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FEDERAL RESERVE BANK OF NEW YORK rCircular No. 6511 L January 15, 1925 J Accounting Department Tenth 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, 1924, and of the Profit and Loss account for that year. For convenient comparison, the relative items for the previous year, 1923, are also shown. Supplementing the Profit and Loss account is a statement showing the size and approximate cost of the various operations conducted by the bank in 1924. We trust that you will find these various statements of interest, pending the issuance of the annual report of the bank which you will receive shortly. Very truly yours, BENJ. STRONG, Governor. Statement of Condition RESOURCES Dec. 31, 1923 Dec. 31, 1924 $583,625,240.61 $384,306,965.61 9,441,006.21 11,557,070.44 168,615,033.36 277,262,589.82 109,813,734.55 286,475,438.52 24,437,091.00 21,867,394.00 $895,932,105.73 $981,469,458.39 $11,845,810.23 $18,517,186.90 $136,174,500.00 $68,744,642.50 28,360,300.73 12,577,441.02 93,151,232.70 101,823,154.40 46,755,950.00 169,898,350.00 CASH R E S E R V E S held by this bank against its deposits and note circulation: GOLD H E L D BY T H E F E D E R A L R E S E R V E A G E N T 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 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 Treasury for redemption 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 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. NON-RESERVE CASH consisting of National Bank Notes, Federal Reserve Bank Notes, and minor coin LOANS AND INVESTMENTS LOANS TO M E M B E R B A N K S : 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 1,746,000.00 F O R E I G N L O A N S on Gold $304,441,983.43 $351,789,587.92 BANK PREMISES $14,671,614.78 $16,242,897.76 CHECKS AND OTHER ITEMS IN PROCESS OF COLLECTION. 115,064,470.49 156,377,299.73 ALL OTHER MISCELLANEOUS RESOURCES 1,067,449.28 8,656,803.63 TOTAL MISCELLANEOUS RESOURCES. $130,803,534.55 $181,277,001.12 TOTAL LOANS AND INVESTMENTS (or Earning Assets) MISCELLANEOUS RESOURCES TOTAL RESOURCES. $1,343,023,433.94 $1,536,053,234.33 Federal Reserve Bank of New York L I A B I L I T I E S Dec. 31, 1923 Dec. 31, 1924 $420,371,240.00 $387,352,885.00 $420,371,240.00 $387,352,885.00 $712,857,792.81 $883,861,349.67 9,562,383.00 16,904,418.11 12,405,744.27 28,194,141.08 $734,825,920.08 $928,959,908,86 $95,341,849.44 $129,054,958.09 3,116,157.21 1,769,392.67 $98,458,006.65 $130,824,350.76 $29,439,300.00 $30,166,800.00 59,928,967.21 58,749,289.71 $89,368,267.21 $88,916,089.71 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 TOTAL CURRENCY IN 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 foreign deposits, deposits of non-member banks, etc TOTAL DEPOSITS MISCELLANEOUS LIABILITIES D E F E R R E D 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 A L L O T H E R MISCELLANEOUS LIABILITIES TOTAL MISCELLANEOUS LIABILITIES CAPITAL AND SURPLUS CAPITAL PAID I N , equal to 3 per cent, of the capital and surplus of member banks SURPLUS—That portion of accumulated net earnings which the bank is legally permitted to retain TOTAL CAPITAL AND SURPLUS TOTAL LIABILITIES $1,343,023,433.94 $1,536,053,234.33 Profit and Loss Account For the calendar years 1923 and 1924 1923 1924 EARNINGS FROM LOANS TO MEMBER BANKS and paper discounted for $8,255,645.84 $2,613,565.96 1,969,837.16 1,446,693.25 1,087,250.95 4,165,856.35 100,448.81 343,234,80 $11,413,182.76 $8,569,350.36 $6,458,906.87 $6,155,270.43 421,229.30 195,550.43 1,489,367.49 1,601,677.18 $8,369,503.66 $7,952,498.04 $3,043,679.10 $616,852.32 I N DIVIDENDS paid to member banks, at the rate of 6 per cent. on paid-in capital $1,749,239.47 $1,796,529.82 I N ADDITIONS TO SURPLUS—The bank is permitted bylaw 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. 129,443.96 them FROM ACCEPTANCES OWNED FROM UNITED STATES GOVERNMENT OBLIGATIONS owned... OTHER EARNINGS TOTAL EARNINGS DEDUCTIONS FROM EARNINGS F O R C U R R E N T B A N K OPERATION. (These figures include most of the expenses incurred as fiscal agent of the United States) F O R FEDERAL RESERVE CURRENCY, mainly the cost of printing new notes to replace worn notes in circulation, and to • maintain supplies unissued and on hand * F O R DEPRECIATION, SERVES, ETC SELF-INSURANCE, AND OTHER R E - TOTAL DEDUCTIONS FROM EARNINGS N E T I N C O M E available for dividends, additions to surplus, and payment to the United States Government DISTRIBUTION OF NET INCOME I N PAYMENT TO THE U N I T E D STATES GOVERNMENT, represent- ing 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.) 1,164,995.67 DEFICIT OF N E T INCOME AFTER DIVIDEND PAYMENTS, which 1,179,677.50 has been charged to Surplus Account TOTAL N E T INCOME DISTRIBUTED $3,043,679.10 $616,852.32 Gross Earnings by Months The following figures show in comparison the gross earnings of the bank by months for the years 1923 and 1924: 1923 1924 $1,140,852.65 $718,395.69 February 997,794.40 712,361.85 March. . . 978,235.89 639,017.63 April 890,673.93 666,883.12 May 928,004.73 523,448.69 June 895,873.77 588,622.38 July 985,718.48 652,694.06 August.. . 919,201.97 652,090.88 September 882,311.28 747,929.62 October. . 899,078.26 822,473.60 November 884,234.02 802,295.96 December. 1,011,203.38 1,043,136.88 $11,413,182.76 $8,569,350.36 January.. Ratio of Net Earnings 1923 1924 10.4 2.1 Per Cent, earned on capital and surplus 3.4 0.7 Per Cent, earned on capital, surplus, and deposits 0.4 0.07 Per Cent, earned on capital paid in EXPENSES OF OPERATION DURING 1924 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 one-third 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 2,653 persons. The expenses for carrying on the work of the bank, divided as nearly as possible according to functions, and with miscellaneous items of overhead similarly apportioned among the various functions, were as follows: 1. MAINTAINING THE ACCOUNTS OF THE BANK This work includes making about 9,704,000 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. $212,128 SUPPLYING CURRENCY AND COIN PAYING OUT, EECEIVING, AND EEDEEMING CURRENCY, involving the count of about 754,000,000 individual notes during the year $888,261 PAYING OUT AND KECEIVING COIN. 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 $274,869,000 for the year 173,233 CURRENCY AND COIN SHIPMENTS to and from out-of-town banks. There were 252,210 such shipments in and out during the year 483,546 PRINTING NEW FEDERAL EESERVE CURRENCY to replace worn notes in circulation and to maintain supplies unissued and on hand, including cost of transportation. Currency is printed by the Government but the cost is borne by the bank 195,550 SUPPLYING CURRENCY AND COIN 3. $1,740,590 MAKING LOANS AND INVESTMENTS MAKING DISCOUNTS AND ADVANCES TO MEMBER BANKS. The number of items handled during the year was 39,622, aggregating $7,031,000,000 PURCHASING ACCEPTANCES AND GOVERNMENT OBLIGATIONS for $244,023 the account of this bank and other Federal Reserve Banks. The items purchased during the year aggregated $3,672,000,000 118,720 MAKING LOANS AND INVESTMENTS 4. $362,743 COLLECTING CHECKS, DRAFTS, NOTES, AND COUPONS COLLECTION OP CASH ITEMS, mostly checks. The average number col- lected was 447,914 a day, or 136,200,000 for the year, aggregating $68,398,000,000 $1,649,443 COLLECTION or NON-CASH ITEMS, including drafts, notes, and coupons. The number of items handled during the year was about 2,429,000, aggregating $1,874,000,000 COLLECTING C H E C K S , ETC 444,533 $2,093,976 5. SUPPLEMENTARY SERVICES CUSTODY or SECURITIES. This service involved holding in safekeeping on the average about $683,000,000 of securities for the United States Government, $34,000,000 for the War Finance Corporation, and $262,000,000 from other sources $260,019 PURCHASE AND SALE or BANKERS ACCEPTANCES and other securities for member banks and foreign banks, amounting for the year to $173,682,000, and receiving and delivering securities for the account of member banks, amounting for the year to about $645,000,000. In addition the bank has acted for the Treasury Department in the purchase and sale of Government securities 129,488 TELEGRAPHIC TRANSFER or 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 involved making an average of 942 transfers of funds to all parts of the country each day, amounting to about $115,269,000 and aggregating for the year $35,041,900,000 118,492 $507,999 SUPPLEMENTARY SERVICES. 6. SERVICES IN CONNECTION WITH GOVERNMENT LOANS This work included during 1924 the receipt or delivery of 2,383,000 individual Government bonds, notes, and certificates, amounting to $3,O14,00O,9which were exchanged or converted or handled in connection with registration; and the payment of 14,055,477 individual coupons on Government bonds, notes, and certificates. It also involved the sale and issue of 71,975 pieces amounting to $578,582,000, and the redemption of 175,634 pieces amounting to $1,430,212,000, 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 $413,460 (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.) GENERAL OR SUPERVISORY EXPENSES, not apportioned among the functions specified above: EXECUTIVE SALARIES (Chairman, governor, four deputy governors, and secretary of the bank, and managing director and cashier of the Buffalo Branch) $222,300 WORK or THE FEDERAL RESERVE AGENT'S FUNCTION, 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 339,270 MAINTAINING THE GENERAL AUDIT, including the daily checking of transactions and records, together with periodical verifications of securities, cash, and cash items DIRECTORS ' FEES AND TRAVELING EXPENSES T H I S B A N K ' S SHARE or THE EXPENSES or THE FEDERAL RESERVE BOARD 257,695 21,459 179,201 GENERAL OR SUPERVISORY EXPENSES $1,019,925 TOTAL $6,350,821 DIRECTORS AND OFFICERS, JANUARY 1, 1925 DIRECTORS Term Expires Bee. SI 1925 GATES W. MCGARRAH, New York City THEODORE F. WHITMARSH, New York City Chairman, The Mechanics and Metals National Bank Term Expires Dec. SI 1926 President, Francis H. Leggett & Company SAMUEL W. BEYBURN, New York City 1926 KOBERT H. TRF.MAN, Ithaca, N. Y. President, Lord & Taylor PIERRE JAY, New York City, Chairman W. L. SATJNDERS, Plainfield, N. J., Deputy Chairman Chairman, Ingersoll-Eand Company President, The Tompkins County National Bank 1927 DELMER RUNKLE, Hoosick Falls, N. Y. President, Peoples National Bank 1925 OWEN D. YOUNG, New York City CLARENCE M. WOOLLEY, New York City Chairman, General Electric Company Chairman, American Radiator Company 1927 1925 1926 1927 MEMBER OF FEDERAL ADVISORY COUNCIL PAUL M. WARBURG, New York City OFFICERS GENERAL OFFICERS B E N J . STRONG, 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 J. HERBERT CASE, Deputy Governor SENIOR OFFICERS GILBERT E. CHAPIN, ARTHUR W. GILBART, RAY M. GIDNEY, Controller of Loans Controller of Cash and Controller of Collections Controller at Large LAURENCE H. HENDRICKS, J . WILSON JONES, LESLIE R. ROUNDS, Controller of Fiscal Agency Function Controller of Administration Controller of Accounts JUNIOR OFFICERS CHARLES H. COE, JAY E. CRANE, EDWIN C. FRENCH, HOWARD M. JEFFERSON, ALAN K. LAUCKNER, ADOLPH J . LINS, WALTER B. MATTESON, Manager, Collection Department Manager, Foreign Department JOSEPH L. MORRIS, Manager, Cash Department ROBERT M. O 'HARA, Manager, Personnel Department JAMES M. RICE, Manager, Methods and Supplies STEPHEN S. VANSANT, Department Manager, Chech Department I. WARD WATERS, Manager, Administration Department Manager, Securities Department Manager, Credit and Discount Department Manager, Bill Department Manager, Accounting Department Manager, Safekeeping Department EDWARD L. DODGE, General Auditor FEDERAL RESERVE AGENT PIERRE JAY, Federal 'Reserve Agent W. RANDOLPH BURGESS, Assistant Federal Reserve Agent CARL SNYDER, General Statistician GEORGE B. ROBKRTS, Manager, Reports Department BUFFALO BRANCH DIRECTORS ARTHUR HOUGH, ELLIOTT C. MCDOUGAL, President, Wiard Plow Company, Batavia, N. Y. WOLCOTT J . HUMPHREY, " President, Marine Trust Company, Buffalo HARRY T. RAMSDELL, President, Wyoming County National Bank, Warsaw JOHN A. KLOKPITO, President, Mfrs. and Traders National Bank, Buffalo CAM/TON M. SMITH, President, Liberty Bank of Buffalo President, Smith, Fassett & Company, Buffalo WALTER W. SCHNECKENBURGER, Managing Director OFFICERS WALTER W. SCHNECKENBURGER, Managing Director HALSEY W. SNOW, J R . , Cashier CLIFFORD L. BLAKESLEE, Assistant Cashier ELMER L. THEOBALD, Assistant Cashier DIRECTORS AND OFFICERS, JANUARY 1, 1925 DIRECTORS Term Expires Dec. SI A GATES W. MCGARRAH, New York City 1925 A ROBERT H. TREMAN, Ithaca, N. Y. A DELMER RUNKLE, Hoosick Falls, N. Y. OWEN D. YOUNG, New York City THEODORE F. WHITMARSH, New York City SAMUEL W. REYBURN, New York City President, Francis H. Leggett & Company 1926 1925 President, The Tompkins County National Bank President, Peoples National Bank Chairman, General Electric Company 1927 President, Lord & Taylor PIERRE JAY, New York City, Chairman W. L. SAUNDERS, Plainfield, N. J., Deputy Chairman Chairman, Ingersoll-Rand Company 1927 B 2 3 Chairman, The Mechanics and Metals National Bank Term Expires Dec. SI 1926 CLARENCE M. WOOLLEY, New York City Chairman, American Radiator Company 1925 1926 1927 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 SENIOR OFFICERS GILBERT E. CIIAPIN, ARTHUR W. GILBART, RAY M. GIDNEY, Controller of Loans Controller of Cash and Controller of Collections Controller at Large LAURENCE H. HENDRICKS, J. WILSON JONES, LESLIE R. ROUNDS, Controller of Fiscal Agency Function Controller of Administration Controller of Accounts JUNIOR OFFICERS CHARLES H. COE, JAY E. CKANE, EDWIN C. FRENCH, HOWARD M. JEFFERSON, ALAN K. LAUCKNER, ADOLPII J. LINS, Manager, Collection Department WALTER B. MATTESON, Manager, Foreign Department JOSEPH L. MORRIS, Manager, Cash Department Manager, Personnel Department ROBERT M. O 'HARA, Manager, Methods and Supplies JAMES M. RICE, Department STEPHEN S. VANSANT, Manager, Chech Department I. WARD WATERS, Manager, Administration Department Manager, Securities Department Manager, Credit and Discount Department Manager, Bill Department Manager, Accounting Department Manager, Safekeeping Department EDWARD L. DODGE, General Auditor FEDERAL RESERVE AGENT PIERRE JAY, Federal Reserve Agent W. RANDOLPH BURGESS, Assistant Federal Reserve Agent CARL SNYDER, General Statistician GEORGE B. ROBERTS, Manager, Reports Department BUFFALO BRANCH DIRECTORS ELLIOTT C. MCDOUGAL, ARTHUR HOUGH, President, Wiard Plow Company, Batavia, N. Y. WOLCOTT J. HUMPHREY, President, Marine Trust Company, Buffalo HARRY T. RAMSDELL, President, Wyoming County National Bank, Warsaw JOHN A. KLOEPFER, President, Mfrs. and Traders National Bank, Buffalo CARLTON M. SMITH, President, Liberty Bank of Buffalo President, Smith, Fassett & Company, Buffalo WALTER W. SCHNECKENBURGER, Managing Director OFFICERS WALTER W. SCHNECKENBURGER, Managing Director HALSEY W. SNOW, JR., Cashier CLIFFORD L. BLAKESLEE, Assistant Cashier ELMER L. THEOBALD, Assistant Cashier
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