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Twenty-third Annual Report

Federal Reserve Bank
of New York
For the Year Ended December 31, 1937




Second Federal Reserve District




CONTENTS
PAGE

Banking and Business Developments in 1937............................

5

Federal Reserve Policy and Money Market Conditions_______

7

Demands for Bank Credit and New Business Capital_____ _
_

14

New Security Issues..........................................................

16

The Foreign Exchanges and Capital and Gold Movements____

19

Foreign Relations.....................................................................

24

Operations of the Bank During 1937______________________

25

Financial Statement ........................................................

28

Income and Disbursements................................................

30

Membership Changes in 1937-------------------------------------------

31

Changes in Directors and Officers____________ __ __________

32

Member of Federal Advisory Council........... ......................

33

Changes in Officers_________________________________

33

List of Directors and Officers.....................................................

34




3

Federal Reserve Bank
O F N E W YO R K

April SOt 1938.
To the Stockholders of the
Federal Reserve Bank of New York :

I
am pleased to transmit herewith the twenty-third annual
report of the Federal Reserve Bank of New York reviewing
the year 1937




G eorge

L.

H a r ris o n ,

President.

4

Twenty-third Annual Report
Federal Reserve Bank of New York
Between the first and last quarters of the year 1937 there
was an abrupt change in the nature of the problems facing the
banking system of the United States, a change almost wholly
conditioned by the sharp reversal of business and price trends
during the year. While the general policy of the Federal Re­
serve Banks, throughout the year, was one of maintaining an
ample supply of funds at low rates of interest, emphasis had to
be shifted from precautionary moves early in the year designed
to reduce the danger of excessive credit expansion, to a later
relaxation of restraints which might in any way throw doubt
on the continuance of easy money for short or long term uses.
As the year opened, there were distinct tendencies toward
inflationary developments in business and in prices. Industrial
activity had been expanding rapidly in 1936, under the impetus
of increased consumer purchasing power, which was enhanced
by veterans’ bonus payments and other large Government
expenditures, and by business expenditures on plants and equip­
ment made necessary by obsolescence and increased consumer
demand. Early in 1937 activity in some plants was temporarily
restricted by strikes, but with commodity prices and labor costs
rising rapidly, there was a wide-spread tendency on the part
of business concerns to place orders for materials and finished
goods well ahead of immediate requirements, partly in anticipa­
tion of further advances in prices, and partly to avoid possible
shortages of supplies which might develop in case deliveries
were interfered with by labor troubles, and industrial produc­
tion in general continued at a relatively high level. There was
an attendant rapid expansion in commercial loans of banks, qnd
also some increase in the volume of borrowing by security
brokers, accompanying a further rise in stock prices to new
high levels for the recovery period. The moderate revival in
the flotation of securities to provide new business capital, which
had developed in 1936, carried through into the early part of
1937, and refunding issues to reduce interest charges on cor­
poration indebtedness continued in large volume.
A heavy inflow of foreign capital continued, and brought
with it a rapid inflow of gold. In the early part of the year a
considerable amount of the incoming foreign capital was in-




5

6

TWENTY-THIRD ANNUAL REPORT

vested in American securities, and thus tended to accelerate the
rise in security prices. The incoming gold was prevented from
causing further expansion of bank reserves, and further pres­
sure on the banks to increase their loans and investments, by
the gold purchase or gold “ sterilization” program that had
been adopted by the Treasury in December, 1936. The inflow
continued, however, at such a rate as to provoke some public
discussion as to the feasibility of its continued absorption by
this country at the price of $35 an ounce; gold imports were at
a rate in excess of the total world production of gold, and the
United States already held nearly 50 per cent of the world
stock of monetary gold. Rumors of an impending reduction in
the United States buying price for gold were circulated in
Europe during the spring, which created expectations of an
appreciation of the dollar, and although the inflow of foreign
capital for investment in American securities was greatly re­
duced after the downturn in security prices started in March,
there was an increase in transfers to this country of short term
foreign balances, so that the gold inflow continued unabated
through September.
PER CENT

Drastic Declines in Basic Com m odity Prices and Steel Mill A ctiv ity in 1937
in Relationship to Movements in Previous Years (M ood y’s Investors Service
index o f 15 basic com m odities in percentage of 1929 average,
and Am erican Iron and Steel Institute data on steel
mill activity in per cent o f cap acity)




FEDERAL RESERVE BANK OF NEW YORK

7

A very different situation prevailed at the close of the year.
Although it was apparent that the volume of orders for finished
goods, semimanufactured products, and raw materials fell off
rapidly in the spring and summer from the high levels reached
in the first three months of the year, and that the high level
of industrial activity was being sustained by work on unfilled
orders, it was rather generally expected that a revival of new
business would occur in the autumn. It developed, however,
that a considerable part of the goods produced between the
autumn of 1936 and the autumn of 1937 accumulated in the
inventories of consuming industries or distributors, so that
the expected revival of new orders did not materialize, and, in
the last quarter of the year, there was a drastic curtailment of
industrial production. Commodity prices also turned down­
ward, and there were precipitate declines in the prices of basic
commodities, especially in October and November. Stock prices
within a few months lost most of their gains between the spring
of 1935 and March, 1937. It became impracticable for many
business organizations to raise new capital through the securi­
ties markets, and even refunding operations were greatly re­
duced. Accompanying these developments, the growth of bank
loans ceased and was followed by contraction. The rapid inflow
of foreign funds gave way to an outflow, accompanied by some
loss of gold.
Federal Reserve Policy and Money Market Conditions
These radical changes in the business situation during the
year were reflected in the credit policies of the Federal Reserve
System. The first important policy decision of the year was
announced by the Board of Governors of the Federal Reserve
System on January 30 in a statement quoted here in part.
The Board of Governors of the Federal Reserve System today
increased reserve requirements for member banks by 33 y3 percent,
as follows: On demand deposits, at banks in central reserve cities,
from 19V to 26 percent; at banks in reserve cities, from 15 to 20
2
percent; and at “ country” banks, from 10% to 14 percent; on
time deposits, at all banks, from 4% to 6 percent. For the purpose
of affording member banks ample time for orderly adjustment to
the changed requirements, one half of the increase will become
effective as of the opening of business on March 1, 1937, and the
remaining half will become effective as of the opening of business
on May 1.
*
*
*
*
*
*
This action completes the use of the Board’s power under the
law to raise reserve requirements to not more than twice the amount
prescribed for member banks in section 19 of the Federal Reserve
Act.




8

TWENTY-THIRD ANNUAL REPORT
The section of the law which authorizes the Board to change
reserve requirements for member banks states that when this power
is used it shall be “ in order to prevent injurious credit expansion or
contraction.,, The significance of this language is that it places
responsibility on the Board to use its power to change reserve
requirements not only to counteract an injurious credit expansion or
contraction after it has developed, but also to anticipate and prevent
such an expansion or contraction.
By its present action the Board eliminates as a basis of possible
credit expansion an estimated $1,500,000,000 of excess reserves
which are superfluous for the present or prospective needs of com­
merce, industry, and agriculture and which, in the Board’s judgment,
would result in an injurious credit expansion if permitted to become
the basis of a multiple expansion of bank credit. The Board esti­
mates that, after the full increase has gone into effect, member
banks will have excess reserves of approximately $500,000,000, an
amount ample to finance further recovery and to maintain easy
money conditions. At the same time the Federal Reserve System
will be placed in a position where such reduction or expansion of
member bank reserves as may be deemed in the public interest may
be effected through open-market operations, a more flexible instru­
ment, better adapted for keeping the reserve position of member
banks currently in close adjustment to credit needs. * * *

In the light of this announcement of policy and of pro­
spective action, many banks readjusted their position in prepara­
tion for the change in reserve requirements, or in expectation
of a change in the course of money rates and security prices;
more particularly Government security prices. The effect of
B IL L IO N S
OF D O LLARS

Deposits Held by Principal New York City Banks for Other Domestic Banks




FEDERAL RESERVE BANK OF NEW YORK

9

these readjustments tended to be concentrated in New York City
as banks in other parts of the country withdrew idle funds from
New York to increase their reserve balances in their respective
Reserve Banks, and a substantial part of the reduction in bank
investments, during the period, took place in this district.
Partly as a result of these readjustments and partly due to
other causes, including some further increase in commercial
demand for funds, money rates advanced somewhat from the
unprecedentedly low levels they had reached at the close of 1936.
Dealers in bankers acceptances raised their offering rates on
unendorsed 90 day acceptances from 3/16 per cent at the end of
December, 1936, to 5/16 per cent at the beginning of February,
1937, and to 9/16 per cent in the latter part of March. (The
buying rate for acceptances at this bank, which was maintained
at y2 per cent for endorsed bills, was something of an assurance
against a rise in market rates much beyond this point.) There
was an accompanying rise in yields on Treasury bills from
around y8 per cent in December, 1936, to around % per cent in
February and 7/10 per cent in April. The prevailing rate on
PER CENT

Course o f M oney Rates, 1929 to 1937
(Dealers* offering rate for 90 day acceptances, Federal Reserve Bank of New Y ork
discount rate, and average yields on Treasury bonds maturing in more
than 8 years and on Aaa corporation bonds)




10

TWENTY-THIRD ANNUAL REPORT

prime commercial paper advanced by 14 per cent to 1 per cent
during this period, the rate on stock exchange call loans re­
mained unchanged at 1 per cent; and the rates at which the
banks made loans directly to their customers were virtually
unchanged.
In addition to these small changes in short term money
rates there were also some moderate changes in rates for longer
term money, as is shown in the diagram on page 9. Prices
of both Government and corporate bonds declined sufficiently to
increase their yields about % per cent. This adjustment, despite
continued ample supplies of funds, was perhaps not surprising
in view of the very long and almost uninterrupted rise in prices
of these bonds over a period of years. It also reflected, in some
degree, a change in the facilities and functioning of the New
York money market. In times past what is called the money
market has consisted of a number of large and active markets
for the employment of short term funds, including the call
loan market, the acceptance market, the commercial paper
market, and the market for short term Government securities.
In recent years three of these markets have shrunk in size and
activity, while the fourth has greatly expanded. The change
in the size of these various markets since 1929 is shown by the
following approximate yearly averages.
Paper Outstanding
(In millions of dollars)]
1929
Call loans ........................................................
Commercial paper ............................................
Bank acceptances ............................................
Short term Government’s (within 5 years)

1937

5,000
325
1,300
5,600

700
300
375
13,500

While, heretofore, such a readjustment in reserve position,
between banks, as was called for in the spring of 1937, might
have taken place largely through the call loan and acceptance
markets, it tends now to move through other channels, and
the principal channel (apart from the use by country banks of
balances with city correspondent banks) is the Government
security market. That market, moreover, was abnormally sensi­
tive, both because of the large holdings of Government securities
in the investment portfolios of the banks and because of the
continued offerings of securities of the Federal Government.




FEDERAL RESERVE BANK OF NEW YORK

11

This situation provided a background for the next step in
Federal Reserve policy, which was taken by the Federal Open
Market Committee on April 4 and announced as follows:
With a view (1) to exerting its influence toward orderly con­
ditions in the money market and (2) to facilitating the orderly
adjustment of member banks to the increased reserve requirements
effective May 1, 1937, the Open Market Committee of the Federal
Reserve System is prepared to make open-market purchases of
United States Government securities for the account of the Federal
Reserve banks in such amounts and at such times as may be desir­
able. This purpose is in conformity with the policy announced by
the Board of Governors of the Federal Reserve System in its state­
ment on January 30, 1937, which declared, with reference to the
increase in reserve requirements, that by this action the System
would be placed in a position where such reduction or expansion of
member bank reserves as may be deemed in the public interest may
be effected through open-market operations.

Under this policy Federal Reserve Bank holdings of Gov­
ernment securities in the System Account were increased by
$96,000,000 during April.
Partly because of these open market purchases, and partly
because of other factors (a smaller demand for currency than
had been anticipated; some reduction in interbank deposits and
hence in reserve requirements; and a reduction in the Treasury
balances with the Reserve Banks), the total volume of excess re­
serves after May 1 did not go as low as had been estimated in
January. After May 1 all member banks in the country had
excess reserves of about $900,000,000 compared with an estimate
of $500,000,000. Of the total excess reserves about $150,000,000
was in New York City, a much smaller proportion than is ordi­
narily held in this market.
Throughout the summer excess reserves in the New York
City banks ranged from about $50,000,000 to $275,000,000. From
time to time seasonal demands for currency, or other move­
ments of funds, reduced the reserves of individual banks to the
point where some found it necessary to obtain additional re­
serves by purchasing ‘ ‘ Federal funds ’ ’ from the banks that still
had surplus reserves. An occasion of this sort early in August,
when aggregate excess reserves of New York City banks were
drawn down to about $40,000,000, for a few days, was followed
by some uneasiness in the market as to the probable effects of
autumn credit requirements on the bank position and on money
rates.




12

TWENTY-THIRD ANNUAL REPORT

It was in these circumstances that the rediscount rate of the
Federal Reserve Bank of New York was reduced from l 1 per
/^
cent to 1 per cent, effective August 27, and preceding and fol­
lowing that date, corresponding reductions were made in the
rediscount rates of most of the other Reserve Banks. These
reductions had the effect of bringing the Reserve Bank rates
into closer adjustment with open market rates and of facilitating
access by member banks to Reserve Bank credit in case seasonal
currency requirements or continued commercial demand for
credit should make it necessary for them to borrow.
As the period of usual autumn expansion in business activ­
ity approached it became apparent that conditions had changed
materially from those prevailing earlier in the year. While
industrial activity continued at a substantial level, reports from
several important industries indicated that operations were
being sustained only by work on orders previously received,
and that unless new orders were received in considerable vol­
ume, production could not long be maintained at the current
levels. In the central money market these changes in the busi­
ness outlook were reflected in severe declines in the prices of
equity securities and of bonds below the highest grades.
At the conclusion of its meeting on September 11 and 12 the
Federal Open Market Committee made the following announce­
ment.
The Federal Open Market Committee met in Washington on
September 11 and 12 and reviewed the business and credit situation.
In view of the expected seasonal demands on the banks for currency
and credit during the coming weeks the Committee authorized its
Executive Committee to purchase in the open market from time to
time sufficient amjounts of short term U. S. Government obligations
to provide funds to meet seasonal withdrawals of currency from
the banks and other seasonal requirements. Reduction of the addi­
tional holdings in the open market portfolio is contemplated when
the seasonal influences are reversed or other circumstances make
their retention unnecessary.
The purpose of this action is to maintain at member banks an
aggregate volume of excess reserves adequate for the continuation
of the System’s policy of monetary ease for the furtherance of
economic recovery.
As a further means of making this policy effective, the Open
Market Committee recommended that the Board of Governors of
the Federal Reserve System request the Secretary of the Treasury
to release approximately $300,000,000 of gold from the Treasury's
inactive account. The Board of Governors acted upon this recom­
mendation and the Secretary of the Treasury agreed to release at
once the desired amount of gold. This will place an equivalent
amount of funds at the disposal of the banks and correspondingly
increase their available reserves.




FEDERAL RESERVE BANK OF NEW YORK

13

This action is in conformity with the usual policy of the
System to facilitate the financing of orderly marketing of crops
and of autumn trade. Together with the recent reductions of dis­
count rates at the several Federal Reserve banks, it will enable
the banks to meet readily any increased seasonal demands for
credit and currency and contribute to the continuation of easy
credit conditions.

The Secretary of the Treasury immediately followed the
recommendation of the Committee by depositing $300,000,000
from the inactive gold account in the Federal Reserve Bank of
New York. This sum was quickly disbursed, largely through
the redemption of Treasury bills that matured during the Sep­
tember tax period. As these Treasury bills were held largely in
New York, a considerable part of the $300,000,000 was added
directly to the reserves of the New York City banks. In addi­
tion, during November, when the full extent of seasonal currency
requirements was still in doubt, the Reserve Banks purchased
$38,000,000 of Government securities in the market, thereby
adding to the excess reserves of member banks by a like amount.
With these accessions the reserves of the banks were adequate
to meet all requirements without strain. At the time of largest
seasonal currency withdrawals just before Christmas, the New
York City banks still held approximately $300,000,000 of excess
reserves and the total for all member banks rose to over
$1,000,000,000. Some evidence of the adequacy of these reserves
appears in a moderate downward tendency in money rates from
the middle of September to the end of the year. This was re­
flected in the prices of Government securities and other prime
obligations. At the same time continued and severe declines in
business activity and commodity prices had their counterpart
in weakness of prices of equity securities and second grade
bonds.




14

TWENTY-THIRD ANNUAL REPORT

Demands for Bank Credit and N e w Business Capital
Early in the year 1937, developments in member bank credit
in the New York district appeared to be those characteristic of
a rather advanced stage of business recovery. Commercial
loans, which in the early stages of recovery from a serious busi­
ness depression frequently continue to decline because of the
collection or charging off of old loans, had increased considera­
bly in 1936 and after a brief seasonal recession in January, 1937,
continued to rise until the middle of October. Security loans
also increased moderately, accompanying the rise in stock prices
which reached its peak in March. Meanwhile bank investments,
which, after increasing rapidly for several years, had leveled
off in the latter half of 1936, declined somewhat during the first
nine months of 1937, so that the ratio of loans to investments
showed the first material increase in a number of years. This
tendency, however, was reversed in the latter part of the year,
when, following drastic declines in security prices and in busi­
ness activity, the demand for loans fell off rapidly and banks
again sought to expand their investment portfolios by purchas­
ing Government securities.
B IL L IO N S
OF D O L L A R S

Total Loans and Investments of W eekly R eporting Member Banks in New Y ork City
(M onthly averages o f weekly figures)




FEDERAL RESERVE BANK OF NEW YORK

15

It is likely that the increase in business borrowing between
the end of January and the middle of October was partly for
the purpose of replenishing cash resources that had been de­
pleted by large dividend disbursements near the end of 1936,
but more largely for the purpose of financing increased inven­
tories of raw materials and finished goods following the heavy
buying movement in the early months of the year. When the
abrupt downturn in business activity occurred in the autumn
and efforts were made by business organizations to reduce their
inventories, commercial loans in the reporting member banks
showed a more than seasonal reduction.
The reduction in security loans, while large in proportion
to the amount of such loans outstanding, was much smaller in
amount than in some earlier periods of drastic decline in se­
curity prices, presumably due to the effect of relatively high
margin requirements, which, by limiting expansion of credit
for the purpose of financing security speculation during the
period of market strength, also limited the amount of credit to
be liquidated during the period of rapidly declining security
prices. Nevertheless, the liquidation of security loans was an
important influence toward credit contraction in the latter part
BILLIONS

Total Loans and Investments o f W eekly Reporting Member Banks in 100 Other Cities
(M onthly averages o f weekly figures)




16

TWENTY-THIRD ANNUAL REPORT

of 1937, and by the end of the year the borrowings of members
of the New York Stock Exchange had declined to the lowest
level since the spring of 1933.
The reduction in investments of banks in New York City
and other principal cities, shown in the preceding diagrams,
undoubtedly gives an exaggerated impression of the liquidation
of security holdings by the banking system as a whole, as “ coun­
try” member banks and nonmember banks continued to add to
their holdings of Government securities during the latter half of
1936 and the first half of 1937. Nevertheless, data for all banks
indicate a cessation of the rapid increase in bank investments.
This change may be attributed in part to selling by city banks
for the reasons discussed in a preceding section of this report,
but there were other important factors that tended to check
the expansion in bank investments. Not only had there been
an increasing outlet for bank funds through loans during the
previous year, but in 1937 the amount of new funds required
by the Treasury to meet Government expenditures, except for
the purchase and “ sterilization” of incoming gold, was greatly
reduced; also there was a heavy demand for Government secu­
rities from other investors, which was indicated by the strength
of the market at various times during the autumn of 1936 and
the late spring and summer of 1937, when the large New York
City banks were reducing their holdings of Government secu­
rities. Insurance companies continued to be important buyers,
and when the yields on short term Government securities rose
moderately in the spring, foreign investors came into the market
for substantial amounts of short dated obligations.
New Security Issues
During the first half of 1937 the new issue market con­
tinued the activity which had characterized the year 1936. In
the second half of the year, accompanying the general decline
in other security markets and the recession in business, the
amount of new issues dwindled rapidly.
In predepression years, flotations of new corporate secu­
rities averaged around $400,000,000 a month, of which something
like 40 per cent represented issues to provide business with the
funds it needed for working capital and to make improvements
and additions to plant, beyond those provided for out of funds
set aside for depreciation and obsolescence and out of undis­
tributed earnings. The remainder of the issues may be consid­




FEDERAL RESERVE BANK OF NEW YORK

17

ered broadly as refunding operations. During the years from
1931 through 1935 the volume of security issues fell far short
of the amount in predepression years, but in 1936 it was begin­
ning to approach the former volume, although the major part of
the financing was for refunding purposes, rather than to raise
new capital. However, a substantial beginning was made in
raising new capital for enterprise, and an increasing proportion
of the new financing was in the form of preferred and common
stock issues. This had the advantage of providing capital repre­
senting a participation in ownership rather than in an increase
of debt. In the first two quarters of 1937 the market continued
moderately active, especially with respect to the amount of new
capital made available, although refunding issues fell off after
the first quarter, following the decline in prices of high grade
bonds. In the second half year issues to provide new capital
also declined rapidly in volume, so that the total capital issues
for the whole year were only about half those of 1936. The
figures as shown in the diagram are in terms of monthly
averages.
The causes of the reduced volume of new issues appear to
be found both in the difficulty of selling new securities under
adverse market conditions such as those that prevailed during

Q UA R TER

1936

Q UARTER

1937

Average M onthly Volume o f Dom estic Corporate Security Issues for New Capital
and for Refunding (In millions o f dollars)




18

TWENTY-THIRD ANNUAL REPORT

most of the latter half of 1937, and the unwillingness of poten­
tial borrowers to begin new undertakings in the face of increas­
ing uncertainties as to the business situation. Even prior to the
most recent business decline, the demand for the lower rated
securities appeared to have been much reduced as compared
with predepression years. Banks and other institutional in­
vestors, after sustaining heavy losses on medium and lower
grade issues during the worst years of the depression, have sub­
sequently limited their investments largely to Government
and other high grade securities. Individual investors seem to
have had smaller amounts of funds available for investment,
and, in view of high rates of taxation and the large increase in
the supply of tax exempt securities, have had considerable in­
centive and greater opportunity to invest in tax exempt securi­
ties, rather than in corporate obligations. Although the lower
grade bonds had a substantial recovery along with stocks from
1932 to early 1937, the margin between their prices and those
of high grade bonds remained greater than in the 20’s, and,
accompanying the slump in business last autumn, the spread
widened rapidly. The drastic declines in prices made further
issues of junior securities impracticable at that time.
Municipal issues showed a somewhat less marked reduction
from 1936 to 1937. The total of such issues, amounting to
$908,000,000, was 19 per cent smaller than in 1936, and this re­
duction was due altogether to a decline in the amount of re­
funding issues. With such issues excluded, municipal new cap­
ital issues were the same in 1936 and 1937 with an average rate
of $61,000,000 a month or about $735,000,000 a year. This is
about half the volume between 1926 and 1930, a reduction which
may be explained at least partly by the increase in expendi­
tures by the Federal Government during the past few years.
In connection with municipal issues it should also be noted that
large amounts of these securities are retired annually by sink­
ing funds and by repayment at maturity from tax revenues.
It seems clear that the amount of new issues in 1937 was less
than the amount of debt retired, so that there was no net con­
tribution to business activity from such issues during the year.




FEDERAL RESERVE BANK OF NEW YORK

19

The Foreign Exchanges and Capital and Gold Movements
During the first three quarters of 1937, the dollar was gen­
erally strong in the foreign exchange market despite an adverse
balance of payments on current account resulting from heavy
American expenditures for merchandise, tourist, and other serv­
ices. This strength was due to a movement of capital to the
United States from abroad at an unprecedented rate. In the
first three months of the year the inflow reflected continued
purchases of foreign and domestic securities by foreigners in
the New York market, as in the latter months of 1936, and
thereafter was due to a large transfer of short term banking
funds to New York, stimulated partly by rumors abroad of an
upward revaluation of the dollar through a reduction in the
American gold price. The inflow of capital was accompanied
by a large inflow of gold throughout the first three quarters of
the year.
In the final quarter of 1937, despite a rapidly growing favor­
able balance of trade, created by a decrease in imports, the dol­
lar became weak in the foreign exchange market. Foreign bal­
ances in New York were drawn upon partly for use in payment
for the excess of American merchandise exports, and partly for
the repurchase of European currencies or for the purchase of
gold.
Individual exchanges fluctuated considerably against the dol­
lar because of specific conditions in various countries. Further
depreciation of the French franc from $0.0467 at the end of
1936 to $0.0339% a year later, and the advance in the pound
sterling from $4.91 to $4.99% were outstanding illustrations of
the diverse movements. The decline in the exchange value of
the franc was attributed to flight of capital from France and
an unfavorable balance of payments on merchandise trans­
actions. Temporary reversals of the capital movement occurred
in the spring and autumn and were accompanied by partial
recoveries in French exchange, but heavy outflows of funds and
acute weakness of the franc occurred preceding and during the
recurrent political and financial crises, especially in early March
and June, and to a lesser extent in September and December.
In each successive period of weakness the franc dropped lower
than the time before. Following the June crisis, a new cabinet,
acting under emergency powers, abrogated the lower limit for




20

TWENTY-THIRD ANNUAL REPORT

franc devaluation that had been established on October 1, 1936.
Over the year as a whole, the reported gold stock of the Bank
of France declined from $2,994,000,000 at the end of 1936 to
$2,567,000,000 at the close of 1937.
The pound sterling, after declining gradually from $4.91 in
the latter part of December, 1936, to $4.88^ on April 9, advanced
rapidly to $4.95 on April 29, reflecting a “ gold scare” which
resulted from rumors abroad of an impending reduction in the
price of gold in the United States. The dollar equivalent of
the London gold price fell sufficiently below the British export
point of about $34.77 to induce arbitrageurs to bid for sterling
in order to take dishoarded gold in London for resale in the
United States, despite the fear abroad of a reduction in the gold
price here. A renewed rise from $4.93% on June 30 to $4.99%
in early August was attributed primarily to the effects of Jap­
anese purchases of sterling with the proceeds of gold shipments
from Japan to the United States. After easing to around $4.95
in October, the pound rose again in the latter part of that
month and early November to a high of $5.03, accompanying
withdrawals of foreign balances from New York, associated
with rumors of a further devaluation of the dollar, and remained
around $5.00 during the remainder of the year.
Closing Cable Rates at New York
Exchange on
Belgium ..............
Denmark..............
England ...............
France .................
Germany ............
Italy....................
Netherlands ..........
Norway ...............
Sweden .................
Switzerland ..........
Argentina ..............
Brazil * .................
Uruguay ...............
Japan ...................
India ....................
Shanghai ..............
Hong Kong ..........

January 2

High

Low

December 31

$.1685
.2192
4.9094
.0467
.4024
.0527
.5476
.2468
.2532
.2298
1.0002
.3273
.0605
.8000
.2840
.3720
.2981
.3075

$.1708
.2240
5.0213
.0467
.4051
.0527
.5572
.2522
.2587
.2328
1.0025
.3346
.0671
.8000
.2927
.3793
.3030
.3144

$.1683
.2178
4.8788
.0329
.4003
.0526
.5440
.2451
.2515
.2275
.9973
.3252
.0522
.7875
.2840
.3690
.2944
.3038

$.1696
.2232
4.9975
.0339
.4027
.0526
.5566
.2512
.2576
.2312
.9989
.3331
.0523
.8000
.2909
.3774
.2963
.3131

* Noon buying rate for free milreis.




FEDERAL RESERVE BANK OF NEW YORK

21

Among the other European currencies, the Swiss franc was
quite steady in the vicinity of $0.23, while the Netherlands
guilder advanced moderately from $0.5476 at the close of 1936
to $0.5566 at the end of 1937. The Belgian monetary unit,
though under pressure during a part of the year as the result
both of internal political developments and of the further depre­
ciation of French exchange, was held close to its lower gold
point by official sales of gold. The pegged quotations for the
Scandinavian currencies in terms of sterling were left unchanged
during 1937. Dealings in the reichsmark and the lira remained
subject to the rigorous official restrictions in force in Germany
and Italy.
A number of South American currencies showed moderate
weakness in the latter part of the year, owing to continued
growth in merchandise imports simultaneous with declining
world prices for their exported raw materials.
Pegged quotations for the Chinese and Japanese currencies
were continued during 1937, evidently through extensive utiliza­
tion of official reserves, since the trade balances of both coun­
tries were adverse.
The capital movement during the first quarter of the year
when the dollar was strong reflected the continuation of tenden­
cies which had been dominant in the fall of 1936. Further
extensive foreign buying of American securities, combined with
additional transfers of funds to the New York market for the
redemption of foreign dollar long term obligations, particularly
by the Argentine Government, was the principal component of
an inflow of capital to the United States in security transactions
of $286,000,000. As distinct from the capital inflow through
security transactions there was no substantial net movement
of short term banking funds between this country and abroad
during the first quarter.
The reversal of the upward movement of American stock
prices in March was followed in April by some foreign selling
of American securities, and although there was some resumption
of purchases in later months, foreign buying of American
securities did not again approach the pace which had prevailed
in the eighteen-month period ended in March, 1937, during which
foreign net purchases of American securities totaled approxi­
mately $1,000,000,000. The inward movement of capital in the




22

TWENTY-THIRD ANNUAL REPORT

second and third quarters, which amounted to $980,000,000,
was almost entirely in short term funds, and was the result of
the spring “ gold scare” and of commercial buying of dollars in
anticipation of fall requirements. England, the Netherlands,
Switzerland, and “ Other Europe” were the outstanding con­
tributors to this inflow of short term funds, and the same coun­
tries, together with Canada and France, were principally respon­
sible for the reduction in foreign balances in this market in the
last quarter of the year.
Movement of Capital between the United States and Foreign Countries
December 31, 1936 to December 29, 1937 (a)
(In millions of dollars; capital inflow [ + ] or outflow [—] )
Short term
banking funds

Security
transactions (b)

Total

Other Europe ........................

+178
+ 55
+ 9
+ 46
— 29
— 26
+ 35

+ 94
+109
+ 73
— 5
+ 11
+ 3
+ 49

+272
+164
+ 82
+ 41
— 18
— 23
+ 84

Total Europe ...................

+268

+334

+602

+
+
—
—

93 (c)
24
69
11

+117 (c)
+ 16
+ 25
+ 5

+210
+ 40
— 44
— 6

+305 (c)

+497 (c)

+802

+ 37 (c)
+574 (c)
+261 (c)
—567 (c)

+286 (c)
+ 56 (c)
+ 89 (c)
+ 66 (c)

+323
+630
+350
—501

+305

+497

+802

By Source

United Kingdom ....................
Netherlands ...........................
France ....................................

Latin America ........................
Far East ................................
Canada ..................................
All other ................................
Total ...............................
By Quarters

Dec. 31, 1936 to Mar. 31,
Apr. 1, 1937 to June 30,
July 1, 1937 to Sept. 29,
Sept. 30, 1937 to Dec. 29,

1937.
1937.
1937.
1937.

Total ...............................

(a) Source: United States Treasury Department.
(b) Including the movement in brokerage balances.
(c), The division of the capital movement between short term banking funds and
security transactions has been adjusted by considering changes in sinking funds as
equivalent to purchases or sales of securities. This does not affect the total inflow of
capital for the period. Adjustments have been made for an increase in sinking funds
amounting to $133,800,000 in the first quarter, and for subsequent decreases of
$28,100,000, $77,800,000, and $76,800,000 in the second, third, and fourth quarters,
respectively.




FEDERAL RESERVE BANK OF NEW YORK

23

The net gain of gold to the United States from abroad,
resulting from imports, exports, and changes in gold held under
earmark, according to the reported data amounted to $1,385,100,000, most of it being concentrated in the first three quarters
of the year, and the bulk of the gold imports coming from
England, Japan, Canada, and Belgium. The net gain in the
first quarter was $339,200,000, in the second quarter $650,700,000,
and in the third quarter $394,200,000. In the final quarter of
the year gold earmarkings for foreign account practically offset
further receipts of gold from Japan and other sources. For
the year as a whole the amount of gold held under earmark for
foreign account showed an increase of $200,400,000. Gold move­
ments during 1937 by countries of origin or destination, are
summarized in the accompanying table, which, however, does
not cover earmarking transactions, as such transactions cannot
be reported by countries.
Gold Movements by Countries
(In thousands of dollars)
Country
Australia .................
Belgium ...................
Canada ...................
Colombia .................
England ...................
France ....................
India ......................
Japan ......................
M exico....................
Netherlands ............
Philippines ..............
Switzerland ..............
All Other ...............
Total...................




Exports to

Imports from

Net

3

34,713
90,871
111,528
18,397
896,713
26,291
50,762
246,470
39,250
6,461
25,428
54,452
30,187

34,713
90,859
111,481
18,397
891,530
— 13,710
50,762
246,464
38,483
6,461
25,427
54,452
30,184

46,020

1,631,523

1,585,503

....
12
47

....

5,183
40,001

....

6
767

....
1
....

24

TWENTY-THIRD ANNUAL REPORT

Foreign Relations

During 1937 the Federal Reserve Bank of New York, acting
in behalf of all twelve Federal Reserve Banks and with the
approval of the Board of Governors of the Federal Reserve
System, opened two new accounts in the names of the National
Bank of Costa Rica—Issue Department, and the State Bank of
the U.S.S.R. The total number of foreign banks of issue (and
the Bank for International Settlements) for which accounts are
maintained, was thereby increased to forty-two. Balances main­
tained by foreign correspondents with this bank increased from
$98,620,000 to $171,750,000 in 1937.
The short term loans extended to a foreign central bank,
outstanding in the amount of $300,000 at the end of 1936, were
repaid early in 1937. A short term loan of $200,000, secured by
gold, was granted to a foreign central bank in March, 1937 and
was paid at maturity in the following month. During September
a short term loan of $1,000,000 against gold in transit was
extended to a foreign correspondent; this loan was repaid on
October 1. The foregoing operations were effected by this bank
in behalf of all twelve Federal Reserve Banks and with the
approval of the Board of Governors of the Federal Reserve
System.
The credit extended jointly by a group of central banks
and the Bank for International Settlements to the National
Bank of Hungary, to mature on July 18, 1937, as reported in
the previous annual report of this bank, was renewed for a
period of three years in the amount of $15,325,000, the share of
the Federal Reserve System being $2,493,000. As a result of
partial repayments of principal, the participation of the Federal
Reserve Banks in this credit was reduced from $2,506,000 at
the close of 1936, to $2,282,000 at the end of 1937.
The balances held abroad by this bank in its own behalf and
in behalf of the other Federal Reserve Banks, were reduced
during 1937 from an aggregate amount equivalent to $220,000
to the equivalent of $179,000; of the latter amount $92,000 was
repayable in United States dollars, and the remainder in for­
eign currencies. Total holdings of commercial bills denominated
in foreign currencies were also reduced from $3,089,000 to
$2,827,000, inclusive of the Hungarian credit referred to above.
Of this remaining amount, $2,744,000 was repayable in United
States dollars.




FEDERAL RESERVE BANK OF NEW YORK

25

Operations of the Bank During 1937

Coincident with the higher level of business activity in the
first nine months of 1937, the volume of operations of this bank
showed some increase over the previous year. For the third
successive year, the number of checks handled and the total
dollar value of checks exceeded those of the preceding year.
The volume of currency received and counted and the wire trans­
fers of funds were also in excess of 1936. Although the amount
of member bank borrowing at no time reached large proportions,
temporary borrowing from time to time by a number of banks
resulted in a larger total dollar volume of bills discounted for
member banks during the course of the year than in 1936.
Applications under Section 13b of the Federal Reserve Act
for loans to supply working capital to business enterprises fell
off considerably in 1937, and the number of loans made was
smaller than in any other year since such loans were first
authorized in June, 1934. A larger proportion of the loans
than in previous years were made in conjunction with commer­
cial banks in this district. Following the sharp recession in
business in the latter part of the year, there was some increase
in business inquiries concerning the possibility of obtaining
working capital loans from this bank, but no great increase in
the number of formal applications had occurred up to the end
of the year.
Altogether 335 loans of working capital to business organi­
zations, totaling about $24,400,000, had been made by this bank
up to the end of 1937. Of this number, 173 represented direct
loans to the borrowers, and 162 were made in cooperation with
commercial banks in the district. At the close of the year, 194
loans totaling $8,000,000 had been repaid in full, and partial
repayments aggregating $6,300,000 had been received on an
additional 129 loans, leaving a total of $10,000,000 to be repaid
on 141 loans.
Operations of this bank as fiscal agent for the Government,
including sales of new Government securities in this district,
redemptions of maturing securities and o f coupons represent­
ing interest on the National debt, payment of Government




26

TWENTY-THIRD ANNUAL REPORT

checks presented through member banks covering all sorts of
Government expenditures including wage payments to W.P.A.
workers, purchases and sales of gold, silver and foreign cur­
rencies for the Stabilization Fund, and custody of collateral
for loans made by the Reconstruction Finance Corporation and
other Government agencies, continued in large volume in 1937,
although there was a considerable reduction in the total from
1936 when such operations included a very large number of
items representing Adjusted Service bonds and checks issued to
veterans in connection with the payment of the veterans’ bonus.

1937

1936

Number of Pieces Handled
Bills discounted:
2,751
4,167
Industrial advances:
Notes discounted ...................................................
Commitments to make industrial advances..............
Bills purchased in open market t ..................................
Currency received and counted.....................................
Coin received and counted..........................................
Checks handled ...........................................................
Collection items handled:
United States Government coupons paid*...............
Issues, redemptions, and exchanges by fiscal agency
department:
United States Government direct obligations..........
Wire transfers of funds.................................................
Amounts Handled
Bills discounted ...........................................................
Industrial advances:
Notes discounted ...................................................
Commitments to make industrial advances..............
Bills purchased in open market for own account.........
Currency received and counted.....................................
Coin received and counted............................................

1,566
4,247

93
57
1,252
683,487,000
1,022,766,000
195,892,000

370
88
1,388
642,563,000
1,047,007,000
188,225,000

4,990,000
2,111,000

4,921,000
2,176,000

1,064,000
395,000
243,000

5,475,000
816,000
240,000

$207,289,000

$104,683,000

2,036,000
2,254,000
8,809,000
3,268,841,000
105,552,000
77,897,043,000

2,171,000
4,225,000
9,072,000
3,024,013,000
107,714,000
69,504,991,000

Collection items handled:
United States Government coupons paid*...............
493,835,000
All other ............................................................... 1,881,825,000
Issues, redemptions, and exchanges by fiscal agency
department:
United States Government direct obligations.......... 13,536,635,000
1,407,081,000
Wire transfers of funds.............................................. 32,765,514,000
t Includes number purchased by this bank for System account.
* Includes coupons from obligations guaranteed by the United States.




447,095,000
2,246,038,000
16,457,943,000
1,614,138,000
31,329,928,000

FEDERAL RESERVE BANK OF NEW YORK

27

This bank continued to participate in the work of the Fed­
eral Open Market Committee through the services of Mr. George
L. Harrison as a member and Vice-Chairman of the committee,
Mr. John H. Williams as Associate Economist, and Mr. W.
Randolph Burgess as Manager of the System Open Market
Account. Purchases and sales of securities for the account and
allotments of the securities in the account among the twelve
Federal Reserve Banks were conducted by this bank, in accord­
ance with the general policies determined by the Federal Open
Market Committee




28

TWENTY-THIRD ANNUAL REPORT

Financial Statement
As the following statement of condition indicates, the earn­
ing assets of this bank showed some increase in 1937, owing
in large measure to an increase in holdings of Government secu­
rities, which resulted partly from purchases during the year and
partly from a redistribution among the twelve Reserve Banks
of the securities in the System Open Market Account. Bills
discounted for member banks increased slightly, but industrial
loans declined somewhat.
Complete operating statistics of each Federal Reserve Bank
will be published in the Annual Report of the Board of Gov­
ernors of the Federal Reserve System.
(In thousands of dollars)
A

ssets

Gold certificates on hand and due from U. S.
Treasury .....................................................
Redemption Fund— Federal Reserve notes..........
Other cash ........................................................
Total reserves..........................................
Bills discounted:
Secured by U. S. Government obligations,
direct or fully guaranteed.............................
Other bills discounted.....................................
Total bills discounted..............................

Dec. 31, 1937
$3,586,484
1,124
78,420

$3,438,991
1,435
64,811

$3,666,028

$3,505,237

$

$
$

Industrial advances ............................................
U. S. Government securities:
Bonds .............................................................
Treasury notes ...............................................
Treasury b ills ............................. .................

Dec. 31, 1936

2,804
316

$

655
491

3,120

$

1,146

212
4,412

$

1,100
5,958

216,814
333,211
189,679

$ 130,269
356,035
158,939

Total U. S. Government securities............

$ 739,704

$ 645,243

Total bills and securities.........................

$ 747,448

$ 653,447

$

%

Due from foreign banks....................................
Federal Reserve notes of other banks.................
Uncollected items ..........................................
Bank premises ...................................................
All other assets...................................................
Total assets............................................ .




$

68
5,292
195,811
9,973
10,808

$4,635,428

84
8,799
241,482
10,134
30,407

$4,449,590

FEDERAL RESERVE BANK OF NEW YORK

29

(In thousands of dollars)
L

ia b il it ie s

Dec. 31, 1937

Dec. 31, 1936

Federal Reserve notes in actual circulation.........

$ 964,902

$ 921,697

Deposits:
Member bank—reserve account........................
U. S. Treasurer—General Account...................
Foreign bank .................................................
Other deposits ...............................................

$3,071,762
39,295
60,892
189,134

$2,942,652
108,703
35,745
96,584

Total deposits..........................................

$3,361,083

$3,183,684

Deferred availability items..................................
Capital paid in....................................................
Surplus (Section 7 )............................................
Surplus (Section 13b)........................................
Reserve for contingencies...................................
All other liabilities.............................................

$ 189,511
51,058
51,943
7,744
8,210
977

$ 223,480
50,591
51,474
7,744
9,000
1,920

Total liabilities .......................................

$4,635,428

$4,449,590

84.7%

85.4%

Ratio of total reserves to deposit and Federal
Reserve note liabilities combined.................
Contingent liability on bills purchased for foreign
correspondents ............................................
Commitments to make industrial advances..........

$

582
4,754

$

1936 figures have been revised to conform with 1937 report.




8,424

30

TWENTY-THIRD ANNUAL REPORT

Income and Disbursements
Items of income and disbursements for 1937, with com­
parable data for 1936, are shown in the following table. In 1937
total earnings were about one million dollars larger than in
1936, chiefly because of the increased holdings of United States
Government securities, and expenses again were slightly smaller
than in the previous year. Profits on Government securities
sold, however, were much smaller than in 1936, and after deduc­
tions from current net earnings for reserves, retirement system,
assessment for the Board of Governors building in Washington,
etc., net earnings were not quite as large in 1937 as in 1936.
Regular dividends of $3,070,000 were paid to member banks,
and $469,000 was transferred to surplus.
Profit and Loss Account
For the Calendar Years 1937 and 1936
(In thousands of dollars)
1937

1936

$

$

10,537
7,441

$

4,198

$

3,096

$

665
53

$

2,889
2

$

718

$

2,891

$
$

Additions to currrent net earnings:
Profit on sales of Government securities........
All other ........................................................

11,549
7,351

199

144
269

639
514
20

505
638
729
3

Deductions from current net earnings:
Reserve for contingencies................................
Special reserves and charge-offs on bank
premises ................... ............ .....................
Prior service contributions to retirement system
Assessment for building for Board of Governors
All other ........................................................
$

1,372

$

2,288

Net earnings........................... ..........................

$

Paid United States Treasurer (Section 13b). . . . .
Dividends paid ................... ............ .................
Transferred to surplus (Section 7 )....................

$

3,544

$

3,699

5
3,070
469

$

14
3,037
648

1936 figures have been revised to conform with 1937 report.




31

FEDERAL RESERVE BANK OF NEW YORK

Membership Changes in 1937

The number of member banks in percentage of total banks
in the Second Federal Reserve District was the same at the end
of 1937 as it was at the end of the previous year. There were
seventeen mergers among member banks and three insolvencies
during the year, but three State banks, three Trust companies,
and one newly organized National bank were admitted to mem­
bership.
In accordance with an amendment to the New York State
Banking Law, effective June 30, 1937, thirty State banks with
fiduciary powers were reclassified as Trust companies.
The tables below show the classification of banks in this
district according to their charters, and an analysis of changes
in membership during 1937.
Number of Member and Nonmember Banks in Second Federal Reserve
District at End of Year
December 31, 1936

December 31, 1937
T

ype

of

B

an k

Non­
Non­
Per cent
Per cent
Members members members Members members members

National banks..........
State banks*..............
Trust companies .......

603
44
129

0
111
147

100
28
47

619
55
115

0
131
137

100
30
45

Total .................

776

258

75

789

268

75

* Excludes Savings banks. By virtue of an amendment to the New York Banking
Law, effective June 30, 1937, thirty State banks previously granted fiduciary powers
were reclassified as Trust companies.
Changes in Federal Reserve Membership in Second District During 1937
Total membership beginning of year.............................................................

789

Increases:
National bank organized.......................................................................
Admission of State banks and Trust companies....................................
National bank succeeded by newly chartered member State bank.......

1
6
1

Total increases ..............................................................................

8

Decreases:
Member banks combined with other members.......................................
National bank succeeded by newly chartered member State bank..........
Insolvencies ..........................................................................................

17
1
3

Total decreases ..............................................................................

21

Net decrease ..............................................................................................
Total membership end of year.....................................................................

13
776




32

TWENTY-THIRD ANNUAL REPORT

Changes in Directors and Officers

At a regular election in the fall of 1937, William C. Potter,
Chairman, Board of Directors, Guaranty Trust Company of
New York, New York, N. Y., was elected by the member banks
in Group I as a Class A director for a term of three years be­
ginning January 1, 1938, to succeed George W. Davison, New
York, N. Y., whose term expired December 31, 1937. Thomas
J. Watson, President, International Business Machines Corpora­
tion, New York, N. Y., was reelected/' by member banks in
Group I as a Class B director for a term of three years, begin­
ning January 1,1938.
In December, 1937, the Board of Governors of the Federal
Reserve System reappointed Owen D. Young, Chairman, Board
of Directors, General Electric Company, New York, N. Y., as a
Class C director for a term of three years, beginning January 1,
1938, and redesignated him Deputy Chairman of the Board of
Directors of this bank for the year 1938; on January 19,1938 the
Board of Governors designated Mr. Young, Chairman and Fed­
eral Reserve Agent, for the remainder of the year, and ap­
pointed Beardsley Ruml, Treasurer, R. H. Maey & Co., Inc., New
York, N. Y., Deputy Chairman also for the remainder of the
year, to succeed Mr. Young.
On January 19,1938, the Board of Governors of the Federal
Reserve System appointed Edmund E. Day, President, Cornell
University, Ithaca, N. Y., a Class C director for the unexpired
portion of the term ending December 31,1939.
In May, 1937, the Board of Governors of the Federal Re­
serve System appointed Gilbert Prole, Genesee Farm Supply
Company, Batavia, N. Y., a director of the Buffalo Branch for
the unexpired portion of the term ending December 31, 1939,
and in December, 1937, reappointed Howard Kellogg, President,
Spencer Kellogg and Sons, Inc., Buffalo, N. Y., for a term of
three years beginning January 1, 1938.
The Directors of this bank reappointed William A. Dusenbury, President, The First National Bank of Olean, Olean, N. Y.,
a director of the Buffalo Branch for the term ending December
31, 1940.




FEDERAL RESERVE BANK OF NEW YORK

33

Member of Federal Advisory Council
The Board of Directors of this bank reappointed Winthrop
W. Aldrich, Chairman, The Chase National Bank of the City of
New York, New York, N. Y., a member of the Federal Advisory
Council' for the Second Federal Reserve District, to serve for
the year 1938.
Changes in Officers
On January 7, 1937, the Directors of this bank appointed
L. Werner Knoke, formerly Assistant Vice President, a Vice
President; William F. Sheehan, formerly Chief Examiner, was
appointed Manager, Bank Examinations Department and Chief
Examiner; and George W. Ferguson, formerly Assistant Gen­
eral Auditor, was appointed General Auditor to succeed Edward
L. Dodge, retired.
Herbert S. Downs, a member of the staff of the bank since
July, 1919, and Manager of the Bank Relations Department
since July 1,1926, died July 27, 1937.
On December 9, 1937, the Board of Directors of this bank
appointed John W. McKeon, an Assistant Vice President, effect­
ive January 1, 1938, to be assigned to the foreign function of
the bank.
On January 6, 1938, the Directors of this bank appointed
Norman P. Davis, formerly Special Assistant, Division of Se­
curity Loans, as Manager of the Security Loans Department.
Horace L. Sanford, formerly Chief of the Reports Division,
Research Department, and Assistant Secretary, was appointed
Manager of the Research Department and will continue as
Assistant Secretary. Insley B. Smith, Special Representative,
Bank Relations Department, was appointed Manager of the
Bank Relations Department.




34

TWENTY-THIRD ANNUAL REPORT

Directors and Officers
DIRECTORS
Class

Expires
Dec. 31

Group

A

1

W

C. P o t t e r , Old Westbury, N. Y...................................
Chairman, Board of Directors, Guaranty Trust Company of
New York, New York, N. Y.

1940

A

2

E

K. M i l l s , Morristown, N. J............................................
President, Morristown Trust Company

1938

A

3

W

F. P l o c h , Long Beach, N. Y........................................
President, The National City Bank of Long Beach

1939

B

1

T

h om as

J. W a t s o n , Lebanon, N. J...............................................
President, International Business Machines Corporation, New
York, N. Y.

1940

B

2

W

alter

C. T e a g l e , Port Chester, N. Y........................................
Chairman, Board of Directors, Standard Oil Company (New
Jersey), New York, N. Y.

1938

B

3

R

T. S t e v e n s , Plainfield, N. J.............................................
President, J. P. Stevens & Co., Inc., New York, N. Y.

1939

Van Hornesville, N. Y., Chairman......................
Chairman, Board of Directors, General Electric Company,
New York, N. Y.

1940

R u m l , New York, N. Y., Deputy Chairman...............
Treasurer, R. H. Macy & Co., Inc., New York, N. Y.

1938

E . D a y , Ithaca, N. Y......................................................
President, Cornell University.

1939

il l ia m

dw ard

il l ia m

obert

C

Owen D. Y oung,

C

B

eard sley

C

E

dmund

DIRECTORS—BUFFALO BRANCH

Term
Expires
Dec. 31

Vacancy ...............................................................

1938

P r o l e , Batavia, N. Y..............................
Genesee Farm Supply Company.

1939

K e l l o g g , Buffalo, N. Y...........................
President, Spencer Kellogg & Sons, Inc.

1940

F . H e n r y , Buffalo, N. Y.........................
Chairman, Washburn Crosby Company, Inc.

1938

J. Coe, Niagara Falls, N. Y.........................
President, Power City Trust Company.

1939

A. D u s e n b u r y , Olean, N. Y..................
President, The First National Bank of Olean.

1940

G

il b e r t

H

ow ard

F

ran k

Fred
W

R

il l ia m

obert

M.

O ’H

ara

,

Managing Director..............

1938

MEMBER OF FEDERAL ADVISORY COUNCIL
W

in t h r o p

W . A

l d r ic h

Chairman, The Chase National Bank of the City of New York, New York, N. Y.




FEDERAL RESERVE BANK OF NEW YORK

35

OFFICERS
G
A

Sprou

llan

W.

R

l

C

harles

R

ay

H.

M . G

urgess,

id n e y

,

L. W
W

il l is t in

L
H. W

il l ia m s

,

J.

H. K

erbert

n

W .

M

cK e o n

n ok e

,

Vice President

L

ogan

,

Vice President and

R.

R

Vice President

,

B.

alter

M

atteson

,

Assistant Vice President
A

P

rthur

Jam
H

,

Vice President

oun ds,

es

M . R

ic e

V. R

arold

Assistant Vice President

,

h elan

,

im b a l l

Assistant Vice President and Secretary
Joh

K

S.

e s l ie

W

Assistant Vice President
W i l s o n J o n e s , Assistant Vice President

H

erner

alter

General Counsel

Vice President
n

President

,

a r r is o n

Vice President

Coe,

H. D

il l ia m

H

Vice President

Joh

W

L.

First Vice President

,

B

andolph

eorge

Assistant Vice President

,

oelse

,

Assistant Vice President

Assistant Vice President
V

a l e n t i:

W

il l is

,

Assistant Vi e President

D

H.

udley

B

W

W.

esley

B

J.

onald

C

H

urt,

am eron

W

,

e l ix

T.

D

a v is

W

,

orm an

P.

D

a v is

,

Manager, Security Loans Department
E

dw ard

O.

D

C. F

d w in

rench

C. M

yles

c

C

,

T

obert

F.

M

,

R

A. M

cM u r r a y

il l e r

,

C

il l ia m

F. S

,

odd

eorge

G. T

il l ia m

ufus

J.

harles

I. W

G

m it h

M .

O ’H

ara

e g in a l d

W . F

ard

ergu so n

,

F. T

B. W

il t s e

T

r im b l e

N.

W




,

,

V

H

an

outen

,

J r .,

aters,

BRANCH
H

,

r e ib e r

General Auditor

,

Assistant Manager

,

Manager, Cash Custody Department

Managing Director
R

,

,

ie b o u t

OFFICERS— BUFFALO
obert

h eeh an

Manager, Security Custody Department

Manager, Securities Department

R

cott,

Assistant Counsel

Manager, Safekeeping Department
S il a s

S

Assistant Counsel

Manager, Service Department
R

A.

Assistant Counsel
W

a h il l

il l ia m

Manager, Bank Relations Department

Manager, Cash Department
M

L. S a n f o r d , Manager, Research
Department, and Assistant Secretary

orace

Insley B . S

ouglas,

Manager, Bill Department and
Manager, Collection Department
E

,

Manager, Bank Examinations Depart­
ment, and Chief Examiner

Assistant Counsel
N

it c h e l l

Manager, Government Bond Department

Manager, Foreign Department
F

M

Manager, Credit Department

Manager, Accounting Department
D

A.

Jacques

arro w s,

Manager, Personnel Department

alsey

W . Sn

ow

,

Cashier
C

l if f o r d

L.

B

lakeslee

Assistant Cashier

,

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