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FEDERAL RESERVE BANK OF NEW YORK ["Circular No. 432 l_January 23,1922. Accounting Department Seventh Annual Statement To the Stockholders of the Federal Reserve Bank of New York: We hand you herewith a condensed statement of the condition of this bank at the close of its fiscal year, December 31, 1921, and of the Profit and Loss account for that year, showing the disposition of net profits. For convenient comparison, the relative items for the previous year, 1920, are also shown. Supplementing the Profit and Loss account is a statement showing the size and cost of the various operations conducted by the bank in 1921. We trust that you will find these various statements of interest, pending receipt of the more complete report of the year's operations contained in the report of the Chairman to the Federal Reserve Board, now in preparation, a copy of which we shall send you as soon as it is published. Very truly yours, BENJ. STRONG, Governor. Statement of Condition R E S O U R C E S Dec. 31,1921 Dec. 31,1920 $283,141,669.40 $132,723,247.12 130,058,226.99 45,901,896.46 CASH RESERVES held by this bank against its deposits and note circulation: GOLD AND GOLD CERTIFICATES in vault GOLD IN THE GOLD SETTLEMENT F U N D lodged with the Treasurer of the United States for the purpose of settling current transactions between Federal Reserve districts 1,211,100.00 GOLD WITH FOREIGN AGENCIES GOLD H E L D BY THE FEDERAL RESERVE AGENT as part of the collateral deposited by the bank when it obtains Federal Reserve notes. This gold is lodged partly in the vaults of the bank and partly with the Treasurer of the United States GOLD 653,004,078.28 254,575,330.89 15,000,000.00 39,000,000.00 50,335,841.00 144,759,115.20 $1,131,539,815.67 $618,170,689.67 $156,013,679.05 $454,751,722.52 53,066,308.08 416,686,474.82 72,593,292.33 113,740,374.53 103,525,400.00 61,184,305.55 REDEMPTION F U N D in the hands of the Treasurer of the United States to be used to redeem such Federal Reserve notes as are presented to the Treasury for redemption LEGAL TENDER NOTES, SILVER, AND SILVER CERTIFICATES in the vaults of the bank (available as reserve only against deposits) TOTAL CASH RESERVES LOANS AND INVESTMENTS LOANS TO MEMBER RANKS: On the security of obligations of the United States By the discount of commercial or agricultural paper or acceptances ACCEPTANCES bought in the open market U N I T E D STATES GOVERNMENT bonds, notes and certificates of indebtedness (including certificates securing Federal Reserve Bank notes) TOTAL LOANS AND INVESTMENTS (or Earning Assets). $385,198,679.46 $1,046,362,877.42 MISCELLANEOUS RESOURCES RANK PREMISES 5% REDEMPTION FUND in the hands of the Treasurer of the United States to be used for redeeming such Federal Reserve Bank notes (mostly in $1 and $2 denominations) as are presented to the Treasury for redemption. This fund may not legally be included in the reserves of the bank CHECKS AND OTHER ITEMS IN PROCESS OF COLLECTION . . . ALL OTHER MISCELLANEOUS RESOURCES TOTAL MISCELLANEOUS RESOURCES TOTAL RESOURCES $6,647,921.86 $4,092,497.30 1,603,360.00 2,766,360.00 103,362,741.74 141,346,433.94 2,851,848.89 1,431,316.02 $114,465,872.49 $149,636,607.26 $1,631,204,367.62 $1,814,170,174.35 Federal Reserve Bank of New York L I A B I L I T I E S Dec. 31,1921 Dec. 31,1920 $663,363,181.0( $867,480,630.00 20,559,200.00 38,833,200.00 $683,922,381.00 $906,313,830.00 $726,097,832.01 $702,431,237.92 32,616,430.48 11,297,895.88 14,450,428.68 12,133,377.48 $773,164,691.17 $725,862,511.28 $83,847,856.21 $93,318,901.11 ALL OTHER MISCELLANEOUS LIABILITIES 2,958,462.10 5,887,825.92 TOTAL MISCELLANEOUS LIABILITIES $86,806,318.31 99,206,727.03 CAPITAL P A I D I N , equal to 3 per cent, of the capital and surplus of member banks $27,113,850.00 $26,372,650.00 SURPLUS*—Transferred from net earnings in past years and this year 60,197,127.14 56,414,456.04 $87,310,977 .*14 $82,787,106.04 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 FEDERAL RESERVE BANK NOTES in actual circulation, payable on demand. These notes, mostly for $1 and $2, are secured by Treasury certificates issued under the Pittman A c t . . . . TOTAL CURRENCY m CIRCULATION DEPOSITS RESERVE DEPOSITS maintained by member banks as legal reserves against the deposits of their customers UNITED STATES GOVERNMENT DEPOSITS carried at the Reserve Bank for current requirements of the Treasury OTHER DEPOSITS including non-member banks, etc foreign deposits, deposits of TOTAL DEPOSITS MISCELLANEOUS LIABILITIES DEFERRED ITEMS, composed mostly of uncollected checks on banks in all parts of the country. Such items are credited as deposits after the average time needed to collect them elapses, ranging from 1 to 8 days CAPITAL AND SURPLUS TOTAL CAPITAL AND SURPLUS TOTAL LIABILITIES 1,631,204,367.62 $1,814,170,174.35 Profit and Loss Account Dec. 31,1921 Dec. 31,1920 EARNINGS FROM LOANS TO MEMEER BANKS and paper discounted for them $30,762,021.40 $49,839,182.52 1,829,665.00 8,323,050.37 1,978,433.39 1,975,648.96 197,168.98 387,439.92 $34,767,288.77 $60,525,321.77 $7,076,187.58 $6,350,862.58 1,091,591.96 648,392.46 505,677.03 397,936.09 $8,673,456.57 $7,397,191.13 $26,093,832.20 $53,128,130.64 In dividends paid to member banks, at the rate of 6 per cent, on paid-in capital $1,608,721.16 $1,477,096.58 In additions to surplus—an amount equivalent to the increase in the bank's subscribed capital during the year, plus 10 per cent, of the remaining net income, as provided by law 3,782,671.10 12,332,523.41 In payment to the United States Government, representing the entire net income of the bank after paying dividends and making additions to surplus * (Federal Reserve notes are not taxed, and this payment is in lieu of taxes on notes and other Federal taxes.) 20,702,439.94 39,318,510.65 $26,093,832.20 $53,128,130.64 FROM ACCEPTANCES O W N E D F R O M U N I T E D STATES G O V E R N M E N T SECURITIES owned, including United States Treasury certificates which secure Federal Reserve Bank note circulation O T H E R EARNINGS TOTAL EARNINGS DEDUCTIONS FROM EARNINGS F O R C U R R E N T B A N K OPERATION. (The expenses for 1921 include expenses incurred as fiscal agent of the United States from July 1 to December 31, 1921. Prior to July 1, 1921, such expenses were reimbursed by the Treasury) FOR FEDERAL R E S E R V E CURRENCY, mainly the cost of printing new notes to replace worn notes in circulation, and to build up supplies unissued and on hand F O R SELF-INSURANCE AND O T H E R R E S E R V E S , D E P R E C I A TION, ETC TOTAL DEDUCTIONS FROM EARNINGS N E T INCOME available for dividends, additions to surplus, and payment to the United States Government DISTRIBUTION OF NET INCOME TOTAL N E T INCOME DISTRIBUTED Gross Earnings by Months The following figures show in comparison the gross earnings of the bank by months for the years 1921 and 1920: 1921 1920 January .. 55,335,895.85 $3,999,906.01 February . 4,763,396.65 4,266,984.48 March 4,696,542.45 4,791,127.35 April 3,706,630.43! 4,433,053.25 May 3,537,521.77 4,858,821.66 June 2,652,685.72 4,986,885.14 July 2,350,879.59 5,395,165.28 August... 2,085,282.18 5,487,126.99 September 1,671,063.19 5,229,776.97 October . . 1,448,945.87 5,777,295.19 November 1,194,674.82 5,567,154.47 December 1,323,770.25 5,732,024.98 $34,767,288.77 $60,525,321.77 Ratio of Net Earnings 1921 1920 Per Cent. Earned on Capital 97.3 215.7 Per Cent. Earned on Capital and Surplus 30.8 71.7 3.4 6.3 Per Cent. Earned on Capital, Surplus and Deposits. • • EXPENSES OF OPERATION DURING 1921 The principal expenses of the Federal Reserve Bank are incurred in carrying out functions prescribed by law or in performing services to member banks and through them to the whole business, agricultural and industrial community, which the legally prescribed functions imply. About onethird of all the banking resources of the country are within this Federal Reserve district, and the New York Reserve Bank conducts about one-third of the business of the entire Federal Reserve system. At the close of busmess on December 31, the total personnel of the New York Reserve Bank, including the Buffalo Branch, numbered 2,907 persons. The expenses for carrying on the work of the bank, divided according to function, and with miscellaneous items of overhead apportioned among the,, various functions, were as follows: 1. MAINTAINING THE ACCOUNTS OF THE BANK. This work includes making about 12,500,000 entries a year in the accounts maintained with member and other banks, and the current determination of reserve balances, which are required by law 2. $260,111 SUPPLYING CURRENCY AND COIN. PAYING OUT, RECEIVING AND REDEEMING CURRENCY, involving the count of about 687,000,000 individual notes during the year $1,247,912 PAYING OUT AND RECEIVING COIN. This service was formerly performed largely by the Sub-Treasury, and is now entirely in the hands of the Federal Reserve Bank. Receipts and issues amounted to $164,000,000 for the year CURRENCY AND COIN SHIPMENTS 193,572 to and from out-of-town banks. There were 175,000 such shipments in and out during the year. 209,826 COST OF PRINTING N E W FEDERAL RESERVE CURRENCY to replace worn notes in circulation and to build up supplies unissued and on hand, including cost of transportation 1,091,592 TAX on Federal Reserve Bank note circulation, mostly of notes in the $1 and $2 denomination. (Federal Reserve note circulation is not taxed).. 136,310 $2,879,212 SUPPLYING CURRENCY AND COIN 3. MAKING LOANS. MAKING DISCOUNTS AND ADVANCES TO MEMBER BANKS. The number of items handled during the year was 149,151, aggregating $30,767,000,000. $428,720 PURCHASING ACCEPTANCES AND TREASURY CERTIFICATES for the account of this bank and other Federal Reserve Banks. during the year aggregated $3,479,000,000 The items purchased 87,682 MAKING LOANS 4. $516,402 COLLECTING CHECKS, DRAFTS, NOTES AND COUPONS. COLLECTION OF CASH ITEMS, mostly checks. The average number of checks handled was 316,100 a day, or 104,519,000 for the year, aggregating $36,100,000,000 $1,768,685 COLLECTION OF NON-CASH ITEMS, including drafts, notes and coupons, aggregating for the year, $1,580,000,000 COLLECTING CHECKS, ETC 621,024 $2,389,709 5. SUPPLEMENTARY SERVICES. CUSTODY OF SECURITIES. This service involves holding in safekeeping on the average about $800,000,000 of securities for the United States Government, $300,000,000 for the War Finance Corporation and $100,000,000 from other sources $121,309 PURCHASE AND SALE OF BANKERS ACCEPTANCES and other securities for member banks and foreign banks amounting to $415,256,000 for the year, and receiving and delivering securities for the account of member banks, amounting for the year to about $400,125,000. In addition the bank has acted for the Treasury Department in the purchase and sale of Government securities TELEGRAPHIC TRANSFER OF FUNDS. 137,207 This service is performed over the telegraph wires of the Federal Reserve system, and is used by the Treasury Department and member banks. It involves making an average of 969 transfers of funds to all parts of the country each day, amounting to about $60,133,000 and aggregating for the year $18,160,344,000 94,034 SUPPLEMENTARY SERVICES 6. $352,550 SERVICES IN CONNECTION WITH GOVERNMENT LOANS. This work included during 1921 the receipt or delivery of 10,520,094 individual Libertv bonds and Victory notes, amounting to $2,879,500,000, which were exchanged or converted or handled in connection with registration; and the payment of 26,125,000 individual coupons on Government bonds, notes*and certificates. It also involved the sale and issue of $1,480,000,000 of Treasury notes and certificates, and the redemption of $1,461,000,000 of Treasury certificates. Prior to July 1 the cost 'of such operations, less miscellaneous items of overhead, was reimbursed to the bank by the Treasury Department. The cost to the bank from July 1 to December 31 was $572,748 (In addition to these operations for the Treasury, the bank performed other work for the Government connected with the currency, the collection of checks, the custody, purchase and sale of securities, the transfer of funds, etc., which have been referred to under their respective headings.) 7. GENERAL OR SUPERVISORY EXPENSES, not apportioned among the functions specified above: EXECUTIVE SALARIES (Chairman, governor, four deputy governors and secretary of the bank, and manager and cashier of the Buffalo Branch)... $206,385 WORK OF THE FEDERAL RESERVE AGENT, including note issues, examination of member banks, visits to member banks, statistical and information services, such as the preparation of weekly bank statements and the publication of the Monthly Review MAINTAINING THE GENERAL AUDIT 329,828 DIRECTORS' FEES AND TRAVELING EXPENSES 32,101 THIS BANK'S SHARE OF THE EXPENSES OF THE FEDERAL RESERVE BOARD. . GENERAL OR SUPERVISORY E X P E N S E S TOTAL 425,933 202,801 $1,197,048 .' $8,167,780 DIRECTORS AND OFFICERS JANUARY, 1922 DIRECTORS PIBHRE JAY, New York City Chairman CHARLES SMITH, Oneonta, N. Y. FRANK L. STEVENS, North Hoosick, N. Y CHARLES A. STONE, New York City WILLIAM L. SAUNDERS, Plainfield, N. J. Deputy Chairman ROBERT H. TREMAN, Ithaca, N. Y. RICHARD H. WILLIAMS, Madison, N. J. JAMES S. ALEXANDER, New York City CLARENCE M. WOOLLEY, New York City MEMBER OF FEDERAL ADVISORY COUNCIL PAUL M. WARBURG, New York City OFFICERS GENERAL OFFICERS BENJ. STRONG, Governor J. HERBERT CASE, Deputy Governor GEORGE L. HARRISON, Deputy Governor EDWIN R. KENZEL, Deputy Governor Louis F. SAILER, Deputy Governor DUDLEY H. BARROWS, Secretary JAY E. CRANE, Assistant Secretary EDWARD H. HART, General Counsel L. RANDOLPH MASON, Assistant General Counsel SENIOR OFFICERS J. HERBERT CASE, GILBERT E. CHAPIN, RAY M. GIDNEY, ARTHUR W. GILBART, GEORGE L. HARRISON, Controller of Foreign Relations, Pro tern. Controller of Loans Controller at Large Controller of Administration Controller of Collections, Pro tern. LAURENCE H. HENDBICKS, JOSEPH D. HIGGINS, J. WILSON JONES, EDWIN R. KENZEL, LESLIE R. ROUNDS, Controller at Large Controller of Cash and Custodies Controller of Fiscal Agency Functions Controller of Investments, Pro tern. Controller of Accounts JUNIOR OFFICERS Manager, Loan Department, Pro tern. CHARLES H. COE, Manager, Check Department JAY E. CRANE, Manager, Foreign Department EDWIN C. FRENCH, Manager, Custody Department ARTHUR W. GILBART, Manager, Building Maintenance Department, Pro tern. BBTHUNE M. GRANT, Manager, Government Securities Sales Department WILLIAM A. HAMILTON, Manager, Cash Department HOWARD M. JEFFERSON, Manager, Personnel Development Department ADOLPH J. LINS, Manager at Large Manager, Certificates of Indebtedness Department and, Manager, Securities Department Manager, Credit Department JOSEPH L. MORRIS, Manager, Collection Department HENRY R. MURRAY, Manager, Bill Department ROBERT M. O'HARA, Manager, Methods and Supplies JOHN E. RAASCH, Department Manager, Government Bond DeJAMES M. RICE, partment Manager, Accounting Department, LESLIE R. ROUNDS, Pro tern. STEPHEN S. VANSANT, Manager, Discount Departmtnt I. WARD WATERS, Manager, Office Service Department and Manager, Personnel Service Department GILBERT E. CHAPIN, WALTER B. MATTESON, AUDITOR FRANCIS OAKEY, General Auditor EDWARD L. DODGE, Manager, Auditing Department FEDERAL RESERVE AGENT PIERRE JAY, Federal Reserve Agent SHEPARD MORGAN, Assistant Federal Reserve Agent WILLIAM H. DILLISTIN, Manager, Bank Examinations Department CARL SNYDER, Manager, Statistics Department BUFFALO BRANCH DIRECTORS E. J. BARCALO, Buffalo, N. Y. THOMAS E. LANNIN, Rochester, N. Y. ELLIOTT C. MCDOUGAL, Buffalo, N. Y. HARRY T. RAMSDELL, Buffalo, N. Y. FRED J. COE, Niagara Falls, N. Y. JOHN A. KLOEPFER, Buffalo, N . Y. WALTER W. SCHNECKENBURGER, Buffalo, N. Y. WALTER W. SCHNECKENBURGER, Manager OFFICERS HALSEY W. SNOW, JR., Cashier CLIFFORD L. BLAKESLEE, Assistant Cashier
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