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FEDERAL RESERVE BANK OF NEW YORK ["Circular No. 526"| Uanuary 22, 1923. J Accounting Department Eighth 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, 1922, 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, 1921, 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 1922. We trust that you will find these various statements of interest, pending receipt of the more extended report of the year's operations contained in the report of the Chairman to the Federal Reserve Board, now in process of publication, a copy of which we shall send you shortly. Very truly yours, BENJ. STRONG, Governor. Statement of Condition Dec. 31, 1922 RESOURCES Dec. 31, 1921 CASH RESERVES held by this bank against its deposits and note circulation: $118,126,581.76 $283,141,669.40 169,378,439.83 130,058,226.99 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 658,970,228.28 653,004,078.28 GOLD 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 10,308,820.39 15,000,000.00 31,313,929.70 50,335,841.00 GOLD AND GOLD CERTIFICATES in vault GOLD I N T H E 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 GOLD H E L D BY T H E FEDERAL R E S E R V E A G E N T as part of LEGAL T E N D E R N O T E S , SILVER, AND SILVER CERTIFICATES in the vaults of the bank (available as reserve only against deposits) TOTAL CASH RESERVES $988,097,999.96 $1,131,539,815.67 LOANS AND INVESTMENTS LOANS TO MEMBER BANKS: 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 $168,235,591.11 $156,013,679.05 16,053,362.30 53,066,308.08 60,863,602.89 72,593,292.33 167,252,450.00 103,525,400.00 $412,405,006.30 $385,198,679.46 $10,238,178.58 $6,647,921.86 134,303,106.41 103,362,741.74 1,892,589.25 2,851,848.89 $146,433,874.24 $114,465,872.49 U N I T E D STATES GOVERNMENT bonds, notes and certificates of indebtedness TOTAL LOANS AND INVESTMENTS (or Earning Assets). MISCELLANEOUS RESOURCES BANK PREMISES 5 % REDEMPTION F U N D in the hands of the Treasurer of the United States, for Federal Reserve Bank notes (mostly in $1 and $2 denominations) presented to the Treasury for redemption. This fund was closed out on December 28, 1922, when the Treasury assumed liability for all such notes remaining unretired CHECKS AND OTHER ITEMS IN PROCESS OF COLLECTION. . . ALL OTHER MISCELLANEOUS RESOURCES TOTAL MISCELLANEOUS RESOURCES TOTAL RESOURCES 1,603,360.00 $1,546,936,880.50 $1,631,204,367.62 Federal Reserve Bank of New York LIABILITIES Dec. 31, 1922 Dec. 31, 1921 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 $597,071,293.50 $663,363,181.00 circulation, payable on demand. Liability for all such notes has now been assumed by the Treasury 20,559,200.00 $597,071,293.50 $683,922,381.00 $749,005,902.75 $726,097,832.01 517,656.11 32,616,430.48 11,439,182.74 14,450,428.68 $760,962,741.60 $773,164,691.17 $98,100,885.92 $83,847,856.21 ALL OTHER MISCELLANEOUS LIABILITIES 2,313,986.23 2,958,462.10 TOTAL MISCELLANEOUS LIABILITIES. $100,414,872.15 $86,806,318.31 CAPITAL P A I D I N , equal to 3 per cent, of the capital and surplus of member banks $28,688,450.00 $27,113,850.00 SURPLUS—That portion of accumulated net earnings which the bank is legally permitted to retain 59,799,523.25 60,197,127.14 $88,487,973.25 $87,310,977.14 TOTAL CURRENCY IN CIRCULATION. DEPOSITS RESERVE DEPOSITS maintained by member banks as legal reserves against the deposits of their customers U N I T E D STATES GOVERNMENT DEPOSITS carried at the Reserve Bank for current requirements of the Treasury OTHER DEPOSITS including foreign non-member banks, etc 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 LIARILITIES $1,546,936,880.50 $1,631,204,367.62 3 Profit and Loss Account Dec. 31, 1922 Dec. 31, 1921 EARNINGS FROM LOANS TO MEMBER BANKS and paper discounted for $3,970,209.76 $30,762,021.40 1,619,512.13 1,829,665.00 5,643,385.44 1,978,433.39 108,211.44 197,168.98 $11,341,318.77 $34,767,288.77 $6,223,404.61 $7,076,187.58 553,124.78 1,091,591.96 843,196.31 505,677.03 $7,619,725.70 $8,673,456.57 $3,721,593.07 $26,093,832.20 $1,652,138.30 $1,608,721.16 In additions to surplus—The bank is permitted by law to accumulate out of earnings 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 206,945.48 3,782,671.10 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.) 1,862,509.29 20,702,439.94 $3,721,593.07 $26,093,832.20 them FROM ACCEPTANCES OWNED FROM U N I T E D STATES GOVERNMENT OBLIGATIONS owned, including United States Treasury certificates which secured Federal Reserve Bank note circulation OTHER EARNINGS TOTAL EARNINGS DEDUCTIONS FROM EARNINGS FOR CURRENT B A N K OPERATION. (These figures include the greater portion of expenses incurred asfiscalagent of the United States, since July 1, 1921) FOR FEDERAL RESERVE CURRENCY, mainly the cost of printing new notes to replace worn notes in circu'.ation, and to maintain supplies unissued and on hand FOR SELF-INSURANCE AND OTHER RESERVES, DEPRECIATION, 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 In dividends paid to member banks, at the rate of 6 per cent, on paid-in capital 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 1922 and 1921: 1922 1921 January.. $984,407.49 $5,335,895.85 February. 886,241.10 4,763,396.65 March 973,938.13 4,696,542.45 April 881,586.90 3,706,630.43 May 1,027,701.56 3,537,521.77 June 890,161.83 2,652,685.72 July 964,385.25 2,350,879.59 August 849,052.29 2,085,282.18 September 910,386.31 1,671,063.19 October... 974,884.30 1,448,945.87 November 907,626.40 1,194,674.82 December. 1,090,947.21 1,323,770.25 $11,341,318.77 $34,767,288.77 Ratio of Net Earnings Per Cent, earned on capital paid in 1922 1921 13.6 97.3 Per Cent, earned on capital and surplus 4.3 30.8 Per Cent, earned on capital, surplus and deposits 0.5 3.4 5 EXPENSES OF OPERATION DURING 1922 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 business on December 31, the total personnel of the New York Reserve Bank, including the Buffalo Branch, numbered 3,043 persons. The expenses for carrying on the work of the bank, divided according to functions, 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 9,120,000 entries a year in the accounis maintained with member and other banks, and the current determination of reserve balances which are required by law 2. $219,034 SUPPLYING CURRENCY AND COIN PAYING OUT, RECEIVING AND REDEEMING CURRENCY, involving the count of about 696,000,000 individual notes during the year PAYING OUT AND RECEIVING COIN. $855,913 This service was formerly performed largely by the Subtreasury, and is now entirely in the hands of the Federal Reserve Bank. Receipts and issues amounted to $186,500,000 for the year CURRENCY AND COIN SHIPMENTS to and from out-of-town banks. were 215,000 such shipments in and out during the year There 173,601 336,961 COST OF PRINTING NEW FEDERAL RESERVE CURRENCY to replace worn notes in circulation and to maintain supplies unissued and on hand, including cost of transportation TAX on Federal Reserve Bank note circulation, mostly of notes in the $1 and $2 denominations. (Federal Reserve note circulation is not taxed.) 553,125 69,374 SUPPLYING CURRENCY AND C O I N 3. $1,988,974 M A K I N G LOANS MAKING DISCOUNTS AND ADVANCES TO MEMBER BANKS. The number of items handled during the year was 60,715, aggregating $9,206,000,000... $307,250 a PURCHASING ACCEPTANCES AND GOVERNMENT OBLIGATIONS for the account of this bank and other Federal Reserve Banks. The items purchased during the year aggregated $3,750,000,000 115,377 M A K I N G LOANS 4. $422,627 COLLECTTNG^CHECKS, D R A F T S , N O T E S AND COUPONS COLLECTION OF CASH ITEMS, mostly checks. The average number collected was 392,715 a day, or 118,600,000 for the year, aggregating $62,300,000,000 $1,537,067 COLLECTION OF NON-CASH ITEMS, including drafts, notes and coupons. The number of items handled during the year was about 1,740,000, aggregating $1,520,000,000 COLLECTING C H E C K S , ETC 512,585 $2,049,652 H 5. SUPPLEMENTARY SERVICES CUSTODY OF SECURITIES. This service involved holding in safekeeping on the average about $700,000,000 of securities for the United States Government, $100,000,000 for the War Finance Corporation and $200,000,000 from other sources $135,019 PURCHASE AND SALE OF BANKERS ACCEPTANCES and other securities for member banks and foreign banks amounting for the year to $302,000,000, and receiving and delivering securities for the account of member banks, amounting for the year to about $916,000,000. In addition the bank has acted for the Treasury Department in the purchase and sale of Government securities 183,645 TELEGRAPHIC TRANSFER OF FUNDS. 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 783 transfers of funds to all parts of the country each day, amounting to about $83,000,000 and aggregating for the year $25,126,000,000 100,242 SUPPLEMENTARY SERVICES. 6. $418,906 SERVICES IN CONNECTION WITH GOVERNMENT LOANS This work included during 1922 the receipt or delivery of 6,387,000 individual Government bonds, notes and certificates, amounting to $4,633,000,000, which were exchanged or converted or handled in connection with registration; and the payment of 22,685,000 individual coupons on Government bonds, notes and certificates. It also involved the sale and issue of 320,000 pieces amounting to $1,922,000,000, and the redemption of 616,000 pieces amounting to $1,451,000,000, of Government bonds, notes and certificates. Aside from amounts received from the Treasury in partial reimbursement, the cost of such operations to the bank was ^ $616,859 (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)... $209,330 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 DIRECTORS' FEES AND TRAVELING EXPENSES THIS BANK'S SHARE OF THE EXPENSES OF THE FEDERAL RESERVE BOARD. 365,219 264,971 23,075 197,882 GENERAL OR SUPERVISORY E X P E N S E S $1,060,477 TOTAL $6,776,529 DIRECTORS AND OFFICERS, JANUARY 1, 1923 A 1 DIRECTORS Term Expires Dec. 31 2 1925 B GATES W. MCGARRAH, New York City Chairman, The Mechanics and Metals National Bank A 2 ROBERT H. TREMAN, Ithaca, N. Y. B 3 CHARLES SMITH, Oneonta, N. Y. B 1 OWEN D. YOUNG, New York City Williams & Peters, New York City 3 FRANK L. STEVENS, North Hoosick, N. Y. President, Stevens and Thompson, Inc. PIERRE JAY, New York City, Chairman 1923 C C President, The Tompkins County National Bank A RICHARD H. WILLIAMS, Madison, N. J. WILLIAM L. SAUNDERS, Plainfield, N. J., 1924 Deputy Chairman Chairman, Ingersoll-Rand Company 1925 CLARENCE M. WOOLLEY, New York City President, The Citizens National Bank Chairman, General Electric Company Terms Expires Dec. 31 1923 1924 1925 1923 1924 President, American Radiator Company MEMBER OF FEDERAL ADVISORY COUNCIL PAUL M. WARBURG, New York City OFFICERS GENERAL OFFICERS BENJ. STRONG, Governor J. HERBERT CASE, Deputy Governor Louis F. SAILER, Deputy Governor GEORGE L. HARRISON, Deputy Governor EDWIN R. KENZEL, Deputy Governor DUDLEY H. BARROWS, Secretary JAY E. CRANE, Assistant Secretary L. RANDOLPH MASON, General Counsel JESSE HOLLADAY PHILBIN, Assistant General Counsel Controller of Loans Controller at Large Controller of Cash and Controller of Collections Controller of Fiscal Agency LAURENCE H. HENDRICKS, Functions GILBERT E. CHAPIN, RAY M. GIDNEY, ARTHUR W. GILBART, SENIOR OFFICERS JOSEPH D. HIGGINS, J. WILSON JONES, EDWIN R. KENZEL, LESLIE R. ROUNDS, Controller at Large Controller of Administration Controller of Investments, Pro tern. Controller of Accounts JUNIOR OFFICERS Manager, Collection Department ADOLPH J. LINS, Manager, Check Department Manager, Foreign Department WALTER B. MATTESON, Manager, Certificates of IndebtedManager, Cash Department ness Department and Manager, Manager, Government Bond Securities Department Department JOSEPH L. MORRIS, Manager, Credit Department Manager, Building Maintenance WILLIAM A. HAMILTON, HENRY R. MURRAY, Manager, Securities Custody Department Department Manager, Personnel Development HOWARD M. JEFFERSON, ROBERT M. O'HARA, Manager, Bill Department Department JAMES M.- RICE, Manager, Accounting Department Manager, Methods and Supplies ALAN K. LAUCKNER, STEPHEN S. VANSANT, Department Manager, Discount Department I. WARD WATERS, Manager, Office Service Department and Manager, Personnel Service Department CHARLES H. COE, JAY E. CRANE, EDWIN C. FRENCH, BETHUNE M. GRANT, AUDITOR EDWARD L. DODGE, Manager, Auditing Department FRANCIS OAKEY, General A udilor FEDERAL RESERVE AGENT PIERRE JAY, Federal Reserve Agent SHEPARD MORGAN, Assistant Federal Reserve Agent CARL SNYDER, General Statistician W. RANDOLPH BURGESS, Manager, Reports Department WILLIAM H. DILLISTIN, Manager, Bank Examinations Dept. BUFFALO BRANCH DIRECTORS E. J. BARCALO, THOMAS E. LANNIN, President, Barcalo Manufacturing Company, Buffalo Vice-President, Lincoln-Alliance Bank, Rochester FRED J. COE, ELLIOTT C. MCDOUGAL, Vice-President, Power City Bank, Niagara Falls President, Marine Trust Company, Buffalo JOHN A. KLOEPFER, HARRY T. RAMSDELL, President, Liberty Bank of Buffalo President, Mfrs. and Traders National Bank, Buffalo WALTER W. SCHNECKENBURGER, Manager OFFICERS WALTER W. SCHNECKENBURGER, Manager HALSEY W. SNOW, J R . , Cashier CLIFFORD L. BLAKESLEE, Assistant Cashier ELMER L. THEOBALD, Assistant Cashier
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