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FIFTEENTH ANNUAL REPORT
OF THE

FEDERAL RESERVE BANK
OF RICHMOND

FOR THE YEAR ENDED DECEMBER 31, 1929

W M . W . HOXTON
Chairman and Federal Reserve Agent




FEDERAL RESERVE BANK
OF RICHMOND

February 21, 1930.
THE FEDERAL RESERVE BOARD,

Washington, D. C.
GENTLEMEN :

I have the honor to submit herewith the Fifteenth
Annual Report of the Federal Reserve Bank of Richmond,
for the year ended December 31, 1929.




Respectfully,
WM. W.

HOXTON,

Chairman of the Board and
Federal Reserve Agent.

DIRECTORS AND OFFICERS
OF THE

FEDERAL RESERVE BANK OF RICHMOND
FOR YEAR 1930
DIRECTORS
Class A

Class B

CHAS. E. RIEMAN, 1930,

Class C

JUNIUS P. FISHBURN, 1930, WM. W. HOXTON, 1982,
ROANOKE VA

BALTIMORE, MD.

CHAIRMAN OF THE BOARD,
RICHMOND, VA.

JAMES C. BRASWELL, 1981 EDWIN C. GRAHAM, 1981,
ROCKY MOUNT, N. C.

FREDERIC A. DELANO. 1980.

WASHINGTON, D. C.

L. E. JOHNSON, 1932,

D. R. COKER, 1932.

ALDERSON, W. VA.

DEPUTY CHAIRMAN.
WASHINGTON, D. C.

ROBERT LASSITER, 1931

HARTSVILLE, S. C.

CHARLOTTE, N. C.

OFFICERS
WM. W. HOXTON,

GEORGE J. SEAY,

CHAIRMAN OF THE BOARD
FEDERAL RESERVE AGENT.

GOVERNOR.

CHAS. A. PEPLE.
DEPUTY GOVERNOR.

J. G. FRY,

R. H. BROADDUS.

ASSISTANT FEDERAL RESERVE AGENT.

DEPUTY GOVERNOR.

J. S. WALDEN, JR..

T. F. EPES.

CONTROLLER.

GEORGE H. KEESEE,
CASHIER.

AUDITOR.

ALBERT S. JOHNSTONE.
MANAGER, PERSONNEL AND SERVICE.

JOHN T. GARRETT,
MANAGER, BANK RELATIONS DEPT.

W. W. DILLARD,
ASSISTANT CASHIER.

EDWARD WALLER, JR..
ASSISTANT CASHIER.

COUNSEL
MAXWELL G. WALLACE.
MEMBER FEDERAL ADVISORY COUNCIL
JOHN POOLE. 1930.
WASHINGTON, D. C.

BALTIMORE BRANCH
DIRECTORS
A. H. DUDLEY, BALTIMORE, MD., 1930.
H. B. WILCOX, BALTIMORE, MD., 1980.

CHARLOTTE BRANCH
DIRECTORS
HUGH LEACH, CHARLOTTE, N. C , 1930.
ROBT. GAGE, CHESTER, S. C, 1930.

LEVI B. PHILLIPS, CAMBRIDGE, MD., 1931. W. H. WOOD, CHARLOTTE, N. C . 1931.
CARTER G. OSBURN, BALTIMORE, MD., 1932. W. J. RODDEY, SR., ROCK HILL, S. C . 1982.
NORMAN R. JAMES, BALTIMORE, MD., 1930. JOHN A. LAW, SPABTANBURG, S. C , 1980.
WM. H. MATTHAI, BALTIMORE, MD., 1931. JOHN LINDSAY MOREHEAD, CHARLOTTE,
N. C, 1931.
EDMUND P. COHILL, HANCOCK, MD., 1932.
C. A. CANNON, CONCORD, N. C , 1932.

OFFICERS
A. H. DUDLEY, MANAGING DIRECTOR.

M. F. REESE, CASHIER.
THOMAS I. HAYS, ASSISTANT CASHIER.
JOHN R. CUPIT, ASSISTANT CASHIER.




OFFICERS
HUGH LEACH, MANAGING DIRECTOR.
W. T. CLEMENTS, CASHIER.

FIFTEENTH ANNUAL REPORT
FEDERAL RESERVE BANK OF RICHMOND

GENERAL BUSINESS CONDITIONS
STATISTICAL SUMMARY
Debits to Individual Accounts (24
Cities)
Number of Commercial Failures, 5th
District
Liabilities Involved in Failures, 5th
District
Cotton Consumption, 5th District
mills (Bales)
Cotton Grown in Fifth District (Bales)
Tobacco Grown in 5th District
(Pounds)
*
Building Permits for New Work (32
Cities)
Value of Permits for New Work (32
Cities)
Value of Contracts Awarded, 5th
District
Total Sales, 30 Department Stores,
5th District
Total Sales, 69 Wholesalers in 5 Lines..

1929

1928

$16,851,269,000 $16,324,326,000
1,420
$

1,518

24,705,654 $

34,345,527

3,039,884
1,624,000

2,838,836
1,604,000

741,560,000

713,590,000

16,354

17,996

$

104,480,968 $

143,208,256

$

384,926,005 $

451,030,185

$

104,985,200 $
68,503,112 $

101,723,680
70,695,201

The preceding table, which contains annual totals for some
of the principal business indicators for 1929 and 1928, shows
that general business in the Fifth reserve district was irregular
last year. Debits to individual accounts figures were more than
half a billion dollars above the 1928 figures, but much of this
increase was probably due to increased trading in stocks. Commercial failures declined in both number and amount involved
in 1929 in comparison with the preceding year. Cotton consumption by Fifth district mills in 1929 was greater than consumption in 1928, but this increase was due to relatively low
figures in 1928 rather than to especially extensive operations in
1929. Building permits issued and building contracts awarded
declined materially last year in the Fifth district, and chiefly
because of this decline, there was considerably more unemployment, especially in the latter half of the year. Department
store sales increased moderately in 1929 over sales in 1928, but
the gain was in the upper half of the district, the showing in



4

FIFTEENTH ANNUAL REPORT OF THE

the Carolinas being worse than in the preceding year. Wholesale trade in the district declined slightly in 1929. In agriculture, the results obtained varied widely. The district produced
more cotton than in 1928, but the 1929 price was much lower
and the crop was less profitable than in the earlier year. The
tobacco crop was slightly larger in 1929, with prices perhaps
averaging a little lower than in 1928, the actual cash returns
being about the same in both years. Truck growers had a better
year than the preceding one, Irish potato growers especially
receiving about twice as much for a smaller yield in 1929 than
for their 1928 crop. Conditions at the end of 1929 in agricultural sections appeared to be about the same as at the end of
1928, taking the district as a whole, but certain sections of the
Carolinas which are chiefly dependent upon cotton are in a
very unfavorable position, as a result of small crops and low
prices. This is particularly true of eastern South Carolina, the
finest cotton section of the state, which experienced unfavorable
weather last summer.
VOLUME OF BUSINESS

The physical volume of business handled by the Federal
Reserve Bank of Richmond in 1929 was greater in every department except in Fiscal Agency work than the volume handled
in 1928, the decline in Fiscal Agency operations being due
chiefly to an unusually large amount of work done in the earlier
year in connection with the redemption and refunding of the
Third Liberty Loan. Bills discounted and bought in 1929 rose
4.77 per cent above the number handled in 1928, and the aggregate amount loaned to member banks in the later year rose
20.37 per cent. The number of borrowing banks in 1929 was
384, against 386 banks which borrowed from the Reserve bank
in 1928, but the borrowers in 1929 were a larger percentage of
the member banks in the Fifth district. More than a million
additional checks were cleared by the Transit Department last
year in comparison with the number cleared in 1928, but the
amount involved, while higher in 1929, did not increase in pro
portion, the average amount for which each check was drawn
being slightly lower in 1929. In dollar amount, the aggregate
of non-cash collections handled in 1929 was below the aggregate
of the 1928 collections, but the number of transactions handled
in 1929 was slightly more than 1 per cent higher than the number handled in 1928.
The following table shows the volume of work handled by
the principal departments during 1929, as compared with the
year 1928:



FEDERAL RESERVE BANK OF RICHMOND

ITEMS

1929

1928

Per Cent of
Increase ior
Decrease

BILLS DISCOUNTED AND
BOUGHT:

Number
Amount

57,049
59,771
4,755,793,000 $ 3,950,970,000

4.77
20.37

54,570,000
55,730,000
$14,118,820,000 $13,990,057,000

2.13
.92

284,929
264,948,000 $

282,008
288,560,000

1.04
8.19

174,518,171
757,851,000 $

156,326,912
699,500,000

11.64
8.34

175,069,783
752,159,000 $

156,366,085
699,665,000

11.96
7.50

148,126,049
16,394,000$

145,044,461
15,743,000

2.12
4.14

148,474,516
16,392,000$

146,448,592
15,307,000

1.38
7.09

141,525
149,495
6,020,866,000$ 5,676,459,000

5.63
6.07

CHECKS HANDLED BY TRANSIT
DEPARTMENT :

Number
Amount
NON-CASH COLLECTIONS
HANDLED :

Number
Amount
CURRENCY RECEIVED AND
COUNTED (Including new

notes) :
Number of pieces
Amount
CURRENCY PAID OUT (Includ-

ing redemptions) :
Number of; pieces
Amount
COIN RECEIVED AND COUNTED

(Including new) :
Number of pieces
Amount
COIN PAID OUT (Including

redemptions) :
Number of, pieces
Amount
TRANSFERS OP FUNDS FOR
MEMBER BANKS :

Number
Amount
FISCAL AGENCY WORK:

U. S. Securities received,
issued, redeemed, cancelled or exchanged:
Number
Amount




50,569
141,732,000$

232,164
221,247,000

78.22
35.94

6

FIFTEENTH ANNUAL REPORT OF THE

FINANCIAL RESULTS OF OPERATIONS

The following is a condensed statement of earnings, expenses, dividends, surplus account, and franchise tax paid for
the year 1929:
Average
Daily
Holdings

Average
Daily
Earnings

$51,383,154
Bills Discounted
11,030,662
Bills Purchased
2,497,085
U. S. Securities Held
48,962
Foreign Loans on Gold.—
Penalties and Miscellaneous Earnings
$64,959,863
Totals
Current Expenses
Current Net Earnings
Account of Reserves, Depreciations, etc
Net Earnings Available
for Dividends, Surplus
and Franchise Tax
Dividend Paid
Transferred to Surplus
Account
Franchise Tax to U. S.
Government

Total
Earnings

$7,038
1,522
209
7

$2,569,042
555,461
76,361
2,448

264
$9,040

Annual
Rate of
.Earnings

96,298
$3,299,610
1,587,244
$1,712,366

.0500
.0504
.0306
.0500

370,140
$1,342,226
$ 368,601
97,363
876,262
$1,342,226

Gross earnings of the Federal Reserve Bank of Richmond
for the year 1929 totaled $3,299,610, an increase of $441,962
over the total income of $2,857,648 in 1928, the increase being
entirely due to a considerable rise in the volume of rediscounting by member banks in 1929. The percentage of gross earnSources of Income
1929




In Terccribqes of

1928

i

FEDERAL RESERVE BANK OF RICHMOND

ings derived from the discount of member bank paper amounted
to 78 per cent last year, compared with 68 per cent in 1928 and
only 43 per cent in 1927, when member banks were borrowing
relatively little and the Richmond bank made large investments
in open market paper and Government securities. The average
rate of earnings on all earning assets during 1929 was .0493,
compared with an average rate of .0429 in 1928 and only .0353
in 1927. The accompanying chart shows in percentage how the
gross earnings of the Richmond bank were derived.
Current expenses of the Federal Reserve Bank of Richmond
totaled $1,587,244 in 1929, an increase of $184,852 over $1,402,392 for 1928. The increase was due in large part to additional
charges for new currency incident to the introduction of small
sized notes in July, this item alone increasing $113,000 in 1929,
but the operation of the Baltimore Branch in its new and larger
quarters also increased operating expenses last year. Current
net earnings for 1929 totaled $1,712,366, as compared with
$1,455,256 for 1928, an increase of $257,110. After the proper
transfers from net earnings to reserve, depreciation and miscellaneous accounts, and the payment of $368,601 in dividends
to member banks on capital stock, there remained $973,625
available for surplus and franchise tax. As the surplus account
of the Bank was in excess of 100 per cent of its subscribed capital, 10 per cent of net earnings remaining after the payment of
dividends, i. e., $97,363, was transferred to surplus account as
provided by the Federal Reserve Act, leaving a balance of
$876,262, wich was paid to the United States Government as
a franchise tax. A chart shows how the gross incomes for 1929
and 1928 were distributed.




Distribution of Income
I n Percentages of
Total

J3ividends
+o Surplus

^5

8

FIFTEENTH ANNUAL REPORT OF THE

EXPENSES OF OPERATION IN 1929
The expenses of Federal Reserve Banks are incurred in the exercise
of functions prescribed by law, which involve the rendering of services
directly to the United States Treasury and to member banks, and through
member banks indirectly to the entire business community—agricultural,
industrial, and commercial.
Federal Reserve Banks—furnish an elastic currency; afford means
of rediscounting commercial and agricultural paper; act as Fiscal Agents
of the U. S. Treasury Department; pay checks and warrants drawn on the
Treasury of the United States; exercise the functions of Sub-Treasuries
in the supply, exchange, and redemption of currency and coin; effect the
par clearance of checks on a large majority of the banks of the country;
collect for member banks maturing notes, drafts, etc.; effect the transfer
of funds by telegraph and mail, and make daily settlement between all
Federal Reserve Districts; and perform other public services.
The expenses of conducting the operations of the Federal Reserve
Bank of Richmond for the year 1929, divided according to functions, were
as follows:
CURRENCY AND COIN
The cost of receiving and handling 174,518,171 pieces of currency aggregating $757,851,000, of which 124,999,146 pieces had
been in circulation and had to be sorted
and counted; paying or shipping out
175,069,783 pieces of currency aggregating
$752,159,000; receiving and handling
148,126,049 pieces of coin aggregating
$16,394,000; paying or shipping out 148,474, 516 pieces of coin aggregating $16,392,000 was
$129,767.86
The shipping charges (postage, expressage
and insurance) on currency and coin to and
from out-of-town members amounted to .. 115,781.63
Assessments by the Treasury Department to
cover the cost of printing and maintaining
an adequate supply of new Federal Reserve notes and the cost of redeeming and
destroying Federal Reserve notes and Federa? Reserve Bank notes unfit for circulation, plus the shipping charges thereon
between the bank and Washington and the
shipping charges on fit F. R. notes between
the bank and other Federal Reserve Banks
amounted to
142,556.15
Total Cost
LOANS, REDISCOUNTS AND INVESTMENTS
The cost of making discounts and advances to
384 member banks: 57,238 notes aggregating $4,691,968,000, were received, examined and discounted; 139,164 notes collateral to member bank notes aggregating
$2,364,140,000 were received, examined,
and handled; 6,386 pieces of marginal or
excess collateral, aggregating $18,714,000,



$ 388,105.64

FEDERAL RESERVE BANK OF RICHMOND

9

were received, examined and handled;
2,533 bankers' acceptances aggregating
$62,328,000, were purchased in the open
market; includes the cost of special handling accorded 7,065 notes aggregating
138,379,000 paid before maturity and the
unearned discount rebated; also includes
the cost of credit investigations, securing
and analyzing commercial and bank statements, maintaining credit files, etc
$ 49,563.96
The cost of effecting 819 transactions in the
purchase and sale (in the open market) of
government securities for out-of-town
banks, aggregating $57,683,000 and the
cost of receiving, verifying and holding
securities pledged as collateral to notes,
and for safe keeping, and maintaining the
proper records thereof, as follows: receiving 41,529 pieces aggregating $567,438,000; shipping 42,612 pieces aggregating $577,761,000; holding in our vaults
throughout the year securities, deposited
by member banks as collateral to discounts
or for safe keeping, ranging .from $77,331,000 to $92,255,000 was
12,065.89
Total Cost
$
TRANSIT AND COLLECTIONS
Handling and collecting 53,875,000 checks,
aggregating $13,907,636,000 cost
$197,383.38
Receiving, examining, paying and listing
according to Treasury regulations 1,855,000
government checks, aggregating $211,184,000, and shipping them to Washington
cost
6,774.80
Handling 1,018,196 checks aggregating $64,655,000 returned unpaid for various
reasons cost
18,024.58
Handling 284,929 non-cash collection items
(maturing notes, drafts, coupons, etc.),
aggregating $264,948,000 cost
35,453.36
Total Cost
ACCOUNTING
This function includes:
The general books, capital stock records, issuing and recording official checks, and the
detail daily transcript of the general account of the Treasurer of the United States.
The member bank accounts—both reserve
accounts and deferred accounts—and the
calculation of deficiencies in reserve, if
any, and the assessments of penalties for
deficiencies as prescribed by law.
The accounts with other Federal Reserve)
Banks, and the operation of the Gold Set


61,629.85

$ 257,636.12

10

FIFTEENTH ANNUAL REPORT OP THE

tlement Fund through which $20,956,000,000 was received from and paid to other
Federal Reserve banks and branches, the
Treasurer of the United States, and the
Federal Reserve Agent.
The transfers of funds for account of member banks of which there were 149,495
aggregating $6,020,866,000.
The accounting involved in making all the
expenditures of the bank.
The accounting and other expenses in connection with closed or suspended banks.
Planning new accounting forms and systems
and making changes in old forms as the
need therefor arises.
Total Cost
$ 128,773.42
FISCAL AGENT OF THE UNITED STATES
Services rendered as Fiscal Agent of the U.
S. Government:
Receiving, proving and crediting to banks,
preparing schedules, cancelling and shipping to Washington 623,279 government
coupons aggregating $11,611,000 cost
$ 3,657.34
Fiscal Agency work for the U. S. Government
principally relating to the issue of 10,328
pieces of government securities amounting
to $50,628,000; the redemption of 24,776
pieces amounting to $38,437,000; the exchange and transfer of 25,537 pieces
amounting to $70,608,000; the redemption
of war savings and thrift stamps 184 pieces
amounting to $488; the receipt of subscriptions and payments for new issues, the
handling of the war loan depositary accounts, the custody of a stock of securities
ranging from $46,377,000 to $111,515,000
cost
27,520.08
Total Cost
$ 31,177.42
Reimbursed by the Treasury Department ..
7,127.48
Net Cost to the Bank

GENERAL EXPENSES—NOT ALLOCATED
TO THE ABOVE FUNCTIONS
Official salaries and supervisory expenses ....$123,796.54
Directors' fees and traveling expenses
7,612.63
Governors', Federal Reserve Agents' and
Federal Advisory Council conferences
523.92
Our proportion of the expenses of the Federal
Reserve Board
35,641.12
Operation of the banking houses at Richmond, Baltimore and Charlotte (includes
salaries of superintendent, mechanics, firemen, janitors, elevator operators, etc., and



$

24,049.94

FEDERAL RESERVE BANK OF RICHMOND

11

rent, light and power, heat, taxes, fire
insurance, repairs and alterations, etc) .... 165,905.11
The provision of personnel
27,018.76
Legal expenses
8,823.79
Maintaining the general audit of the bank
and branches
25,817.22
Work of the Federal Reserve Agent's Department, including issuance of Federal
Reserve notes, custody of collateral therefor, custody of reserve stock of Federal
Reserve notes, the examination of member
banks, preparing and publishing the Monthly Review of Business and Agricultural
Conditions, assembling various statistical
data, etc
49,817.48
Bank relations work; visiting and advising,
and conferences with member and nonmember banks
Handling incoming and outgoing ordinary and
registered mail
Protection—Salaries of special officers and
watchmen, and other protective services -...
Other general services, including purchasing
of supplies and equipment, operating the
office supplies and stationery stock room,
telephone service, filing and caring for old
records, operating duplicating processes,
salaries of general office boys, operation of
automobile trucks, and repairs to equips
ment
Shipping charges (postage and insurance) on
securities
Postage on ordinary mail
Insurance—Employees' group life, Employees'
fidelity, Bankers' blanket bond and burglary, Workmen's Compensation, Fire —
equipment and supplies, and automobile ..

25,949.65
24,556.55
64,785.27

74,957.43
2,442.73
69,080.94

20,541.88

Total Cost

$ 727,271.02

Total Operating Expense*

$1,587,465.99

*NOTE: The total Operating Expense during 1929 was $222.38
more than the total amount of expenditures charged to the Current Expense account of the Bank during the year. The difference represents
the excess of office supplies, printing and stationery, and postage actually
used during the year and charged to the proper functions in the above
statement of Operating Expenses, over the amount of such supplies purchased during the year and charged to Current Expense account.



FIFTEENTH ANNUAL REPORT OF THE

12

DISCOUNT OPERATIONS
AVERAGE
In
Millions
65

JAN

FE3

MAR

AMOUNT OF PAPER UNDER DISCOUNT
By Months in 1929, 1928 t 1927

APR

MAY

JUL

JUN

AUG

SEP

OCT

NOV

DEC

In
Millions

65
—^_

60

60

55
1929

i

50

.....

•5
1929
40

.IV£.

55
50
*5
40

35

35

30

30

25
20

122J_

25

1927

20

15
10

15
10

5

5
Top solid line, 1929; dotted line, 1923; lower solid lino, 1927.

The demand from member banks for reserve bank credit
was heavier in 1929 than in either 1928 or 1927, as the preceding chart shows. The Federal Reserve Bank of Richmond discounted bills totaling $4,691,968,000 last year, an increase of
22.18 per cent over discounts totaling $3,840,120,000 in 1928.
The daily average of paper under discount, which is a better
measure of actual credit needs than the aggregate for the year,
was $51,379,334* in 1929, an increase of 21.37 per cent over the
daily average of $42,332,126 in 1928. The banks in all of the six
geographical divisions in the Fifth reserve district used reserve
bank credit more extensively in 1929 than in 1928, District of
Columbia banks increasing their rediscounts most with 115.14
per cent and Maryland banks increasing least with 9.80 per cent.
The table on the next page shows by states the daily average
amount of paper under discount at the Richmond bank during
1929 and 1928, with percentages of increase last year.
A larger proportion of the member bank paper handled by
the Richmond reserve bank in 1919 was made up of member
banks' notes largely secured by customers' paper, or by rediscounts of secured and unsecured commercial or agricultural
paper than in other recent years. Of the total volume of 1929
discounts, only 38.42 per cent was secured by Government obligations, compared with 53.84 per cent in 1928 and 45.42 per
cent in 1927. Member bank notes secured by eligible paper and



FEDERAL RESERVE BANK OF RICHMOND
STATES

1929

1928

13

Per Cent of
Increase or
Decrease
9.80
115.14
16.60
20.49
24.30
20.07

$ 8,210,000 $ 7,477,054
Maryland
1,442,787
3,103,984
District of Columbia.
15,300,445
Virginia
17*840,022
3,818,579
West Virginia
4,60tt,039
10,931,504
North Carolina
13,587,908
3,361,757
South Carolina
4,036,381
21.37
Fifth District.
$51,379,334* $42,332,126
* This figure, which varies slightly from the average shown on page
6, is correct. The slight inaccuracy in the other figure is due to the
special method of calculation used in accruing earnings.

rediscounts of secured or unsecured commercial or agricultural
paper made up 61.57 per cent of total discounts and rediscounts
at the Federal Reserve Bank of Richmond in 1929, compared
with 46.16 per cent in 1928 and 54.58 per cent in 1927.
On December 31, 1929, the total of discounted paper held by
the Bank was $38,938,704. In addition to the paper under discount at the end of the year, the Bank held $13,335,750 in bills
purchased in the open market and $9,559,100 in Government
securities, bringing the total earning assets up to $61,833,555,
in comparison with total earning assets amounting to $66,356,560 on December 31, 1928. Although discounts held for member
banks and Government securities owned were both higher on
the 1929 date, a decline of approximately 45 per cent in the
Bank's holdings of paper purchased in the open market brought
the total earning assets nearly 7 per cent below the total at the
end of 1928.
Three hundred and eighty-four member banks discounted
paper with the Federal Reserve Bank of Richmond at some time
in 1929, and at the end of the year 258 banks were being accommodated. The number of banks discounting at the reserve bank
was slightly smaller in 1929 than in 1928, but was a higher
percentage of the total membership in the Reserve System in
the Fifth district.
The discount rate on all classes of paper at the Bank was
5 per cent during the entire year 1929, at which figure it was
fixed on July 13, 1928.
ACCEPTANCES

The Federal Reserve Bank of Richmond discounted trade
acceptances totaling $1,256,241 for member banks in 1929, compared with $1,106,773 of the same class of paper discounted
in 1928. The percentage increase in trade acceptances discounted last year over the 1928 figures was much less than the
increase in other discounts.



14

FIFTEENTH ANNUAL REPORT OF THE

The Richmond bank purchased bankers' acceptances from
member banks and in the open market less extensively in 1929
than in the preceding year, partly due to the increased use of
its funds in rediscounting member bank paper. Aggregate purchases of acceptances by this Bank in 1929 totaled only $63,825,043, in comparison with $110,850,313 in acceptances purchased in 1928. Purchases from member banks last year totaled
$20,031,788, compared with $41,644,919 in 1928; purchases from
non-member banks and dealers totaled $42,295,923 against $61,602,075 in 1928; and purchases through foreign banks totaled
$1,497,332 compared with $63,802 in 1928. No purchases from
other Federal reserve banks were made in 1929, but acceptances
totaling $7,539,517 were bought from other reserve banks in
1928.
CHECK COLLECTIONS

Operations in the Transit Department set new records in
1929 for both number of checks handled and aggregate amount
involved. The department handled 55,730,000 checks during the
year, an increase of 1,160,000 checks over 54,570,000 handled
in 1928, which was a record number up to that time. The total
amount involved in the checks cleared last year was $14,118,820,000, compared with $13,990,057,000 in 1928, an increase of
$128,763,000. The average amount of each item handled dropped
slightly in 1929, to $253 from $256 average in 1928. The average number of items handled each working day in 1929 was
184,536, amounting in round numbers to $46,751,000, compared
with 180,695 items totaling $46,325,000 handled daily in 1928.
Of the 55,730,000 items handled in 1929, 5,001,000 were drawn
on banks outside the Fifth reserve district and were forwarded
to other Federal reserve' banks and branches, and 1,855,000
items were drawn on the Treasurer of the United States.
Cash letters forwarded direct to other Federal reserve
banks and branches by member banks in the Fifth district, for
collection and credit to the reserve accounts of the sending banks
at the Federal Reserve Bank of Richmond, numbered 210,776
last year, totaling in amount $2,434,671,000, as compared with
231,111 cash letters amounting to $2,330,256,000 sent direct to
other districts in 1928. The direct routing of cash items, which
increased steadily up to 1929, results in a saving of transit time
in securing credit to reserve accounts.
NON-CASH COLLECTIONS

The Collection Department of the Federal Reserve Bank of
Richmond, which undertakes to collect notes, acceptances,
drafts and securities for member banks, handled 284,929 items
in 1929, having an aggregate value of $264,948,000, as compared



15

FEDERAL RESERVE BANK OF RICHMOND

with 282,008 items amounting to $288,560,000 handled in 1928.
These figures show an increase of 1.04 per cent in the number
of items handled last year, but the aggregate amount handled
decreased 8.19 per cent, the average amount of the items collected in 1929 being less than in 1928.
GOLD SETTLEMENT FUND

The Federal Reserve Bank of Richmond received $10,475,302,000 from Federal reserve banks and other sources through
the Gold Settlement Fund in 1929, while it paid out $10,481,188,000. The excess of disbursements over receipts resulted in
a net decrease for the year of $5,886,000, leaving a balance of
$8,093,000 in the Fund to the credit of this Bank at the close
of business December 31, 1929.
The following table shows the total receipts from and payments to other Federal reserve banks on account of daily transit clearings, with percentages:
(000 omitted)
Receipts
from

District
Boston
New York
Philadelphia
Cleveland
Atlanta
Chicago
St. Louis
Minneapolis
Kansas City
Dallas
San Francisco
Totals

$

168,976
2,785,218
708,610
638,052
414,808
382,491
122,848
16,304
35,111
47,219
53,589

$

169,814
2,638,293
757,719
585,123
404,932
414,153
197,225
5,116
35,686
34,805
51,773

Total
Settlements
'$

338,790
5,423,511
1,466,329
1,223,175
819,740
796,644
320,073
21,420
70,797
82,024
105,362

$ 5,373,226

$ 5,294,639

$10,667,865

2,528,463
1,739,761
671,967

2,365,461
1,853,940
720,790

$10,313,417

$10,234,830

Percentage
of Total
3.18
50.84
13.74
11.47
7.68
7.47
3.00
.20
.66
.77
.99

4,893,924
3,593,701
1,392,757
$20*548,247

Settlements between
Head Office a n d
Branches:
Richmond
Baltimore
Charlotte
Totals

Payments
to

100.

The percentage of settlements with Cleveland, Chicago,
Kansas City and Dallas were higher in 1929 than in 1928, but
all percentage changes were very small. Settlements in aggregate amounts between the Richmond district and the other eleven
districts were all larger in 1929 than in 1928 except between
Richmond and Minneapolis and Richmond and San Francisco.



16

FIFTEENTH ANNUAL REPORT OF THE

We received more from than we paid to New York, Cleveland,
Atlanta, Minneapolis, Dallas and San Francisco, while we paid
more to than we received from Boston, Philadelphia, Chicago,
St. Louis, and Kansas City. The total for all districts was approximately $380,000,000 more in 1929 than in the preceding
year, of which $180,000,000 occurred in settlements between
Richmond and New York.
WIRE TRANSFERS OF FUNDS

Wire transfers of money, which are made for member
banks without cost to them, are facilitated by the operation of
private leased wires connecting all Federal reserve banks and
branches, and the Federal Reserve Board. The use of our wire
facilities has steadily increased, funds having been transferred
for member banks 149,495 times in 1929, the total amount so
transferred being $6,020,866,000, compared with 141,525 transfers aggregating $5,676,459,000 made in 1928. There were
145,534 telegrams sent or received over the private wire during
1929, compared with 140,986 messages in 1928. In its transactions with and for member banks, the bank uses commercial
telegrams extensively, in addition to the operation of the private
leased wire.
RESERVE NOTE CIRCULATION

The average daily circulation of Federal reserve notes of
the Richmond bank was higher in every month in 1929 than in
the corresponding month in 1928. Circulation followed a seasonal trend during the year, declining steadily from a daily
average of $81,275,496 in January to $66,105,238 in June, and
then rising to $97,996,997 in December, the high point of the
year. The upturn came approximately a month earlier in 1929
than in most years, and was more extensive, due to the fact
than on July 10, 1929, the Federal reserve banks put the new
small sized currency in circulation, and for some time both the
old and new money circulated quite freely. Because of demands
for the new currency, much of which was carried or stored away
for souvenirs, the banks were compelled to draw more currency
from the reserve bank than they normally need. This extra
demand continued for several months, and kept the total amount
of circulation above the level required by the volume of ordinary business being done. The low point in circulation reached
in June was $13,247,502 above the low point in July 1928, and
the high average of December 1929 was $11,348,634 above the
December 1928 circulation. The 1929 yearly average of $78 715,188 was $14,137,463 above the 1928 average of $64,577,725.
On December 31, 1929, the volume of notes in circulation totaled



FEDERAL RESERVE BANK OF RICHMOND

17

$98,670,400, as compared with $86,338,950 on December 31,
1928.
CURRENCY AND COIN SERVICE
The Federal Reserve Bank of Richmond received $510,197,758 in currency and coin from member banks in 1929, and $64,191,812 from non-member banks. Shipments to member banks
during the year totaled $489,135,668, and $21,713,478 were sent
to non-members. The total amount of currency and coin received
from or shipped to member and non-member banks in 1929 was
$1,085,238,716, a sum $104,903,273, or 10.7 per cent, in excess
of total receipts and shipments in 1928. Part of the increase
in the receipts and deliveries of currency and coin in 1929 was
due to the introduction of new currency and retirement of much
of the former paper money.
In shipments of currency and coin to or from member
banks, the reserve bank defrays all shipping charges and insurance. It also pays the charges on remittances from nonmember banks in settlement for cash, letters, but all other shipments to or from non-member banks are made at the expense
of the non-members concerned in the transaction. Such other
shipments are usually in the nature of Subtreasury transactions.
RESERVE POSITION
The ratios of cash reserves to note and deposit liabilities
combined were higher at the Federal Reserve Bank of Richmond
in every month except three in 1929 than in 1928, chiefly due to
reduced investments in open market paper and Government securities and a consequent increase in cash reserves last year. In
January and February 1929 the reserve ratios were higher than
in 1928, but in March, April and May the ratios were lower,
reaching the lowest point of the year, 57.63 per cent, in May.
From and including June to the end of 1929 the reserve ratio
was higher each month than in the corresponding month of the
preceding year, the highest monthly average, 65.24 per cent, for
1929 being reached in December. In 1928 the low point of
50.79 per cent occurred in January and the high point of 69.05
per cent in March. The average ratio for the year 1929 was
61.25 per cent, compared with 58.15 per cent in 1928.
Holdings of open market paper and Government securities
last year influenced the reserve ratio less than in the preceding
year, discounts for member banks in 1929 making up a much
larger percentage of total earning assets than in either 1928
or 1927. Combined monthly holdings of acceptances and Government obligations averaged approximately $13,528,000 during 1929, compared with an average of $22,763,000 in 1928 and
$32,657,000 in 1927. On the other hand, the average monthly
holdings of discounts for members rose in 1929 to $51,383,154,



18

FIFTEENTH ANNUAL REPORT OF THE

compared with $42,308,000 in 1928 and only $23,429,000 in 1927.
The average daily deposits totaled $69,246,347 in 1929,
against $72,030,327 in 1928; average daily note circulation was
$78,715,188 in 1929 and $64,577,725 in 1928; and daily average
cash reserves totaled $90,628,000 last year and $79,434,939 the
preceding year. Deposits averaged highest in January and
lowest in December; note circulation was highest in December and lowest in June; and cash reserves were highest in
December and lowest in May.
CHANGES IN MEMBERSHIP

Membership in the Federal Reserve System in the Fifth
district declined during 1929 from 555 banks to 525 banks.
Five banks joined the System during the year, but 35 members
were lost through liquidations, mergers or withdrawals, a net
decrease of 30 members, 8 of these being withdrawals of
National banks upon surrender of their charters to merge with
State banks or to be absorbed in State bank branch systems.
At the end of 1929 there were 480 National bank members and
45 State bank members in the district. Increased capital and
surplus, and the subscriptions of new member banks, added
11,892 share of stock of the reserve bank to members' holdings
during 1929, but liquidations, mergers and withdrawals deducted 13,531 shares, a net loss of 1,639 ishares during the year.
On December 31, 1929, the shares of this Bank owned by member banks numbered 121,499, as compared with 123,088 shares
held on December 31, 1928. The net decrease in the paid-up
capital of the Bank during 1929 was $81,950.
BANK RELATIONS WORK

Measured by the number of visits made during 1929, the
volume of work done by the Bank Relations Department was
slightly less than in 1928, the decrease being in visits to nonmember banks. In accordance with the policy established by
the Board of Directors, each member bank in the district was
visited at least once during the year, and certain banks were
visited several times. In addition to the work among member
banks, many visits were paid to non-member banks, the visits
for the year being 665 to member banks and 264 to non-members, a total of 929.
As heretofore, a great deal of attention was given during
1929 to member banks considered to be in unsatisfactory condition. It should be noted, however, that the number of such
cases was less than in former years. The Relations Department
accomplished a considerable amount of work during 1929 in
the cases of suspended member banks which were indebted to
us at the time of suspension.



FEDERAL RESERVE BANK OF RICHMOND

19

During the year one or more representatives of the department attended each State banking convention held in the district. Representatives were also present at several group meetings held by the various State banking associations. The department undertook a study of methods used by member banks
in computing their required reserves, and in some instances was
able to point out errors and secure proper classification of statement items. The member banks willingly co-operated in this
investigation.
BANK EXAMINATION DEPARTMENT

The personnel of the Examination Department of the Richmond reserve bank remained unchanged during 1929. Four
examiners, a clerk and one stenographer comprise the force, all
working under the supervision of the Assistant Federal Reserve
Agent.
Examinations and credit investigations were made during
1929 as follows:
Banks
Credit investigations made at time bank was being examined by State bank examiners
18
Regular and independent examinations of State member banks
10
Special visits
1
State bank examined in connection with application for
membership
-i
1
National bank examined for membership of State bank,
conversion of the National bank
1
Investigation of State member bank in connection with
merger with non-member State bank
1
32

Branches
8

8

STOCKHOLDER'S ANNUAL MEETING

The stockholder of the Federal Reserve Bank of Richmond
held their fifth annual meeting in the Auditorium of the Bank
on April 12, 1929, with C. E. Tiffany, of Warrenton, Va., President of the Association, in the Chair. One hundred and sixtyfour representatives of 125 banks were present, and in addition
there were two representatives from the Federal Reserve Board
staff, 6 Directors of the Federal Reserve Bank of Richmond, 5
Directors of the Baltimore Branch, and 5 Directors of the Charlotte Branch. The meeting opened with addresses by Wm. W.
Hoxton, Chairman of the Board of this Bank, and President
Tiffany. H. H. McKee, Chairman of the Advisory Committee,
presented the Committee's report, and Mr. Hoxton then introduced the guest of honor, Hon. Charles S. Hamlin, a member of
the Federal Reserve Board. Governor George J. Seay addressed



20

FIFTEENTH ANNUAL REPORT OF THE

the meeting, after which it was thrown open to the delegates
for general discussion. The topic which proved of chief interest to the representatives of the member banks was the
question of distribution of reserve bank earnings. Upon the
suggestion of John Poole, of Washington, Mr. Hamlin introduced Dr. E. A. Golden weiser, Director of the Division of Research & Statistics of the Federal Reserve Board, and Dr. Goldenweiser spoke on the general credit situation in the United
States. Upon recommendation of the Nominating Committee,
the following officers were elected to serve during the next year:
for President, Waldo Newcomer, Chairman of the Executive
Committee of the Baltimore Trust Co.; for Vice-President, F.
F. Beattie, President of the First National Bank of Greenville,
S. C.; and for Secretary, George H. Keesee, Cashier of the
Federal Reserve Bank of Richmond. As members of the Advisory Committee the Association elected George R. Gehr, of
Maryland; Floyd E. Davis, of the District of Columbia; D. J. F.
Strother, of Welch, West Virginia; C. S. Carter, of Bristol,,
Virginia; John M. Miller, III, of Gastonia, North Carolina; and
W. L. Glover, of Orangeburg, South Carolina. At the close of
the meeting Governor Seay laid eleven questions bearing on
Federal reserve bank policy before the delegates, and asked
consideration of them during the next year. The meeting then
adjourned to the Commonwealth Club for lunch.
PERSONNEL

The Board of Directors held twelve regular meetings in
1929. In the annual Fall election, member banks in Group 2
reelected D. R. Coker, of Hartsville, South Carolina, as a Class
B director, and member banks in Group 3 reelected L. E. Johnson, of Alderson, West Virginia, as a Class A director. Both of
these gentlemen will serve three years from December 31, 1929.
The Federal Reserve Board reappointed Wm. W. Hoxton as a
Class C director, for a three year term beginning December 31,
1929, and redesignated him as Chairman of the Board and
Federal Reserve Agent for the year 1930. Mr. Frederic A.
Delano was redesignated as Deputy Chairman.
The Board of Directors, at the December meeting, reelected
John Poole, President of the Federal-American National Bank,
Washington, D. C, as the representative on the Federal Advisory Council for the Fifth District, and designated Charles E.
Rieman, President of the Western National Bank, Baltimore,
Maryland, as alternate.
There were no changes in the official personnel of the Bank
during 1929. The total number of officers and employees at
Richmond on December 31, 1929, was 332 as compared with
341 on December 31, 1928. The total number of officers and



FEDERAL RESERVE BANK OF RICHMOND

21

employees in the Richmond, Baltimore and Charlotte offices,
combined, on December 31, 1929, was 575, as compared with
572 on December 31, 1928. A reduction of 9 at Richmond, an
increase of 10 at Baltimore, and an increase of 2 at Charlotte,
increased the total force by 3. The increase in Baltimore was
caused chiefly by the greater volume of currency and coin handled, due largely to the change in the size of currency.
BALTIMORE BRANCH

The Baltimore Branch office serves the State of Maryland
and thirty counties in northern West Virginia, as follows:
Barb our
Berkeley
Braxton
Calhoun
Doddridge
Gilmer
Grant
Hampshire

Hardy
Harrison
Jackson
Jefferson
Lewis
Marion
Mineral
Monongalia

Morgan
Nicholas
Pendleton
Pleasants
Preston
Randolph
Ritchie

Roane
Taylor
Tucker
Upshur
Webster
Wirt
Wood

At the close of the year 1929 there were 147 member banks
and 241 non-member banks in the territory served by the Baltimore Branch, all of the non-member banks being on the par list.
The actual number and amount of all transactions of the
Baltimore Branch are included in the aggregate volume of business reported by the Head Office. However, the volume handled
by the Branch increased substantially for the year 1929, as
compared with the year 1928, the increase being principally in
the Currency and Check Collection Departments.
The number of employees at the Baltimore Branch, including four officers, increased from 175 at the close of 1928 to 185
at the close of 1929, this increase in the number of employees
being occasioned by the greater volume of work in the Currency
Department and the opening of a cafeteria during 1929.
CHARLOTTE BRANCH

The Charlotte Branch territory embraces 34 counties in
western North Carolina and 21 counties in western South Carolina. Counting out-of-town branches as separate banks, there
were in the territory of the Charlotte Branch on December 31,
1929, 64 member banks, 34 par non-member banks, and 208
non-par non-member banks. The counties served are as follows:



FIFTEENTH ANNUAL REPORT OF THE

22

NORTH CAROLINA

Alexander
Alleghany
Ashe
Avery
Buncombe
Burke
Cabarrus
Caldwell
Catawba
Cherokee
Clay
Cleveland
Gaston
Graham
Haywood
Henderson
Ire dell

Jackson
Lincoln
Macon
Madison
McDowell
Mecklenburg
Mitchell
Polk
Rowan
Rutherford
Stanley
Swain
Transylvania
Union
Watauga
Wilkes
Yancey

SOUTH CAROLINA

Abbeville
Aiken
Anderson
Cherokee
Chester
Edgefield
Fairfield
Greenville
Greenwood
Lancaster
Laurens

Lexington
McCormick
Newberry
Oconee
Pickens
Richland
Saluda
Spartanburg
Union
York

Working conditions at the Charlotte Branch were not changed during the year 1929. The Branch occupies the entire twentieth floor and a part of the basement of the First National Bank
Building. The vault is located in the basement, and the Branch
has the exclusive use of an elevator running between the basement and the twentieth floor.
At the end of 1929 there were employed at the Charlotte
Branch 2 officers and 56 employees, compared with 2 officers and
54 employees on December 31, 1928.
The number and amount of all transactions at the Charlotte
Branch are included in the aggregate volume reported by the
Federal Reserve Bank of Richmond. The physical volume of
business transacted through the Branch was larger in all departments in 1929 than during 1928, but the aggregate amounts of
checks and non-cash collection items were slightly less in 1929
than in 1928.
FISCAL AGENCY OPERATIONS

The work handled by the Federal Reserve Bank of Richmond
as Fiscal Agent of the United States was much smaller in 1929
than in 1928. There were only four issues of Certificates of Indebtedness, and one special offering of Treasury Notes sold on
bids. Five bids were made in the Fifth district, one of which was
accepted and the notes allotted. Total subscriptions to all issues
in 1929 amounted to $131,536,500, of which $80,904,500 was allotted. Including deliveries, redemption and exchanges- of Certificates of Indebtedness, Treasury Notes and Treasury Bonds,
Victory and Liberty Bonds, and War Savings Stamps, the Bank
handled 50,569 pieces with an aggregate value of $141,732,000
during 1929, compared with 232,164 pieces valued at $221,


23

FEDERAL RESERVE BANK OF RICHMOND

247,000 handled in 1928, a decrease last year of 78.22 per cent
in number of pieces and 35.94 per cent in total value.
An analysis of the United States Treasurer's general account
with the Bank shows that on January 1, 1929, the Treasurer had
a balance of $1,432,000. Receipts for the credit of the Treasurer
during the year totaled $891,908,000, while disbursements totaled $891,190,000, leaving a balance due the Treasurer on December 31, 1929, of $2,150,000. The receipts and disbursements by
the Bank for the account of the Treasurer in 1929 were about
7/10ths of 1 per cent less than in 1928 .
FIDUCIARY POWERS

During 1929 permission was granted to fifteen National
banks to exercise fiduciary powers under authority of Section
11 (k) of the Federal Reserve Act, as amended, and the privilege
of exercising additional powers was granted to two banks which
had previously exercised partial powers. The seventeen banks
whose applications to exercise fiduciary powers in whole or in
part were approved in 1929 were located as follows: District of
Columbia 1; Maryland 1; Virginia 7; West Virginia 4; North
Carolina 2; and South Carolina 2.
Name of Bank
Riggs National Bank
National Bank of Rising Sun (x)..
Second National Bank
Virginia National Bank*
National Bank of Norton
National Bank of Orange
Colonial-American National Bank*
Farmers & Merchants National
Bank
First National Bank
Bluefield National Bank
Charleston National Bank*
Peoples National Bank
South Branch Valley National Bank
First National Bank of Granville*..
First National Bank*
Peoples National Bank(x)
Peoples National Bank

Location

Date Granted

Washington, D. C
Rising" Sun, Md
Culpeper, Va
Norfolk, Va
Norton, Va
Orange, Va
Roanoke, Va

1-23-29
2- 8-29
4-23-29
10- 1-29
1- 8-29
2-27-29
7-30-29

Stanley, Va.
Wytheville, Va
Bluefield, W. Va
Charleston, W. Va, ..
Fairmont, W. Va
Moorefield, W. Va. ..
Oxford, N. C. ._
Rocky Mount, N. C. ..
Greenville, S. C
Rock Hill, S. C

4- 9-29
8-15-29
4- 9-29
3-18-29
9-28-29
12-10-29
8-15-29
4- 1-29
7-16-29
4- 5-29

* Powers previously granted reaffirmed after consolidation,
(x) Supplementary powers.




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