than one year earlier. Total cash reserves
showed little change during the year, but were slightly lower
on December 31, 1935, than on the same date in the preceding
year.
This bank did not borrow from nor lend to any other
Federal Reserve Bank during 1935. The discount rate of this



bank which had remained unchanged at 3 per cent since March
16, 1934, was reduced to 2V2 per cent on January 8, 1935, and
was further reduced to 2 per cent on May 14, 1935. The 2 per
cent rate was continued in effect throughout the balance of
the year.
B. Earnings and Expenses
The gross earnings of this bank during 1935 were $1,456,000 as compared with $1,415,000 in 1934. Increases in earnings
from industrial advances more than offset the decrease in earnings from all other regular income accounts. Current net earnings, however, were only $163,000 compared with $210,000 in
1934. Miscellaneous additions to current net earnings in 1935
were $191,000 compared with $285,000 in the preceding year
and deductions from current net earnings totaled $423,000 as
compared with only $318,000 in 1934, resulting in a net loss
for 1935 of $69,000, before dividends, as compared with net
earnings before dividends of $176,000 in 1934. Dividends of
$185,000 were authorized at the rate of 6 per cent per annum
on all paid-in capital stock and paid to member banks.
Our "Surplus-Section 13b" increased to slightly more than
one million dollars as compared with three-quarters of a million
one year earlier. The unsegregated surplus account authorized
under section 7 of the Federal Reserve Act amounted to
$3,149,000 on December 31, 1935, after giving effect to all
charges and credits authorized by the Board of Governors.
C. Departmental Statistics of Volume (Including Both the
Head Office and the Helena Branch)
The Transit, or Check Collection Department, handled
23,866,000 items during 1935, amounting to $4,412,975,000 as
compared with 21,491,000 items during 1934, amounting to
$3,769,974,000. This department also handled 5,131,000 United
States Government checks during 1935, totaling $467,608,000
as compared with 6,483,000 items in 1934, totaling $599,704,000.
The Collection Department received 895,000 items (including coupons other than those on Government issues) during
1935, amounting to $341,237,000 as compared with 783,000
items during 1934, amounting to $283,833,000.
The Currency Department received and counted 44,948,000
bills, amounting to $217,411,000 in 1935 as compared with 42,573,000 bills, amounting to $196,397,000 in 1934. This department also received and counted 19,607,000 coins, amounting to
$3,800,000 in 1935 as compared with 14,602,000 coins, amounting to $3,447,000 in 1934.
The Vault Custody Department in its service of safekeeping of securities cut and forwarded to the owners of these
securities or turned over to other departments for collection or
credit 294,542 coupons during 1935 as compared with 280,520
coupons during 1934.
Transfers of funds made for member banks, including
those made for the 5 per cent Redemption Fund, numbered



10

33,400 totaling $1,588,898,000 during 1935 as compared with
42,300 totaling $1,640,380,000 during 1934.
During 1935 the Discount Department discounted 142
notes for 14 member banks amounting to $657,000 as compared
with 440 notes, for 47 member banks, amounting to $2,525,000
in 1934.
During 1935, 104 industrial advances were made, totaling
$1,051,000 as compared with 76 in 1934, totaling $1,887,000.
A.

FISCAL AGENCY FUNCTIONS—1935
Volume of Operations

Issues, redemptions or exchanges of various United States
Government securities, including Treasury Savings Certificates, Federal Intermediate Credit Bank debentures, Home
Owners' Loan Corporation, and Federal Land Bank bonds redeemed at this office, which were handled by the Fiscal Agency
operated by us for the United States Government, numbered
218,763 pieces and amounted to $316,102,506 as compared with
161,673 pieces amounting to $309,979,854 in 1934.
This Agency also handled during 1935, 5,131 purchases
and 11,292 resales of Government securities totaling $37,111,400. In addition, either delivery or payment or both, was
handled for banks and trust companies on 1,181 transactions
in Government securities amounting to $183,646,200. There
were also 11,688 transactions of Government guaranteed and
miscellaneous general market securities aggregating $55,960,413. Altogether, of these various transactions there were
29,292 totaling $310,494,563, as compared to 33,932 totaling
$302,489,941 in 1934.
Delivery of 92,810 pieces totaling $174,040,995 was made
on purchase and resale transactions for other than our own
account. In addition, on exchange transactions, such as denominational exchange, the exchange of coupon for registered
securities, etc., 20,633 pieces were delivered, amounting to
$128,129,900. The total number of pieces delivered was 113,443,
amounting to $302,170,895 in comparison with 130,527 totaling $290,061,595 during the preceding year.
Acting as Fiscal Agent of the Federal Farm Mortgage
Corporation during 1935, this Agency made 26,001 deliveries
of 128,263 Federal Farm Mortgage Corporation bonds amounting to $72,463,100 in accordance with instructions received
from the Federal Land Bank of St. Paul. During 1934, 263,498
of these bonds were delivered amounting to $131,067,700.
On subscriptions, exchanges and redemptions of bonds
handled by this Agency as Fiscal Agent for the Federal Farm
Mortgage Corporation during 1935 there were 34,314 pieces
amounting to $23,617,800. There were also 52,472 pieces totaling $46,982,525 for the Home Owners' Loan Corporation and
10,584 pieces aggregating $13,208,960 for the Federal Land



11

Banks. In addition, 370 Federal Intermediate Credit Bank debentures amounting to $2,565,000 were redeemed. Altogether,
on issues, exchanges and redemptions of other than the direct
United States Government securities, there were 226,003
pieces, contained in 35,059 applications, totaling $158,837,385.
The total number of individual securities received and delivered by the Fiscal Agency Department (including the Federal Farm Mortgage Division) during 1935 was 559,235 totaling $783,972,736 as compared with 624,605 totaling $769,911,149 in 1934.
The Fiscal Agency operated by us for the Government
redeemed 390,870 Government coupons amounting to $9,062,769 during the past year as compared to 556,958 coupons totaling $10,583,598 during 1934. They also redeemed 412,400 Federal Land Bank, Federal Farm Mortgage Corporation and
Home Owners' Loan Corporation coupons amounting to
$3,807,971 during 1935 as compared with 189,283 totaling
$1,776,824 in 1934.
B.

Liberty Loan Bonds

In March, holders of Third-called Fourth Liberty Loan
bonds (i. e., the Fourth Liberty Loan 4*4 per cent bonds bearing serial numbers the final digit of which was 5, 6, or 7) were
offered the opportunity of exchanging these bonds for 2% per
cent Treasury bonds of 1955-60. There were 2,644 applications
submitting $5,487,100 in coupon bonds and 2,899 applications
tendering $15,738,800 in registered bonds received and accepted by this Agency on such exchanges. Third-called Fourth Liberty bonds, numbering 34,829 and amounting to $13,642,900
were also redeemed.
On March 14, notice was given by the Secretary of the
Treasury that all outstanding First Liberty Loan bonds were
called for redemption on June 15, 1935, on which date interest
on such bonds would cease.
In April, the Treasury Department offered to holders of
the First Liberty Loan bonds the privilege of exchanging them
for an additional issue of the 2% per cent Treasury bonds of
1955-60 or an additional issue of the 1% per cent Treasury
notes of Series A-1940. On such exchanges, 2,818 applications
for $15,254,850 were received and accepted at this office. The
remainder of First Liberty bonds presented to this Agency,
17,752 in number and totaling $6,100,000, were redeemed.
On April 13, the Secretary of the Treasury gave notice
that all outstanding Fourth Liberty Loan 414 per cent bonds
of 1933-38 bearing serial numbers the final digit of which was
3 or 4 were called for redemption on October 15, 1935.
In September, the privilege of exchanging for 2% per cent
Treasury bonds of 1945-47 or l1/^ per cent Treasury notes of
Series C-1939 was offered to holders of Fourth-called Fourth
Liberty bonds. There were 11,199 of the latter bonds in coupon
form amounting to $13,863,400 and 4,543 in registered form



12

amounting to $2,748,550 contained in 4,067 applications received and accepted by this Agency on such exchanges. There
were also 15,399 coupon bonds amounting to $4,521,250 and
5,786 registered bonds totaling $1,978,300 of the Fourth-called
Fourth Liberty bonds redeemed by this office.
C. Other Services

With the exception of Treasury bills, there were fifteen
offerings of United States Government securities during 1935.
In such operations, 13,832 individual subscriptions contained in
13,598 different applications for $151,460,250 were received in
this district. The amount allotted on these subscriptions was
$89,062,400. During 1934, 10,267 individual subscriptions were
submitted in 9,045 different applications on fourteen similar
offerings and $132,089,250 was allotted.
During 1935, 147 tenders amounting to $18,621,000 were
received by this Agency on 74 offerings of Treasury bills. Of
these, 19 tenders on a discount basis ranging from .09 per cent
to .25 per cent and amounting to $8,251,000 were accepted.
During 1934, 321 tenders amounting to $20,489,000 were received and 48 tenders totaling $8,480,000 were accepted on the
59 offerings of Treasury bills made that year.
Five offerings of Treasury bonds, on which purchasers
submitted tenders, were announced during 1935. On these
offerings, 317 tenders amounting to $6,796,000 were received
and 37 tenders totaling $700,000 were accepted.
In March, public notice was given by the Secretary of the
Treasury that all outstanding 2 per cent Consols were called
for redemption on July 1, 1935. Notice was given at the same
time that the outstanding 2 per cent bonds of the Panama
Canal Loan were called for redemption on August 1, 1935.
There were 1,026 of these bonds amounting to $6,861,950 received by us and transmitted to the Treasury Department for
payment.
On May 1, the first request for payment of a United
States Savings Bond, Series A, previously sold through the
Postal Service, was received by this Agency. During 1935,
1,167 of these bonds, all in registered form and amounting to
$213,775, were received for redemption.
In May, the Home Owners' Loan Corporation 4 per cent
bonds of 1933-51 were called for redemption on July 1, 1935.
The Secretary of the Treasury, on behalf of the Home Owners'
Loan Corporation, offered to holders of these bonds the privilege of exchanging for a IV2 per cent Home Owners' Loan Corporation bond, Series F-1939, maturing June 1, 1939. There
were 295 of these exchanges aggregating $10,641,275 handled
by this Agency.
On behalf of the Federal Farm Mortgage Corporation, the
Secretary of the Treasury, on August 26, 1935, offered to the
public a IV2 per cent bond of that Corporation maturing Sep


13

tember 1,1939, and invited tenders therefor. Fourteen tenders
amounting to $1,716,000 and ranging from 99%2 to 100 were
received and accepted by this Agency.
In September, announcement was made by the Treasury
Department that owners of outstanding gold clause securities
of the United States would be permitted, under certain regulations, to receive immediate payment of the stated dollar
amount, plus interest to date of payment, or to prior maturity
or redemption date, whichever was the earlier, up to January 1,
1936, but the Secretary of the Treasury might extend this time
to July 1, 1936. No securities other than those called for payment were redeemed by this Agency under the terms of this
announcement prior to maturity date.
At the close of 1935 there were 241 banks and trust companies in this district which were designated as special depositaries of public moneys, thereby being qualified to make payment through their War Loan Deposit Accounts on a by credit
basis for subscriptions to new offerings of Government securities. At the close of the preceding year there were 321 banks
and trust companies so designated.

A.

ACTIVITIES OF THE FEDERAL RESERVE
AGENT'S OFFICE
Federal Reserve Notes

The new series of small-size Federal Reserve notes which
were first issued early in July, 1929, had largely replaced the
old-size notes by December 31, 1935, on which date the outstanding new series Federal Reserve notes amounted to $112,176,350, as compared with only $3,286,955 of the old series.
On December 31, 1935, the amount of old and new series
notes outstanding was $115,463,305, and the Federal Reserve
Agent held $60,255,000 of new and fit-for-use notes. Of this
total outstanding ($115,463,305) there was in actual circulation $110,563,000, the notes held by our paying tellers at the
Head Office and at the Helena Branch, together with the
amount of mutilated Federal Reserve notes in transit for redemption accounting for the remainder.
During 1935, the Federal Reserve Agent and his assistants
received $29,000,000 of new Federal Reserve notes from the
Comptroller of the Currency at Washington, and $6,560,000 of
fit-for-use notes from our receiving tellers. The issues of new
and fit-for-use notes totalled $40,862,000, as compared with
$48,400,000 during the preceding year and $81,665,000 in 1933.
The amount of Federal Reserve notes outstanding with this
Federal Reserve Bank increased from $111,439,080 to $115,463,305 between December 31, 1934, and December 31, 1935.
On December 31, 1935, the Federal Reserve Agent held
$10,000,000 of United States obligations as collateral security
for the Federal Reserve notes outstanding with the Federal
Reserve Bank, together with a $106,500,000 gold credit on de


14

posit with the Board of Governors of the Federal Reserve
System.
B. Membership
At the close of the year, there were 501 member banks
operating in this district as compared with 524 member banks
at the beginning of the year. There was a net decrease of 22
national banks and 1 state bank. The total membership (banks
in operation only) at the close of 1935 was divided into 433
national banks and 68 state banks. The banks which joined
the Federal Reserve System in 1935 are
Name of Bank
The Miners National Bank of Butte
First State Bank of Libby

Location
Butte, Montana
Libby, Montana

No. of Shares
Subscribed
66
23

The licensed banks in the district were distributed among
the states of the district as shown in the following table:
NUMBER OF LICENSED BANKS IN OPERATION IN THE
NINTH FEDERAL RESERVE DISTRICT
December 31,1934, and December 31, 1935
National
State Members Non-Members
Total
1934
1935
1934 1935
1934 1935
1934 1935
Michigan
29
29
7
7
19
22
55
58
Minnesota
211
205
17
15
458* 468
686
688
Montana
46
46
20
21
53
54
119
121
North Dakota.... 69
66
0
0
137
137
206
203
South Dakota.... 64
52
23
23
125
124
212
199
Wisconsin
36
35
2
2
91
99
129
136
Ninth Federal
Reserve Dist...455
433
69
68
883
904 1,407
1,405
*Excludes two trust companies which do not receive deposits and one
which was in liquidation at the end of the year, but which was included
in the State Banking Department abstract.

C. Examination of Banks
During 1935, 100 credit investigations, examinations, and
special visits were made by the Federal Reserve Agent's examiners in connection with state member banks and state banks
applying for membership. In the examination work this year,
the examiners and their assistants traveled in the aggregate
55,337 miles.
In addition to the information obtained from the Federal
Reserve examiners, 876 reports of examination of national
banks and 89 duplicate copies of reports of examination of
Montana national banks were received from the Chief National
Bank Examiner's Office; also 21 reports of examination of
state member banks were received from the various state banking departments. There were four calls for reports of condition of national banks and four calls for reports of condition
of state member banks during the year. Also two semi-annual
statements of earnings and dividends were required from all
member banks.



15

D.

Applications for Fiduciary Powers

National banks have continued to apply for trust powers
under Section 11-K of the Federal Reserve Act. Applications
received and approved by the Board of Governors of the Federal Reserve System during 1935 include the following:
Date
Name of Bank
Location Approved Capital Powers
The Miners National Bank of Butte, Butte, Mont...4-30-35 $100,000 Full

E.

Public Relations

Twenty bank officers and other representatives traveled
73,700 miles on public relations work during 1935. They
attended 7 bankers' conventions and 39 other meetings,
delivered 26 addresses, and made 787 visits at member banks
and 809 visits at non-member banks in the district. Practically every bank in the district was visited at least once during
the year.
A talking moving picture, showing the operations of this
Federal Reserve Bank, was produced during the summer of
1935, and public showings began in November. The attendance
at showings of the movie during 1935 was 22,268 people. Three
portable outfits and two theater-type films were used in making
these showings.
The Board of Directors of this bank visited the Helena
Branch in July and attended the annual convention of the Montana Bankers' Association at Glacier Park.
Twelve issues of the Monthly Review were printed and
distributed to a mailing list which, in December, consisted of
7,500 names.
CHANGES IN PERSONNEL
At the January meeting of the board of directors all officers of both the Head Office and the Helena Branch were reelected. The board also re-elected Mr. Sigurd Ueland and Mr.
Rolf Ueland as Counsel and Assistant Counsel for the Head
Office and Mr. T. B. Weir as Counsel for the Helena Branch.
Telegrams were presented announcing that the Federal Reserve Board had reappointed Mr. J. N. Peyton as Chairman
and Federal Reserve Agent for the year 1935, Messrs. F. M.
Bailey and E. W. Swanson as Assistant Federal Reserve
Agents, Mr. O. S. Powell as Alternate for the Federal Reserve
Agent and Assistant Federal Reserve Agents, and Mr. J. E.
O'Connell as director of the Helena Branch all for the year
1935. Mr. W. B. Geery was re-elected a member of the Board
of Trustees of the employees' retirement fund for a three-year
term beginning March 1,1935.
At the February meeting it was announced that Mr.
George W. McCormick had been reappointed by the Federal
Reserve Board as a Class C director for the three years ending



16

December 31, 1937. The board of directors voted to reappoint
all members of the Industrial Advisory Committee to serve for
one year beginning March 1, 1935, the committee consisting of
the following members: Messrs. Sheldon V. Wood, Chairman;
John M. Bush; C. O. Follett; H. C. Jewett, Sr.; and Albert
Miller.
At the August meeting the board of directors voted to
discontinue the post of Legal Counsel of the Helena Branch at
the close of 1935.
At the October meeting it was announced that Assistant
Cashier L. E. Rast had severed his connections with the bank
to enter another line of business.
In November Mr. H. R. Kibbee was re-elected a Class A
director for a three-year term ending December 31, 1938, and
Mr. J. E. O'Connell was re-elected a Class B director for the
same term.
At the December meeting of the board of directors Mr.
W. B. Geery was re-elected a member of the Federal Open
Market Committee to serve until March 1, 1936; Mr. M. O.
Grangaard was re-elected a member of the Executive Committee for the calendar year 1936; and Mr. Theodore Wold was
re-elected a member of the Federal Advisory Council for the
calendar year 1936. A telegram was read from the Board of
Governors of the Federal Reserve System reappointing Mr.
J. N. Peyton as Class C director of the bank for three years
beginning January 1, 1936, and as Chairman of the Board and
Federal Reserve Agent for the two months January 1, 1936, to
February 29, 1936, inclusive. A telegram was also read appointing Mr. O. S. Powell as Assistant Federal Reserve Agent
for the year 1936.
The complete staff of the Federal Reserve Bank of Minneapolis and its Helena Branch, including officers, employees
and building employees, but excluding temporary help, numbered 417 persons on December 31, 1935, as compared with 482
at the close of the previous year.




17

Comparative Statement of Condition of the Federal Reserve Bank
of Minneapolis
(In thousands of dollars)
RESOURCES
Dec. 31,
1935
Inter-District Settlement Fund
$ 30,244
Gold and Gold Certificates with Federal Reserve Agent.... 106,500
Redemption Fund, Federal Reserve Notes
540
Gold and Gold Certificates
0

Dec. 31,
1934
$ 29,798
110,000
330
0

Dec. 31,
1933
$ 19,518
76,254
1,612
550

Total Gold and Gold Certificate Reserves
Other Reserve Cash

$137,284
8,229

$140,128
11,341

$ 97,934
8,322

$145,513

$151,469

$106,256

0

0

593

42
61
1,590
75,568
0

0
81
1,753
65,589
0

1,872
3,189
0
65,669
80

Total Bills and Securities
$ 77,261
Due from Foreign Banks
3
Federal Reserve Notes of Other Federal Reserve Banks....
1,248
Uncollected Items
16,071
Bank Premises
1,531
All Other Resouices
427

$ 67,423
6
1,128
11,989
1,580
771

$ 70.810
9
658
10,641
1,657
1,474

$242,054

$234,366

$192,098

$ 2,999
3,148
1,003

$

3,134
3,420
751

$ 2,876
6,930
0

3,155
96,228
7,756

2,590
97,421
6,710

91
*62,013
4,191

$107,139
$110,563
0
15,513
1,689

$106,721
$106,687
0
12,136
1,517

$ 66,295
$ 92,896
7,718
11,128
4,255

$242,054

$234,366

$192,098

Total Cash Reserves
Redemption Fund, Federal Reserve Bank Notes
Bills and Securities:
Bills Discounted
Bills Purchased in Open Market
Industrial Advances
U. S. Government direct obligations
Other Securities

Total Resources
LIABILITIES
Capital paid in
Surplus—Section 7
Surplus—Section 13 " B "
Deposits:
Government
Member Banks* Reserve Account
All Other
Total Deposits
Federal Reserve Notes in Actual Circulation
Federal Reserve Bank Notes in Actual Circulation
Deferred Availability Items
AH Other Liabilities
Total Liabilities

Ratio of total reserves to deposit and Federal reserve
note liabilities combined (per cent)

66.8

71.0

66.7

Contingent liabilities on bills purchased for foreign correspondents

0

15

88

•Reserve deposits of licensed member banks and member banks in hands of conservator.




18

Earnings and Expenses of the Federal Reserve Bank of Minneapolis
1935

1934

1933

$

15,628
3,224
15,928
1,346,610
1,213
32,494

$ 221,740
37,596
0
1,179,975
8,017
50,341

$1,455,877
1,293,050

$1,415,097
1,205,330

$1,497,669
1,114,094

Current Net Earnings
$ 162,827
Additions to Current Net E a r n i n g s :
Withdrawn from Reserve for Losses
390
Profit on Sale of U. S. Government Direct Obligations
148,210
All Other
42,800

$ 209,767

$ 383,575

Total Additions
$ 191,400
Deductions from Current Net E a r n i n g s :
Bank Premises—Depreciation
48,917
Furniture and Equipment
15,095
Reserve for Probable Losses
0
Reserve for Prior Service Liability under Retirement System
332,168
All Other
27,226

$ 284,584

Total Deductions
Net Deductions from Current Net Earnings
Net Earnings
Dividends Paid
Payment to Secretary of Treasury, Section 13-B
Withdrawn from Surplus, Section 7
Withdrawn from Surplus, Section 13-B

Earnings F r o m :
Discounted Bills
Purchased Bills
Industrial Advances
U. S. Government Direct Obligations
Deficient Reserve Penalties
Miscellaneous

$

Total Current Earnings
Current Expenses

1,039
587
116,167
1,292,200
397
45,490

0

0

192,914
91,670

26,308
19,953
$

46,261

84,997
15,701
207,025

90,371
19,547
234,590

0
10,343

0
3,243

$ 423,406
232,006

$ 318,066
33,492

$ 347,751
301,490

$

$ 176,285
181,118
0
0
4,833

$

69,179f
185,448
16,854
271,481
0

DETAILS OF CURRENT EXPENSES
1935

82,085
171,569
0
89,484
0

1934

1933

119,679
421,027
139,682
119,202
618
0
1,617
11,301
3,315
27,022
34,118
11,879

$ 113,322
427,566
119,534
50,260
720
416
1,308
7,994
1,371
23,412
31,535
12,504

$ 105,369
367,666
119,742
0
806
194
1,299
9,533
0
31.307
18,473
14,455

20,507
82,079
6,977
19,994
7,302
12,490
106,726
9,871
7,775
18,232
14,086
40,980

23,311
83,699
11,758
20,321
7,812
13,736
115,608
7,327
10,112
22,601
20,215
38,725

32,340
68,319
1,940
18,795
9,786
17,063
109,670
11,773
11,200
18,993
17,017
37,956

Total exclusive of cost of currency
$1,236,479
Federal Reserve Currency (including shipping charges) :
Original cost
51,147
Cost of redemption
5,424
Tax on Federal Reserve Bank note circulation....
0

$1,167,167

$1,023,696

24,137
4,842
9,184

77,960
4,245
8,193

$1,293,050

$1,205,330

$1,114,094

REIMBURSABLE EXPENSES
$ 137,726

$ 151,477

$

44,850

70,284

20,790

$ 182,576

$ 221,761

$ 104,614

Salaries :
Bank officers
$
Clerical staff
All other
Contributions—Retirement Fund
Governors' conferences
Federal Reserve Agents' conferences
Federal Advisory Council
Directors' meetings
Industrial Advisory Committee
Traveling expenses*
Assessment for expenses of Board of Governors
Legal fees
Insurance (other than on currency and security shipments)
Taxes on banking house
Repairs and alterations, banking house
Light, heat and power
Telephone
Telegraph
Postage
Expressage
Insurance on currency and security shipments
Printing and stationery
Office and other supplies
All other expenses

Total Current Expenses

Salaries
All other expenses
Total

83,824

tExcess of deductions over current net earnings and additions.
•Other than those connected with governors' and agents' conferences and meetings
of the directors and of the Advisory Council.




19

DIRECTORS AND OFFICERS
FEDERAL RESERVE BANK OF MINNEAPOLIS
DIRECTORS
Class A
H. C. Hansen

Expiration
of Term
Dec. 31, 1936

M. O. Grangaard

Dec. 31, 1937

H. R. Kibbee

Dec. 31, 1938

Class B
Albert P. Funk

Dec. 31, 1936

W. O. Washburn

Dec. 31, 1937

J. E. O'Connell

Dec. 31, 1938

Class C
Homer P. Clark
Deputy Chairman
Geo. W. MeCormick

Dec. 31, 1936

W. B. Geery
Chairman

Dec. 31, 1937
Dec. 31, 1938

Business Affiliation
President, First National Bank,
Churchs Ferry, North Dakota.
Vice President, First National Bank &
Trust Co., Minneapolis, Minnesota.
President, Commercial Trust & Savings
Bank, Mitchell, South Dakota.
President, La Crosse Rubber Mills Co.,
La Crosse, Wisconsin.
President, A. J. Krank Company,
St. Paul, Minnesota.
President, Eddy Bakery Company,
Helena, Montana.
Chairman of the Board, West Publishing Co., St. Paul, Minnesota.
Vice President and General Manager,
Superior Sugar Refining Company,
Menominee, Michigan.
Chairman of the Board and Federal
Reserve Agent, Minneapolis, Minn.

OFFICERS
FEDERAL RESERVE AGENT'S OFFICE
W. B. Geery, Federal Reserve Agent
E. W. Swanson, Assistant Federal Reserve Agent
O. S. Powell, Assistant Federal Reserve Agent and Secretary of the Board of Directors
BANKING DEPARTMENT
John N. Peyton, President
Harry Yaeger, Secretary and
H. I. Ziemer, Vice President and
Vice President
Cashier
A. R. Larson, Assistant Cashier
H. C. Core, Assistant Cashier
Otis R. Preston, Assistant Cashier
W. E. Peterson, Assistant Cashier
F. C. Dunlop, Auditor
Member of Federal Advisory Council
Theodore Wold, President, Northwestern National Bank & Trust Co.,
Minneapolis, Minnesota
Legal Counsel
Sigurd Ueland, Counsel
Rolf Ueland, Assistant Counsel

HELENA BRANCH—(MONTANA)
R. E. Towle
A. R. McDermott
J. E. O'Connell
Peter Pauly


A. A. Hoerr, Cashier


DIRECTORS
Dec. 31, 1936
Managing Director, Federal Reserve
Branch Bank, Helena, Montana.
Dec. 31, 1936
Vice President, Montana National
Bank, Billings, Montana.
Dec. 31, 1937
President, Eddy Bakery Company,
Helena, Montana.
Dec. 31, 1937
Vice President, Deer Lodge Bank &
Trust Co., Deer Lodge, Montana.
OFFICERS
R. E. Towle, Managing Director
C. J. Larson, Assistant Cashier


Federal Reserve Bank of St. Louis, One Federal Reserve Bank Plaza, St. Louis, MO 63102