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SEVENTEENTH ANNUAL REPORT
TO THE
FEDERAL RESERVE BOARD
BY THE
FEDERAL RESERVE AGENT
FEDERAL RESERVE BANK
SAN FRANCISCO
FOR THE
YEAR ENDED DECEMBER 31, 1931
SEVENTEENTH ANNUAL REPORT
TO THE
FEDERAL RESERVE BOARD
BY THE
FEDERAL RESERVE AGENT
FEDERAL RESERVE BANK
SAN FRANCISCO
FOR THE
YEAR ENDED DECEMBER 31, 1931
DIRECTORS AND OFFICERS
OF THE
FEDERAL RESERVE BANK OF SAN FRANCISCO
January 1, 1932
A
Term
Expires
Dec. 31
DIRECTORS
Class Group
C. K. MCINTOSH, San Francisco, California
President, The Bank of California, N. A., San Francisco,
California.
1934
THOMAS H. RAMSAY, Red Bluff, California
1932
-
President and General Manager, Pacific National Agricultural Credit Corporation, San Francisco, California.
KEITH POWELL, Woodburn, Oregon
- - - - - President, Bank of Woodburn, Woodburn, Oregon.
A. B. C. DOHRMANN, San Francisco, California Chairman of the Board, Dohrmann Commercial Company
and The Emporium Capwell Corporation, San Francisco,
California.
MALCOLM MCNAGHTEN, LOS Angeles, California
1933
1932
-
1933
President, Broadway Department Store, Inc., Los Angeles,
California.
ELMER H. COX, San Francisco and Madera, California
President, Madera Sugar Pine Company, Madera, California.
1934
ISAAC B. NEWTON, LOS Angeles, California
-
1932
-
1933
Chairman of the Board.
WALTON N. MOORE, San Francisco, California
Deputy Chairman,
President, Walton N. Moore Company, San Francisco, California.
WILLIAM SPROULE, San Francisco, California
-
1934
President-Retired, Southern Pacific Company; President,
and Director, Central Pacific Railway Co. and Southern
Pacific Railroad Co., San Francisco, California.
MEMBER FEDERAL ADVISORY COUNCIL
HENRY M. ROBINSON, representing District No. 12
Chairman of the Board, Security-First National Bank,
Los Angeles, California
OFFICERS
ISAAC B. NEWTON,
Chairman of the Board and
Federal Reserve Agent
S. G. SARGENT,
Assistant Federal Reserve Agent,
Chief Examiner, and Secretary
OLIVER P. WHEELER,
Assistant Federal Reserve Agent
F. H. HOLMAN, General Auditor
R. T. HARDY, Auditor
JNO. U. CALKINS,
Governor
WM.
A. DAY,
Deputy Governor
IRA CLERK,
Deputy Governor
W. M. HALE, Cashier
CHESTER D. PHILLIPS, Assistant Cashier
C. E. EARHART, Assistant Cashier
H. N. MANGELS, Assistant Cashier
E. C. MAILLIARD, Assistant Cashier
J. M. OSMER, Assistant Cashier
DIRECTORS AND OFFICERS OF BRANCHES
January 1, 1932
SPOKANE BRANCH
Term
Expires
Dec. 31
Directors
PETER MCGREGOR*,
Officers
D . L. DAVIS, Managing Director
Chairman
G. I. T O E V S *
1932
J . M. LEISNER, Assistant Manager
1933
A. J. DTJMM, Assistant Cashier
D. W. TwoHYf
.
.
.
. 1933
R. M. H A R D Y !
.
.
.
.
1932
D. L. D A V I S !
.
.
.
.
1932
S E A T T L E BRANCH
H E N R Y A. R H O D E S * ,
Chairman
C. R . SHAW, Managing Director
.
.
.
1932
B. A. RUSSELL, Assistant Manager
1933
G. W. R E L F , Assistant Cashier
C H A R L E S H. C L A R K E *
.
.
M. A. ARNOLDf
M. F . BACKusf
.
.
. 1933
. 1932
.
.
.
.
C. R. S H A W J
1932
P O R T L A N D BRANCH
EDWARD C. P E A S E * ,
R. B. W E S T , Managing Director
Chairman
1932
S. A. MACEACHRON, Assistant Manager
1933
J . P . BLANCHARD, Assistant Cashier
N A T H A N STRAUSS*
.
.
.
J. C. AlNSWORTHf
.
.
. 1933
JOHN F. D A L Y ! } .
.
.
.
R. B . WESTf
1932
1932
SALT L A K E CITY BRANCH
G. G. W R I G H T * ,
W. L. PARTNER, Managing Director
Chairman
LAFAYETTE HANCHETT*
.
1932
1933
H. E. HEMINGWAY!
•
•
•
1933
E. O. HowARDf
.
.
.
. 1932
W. L. P A R T N E R ! .
.
.
.
H. M. CRAFT, Assistant Manager
W. M. Smoot, Assistant Cashier
1932
LOS A N G E L E S BRANCH
J E S S E B . ALEXANDER*,
W. N . AMBROSE, Managing Director
Chairman
CHARLES B. VOORHIS*
.
1932
M. MCRITCHIE, Assistant Manager
.
1933
F R E D C. BOLD, Assistant Cashier
1933
L. C. MEYER, Assistant Cashier
F . J. BELCHER, J R . f .
.
.
A. J. CRUICKSHANKf
.
. 1932
.
.
W. N . A M B R O S E !
.
1932
* Appointed by Federal Reserve Board. fAppointed by Federal Reserve Bank
^Succeeded b y Richard S. Smith, February 18, 1932.
LETTER OF TRANSMITTAL
Federal Reserve Bank,
San Francisco, California,
March 1, 1932.
Sirs:
I have the honor to submit the following report concerning conditions in the Twelfth Federal Reserve District and the operations of
the Federal Reserve Bank of San Francisco, for the year ended
December 31, 1931.
Yours respectfully,
Chairman of the Board
and Federal Reserve Agent.
Federal Reserve Board,
Washington, D. C.
ECONOMIC REVIEW OF THE YEAR 1931
TWELFTH FEDERAL RESERVE DISTRICT
Agriculture
Agricultural products brought unusually low returns to District
farmers during 1931. Shortages of rainfall and irrigation water in all
states of the District except Arizona and excessive temperatures during
mid-summer reduced crop production to the smallest volume since 1921
and created a serious shortage of feed on livestock ranges. Not only
were harvests greatly reduced, but average farm prices reached the
lowest levels since the immediate pre-War period, some of the important
commodities of the District selling at the lowest prices on record. Although costs of production were reduced during 1931, gains from such
sources did not offset declines in production and in prices received for
agricultural products and, as a result, the farmer's purchasing power
was further sharply curtailed during 1931.
INDEXES OF CROP PRODUCTION
Twelfth Federal Reserve District
(1925-1927 Annual Average = 100)
,
1931*
.
Volume Value
Grains . . . 73.7 35.7
Field Crops 88.9 56.6
Fruits . . . . 107.6 68.1
Vegetables. 126.9 91.5
All Crops.. 94.6 58.4
*Preliminary. •)•]Revisec
,
1930t Volume! Value
94.7
104.7
120.7
136.5
110.2
53.9
81.0
100.3
122.6
84.4
r— 1929
,
Volume Value
99.1
105.6
112.9
132.7
108.7
92.7
124.3
111.4
128.4
112.8
t
1928
N
Volume Value
115.2
105.3
111.5
117.2
109.0
96.C
107. J
102.0
116.8
103.5
,
1921 -
Volume Value
101.3
92.2
73.6
47.6
84.9
77.6
77.8
90.0
50.3
79.8
While production of crops decreased during 1931, output of dairy
and poultry products and marketing of cattle and lambs were greater
than in 1930. Decreases of from 10 to 30 per cent in the prices of these
products, however, more than offset increases in production and their
aggregate value in 1931 was below that of the preceding year. Except
in Arizona, livestock ranges were in poor condition throughout the year
and the condition of livestock was affected accordingly. During the
autumn and winter it became necessary to use increased amounts of
supplemental feeds to prepare livestock for market—a factor which
prevented any appreciable saving from lowered costs of production.
Industry and Trade
Industrial production in the Twelfth District was comparatively
stable during the first five months of 1931, but declined sharply during
the later months of the year. For the year as a whole, slaughter of livestock, production of butter, and consumption of wool were greater than
in 1930, while output of flour and paper and pulp declined but slightly.
Gold production was also larger in 1931 than in 1930. Consumption of
electric energy, which has increased during each of the past 12 years,
partly as a result of a shift to the use of electric power in place of other
forms of energy, was about 3 per cent smaller in 1931 than in 1930.
Marked declines in activity were recorded in the lumber, petroleum,
cement, non-ferrous metals, furniture, dried fruits, and canning and
preserving industries. The value of contracts awarded for such public
6
SEVENTEENTH ANNUAL REPORT
enterprises as sewers, bridges, streets and roads, and the Hoover Dam
was larger than in 1930, but the value of all other types of building was
smaller than in any year since 1922. Both the number of employees
engaged by industry and the average earnings per worker averaged
well below the reduced levels of 1930.
Distribution of commodities proceeded at a slower rate in 1931 than
in 1930. Sales of department stores and wholesalers decreased substantially in value and, after allowance for the decline in prices, there
appears also to have been some reduction in the volume of goods sold.
The most abrupt declines of the year (seasonal factors allowed for)
occurred during September, October, November, and December. The
value of stocks carried by department stores decreased during 1931,
with the result that the rate of turnover remained about the same as in
previous years. Collections by those stores were somewhat slower, particularly during the last few months of the year. Greater decreases
were shown in freight carloadings of industrial products on District
railroads than in merchandise shipments. Intercoastal traffic through
the Panama Canal was at a much lower level in 1931 than in 1930,
largely because of a reduced movement of petroleum products. The
value of foreign trade decreased sharply as compared with a year
earlier, the decrease in imports exceeding that in exports, reflecting the
greater decline in prices of certain major import commodities such as
silk and rubber than in the bulk of commodities exported.
INDEXES OF INDUSTRIAL PRODUCTION
Twelfth Federal Reserve District
(1923-1925 Annual Average=100)
Industrial Production
1931
1930
1929
1928
1927
1926
1925
74
98
123
114
110
110
104
58
85
111
113
108
112
110
Electric Power Production
155
159
157
144
131
121
109
Manufactures
Foods
Butter
Canned Fruits
Canned Vegetables
Canned Fish
Flour
Slaughter of Livestock
Wool Consumption
Lumber
Paper and Pulp
Eefined Mineral Oils
Cement
Metals and Metal Products
Minerals
Petroleum
Copper
Lead
Silver
Building and Construction
Building Permits
Larger Cities
Smaller Cities
Engineering Contracts Awarded
Excluding Buildings
75
102
121
110
77
112
104
91
89
54
123
140
70
58
71
79
62
68
47
62
31
29
36
109
191
102
122
114
148
160
131
109
80
71
86
128
168
90
93
90
95
83
96
71
67
51
49
59
120
128
124
120
105
138
160
144
113
84
82
108
142
193
106
143
122
121
129
114
86
81
68
64
87
134
134
118
124
111
167
132
135
103
94
75
107
145
155
115
128
104
96
118
111
85
83
75
71
94
124
113
114
113
110
129
109
148
99
97
89
105
114
116
104
164
112
106
92
94
80
109
132
148
133
114
121
110
121
106
105
98
121
118
123
80
97
94
106
104
118
107
102
100
100
93
109
114
92
100
96
106
113
99
93
92
88
109
115
95
102
104
103
107
106
99
Carloadings, Industrial
96
106
118
89
88
84
81
97
132
105
132
FEDERAL RESERVE BANK OF SAN FRANCISCO
7
Credit
The record of the credit situation in the Twelfth District during
1931 shapes itself into three general periods. The first period, covering
five months, bore the general characteristics of easy money conditions.
Interest rates continued to decline as they had throughout 1930 and,
although banks scrutinized loan applications carefully, money Avas advanced for sound undertakings. Time deposits of reporting member
banks increased to record levels; net demand deposits rose slightly;
commercial loans changed little; security loans continued the decline
that had commenced in October, 1930, and investments increased
rapidly. Demand for currency on the part of the public showed no
appreciable change aside from its usual seasonal fluctuations. Borrowings from the Reserve Bank, although somewhat higher than during
most of 1930, were at relatively low levels.
A distinct change in the credit situation was ushered in late in the
second quarter of 1931. Bankers' balances in the larger centers of the
District declined, thereby necessitating increased borrowing from the
Reserve Bank. About that time greater than seasonal withdrawals of
currency began to affect deposits appreciably, a development which
moved swriftly to its climax for the year in October. Although the
volume of currency in circulation continued
to increase during November and December, the advance wras largely in response to seasonal
INDEXES OF TRADE
Twelfth Federal Reserve District
(1923-1925 Annual Averajre = 100)
1931
1930
1929
192S
1927
1926
1925
Carloadings
75
Merchandise and Miscellaneous . . 90
Foreign Trade*
72
Imports*
64
Exports
7G
Intercoastal Trade
71
Eastbound
67
Westbound
87
Wholesale Sales
73
Agricultural Implements
72
Automobile Supplies
54
Dry Goods
52
Electrical Supplies
70
Furniture
77
Groceries
105
Hardware
60
Shoes
62
Paper and Stationery
79
97
107
109
105
110
87
80
109
93
128
72
68
103
96
118
81
82
94
112
117
141
128
147
98
87
137
108
155
89
88
124
122
123
99
101
103
114
117
130
116
138
89
80
120
102
139
93
89
121
110
102
96
106
96
112
116
121
114
124
97
94
110
97
132
94
88
112
97
89
94
110
98
112
113
125
120
127
99
96
107
100
134
96
90
112
102
94
99
104
102
108
107
102
104
102
85
82
96
101
120
98
95
106
101
97
98
99
101
Department Store Sales
Los Angeles
Salt Lake City
San Francisco
Seattle
Department Store Stocks
103
103
90
100
92
91
113
116
97
107
110
104
120
125
110
114
120
106
117
122
111
113
117
108
114
121
103
110
107
108
111
115
104
109
103
101
105
107
103
105
102
102
Automobile Registrations—New Cars 66
Passenger
61
Commercial
112
95
90
151
133
129
180
99
99
96
89
86
95
109
109
105
102
103
98
*Excluding raw silk.
O
SEVENTEENTH ANNUAL REPORT
demands. Withdrawals of both time and demand deposits, combined
with a desire for increased liquidity on the part of banks prompted
bankers to adopt a more stringent policy in the placing and continuance
of loans so that their institutions might retain other readily marketable
assets. This tendency was reflected in a sharp turn downward in commercial loans of reporting member banks in August, a movement which
continued to the end of the year. Further liquidation of loans on
securities also took place during this period. As would be expected,
these developments were accompanied by advances in interest rates.
COMMERCIAL LOAN RATE
MILLIONS
OF
DOLLARS
40
Reporting Member Banks
Twelfth District
Interest Rate and Bankers' Balances
San Francisco
Bank failures became more numerous during these and later months of
1931, the largest share of the year's total (33 member and 43 nonmember) coming in September, October, November, and December
when 49 banks were closed. The departure of several countries from
the gold standard and subsequent withdrawals of gold from the United
States added to the tightening of the credit structure in this District.
MILLIONS OF DOLLARS
DEMAND FOR CURRENCY
CREDIT EXTENDED
IN THE
TWELFTH DISTRICT
Reserve Bank Credit
Currency Circulation Twelfth District
Changes cumulated from January 2,1929
Culmination of the effects of these various factors was evident in October, when demand for credit at the Federal Reserve Bank of San
Francisco reached almost record proportions and total credit extended
by that Bank, both within and outside the District, stood at 246 million
dollars on October 28, compared with the record of 249 million dollars
for October 1, 1920.
FEDERAL RESERVE BANK OP SAN FRANCISCO
9
During the last two months of 1931, there was some easing from the
pressure of the June-October period. Public demand for currency
ceased to expand other than for seasonal needs, the downtrend in deposits moderated, the need for Reserve Bank credit diminished, and in
December interest rates declined slightly.
Considering the year as a whole, volume of credit extended by
Twelfth District member banks declined substantially. The contraction
was evident chiefly in total loans, as investment holdings, a large part
of which is purchased in national markets, increased during the year.
Part of the funds transferred from the District in payment for these
additional investments was repatriated indirectly by a reduction in
open market loans which represented almost entirely the extension of
credit to other areas. On the basis of reports for all member banks,
total loans and investments declined 245 million dollars (80 million
dollars at country banks and 165 million dollars at city banks), investments increased 77 million dollars (90 million dollars at city banks
offset in part by a decline of 13 million dollars at country banks), while
total loans decreased 322 million dollars (255 million dollars at city
banks and 67 million dollars at country banks).
Net demand and time deposits of member banks declined 407 million
dollars during 1931. The more important factors contributing to this
decrease were:
(1) A decline of 277 million dollars in total loans, excluding open
market loans.
(2) A net loss to the District of 261 million dollars through payments to other areas for the account of individuals.
(3) A net increase of approximately 51 million dollars in currency
in the hands of the public in this District.
Partially offsetting these factors were the following elements which
tended to increase deposits:
(1) Mint purchases of locally produced gold amounting to 44 million dollars.
(2) United States Treasury expenditures in the Twelfth District 144
million dollars in excess of collections.
(:3) An increase of 6 million dollars in loans to banks.
The factors tending to reduce deposits amounted to 589 million dollars and the offsetting factors amounted to 194 million dollars. The
difference between these two totals (395 million dollars) thus accounts
for all but 12 million dollars of the 407 million dollar decline of total
deposits during the year.
The Federal Reserve Bank of San Francisco supplied but little credit
to the District banking structure during the first few months of 1931.
Holdings of discounted bills and locally purchased acceptances combined approximated 20 million dollars prior to late May when borrowings began to increase. Investments in United States securities
were maintained at a fairly high level throughout the year, but inasmuch as practically all purchases for this portfolio are made in New
York these holdings represent principally a direct extension of credit
outside the District. The increase in total credit extended by the Bank
to near-record proportions in October was the result not only of increased discounts for member banks, but also of record holdings of
acceptances representing participation in the System's extension of
credit in the open market.
10
SEVENTEENTH ANNUAL REPORT
STATEMENT OF CONDITION
Federal Reserve Bank of San Francisco
RESOURCES
December 31, 1931
Cash Reserves held by this bank against its
deposits and note circulation:
Gold and Gold Certificates in vault
$ 18,925,961.62
Gold in the Gold Settlement Fund lodged with
the Treasurer of the United States for the
purpose of settling current transactions
between Federal Reserve Districts
26,617,538.71
Gold Held by the Federal Reserve Agent as
part of the collateral deposited by the bank
when it obtains Federal Reserve notes. This
gold is lodged in his name partly in the
vaults of the bank and partly with the
Treasurer of the United States
214,662,550.00
Gold Redemption Fund in the hands of the
Treasurer of the United States to be used
to redeem such Federal Reserve notes as
are presented to the Treasurer for redemption
3,268,046.29
Legal Tender Notes, Silver, and Silver Certificates in vaults of the bank (available as
reserve against deposits only)
8,812,715.00
Total Cash Beservcs
$272,286,811.62
December 31, 1930
* 43,003,674.95
27,057,475.41
215,762,550.00
4,529,086.43
8,392,116.00
$298,744,902.79
Loans and Investments
Loans to Member Banks:
On the security of obligations of the United
States
$ 10,844,261.50 $ 5,893,005.00
By the discount of commercial or agricultural paper or acceptances
19,898,289.63
9,590,701.58
Acceptances bought in the open market
32,013,913.11
31,023,120.89
United States Government Bonds, Notes, etc. 62,810,000.00
51,082,350.00
Federal Intermediate Credit Bank Debentures
1,870,000.00
Total Loans and Investments (or Earning
Assets)
$127,436,464.24
$ 97,589,177.47
Uncollected Items
Checks and Other Items not yet collected. .. $ 27,081,334.96
$ 31,560,282.05
Miscellaneous Resources
Bank Premises
$ 4,433,213.90
Non-Reserve Cash, consisting largely of National Bank notes and minor coin
6,394,917.09
All Other Miscellaneous Resources
Total Miscellaneous Resources
TOTAL RESOURCES
1,474,801.15
$ 4,620,999.03
5,310,820.80
783,629.84
$ 12,302,932.14 $ 10,715,449.67
$439,107,542.96
$438,609,811.98
FEDERAL RESERVE BANK OF SAN FRANCISCO
11
LIABILITIES
December 31, 1931
December 31, 1930
Currency in Circulation
Federal Reserve Notes in actual circulation,
payable on demand. These notes are secured in full by gold and discounted and
purchased paper
$231,077,615.00
$185,838,075.00
Deposits
Reserve Deposits maintained by member
banks as legal reserves against the deposits of their customers
$138,600,061.70
United States Government Deposits
3,193,632.81
Other Deposits, including foreign deposits,
deposits of non-member clearing banks, etc. 12,679,923.33
Total Deposits
$182,583,846.72
1,409,493.75
7,432,342.65
$154,473,617.84
$191,425,683.12
Deferred Availability Items
Deferred Items, composed mostly of uncollected checks on banks in all parts of the
country
$ 22,447,616.24
$ 30,793,00:5.42
Miscellaneous Liabilities
Reserves and All Other Miscellaneous
Liabilities
$
$ 2,063,083.94
573,755.21
Capital and Surplus
Capital Paid In, equal to 3 per cent of the
capital and surplus of member banks
$ 11,339,050.00 $ 11,504,300.00
Surplus as permitted by law
17,706,559.94
18,474,995.23
Total Capital and Surplus
TOTAL LIABILITIES
$ 29,045,609.94 $ 29,979,295.23
: . $439,107,542.96
$438,609,811.98
12
SEVENTEENTH ANNUAL REPORT
OPERATIONS OF THE FEDERAL RESERVE BANK OF
SAN FRANCISCO DURING 1931
Changes most noticeable in the statistical record of the operations of
the Federal Reserve Bank of San Francisco during 1931 were concerned chiefly with (a) the increase of currency in the hands of banks
and of the public and the accompanying decline of deposits at member
banks; (b) a decline in the availability of "Federal" funds and of
bankers' balances generally, with the consequent necessity of increased
borrowing on the part of member banks, and (c) the general tightening
of credit and increased dependence upon the Reserve Bank necessitated
by these two movements, The effects upon the Bank's operations of
these circumstances so far as they can be expressed numerically are
shown in the table on the opposite page. A more specific explanation of
the important items follows:
(1) An outstanding change as compared with 1930 was the relatively large increase in the Bank's discounting and rediscounting operations. As previously indicated, most of the increase
over 1930 came during the last three or four months of the year,
following the abandonment of the gold standard by England in
September. That event tended to accentuate the increase of
currency circulation which had become evident early in the
second quarter. At the same time individual deposits decreased
at an accelerated pace and net bankers' balances at city member
banks, particularly in San Francisco, continued a sharp drop
Avhich commenced earlier in the year. The combined result of
these circumstances was a sizeable increase in the volume of
member bank borrowing at the Reserve Bank.
(2) In contrast with 1930, acceptance dealings of this Bank declined
in relative importance, reflecting primarily a decline in the volume of business which customarily serves as a basis for the
creation of acceptances and late in the year, a shifting within
the interest rate structure which tended to favor borrowing of
member banks at the discount window rather than through the
sale of acceptances.
(3) The function of supplying currency and coin showed a decrease
in the number of individual pieces and in the dollar amount of
coin and currency received and counted. This decrease contrasted with an increase during 1930, a year when currency circulation declined, and reflected in large measure the marked
increase of currency held by the banks and the public during
1931.
(4) A further decrease in the volume of operations appears in the
number and dollar amount of telegraphic transfers of funds
during 1931. The greater share of this decrease may be attributed to (a) the reduction of bankers' balances and the less
rapid shuttling of "Federal" fund's back and forth between
Twelfth District and New York money markets, and (b) the
sluggish action of securities markets, whose operations instigate
the transfer of a considerable volume of funds during periods
of activity.
13
FEDERAL RESERVE BANK OF SAN FRANCISCO
(5) Reflecting the necessity for the United States Treasury to borrow large amounts during 1931 and its practice of using short
term instruments predominantly, the physical volume and dollar amount of United States securities issued, redeemed or
exchanged during the year exceeded the 1930 figures by a relatively large amount.
(6) Although there were no changes in methods of procedure or in
organization which appreciably affected the volume of checks,
drafts, notes and coupons collected, both the number of items and
their dollar amount declined sharply during 1931. This decline
is primarily an indicator of the trend of general business activity during the year.
PRINCIPAL OPERATIONS
1931
Supplying Currency and Coin
Currency Received and Counted:
Individual notes counted
Dollar amount
Coin Received and Counted:
Number
Dollar amount
Making Loans and Investments
Bills Discounted for Member Banks:
Number
Dollar amount*
Bills Purchased for the Account of
this Bank:
Number
Dollar amount
1930
1929
129,561,000
$832,157,000
134,955,000
$912,188,000
125,680,000
$899,442,000
132,158,000
$63,220,000
135,439,000
$74,913,000
124,060,000
$29,887,000
20,000
2,182,084,000
21,000
16,000
,109,586,000 $4,089,446,000
17,000
$299,630,000
28,000
$446,841,000
19,000
$301,741,000
Collecting Checks, Drafts, Notes,
and Coupons
Checks handled for collection:
67,180,000
76,800,000
Number
61,547,000
Dollar amount
$13,176,339,000 $15,322,015,000 $15,399,865,000
Collection Items handled, including
drafts, notes, and coupons:
1,437,000
1,572,000
1,293,000
Number
$387,186,000
$353,899,000
$321,519,000
Dollar amount
Supplementary Services
United States Government Securities issued, redeemed, or exchanged :
Number
94,000
74,000
51,000
Dollar amount
$453,845,000
$568,591,000
$311,343,000
Funds Transferred:
Number of transfers
158,000
129,000
149,000
Dollar amount
$17,325,704,000 $25,282,661,000 $16,561,947,000
'•Includes paper discounted for the Federal Intermediate Credit Banks at Berkeley, California, and
Spokane, Washington, amounting to $0,675,000 in 1931; $5,581,000 in 1930; and $16,374,000 in 1929.
14
SEVENTEENTH ANNUAL REPORT
INCOME AND DISBURSEMENTS
Federal Reserve Hank of San Francisco
Earnings
I9SI
On Loans to Banks and Paper Discounted for
Them
$1,091,639.84
On Acceptances Purchased
471,8.33.53
On United States Government Obligations
Owned
972,636.47
Other Earnings
181,410.39
Total Earnings
$2,717,520.23
1,017,171.06
79,548.44
$2,408,510.33
Additions to Earnings
$ 117,073.28
$ 110,275.23
Deductions from Earnings
For Current Bank Operation
$2,12!),347.50
For Assessments for Federal Reserve Board
Expenses
48,497.57
For Federal Reserve Currency, mainly the cost
of printing new notes to replace worn notes
in circulation, and to replenish the stock unissued and on hand
180,935.25
For Furniture and Equipment
13,214.47
For Reserves and Depreciation, Self-Insurance,
Losses, etc
188,840.88
All Other
19,748.84
Total Deductions from Earnings
$2,580,584.51
Net Income available for dividends, additions to surplus, and payment to the
United States Government'
$ 253,210.95
Dividends Paid to Member Banks, at the rate of
6 per cent on paid-in capital
$ 685,070.12
Excess of Dividends and Expenses over net income
431,859.17
$ 558,033.03
753,757.80
$2,251,862.72
55,915.2]
190,870.83
1S6,3O9.15
188,840.88
7,473.84
$2,881,272.63
$ S55.689.02*
$ 682,946.11
1,038,635.13
Addition to Surplus—The bank is permitted by
law to accumulate out of net earnings, after
payment of dividends, a surplus amounting to
100 per cent of the subscribed capital; and
after such surplus has been accumulated to pay
into surplus each year 10 per cent of the net
income remaining after paying dividends....
—0—
—0—
Payment to the United States Government as a
franchise tax representing the entire net income of the bank after paying dividends and
making additions to surplus (as above). No
balance remained for such payments in 1930
and 1931
—0—
—0—
Charges to Surplus Account
Excess of Dividends over Net Income
$ 431,859.17
Excess of Expenses over Net Income
—0—
Depreciation Reserve on United States Government Securities
336,576.12
Total Charged to Surplus Account
'Deficit.
$ 768,435.29
$ 682,!)46.11
355,689.02
—0
$1,038,635.13
FEDERAL RESERVE BANK OF SAN FRANCISCO
15
Earnings and Expenses
In consequence chiefly of the more active discount operations, earnings of the Bank were $309,010 larger in 1931 than in 1930. At the
same time total expenses were reduced by $300,688 and net earnings of
$253,211 were reported for 1931, contrasting with a net loss on 1930
operations amounting to $355,689. Dividend payments to member
banks at the legal rate of 6 per cent per annum required $685,070 during 1931 and, tinder authorization of the Board of Directors, surplus
was reduced by $431,859, or the difference between that amount and
net earnings ($253,211).
The largest items contributing to the reduction of expenses during
1931 were decreases in expenditures amounting to $173,095 for furniture and equipment and $122,515 for current bank operation. Expenditures for furniture and equipment were unusually large in 1930 when
the Los Angeles Branch moved into its new building. A substantial
reduction in rent, due largely to the occupancy of owned quarters by
the Los Angeles Branch, and some reduction of expenditures accruing
from a slight reduction in the number of employees during the year
account for the major part of the decline in current bank operation
expenses.
The principal sources of earnings of the Federal Reserve Bank of
San Francisco during 1931 and 1930, with an enumeration of the major
classifications of operating expenses, and a statement of distribution of
net income, are presented in the table on the opposite page.
Changes in Membership
Three banks were admitted to membership during 1931. Resources
added by these banks and by other changes which did not affect the
number of member banks amounted to $7,155,000. Losses to membership during the year, however, totaled 62 banks with combined total
resources of $49,348,000. Included in the reduction of 62 in the number
of active member banks were 15, having total resources of $21,081,000,
which lost their identity through merger with other member banks and
thus did not affect total resources of all member banks. The absorption
by non-member banks of 11 member banks with resources of $5,529,000
reduced both the number and resources of member banks by the respective equivalent amounts as did the suspension or insolvency of 33
member banks with resources of $40,118,000. Other classes of membership losses involved 3 banks with resources of $3,701,000, thus accounting for the $49,348,000 gross loss of resources incident to changes in
bank membership. These changes in membership account for the net
loss of 59 member banks and a net decline of $42,193,000 in resources.
In addition, there was a shrinkage during the year of $458,382,000 in
member bank resources due to other causes, including the general
tightening of the credit situation.
Although the period of credit strain experienced in 1931, with its
testing of the banking structure, reduced the amount of banking resources in the District, it was accompanied by an increase of approximately 10 per cent in the average capital and surplus of banks.
16
SEVENTEENTH ANNUAL REPORT
CHANGES IN BANK MEMBERSHIP DURING THE YEAR 1931
f
National
Active Member Banks December 31, 1930
-Member Banks
Number
\
State
Total
Resources
(000 omitted)
470
111
581
$4,206,448
1
..
1
354
1
..
..
..
..
1
..
1
..
711
Additions to Membership:
Organization of National Banks
Conversion of non-member banks to
National banks
Admission of State banks
Eesumption following suspension
Conversion within the System
Succession between member banks of
same class
Absorption of non-member banks by
National and State member banks. .
TOTAL ADDITIONS
1
1*
13*
..
1*
170
1*
(5,082)t
14*
3
..
3
12
1
2
..
10
13
2
1
33
..
..
2
11
..
2
..
..
..
..
..
..
1*
..
15
62
5,920
$
7,155
Losses to Membership:
Merger between member banks:
Intraclass
Interclass
Voluntary liquidation
Suspension or insolvency
Absorption of member by non-member
banks
Conversion of member to non-member.
Withdrawal of State banks
Termination of membership by reason
of expiration of charter
Conversion within the System
Succession between member banks:
Intraclass
Interclass
TOTAL LOSSES
Net Change
Active Member Banks December 31, 1931
1
23
11
..
1*
47
($18,467) t
( 2,614) t
1,849
40,118
5,529
1,852
(5,082) t
$
49,348
—44
—15
—59
—42,193
426
96
522
$3,705,873
*Changes not affecting total number of member banks.
tChanges not affecting total resources of member banks.
Bank Organization and Personnel
In the annual election of directors held in 1931, two places on the
Board of Directors were filled. The banks of Group One (those having
a combined capital and surplus in excess of $599,999) reelected C. K.
Mclntosh, President of the Bank of California, N. A., San Francisco,
as a Class A director for a three-year term ending December 31, 1934.
The banks of Group Three (those having a combined capital and surplus of less than $125,000) reelected Elmer H. Cox, President, Madera
17
FEDERAL RESERVE BANK OK SAN FRANCISCO
Sugar Pine Company, Madera, California, as a Class B director for a
similar three-year term. The Federal Reserve Board at Washington,
D. C, reappointed William Sproule, President-Retired, Southern Pacific Railway Company, and President and Director, Central Pacific
Railway Company and Southern Pacific Railroad Company, San Francisco, a Class C director for the three years which end December 31,
1934.
Isaac B. Newton of Los Angeles, California, a Class C director whose
term expires December 31, 1932, was redesignated Chairman of the
Board and Federal Reserve Agent for the year 1932. Walton N. Moore,
President, Walton N. Moore Company, San Francisco, was redesignated Deputy Chairman of the Board to serve during the year 1932.
To represent the Twelfth Federal Reserve District in the Federal
Advisory Council during the year 1931, the Board of Directors selected
Henry M. Robinson, Chairman of the Board, Security-First National
Bank of Los Angeles, Los Angeles.*
The directorates at the five branches of the Federal Reserve Bank
of San Francisco were not changed at the year-end, t A new chairman
of the board was appointed at each branch in conformity with a policy
of alternation in that office of the two branch directors appointed by
the Federal Reserve Board.
There were two changes in the official staff of the Bank during the
year. On April 1, 1931, Fred C. Bold, formerly Assistant Cashier at
II~2d Office, was transferred to Los Angeles as Assistant Cashier of the
branch, and A. J. Dumm, formerly Assistant Cashier at the Los Angeles Branch, was transferred to Spokane as Assistant Cashier of the
Branch.
PERSONNEL AND SALARIES
Federal Reserve Bank of San Francisco
(including Branches)
,—Number—-i
Jan. 1 Jan.1
1932
1931
OFFICERS
t
Annual Salaries
^
Jan.1
Jan. 1
1932
1931
30
30
$ 252,400
$ 251,800
650
22
6
10
662
27
7
11
1,077,300
54,240
13,020
19,080
1,090,370
63,840
16,080
23,220
718
737
$1,416,040
$1,445,310
32
2
30
4,320
36,600
4,320
34,440
752
769
$1,456,960
$1,484,070
5
7
$
$
EMPLOYEES BY DEPARTMENTS :
Banking Department
Federal Eeserve Agent's Department
Auditing Department
Fiscal Agency Department
TOTAL
EMPLOYEES WHOSE SALARIES ARE
EEIMBURSED TO B A N K :
Fiscal Agency Department
Other Employees
GRAND TOTAL
TEMPORARY EMPLOYEES (not included)
4,808
6,408
*On January 7, 1932, Henry M. Eobinson was appointed to serve as the representative of the Twelfth Federal Reserve District in the Federal Advisory Council
for the year 1932. tAt Portland, Eichard S. Smith succeeded J. F. Daly February 18, 1932.
IS
SEVENTEENTH A N N U A J J REPORT
BRANCH BANKING
The number of branch operating banks in the Twelfth District decreased from 64 to 59 during 1931, while consolidations and closings of
individual branches reduced the number of branches from 857 to 833.
Statistics of branch banking shown in the accompanying table include
figures for all banks 'operating offices other than their Head Office,
whether such offices are located in the same city as the Head Office or in
another locality.
The establishment of branches is prohibited by law in Idaho, Nevada,
and Utah, while the operation of rbranches established prior to the passage of the existing banking law s is permitted in Oregon and Washington. At the beginning of 1931 one branch operating bank with one
branch was located in Oregon, but that institution suspended operations during the year and there are now no branch operating banks in
Oregon.
BRANCH BANKS IN THE TWELFTH DISTRICT
—• Branches f
Banks Operating
i
Operated by \ L O C E ited
Out— Branches —
Mem- Non\
In
ber MemN a - State Nonside
National Mem- Memtional State ber Home Home
ber Total Banks Banks Banks City
City
Total Banks ber
0
.1
0
0 23
1
23
l i t 12
4
51
12
35 805 520J 103 1SL> 262 543 %
4
I
State
Arizona*
California
Washington . . .
Number of
Banks
21
393
286
3
1
2
5
3
•>
3
*Does not include part of the state of Arizona which is in the Eleventh Federal Heserve District, tIncludes four branches located in the Eleventh Federal
Reserve District. {Includes three branches of Bank of California, N. A., San
Francisco, located in Oregon and Washington and excludes one foreign branch
of the Bank of America National Trust and Savings Association, San Francisco.
BRANCH BANKS IN CALIFORNIA
December 31, 1931:
State Banks—Member
Non-Member
Total number of State banks having branches
Total number of National banks having
branches*
Total
Number
of
Kanks
Number
of
Branches
-1
35
103
182
39
2 S.I
$ 520,040,000
565,114,000
1,085,154,000
12
520
1,767,958,000
51
805
$2,853,112,000
Total
Resources
'"Includes three branches of Bank of California, N. A., San Francisco, located
in Oregon and Washington and excludes one foreign branch of the Bank of
America National Trust and Savings Association, San Francisco.
NOTE
Detailed .statistical tables pertaining to the Twelfth Federal Reserve District and the Federal Reserve Bank of San Francisco will
appear in the Annual Report of the Federal Reserve Board. Copies
of the Board's report may be obtained, when published, from the
Federal Reserve Board at Washington, D. C.
FEDERAL RESERVE BANK OF SAN FRANCISCO
TWELFTH FEDERAL RESERVE DISTRICT
Includes the States of Arizona, except the five southeastern counties,
California, Idaho, Nevada, Oregon, Utah and Washington
SAN FRANCISC
Map showing territory of Head Office and Branches of the
Federal Reserve Bank of San Francisco
19
@FedFRASER