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TENTH ANNUAL REPORT
TO THE

FEDERAL RESERVE BOARD
BY THE

FEDERAL RESERVE AGENT
FEDERAL RESERVE BANK
SAN FRANCISCO

FOR THE

YEAR ENDED DECEMBER 31, 1924




TENTH ANNUAL REPORT
TO THE

FEDERAL RESERVE BOARD
BY THE

FEDERAL RESERVE AGENT
FEDERAL RESERVE BANK
SAN FRANCISCO

FOR THE

YEAR ENDED DECEMBER 31, 1924




DIRECTORS AND OFFICERS
OF THE

FEDERAL RESERVE BANK OF SAN FRANCISCO
January 1, 1925

DIRECTORS
Class Group
C. K . M C I N T O S H , S a n F r a n c i s c o , California
1
A
P r e s i d e n t , B a n k of California, N . A.
A
J. S. M A C D O N N E L L , P a s a d e n a , California
President, First National Bank.
H O W A R D W H I P P L E , T u r l o c k , California
President, First National Bank.
A. B . C . D O H R M A N N , S a n F r a n c i s c o , California President, D o h r m a n n Commercial C o m p a n y .
W I L L I A M T . S E S N O N , S o q u e l , California
Agriculturist.
E . H . C o x , M a d e r a , California
Vice-President a n d General Manager, M a d e r a Sugar Pine
C o m p a n y , M a d e r a , California.
J O H N P E R R I N , S a n F r a n c i s c o , California
C h a i r m a n of t h e B o a r d .
W A L T O N N . M O O R E , S a n F r a n c i s c o , California Deputy Chairman,
President, W a l t o n N . Moore D r y Goods Co., Inc.
c
W M . S P R O U L E , S a n F r a n c i s c o , California
P r e s i d e n t , S o u t h e r n Pacific C o m p a n y .

Term
Expires
Dec. 31

1925
1926
1927
1926
1927
1925
1926
1927
1925

MEMBER FEDERAL ADVISORY COUNCIL
HENRY S. MCKEE, representing District No. 12

President, Barker Bros. Inc.,
Los Angeles, California.

OFFICERS
JOHN PERRIN,

Chairman of the Board and
Federal Reserve Agent
S. G. SARGENT,

Assistant Federal Reserve Agent
and Chief Examiner
ALLAN SPROUL,

Assistant Federal Reserve Agent
and Secretary

JNO. U. CALKINS,

Governor
WM. A. DAY,

Deputy Governor
IRA CLERK,

Deputy Governor
L. C. PONTIOUS,

Deputy Governor
W. N. AMBROSE, Cashier
W. M. HALE, Assistant Cashier
CHESTER D. PHILLIPS, Assistant Cashier
C. E. EARHART, Assistant Cashier
H. N. MANGELS, Assistant Cashier
M. MCRITCHIE, Assistant Cashier
H. M. CRAFT, Assistant Cashier*
E. C. MAILLIARD, Assistant Cashier
S. A. MACEACHRON, Assistant Cashier

F. H. HOLM AN, General Auditor

J. M. Osmer, Auditor
E. W. Morton, Auditor

A. C. AGNEW, Counsel

* Appointed Assistant Manager of Salt Lake City Branch February 15, 1925.




DIRECTORS AND OFFICERS OF BRANCHES
January 1, 1925

SPOKANE BRANCH
Term

Directors

Expires

Dec. 31

1925
1926
1927
1925
1926
1927
1925

PETER MCGREGOR* .
G. I. TOEVS* . . .
E. H. VAN OSTRAND*

R. L. RuTTERf
C. E. McBROOMf
CHAS. L. MACKENZIEI
W. L. PARTNER! .

Officers

W. L. PARTNER, Managing Director
D. L. DAVIS, Assistant Manager
EVAN BERG, Assistant Cashier

SEATTLE BRANCH
CHAS.
CHAS.
CHAS.
M. F.
M. A.

1925
1926
1927
1925
1926
1927
1925

E. PEABODY*
H. CLARKE*
E. GACHES*
BACKUS! .
ARNOLD! .

E. W. PURDYf
C. R. SHAWf .

.

C. R. SHAW, Managing Director
B. A. RUSSELL, Assistant Cashier

PORTLAND BRANCH
JOSEPH N. TEAL*
NATHAN STRAUSS*
A. C. DIXON*
.

1925
1926
1927
1925
1926
1927

.

EDWARD CooKiNGHAMf

J. C. AlNSWORTHf
WILLIAM POLLMAN! .
FREDERICK GREENWOOD!

.

FREDERICK GREENWOOD, Managing Director

R. B. WEST, Assistant Manager
J. P. BLANCHARD, Assistant Cashier

1925

SALT LAKE CITY BRANCH
G. G. WRIGHT* . . .
LAFAYETTE HANCHETT* .
CHAPIN A. DAY* .
L. H. FARNSWORTH!
CHAS. H. BARTON! •
J. S. BUSSELL!
R. B. MOTHERWELL!

.
.
.
.
.
.
.

1925
1926
1927
1925
1926
1927
1925

R. B. MOTHERWELL, Managing Director
A. B. NORDLING, Assistant Manager^
PAUL M. LEE, Assistant Cashier 1i
J. M. LEISNER, Assistant Cashier

LOS A]
ISAAC B. NEWTON* .
W. L. VALENTINE* .
E . M . LYON* . . . .
HENRY M. ROBINSON! .
J. F. SARTORI!
F. J. BELCHER, J R . ! .
C. J. SHEPHERD! .

.
.
.
.
.
.
.

1925
1926
1927
1925
1926
1927
1925

C. J. SHEPHERD, Managing Director
G. H. SCHMIDT, Assistant Manager
A. J. DUMM, Assistant Cashier
L. C. MEYER, Assistant Cashier

*Appointed by Federal Reserve Board. !Appointed by Federal Reserve Bank.
^Resigned February 15, 1925. Succeeded by Mr. H. M. Craft, formerly Assistant
Cashier at Head Office.
ifResigned March 31, 1925.




LETTER OF TRANSMITTAL
Federal Reserve Bank,
San Francisco, California,
March 4, 1925.
GENTLEMEN :

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, 1924.
Yours respectfully,

Chairman of the Board
and Federal Reserve Agent.

Federal Reserve Board,
Washington, D. C.




ECONOMIC REVIEW OF THE YEAR 1924 IN THE
TWELFTH FEDERAL RESERVE DISTRICT
In this district the year 1924 was one of distinct economic progress
and of generally active business. Productive output of the district,
while not at the high levels of 1923, represented a more even distribution of activity among major industries than was the case in the
previous year. Distribution proceeded in large volume without
transportation difficulties. Price maladjustments between groups of
commodities, particularly between agricultural and non-agricultural
products, were largely eliminated. Credit demands, although greater
than ever before, were largely met by the banks of the district
without recourse to the Federal Reserve Bank.
Unfavorable factors during the year were the widespread drought
during the 1923-1924 growing season, which materially reduced the
size of the district's crops, and the serious menace of hoof and mouth
disease of livestock in California during the spring and summer
months of the year.
Production, trade, and credit conditions in the district during 1924
are summarized in the following table:
Primary Production
Grains* (index number of volume—five-year
average 1918-1922 = 100)
Field Crops* (1919-1923 = 100)
Fruits*
(1919-1923 = 100)
Lumber (output of four associations in board
feet)
Copper (pounds)
Petroleum (barrels)
Business Activity
Building Permits—value in 20 cities
Bank Debits—20 cities
Prices
Wholesale -Prices—United States Bureau of
Labor average 404 commodities for December (1913 = 100)
..
Cost of living—December index number National Industrial Conference Board (July,
1914 = 100)

1924
67.3
86.9
99.5

123.8
96.8
115.0

8,011,164,000
1,056,586,000
230,063,117

8,403,620,000
942,979,000
263,728,895

$394,182,000
$30,012,726,000

$419,726,000
$29,424,384,000

157.0

151.0

166.0

165.0

Credit
Loans—total loans of reporting member banks
at close of year
$1,049,618,000
Borrowings of all member banks from Federal
Reserve Bank of San Francisco at close of
year
$15,742,000
Interest rates charged commercial borrowers by
banks at close of year:
Los Angeles
6-7%
Portland, Salt Lake City
6%
San Francisco
5-5H%
Seattle
6%
Spokane
5-7%
page 6 for list of crops included.
Digitized *See
for FRASER


1923

$1,007,606,000
$53,114,000
6%%
7%
5j^-6%
6%
7%

ANNUAL REPORT OF FEDERAL RESERVE BANK OF SAN FRANCISCO

Production
Agricultural yields of 1924 in the district were below the record
figures of 1923 and generally below the average of recent years. Lack
of seasonal rainfall during the spring growing season affected crops
unfavorably and reduced the supply of water available for irrigation
purposes later in the year. Advance in prices of many agricultural
products during and immediately following the harvest, however,
offset, at least in part, the effects of curtailed production, and aggregate returns to farmers were not much below those of years when
yields were more abundant. At the close of 1924, index numbers of
the United States Bureau of Labor Statistics showed that prices of
farm products at wholesale were more nearly on a parity with prices
of commodities purchased by farmers than at any time since the close
INDEX NUMBEOS

IHDEX NUMBERS

140

140

100

100
V

60

20

1920 1 921 1 922 1923 1 924

VOLUME

GRAINS
FIELD COOPS
FRUITS
X—X

PURCHASING P<3WEQ 0
FAPJM PROt JUCTS

1920 192 1 1922 1023 1924
VALUE

Volume and Value of Production of Fourteen Principal Crops in the Twelfth Federal Reserve District
NOTE: See text and tables for sources and explanation

of the war. Index numbers prepared by this bank to show the trend
of production and value of the principal crops of the district and the
United States Department of Agriculture's index of purchasing
power of farm products are presented in the following table and are
shown graphically in the accompanying charts :
1924
Volume Value

1923
Volume Value

1922
Volume Value

Grains (wheat, barley, oats)*
97.5 69.3
67.3 63.0
123.8 83.9
Field crops (beans, cotton, potatoes,
rice, sugar beets) f
86.9 75.1
96.8 83.7
94.9 68.2
Fruits (apples, peaches, pears,
prunes, raisins, oranges) f
99.5 84.5
115.0 76.8
103.8 86.1
Purchasing power of farm products
(United States) t
78
74
s:;
*Five-year average 1918-1922 = 100. f Five-year average 1919-1923 = 100. JRatio
of farm prices of 30 principal agricultural products (August, 1909-July, 1914 = 100)
to wholesale prices of non-agricultural commodities (1910-1914 = 100).

Further difficulty has been experienced in the cattle raising industry during the past year. Unfavorable range conditions and rising
feed prices tended to increase production costs at a time when
market values of beef cattle were relatively low. Heavy marketing
of beef animals, not all of which were in best condition for sale, has



ANNUAL REPORT OF FEDERAL RESERVE BANK OF SAN FRANCISCO

t

resulted in reducing the number of cattle in the district. The sheep
raising industry, while suffering from the same adverse physical conditions as affected the cattle industry, has benefited materially from
a steady strong market for lambs and wool and has entered the year
1925 in better financial condition than at any time since 1920. The
number of livestock on farms and ranges of the district on January
1st of the past three years has been estimated by the United States
Department of Agriculture as follows:
Milk Cows
Other Cattle
Sheep
Hogs

1925

1924

1923

1,572,000
4,365,000
12,059,000
1,629,000

1,535,000
4,652,000
12,130,000
1,859,000

1,467,000
4,712,000
11,938,000
1,778,000

Industrial output during 1924, while not maintained at the levels
of 1923, was above the average of recent previous years. Of importance in maintaining activity in industry was the continuance of
a large volume of building construction. The value of building permits issued in 20 principal cities of the district was $394,182,000 in
1924 compared with $419,726,000 in the record year 1923. In estimating, from the value of building permits, the volume of construction in the two years, consideration must be given changes in costs
of building materials and wages in the building trades, which are
estimated to have averaged 2.5 per cent lower in 1924 than in 1923.
MILLIONS OF BOARD FEET

800

1923

MILLIONS OF DOLLARS

1923 +.

40
, ' \

\

600

•

1924

\ y

I

30

•

/

/

i

V

1924

400

20

200

1 0
o
Lumber Production as Reported by Four
Lumber Associations

t i l l

i

i

i

i 1 i

i

i

i

Dollar Value of Building Permits Issued
in 20 Principal Cities

Lumber production during 1924 was adjusted more closely to
demand than was the case in 1923. The cut was approximately 7.6
per cent smaller than in the earlier year. Unfilled orders held by
reporting mills were larger by 5.1 per cent on January 1, 1925, than
on January 1, 1924. Stocks at the close of 1924, however, were no
larger than at the close of 1923. Figures of production and sales of
approximately 200 reporting mills follow (000 omitted) :
Production
Shipments
Orders




D e c . 27, 1924
(board feet)

8,011,164
7,737,552
7,508,628

-52 Weeks EndingDec. 29, 1923
(board feet)

8,672,183
8,067,795
7,648,594

Dec. 30, 1922
(board feet)

6,653,345
6,124,816
6,880,689

8

ANNUAL REPORT OF FEDERAL RESERVE BANK OF SAN FRANCISCO

The mining industry, particularly during the later months of 1924,
was stimulated by steadily increasing demand with rising prices for
copper and lead, the principal industrial metals produced in the district. Output was above the levels of 1923. District production of
gold was smaller in 1924 than in 1923, partly because of drought
conditions in California which prevented normal operation of gold
dredges in that state. Output of silver also declined, largely as the
result of readjustment of producing schedules to meet changes in
market conditions which followed cessation on July 1, 1923, of government purchases of silver, under the Pittman Act, at a fixed price
of $1.00 per ounce. The average market price of silver during the
year 1924 was 66.78 cents per ounce. Figures of district production
of principal metals follow (figures for all counties of Arizona, five
of which are in Eleventh Federal Reserve District, are included) :
1924
1923
1922

Gold
(oz.)

Silver*
(oz.)

Copper*
(lbs.)

Lead*
(lbs.)

Zinc
(tons)

1,303,348
1,374,201
1,209,598

44,391
48,652
39,946

1,056,586
942,979
547,555

533,935
492,735
364,385

23,452
28,237
8,044

*000 omitted.

Production of petroleum in California declined steadily throughout 1924, as flush production subsided in fields opened in 1923 and
no new areas of equal producing capacity were discovered. Production, however, exceeded consumption, stored stocks increasing from
89,274,244 barrels at the beginning of the year to 97,829,374 barrels
at its close, an increase of 8,555,130 barrels or 9.5 per cent. Figures
of production follow:
1924
1923
1922

California
Production
(barrels)

United States
Production
(barrels)

Per Cent
California to
United States

230,064,000
262,876,000
138,468,000

714,000,000
732,407,000
557,531,000

32.5
36.0
24.8

Reports of 16 flour milling companies, representing approximately
65 per cent of the total milling capacity of the district, indicate that
production of flour was 23 per cent less in 1924 than in 1923, a reflection both of reduced foreign and domestic sales and of short supplies
of wheat held at prices much higher than were asked a year ago.
Figures follow:
Production

(barrels)

1924
1923
1922

5,907,329
6,779,155
5,744,977

Stocks of Flour
Close of Year
(barrels)

548,550
569,430
521,501

Stocks of
Wheat
Close of Year
(bushels)

2,927,762
3,901,986
4,337,362

Volume of employment during the greater part of 1924 was less
than in 1923, but at no time did a serious unemployment situation
develop.
Business Activity
Debits to individual accounts (bank debits) at banks in principal
clearing house centers afford the best single available index of the
total volume of business transacted in the district. Figures for the
early months of 1924 were larger than those for the corresponding



ANNUAL REPORT OF FEDERAL RESERVE BANK OF SAN FRANCISCO

0

months of 1923, but from April to December, excepting only the
unusually small total reported for June, they fluctuated closely
about the levels of the previous year. The total for the year 1924
was 2 per cent larger than the total for 1923.
MILLIONS OF DOLLARS

MILLIONS OF DOLLARS

3000

25
1924

2600

2200

\/

V

I

N

Debits to Individual Accounts at Banks
in 20 Principal Cities

Net Sales of 32 Department Stores—
Retail Trade

In wholesale trade, following a period of activity in January and
February, irregularities appeared during March, persisting throughout the remainder of the year. In the majority of the eleven lines of
business for which this bank collects figures, value of sales during
the last 10 months of 1924 was less than in the corresponding months
of 1923. Decreases in volume of business were most noticeable in
mid-summer, but improvement during the autumn and winter was
only of moderate proportions and in December, 1924, seven of eleven
lines of trade reported decreases in value of sales ranging from 0.6
to 23.4 per cent as compared with December, 1923. Trade at retail
also experienced a period of activity in the spring of 1924 followed
by seven months of steady trade at approximately the levels of 1923.
Although value of sales as shown by reports of 35 department stores
in the larger cities of the district was greater in 1924 than in 1923,
the rate of increase was slightly less than the rate of annual growth
which has occurred in previous years. Foreign commerce of the district was larger in volume during 1924 than during 1923. Reported
value of exports through Pacific Coast customs districts was $436,798,221 during 1924 compared with $363,021,034 during 1923, and of
imports $455,213,650 in 1924 compared with $468,155,466 in 1923.
Credit Conditions
Bank accommodation was available at relatively low rates
throughout the year 1924. Total loans and total investments of
reporting member banks rose to record levels during the year. The
increase was not accompanied by increased borrowing from the
Federal Reserve Bank, however, rediscounts of the latter beingreduced to the lowest levels since 1917.
The total' volume of credit extended by reporting member banks
of the district (total loans and investments) increased from $1,353,-




10

ANNUAL REPORT OF FEDERAL RESERVE BANK OF SAN FRANCISCO

000,000 at the beginning of the year to $1,485,000,000 at its close,
the latter figure being the highest on record and 11.6 per cent above
the high point of $1,331,000,000 reached in December, 1920. Significant differences not apparent in a comparison of total figures, however, marked the situation in the two years. At the close of 1920
MILL IONS OF DOLLARS
1500

1000

500

BORROWINGS FROM FEDERAL RESERVE BANK

1921
1924
1923
Deposits, Loans and Discounts, Investments, and Borrowings from Federal Reserve Bank—
Reporting Member Banks, Twelfth District
(as of last statement of each month)

total loans were 77.7 per cent of total loans and investments and
89.2 per cent of total deposits, while borrowings from the Eeserve
Bank amounted to 11.4 per cent of total loans and were near the
highest point ever reached. At the close of 1924 total loans of the
reporting banks were but 70.5 per cent of total loans and investments and were 70.0 per cent of total deposits, while borrowings
from the Reserve Bank were but 0.9 per cent of total loans. Movement of member bank credit throughout the year is indicated in the
following table and in the accompanying chart:
Reporting City Member Banks—Twelfth Federal Reserve District
[000 omitted]
Jan. 2, 1924

Loans and Discounts
Investments
Total Loans and Investments...
Borrowings from Federal Reserve
Bank
Total Deposits
Ratio of Deposits to Loans and
Investments

June 25,1924

Sept. 24,1924

Jan. 7,1925

$1,007,912 $1,006,214 $1,017,594 $1,040,889
344,622
357,513
393,111
435,424
1,352,534 1,363,727 1,410,705 1,476,313
38,105
1,333,989

12,082
1,350,984

5,740
1,437,176

9,527
1,486,787

98.6

99.0

101.9

100.7

Rediscounts of member banks with the Reserve Bank, excepting
only seasonal increases during the spring planting and the winter
holiday periods, declined steadily throughout 1924. During the first
eight months of the year the decline was the result chiefly of
decreased borrowing by city member banks, but during the autumn,
as harvesting and sale of the district's crops proceeded, paper
rediscounted by country member banks was liquidated and their borrowings from the Federal Reserve Bank were reduced. Total investments of the bank changed little during the first five months of
the year, and total earning assets averaged well below the figures
for the same period of 1923. During the last half of 1924 investments




ANNUAL REPORT OF FEDERAL RESERVE BANK OF SAN FRANCISCO

11

were increased and at the close of the year total earning assets were
higher than at any time since April, 1923.
Federal reserve note circulation, following the usual post-holiday
decline in January, 1924, fluctuated at a level slightly above $200,000,000 until, during the last two months of the year, holiday needs
of their customers again caused member banks to request additional notes. The extent of the seasonal expansion and contraction
in currency circulation at the year-end is illustrated by the following
figures of circulation of Federal reserve notes of the Federal Reserve
Bank of San Francisco.
Nov. 26,1924

Dec. 24. 1924

Jan. 14,1925

$209,433,000

$222,037,000

$204,278,000

The general course of Federal Reserve Bank credit in this district
during the past year is shown in the following table and in the
accompanying chart:
Federal Reserve Bank of San Francisco
[000 omitted]

Jan. 2,1924 June 25,1924 Sept. 24,1924 Jan. 7,1925

Discounts*
Purchased Bills and Securities
Total Earning Assets
Total Reserves
Federal Reserve Note Circulation
Reserve Ratio

$ 55,210 $ 31,492 $ 18,199 $ 15,535
47,146
69,629 105,265
48,015
102,356
87,828 121,256
79,507
295,828 298,892 302,339 278,024
227,747 205,207 208,196 211,867
76.9
71.3
80.1
82.3

*Excluding foreign loans on gold.

Interest rates charged by banks on customers' prime commercial
paper of 30-90 days' maturity declined slightly during the year. Tn
December, 1924, the prevailing rate in San Francisco was 5-5% per
cent compared with 5^-6 per cent in December, 1923, and was 6 per
cent in other principal cities of the district compared with a range
of 6 to 7 per cent in December, 1923. On June 10, 1924, the redisMILLIONS OF DOLLARS

300

200

FEDERAL RESERVE NOTE CIRCULATION

.INVESTMENTS

1OO

1921

1922

1923

1924

Total Reserves, Federal Reserve Note Circulation, Investments, and Bills Discounted—
Federal Reserve Bank of San Francisco
(as of the last statement of each month)

count rate of the Federal Reserve Bank of San Francisco was
reduced from 4% per eent to 4 per cent. The 4% per cent rate had
been in effect since March, 1923. On August 25, 1924, a further
reduction of one-half of one per cent was made, placing the rate on
all classes of paper at 3^2 per cent, where it stood at the close of
the year.



]2

ANNUAL REPORT OF FEDERAL RESERVE BANK OF SAN FRANCISCO

OPERATIONS OF FEDERAL RESERVE BANK OF
SAN FRANCISCO DURING 1924
Earnings of the Federal Reserve Bank of San Francisco during
the year 1924 did not cover operating and other expenses and dividends. A decline in volume of the year's total discount operations,
amounting to approximately 50 per cent as compared with the previous year, was accompanied by an even greater proportionate decline in earnings because of the reduced rates at which business was
transacted. This decline was partially offset by earnings from holdings of United States Government securities. Reduction in expenses
of operation, proportionate to the decrease in earnings could not be
effected as the volume of those services performed by the bank, for
which no charge is made, increased slightly during 1924 or was maintained at previous levels. (See table on opposite page.) The staff of
the bank, including head office and five branches, was reduced from
1,135 at the close of 1923 to 1,052 at the close of 1924, annual salaries
declining from $1,916,600 to $1,843,380.
Statement of Condition
A comparative statement of condition of the Federal Reserve Bank
of San Francisco as of December 31, 1924, and December 31, 1923, is
presented in condensed form below:
RESOURCES
Dec. 31,1924

Total Gold Reserves
$274,264,000
Total Reserves
278,046,000
Loans and Investments:
Loans to member banks
15,742,000
Bills and securities purchased:
Acceptances
54,068,000
United States Government securities
55,143,000
Total loans and investments (earning assets).. . 125,409,000*
All other resources (mostly uncollected checks).
46,991,000
TOTAL RESOURCES

Dec. 31,1923

$298,674,000
301,002,000
53,114,000
38,059,000
9,185,000
100,358,000
52,584,000

$450,446,000

$453,944,000

LIABILITIES
Federal Reserve notes in circulation
$215,030,000
Total deposits
175,646,000
Capital
8,113,000
Surplus
15,071,000
All other liabilities (mostly checks on deferred
credit)
36,586,000

$229,082,000
160,432,000
7,862,000
15,301,000

TOTAL LIABILITIES

$450,446,000

41,267,000
$453,944,000

*Includes miscellaneous items not shown under loans and investments.

Principal changes in the balance sheet over the year were the decline in total discounts from $53,114,000 to $15,742,000 and the increase in investments from $47,244,000 to $109,211,000, the net result
of the two movements being an increase of $25,100,000 in total
earning assets. Total reserves, the other principal resource item of
the statement, declined by $23,000,000 during the year. Total
resources at the close of 1924 were approximately the same as at
the close of 1923. In the schedule of liabilities there was an increase
of $15,000,000 in deposits and a decrease of $14,000,000 in Federal
reserve note circulation during the year. The surplus account of



ANNUAL REPORT OF FEDERAL RESERVE BANK OF SAN FRANCISCO

13

PRINCIPAL OPERATIONS
FEDERAL RESERVE BANK OF SAN FRANCISCO
The,following table presents in comparative form for the past three years the
volume of the principal operations of the bank, which are of such character that they
can be expressed in quantitative terms.

Supplying Currency and Coin
Currency Received and Counted:
Individual notes counted
Dollar amount received and
counted. . . .
Coin Received and Counted, a service previously performed largely
by the Subtreasury, but now entirely in the hands of the Federal
Reserve Bank:
Number of coins handled in receiving and counting
Dollar amount received and
counted
Making Loans and Investments
Bills DiscountedforMemberBanks,
either discounted customers'
paper or advances against the
notes of member banks secured
by collateral in the form of Government securities or commercial
or agricultural paper.
Number of bills discounted
Dollar amount
Bills Purchased for the Account of
this Bank:
Number
Dollar amount

1924

1923

95,857,000

83,236,000

56,866,000

$753,896,000

$707,765,000

$602,138,000

44,298,000

32,070,000

16,811,000

§23,425,000

$24,767,000

$13,950,000

37,212
$929,140,000
18,433
$176,933,000

1922

53,316
57,725
$2,108,963,000 $1,535,300,000
21,771
$225,162,000

17,134
$211,800,000

Collecting Checks, Drafts, Notes,
and Coupons
Checks handled for collection for
banks in all parts of the country:
65,442,000
53,729,000
Number of items.
74,367,000
$14,645,586,000 $14,066,535,000 $8,777,048,000
Dollar amount
Collection Items handled, including
drafts, notes, and coupons:
5,702,000
6,957,000
4,027,000
Number of items
$320,082,000 $243,967,000
$326,516,000
Dollar amount
Supplementary Services
United States Government Securities issued, redeemed, or exchanged, including Government
bonds, notes, and certificates of
indebtedness:
2,151,000
1,518,000
*10,827,000
Number of items
$486,429,000 $763,488,000
Dollar amount
$353,309,000
Funds Transferred by Telegraph to
and from all parts of the country
for the Treasury Department and
for member banks:
131,000
114,000
Number of transfers
130,000
Dollar amount
$9,568,293,000 $8,241,696,000 $6,579,750,000
*Large increase due to redemption of War Savings securities which matured

January
1, 1923.



14

ANNUAL REPORT OF FEDERAL RESERVE BANK OF SAN FRANCISCO

the bank was reduced by $230,045 at the year-end to provide funds
for payment of the cumulative annual dividend of 6 per cent on
paid-in capital stock which was not wholly covered by available net
earnings. Surplus after the reduction was but slightly less than 100
per cent of authorized capital stock and nearly 200 per cent of
paid-in capital stock.
Earnings and Expenses
The Federal Reserve Bank of San Francisco, in common with five
other Federal reserve banks, did not earn enough during the year
1924 to cover expenses and dividends. Because of the large volume
of members banks' available funds, rediscounts with the Federal
Reserve Bank were smaller than in recent previous years, and Reserve Bank earnings on discount operations and on purchased acceptances and Government securities held were low. Earnings from discounted and purchased bills were less by $1,484,000 (53.2 per cent)
and $439,000 (42 per cent), respectively, than in 1923, the combined
decrease being only partially offset by a gain of $639,744 (76.4 per
cent) in earnings on United States Government securities held. The
gross income of the bank during 1924 ($3,487,931) was less by
$1,127,296, or 24.4 per cent, than in 1923 ($4,615,227).
Current expenses, at $2,853,384 for 1924, were slightly larger than
in 1923, the failure of expenses to decline concurrently with the
12.7
USTREBSORY
9.2

7.0

4.8

4.6

* CHARGE-OFFS

SURPLUS
FROM SURPLUS
GROSS EARNINGS

DIVIDENDS-*
EXPENSES

1919

1920

J
1921

1922

1923 1924

Amount and Distribution of Earnings of the Federal Reserve Bank of San Francisco
[in millions of dollars]
*Chiefly depreciation allowances on bank premises, reserve for possible losses, and cost of furniture and equipment
purchased.

decline in volume of discount operations reflecting in part the continued growth in volume of those free services, such as check collections, which are performed by the bank, and in part the increased
costs of plant operation incident to occupation of the new building
at San Francisco.
Current net earnings were $634,547 in 1924 compared with
$1,798,062 in 1923. From these net earnings were deducted $384,000,
representing principally a further depreciation allowance of
$127,755 on the bank premises and the sum of $197,776 spent for
furniture and equipment. Remaining net earnings, amounting to
$250,517, were not sufficient to pay the cumulative annual dividend



ANNUAL REPORT OF FEDERAL RESERVE BANK OF SAN FRANCISCO

15

of 6 per cent on stock of this bank held by the member banks, which
totaled $480,562. It was necessary to draw upon surplus accumulated
in previous years of larger earnings in order to meet this charge. The
principal sources of gross earnings of the Federal Reserve Bank of
San Francisco during 1924 and 1923, with an enumeration of the
major classifications of operating expenses and a statement of distribution of net income, are presented in the following table :
Earnings
1924
F r o m rediscounts a n d a d v a n c e s t o m e m b e r b a n k s . . . . $1,302,272
From acceptances owned
582,182
From United States Government securities owned. . . .
1,476,505
From all other sources
126,972

1923
$2,786,349
1,020,834
836,761
*28,717

$3,487,931
536

$4,615,227
14,842

$3,488,467

$4,630,069

$1,944,232
761,446
147,707
127,755
197,776
59,035

$1,935,817
713,633
167,715
615,921
325,000
324,282
42,275

$3,237,950

$4,124,643

NET INCOME

$250,517

$505,426

Distribution of Net Income
Dividends paid
Transferred from surplus
Transferred to surplus

$480,562
230,045

$467,720

Miscellaneous additions to earnings
TOTAL INCOME

Deductions from Total Income
Salaries
All other operating expenses
Cost of Federal reserve currency
Depreciation allowance on bank premises
Reserve for possible losses
Furniture and equipment purchased
All other
TOTAL DEDUCTIONS FROM INCOME

37,706

*Losses.

Fiscal Agency Operations
The volume of work performed by this bank as Fiscal Agent of
the United States Government in 1924, while large, was smaller than
in 1923, as is shown by the following table:
ISSUES OF CERTIFICATES OF INDEBTEDNESS,
TREASURY NOTES, AND BONDS:

Number of subscriptions
Amount

1924

688
$110,794

1923

1,549
$145,952

EXCHANGES AND CONVERSIONS OF GOVERNMENT
SECURITIES :

Number of pieces received and delivered
Amount delivered

371,732
$146,374,400

594,976
$91,633,863

1,144,652
$6,613,948

9,922,254
$51,810,981

TREASURY SAVINGS SECURITIES SOLD AND
REDEEMED:

Number of pieces
Amount

The principal Treasury financing operation in which this bank
participated during 1924 was the issue of 4 per cent Treasury bonds
dated December 15, 1924, maturing December 15, 1954, and callable
at any interest date after December 15, 1944. This was the first
Government bond issue since 1922. Subscriptions received by the
bank aggregated $121,000,000, of which $34,910,000 were allotted.
Included in this allotment were exchanges of Third Liberty Loan

bonds
amounting to $1,400,000, the acceptance of these bonds, which


16

ANNUAL REPORT OF FEDERAL RESERVE BANK OF SAN FRANCISCO

mature in 1928, in payment for the bonds of 1954 having been
authorized and encouraged by the Treasury Department.
Member Bank and Public Relations
The number of banks in this district which are members of the
Federal Reserve System decreased by 37 during the year 1924, but
resources of member banks were 70.6 per cent of resources of all banks
at the close of the year compared with 69- per cent at its beginning.
Changes in Bank Membership During the Year 1924*
National and State Bank Membership in District, December
31, 1923
New national banks established during year
10
New state member banks admitted during year
2

803

12

12

National banks absorbed by state banks
State member banks absorbed by other state banks
State member banks liquidated
National banks absorbed by other national banks
National banks liquidated
State member banks absorbed by or converted into national
banks
State member banks withdrawn

21
5
2
4
8
2
6
48

Total Number of Member Banks in District, December 31, 1924

815

48
767

*Does not include banks which for various reasons—suspension, liquidation, or
absorption by other banks—were on December 31, 1924, no longer going institutions, although stock in Federal Reserve Bank which they held while active members
had not yet been surrendered.

The number and resources of California banks having branches,
and the number of their branches, are shown by the following table:
Branch Banks in California
Date

Number

Dec. 31, 1923—State Banks:
Member
Non-member
Total number of state banks
tTotal number of national banks. .
Total
Dec 31, 1924—State Banks:
Member
Non-member
Total number of state banks
tTotal number of national banks. .
Total

Number

Banks Branches
19
264
69
202

Resources
$1,036,517,000
570,213,000

88

466

$1,606,730,000

8

14

286,542,000

96

480

$1,893,272,000

18
67
85
13
98

321
209
530
28
558

$1,312,378,000
670,649,000
$1,983,027,000
334,514,000
$2,317,541,000

tlncludes Bank of California, N. A., San Francisco, with branches at Portland,
Seattle, and Tacoma. Also includes agencies of national banks established in city
of head office, with approval of the Comptroller of the Currency.



ANNUAL REPORT OF FEDERAL RESERVE BANK OF SAN FRANCISCO

17

Effective February 1, 1924, the following resolutions relative to
branch banking were adopted by the Federal Reserve Board:
Resolved, That as a general principle, State banks with
branches or additional offices outside of the corporate limits of
the city or town in which the parent banks are located or territory contiguous* thereto ought not be admitted to the Federal
Reserve System except upon condition that they relinquish such
branches or additional offices, be it further
Resolved, That as a general principle, State banks which are
members of the Federal Reserve System ought not be permitted
to establish or maintain branches or additional offices outside the
corporate limits of the city or town in which the parent bank is
located or territory contiguous* thereto.
By amendment to the Board's resolution effective during the
period February 1 to August 1, 1924, the term contiguous territory
as applied to the cities of Los Angeles and San Francisco was interpreted as including a considerable area financially dependent upon
these centers of population although not actually physically adjacent
to the corporate limits of the respective cities. Since August 1, 1924,
the resolution as originally adopted has been in force, as set forth
in Section VI of Federal Reserve Board Regulation II, although applications for permission to establish branches in non-contiguous territory have been considered in special cases where the state banking
authorities have certified, and the Board believes, that public necessity or advantage might render a departure from the principal necessary or desirable. No such applications were granted.
A tabular summary of examinations, credit investigations, and
economic surveys made by the Federal Reserve Bank of San Francisco during the year 1924 follows:
Independent examinations
7
Examinations made concurrently with national or state banking departments. . 2
Independent credit investigations
6
Credit investigations made concurrently with state banking departments
84
Economic surveys
9
Other investigations
1
TOTAL EXAMINATIONS AND INVESTIGATIONS MADE

109

Arrangements whereby this bank, although not participating in
the examination, receives copies of all reports of examinations of
member banks made by national bank examiners or state banking
departments have been continued. The examination work of the
Federal Reserve Bank has consequently been reduced to the
minimum.
The Monthly Review of Business Conditions, prepared by the Federal Reserve Agent at San Francisco, was published throughout the
year and distributed without charge to approximately 12,000 banks
and interested individuals.
*The term contiguous territory is defined to mean "The territory of a city or town
whose corporate limits at some point coincide with the corporate limits of the city
town
in which the parent bank is located."
Digitizedorfor
FRASER


18

ANNUAL REPORT OF FEDERAL RESERVE BANK OF SAN FRANCISCO

Bank Organization and Personnel
On December 31, 1924, the terms of three directors of the Federal
Reserve Bank of San Francisco, Mr. M. A. Buchan of Class A, Mr.
William T. Sesnon of Class B, and Mr. Walton N. Moore of Class C,
expired. Mr. Buchan was ineligible for renomination as a representative of member banks in Group Three (those having a combined
capital and surplus of less than $125,000), because he had become an
officer and director of a Group Two bank (those having a combined
capital and surplus not exceeding $599,000 and not less than
$125,000). Mr. Howard Whipple, President of the First National
Bank of Turlock, was elected as Class A director to represent Group
Three banks for a term of three years ending December 31, 1927.
Mr. William T. Sesnon was re-elected by the banks of Group Two for
a similar three-year term as director of Class B, which consists of
members actively engaged in commerce, agriculture, or other industrial pursuit. The Federal Reserve Board reappointed Mr. Walton
N. Moore of San Francisco a Class C director for a term of three
years ending December 31,1927, and redesignated him Deputy Chairman of the Board for the year 1925.
Mr. John Perrin of San Francisco, a Class C director, whose term
expires December 31, 1926, was similarly redesignated Chairman of
the Board and Federal Reserve Agent for the year 1925.
On January 1,1925, a new regulation of the Federal Reserve Board
relating to appointment, composition, and organization of Boards of
Directors of branches of Federal reserve banks became effiective.
The new regulation increased the number of directors at each branch
from five to seven, provided for a wider representation of banking
and business interests than heretofore, and provided for representation of communities outside of the branch cities. The principal provisions of the new regulation follow :
1. That four of the seven directors shall be appointed by the Board
of Directors at the Head Office of the bank and three by the
Federal Reserve Board.
2. That those directors appointed by the Federal Reserve Bank
shall be chosen from the ranks of men well qualified and experienced in banking, and those appointed by the Federal Reserve
Board shall be chosen from among those of high character and
standing who are engaged in agriculture, industry, or commerce, insofar as may be practicable.
3. That in the case of each branch at least one of those appointed
by the Federal Reserve Bank and at least one of those appointed
by the Federal Reserve Board shall be chosen from outside the
city of the branch office.
4. That one of the directors appointed by the Federal Reserve
Bank shall be the active manager of each branch and shall have
the title Managing Director.
5. That except in the case of the Managing Director, who is
appointed for one year, directors' terms shall be for three years,
arranged so that one of those appointed by the Federal Reserve
Bank and one of those appointed by the Federal Reserve Board
shall go out of office each year.
6. That that appointee of the Federal Reserve Board having only
one year to serve shall each year be elected Chairman of the
Board.



ANNUAL REPORT OF FEDERAL RESERVE BANK OF SAN FRANCISCO

The following changes in the official staff of the bank took place
during 1924:
1. The number of auditors assisting the General Auditor was
reduced from three to two by the transfer of Mr. J. P. Read to
the Federal Reserve Agent's Department, April 8, 1924.
2. On July 15, 1924, Mr. Harry C. Vogelsang, Assistant Cashier,
Los Angeles Branch, resigned to accept a position as Assistant
Vice-President of the Citizens National Bank of Los Angeles.
The vacancy created by the resignation was filled by the
appointment, effective May 1, 1924, of Mr. L. C. Meyer as Acting Assistant Cashier, Los Angeles Branch. On January 1,
1925, Mr. Meyer was appointed Assistant Cashier.
3. On November 30, 1924, Mr. Henry C. Breck tendered his resignation as Assistant Federal Reserve Agent and Secretary of the
Board of Directors to become executive assistant at Berlin,
Germany, to Mr. S. Parker Gilbert, Agent General for Reparations under the Dawes Plan. On December 1, 1924, Mr. John
Perrin, Federal Reserve Agent, appointed as Assistant Federal
Reserve Agent to succeed Mr. Breek, Mr. Allan Sproul, a member of the Federal Reserve Agent's Department for the past
four years. On December 4, 1924, Mr. Sproul was appointed
Secretary of the Board of Directors.
4. Effective January 1, 1925, the Board of Directors appointed
Mr. Ira Clerk and Mr. L. C. Pontious, Deputy Governors, at the
same time abolishing the title Assistant Deputy Governor,
which they had previously held.
Following is a comparative summary of the number of officers
and of employees in the principal departments of the bank with
corresponding aggregate salaries paid on December 31, 1924, and
December 31, 1923. (Figures are for Head Office and branches
combined.)
Number
OFFICERS:

Chairman and Federal Reserve Agent
Governor
Other officers

1924

1
1
35

Officers and Employees
Annual Salaries

1923

1924

1923

1

1
37.73

$ 24,000
25,000
207,880

$ 24,000
25,000
209,526

963
23
28
56.51

1,425,660
59,620
25,320
64,200

1,406,960
60,280
49,320
96,535

1,046 1,110.24

$1,831,680

$1,871,621

1.27
22.49

10,200

5,374
38,105

1

1,500

1,500

GRAND TOTAL
1,052 1,135
TEMPORARY EMPLOYEES (not included

$1,843,380

$1,916,600

$7,920

$3,600

EMPLOYEES, by Departments:

Banking Department
Federal Reserve Agent's Department
Auditing Department
Fiscal Agency Department
TOTALS

938
23
12
36

OFFICERS AND FISCAL AGENCY D E -

PARTMENT EMPLOYEES whose salaries

are reimbursed by the Treasury Department :
Officers
Employees

5

OTHER EMPLOYEES whose salaries are

reimbursed to bank, including building employees in space rented to
tenants

above)



1

6

3

20

ANNUAL REPORT OF FEDERAL RESERVE BANK OF SAN FRANCISCO

NOTE
Detailed statistical tables formerly published as an appendix to
the Annual Report of the Federal Reserve Agent will hereafter
appear only in the Annual Report of the Federal Reserve Board,
which will include the following- exhibits pertaining to the Twelfth
Federal Reserve District and the Federal Reserve Bank of San
Francisco:
1. Comparative Statement of Condition.
2. Movement of Principal Assets and Liabilities.
3. Volume of Discount and Open Market Operations.
4. Volume of Bills Discounted for Member Banks in Each State.
5. Earnings and Expenses.
6. Volume of Operations in Principal Departments.
7. Operations of Federal Reserve Clearing System.
8. Clearings and Transfers Through Gold Settlement Fund.
9. Principal Assets and Liabilities of Reporting Member Banks
in Leading Cities of District.
10. Debits to Individual Accounts at Banks in Principal Clearing
House Centers.
Copies of the Board's report may be obtained, when published,
from the Federal Reserve Board at Washington, D. C.




TWELFTH FEDERAL RESERVE DISTRICT

SAN FRANCISC

Map showing territories of Head Office and Branches
of the Federal Reserve Bank of San Francisco