Full text of Federal Reserve Bulletin : June 1936
The full text on this page is automatically extracted from the file linked above and may contain errors and inconsistencies.
FEDERAL RESERVE BULLETIN JUNE 1936 ISSUED BY THE BOARD OF GOVERNORS OF THE FEDERAL RESERVE SYSTEM AT WASHINGTON Recent Business and Credit Developments Annual Report of Bank for International Settlements UNITED STATES OF AMERICA 1936 BOARD OF GOVERNORS OF THE FEDERAL RESERVE SYSTEM MARRINER S. ECCLES, Chairman JOSEPH A. BRODERICK RONALD RANSOM M. S. SZYMCZAK RALPH W. MORRISON JOHN K. M C K E E CHARLES S. HAMLIN, Special Counsel LAWRENCE CLAYTON, Assistant to the Chairman ELLIOTT THURSTON, Special Assistant to the Chairman CHESTER MORRILL, Secretary LISTON P. BETHEA, Assistant Secretary S. R. CARPENTER, Assistant Secretary J. C. NOELL, Assistant Secretary WALTER WYATT, General Counsel GEORGE B. VEST, Assistant General Counsel B. MAGRUDER WINGFIELD, Assistant General Counsel J. P. DREIBELBIS, Assistant General Counsel LEO H. PAULGER, Chief, Division of Examinations R. F. LEONARD, Assistant Chief, Division of Examinations C. E. CAGLE, Assistant Chief, Division of Examinations E. A. GOLDENWEISER, Director, Division of Research and Statistics WOODLIEF THOMAS, Assistant Director, Division of Research and Statistics LAUCHLIN CURRIE, Assistant Director, Division of Research and Statistics GEORGE W. BLATTNER, Assistant Director, Division of Research and Statistics E. L. SMEAD, Chief, Division of Bank Operations J. R. VAN FOSSEN, Assistant Chief, Division of Bank Operations J. E. HORBETT, Assistant Chief, Division of Bank Operations CARL E. PARRY, Chief, Division of Security Loans PHILIP E. BRADLEY, Assistant Chief, Division of Security Loans O. E. FOULK, Fiscal Agent JOSEPHINE E. LALLY, Deputy Fiscal Agent FEDERAL OPEN MARKET COMMITTEE FEDERAL ADVISORY COUNCIL MARRINER S. ECCLES, Chairman District No. 1 (BOSTON) THOMAS M. STEELE. GEORGE L. HARRISON, Vice Chairman District No. 2 ( N E W YORK) District No. 3 (PHILADELPHIA) JAMES H. PERKINS. HOWARD A. LOEB, District No. 4 (CLEVELAND) ARTHUR E. BRAUN. JOSEPH A. BRODERICK Vice-President. M. J. FLEMING G. H. HAMILTON JOHN K. M C K E E District No. 5 (RICHMOND) CHARLES M. GOHEN. B. A. MCKINNEY District No. 6 (ATLANTA) H. LANE YOUNG. RALPH W. MORRISON District No. 7 (CHICAGO) EDWARD E. BROWN. RONALD RANSOM District No. 8 (ST. LOUIS) WALTER W. SMITH, District No. 9 (MINNEAPOLIS) THEODORE WOLD. President. GEORGE J. SCHALLER M. S. SZYMCZAK CHESTER MORRILL, Secretary WALTER WYATT, Counsel E. A. GOLDENWEISER, Economist JOHN H. WILLIAMS, Associate Economist W. RANDOLPH BURGESS, Manager of Account District No. 10 (KANSAS CITY) W. T. KEMPER. District No. 11 (DALLAS) JOSEPH H. FROST. District No. 12 (SAN FRANCISCO)__M. A. ARNOLD. WALTER LICHTENSTEIN, Secretary SENIOR OFFICERS OF FEDERAL RESERVE BANKS Federal Reserve Bank of— Chairman and Federal Reserve Agent President First Vice President Vice President R. A. Young.. W. W. Paddock.. G. L. Harrison. Allan Sproul R. L. Austin. J. S. Sinclair.... F. J. Drinnen... C. A. Mcllhenny.2 W. J. Davis. Cleveland E. S. Burke, Jr.. M. J. Fleming.. F. J. Zurlinden_. H. F. Strater. W. F. Taylor.i Richmond F. A. Delano.... Hugh Leach Atlanta.. H. W. Martin. Oscar Newton.. R. S. Parker.. H. F. Conniff. M. W. Bell.i Chicago.. G. J. Schaller.. H. P. Preston.. C. R. McKay. J. H. Dillard. W. H. Snyder.2 St. Louis W. McC. Martin. O. M. Attebery. J. S. Wood. J. G. McConkey. Harry Yaeger. H. I. Ziemer.2 J. W. Helm.2 Boston New York.. F. H. Curtiss.. Philadelphia.. W. Willett.i W. R. Burgess. L. R. Rounds. L. F. Sailer. W. S. Logan. J. H. Williams. C. H. Coe. R. H. Broaddus. J. S. Walden, Jr. G. H. Keesee.i Minneapolis W. B. Geery J. N. Peyton Kansas City Dallas J. J. Thomas G. H. Hamilton... C. A. Worthington.. C. C. Walsh B. A. McKinney.. R. R. Gilbert R. B. Coleman.2 Ira Clerk W. M. Hale. C. E. Earhart.i San Francisco W. A. Day. 1 Cashier. 2 Also cashier. MANAGING DIRECTORS OF BRANCHES OF FEDERAL RESERVE BANKS Federal Reserve Bank of— Managing director New York: R. M. O'Hara. Buffalo branch Cleveland: B. J. Lazar. Cincinnati branch T. C. Griggs. Pittsburgh branch Richmond: Baltimore branch _ W. R. Milford W. T. Clements. Charlotte branch Atlanta: J. H. Frye. Birmingham branch G. S. Vardeman, Jr. Jacksonville branch. _ J. B. Fort, Jr. Nashville branch... ._ New Orleans branch Marcus Walker. Chicago: Detroit branch._ R. H. Buss. St. Louis: Little Rock branch A. F. Bailey. Louisville branch J. T. Moore. Memphis branch W. H. Glasgow. Managing director Federal Reserve Bank of— Minneapolis: Helena branch Kansas City: Denver branch Oklahoma City branch Omaha branch Dallas: El Paso branch Houston branch San Antonio branch San Francisco: Los Angeles branch Portland branch Salt Lake City branch Seattle branch Spokane branch R. E. Towle. J. E. Olson. C. E. Daniel. L. H. Earhart. __ J. L. Hermann. W. D. Gentry. M. Crump. _ W. N. Ambrose. R. B. West. W. L. Partner. C. R. Shaw. D. L. Davis. SUBSCRIPTION PRICE OF BULLETIN The FEDERAL RESERVE BULLETIN is the Board's medium of communication with member banks of the Federal Reserve System and is the only official organ or periodical publication of the Board. The BULLETIN will be sent to all member banks without charge. To others the subscription price, which covers the cost of paper and printing, is $2. Single copies will be sold at 20 cents. Outside of the United States, Canada, Mexico, and the insular possessions, $2.60; single copies, 25 cents. in TABLE OF CONTENTS PAGE Review of the month—Recent business and credit developments 407 Legislation affecting Reserve Bank of New Zealand 413 National summary of business conditions 415-416 Summary of financial and business statistics 418 Law department: Rulings of the Board: Payment of interest after maturity on time certificates of deposit renewed within ten days after maturity 419 Maximum rate of interest payable on time certificate of deposit callable by bank on 30 days' written notice 419 Stock certificate of State member bank representing stock of corporation holding bank premises 419 Renewal or extension of loans made to executive officers of member banks prior to June 16, 1933__ 420 Interpretations of Regulation U 420 Amendment to Federal income tax regulations 421 Discussion of questions arising under regulations of the Comptroller of the Currency governing the purchase of investment securities 421 Text of act relating to taxation of capital investment of Reconstruction Finance Corporation in banks,_ 423 Text of act amending Securities Exchange Act 424 Annual report of Bank for International Settlements 427-465 Financial, industrial, and commercial statistics: Member bank reserves, Reserve bank credit, and related items 466 Federal Reserve bank statistics 467—469 Member bank reserve balances 470 Money in circulation 471 Gold stock and gold movements 472 All banks in the United States 473 All member banks 474-475 Reporting member banks in leading cities 476-479 Banks suspended and placed in liquidation or receivership; bank debits; Postal Savings System 480 Acceptances, commercial paper, and brokers' borrowings 481 Federal Reserve bank discount rates 482 Money rates and bond yields 483 Security markets 484 Treasury finance 485 Governmental corporations and credit agencies 486—487 Production, employment, and trade 488-494 Wholesale prices 495 International financial statistics: Gold reserves of central banks and governments 496 Gold production 497 Gold movements 497-499 Central banks 500-503 Bank for International Settlements 503 Commercial banks 504 Discount rates of central banks 505 Money rates 505 Foreign exchange rates 506 Price movements: Wholesale prices 507 Retail food prices and cost of living 508 Security prices 508 IV FEDERAL RESERVE BULLETIN VOL. 22 JUNE 1936 REVIEW OF THE MONTH Business activity, which after a rapid advance during the second half of 1935 had declined somewhat in the Recent business first quarter of 1936, resained most of this decline in April, and incomplete figures for May indicate that the April level was maintained. For the first five months of this year business taken as a whole was substantially larger than in the corresponding period of any of the four preceding years, and many types of activity were at the highest levels since early in 1930. The most marked increases in production during the past year, as in other recent years, have been in the durable goods industries. Output of durable goods, however, is still far below pre-depression levels, owing largely to the lag of recovery in construction activity. In the past year there has been an increase in construction, reflecting larger expenditures for residential, industrial, and commercial building as well as increased outlays for publicly financed projects. Increased output has been accompanied by a growth in the number employed and, reflecting principally an increase in the average number of hours worked, by a somewhat larger growth in pay rolls. Unemployment has remained large, however, and there has been relatively little change in the total number of persons receiving relief or employed on works projects financed by public funds. Agricultural income, which had increased considerably in the past three years, has shown a further growth this year, reflecting larger income from the sale of farm products offset in part by a decline in Governmental rental and benefit payments. Stocks of cotton No. 6 have been reduced during the last four years but are still at a relatively high level, while stocks of wheat have been reduced to about the level prevailing prior to 1929. Preliminary estimates by the Department of Agriculture indicate a somewhat larger wheat crop this year than in the three preceding years, when crops were unusually small. The supply of hogs on farms, which was exceptionally small a year ago, has shown some increase during the past year. Wholesale commodity prices, which had advanced considerably during 1933 and 1934 and slightly in 1935, have declined somewhat this year, reflecting reductions in prices of farm products and foods to the lowest levels since the end of 1934. The principal decreases were in livestock, grains, and their manufactures. Prices of other commodities as a group have shown relatively little change in the past two and a half years. Retail food prices and the cost of living have been about the same as they were a year ago. Profits of large industrial corporations increased sharply in the last half of 1935 and, although somewhat smaller in the first quarter of 1936, according to preliminary reports, they continued at a higher level than in any other quarter since 1930. Security prices in the early months of the year continued the advance that began in the spring of 1935. There were substantial declines in lower grade bonds beginning in March and in stocks beginning in April, followed by some recovery in May. Security prices in general have continued above the highest levels of 1935. New security flotations have increased further and during the first five months of this year were larger in amount than in any period of similar length in recent years. Most of the flotations con407 408 FEDERAL RESERVE BULLETIN tinue to be for refunding, and although the amount of corporate issues to raise new capital has increased, it is still small compared with years prior to 1932. Money rates have continued at low levels. Bank loans and investments have increased further, the growth since the turn of the year being for the most part in investments—both in Government and in other obligations. Loans for commercial, industrial, and agricultural purposes have also shown an increase, which was in excess of the usual seasonal amount. Notwithstanding the increase in loans and investments, bank deposits showed little further growth in the first four months of the year, reflecting a building up of the Treasury's working balance. Within recent weeks, however, deposits at banks in leading cities have risen to new high levels. Country bank deposits, notwithstanding substantial increases in recent years, continue to be much smaller than in pre-depression years. Fluctuations in member bank reserves since the turn of the year have reflected principally changes in Treasury balances at the Reserve banks, which, in anticipation of heavy disbursements, have been built up to an unusually large volume by new public debt issues. Variations in member bank reserves and the factors affecting them are shown in the chart on page 417 of this BULLETIN. Excess reserves, which continued at close to $3,000,000,000 in the first ten weeks of the year, were reduced by Treasury operations to $2,300,000,000 in the last half of March but increased to about $2,900,000,000 in the latter part of May. The increase during May reflected large gold imports, which totalled $160,000,000 in that month, as well as Treasury disbursements from accumulated balances. The gold movement continued in June and during the first week an additional $160,000,000 of gold was received in this country or reported as engaged for shipment from abroad. Most of the gold came from JUNE 1936 France and substantial amounts also came from Holland. The course of business activity in recent years is summarized in the following table: BUSINESS CONDITIONS [Index numbers, 1923-1925 average=100] ConstrucIndustion Factory Factory trial contracts employ- p a y produc- awarded rolls ment tion (value) Department store sales (value) Wholesale prices i 119 64 117 28 105 64 109 46 111 69 95 65 Oct.-Dec 89 86 88 99 27 28 39 58 82 81 81 85 68 68 70 76 77 76 80 81 79 80 80 81 1936: Jan.-Mar Apr 95 100 53 47 84 85 74 77 82 81 80 80 1929 1932 1935: Jan.-Mar Apr.-June__ _ July-Sept.... i 1926=100; index of Bureau of Labor Statistics. NOTE.—Figures for periods of less than a year adjusted for seasonal variation, except the figures for wholesale prices. The volume of industrial production increased substantially in the second half of 1935 Industrial > a n d t h e average for the production final quarter of that year was 99 percent of the 1923-1925 average, the highest level of the recovery period. In the first quarter of 1936 output showed little change, although it usually increases at this season and, consequently, the Board's seasonally adjusted index declined. The average for the first quarter was 95 percent. In April the production index rose to 100 percent and incomplete figures indicate that this level was maintained in May. This compares with a low average of 64 percent for the year 1932 and a high level of 119 percent for 1929. The expansion in activity in the last quarter of 1935 represented primarily increased production of automobiles, machinery, steel, tires, and glass. Output of automobiles and allied products was unusually large for the season, reflecting in part an early introduction of new models. This higher level was not sustained in the first two months of 1936 but has since been restored. The most marked increases in manufac- turing output during the past year and also since the early part of 1933 have been in industries producing durable goods, as is shown on the accompanying chart. The figures are adjusted for seasonal variation and are in terms of points in the index of total manufacturing production. Output of some durable manufactures, including automobiles, agricultural impleINDEX OF MANUFACTURING PRODUCTION ADJUSTED FOR SEASONAL VARIATION, 1923-25 AVERAGE FOR TOTAL* 100 POINTS IN TOTAL INDEX POINTS IN TOTAL INDE) 130 130 1927 409 FEDERAL RESERVE BULLETIN JUNE 1936 1928 1929 1930 1931 1932 1933 1934 1935 1936 crease in recent years has been more gradual. In recent months activity at tobacco factories, shoe factories, and petroleum refineries has been at a higher level than in any previous year, while activity at meat-packing establishments and flour mills has been at a lower level than in pre-depression years. Accompanying the growth in production during the past year there has been a slight increase in employment and Employment and a SOmewhat larger growth pay rolls . e . m pay rolls. These increases have been general throughout industry and trade. In certain industries local shortages of highly skilled labor have been reported recently, reflecting increased activity in those industries, population shifts, and the fact that the number of workers trained during the long period of depression was small. The principal factor accounting for the larger rise in pay rolls than in employment during the past year has been an increase in the average number of hours worked by those employed. Some lengthening of the working week is usual when activity is expanding, but the increase since the middle of 1935 has been larger than usual in some industries. Increases in pay rolls of the railroads and of bituminous coal mines have been larger than in most other industries, reflecting in part advances in wage rates. Changes in employment and pay rolls in four major groups of industries during the past year are shown in the following table: ments, and certain other types of machinery, has advanced to about the level of the years before 1929. Increases in the output of durable goods used in the construction, railroad, and public utility industries, however, have been smaller, and consequently output of durable goods as a whole continues at a lower level than in the middle 1920's. Volume EMPLOYMENT AND PAY ROLLS TN FOUR GROUPS OF INDUSTRIES, JANUARY-APRIL 1936 of steel production, which depends on demand from a wide variety of sources, has C h a n g e from year ago (in p e r c e n t ) increased from 32 percent of the 1923-1925 average in 1932 to 90 percent in the first four EmployPay ment rolls months of 1936, a level that is still considerably lower than in 1929 and somewhat lower Factories—total _ _ . _ . . . +3 +9 than that of several earlier years. Durable group. . _ _ _ _ _ _ _ _ _ _ +8 + 17 -1 N o n d u r a b l e group.__ __ _ _ _ _ _ _ +2 • Production of nondurable manufactures M i n e s _ ._ ______ _ _ _ _ + 12 +1 declined much less during the depression R a i l r o a d s + 15 +5 _ __ +5 +2 than output of durable goods and the in- P u b l i c utilities 410 FEDERAL RESERVE BULLETIN The average number of workers at factories in the first four months of the year was 3 percent larger than a year earlier and pay rolls were 9 percent larger, reflecting chiefly further increases in activity in the durable goods industries, particularly in industries producing machinery, steel, and lumber products and at railroad repair shops. Employment and pay rolls in industries producing nondurable manufactures were at about the same level as last year. Changes in employment in the more important manufacturing industries are shown in the accompanying table. JUNE 1936 ing chart. The figures are adjusted for seasonal variation. Residential building showed a moderate but widespread increase during the first half of 1935 and the level reached in the middle of the year has been maintained since that time. House rents have continued to advance and mortgage money has been available at lower rates. CONSTRUCTION CONTRACTS AWARDED 700 700 600 Total Change from a year ago Average number of employees (estimated) 500 C/V) FACTORY EMPLOYMENT B Y INDUSTRIAL GROUPS, JANUARY-APRIL 1936 \ 400 400 All Other K1 M r/VVV 300 Percent \ • \ Total . +207,000 V^Residentic +3 +8 Durable group Transportation equipment, other than automobiles Machinery Railroad repair shops Nonferrous metals and products Lumber and products Iron and steel and products Stone, clay, and glass products Automobiles and parts +256, 000 + 17,000 +97, 000 +28,000 +21,000 +40, 000 +54, 000 +11,000 -12,000 + 17 + 13 + 11 +9 +9 +9 +6 Non iurable group* Paper and printing Textile wearing apparel Petroleum refining Chemical group, except petroleum refining. Food products Textile fabrics Leather and products Tobacco products Rubber products -48,000 +9,000 +7, 000 0 +2 +1 ) 1 2 -1,000 -14,000 - 2 7 , 000 - 9 , 000 - 3 , 000 - 6 , 000 -2 I LJ \ 100 \-/ 200 100 0 0 1927 1928 1929 1930 1931 1932 1933 1934 1935 1936 Three-month moving averages of F. W. Dodge data for value of contracts awarded in 37 Eastern States, adjusted for seasonal variation. -1 () -2 -3 -3 -4 -5 Includes a few miscellaneous industries not shown separately. Less than one-half of 1 percent change. The amount of construction work this year has been somewhat larger than in the corresponding period of any of the Construction four preceding years, but the current level, as indicated by the award of construction contracts in recent months, is still only two-fifths of the level in the peak years. Recent changes in the volume of contracts awarded for residential and other types of construction are shown in the accompany- A V * 1 200 300 The wide fluctuations in contracts for nonresidential construction during recent months, as in 1933 and 1934, have reflected largely changes in the volume of public work. The volume of contracts for factory, commercial, and other privately financed work has increased recently, and in the first four months of 1936 was considerably larger than in other recent years. Reflecting larger incomes in both rural and urban areas, the distribution of commodities to consumers has increased Domestic trade in volume during the past year and in March and April was at the highest level of the recovery period. Recovery in department store sales in the past year has been evenly distributed J U N E 1936 FEDERAL RESERVE BULLETIN 411 throughout the country. In the two preced- quarter indicate somewhat smaller profits ing years the expansion in sales in New Eng- than in the last quarter of 1935, but they land and in the Middle Atlantic States had were still about 50 percent above those for been smaller than in the rest of the country. the first quarter of 1935. Sales by wholesalers were considerably Industries in which these large corporalarger in the first four months of 1936 than tions as a group reported the most marked a year earlier, with the most marked in- increases in earnings in 1936 as compared creases in sales of such durable commodities with 1935 include petroleum, machinery and as machinery, hardware, and lumber. tools, railroad equipment and automobiles. Freight-car loadings, which had increased Substantial increases also occurred in indusin the last half of 1935, were sustained in the tries producing electrical equipment, chemifirst part of 1936. cals and drugs, non-ferrous metals, building Value of exports from the United States materials and supplies, and office equipment. in the first four months of 1936 was 12 per- Railroads as a group reported a loss during cent larger than in the cor-the first three months of 1936 but the deficit Foreign trade responding period a year ago, was about one-third smaller than in the corand imports were 17 percent greater. For responding period of the preceding year. the four months imports exceeded exports The profits of public utility companies showed by $12,000,000, whereas in the same period a moderate increase during the first quarter of 1935 exports exceeded imports by $21,- of 1936 over the same quarter of 1935. 000,000. Stock prices, which had advanced almost Exports for the first four months totaled without interruption for 12 months, declined $769,000,000, an amount larger than in the sharply in April to about the corresponding period of any of the past four Security markets ^ ^ r e a c h e ( j ^ t h e e n ( j o f years but somewhat less than half the aver- 1935. There were increases in prices in May, age for that period from 1925 to 1929. The but volume of trading was smaller than in higher level of exports has reflected chiefly any month since early in 1935. larger exports of machinery, automobiles, Volume of trading in bonds on the exand cotton, partly offset in the total by de-changes broadened markedly towards the end clines in exports of animal products and of 1935. In January 1936 trading, especially copper. in the more speculative issues, was heavier Value of imports showed a general rise in than in any month since 1920. In succeed1935, and the increase continued in the first ing months when prices of lower-grade bonds four months of 1936. For the four months reached a peak and then declined, trading imports totaled $781,000,000, more than became much lighter. Yields on high-grade twice as much as the low level in the corre- corporate bonds have continued to move sponding period of 1933, but little more than gradually lower since January and Moody's half of the average for the years from 1925 Aaa bond yield average at the end of May to 1929. was 3.56 percent as compared with the 1935 Profits of large industrial corporations low of 3.68 percent in July. The steady deduring the last quarter of 1935 and the first cline of lower-grade bond yields since April quarter of 1936 were larger 1935 continued into February of this year, Corporate profits t h a n i n a n y o t h e r s i x _ m o n t h but was reversed in March and April. Notperiod since 1930. Reflecting in part the withstanding the decline in prices in the slight industrial recession in the early months course of these two months, Moody's average of this year, preliminary reports for the first of Baa bond yields at the end of April was 412 FEDERAL RESERVE BULLETIN still below the 1935 lows established at the year-end, and price movements in May though irregular resulted in further declines in yields. Yields on outstanding long-term Treasury bonds have continued to decline practically without interruption since last October. By the first week of March bonds which had declined in price during August and September of last year had fully regained their losses. After further advances in prices, the average yield on long-term Treasury bonds reached a new low level of 2.47 percent in May. Capital issues have continued to appear in large volume, chiefly to refund outstanding debt. The period of renewed Capital issues activity in the capital marke t which commenced last spring has extended over more than a year. Exceptionally large amounts were offered in March and April of this year but in May flotations were little larger than in January and February. A new development within the past nine months has been the underwriting of a considerable number of small common stock issues. The amount of corporate and other issues to obtain new capital during the first five months of 1936, totaling $650,000,000, was somewhat smaller than in the lastfivemonths of 1935. Refunding issues of about $2,300,000,000 during the first five months of 1938 were greater than in anyfive-monthperiod in 1935 and much greater than the maximum for any five months in earlier years. State and municipal borrowing, which had increased in 1935, has shown no further increase in 1936. Publicly offered issues by Federal Government agencies, although rather large in April, have been much less during the first five months of 1936 than a year ago. Flotations of domestic corporate issues, which totaled about $2,000,000,000 in the first five months of this year, were exceptionally large in March and April, and in each of JUNE 1936 those months exceeded flotations of last July, the peak month of 1935. Corporate securities issued in May declined to $300,000,000, in part as a consequence of the decline in bond prices during March and April. Railroad issues in the first five months of this year showed the largest increase over like periods of last year; there were also increases in most other industries. Public utilities, railroads, steel, copper and oil corporations accounted for more than four-fifths of the total volume of issues. About 85 percent of the corporate issues were made for refunding. A number of the new issues, chiefly industrials, carried conversion privileges. Issues of common stock, which were made chiefly for the purpose of raising new capital, as well as the proceeds of corporate bond and other issues not applied to refunding, although remaining at low levels, showed an appreciable increase over earlier months. The amount of new capital raised by corporations from January to May was reported at $300,000,000 as compared with $250,000,000 and $140,000,000 in the two preceding five-month periods. It appears that more than half of these amounts was acquired for improvements, equipment, working capital, and similar purposes, as distinguished from the repayment of bank loans or additions to funds for investment. In recent months the Treasury has also offered a substantial amount of securities to raise new funds and through Treasury these operations has accumufinancing x lated an unusually large working balance. Treasury bonds and notes issued in March provided about $900,000,000 of new funds in addition to refunding Treasury bills maturing March 16 and Treasury notes maturing April 15, totaling $1,000,000,000. Beginning with the first week of May the Treasury has raised $50,000,000 of new funds weekly through sales of bills. On June 1 about $600,000,000 of 15-18 year 2% JUNE 1936 FEDERAL RESERVE BULLETIN percent Treasury bonds and $400,000,000 of 5-year 1% percent Treasury notes were offered for cash subscription, and an additional amount of the same issues was offered in exchange for $1,050,000,000 of Treasury notes maturing in June and August. These offerings were fully subscribed; most of the exchange subscriptions were for the new bonds. Appointment of First Vice President of the Federal Reserve Bank of Philadelphia Effective June 1, 1936, Frank J. Drinnen who had served as a Federal Reserve Examiner for the Board of Governors of the Federal Reserve System since November 29, 1919, was appointed First Vice President of the Federal Reserve Bank of Philadelphia. 413 the same body corporate as at the time of its establishment. The new law, entitled "Reserve Bank of New Zealand Amendment Act, 1936," is retroactive to April 1, 1936, and is deemed part of the principal Act of 1933 under which the Reserve Bank was established. Shareholders of the Reserve Bank are to be reimbursed in either cash or Government securities at the rate of 6 pounds 5 shillings for each 5-pound share, and the nominal amount of the capital, £500,000, is to be transferred to the General Reserve Fund into which the Government had originally paid £1,000,000. The statement of the bank's objectives is given in the following paragraph of section 10: It shall be the general function of the Reserve Bank, within the limits of its powers, to give effect as far as may be to the monetary policy of the Government, as communicated to it from time to time by Rearrangement of Bulletin Tables the Minister of Finance. For this purpose, and to Beginning with this issue of the BULLETIN the end that the economic and social welfare of New the statistical tables appear in revised form Zealand may be promoted and maintained, the Bank and in rearranged order. It has been the shall regulate and control credit and currency in New practice to group general tables in an earlier Zealand, the transfer of moneys to or from New Zealpart of the BULLETIN and to present more de- and, and the disposal of moneys that are derived from the sale of any New Zealand products and for the tailed statistics by Federal Reserve districts time being are held overseas. and other classifications toward the end of the BULLETIN. This arrangement has proved to be somewhat confusing, and the two sections have now been consolidated so that all statistics dealing with a given subject matter appear in one place in the BULLETIN. One summary table, however, presenting an abstract of the most important banking and business figures, is given in the earlier part of the BULLETIN immediately after the national summary of business conditions. RESERVE BANK OF NEW ZEALAND The Reserve Bank of New Zealand, which began operations on August 1, 1934, with all its shares privately held, became a Government institution under legislation approved on April 8, 1936. The bank continues to be Present members of the Board of Directors, other than the Governor, the Deputy Governor, and the Secretary to the Treasury, will hold office subject to the pleasure of the Governor-General in Council but will in any case retire according to a scheduled order beginning in the current year, and their successors will be appointed by the Governor-General in Council, to hold office during his pleasure. The powers of the bank to extend credit to the New Zealand Government have been enlarged. Accommodation may now be granted to the Treasury up to the full amount of the revenue or estimated revenue for the year, instead of half the amount as under the old law. Credit in the form of overdrafts may be extended to the Government and to official 414 FEDERAL RESERVE BULLETIN organizations to finance the purchase and marketing of New Zealand produce, with no stated limit to the total of such overdrafts. The bank is further authorized to underwrite Government loans. Securities which the bank may buy and sell, formerly limited to those of the Governments of New Zealand and the United Kingdom, now include securities guaranteed by those Governments, and the former limitation upon holdings of such securities is now abolished. A former limit on the volume of the bank's holding of paper of not more than six months' maturity arising out of transactions involving livestock and primary products is withdrawn. JUNE 1936 Suspension of the bank's obligation to redeem its notes in exchange on London may be ordered by the Minister of Finance at any time. Notwithstanding such suspension, the bank's notes shall continue to be legal tender. Formerly there was no specific provision for suspension of the redemption obligation, and notes remained legal tender only so long as the bank redeemed them in sterling exchange. The Governor of the bank, acting with the authority of the Minister of Finance, may increase or decrease the requirements as to balances to be maintained by all other banks with the Reserve Bank, but these requirements shall not be reduced below the amount fixed in the principal Act. 415 FEDERAL RESERVE BULLETIN JUNE 1936 NATIONAL SUMMARY OF BUSINESS CONDITIONS [Compiled May 26 and released for publication May 28] Industrial production increased in April, with the most marked advances at steel mills reflecting principally larger output of steel and at plants producing machinery, autoand of automobiles. Employment and pay mobiles, and building materials. There was rolls in the durable goods industries showed an increase in employment at rubber tire advances. factories, which in March had been affected Production and employment.—Volume of by a strike, while at woolen mills employindustrial production, as measured by the ment declined. Board's seasonally adjusted index, increased from 93 percent of the 1923-1925 average in 120 FACTC)RYENIPLOYHAENT March to 100 percent in April. The average PERCI PER CENT 130 140 INDUSTRIAL PRODUCTION 140 A, L 120 120 110 V 90 \ 100 90 \ 110 \ /V A 100 90 A / 'V V Vv 80 70 60 50 100 130 V 1929 1930 1931 1932 1933 1934 1935 100 70 60 50 1936 rs/ VJ 70 90 80 /\_ 80 60.. 80 70 60 50 1929 1930 1.931 1932 1933 1934 1935 1936 Monthly index of number employed, adjusted for seasonal variation, 1923-1925 average = 100. Value of construction contracts awarded, according to figures of the F. W. Dodge Corporation, increased in April by somewhat rate of production at" steel mills in April more than the usual seasonal amount. Conwas 69 percent of capacity as compared with tracts for residential building were in consid59 percent for the preceding month. At erably larger volume, and privately financed automobile factories output amounted to projects other than residential continued to 503,000 passenger cars and trucks and, except for the spring months of 1929, wasincrease. Distribution.—Retail trade showed a sealarger than in any previous month. In the sonal increase in April, following a considerfirst three weeks of May activity in both the able advance March. Department store steel and automobile industries was main- sales rose byin less than the usual seasonal tained at about the levels reported for April. Output of nondurable manufactures in April amount, while at variety stores and mailwas slightly larger than in March, due chiefly order houses there were further increases. to increases at cotton textile mills, meat- Freight-car loadings increased from March packing establishments, and tobacco fac- to April. Commodity prices.—Wholesale prices of tories. Activity at woolen and silk mills declined. Bituminous coal production showed commodities showed little change during little change from March to April, although a April and declined during the early part of considerable decrease is usual at this season, May, reflecting decreases in the prices of while at anthracite mines there was a sharp farm products and foods, while prices of other rise from the low level of March. Output commodities as a group continued to show of crude petroleum continued to increase. little change. Bank credit.—Excess reserves of member Factory employment and pay rolls were larger in the middle of April than a month banks have increased steadily since the latter earlier. Increases in the number of workers part of March and by May 20 amounted to were general in the durable goods industries, $2,860,000,000. The growth was due in April Monthly index of physical volume of production, adjusted for seasonal variation, 1923-1925 average = 100. 416 FEDERAL RESERVE BULLETIN to Treasury disbursements from accumulated balances and in May to continued disbursements together with substantial imports of gold. Treasury disbursements and gold imports have also been reflected in a sharp increase JUNE 1936 have increased further, while holdings of other securities and loans to customers have remained at the levels reached early in April. Loans to brokers and dealers in securities, which increased considerably in March and April, declined in the first half of May. BILLIONS OF DOLLARS WHOLESALE PRICES MEMBER BANK CREDIT 120 110 110 100 s—/ V 90 100 Demand Deposits-A Adjusted \ f f Other ommodi ties jr 70 V i Balances of Banks in U. S. y, 80 • .Govt. Obligations - (L irect and 70 to Customers " ity* ^ Farm Pr oducts Guaranteed)^ Ti'me DeDosits 60 46 22 21 f [Foods 60 50 r 20 J 90 80 23 Total Loans xJ 50 40 30 6tiierSecunties * tomers Street Loons ial. of Foreign B a n l ^ \ ^ f > > ^ '34 1929 1930 1931 1932 1933 1934 1935 1936 Indexes compiled by the United States Bureau of Labor Statistics, 1926 = 100. By months, 1929 to 1931; by weeks, 1932 to date. Latest figure is for week ending May 30, 1936. Wednesday figures for reporting member banks in 101 leading cities, September 5, 1934 to May 27, 1936. Loans on real estate, loans to banks, and acceptances and commercial paper bought included in total loans and investments but not shown separately. of deposits at reporting member banks in The rate charged on calj loans with stock leading cities since the beginning of April. exchange collateral was raised on May 11 by Adjusted demand deposits at these banks New York City banks from three-fourths of increased to a new high level and time de- 1 percent to 1 percent and that on time loans posits rose to the highest figure in three from 1 percent to 1^4 percent. Rates on years. Holdings of United States Govern- other open-market loans have continued at ment obligations by the reporting banks low levels. 417 FEDERAL RESERVE BULLETIN JCNE 1936 MEMBER BANK RESERVES AND RELATED ITEMS Wednesday figures BILLIONS OF DOLLARS BILLIONS OF DOLLARS 11 11 10 / 10 GOL D STOCK I 6 MONEY IN CIR(DULAT1ON I I 6 > 5 5 - i 4 \ ^ :x- 4 .A 3 AJ 2 V 1 RESERVE BANK ;REDIT / " — _/ 3 2 1 1 TREASURE UAbH AIMU DEPOSITS WITH F.R.BANKS 4 0 0 1 1930 1931 1932 1933 1934 1935 1936 7 7 6 6 MEMBER BANK RESERVE BALANCES 5 5 4 4 f 3 EXCESS RESERVESxK; 3 2 2 1 1 0 1930 1931 1932 1933 1934 1935 Latest figures for May 27, 1936. See table on page 466. 1936 0 418 FEDERAL RESERVE BULLETIN JUNE 1936 SUMMARY OF FINANCIAL AND BUSINESS STATISTICS Average for year Treasury currency M o n e y i ncirculation ___ _____ 1934 1,459 952 241 208 3,996 2, 015 4,476 2,077 521 71 1,461 3,952 2,096 5,328 2,429 283 83 2, 052 4,059 2,271 5,576 2,502 36 25 2,432 7,512 2,381 5,403 2,475 7 5 2,431 9,059 2,478 5,585 2,471 6 5 2,431 8,641 2,548 5,500 2,476 2,494 2,484 2,493 2,484 2,480 7 6 6 8 6 6 5 5 5 5 5 5 2,434 2,430 2,430 2,430 2,430 2,430 8,755 10,072 10,158 10,163 10,172 10, 202 2,534 2,454 2, 486 2,495 2,502 2,503 5,507 5,897 5,757 5,779 5,857 5,892 275 407 343 497 2,879 438 2,919 507 3,209 514 2,942 537 2, 869 539 3,058 533 2,981 584 3,278 603 3,384 608 2,114 256 2,343 528 3,676 1,564 5,001 2,469 4,436 2,026 4,778 2,297 5,716 2,983 5,780 3,033 5,808 3,038 5,420 2,653 5,300 2,510 REPORTING MEMBER BANKS 1935 Apr. May Dec. Feb. Apr. May 2,476 5 4 2,430 10, 324 2,495 5,918 3,133 606 5,638 800 P2, (Averages of Wednesday figures; in millions of dollars) Total loans and investments Loans to brokers in New York City Other loans on securities All other loans U. S. Government obligations: Direct Fully guaranteed Other securities Reserves with Federal Reserve banks Ca^h in vault Balances with domestic banks Demand deposits—adjusted __ Time deposits (excluding interbank) 2 Deposits of domestic banks3 Borrowings 22, 599 19, 080 17, 505 18, 672 19, 997 1,405 337 591 815 820 6,251 4,508 3,343 2,711 2,301 9,231 6,578 5,222 4,965 4,907 _ 2,865 4,413 2,847 1,725 248 1,142 (x) 6,788 2,787 674 3,245 1,673 214 1,250 0) 5,666 2,772 228 5,228 6,856 7,989 928 "325 3,121 «3,000 3,052 1,822 2,875 4,024 240 326 271 1,322 1,688 2,112 0) 12, 729 C1) 4,946 4,937 4,883 2 822 3,814 4,938 115 8 6 MONEY RATES AND BOND YIELDS Commercial paper _ Stock exchange call loans U. S. Treasury bills U S Treasury bonds, long term Corporate high grade bonds (Moody's Aaa)__ 19, 856 19, 814 20, 769 20, 928 21, 053 21, 445 21, 745 785 844 921 923 901 995 1,008 2,340 2, 306 2,281 2.247 2,230 2,272 2,292 4,958 4,933 4, 982 4,910 4,850 4,956 5,061 21, 832 973 2,290 5,092 7,909 7,853 8,433 8,599 8,708 8,737 8,767 783 787 1,131 1,155 1,247 1, 273 1,194 3,081 3,091 3,021 3,094 3,170 3,238 3,344 3,462 3,820 4,694 4,773 4,782 4,363 4,180 307 301 376 354 366 370 356 1,968 2,043 2,312 2,336 2,335 2,334 2,262 11,916 12, 373 13, 904 13, 824 14,064 13, 881 13,982 4, 922 4,970 4,872 4,892 4,893 4,923 4,971 4,713 4,758 5,388 5, 620 5 647 5 649 5 484 5 2 6 2 2 7 13 8,877 1,286 3,314 4,577 378 2,283 14, 371 5, 051 5 477 (Averages of weekly figures; percent 3.60 4.73 2.73 2.05 .88 3.66 5.01 1.72 1.16 .52 3.31 4.49 190 48 63 5.85 7.61 STOCK PRICES 1.02 1.00 .26 3.10 4.00 .76 .56 .14 2.70 3.74 .75 .64 .17 2.64 3.72 .75 .25 . 15 2.61 3.74 .75 .75 .09 2.73 3.72 per annum) .75 .75 .11 2.54 3.61 .75 .75 .10 2.51 3.60 .75 .93 .18 2.50 3.58 106 109 109 101 302 107 195 195 13 181 768 130 637 595 59 536 1,050 177 873 658 128 530 413 112 302 305 38 267 94 91 110 52 25 73 84 73 70 80 93 93 95 47 26 63 84 76 66 88 p 100 P 99 105 47 30 60 85 78 69 81 199 187 182 193 195 199 P193 P202 81 78 84 79 82 81 80 83 79 81 80 77 80 79 80 80 77 80 79 80 .75 .75 .10 2.68 3.66 .75 .75 .08 2.62 3.62 (Averages of weekly figures; index numbers, 19i 3=100) 419 common stocks 72 78 | 58 73 95 100 (Monthly basis ; in millions of dollars) CAPITAL ISSUES All issues—total New Refunding Domestic corporate issues—total New Refunding __ __ . 959 841 118 781 667 115 146 100 46 54 27 27 Industrial production—total Ivl anuf actures Minerals Construction—total Residential All other 180 116 64 41 15 26 119 119 115 117 87 142 105 109 106 111 64 63 71 28 13 40 64 46 56 69 76 75 82 25 11 37 69 49 58 67 79 78 86 32 12 48 79 62 62 75 _ ._ 437 367 134 110 140 121 178 138 ._ 95 105 100 92 105 65 48 61 70 68 66 51 61 71 66 75 65 71 78 74 -_ - Factory employment Factory pay rolls (unadjusted) Freight car loadings Department store sales 89 60 29 32 13 18 _______ _ 90 90 91 37 21 50 82 70 63 79 (Monthly MERCHANDISE EXPORTS AND IMPORTS Exports including re-exports General imports 389 124 265 189 34 155 190 1 171 1 COMMODITY PRICES Wholesale prices (1926=100): All commodities _ Farm products Foods Other commodities.. Retail food prices (1923-25 —100) 503 90 413 156 22 134 472 87 384 127 45 82 417 231 186 168 67 101 402 122 280 266 65 201 (Index numbers, adjusted for seasonal variation, 19 23-25=100) BUSINESS INDEXES Mar. 1933 Treasury cash and deposits with Federal Reserve banks 229 Nonmember deposits and other accounts 406 Member bank reserve balances: Total 2,358 Excess (estimated) 43 p Preliminary. i Figures not available. Jan. 1932 (Averages of daily figures; in millions of dollars) _ _ _ ___ 1936 1929 RESERVE BANK CREDIT, MEMBER BANK RESERVES, AND RELATED ITEMS Reserve bank credit—total Bills discounted.. _ _ Bills bought U. S. Government securities Monetary gold stock 1935 86 86 87 27 18 33 82 71 61 73 85 84 89 27 21 32 81 69 61 76 104 104 101 67 26 101 86 76 71 84 98 97 103 61 25 90 85 73 70 79 (J) 1 I) (1) m n\ 0) 70 basis; in millions of dollars) 164 171 165 171 223 187 C1) 0) (Index numbers) 80 79 84 78 80 80 80 85 77 81 80 81 84 78 81 «Part estimated. 2 Includes time deposits of banks, domestic and foreign, 1929-1934. 81 78 86 79 82 3 § Does not include time deposits 1929-1934. JONE 1936 FEDERAL RESERVE BULLETIN 419 LAW DEPARTMENT Payment of interest after maturity on time certificates Maximum rate of interest payable on time certificate of deposit renewed within ten days after maturity of deposit callable by bank on 30 days' written notice The Board has recently considered the The Board has recently given consideraquestion whether, under the provisions of Regulation Q and section 19 of the Federal tion to the question of the maximum rate of Reserve Act, a member bank may pay inter- interest payable on a time certificate of deest after maturity on a time certificate of posit which provided that the principal deposit renewed within ten days after ma- amount thereof was payable to the order of jthe depositor upon presentation and surrender turity. The terms of Regulation Q do not contain of the certificate after 6 months' written noa provision for the payment by a member tice of withdrawal and which also provided the certificate might be called for paybank of interest on a time deposit between that ment by the bank at any time by giving 30 the date of maturity of the certificate repre- days' notice thereof to the depositor. senting such deposit and the date of renewal Section (3) the supplement to Regulaof such certificate. However, the first para- tion Q providesofthat member bank shall graph of section 19 of the Federal Reserve pay interest accruing no January 1, 1936, Act authorizes the Board to define the terms at a rate in excess of after 1 per per annum, ''demand deposits," "deposits payable on de- compounded quarterly, on cent a time deposit mand/' and "time deposits," and to prescribe "having a maturity date less than 90 days such rules and regulations as it may deem after the date of deposit or payable upon necessary to effectuate the purposes of the written notice of less than 90 days." section. The Board expressed the view that a proSection 19 of the Federal Reserve Act pro- vision authorizing the bank to call a time hibits the payment of interest on any deposit certificate of deposit for payment at any which is payable on demand and the question time by giving 30 days' written notice thereof arises whether this provision affects the to the depositor would cause the certificate payment of interest after maturity on a time to be "payable upon written notice of less than deposit which is renewed within ten days 90 days" within the meaning of section (3) after maturity. It is believed, however, that of the supplement to Regulation Q and, acthe payment of interest in such circumstances cordingly, the maximum rate of interest payis not prohibited by this provision of the law. able thereon would be 1 per cent per annum. If the deposit is withdrawn during the ten- In other words, when a certificate provides day period no interest may be paid thereon that it is payable upon a written notice by for any part of the period subsequent to ma- the depositor and also provides that the bank turity. Only by renewing the deposit as a may call the certificate by giving a written time deposit can the depositor obtain any in- notice to the depositor, the shorter period of terest after the maturity of the original de- notice controls in determining the maximum posit. This does not appear to involve the rate of interest payable by a member bank evils inherent in the payment of interest on on the certificate. demand balances which the statute was apparently designed to eliminate. After considering all of the attendant cir- Stock certificate of State member bank representing cumstances, the Board has decided that it will stock of corporation holding bank premises offer no objection to the payment by a memThe Board recently received an inquiry inber bank of interest on a time certificate of volving interpretation of the exception condeposit at a rate not exceeding the applicable tained in the following provisions of the maximum rate prescribed in Regulation Q twentieth paragraph for the period between the maturity date of eral Reserve Act: of section 9 of the Fedthe certificate representing such deposit and the date of renewal thereof, provided such After the date of the enactment of the Banking of 1935, no certificate evidencing the stock of certificate is renewed within ten days after Act any State member bank shall bear any statement maturity. purporting to represent the stock of any other cor- 420 FEDERAL RESERVE BULLETIN poration, except * * * a corporation engaged on June 16, 1934, in holding the bank premises of such member bank, * * *. The question was whether such exception is limited to corporations engaged solely in holding the bank premises of the affiliated bank. Prior to the enactment of the Banking Act of 1935, such statutory provisions read as follows: After one year from the date of the enactment of the Banking Act of 1933, no certificate representing the stock of any State member bank shall represent the stock of any other corporation, except * * * a corporation existing on the date this paragraph takes effect engaged solely in holding the bank premises of such State member bank, * * *. In response to such inquiry, the Board expressed the opinion that, in view of the legislative history of the provisions of the Banking Act of 1935 amending the above-quoted provisions of section 9 of the Federal Reserve Act and the corresponding provisions of section 5139 of the Revised Statutes of the United States relating to national banks, such exception, in its present form, can not properly be interpreted as being limited to corporations engaged solely in holding the bank premises of the affiliated bank. Renewal or extension of loans made to executive officers of member banks prior to June 16, 1933 The Board has recently received an inquiry as to whether a loan made to an executive officer of a member bank prior to June 16, 1933, which has been extended by resolution of the board of directors of such bank, even though secured by marketable collateral sufficient to liquidate the loan, can be considered to have been properly extended in view of the requirement of section 22 (g) of the Federal Reserve Act that the board of directors must be satisfied that the officer has "made reasonable effort to reduce his obligation/' Advice was also requested on the same question with the additional facts that a part of the loan had been charged off and the marketable collateral to the loan is sufficient to liquidate the remainder. In replying to the inquiry, the Board observed that the law requires that the board of directors of a member bank shall be satisfied as to the matters prescribed by the law before extending or renewing a loan of the kind under discussion and tlvit in addition to determining whether the officer "has made JUNE 1936 reasonable effort to reduce his obligation," the board of directors must also be satisfied that the extension or renewal "is in the best interest of the bank." The language of the provision in question indicates that the primary responsibility for the extension or renewal of such a loan is placed by law upon the board of directors of the member bank involved and that in reaching a determination in the matter the board of directors should consider all the facts and circumstances in the particular case. The Board stated that the fact that a loan of the kind under discussion is secured by marketable collateral in an amount sufficient to liquidate the loan would not of itself show that an extension of the loan was not in conformity with the requirements of section 22 (g) but that all of the facts of the particular case would have to be given consideration in determining this question. The fact that a part of the loan had been charged off and the marketable collateral would liquidate the remainder would not change such conclusion. Of course, in any case where it appears that a loan may have been extended without a proper regard for the requirements of the law, it would be desirable for the bank examiner, in connection with his examination of the bank, to give particular consideration to all the facts involved in the case in order to determine whether or not the directors may have acted arbitrarily in extending the loan. Interpretations of Regulation U The Board has recently been asked to rule on the following questions under Regulation U, which relates to loans by banks for the purpose of purchasing or carrying stocks registered on a national securities exchange: 1. Whether, in subsection (b) of section 2, which exempts "any loan to any person whose total indebtedness to the bank at the date of and including such loan does not exceed $1,000," the term "total indebtedness" means the total of all loans regardless of their purposes or the total of all loans for the purpose of purchasing or carrying stocks registered on a national securities exchange ? In response to this inquiry the Board stated that the term "total indebtedness" means total indebtedness for all purposes and is not restricted to total indebtedness for the pur- JUNE 421 FEDERAL RESERVE BULLETIN 1936 pose of purchasing or carrying stocks registered on a national securities exchange. 2. The Board has also been asked, under subsection (a) of section 3 if the statement signed by an officer, upon which a bank may rely in determining whether or not a loan is for the purpose specified in section 1 or for any of the purposes specified in section 2, must be based only on facts related to the officer by the prospective borrower or if it may be based also on facts within the knowledge of the officer not specifically stated by the borrower. In response to this inquiry the Board ruled that the officer's statement might be based not only on statements or representations made to him by the prospective borrower but also upon any other information which the officer had obtained from any source. 3. The Board has also been asked whether in subsection (e) of section 3 permitting a bank to accept the transfer of a loan from "another lender," the term "another lender" refers solely to a bank or includes any other lender. In response to this question the Board ruled that the term quoted includes not only a bank but also any other lender. Amendment to Federal income tax regulations There is set out below a copy of a recent amendment to the regulations issued under the Revenue Act of 1934 and the Revenue Act of 1932, relating to the deductibility, in computing net income for the purpose of Federal income tax, of debts charged off in whole or in part during the taxable year in obedience to the specific orders of supervisory authorities. For ready reference there are also set out below copies of the two paragraphs of the regulations which were affected by the amendment. (T. D. 4633) Income Tax Last paragraph of article 23 (k)-l of Regulations 86 and last paragraph of article 191 of Regulations 77, Amended. TREASURY DEPARTMENT OFFICE OF COMMISSIONER OF INTERNAL REVENUE WASHINGTON, D. C. "Where banks or other corporations which are subject to supervision by Federal authorities (or by State authorities maintaining substantially equivalent standards) in obedience to the specific orders of such supervisory officers charge off debts in whole or in part, such debts shall be conclusively presumed, for income tax purposes, to be worthless or recoverable only in part, as the case may be, but in order that any amount of the charge-off may be allowed as a deduction for any taxable year it must be shown that the charge-off took place within such taxable year." This document is issued under the authority prescribed by section 62 of the Revenue Act of 1934, and section 62 of the Revenue Act of 1932. GUY T. HELVERING, Commissioner of Internal Revenue. Approved: April 3, 1936. WAYNE C. TAYLOR, Acting Secretary of the Treasury. Last paragraph of Article 23(k)-l of Regulations 86 (relating to Revenue Act of 1934), as it existed prior to above amendment of April 3, 1936: "Federal or State authorities incident to the regulation of banks and certain other corporations may require that debts be charged off in whole or in part. If, in any such case, the basis of the requirement is the worthlessness or partial recoverability of the debt, as the case may be, such charging off will, for income tax purposes, be considered prima facie evidence of worthlessness; but if the charging off is due to market fluctuations, or if no reasonable attempt has been made to determine to what extent recovery may be made, no deduction for income tax purposes of the amount so charged off can be allowed." Last paragraph of Article 191 of Regulations 77 (relating to Revenue Act of 1932), as it existed prior to above amendment of April 3, 1936: "Where banks or other corporations which are subject to supervision by Federal authorities (or by State authorities maintaining substantially equivalent standards) in obedience to the specific orders, or in accordance with the general policy of such supervisory officers, charge off debts in whole or in part, such debts shall, in the absence of affirmative evidence clearly establishing the contrary, be presumed, for income tax purposes, to be worthless or recoverable only in part, as the case may be." Discussion of questions arising under regulations of the Comptroller of the Currency governing the purchase of investment securities For the information of member banks, there are printed below excerpts from an address made by the Comptroller of the Currency before the California Bankers Association, at Sacramento, Calif., on May 22, 1936, in which there are discussed certain questions regarding his regulations governing the purchase of investment securities pursuant to the provisions of section 5136 of the Revised Statutes: To Collectors of Internal Revenue and Others Concerned: The last paragraph of article 23(k)-l of RegulaEffective as of February 15, 1936, certain regulations 86 and the last paragraph of article 191 of tions governing the purchase of investment securities Regulations 77 are amended to read: 422 FEDERAL RESERVE BULLETIN by banks, subject to the provisions of section 5136 of the Revised Statutes, were promulgated by the Comptroller's office. These regulations were issued in compliance with a duty imposed by Congress in Section 5136 which reads: "The association may purchase for its own account investment securities under such limitations and restrictions^ as the Comptroller of the Currency may by regulation prescribe . . . As used in this section the term 'investment securities' shall mean marketable obligations eyidencing indebtedness of any person, co-partnership, association or corporation, in the form of bonds, notes and/or debentures, commonly known as investment securities under such further definition of the term 'investment securities' as may by regulation be prescribed by the Comptroller of the Currency." It will also be noted that it was by virtue of the Act of Congress and not by regulation of the Comptroller's office that the limitation on investment is imposed in section 5136, which provides that: "In no event shall the total amount of the investment securities of any one obligor or maker, held by the association for its own account, exceed at any time 10 per centum of its capital stock actually paid in and unimpaired and 10 per centum of its unimpaired surplus fund." A few State Federal Reserve member banks have not understood that the reason that both the 10 percent limitation and the provisions of the regulations of the Comptroller's office apply to them is due to the fact that Congress enacted as part of the Banking Act of 1933, an amendment to section 9 of the Federal Reserve Act, providing that: "State member banks shall be subject to the same limitations and conditions with respect to the purchasing, selling, underwriting and holding of investment securities and stock as are applicable in the case of national banks under paragraph 'Seventh' of section 5136 of the Revised Statutes, as amended." Having in mind the great extent to which the healthy condition of our banks is dependent upon the exercise of sound investment policies, and being acutely conscious of the disasters precipitated in the past because a portion of the banks failed to exercise such sound policies, my office made a protracted and comprehensive study of the situation with a view to prescribing, with the effect of law, the investment policies which must hereafter be followed—policies which were in the main already in force in the better managed institutions. Manifestly, the problems of the billion-dollar bank are not the same as those of a two-hundred-thousand dollar bank, and to frame a regulation that will in every case operate equally and equitably on both the large and small institution is a difficult task. As you may have observed, the motif running through the regulations is one of anti-speculation. The reason therefor is based on causes which have been admirably expressed by the Commission on Banking Law and Practice of the Association of Reserve City Bankers in its "Summary of Arguments on Title II of the Banking Bill of 1935" issued in May, 1935. Permit me to quote from that pamphlet: "The disastrous period of bank liquidations is getting further and further behind us and it is probable that even bankers are becoming somewhat forgetful of the true causes of the trouble, although at one time there would have been little disagreement as to JUNE 1936 the factors involved. Most of the public, unfortunately, never knew fully the causes of our banking troubles because the facts were not available to them, and they might be easily convinced that the whole trouble can be charged to so simple a thing as strict eligibility requirements. "It is contended that a study of the assets of failed banks would completely dispel the view that the troubles of these banks were due chiefly to a lack of borrowing power. No one can peruse the facts without arriving at the absolute conviction that the troubles of the banks were due in considerable part to assets which should never have been in the banks at any time, under any conditions. In the years prior to the depressions of both 1921 and 1929 the banks became involved in the speculative fever of the age, and many of them filled their portfolios with assets which were bound to show losses with the turn of the economic tide. No artificial methods of liquidity and no attempt to have the Federal Reserve System hold up the inflated balloon could possibly have avoided the ultimate consequences. "It may be of interest at this point to present a few simple facts which were revealed by a detailed analysis of the assets of failed banks. Of the banks failing in 1931, 105 were picked at random from all sections of the country, and the 50 bonds contributing the greatest depreciation to the portfolios of the 105 banks were listed and tabulated. The two bonds which contributed the greatest depreciation to the portfolios of this group were convertible bonds which had been bought at prices substantially above par. In other words, they were speculations. There were several other convertible bonds in the list which also caused heavy losses. Of the first 50 bonds in point of depreciation, only five had ratings of the first three grades in 1929; four of these five were convertible issues in which the banks' losses were due to having bought them at too high a price. The remainder of the issues were of the fourth grade or lower. These banks were sacrificing security for high yield. Only four of the 50 issues were brought out before 1923 and 42 percent of them were brought out in 1928 or later. In other words, the bonds causing the greatest amount of depreciation were unseasoned issues, largely the product of boom conditions in the bond market." As is inevitable in the matter of regulations, questions of interpretation arise from time to time. While there has been unanimous aproval of the objective toward which these regulations are directed, a committee of the American Bankers Association has suggested that some of their members desire to have clarified certain aspects of the regulations. The provision which has probably been of most interest in this connection is paragraph (3) of section II of the regulations, and the footnote thereto. This paragraph prohibits the purchase of investment securities in which the investment characteristics are distinctly or predominately speculative and the footnote states that the terms used in the paragraph may be found in recognized rating manuals, and that where there is doubt as to eligibility, then such eligibility must be supported by not less than two rating manuals. Inquiry has been made as to whether this means that member banks are thus confined to the purchase of securities which have a rating classification in one of the four groups according to rating services. The responsibility for proper investment of bank funds, JUNE 1936 now, as in the past, rests with the directors of the institution, and there has been and is no intention on the part of this office to delegate this responsibility to the rating services, or in any way to intimate that this responsibility may be considered as having been fully performed by the mere ascertaining that a particular security falls within a particular rating classification. Reference to the rating manuals was made in the regulation in recognition of the fact that many banking institutions, by reason of lack of experienced personnel and access to original sources, are unable personally to investigate the background, history and prospects of a particular issuer of securities, and consequently must rely to some extent upon such information as has been compiled by various rating services in their large rating manuals. It may also be expected that banking institutions will desire to supplement their own judgment by checking it against the opinion of others, including ratings that have been given by rating services. Such ratings, however, regardless of whether or not they are in the first four groups, are not conclusive on the question of eligibility. It is recognized that some securities, which are entirely eligible from a non-speculative standpoint at the time they are available for purchase, may have as yet received no rating by the rating services. It is also recognized that a security with a high rating according to the services may, in the circumstances of a particular case, be an undesirable investment, whereas on the other hand, conditions existing at the time of investment may make a security entirely eligible, notwithstanding the fact that it has a comparatively low rating according to the standard rating services. In the latter type of case, of course, there will be a correspondingly greater burden upon the bank to satisfy the examiners that a particular security is in fact eligible from a nonspeculative standpoint. Paragraph (5) in section II of the regulations prohibits the purchase of securities convertible into stock at the option of the issuer. In this connection question has been raised as to purchase of securities accompanied by stock purchase warrants or rights. It is unnecessary to remind you gentlemen of the prohibition against banks investing in stocks. The statement quoted a few moments ago relative to the dang-er of investment in convertible bonds equally applies to securities carrying stock purchase rights. They are speculations—and in addition to being objectionable as such, they in effect constitute a prohibited investment in stocks because the price paid by the bank involves a premium which in part reflects the conjectural value of the stock right, and such purchase is to that extent not a purchase of an investment security. Inasmuch as the bank is prohibited by law from exercising the purchase warrant after it has been acquired, such portion of the bank funds as are allocable to the original purchase of the warrant, would have been expended on no justifiable basis under the law. Some banks have misunderstood the amortization requirements of the regulations as respects securities purchased at a price exceeding par. It should be made clear that the premium need only be gradually amortized at regular intervals over the life of a security to the end that at its maturity the security will not be carried at an amount in excess of par. If 423 FEDERAL RESERVE BULLETIN the security is callable at a given price above par, the rate of amortization will have to be such as to have gradually extinguished the premium down to call price by the call date, regardless of whether the security is in fact called on that date. Thereafter, if not called, amortization shall continue from that point to maturity on the same basis as though the security had been purchased on the call date at the call price. Taxation of capital investment of Reconstruction Finance Corporation in banks [PUBLIC—No. 482—74TH CONGRESS] [S. 3978] AN ACT Relating to taxation of shares of preferred stock, capital notes, and debentures of banks while owned by the Reconstruction Finance Corporation and reaffirming their immunity. Be it enacted by the Senate and House of Representatives of the United States of America in Congress assembled, That section 304 of the Act entitled "An Act to provide relief in the existing national emergency in banking and for other purposes", approved March 9, 1933, as amended, be further amended by adding at the end thereof the following : "Notwithstanding any other provision of law or any privilege or consent to tax expressly or impliedly granted thereby, the shares of preferred stock of national banking associations, and the shares of preferred stock, capital notes, and debentures of State banks and trust companies, heretofore or hereafter acquired by Reconstruction Finance Corporation, and the dividends or interest derived therefrom by the Reconstruction Finance Corporation, shall not, so long as Reconstruction Finance Corporation shall continue to own the same, be subject to any taxation by the United States, by any Territory, dependency, or possession thereof, or the District of Columbia, or by any State, county, municipality, or local taxing authority, whether now, heretofore, or hereafter imposed, levied, or assessed, and whether for a past, present, or future taxing period." Section 2. Effective upon the date of enactment of this Act, interest charges on all loans by the Reconstruction Finance Corporation to closed banks and trust companies, now in force, or made subsequent to the date of enactment of this Act, shall not exceed 3 V2 per centum per annum on condition that the rate of interest charged debtors of such banks or trust companies shall not exceed AV2 per centum per annum; otherwise such interest rate shall be as fixed by the Reconstruction Finance Corporation: Provided, however, That no provision of this Act shall be construed to authorize a reduction in the rate of interest on such loans by the Reconstruction Finance Corporation retroactive from the date of enactment of this Act. Section 3. If any provision, word, or phrase of this Act, or the application thereof to any condition or circumstance, is held invalid, the remainder of the Act, and the application of this Act to other conditions or circumstances, shall not be affected thereby. Approved, March 20, 1936. 424 FEDERAL RESERVE Amendments to Securities Exchange Act [PUBLIC—No. 621—74TH CONGRESS] [S. 4023] AN ACT To provide for the continuation of trading in unlisted securities upon national sscurities exchanges, for the registration of over-the-counter brokers and dealers, for the filing of current information and periodic reports by issuers, and for other purposes. Be it enacted by the Senate and House of Representatives of the United States of America in Congress assembled, That subsection (f) of section 12 of the Securities Exchange Act of 1934 is amended to read as follows: "(f) Notwithstanding the foregoing provisions of this section, any national securities exchange, upon application to and approval of such application by the Commission and subject to the terms and conditions hereinafter set forth, (1) may continue unlisted trading privileges to which a security had been admitted on such exchange prior to March 1, 1934; or (2) may extend unlisted trading privileges to any security duly listed and registered on any other national securities exchange, but such unlisted trading privileges shall continue in effect only so long as such security shall remain listed and registered on any other national securities exchange; or (3) may extend unlisted trading privileges to any security in respect of which there is available from a registration statement and periodic reports or other data filed pursuant to rules or regulations prescribed by the Commission under this title or the Securities Act of 1933, as amended, information substantially equivalent to that available pursuant to rules or regulations of the Commission in respect of a security duly listed and registered on a national securities exchange, but such unlisted trading privileges shall continue in effect only so long as such a registration statement remains effective and such periodic reports or other data continue to be so filed. "No application pursuant to this subsection shall be approved unless the Commission finds that the continuation or extension of unlisted trading privileges pursuant to such application is necessary or appropriate in the public interest or for the protection of investors. No application to extend unlisted trading privileges to any security pursuant to clause (2) or (3) of this subsection shall be approved except after appropriate notice and opportunity for hearing. No application to extend unlisted trading privileges to any security pursuant to clause (2) or (3) of this subsection shall be approved unless the applicant exchange shall establish to the satisfaction of the Commission that there exists in the vicinity of such exchange sufficiently widespread public distribution of such security and sufficient public trading activity therein to render the extension of unlisted trading privileges on such exchange thereto necessary or appropriate in the public interest or for the protection of investors. No application to extend unlisted trading privilges to any security pursuant to clause (3) of this subsection shall be approved except upon such terms and conditions as will subject the issuer thereof, the officers and directors of such issuer, and every beneficial owner of more than 10 per centum of such security to duties substantially equivalent to the duties which would arise pursuant to this title if such security were duly listed and registered on a national securities exchange; except that such terms BULLETIN JUNE 1936 and conditions need not be imposed in any case or class of cases in which it shall appear to the Commission that the public interest and the protection of investors would nevertheless best be served by such extension of unlisted trading privileges. In the publication or making available for publication by any national securities exchange, or by any person directly or indirectly controlled by such exchange, of quotations or transactions in securities made or effected upon such exchange, such exchange or controlled person shall clearly differentiate between quotations or transactions in listed securities, and quotations or transactions in securities for which unlisted trading privileges on such exchange have been continued or extended pursuant to this subsection. In the publication or making available for publication of such quotations or transactions otherwise than by ticker, such exchange or controlled person shall group under separate headings (A) quotations or transactions in listed securities, and (B) quotations or transactions in securities for which unlisted trading privileges on such exchange has been continued or extended pursuant to this subsection. "The Commission shall by rules and regulations suspend unlisted trading privileges in whole or in part for any or all classes of securities for a period not exceeding twelve months, if it deems such suspension necessary or appropriate in the public interest or for the protection of investors or to prevent evasion of the purposes of this title. "Unlisted trading privileges continued for any security pursuant to clause (1) of this subsection shall be terminated by order, after appropriate notice and opportunity for hearing, if it appears at any time that such security has been withdrawn from listing on any exchange by the issuer thereof, unless it shall be established to the satisfaction of the Commission that such delisting was not designed to evade the purposes of this title or unless it shall appear to the Commission that, notwithstanding any such purpose of evasion, the continuation of such unlisted trading privileges is nevertheless necessary or appropriate in the public interest or for the protection of investors. On the application of the issuer of any security for which unlisted trading privileges on any exchange have been continued or extended pursuant to this subsection, or of any broker or dealer who makes or creates a market for such security, or of any other person haying a bona-fide interest in the question of termination or suspension of such unlisted trading privileges, or on its own motion, the Commission shall by order terminate, or suspend for a period not exceeding twelve months, such unlisted trading privileges for such security if the Commission finds, after appropriate notice and opportunity for hearing, that by reason of inadequate public distribution of such security in the vicinity of said exchange, or by reason of inadequate public trading activity or of the character of trading therein on said exchange, such termination or suspension is necessary or appropriate in the public interest or for the protection of investors. "In any proceeding under this subsection in which appropriate notice and opportunity for hearing are required, notice of not less than ten days to the applicant in such proceeding, to the issuer of the security involved, to the exchange which is seeking to continue or extend or has continued or extended unlisted trading privileges for such security, and to the exchange, if any, on which such security is listed and registered, shall be deemed adequate notice, and any JUNE 1936 FEDERAL RESERVE BULLETIN broker or dealer who makes or creates a market for such security, and any other person having a bonafide interest in such proceeding, shall upon application be entitled to be heard. "Any security for which unlisted trading privileges are continued or extended pursuant to this subsection shall be deemed to be registered on a national securities exchange within the meaning of this title. The powers and duties of the Commission under subsection (b) of section 19 of this title shall be applicable to the rules of an exchange in respect of any such security. The Commission may, by such rules and regulations as it deems necessary or appropriate in the public interest or for the protection of investors, either unconditionally or upon specified terms and conditions, or for stated periods, exempt such securities from the operation of any provision of section 13, 14, or 16 of this title." Section 2. Any application to continue unlisted trading privileges for any security heretofore filed by any exchange and approved by the Commission pursuant to clause (1) of subsection (f) of section 12 of the Securities Exchange Act of 1934 and rules and regulations thereunder shall be deemed to have been filed and approved pursuant to clause (1) of said subsection (f) as amended by section 1 of this Act. Section 3. Section 15 of the Securities Exchange Act of 1934 is amended to read as follows: "SEC. 15. (a) No broker or dealer (other than one whose business is exclusively intrastate) shall make use of the mails or of any means or instrumentality of interstate commerce to effect any transaction in, or to induce the purchase or sale of, any security (other than an exempted security or commercial paper, bankers7 acceptances, or commercial bills) otherwise than on a national securities exchange, unless such broker or dealer is registered in accordance with subsection (b) of this section. "(b) A broker or dealer may be registered for the purposes of this section by filing with the Commission an application for registration, which shall contain such information in such detail as to such broker or dealer and any person directly or indirectly controlling or controlled by, or under direct or indirect common control with, such broker or dealer, as the Commission may by rules and regulations require as necessary or appropriate in the public interest or for the protection of investors. Except as hereinafter provided, such registration shall become effective thirty days after the receipt of such application by the Commission or within such shorter period of time as the Commission may determine. "An application for registration of a broker or dealer to be formed or organized may be made by a broker or dealer to which the broker or dealer to be formed or organized is to be the successor. Such application shall contain such information in such detail as to the applicant and as to the successor and any person directly or indirectly controlling or controlled by, or under direct or indirect common control with, the applicant or the successor, as the Commission may by rules and regulations require as necessary or appropriate in the public interest or for the protection of investors. Except as hereinafter provided, such registration shall become effective thirty days after the receipt of such application by the Commission or within such shorter period of time as the Commission may determine. Such registration shall terminate on the forty-fifth day after the effective date thereof, unless prior thereto the successor shall, in accordance with such rules and regulations 425 as the Commission may prescribe, adopt such application as its own. "If any amendment to any application for registration pursuant to this subsection is filed prior to the effective date thereof, such amendment shall be deemed to have been filed simultaneously with and as part of such application; except that the Commission may, if it appears necessary or appropriate in the public interest or for the protection of investors, defer the effective date of any such registration as thus amended until the thirtieth day after the filing of such amendment. "The Commission shall, after appropriate notice and opportunity for hearing, by order deny registration to or revoke the registration of any broker or dealer if it finds that such denial or revocation is in the public interest and that (1) such broker or dealer whether prior or subsequent to becoming such, or (2) any partner, officer, director, or branch manager of such broker or dealer (or any person occupying a similar status or performing similar functions), or any person directly or indirectly controlling or controlled by such broker or dealer, whether prior or subsequent to becoming such, (A) has willfully made or caused to be made in any application for registration pursuant to this subsection or in any document supplemental thereto or in any proceeding before the Commission with respect to registration pursuant to this subsection any statement which was at the time and in the light of the circumstances under which it was made false or misleading with respect to any material fact; or (B) has been convicted within ten. years preceding the filing of any such application or at any time thereafter of any felony or misdemeanor involving the purchase or sale of any security or arising out of the conduct of the business of a broker or dealer; or (C) is permanently or temporarily enjoined by order, judgment, or decree of any court of competent jurisdiction from engaging in or continuing any conduct or practice in connection with the purchase or sale of any security; or (D) has willfully violated any provision of the Securities Act of 1933, as amended, or of this title, or of any rule or regulation thereunder. Pending final determination whether any such registration shall be denied, the Commission may by order postpone the effective date of such registration for a period not to exceed fifteen days, but if, after appropriate notice and opportunity for hearing, it shall appear to the Commission to be necessary or appropriate in the public interest or for the protection of investors to postpone the effective date of such registration until final determination, the Commission shall so order. Pending final determination whether any such registration shall be revoked, the Commission shall by order suspend such registration if, after appropriate notice and opportunity for hearing, such suspension shall appear to the Commission to be necessary or appropriate in the public interest or for the protection of investors. Any registered broker or dealer may, upon such terms and conditions as the Commission may deem necessary in the public interest or for the protection of investors, withdraw from registration by filing a written notice of withdrawal with the Commission. If the Commission finds that any registered broker or dealer, or any broker or dealer for whom an application for registration is pending, is no longer in existence or has ceased to do business as a broker or dealer, the Commission shall by order cancel the registration or application of such broker or dealer. 426 FEDERAL RESERVE BULLETIN " (c) No broker or dealer shall make use of the mails or of any means or instrumentality of interstate commerce to effect any transaction in, or to induce the purchase or sale of, any security (other than commercial paper, banker's acceptances, or commercial bills) otherwise than on a national securities exchange, by means of any manipulative, deceptive, or other fraudulent device or contrivance. The Commission shall, for the purposes of this subsection, by rules and regulations define such devices or contrivances as are manipulative, deceptive, or otherwise fraudulent. "(d) Each registration statement hereafter filed pursuant to the Securities Act of 1933, as amended, shall contain an undertaking by the issuer of the issue of securities to which the registration statement relates to file with the Commission, in accordance with such rules and regulations as the Commission may prescribe as necessary or appropriate in the public interest or for the protection of investors, such supplementary and periodic information, documents, and reports as may be required pursuant to section 13 of this title in respect of a security listed and registered on a national securities exchange; but such undertaking shall become operative only if the aggregate offering price of such issue of securities, plus the aggregate value of all other securities of such issuer of the same class (as hereinafter defined) outstanding, computed upon the basis of such offering price, amounts to $2,000,000 or more. The issuer shall file such supplementary and periodic information, documents, and reports pursuant to such undertaking, except that the duty to file shall be automatically suspended if and so long as (1) such issue of securities is listed and registered on a national securities exchange, or (2) by reason of the listing and registration of any other security of such issuer on a national securities exchange, such issuer is required to file pursuant to section 13 of this title information, documents, and reports substantially equivalent to such as would be required if such issue of securities were listed and registered on a national securities exchange, or (3) the aggregate value of all outstanding securities of the class to which such issue belongs is reduced to less than $1,000,000, computed upon the basis of the offering price of the last issue of securities of said class offered to the public. For the purposes of this subsection, the term 'class' shall be construed to include all securities of an issuer which are of substantially similar character and the holders of which enjoy substantially similar rights and privileges. Nothing in this subsection shall apply to securities issued by a foreign government or political subdivision thereof or to any other security which the Commission may by rules and regulations exempt as not comprehended within the purposes of this subsection." SEC. 4. Subsection (a) of section 17 of such Act is amended by striking out "every broker or dealer making or creating a market for both the purchase and sale of securities through the use of the mails or of any means or instrumentality of interstate commerce", and inserting in lieu thereof "every broker or dealer registered pursuant to section 15 of this title". SEC. 5. Subsection (a) of section 18 of such Act is amended by inserting immediately before the comma following "any rule or regulation thereunder" the following: "or any undertaking contained in a registration statement as provided in subsection (d) of section 15 of this title". JUNE 1936 SEC. 6. Subsection (c) of section 20 of such Act is amended by inserting immediately before the period the following: "or any undertaking contained in a registration statement as provided in subsection (d) of section 15 of this title". SEC. 7. Subsection (f) of section 21 of such Act is amended by inserting immediately before the period the following: "or with any undertaking contained in a registration statement as provided in subsection (d) of section 15 of this title". SEC. 8. Subsection (a) of section 23 of such Act is amended to read as follows: "(a) The Commission and the Board of Governors of the Federal Reserve System shall each have power to make such rules and regulations as may be necessary for the execution of the functions vested in them by this title, and may for such purpose classify issuers, securities, exchanges, and other persons or matters within their respective jurisdictions. No provision of this title imposing any liability shall apply to any act done or omitted in good faith in conformity with any rule or regulation of the Commission or the Board of Governors of the Federal Reserve System, notwithstanding that such rule or regulation may, after such act or omission, be amended or rescinded or be determined by judicial or other authority to be invalid for any reason." SEC. 9. Section 32 of such Act is amended by striking out "SEC. 32." and inserting in lieu thereof "SEC. 32. (a)"; by inserting immediately before the comma following the phrase "filed under this title or any rule or regulation thereunder" the following: "or any undertaking contained in a registration statement as provided in subsection (d) of section 15 of this title"; and by adding thereto a new subsection (b) to read as follows: "(b) Any issuer which fails to file information, documents, or reports pursuant to an undertaking contained in a registration statement as provided in subsection (d) of section 15 of this title shall forfeit to the United States the sum of $100 for each and every day such failure to file shall continue. Such forfeiture, which shall be in lieu of any criminal penalty for such failure to file which might be deemed to arise under subsection (a) of this section, shall be payable into the Treasury of the United States and shall be recoverable in a civil suit in the name of the United States." SEC. 10. All brokers and dealers for whom registration is in effect on the date of enactment of this Act in accordance with rules and regulations of the Commission prescribed pursuant to section 15 of the Securities Exchange Act of 1934 shall be deemed to be registered pursuant to section 15 of such Act as amended by section 3 of this Act. SEC. 11. Nothing in this Act shall be deemed to extinguish any liability which may have arisen prior to the effective date of this Act by reason of any violation of section 15 of the Securities Exchange Act of 1934 or of any rule or regulation thereunder. SEC. 12. This Act shall become effective immediately upon the enactment thereof; except that clause (2) of subsection (f) of section 12 of the Securities Exchange Act of 1934, as amended by section 1 hereof, and subsections (a) and (d) of section 15 of such Act as amended by section 3 hereof, shall become effective ninety days after the enactment of this Act, and that clause (3) of said subsection (f), as amended by section 1 hereof, shall become effective six months after the enactment of this Act. Approved, May 27, 1936. JUNE 1936 FEDERAL RESERVE BULLETIN 427 ANNUAL REPORT OF THE BANK FOR INTERNATIONAL SETTLEMENTS The sixth annual report of the Bank for International Settlements, covering the year ended March 31, 1936, was submitted by Mr. L. J. A. Trip, president of the bank, to the general meeting of shareholders on May 11, 1936. Sections of the report are given herewith:1 tempts proved unsuccessful, by the introduction of moratona, transfer provisions and exchange restrictions, with the result that not only did foreign credits remaining in the countries affected become frozen but ordinary trade was hampered by new and formidable fetters. Fourthly, in the autumn of the same year INTRODUCTION there followed the depreciation of sterling Seven years have passed since in the course and of a number of other currencies. New of 1929 the great depression began which still elements of uncertainty were thus added to holds large parts of the world in its grip. the economic and financial situation and It might have been expected that in the period strong downward pressure was exerted on which has elapsed the depressive forces would prices quoted on a gold basis in the world have spent themselves and general prosperity markets. A period of monetary changes had would have returned. But the depression of begun which within two years was also to these seven lean years has not been merely involve the United States dollar. a slump of the pre-war order. Its backThe time has come to take stock of the ground was different—it supervened upon situation and to consider what progress has an economic and financial situation still suf- been made on the path of recovery. fering from the dislocation caused by a world Signs are not lacking that the downward war; and, with the volume of world unem- trend of business, the element in the depresployment above 30,000,000, it has grown into sion which in its reactions most nearly corsomething vaster than any pre-war depres- responds to pre-war experience, has already sion. In the succession of events it is pos- been arrested over a wide field. Articles wear sible to recognize four major disturbances: out, tools and machinery require replacement Firstly, there was the ordinary downward and buildings need repair. As a depression trend of business. Conforming to type, this proceeds and population increases unsatisfied was characterized by reduced sales, accumu- wants accumulate and these sooner or later lation of stocks and decline in output, par- find expression in effective demand. Furthericularly in branches such as the iron and steel more, when times are difficult bad business industries which produce capital goods or, in is in constant process of liquidation, unecogeneral, provide industrial, agricultural, nomic methods are scrapped and countless efforts are made by individual firms to put trade and transport equipment. Secondly, there was a widespread fall in their affairs on a remunerative basis. The prices of primary products—both foodstuffs cumulative effect of all these separate efforts and industrial raw materials. This put a helps to restore that equilibrium between particularly heavy strain on the balances of costs and prices which alone can form the payments of a number of overseas countries basis of recovery. Typical evidence of reand, within a short time, effectively arrested turning activity is afforded by the improvethe flow of capital in their direction, whether ment in the tool and machine industries which in the form of loans or of new investments. after the lull of the last few years suddenly Thirdly, in the late spring and summer of found difficulty in recruiting sufficient skilled 1931 there came the banking crisis in Austria labor. and Germany. Massive withdrawals of funds In any examination of the causes of the were followed by a series of organized at- improvement which has taken place due tempts to stem the tide through the granting weight should be given to the steady influence of emergency credits and, when these at- of the curative forces inherent in the ecoIn add ition the report contains sections dealing with price move nomic system itself. It is of interest to note ments, foreign trade, short and long-term interest rates in detail, trustee that in spite of continued stagnation in the and agency functions of the bank, deposits and investments, net profits, reserves, dividend, other distributions, changes in the board of directors building trade a strengthening of demand and other executive officers, together with a number of annexes showing central banks or other banking institutions to which have been alotted and a revival of industrial activity occurred shares in the capital stock of the bank, profit and loss account, trustee in France, the largest gold bloc country, duroperations, etc. For earlier reports see Bulletin for June 1935, 1934, 1933, ing the latter half of 1935 and the first months 1932, and July 1931. 1 428 FEDERAL RESERVE BULLETIN of 1936. This development may be regarded as an indication that recent recuperative tendencies have been strong enough to mitigate maladjustments remaining in the cost and price structure of the different countries consequent upon the monetary changes of the past five years. The abrupt decline in the prices of primary products which began in 1929 affected both foodstuffs and raw materials and in a few years brought about a veritable revolution in the whole price structure. From 1929 to 1933 the average of prices of important foodstuffs fell by some 60 percent while the prices of essential industrial raw materials fell by fully 50 percent. The price of wheat expressed in gold touched the lowest point recorded for over 400 years. This decline came after six or seven years of relative stability during which wholesale price indices in practically all important countries had stood at about 40 percent above the 1913 level, giving apparent substance to the belief that this increase above pre-war levels would become a permanent feature of post-war economy. In a number of cases the decline in prices was due to an advance in technique which lowered costs of production; other influences, however, were also at work. In the case of wheat, for instance, governments at first intervened to keep up the price, with the result that huge stocks were accumulated which eventually weighed heayily on the market. The output of many primary products, and of agricultural produce in particular, was maintained undiminished during the depression but prices fell heavily. The exact opposite happened with regard to many manufactured articles; prices were kept up by monopolistic organizations or generally by lack of adjustment, sales went down however and soon production had to be correspondingly curtailed. The result was a great disparity in prices, which not only added to the difficulties of the raw material producing countries but threw the whole international price relationship out of equilibrium. The first signs of a reaction were noticeable in the autumn of 1932 and, in spite of interruptions and difficulties, the upward movement has asserted itself; the year 1935 witnessed a steady improvement in the prices of primary products not only in depreciated currencies but also to some extent in gold. By government action or simply through agreement between producers a number of restrictive JUNE 1936 schemes, affecting such products as copper, jute, lead, nitrate, rubber, silk, sugar, tea, tin, tin plates and wheat, have been put into operation. For some agricultural products (notably wheat) a reduction in supply was caused by the widespread drought in 1935. The case of wool is interesting: no artificial restriction was ever attempted and no stocks were laid up but current supplies regularly brought to the market. Prices slumped heavily at first, but this stimulated consumption and before long prices began to recover mainly under the influence of reviving demand. On the whole the influence of the various restrictive schemes should not be overrated. It is not easy to put into effect schemes that are sufficiently comprehensive to govern the world supply of any commodity. When a scheme covers only part of the total actual or potential output there is always the possibility of increasing production in counties not adhering to the scheme. A careful analysis of price movements during 1935 tends to show that, with the exception of a few commodities like tea and tin, increased demand by consumers and resumption of industrial activity has counted for more in reducing stocks and lifting prices than any artificial restriction of supply. Government spending for armament purposes and the purchase of reserve stocks prompted by war scares have also had an influence on the trend of certain prices. But not all the new spending represented a net addition to total world demand; in the case of Germany, for instance, increased imports of raw materials required by armament industries was more than offset by reduced imports of other commodities. Generally speaking, it was the greater absorption of commodities in the markets of Great Britain, the United States and a number of other countries which was the main cause of the revival in prices during the past year; and in this connection account must be taken of the expanding demand resulting from the increased gold production. The increase in the demand for raw materials at improved prices is reflected in the mounting export trade of the South American countries, the Straits Settlements, New Zealand and Australia. It is true that from the point of view of the importing countries the rise in prices means that a larger amount in foreign currencies has to be paid for raw materials, but this additional outlay should soon be recovered in the general improve- JUNE 1936 FEDERAL RESERVE BULLETIN ment in world business. The brisker trade with overseas countries has already helped to revive shipping. Many of the countries producing primary products, though helped by the better prices, are still faced with a series of problems, including certain difficult debt conditions. There has been in some cases conversion of old loans to lower interest rates, but not yet any recovery in new foreign lending to countries producing primary products or in the investment in any form of new foreign capital in them. The Empire and foreign issues on the London capital market registered, again in 1935, figures constituting new low records (except for the war years). The liquidity crisis which swept over Europe in 1931 left behind it a system of exchange restrictions which as time went on developed into a network of ever-increasing control and prohibitions. In only one severely affected country, Austria, has it been possible to abolish most of the restrictions imposed during the crisis and restore a free foreign exchange market. In Hungary and Rumania some simplification was made in the course of 1935 in the very complicated system that had gradually been elaborated. Moreover, in South America, Ecuador completely abolished all exchange control in the autumn of 1935, and in the course of the same year several other countries found it possible to apply with somewhat greater freedom the regulations on their exchange markets. Against this, however, must be set the imposition of new restrictions in Danzig, Italy, Lithuania and recently in Poland, the enforcement of a more severe control in several markets and a continued multiplication of clearing arrangements, bringing the number of such arrangements concluded by Germany, for instance, from 25 in 1934 to 32 at the end of 1935. On balance little improvement has been achieved; the transfer of funds from one market to another, whether for financial or commercial account, is still subject to intricate regulations in a large number of countries. But if the restrictions still remain in force, the underlying debt position which gave rise to their introduction has in many ways improved. The statistics compiled by the Bank for International Settlements (and given later in this report) show that from 1930 to 1935 the total volume of short-term international indebtedness of European countries and the United States was reduced 429 from 70,000,000,000 to 30,000,000,000 Swiss francs. When the crisis broke out in 1931 reserves accumulated by central banks and other credit institutions were employed to cover withdrawals and when these resources became exhausted other methods were found, varying in character from country to country. Germany thus concluded agreements with her standstill creditors under which short-term credits were liquidated by the sale of so-called registered marks for tourist and other purposes. In many cases individual debtors and creditors made arrangements between themselves for repayments, the creditors as a rule accepting a more or less heavy discount on the amount due when ready cash was forthcoming for the remainder. On long-term account also a reduction of outstanding foreign indebtedness was achieved mainly by the repatriation of bonds by private individuals. Adequate statistics are lacking, but such enquiries as have been made indicate that repurchases of bonds have taken place on a very extensive scale. As far as European countries are concerned, foreign indebtedness has been reduced far below the high level reached a few years ago. If, however, reserves are slender and the export position uncertain, even comparatively moderate indebtedness can cause great difficulty and necessitate the maintenance of hampering restrictions. The world has been caught in a vicious circle where the system of control handicaps trade, and the shrinkage in trade increases the difficulties of the foreign exchange position subject to control. But cannot this circle be broken? Once the total volume of indebtedness has been brought down to manageable proportions the case for settlement by consolidation and adjustment of charges acquires additional strength. With so many signs to indicate that general business conditions in the world have taken an upward trend, surely arrangements for the solution of outstanding debt problems should be made at the earliest possible moment, particularly with the object of hastening the removal of those restrictions which are most harmful to the spreading of recovery. The history of currency depreciation during the course of the depression may be readily summarized: before the crisis of the summer and autumn of 1931 the currencies of four raw material producing countries 430 FEDERAL RESERVE BULLETIN had left gold; during the period beginning with the depreciation in sterling in September, 1931, and ending in April, 1933, when the exchange value of the dollar fell below par, 35 currencies went off gold; and since 1933 the dollar and some other currencies, including the three silver-standard currencies of China, Manchukuo and Hong Kong, have depreciated. These many changes in currency values could not fail to exert a direct effect adverse to world trade. There was, however, an indirect effect, in many ways more pernicious; when exchange rates between countries suddenly fluctuated to the extent of 20 percent or more, the governments of countries adversely affected found themselves obliged to apply measures for the protection of the economic life of their countries; new duties were imposed, existing duties were increased and many governments had recourse to quotas and similar limitations which in their effect on trade and economic relations generally were distinctly more hampering than the other measures of protection. During the past five years changes in currency values have ranged from zero, in the few countries which have remained on gold at par, to a depreciation of 75 percent in the case of Chile. These figures may, however, give a somewhat exaggerated impression of the disorder experienced, for measures were as a rule taken by central banks or governments to reduce fluctuations of foreign exchange rates or to establish a new relationship to gold. The United States dollar, the Czechoslovakian crown, the bdga and the Danzig guilder have been re-linked directly to gold; and though the governments in the United States and Belgium obtained the right to alter, within certain definite limits, the weight in gold of their currency units, no use has been made of this right; in fact, the belga was definitely stabilized in the spring of 1936. In a number of other countries exchange rates have been maintained stable in relation to some gold currency. The Greek drachma, for instance, which depreciated in 1932 has since been pegged at a lower level on the French franc ; the Austrian schilling and the Yugoslav dinar have likewise been held stable since 1933 on the basis of the franc; and in February, 1936, the State Bank of the U. S. S. R. was charged with the maintenance of a fixed rate for the ruble in terms of the French franc in all its exchange operations. JUNE 1936 In the countries which had introduced exchange regulations, the actual rates at which foreign currencies were sold would often depend on the particular character of the business involved. But the tendency recently has been to apply more uniform rates and this development represents a further step toward real stability. The working of clearing arrangements has further led to a standardization of the exchange rates on which current commercial transactions are based. Then there are a number of currencies which have been pegged on sterling; these include, in addition to members of the British Empire, the Scandinavian countries, Finland, Estonia, Portugal, Japan and some South American countries. For this group the control by the Exchange Equalization Account established in Great Britain in 1932 has been of outstanding importance. The object of the Account was to iron out undue exchange fluctuations and it served to counteract seasonal and other temporary influences. Still, however, the fluctuations over the year in the exchange value of the pound were of the magnitude of 13 percent in 1934. But from the spring of 1935 the Exchange Equalization Account exerted stronger control and in the autumn the seasonal downward pull was effectively counteracted. Indeed, since the middle of 1935 the widest variations in the price of gold in London have not exceeded in all 2 percent, which means that within very narrow limits sterling has been stable in terms of gold. When the fluctuations of sterling were still comparatively wide, it was easy to indicate which currencies were to be included in the sterling group and which were linked to gold or the French franc. But now that sterling is relatively stable in terms of gold this distinction between different groups becomes more difficult to observe. Since the cutting of the link with silver the exchange rates of the Chinese dollar have been kept approximately stable, but the Chinese currency cannot be said to have been pegged either on sterling or on the United States dollar. The division of currencies into different groups has lost some of its original significance due to the realization of greater de facto currency stability over the world as a whole. Unfortunately no corresponding progress has been made in the restoration of real monetary confidence internationally. At one time or another during the course of the year JUNE 1936 FEDERAL RESERVE BULLETIN every one of the major currencies has been under discussion, with rumors circulating as to possible depreciation from present values. In these circumstances it is hardly surprising that people have transferred their funds from one country to another, and it is transfers of this kind more than purely speculative operations based on borrowed money which have given rise to the movements of balances and gold in the year under review. To have realized exchange stability through the control exercised by central banks and exchange funds is clearly an achievement, but something more is needed. The world's monetary structure must be so strengthened that it will again command the confidence of the public. Political and monetary authorities should show the necessary determination and have at their command adequate resources to give effect to the policy adopted and not be deterred by any flow of nervous money, however large in volume or persistent in movement. The aim should be to build up again a stable system which will fulfill the essential conditions of financial and economic equilibrium; costs and prices in the individual countries must be adapted to the requirements of the common standard and a balance achieved in which the stresses and strains of currency over or under valuation would be reduced to a minimum. The past seven years have constituted one of the most disturbed periods through which the world economy has ever passed in times of peace. Since 1929, when quotations on the stock exchanges slumped and prices of primary products began to decline, until 1933, when the dollar depreciated, one major disturbance after the other beset the world. An abnormal volume of unemployment and exceptionally large gold movements are signs of the prevailing difficulties and uncertainties. It is evident, however, that in many respects improvement has been achieved since the worst days of the depression. The normal cyclical swing is now upward. Primary products are again in greater demand and are being sold at better prices. International indebtedness has been substantially reduced and a large measure of de facto exchange stability between the principal currencies has been maintained for fully a year. But monetary restrictions continue to hold the field in a large part of the world, hampering finance and commerce, and in international dealings confidence in currencies is 431 still widely lacking. Industrial production has advanced well in a number of countries, but international trade has not made a corresponding improvement. The growth in foreign trade has in the first place been in raw materials, while manufactured articles penetrate only with difficulty the barriers surrounding national markets. The world has once more to learn the lesson that trade grows best when freed from fetters. Some progress in removing obstacles to trade has been made in the last few years by the conclusion of bilateral agreements, the benefits of which are extended by the inclusion of the most-favored-nation clause. These efforts aim at an expansion of trade, the antithesis of the extreme restrictionist policy which to so large an extent has characterized government policy since the depression began in 1929. In the monetary field the large current gold production provides an expanding basis for a liberal monetary policy. There is certainly a desire in each country to proceed along the lines of cheap and plentiful credits and deviations from this policy forced upon individual central banks in the course of 1935 have been in the nature of temporary reactions against an abnormal outflow of funds. Political tension, though it has not entirely prevented recovery, has greatly influenced the direction which recovery has taken. Fear of war is naturally apt to give increased weight to nationalistic tendencies and particularly to stimulate a movement toward autarchy. Expansion of credit and other measures taken to overcome the depression have as a rule been confined to the national sphere. Internationally the influence has made itself felt in the main through the greater de facto stability of the foreign exchanges and the larger purchases of raw materials by countries in which domestic production has increased. Faced with the problems of the depression, central banks have endeavored to perfect methods of action both at home and in their international relations. Assistance has been given in many ways by the monetary authorities of one country to those of another in order to maintain exchange fluctuations within narrow limits. New and effective means have been devised to prevent funds from becoming available for currency speculation; if during the past year such speculation has counted for less in the international movement of funds than it otherwise would have 432 FEDERAL RESERVE BULLETIN done, this is at least partly due to the initiative of the central banks. In addition to the questions which fall within their own sphere of action, central banks have to tender advice to their respective governments and markets on a large number of questions, many of them involving matters of international importance, for which contact between the central banks cannot fail to be of value. During the course of the year the Bank for International Settlements has continued to serve as a center for consultation and is happy to find that at the regular meetings in Basel not only has contact been maintained, but useful suggestions have been put forward which have been translated into practical action. EXCHANGE RATES Events in the opening months of 1935 did not augur well for the maintenance of exchange stability. Contrary to the normal seasonal trend, sterling showed great weakness in February and March; the gold price in London rose on March 6, 1935, to 149s. 4d., the highest sterling quotation ever recorded, as compared with a maximum of 140s. Od. in the corresponding months of the previous year. On April 1,1935, the belga was devalued by 28 percent in terms of gold, and on May 2 the Danzig guilder by 42 percent. In the course of the spring large transfers were made from the French, Dutch and Swiss markets and spot quotations of the French franc, the guilder and the Swiss franc were brought to the gold export points; forward rates also widened considerably, the discount on three months forward French francs in London touching a point one day in May, 1935, corresponding to an interest rate of 40 percent per annum. The gold currencies were, however, maintained by the classical means of gold exports and increases of discount rates sufficiently vigorous to indicate the determination of the respective central banks to defend their positions. The outflow of funds from the continental markets helped to sustain the value of the pound and assisted the authorities in London in taking firmer control of their exchange position. In the autumn when large foreign payments had to be made, the Exchange Equalization Account employed a substantial part of its gold holdings to provide the market with the foreign exchange required and thus prevented an undue fall in the value of JUNE 1936 the pound. Since June 1, 1935, the distance between the highest and lowest quotations of the French franc-sterling rate has been only l!/2 percent, as compared with about 7 percent in the previous twelve months. The great measure of exchange stability which has prevailed since the spring of 1935 can best be judged from the fact that there are only a very limited number of countries whose currencies have since then been subject to any appreciable change. First there are the three silver standard countries in the East: China, Manchukuo and Hong Kong, which after severing their link with silver adopted systems of management of their foreign exchanges; the rates quoted by the end of 1935 involved some 30 percent depreciation, in terms of gold, from the increased value to which the rise in the silver price had brought them. The rial of Iran was also affected by the changes in the price of silver; it rose in value in sympathy with the silver price until in the summer of 1935 a change was made and the exchange value was lowered to about 20 percent below the level obtaining at the beginning of the year. In Europe the new system of premia paid by the National Bank of Rumania for certain currencies caused the quotation of the leu to depreciate in the free markets by some 30 percent. New regulations regarding the premia to be paid by importers and to exporters were also issued in Hungary and seem to have somewhat affected the quotation of the pengo on foreign markets. The gold value of the Italian lira fell by 6 percent during the year. In the U. S. S. R. a decree of November 16, 1935, terminated the sale of goods in the Torgsin shops against foreign currencies and fixed, for all operations connected with foreigners' visits to the U. S. S. R., a rate of one ruble equal to three French francs (instead of the previous legal rate of one ruble to 13.13 francs). By a further decree dated February 29, 1936, the new rate was adopted for all foreign business; the State Bank was authorized to revalue its reserves of gold and foreign currencies and charged with the maintenance of this rate in all exchange operations. The exchanges of several South American countries were subject to fluctuations during 1935, the most pronounced being a further depreciation of the Bolivian and Paraguayan currencies which were adversely affected by the Chaco war. The Brazilian free milreis JUNE 1936 FEDERAL RESERVE BULLETIN and the Colombian peso also declined in value, the former by 16 percent and the latter by 10 percent, these being the extreme movements of the year. On the other hand, the quotations of the Argentine peso in the free market improved by 9 percent and the Peruvian sol by about 3 percent. In the remaining countries of the world currency changes have been unimportant, which means that an area covering more than 85 percent of world trade has for a full year enjoyed practical de facto exchange stability. The reestablishment of such a degree of order in the exchange situation has been possible only by very determined efforts and it is satisfactory to record that co-operation between the monetary authorities of the different countries has played a growing part in the execution of this policy. Means have been devised to fight against currency speculation and in their current dealings on the exchange markets the monetary authorities have been able actively to assist one another. It may be of interest to quote the testimony of two central banks given in their annual reports: the Bank oil France writes that in the course of 1935 it appeared essential to maintain closer contact with foreign centers; the bank wished to express its gratitude to the Bank for International Settlements and to the banks of issue of the principal markets for the real support rendered in aid of the defense of the franc. And the Swiss National Bank emphasizes the collaboration in the following words: "More than once in the course of the year it was found that banks of issue made efforts to limit fluctuations in the quotations by intervention on the exchange markets. In this way they have not only supported their own exchanges, but also frequently aided other countries to defend their currencies." Secrecy is still maintained about the transactions of the British Exchange Equalization Account and the variations in its assets, although the general character of the control has become fairly well known and its significance is increasingly discussed in the public press. The Account was formed in the spring of 1932 to iron out undue fluctuations in the exchange rate of sterling, and it has been supplied altogether witl £375,000,000 in sterling assets, mostly Ti easury bills, from the sale of which it obtains the sterling balances necessary for its operations. When 433 there is an inflow of funds into the British market and the Account sees fit to intervene, Treasury bills are sold and the sterling thus obtained is used to buy, say, French francs which the Account is able to convert into gold. Gold may also be bought or sold directly on the London market against sterling to exert a desired influence on the gold price. Thus through the double operation of selling Treasury bills and buying foreign exchange or gold, not only the foreign exchange position but also the volume of credit on the domestic market is affected. The sale of Treasury bills by the Account acts, in fact, as an offsetting open-market operation preventing an inflow of gold to London from increasing the cash balances of the joint stock banks with the Bank of England. Conversely, when the Account sells gold or French francs to support the exchange value of the pound, it obtains resources in sterling with which it may repurchase part of its Treasury bills outstanding, thereby operating in the opposite direction so that the cash reserves of the market are maintained in spite of an outflow of funds. An addition to the gold holdings of the Exchange Equalization Account, therefore, does not lead to an increase in the amount of bankers' balances. To provide for more notes in circulation or an increase in bankers' balances, the Bank of England may take over part of the gold, without a counteracting sale of securities, or purchase securities on its own initiative. It is interesting to analyze on the basis of the Bank of England returns the changes which have taken place since the depreciation of sterling in 1931. In the year 1932 when the policy of cheap and plentiful credit was put into effect the Bank of England increased its holdings of securities by £31,000,000 and this was the main cause of an expansion in bankers' balances by £38,000,000 (from January, 1932, to January, 1933), the note circulation remaining practically stable. During the three years from January, 1933, to January, 1936, bankers' balances hardly changed (apart from regular fluctuations of a seasonal character), but the amount of notes in circulation went up £44,000,000. This increase in the bank's liabilities was more than counterbalanced by an increase of £79,000,000 in the gold holdings, while the Banking department's holdings of securities were reduced by £15,000,000 and the fiduciary issue, and the securities behind it in the Issue de- 434 FEDERAL RESERVE BULLETIN J U N E 1936 partment, were also reduced by £15,000,000. and $123,000,000 in February. Though no The following table gives the relevant fig- announcement has been made as to the gold ures : or foreign exchange held by the Fund, it [In millions sterling] should be observed that all gold actually shipped to the United States appears in the Fiduciary Total official returns of the total gold stock. issue covsecuriBankNotes Bank of England Gold ered by se- ties in holders' in Gold shipped to the United States is pur(Averages of curities in banking circubalWednesday figures) ing lation ances chased for account of the Treasury and paid issue dedepartpartment ment for by drafts on the Reserve banks. In this way an increase takes places in member 121 January 1932___ 275 107 353 76 121 275 138 357 January 1933 .__ __ 114 banks' reserve balances. It has not been part 260 123 200 401 January 1936 _ _ 115 of the task of the Exchange Stabilization Fund to undertake open-market operations The American Gold Reserve Act, approved affecting the internal credit position of the by the President on January 31,1934, author- market, and the amount of securities held by ized the Secretary of the Treasury for two the Federal Reserve banks has not changed years (which the President might extend for since the dollar was devalued at the begina further year) to deal in gold and foreign ning of 1934. It will be seen from the followexchange and such other instruments of ing table that $3,020,000,000 have been added credit and securities as would be necessary to the gold stock from February 1934 to Janfor the purpose of stabilizing the exchange uary 1936 and that member banks' reserve value of the dollar. At the same time an Ex- balances have gone up by nearly the same change Stabilization Fund of $2,000,000,000 figure, the increase in the money in circulawas established out of the book profits on the tion corresponding approximately to the gold reserves accruing to the Government amount of silver certificates issued. from the devaluation of the dollar by 40.94 [In millions of dollars] percent. In the daily statements of the Treasury Department $1,800,000,000 are U. S. monetary gold Holding Mone- Money Member bank of U. S. reserve balances shown as a liability against the Government's stock and related items Governtary in of daily circugold gold holdings under the heading "Exchange (Average ment se- stock lation figures) curities Total Excess Stabilization Fund." The remaining $200,000,000 are entered on the general account February 1934 2,822 5,339 891 _ 2,432 7,138 5,780 3,021 (the "General Fund") of the Treasury De- January 1936 2,430 10,158 5,757 partment in such a way that transactions Changes over the -2 + 3 , 020 +418 +2, 958 +2,130 period undertaken by means of this allocation cannot be specifically traced; the dollars may thus be kept in a form readily available for mone- By a proclamation dated January 10, 1936, tary operations on the gold and exchange the President extended for a further year the markets. As, however, the United States life of the Exchange Stabilization Fund and dollar was re-linked to gold at the same time the corresponding powers of the Secretary as the Fund was instituted, there has been no of the Treasury. need for the Fund to intervene regularly In Belgium likewise an Exchange Equalizato prevent the gold value of the dollar from tion Fund was established at the time of the fluctuating. Only on certain occasions, when devaluation of the currency in April 1935. the foreign exchange markets have been in Although the belga was devalued at a rate a particularly strained condition, has the corresponding to a depreciation from the old Fund intervened and then, for example, pro- parity of 28 percent, giving a gold content vided dollars on foreign markets against gold of 0.150632 grammes fine, the gold reserve or foreign currencies. of the National Bank was provisionally reOn February 11, 1935, the Secretary of the valued on the basis of a rate of depreciation Treasury announced that the Fund had been of 25 percent. Out of the book profits thus employed in the foreign exchange markets realized 1,125,000,000 Belgian francs were since the 14th of the previous month. That set aside for the Equalization Fund. The was at a period when the dollar was excep- value of the currency was however maintionally strong, the United States receiving tained in the ordinary course of business no less than $149,000,000 in gold in January without any spBcial intervention on the part JUNE 1936 FEDERAL RESERVE BULLETIN of the Fund, the National Bank having conformed its operations immediately to the new gold parity. In his address to the shareholders on February 24, 1936, the Governor of the National Bank declared that at the gold points calculated on the new basis the bank had always been and was always ready to buy and sell either gold or gold currencies. The choice between these modalities, he said, was left by the law of October 1926 to the bank. But in both cases the effect was the same: either the bank bought or sold gold to the market, or the bank undertook itself to receive or deliver the metal by a direct transaction with the foreign central bank concerned. On April 1,1936, the devaluation of the belga by 28 percent was made definitive and the gold revalued on this basis. The Exchange Equalization Fund was wound up and its assets, as well as those realized by the new revaluation of the bank's gold holding, were taken over by the Treasury. In the summer of 1935 an Exchange Fund of the Dominion Government was instituted in Canada. It was provided with $63,000,000 out of the profits which the government obtained from the revaluation of the gold holdings at the market value of gold, i. e. circa $35 per ounce, revaluation being made although the Canadian dollar had not been officially devalued. The Fund bought Dominion bonds from the Bank of panada and also holds short-term Treasury bills and amounts on deposit at the bank. Future profits or losses on gold held by the Bank of Canada will be credited or debited to the account of the Exchange Fund. The various exchange funds which have been instituted in recent years thus differ widely both as regards their assets and the functions they perform. As far as can be seen their operations are of a kind that falls properly within the normal field of action of central banks. Such temporary arrangements may be used to provide against exceptional risks or as a method of furnishing extraordinary resources (in the form of securities, balances or gold) for intervention on the markets. Under these arrangements government departments have become connected with the formation of exchange policy in a period of great monetary disturbance; the central banks continue to be the agencies which handle the actual operations on the exchange markets. At a time when the ordinary currency 435 legislation is more or less suspended and new situations arise the political authorities become more preoccupied with monetary issues. But once the basic monetary principles shall have been fixed again and a reasonable degree of continuity assured, the temporary circumstances will have ceased which gave rise to the introduction of dual responsibility in these matters. When in January 1936 the President of the United States extended the life of the Exchange Stabilization Fund for another year, he gave as his reason for doing so that the situation which had called for the establishment of the Fund had become worse and presented conditions of instability for international commerce and exchanges. Although in the re-establishment of de facto exchange stability the last twelve months certainly compare favorably with previous years, it must be admitted that, if account be taken of the extent to which real monetary confidence has been regained, no progress but rather a setback has occurred, the past year being characterized by widespread fears of radical changes in currency values. Symptomatic of the disturbed conditions have been the extensive movements of balances from one country to another and also the wide spreads of forward rates, which register in a very sensitive way the shifting phases of monetary sentiment. Outstanding among the monetary events of 1935 have been the changes in the currency systems of the silver standard countries, China, Manchukuo and Hong Kong. The Silver Purchase Act of June 1934 declared it to be the policy of the United States to increase the proportion of silver to gold in the monetary stocks of the country with the ultimate objective of having and maintaining one-quarter of the monetary value of such stocks in silver. In pursuance of this policy the U. S. Treasury bought silver in large mounts at rising prices from August 1934 to the spring of 1935, after which the price again declined. For China the increase in the price of silver meant an appreciation of the national currency at a time when the currencies of other countries, especially those with which China maintained the closest commercial contact, were depreciated. Faced with this situation, the Chinese Government in October 1934 imposed a sliding-scale duty on silver exports to provide a margin of freedom 436 FEDERAL RESERVE BULLETIN for exchange management. After some wide initial variations, the duty was maintained within limits of 13^-14^ percent; for the following four months (November 1934-February 1935), during which the price of silver was fairly stable, the imposition of this duty kept the "official" exchange rate of the Chinese dollar about 14 percent below the silver parity, while the Shanghai exchange rate (the free rate quoted on the market) was as a rule a few points percent lower. Towards the end of February 1935 the price of silver began to rise and as the duty remained the same the "official" rate moved with the price of silver. The Shanghai exchange rate, which was of importance for current commercial and financial transactions was, however, held fairly stable through intervention by the Chinese Exchange Committee, a government institution acting in close cooperation with the banks. Exports of silver were discouraged by arrangement with the banks and the value of the market rate was in fact almost completely divorced from the price of silver. This phase lasted to October 1935, when there was a sharp decline in the exchange rate on rumors of devaluation. On November 4, 1935, the Government cut what remained of its link with silver, made the notes of the Central Bank of China, the Bank of China and Bank of Communications legal tender, and charged the Chinese Exchange Committee with the task of managing the exchange rate. Silver, whether in bars or coin, was to be handed over to the Government against payment of the nominal value in notes. A month later, on December 5, Hong Kong adopted a similar policy of a managed inconvertible currency, the rate of the Hong Kong dollar being in fact maintained fairly stable in relation to the Shanghai dollar, with a premium of about 7 percent over the latter. Already earlier in the year the silver basis had been abandoned in Manchukuo, after a period of two years, 1933 and 1934, during which the exchange rate of the yuan had been maintained stable in relation to the Chinese dollar. From the beginning of 1935 the yuan was allowed to depreciate in terms of silver and since September 1935 has been maintained at par with the Japanese yen. From 1932 to 1934, fifteen to sixteen Chinese dollars had been equal to one pound (which, incidentally, gave the Chinese dollar about the same exchange value as the Swiss JUNE 1936 franc). With the rise in the price of silver the Chinese dollar appreciated and in May 1935 about ll 1 /^ dollars sufficed to obtain £1. After the change in the system introduced in the late autumn of 1935, the value of the Chinese currency again fell and has since been kept at a rate of about I6V2 dollars to £1. If the present value of the Chinese currency is calculated as a percentage of its average value in 1929, the Chinese dollar will be found to have depreciated by 58 percent in terms of gold as compared with a depreciation of 40 percent of the British pound and the United States dollar and a depreciation of 6 5 ^ percent of the Japanese yen—the three currencies with which Chinese foreign trade is mostly concerned. At the time of writing it is not clear to what extent the new monetary arrangement adopted in China in the autumn of 1935 has really been made effective in the management of the exchange rate and in the internal organization. The problems connected with the organization of a central bank equipped to undertake the management of the currency, to accustom the people to payments in bank-notes instead of in specie, to regulate the internal credit volume and to make the reforms effective over an area inhabited by hundreds of millions of people, are indeed formidable. The first task to engage the attention of the authorities has been to build up a reserve in gold and foreign currencies to serve as a basis for exchange management. In November 1935 an arrangement was made under which the United States Government purchased 50,000,000 ounces of silver directly from China for $32,500,000, of which $10,000,000 were taken in gold by the Central Bank of China. The silver policy of the United States caused dislocation of Eastern exchanges and made China, Hong Kong and Manchukuo give up their age-long link with silver—a venture of which the end has not yet been seen. The American purchases of silver on foreign markets contributed, on the other hand, in a year of exceptionally large movements of funds, to the settlement of the accounts between the United States and the rest of the world. In 1935 net silver imports into the United States had a declared value of $336,000,000, compared with an export surplus of merchandise (other than silver and gold) amounting to $235,000,000. In the same year $1,739,000,000 net in gold JUNE 1936 were imported; in 1933 and 1934 there were periods during which the traffic of gold across the Atlantic was more intense than at any time in 1935, but never before has so large an amount moved from Europe to the United States in a single year. This oneway movement was not caused by any disequilibrium in the current account of the balance of payments but constituted transfers of funds made for a number of reasons; part represented the home-taking of funds owned by Americans (e. g. transfer of deposits from foreign to domestic banks) ; part consisted of money seeking security outside Europe; part went to participate in the rise on the New York stock exchange; and part was transmitted to increase balances with New York banks at a time of trade recovery. These movements, all of them on capital account, have dominated the exchange position and overshadowed the influence of merchandise trade and other items on the income account of the balance of payments which are more closely connected with the relative levels of costs and prices in the different countries. THE SUPPLY AND MOVEMENTS OF GOLD In 1935 the world's gold production not only attained a new high figure but the absolute increase in the year was the largest ever recorded; and although the amount released by China, India and Egypt showed a declining tendency (amounting to only half of the peak year of 1932), the combined supply of new gold from current production and the East was slightly higher than in 1934. Again a part of the new gold available was absorbed by fresh private hoarding, for the increase in the gold hoarded by private individuals and firms resident on the continent of Europe was only partially counterbalanced by reductions on other accounts as, for instance, in the amount held in London by American individuals and firms. Large gold losses were sustained by the central banks of France, Holland, Italy and Switzerland. The largest recipient of gold was the Treasury Department of the United States which received an amount not far short of double the year's total production. The gold reserves of the Bank of England and of several other central banks, particularly in the sterling area, were strengthened, and the British Exchange 437 FEDERAL RESERVE BULLETIN Equalization Account also added considerably to its holdings. (1) The supply of gold.—Estimates of the world's annual gold production are necessarily somewhat approximate, as complete data are lacking for a number of countries. But one thing is certain, the production of gold continues to rise at a pace more rapid than ever before. Since 1929, i. e. in the course of the past six years, the output of gold has risen by fully 50 percent and by no less than 150 percent if valued in currencies which have depreciated by 40 percent (as e. g. the dollar at the legal price of $35 per ounce and sterling with a gold price in London of slightly above 140/- per ounce). The following table shows the world's gold production in 1915, the record year before 1932, and each year from 1923 onwards. South Africa U.S.A.i S. Canada U. b . XV. Q T? Other countries Total for the world Year In millions of Swiss francs In thousands of ounces of fine gold 19152 1923 1924 1925 1926 1927 1928 1929 1930 1931 1932 1933 1934 1935 9,096 9,149 9,575 9,598 9,955 10,122 10,354 10, 412 10, 716 10, 878 11, 559 11,014 10,480 10, 773 4,888 2,503 2,529 2,412 2,335 2,197 2,233 2,208 2,286 2,396 2,449 2,537 2,916 3,619 918 1,233 1,525 1,736 1,754 1,853 1,891 1,928 2,102 2,694 3,044 2,949 2,965 3,280 1,546 438 594 693 895 810 899 1,085 1,434 1,701 1,990 2,667 4,263 5,650 6,146 4,463 4,827 4,592 4,430 4,464 4,206 4,040 4,184 4,702 5,224 6,347 6,715 7,356 22, 594 17, 786 19, 050 19, 031 19, 369 19,446 19, 583 19, 673 20,722 22,371 24, 266 25, 514 27,339 30, 678 2,420 1,905 2,041 2,039 2,075 2,083 2,098 2,108 2,220 2,397 2,600 2,733 2,929 3,287 1 Including the Philippines. 2 Kecord year before the years 1932-1935. Although the Union of South Africa is still by far the most important gold producing area in the world, the South African production has not kept pace with the expansion in other countries. There was even a decline in output in 1933 and again in 1934; a slight recovery in 1935 was not enough to bring the figure back to the 1932 level. But this comparatively even tenor of production does not mean that the gold mining industry in South Africa has stood still, for a marked development has in fact taken place. When the price of gold rose in terms of the South African currency, it became possible to exploit ore of lower grades, particularly large tonnages of ore which had been exposed in previous years but could not be milled profitably 438 FEDERAL RESERVE BULLETIN J U N E 1936 at the price then obtainable for the metal. With the exception of Colombia, the outIn its report for 1935 the Union Corporation put of gold seems to have been maintained of South Africa explained that the addition or increased all round during the year. The of this low grade ore to the ore reserves jus- increase certainly helped the producing countified an increase in milling capacity, but this tries in the promotion of domestic recovery involved in most cases an extension of re- and in meeting foreign liabilities; it had, duction works and in some cases the sinking however, a beneficial effect also in a more of new shafts—both of which took time. general way, for it meant a strengthening The immediate effect, therefore, of the of the purchasing power of the world availincrease in the price of gold was a fall in able especially for purchases on foreign marthe grade of ore treated and a consequent kets and thus tended to facilitate expansion fall in the production of gold on the Rand. of trade. There was a decline in 1935 in the amount But the Union Corporation estimates that by 1937 the increased capacity of the plant and of gold provided by the East from the rethe bringing into production of new mines lease of hoards. Shipments from India were will more than offset the reduction in output still important, but very little came from due to the milling of low grade ore, and that China either directly or smuggled by way thereafter production in the Union of South of Hong Kong. Even a reversal of the curAfrica should steadily expand and may pos- rent set in at the end of the year when the sibly approach the 15,000,000 ounce mark Chinese Government obtained $10,000,000 in gold from the United States Government as within the next five or six years. The marked increase in U. S. S. R. gold pro- part payment for a sale of silver. India's duction which began in 1928-29 continued exports will presumably continue to decline in 1935, thus confirming the U.S.S.R/s posi- and the country might become a purchaser tion in the second place among the gold pro- of gold if economic conditions showed a deducing countries, and recalling the fact that cided improvement. The following table in the first half of the 19th century, before shows the net gold exports from India, the discoveries in California, Russia was the China and Hong Kong in the period 1931 largest producer of gold in the world. The to 1935. [In millions of Swiss francs] production in 1935 was seven times as large as in 1927, very great efforts having been Net gold exports India China Hong Kong Total made to modernize the technical apparatus and make new discoveries. The Chief of the 1931 54 477 63 594 Soviet Trust concerned with gold production 1932 118 1,014 59 1,191 1933 74 653 100 827 announced that the gold industry was the 1934 54 _ 706 68 828 43 495 34 572 first to complete its program under the Five 1935 Year Plan. He also estimated that by 1940 4,012 324 Total 3,345 343 U. S. S. R. production would reach the present level of the Union of South Africa, i. e. beThe increase which took place in the protween 10,000,000 and 11,000,000 ounces, equal in value to about 1,200,000,000 Swiss duction of gold during 1935 was just sufficient to counterbalance the decline in the francs. Both in the United States and in Canada shipments from the East, with the result gold production has advanced well in the that Sw. frs. 3,860,000,000 of new gold, course of the year; in the latter country the rather more than in 1934, became available Government successfully carried out a pro- to meet the demand for monetary and other gram of geological research in the regions purposes. In Italy large collections of gold were where it was expected to find gold. The number of Canadian gold mining enterprises made in the late autumn of 1935, the public rose from 32 at the end of 1931 to 155 in being actuated by patriotic motives; but the 1935 and their daily operating capacity from amount obtained has not been published and 16,000 to 29,000 tons of ore. It is not so could barely have been available for monemuch large mining concerns as a number of tary uses at the end of 1935. small proprietors that have played a preIt has not been necessary in recent years, ponderating part in the expansion of pro- prior to 1935, to make allowance for indusduction. trial requirements, for these have been more JUNE 1936 FEDERAL RESERVE BULLETIN than met by the recovery of old gold from the public. In some countries, notably Great Britain, it would appear that in 1935 also the amount of old gold available has been sufficient to supply the needs of industry but it is known that, for instance in France and a number of other countries, this has not been the case. On balance there would seem to have been a net consumption of gold in industry which may be tentatively estimated at about Sw. frs. 160,000,000, representing about 5 percent of current gold production. If the net amount of gold consumed by industry be deducted from the supply of new gold from the mines and the East, there remains a net amount of approximately Sw. frs. 3,700,000,000 available for monetary purposes. Where has this gold gone? About Sw. frs. 1,700,000,000 represent a net increase in the aggregate reported gold holdings of banks of issue and governments. As to the destination of the remainder, amounting to Sw. frs. 2,000,000,000, no exact information is available, but it is possible to give at least some indication of the main direction this gold has taken, whether it has gone to swell private hoards or been absorbed into the stocks of exchange funds, or found its way into the gold holdings which several central banks maintain outside their reported reserves. As regards hoarding, the year has been characterized by a number of diverse movements. There have been certain notable reductions in the amounts held in hoards. When the Swiss market became exposed to an acute strain of foreign withdrawals in the spring of 1935, the private banks employed gold in their possession to procure liquid funds. Americans who particularly in 1933 had acquired gold in London and elsewhere sold a large part of this gold in the course of 1935 and repatriated the proceeds, actuated partly by fears of conflicts between European powers, partly by a growing belief in the stability of the dollar and by a desire to invest their capital in securities on the American stock exchanges to profit by the rising quotations. Furthermore, large international trading concerns which had begun to keep a substantial part of their cash in gold or to hold gold as a counterpart to commercial transactions as an insurance against losses, seem to have kept less actual gold and dealt more in currencies, taking advantage of the greater de facto 439 exchange stability during the past year. But against these reductions must be set the continued increase in hoarding by individuals and firms resident on the continent of Europe. On balance there was undoubtedly a net increase in the total amount of gold privately hoarded, but the increase was probably lower than in any of the previous four years. (There has, however, been an intensification of private hoarding in the first quarter of 1936, but this period cannot yet be fully reviewed.) A certain amount of gold would also appear to have been taken by central banks and kept outside their statutory gold reserves, being included for instance in the foreign exchange holdings or "miscellaneous assets." A large part of the Sw. frs. 2,000,000,000 in gold mentioned above has, however, been acquired by the special exchange funds. The gold held by these funds must of course be said to serve a monetary purpose for it is specifically employed to provide for intervention on the markets with a view to ironing out fluctuations in the exchange and is thus available for the settlement of foreign balances. The British Exchange Equalization Account in particular has added considerably to its gold holdings during the year, while the foreign liabilities of the London market have also risen though not in the same proportion. Taking all these factors into consideration it appears probable that the total monetary gold stock (including the exchange funds) increased by about 5 percent during the year, And the total gold production of the year increased by 12 percent. These are very rapid rates of increase and, as has been mentioned above, further rises in output are expected within the next few years both in South Africa and in the U.S.S.R. What effect this mounting gold production may have on prices is a question already widely discussed. There are a number of indications which all appear to point in the same direction. Firstly, the slowing down of the annual increase in population in many countries which began during the war is now affecting the active population, persons above sixteen years of age. Secondly, a policy of cheap and plentiful credits is being applied wherever possible and it is foreseen that where interest rates have not yet fallen reductions will be made as soon as market conditions permit. Thirdly, a great many governments are spending for armaments 440 FEDERAL RESERVE BULLETIN J U N E 1936 and other purposes more than they can well due to the conversions of their own holdings afford. Fourthly, the starting point for a of foreign exchange into gold; at the same rise in prices, the present price level as cal- time, the private banks of these countries culated on a gold basis, is particularly low in called for repayment outstanding credits Great Britain, the United States and other which had previously been granted abroad; countries of which the currencies have de- moreover, floating funds in search of securpreciated. In spite of the upward tendency ity were attracted to the countries whose of prices in 1935 the level when measured currencies remained on gold and were backed on a gold basis still remains well below the by particularly large monetary reserves. lowest point ever reached from 1800 to 1930. With regard to this last factor there was, Assuming that about the present price of however, a change of sentiment in the sumgold in sterling and the present gold value mer of 1933 caused by the clash of opinions of the dollar are retained, there is a likeli- at the Monetary and Economic Conference hood of a continued rise in commodity prices held in London, and in the autumn by a on the British and American markets. Such number of concurrent events, including the a rise will no doubt tend to facilitate a gen- inauguration of the gold buying policy in eral return to equilibrium in the near future the United States, budgetary difficulties in and should be welcomed from this point of France and pronounced weakness of sterling. view. But developments need watching, for Foreign funds which had been invested in a marked rise in prices is not an unmixed the markets of the gold bloc countries were blessing but brings its own dangers and withdrawn and their central banks sustained difficulties. losses of gold reserves. In 1934, on the other (2) The flow of gold between monetary hand, the Paris market saw a reversal of the centers.—Apart from the distribution of new current; the French public began to bring gold from current production and the East, home funds which had in some cases been the outstanding movement during 1935 was held abroad for years, and this repatriation the very substantial loss of gold sustained by was at times on a very large scale. The the central banks in France, Holland and Bank of France gained gold, but both the Switzerland. For France this loss contrasts Nederlandsche Bank and the Swiss National sharply with the large inflow which occurred Bank Jost on balance, although the amounts in the previous year when the Bank of were inconsiderable. But in the following France was, after the United States Treas- year, 1935, the strain on the gold bloc counury, the biggest recipient of gold. Indeed, tries became very acute, first after the dethe various changes in the direction of the valuation of the belga on April 1 and again gold current to and from the gold bloc coun- in the summer and late autumn. As far as tries in the period 1931 to 1935 clearly illus- the Swiss market was concerned, the outtrate some of the main forces which in that flow was largely the result of withdrawals period influenced the transfer of funds from by foreigners who in previous years had made investments in Swiss securities or kept one market to another. money on deposit in Swiss banks, but the foreign balances withdrawn from the French Nederlandsche Swiss National and Dutch markets were not of a magnitude Bank of France ' Bank Bank to explain the outward movement of funds; Gold reserves in fact in both these cases the main moveYearly Yearly Yearly (in millions) Total change Total change Total change ment was the result of an export of home capital by nationals. Throughout the period French francs Guilders Swiss francs since 1930 the gold movements to and from France, Holland and Switzerland have been E n d of: almost entirely due to capital movements 1930 53, 578 426 713 1931 68, 863 +15, 285 887 +461 2,347 + 1 , 634 and not to any considerable surplus or deficit 1932 83,017 +14,154 1,033 2,471 +146 + 124 1933 77, 098 - 5,919 922 1,998 -111 473 in the current account of the balances of 1934 82,124 + 5,026 842 - 80 1,910 88 1935 66, 296 -15,828 643 1,389 -199 521 payments. Poland, which until April 1936 remained In 1931 and 1932 the central banks of one of the few countries whose currency was France, Holland and Switzerland gained maintained at the gold parity without legal gold on a very large scale. This was partly exchange restrictions, also felt the strain in JUNE 1936 FEDERAL RESERVE BULLETIN 1935 as is evidenced by the net export of gold. The Annual Report of the Bank Polski for 1935 explains that the reduction in the gold reserves from 503,000,000 to 444,000,000 zlotys in the course of the year was partly due to hoarding of gold coins internally in the early summer and again in the autumn, and partly to a shrinkage in the export surplus (from Zl. 177,000,000 in 1934 to 66,000,000 in 1935), which was felt the more as a portion of the amounts due in payment of exports was immobilized in countries with exchange restrictions. The gold reserves of the Banca d'ltalia fell from 5,811,000,000 lire at the end of 1934 to 3,027,000,000 lire at the end of 1935, the bank having to provide foreign exchange for payments largely connected with the military campaign in Africa. It should be explained that the gold collected from the public in the late autumn is not incorporated in the holdings of the Banca d'ltalia but is maintained in a separate fund under the ownership of the Minister of Finance. The gold reserves of the Reichsbank throughout the year remained at the low level of less than RM 100,000,000 which had been reached in the course of 1934. After a slight improvement in the summer of 1935, the reserves again dropped in the autumn, the net change over the year being insignificant. The Reichsbank explains in its Annual Report that in the circumstances no alleviation in exchange control could be made, but that it was necessary strictly to adhere to the principles of the "New Plan," according to which allocations of foreign exchange would be made only to the extent that exchange became available. By strict control the total imports into Germany were reduced from RM 4,451,000,000 in 1934 to 4,159,000,000 in 1935 and, as at the same time exports rose from RM 4,167,000,000 to 4,270,000,000, the import surplus of RM 284,000,000 in 1934 was converted into an export surplus of RM 111,000,000 in 1935. These figures cannot of course be related directly to the gold and devised position of the country as other items in the balance of payments must be taken into account and no estimate for 1935 has yet been published. It is interesting, however, to analyse the foreign trade figures and information is available to show that in the year 1935 60 percent of German exports passed through clearing accounts. Any export surplus in 441 favor of Germany on these clearing accounts is not in most cases freely available. Further, 20 percent of German exports was offset through private clearings or by socalled ASKI-transactions. Only 20 percent of exports were made for "free devisen" of which one-half was earmarked against standstill and other interest payments, so that only 10 percent remained to meet import surpluses from countries with which no clearing existed and to cover amongst other foreign payments the expenses of German official representatives abroad, for example. Now, according to German customs statistics gold imports in 1935 exceeded exports by about RM 100,000,000, while the Reichsbank's gold holding abroad remained practically unchanged. A certain part of this import of gold may have been on foreign account but that part on German account, in so far as it was not used for industrial purposes, is understood to be kept as a special reserve against certain foreign commitments already incurred, particularly those of the "Konversionskasse." Among other central banks which registered a decline in their gold reserves, Nationalbanken i Kj^benhavn utilized 15,000,000 kroner for the repayment of an outstanding foreign credit and the Bank of Java drew on its reserves to meet foreign obligations ; but an improvement set in at the end of the year under the influence of the recovery in the prices of overseas products from which the Dutch East Indies naturally benefited. The continent of Europe has lagged behind the rest of the world in the recovery of business and particularly in the revival of foreign trade, this retardation being reflected also in the gold statistics. While the central banks in several countries on the continent of Europe suffered a loss of reserves, not one of them, apart from Soviet Russia, was able to add appreciably to its gold stock. Of particular interest are the developments in Belgium. In the first quarter of the year the National Bank of Belgium drew on its gold reserves to provide the exchange required to meet a strong outflow of funds. After the devaluation on April 1, 1935, there was an almost immediate return movement of amounts previously expatriated and an influx of other funds of a more temporary nature. The maximum gold holding was reached in June, since when a slight decline 442 FEDERAL RESERVE BULLETIN has occurred, presumably connected with the gradual withdrawal of some foreign-owned balances. At the end of the year the gold reserve, as shown in the balance sheet of the National Bank was only slightly above what it had been at the end of 1934. As to such moderate increases in reserves as have occurred, it should be mentioned that the National Bank of Rumania has acquired some gold from domestic production, and the National Bank of Yugoslavia has also somewhat strengthened its gold holding. Besides the United States and Great Britain, mentioned below, a number of other countries have appreciably increased their gold holdings: among them are Norway and Sweden, and outside Europe, Japan and South Africa. In 1935 Japan had an export surplus, not large in itself (only 27,000,000 yen) but the first the country has had since the war. As regards South Africa, it should be recalled that in the course of 1934 and the first quarter of 1935 the Reserve Bank had increased its gold stock considerably and reduced its holdings of British Treasury bills. In the remaining three quarters of 1935 no further amounts were added to the gold stocks; on the contrary, a certain reduction took place, but on the year the gold reserve was higher by £3,500,000. The gold reserves of the United States increased during every month in 1935, the total increase over the year being $1,887,000,000 or Sw. frs. 5,780,000,000. The magnitude of this figure in relation to current production, recoveries from the East and the aggregate of net gold losses of the Bank of France, the Nederlandsche Bank and the Swiss National Bank, is shown for 1935 by the following comparisons: Millions of Swiss francs Increase of U. S. gold holdings New gold: Current gold production.... 3,290 Gold recovered from the East 570 Aggregate of net gold losses of the Bank of France, the Nederlandsche Bank and the Swiss National Bank. . 5,780 3,860 4,160 The United States thus absorbed in 1935 an amount equal to the whole supply of new gold from current production and the East plus nearly half of the aggregate net gold losses of the Bank of France, the Nederlandsche Bank and the Swiss National Bank. Of the increase in the United States gold reserves $148,000,000 were obtained from JUNE 1936 domestic production, return of coins and similar sources, while $1,739,000,000 came from net gold imports. In 1935 the United States also imported $336,000,000 of silver and the net imports of gold and silver together thus amounted to $2,075,000,000. This extraordinarily large import of precious metals does not reflect any excess amount due to the United States on the current account of the balance of payments; it is especially significant that in recent years imports of merchandise have shown a steady increase : [In millions of dollars] U. S. A. foreign commerce Imports of merchandise Exports of merchandise Export surplus Net imports (+) or exports (—) of gold Net imports of silver 1932 1933 1934 1,323 1,611 1,450 1,675 1,655 2,133 2,04 2,282 288 225 478 235 -173 •4-1,134 4-1, 739 4- 336 -446 + 6 + 41 + 86 1935 Recent estimates of the balance of payments tend to show that the remaining export surplus and the income receipts from foreign investments are more than counterbalanced by tourist expenditure abroad, immigrants' remittances and freight payments to foreign vessels. The import of gold and silver in 1935 appears to result solely from movements on capital account. These movements, to which reference has been made in other parts of this report, include the repatriation of American funds from Germany (e. g. under Standstill agreements) and from London and Paris; the increase of European balances in American banks; and the transfer of large amounts for investment in the New York stock market. In Great Britain the gold reserves of the Bank of England, which are valued at the old parity, increased during the year by £7,800,000, which at the present value of sterling corresponds to about £13,000,000. It can be concluded, however, that in addition the Exchange Equalization Account increased its gold holdings by an appreciable amount. Net imports of gold into Great Britain in 1935 had a value of £70,000,000 at the current gold price. The Board of Trade in its carefully worded comment on this figure explained that "as in the two previous years the net inward movement of gold during 1935 was no doubt again due JUNE 1936 FEDERAL RESERVE BULLETIN in part to gold being sent to this country and held here on foreign account though perhaps not to the same extent as in 1933 and 1934." An increasing proportion of the net imports has thus been available for purchases on British account, i. e. for the Bank of England and the Exchange Equalization Account. It is of interest to relate this conclusion to the world figure, already given above, of the amount of gold which "disappeared" in 1935. The total supply of gold from current production and the East was Sw. frs. 3,860,000,000, and if industrial requirements of about Sw. frs. 160,000,000 be deducted there remain Sw. frs. 3,700,000,000. Now the reported reserves of banks of issue and governments increased by Sw. frs. 1,700,000,000, leaving an amount of Sw. frs. 2,000,000,000 or about £130,000,000 sterling to be accounted for in other ways. Part of this gold, as has been explained above, was absorbed by fresh private hoarding, and part went into the holdings of central banks outside reported reserves, but a large amount must have been taken by government exchange funds and especially the British Exchange Equalization Account. The increase in the reserves of the British monetary authorities are the net result of a number of diverse movements. There was, on the one hand, a surplus on the current account of the balance of payments estimated by the Board of Trade at £37,000,000, and a further surplus of something like the same amount derived from the repayments on foreign loans over and above new foreign issues; against this must be set, however, an amount not known exactly but evidently fairly substantial, representing private investments abroad, particularly in American securities. In relation to the United States there was further a transfer of balances to the New York market; but this decrease in foreign liabilities was more than counterbalanced by an increase in the amount of funds held in London by countries of the sterling area and the continent of Europe. Although a certain proportion of the continental funds went to reduce sterling liabilities rather than accumulate sterling assets, there would seem to have been on balance a net increase in the foreign liabilities of the London market, but this increase would appear to have been well within the additions to the gold stocks of the Bank of England and the Exchange Equalization Account. 443 Over the year the foreign liabilities thus rose to a certain extent in London and considerably in New York, but the increases in the gold reserves of these two centers were more than sufficient to take care of the new foreign commitments. Movements on capital account continue to overshadow the international transactions arising out of merchandise trade, interest payments and similar items. In 1935 only a minor part of the capital movements was caused by transfers of funds already held abroad; the most important movement represented an expatriation of home capital: British, French, Dutch, Swiss and other European investors bought American securities and further transfers were also made from the continent to London. In the course of the first quarter of 1936 the active buying of securities in New York for European account diminished, but the strain on the French market caused by the outflow of funds continued unabated. Obviously movements of capital funds are difficult to foresee as they depend not only on financial and economic considerations but are largely influenced by the psychological disposition of the owners of the capital. An important point to retain is that only in the case of a few countries has disequilibrium on the current account of the balance of payments given rise to extraordinary shipments of gold. Should the movement of capital funds slow down, the effect would be felt as a distinct relief from the tension still affecting the gold position. Indeed, the current supply of gold from the mines is already so large and holds out such a prospect of further increases, that within a short time the world may be faced, not with scarcity but with an abundance of gold greater than has ever before been experienced. The amount of gold "earmarked" for the account of central banks does not appear in the balance sheet of the Bank for International Settlements. At March 31, 1936, it totalled the equivalent of 268,000,000 Swiss francs; at March 31, 1935, the corresponding figure was 272,000,000. But here again a comparison between the two figures gives no indication of the volume of the transactions registered during the past financial year. In point of fact the amount of gold held in this form during the year was, on an average, 30 percent greater than that held during the preceding year; at a certain moment the figure for deposits of this nature 444 FEDERAL RESERVE BULLETIN even exceeded 300,000,000 Swiss francs, this being the highest figure ever recorded under this heading. These deposits, like the bank's gold holdings for its own account, are distributed over five or six different markets, and this often makes it possible to dispense with the actual shipment of gold when the depositor central banks wish to move their deposits from one market to another. In such circumstances physical shipment can frequently be avoided when we have received an order from another central bank for a shipment in the opposite direction, providing an offset for the. amount in question. If no such order has been received and we cannot immediately procure one, the shipment of gold can be avoided wholly or in part by the use of the metallic reserves of the Bank itself, which then effects the offset for its own account. In this connection it may be said that our operations in gold have developed in a more or less logical manner. The progressive abandonment of the application of the gold exchange standard and the parallel reduction of the foreign exchange reserves of central banks have led to the practice of voluntary or automatic intervention by the latter, in the form of purchases, sales and transfers of gold on the various markets, for the purpose of defending their exchanges or regulating their money markets. The Bank for International Settlements was formerly the center in which a certain volume of the foreign exchange reserves in question was administered and employed for intervention purposes. It is therefore only natural that it should now be called upon to effect in gold operations which the central banks previously entrusted to it in foreign exchange. The large number of orders received for operations in gold has made it easier to find the counter-parties required by our correspondents. The greater advantages which we have thus been able to offer them have led to an increasing recourse to our services and this has enabled us, in our turn, to extend our facilities in a more regular manner and on more favorable terms. JUNE 1936 tions as well as by depreciation of currencies in which the debts were due was shown by the estimates made at the Bank for International Settlements and published in earlier reports: the aggregate of international indebtedness with maturity of not more than twelve months of European countries and the United States was given at the equivalent of 70,000,000,000 Swiss francs at the end of 1930 and was estimated to have been reduced to 32,000,000,000 Swiss francs in 1933 and around 29,000,000,000 to 30,000,000,000 Swiss francs at the end of 1934. In the course of 1935 European debtor countries continued to liquidate outstanding liabilities and substantial amounts which had been held on deposit, particularly in English and French banks, were withdrawn by Americans but, on the other hand, foreign deposits in American banks rose considerably while the total of foreign deposits in London also increased somewhat. Fuller information has been made available to the Bank for International Settlements in 1935 than in earlier years, but comparable figures show that on balance there would appear to have been little change in the aggregate volume of short-term foreign debts outstanding in the world, although the frozen position was, perhaps, somewhat reduced. It must be remembered that an estimate made at a particular moment of a total in fact continually changing in size and composition is in the nature of a snapshot which gives little idea of the movement or rate of turnover, important as a barometer of current business activity and an essential factor from the monetary point of view. (It appears that only in Finland are turnover statistics available of the banks' accounts with foreign correspondents and of foreign bills.) Further, it is important to bear in mind that the above estimates cover commitments of a very heterogeneous character, including the following classes of funds: i) Merchandise credits represented most typically by bills of exchange and reimbursement credits. In normal times this would constitute the bulk of short-term international financing, fluctuating in volume according to the trend of world affairs, ii) Contractual INTERNATIONAL SHORT-TERM INDEBTEDNESS credits generally represented by some document. These are short-term "credits" in the The enormous reduction in the gold value strict sense of the word, being as a rule of international short-term indebtedness ef- granted for a certain period as between fected through repayments and consolida- banks or other institutions; the turnover JUNE 1936 FEDERAL RESERVE BULLETIN of this class is now low since the imposition of standstill agreements and foreign exchange restrictions, the total being subject generally to a slow contraction as very little new lending of this nature is undertaken, iii) Liabilities resulting from a deposit or similar transactions and often represented by a mere book entry. They include all those deposits and short-term employments made for one reason or another largely in the important money markets which as a counterpart become debtors at short term. This class differs from that mentioned under (ii) largely on account of the initiative in the creation of the debt and raises the technical differences between a credit and a deposit. This latter class has in recent years been subject to rapid changes of volume and turnover. In addition to the transfers of funds falling within these three categories, large movements of capital may occur in connection with transactions in long-term securities. Foreign holdings of bonds and shares represent for the market concerned potentially a short-term liability about which it is difficult to obtain adequate information. The outstanding feature of international capital movements since January 1934, when the new gold value of the dollar was fixed, has been a persistent flow of funds to the United States: American capital has been repatriated (both funds lent to Europe in the post-war decade and funds transferred abroad in 1933 while uncertainty about the dollar prevailed) and more recently European funds have been sent to the United States partly for employment on Wall Street and partly to build up new balances. Although a large turnover in the short-term and foreign exchange markets has been evident and the consequent flow of gold to the United States has been a striking manifestation of this phenomenon, the movement has been only partly visible in the statistics of short-term funds covering the various national markets. The explanation is largely that funds which have moved through the short-term and foreign exchange markets have been employed to a great extent in long-term investments at each end of the chain. Nevertheless, it is of interest to follow this movement in so far as it is revealed in short-term statistics, especially as weekly statistics are now published covering over 90 percent of the foreign deposits with all member banks of the 445 Federal Reserve System. As explained in the Federal Reserve Bulletin: "Statistics collected have been revised from time to time in response to new needs or changes in economic conditions and all new information of substantial accuracy and of public interest has been made available to the public." Using the published statistics of the member banks and figures of foreign bank deposits and contingent liabilities on bills purchased for foreign correspondents of the Federal Reserve banks, figures have been compiled to give a general idea of the movements of short-term foreign funds in the American market since the end of 1928; the volume thus obtained varies from 30 to 50 percent of the total foreign short-term liabilities of the United States according to the yearly data of the Department of Commerce. The importance of the amounts previously held by foreign central banks on the New York market may be indicated by the fact that in the middle of 1929 the acceptances purchased by the Federal Reserve banks for foreign correspondents rose above 40 percent of the total acceptances outstanding in the market. This position has in recent years been almost completely liquidated, central banks having either converted their dollar holdings into gold or used them in the defense of their currencies. The reduction in the short-term foreign assets which were built up in the post-war decade continued until the end of 1932; after an interruption in the next two years the trend was resumed in 1935. On the liabilities side the withdrawal of money held in New York by foreign individuals and institutions went on at a rapid pace up to 1933; in the following year a return movement began and during the year 1935 foreign funds in American banks doubled in volume and reached the highest level since the spring of 1932. This increase of foreign funds in New York appears to consist not only of resources of European banks and private concerns but also to include a certain amount of flight capital. It is difficult to form an opinion of the volume of European funds which has gone into the New York stock exchange, but there can be little doubt that this has been considerable, especially during the past year. 446 FEDERAL RESERVE BULLETIN London has in some respects been exposed to the same forces as the American market; for example, central banks on the continent of Europe generally disposed after 1931 of the sterling assets which they previously held. But the position of the London market as the financial center of a number of countries within and outside the British Commonwealth of Nations made it subject to special influences which showed their effect both before and after the 1931 crisis. The reduction in central sterling resources from over £100,000,000 at the end of 1928 to under £40,000,000 in the autumn of 1931 gives one reason for the strain on sterling experienced during the years prior to the suspension of the gold standard and shows how London, as the financial center of a group of non-industrial countries, stands to feel directly the strain of a decline in the prices of primary products in countries separated from it by thousands of miles. Yet this picture does not tell the whole story, for amongst other factors in the three years up to the middle of 1931 Australia borrowed almost £40,000,000 at short-term in London, while India raised nearly £30,000,000 of new money in the same year. Since 1931 there has been a rapid accumulation of central sterling resources to a level higher than at the peak of 1928. It should be noted, however, that commercial banks in general tend to hold less surplus sterling than in earlier years and to sell balances to the central bank as they arise. Further, special factors mustbe taken into account when judging the position of each of these countries: India has been able to pay off part of its maturing London debt out of accumulating balances; South Africa has similarly repaid the whole of its so-called war debt and has recently replaced part of its sterling holding, which had swollen to abnormal proportions early in 1934, by gold; Australian London funds were alimented by sales of gold but, on the other hand, the whole of the short-term debt has been repurchased by the Commonwealth Bank and is now held in addition to sterling (if gold and the sterling holdings of the trading banks be also taken into account, the international reserves of Australia are at present only half of the level of 19281929). Similar movements of funds are shown by other countries of the sterling area. For example, the Sveriges Riksbank, besides in- JUNE 1936 creasing its gold holding, has accumulated some £30,000,000 since the spring of 1932, while the Reserve Bank and trading banks of New Zealand held at the end of 1935 over £30,000,000 of sterling resources (whereas in 1931 the country was borrowing in London to cover maturing liabilities). Seen from the London point of view, these accumulations represent an increase in the commitments of the market towards sterling area countries. At the present time shortterm resources of the sterling area in London constitute a great proportion of the shortterm foreign liabilities of that market. During the year 1935 the flight of European capital went largely through London en route for New York, sterling being a sort of conduit pipe through which these funds passed; but part of the capital remained in London, continental countries increased their bank balances, bought securities on the stock exchange and repaid sterling liabilities e. g. on commercial account. On the other hand, American funds invested in London and moneys previously held on deposit and in gold moved towards the United States. As a whole, outside the sterling area for which London is the natural center, the foreign short-term assets held in the market did not greatly increase in 1935. But during the first quarter of 1936 there was a large flow of continental funds to England, only a minor stream passing on to the United States; the foreign short-term liabilities of the London market thus rose rather steeply but the increase was fully covered by an addition of corresponding assets in gold or foreign claims. The position of the northern European members of the sterling area developed favorably during 1935. Thanks to a succession of years with an active merchandise balance (which closely determines the balance of payments), Finland was able to make substantial repayments of her foreign liabilities, both at short and long term, and by the end of 1933 became for the first time a creditor on net foreign short-term account. During 1935, however, foreign short-term assets were reduced by 250,000,000 Finnish marks in spite of an export surplus of 860,000,000 Finnish marks; the explanation lies in the fact that besides a gold purchase of some 300,000,000 Finnish marks made by the central bank, 870,000,000 Finnish marks of long-term bonds issued abroad were repat- JUNE 1936 riated or redeemed. The current account of the Swedish balance of payments has yielded a surplus since 1932, and in addition fairly substantial amounts of Swedish foreign investments have been liquidated and the proceeds brought home. In 1935 the Sveriges Riksbank purchased gold for about Kr. 100,000,000, but nevertheless its net claims abroad rose by Kr. 76,000,000 to a total of Kr. 629,000,000 (after touching Kr. 657,000,000 in September—the highest figure ever reached), while the net position of the Swedish private banks remained practically unchanged according to the official statistics. In Norway also the net foreign position of the joint stock banks shows little change on the year, but the foreign exchange holding of the Norges Bank has risen from Kr. 57,000,000 to Kr. 112,000,000, the portion "provisionally placed in gold" increasing from Kr. 16,000,000 to Kr. 66,000,000. For Denmark the year has been more troubled. In the autumn a certain farming organization called a "valuta" strike, which by increasing the credit to English importers from the usual 10 days to 3 months would have deprived the Nationalbank of the normal influx of foreign exchange from exports for some 2V-> months and thus, it was hoped, force a further depreciation of the currency. But the Nationalbank took precautions, inter alia raising the discount rate from 2*4 to 3 ^ percent, and the strike in fact broke down almost before it had started. Confidence in the stability of the krone was strengthened and a simultaneous recovery in the price of Danish export products helped to create a further improvement. In August the Nationalbank sold Kr. 15,000,000 gold, usmg the proceeds to repay a Swiss credit of Sw. frs. 20,000,000 which had been outstanding since 1932. The countries of the gold bloc suffered a succession of extraordinary movements of funds during the year. The efflux of capital from Belgium reached its climax in March 1935 without, however, seriously affecting the position of the National Bank. After devaluation of the currency on April 1 (due to economic and political considerations of a general nature), a reverse movement of both national and foreign capital attained considerable proportions and contributed to the strengthening of the position of the commercial banks. This inward movement continued until June, after which some reflux occurred, insufficient, however, to reduce the 447 FEDERAL RESERVE BULLETIN central bank's ratio. At the end of the year net foreign short-term liabilities of the banks were about 1,900,000,000 Belgian francs (compared with the National Bank's gold holding of over 17,000,000,000.) In April and May 1935 the storm shifted over Switzerland, Holland and France and returned at intervals throughout the year, particularly in July, September (Holland) and November (France). The incidents may be illustrated by the following table which gives the gold losses ( —) or gains ( + ) of the central banks each quarter from January 1935 to March 1936: [In millions of Swiss francs] Quarterly movements of central gold reserves France Holland Switzerland Belgium Italy Total Total __ .__ 1935 First Second 1936 Third Fourth First +104 -130 -197 -210 -2, + 359 253 517 313 +190 -254 +177 - 84 -1,155 + 224 + 16 -476 +146 +120 -125 -433 + 4 -2,816 64 + 29 -365 - -335 -429 - 2 , 880 -336 -1,248 + 1 914 334 The movements were characterized by their concentrated intensity: in April 1935 the Swiss National Bank lost Sw. frs. 350,000,000, one-fifth of its gold reserve; in May the Bank of France lost Frs. 9,000,000,000 of its gold holdings and again nearly 6,000,000,000 in November; the Nederlandsche Bank lost one-fifth of its gold reserve in a single week in July and the cover ratio fell 13 points. The Governor of the Bank of France at the Annual Meeting of the Bank in January 1936 said: "The wide spread of the forward rate discloses the existence of speculative positions which have not yet been definitely liquidated in spite of repeated setbacks. It would be vain, however, to attribute to this single cause the adverse tendencies which have been manifest on the exchange market. In fact, they result principally from a movement of export of capital which, particularly in November, was encouraged by a recovery of security values in the United States. Foreign deposits on the Paris market play too insignificant a role for their withdrawal sufficiently to explain these transfers of funds. In reality, more than ever, the fate of the franc is in the hands of the French." During the past year the exodus of capital has gone 448 FEDERAL RESERVE BULLETIN further than the mere liquidation of foreign assets in the principal money markets and has affected a deeper layer of funds. From Switzerland the outflow was mainly of moneys which for years had been invested in the country by foreigners; while the capital which went abroad from France and Holland was on the whole the property of nationals. The contraction of the home market due to the export of capital and not the insufficiency of gold reserves which in fact remained adequate, caused the French Treasury in February 1936 to raise a credit of £40,000,000 in London to cover expenditure in francs. The credit was granted at 3 percent, a rate appreciably below that at which the operation could have been concluded in Paris, and appeal was naturally made to the cheapest market. The gold losses of the Banca d'ltalia, which, except for a balance sheet on December 31, 1935, has published no return since October 20, were heavy in the second half of 1935 on account of the repayment of outstanding commercial and other credits and the purchase of further imports for cash. In 1935 the gold value of the short-term indebtedness of Germany was not, as in previous years, reduced by any further depreciation of sterling and the dollar. The liquidation of the standstill credits, which in the summer of 1931 were the equivalent of some RM 6,300,000,000, has continued through the operation of registered marks. Although total English credit lines have been reduced the amount utilized has actually increased over the year; Swiss and Dutch availed credits have been reduced by about one-third and French by over a half; American withdrawals were much more moderate than in recent years. Since March 1, 1933, when the registered mark system was inaugurated RM 1,416,000,000 has been withdrawn in this way, of which over 60 percent was for tourist purposes in Germany. The foreign debts of Hungary have decreased considerably since 1931, owing partly to the depreciation of certain foreign currencies and partly to capital repayments. The short-term debts subject to a Standstill agreement between foreign creditors and their banking debtors have been reduced by more than one-half in the last four years. Repayments on short-term debts have been made by the Hungarian debtors in pengo. Pengo amounts paid on Standstill debts could JUNE 1936 be converted into foreign exchange by means of additional exports under the Pengo Transfer Agreement and by way of sale for the purpose of tourist traffic, emigrant remittances and other similar transactions. In relation to certain countries Hungary became a creditor on clearing account and took advantage of this position to offset previous liabilities due to the same countries. Thus a part repayment on the $5,000,000 credit granted by the Reichsbank in 1931 was made during the year and at the beginning of 1936 the settlement of a previous credit was arranged with the Banca d'ltalia. The lapsing of the Austrian Standstill agreement was recorded in last year's Annual Report. Early in 1936 a final settlement of the Credit Anstalt debts, which were provided for by an agreement outside the Standstill, was concluded whereby the creditors agreed to receive in full settlement of their "live claims" of 215,000,000 schillings an immediate cash payment of 60,000,000 schillings and a further 40,000,000 schillings spread in instalments over 20 years. Of the 60,000,000 schillings required in foreign exchange, the National Bank provided 38,800,000 schillings from its reserve, 12,000,000 schillings were received from the Credit Anstalt and the remaining 9,200,000 schillings were covered by special settlements with individual live claim creditors. The immediate payment of so large an instalment in foreign exchange was possible owing to the favorable development of the position of the National Bank whose exchange holding had increased from 35,000,000 schillings to 112,000,000 schillings during 1935. U.S.S.R. short-term indebtedness which reached considerable proportions in 1930 became almost extinct during 1935 with the repayment of short-term German credits. In April 1935 a new trade agreement was signed with Germany, but the RM 200,000,000 5-year credit granted in this connection was only partly utilized at the end of the year. In 1932, 46 percent of Soviet imDorts came from Germany but in 1935 only 9 percent.; Soviet debt repayments to Germany are estimated at only RM 60,000,000 for 1936 against RM 220,000,000 the previous year. The repayment of outstanding foreign credits has been greatly facilitated by the growing gold production. The U.S.S.R. obtained long or middle-term credits from certain countries (Czechoslovakia, Italy, JUNE 1936 FEDERAL RESERVE BULLETIN etc.) during the year but the first place for both imports and exports is now taken by Great Britain. The accumulation of trade debts has caused difficulties in certain countries, notably Rumania and Spain, arrears amounting in the latter case t;o some six months' imports, a position which led to the arrangement of a clearing with England where Spain has a large active balance. When commercial debts remain unpaid for a protracted period the exporter is deprived of his working capital and exposed to the risk of currency fluctuations, a situation which has serious repercussions on the volume of international trade. In an increasing number of countries arrangements have been made through a central institution for frozen exporters' assets to be mobilized; in Yugoslavia and Hungary the provision of funds for this purpose has been a factor in the increase of the note circulation. The movements of short-term funds from one market to another at the time of acute crisis in 1931 were chiefly caused by withdrawals of sums which at an earlier date had been placed on deposit with foreign banks or granted in the form of credits to foreign banks or other institutions. In the past year there also occurred withdrawals of a similar character, Americans in particular repatriating funds that they held on deposit abroad; but in 1935 the bulk of the transfers were of a different character. As a rule no credit transactions were involved, the nature of the movement being a transfer of private investments. Attention must also be drawn to the effect which may be caused by a re-arrangement of the payment of commitments arising out of the import and export trade. In a number of cases when there was an apparent outflow of balances from a market, it was found that a considerable part of the pressure resulted from commercial firms covering their foreign commitments in advance or allowing maturing claims in foreign currencies to remain abroad for the time being. There may be a certain semi-speculative element involved in changes of this kind, but to a large extent it is natural for the commercial community to be prompted by the legitimate desire to avoid losses which might arise in the event of a sudden change in monetary values. Speculation, in the strict sense of the word, may with borrowed money intensify a movement at any given time, but it can only be 449 successful in so far as it creates a psychological atmosphere favorable for more important factors to come into play. After a series of discussions at Basel in the spring of 1935 between the governors who take part in the Board meetings of the Bank for International Settlements, central banks of the leading markets in Europe made arrangements with their private banks and other credit institutions with a view to checking the granting of credits for the purpose of speculation in gold or currencies. Particular care was taken that lending in respect of dealings in forward exchange should be restricted as far as possible to commercial or other nonspeculative transactions. The restrictions agreed upon have to a large extent been effective in limiting the amount of speculation based on borrowed funds. This intervention by the central banks has been important not only in so far as it checked speculation of an undesirable character but generally as a measure designed to guard against the dangers arising from sudden movements of funds from one market to another. In view of the importance of the flow of nervous money from a monetary point of view, it may be of interest to set out briefly the measures which may serve as safeguards against a dangerous development: (I) Firstly, central banks already keep a stricter watch on borrowing abroad than has been usual in earlier periods. More complete statistics are collected and they are analyzed with increasing knowledge of the problems involved. Typical of the views which are beginning to be held was the statement by Dr. Kienbock, President of the Austrian National Bank (quoted in last year's report) to the effect that Austria would not accept short-term foreign credits except those arising naturally from the import trade. Observance of that rule would exclude a class of credits which might easily render a country's situation highly illiquid. (II) Secondly, central banks in creditor countries are also giving these questions increased attention, collecting more complete information and generally watching the position. The arrangements made by a number of cen- 450 FEDERAL RESERVE BULLETIN tral banks in the course of 1935 with credit institutions in their markets with a view to withholding advances for speculation in currencies and gold are a sign of the active interest taken in this matter. (III) To be able to meet the strain of an outward movement of funds central banks must have at their disposal adequate monetary reserves. The revaluation of the gold holdings in countries with depreciated currencies will automatically increase the gold backing of their markets in relation to actual and potential foreign commitments. Furthermore, the increase in the current gold production (in weight now 50 percent, higher than in 1929) provides a larger supply from which the reserves of central banks may be replenished. At the Monetary and Economic Conference held in London in 1933 a resolution was adopted recommending that increased elasticity should be given to central banks' legal cover provisions by the reduction, for instance, of the percentage gold cover to a minimum ratio of not more than 25 percent. It was explained that such a change should not be taken as an excuse for building up a large superstructure of notes and credits, but should be made in order to increase the free reserves of central banks and thereby to strengthen their position. In conformity with this solution, the laws and statutes of several central banks have been amended in such a way as to render the monetary reserves more effective for the purpose of meeting foreign payments. In an emergency the reserves of a central bank may also be strengthened by the granting of credits from other central banks. (IV) Any undesirable influence which an outflow or inflow of migrating funds might have on the domestic credit position may be at least reduced by the credit policy which the central bank in the exposed market finds opportune to pursue. In planning their policy the central banks have to distinguish between gold movements which reflect a lack of equilibrium in JUNE 1936 the current balance of payments and which should be allowed to have their effect on the credit volume and other movements which are simply the result of a temporary outflow or inflow of funds. (V) Finally, it may be pointed out that the danger in 1931 arose not only from an exaggerated use of short-term credits for purposes properly requiring long-term financing but also from the fact that short-term funds were held abroad in excessive amounts and not always in their natural centers. It is evident, for example, that a large volume of sterling area funds in London, although subject to extensive movements over a number of years, is much less subject to sudden and violent waves thau a similar volume of European funds. The position in 1930 was due largely to the overgrown foreign exchange standard which is unlikely in the future to assume the same proportions. The extensive movements of funds in recent years have been caused largely by fears of abrupt changes in currency values. If a stable monetary system were re-established and general confidence restored, it is certain that much less anxiety need be felt with regard to rapidly-moving short-term balances. But even if monetary confidence were restored, say, to the extent found in the years before 1914, the evolution of shortterm international indebtedness would still need watching, for important movements may occur other than those caused by fear of depreciation, affecting the liquidity of the money markets and occasionally taxing the reserves of the central banks. In a period of active international lending there may be an interval between the time when a loan is issued and when the funds are drawn upon, and during this interval the volume of short-term funds in the lending market may be swollen beyond normal proportions. Furthermore, a depression affecting a large number of countries may lead to a protracted strain on the monetary center in which these countries keep their monetary reserves. And the large movement of funds to the United States for investment in call loans or securities on the New York stock exchange which JUNE 1936 FEDERAL RESERVE BULLETIN occurred in 1928-1929 is another example of persistent pressure on the exchange situation at a time when there was jio monetary unrest. It is thus essential that central banks should continue to collect information regarding international assets and liabilities and that the position as it develops should be studied closely in each national market and also from an international point of view. THE TREND OF SHORT AND LONG-TERM INTEREST RATES The downward pressure on short and longterm interest rates which began in the spring of 1932 after the acute phase of the liquidity crisis of the previous summer and autumn had passed, still characterized developments in 1935. Outside Europe the tendency towards cheaper short-term money was continued almost without check. In Europe also the improvement continued in so far as a number of the higher rates were reduced, several central banks quoted the lowest rates recorded since the war or for all time, and some of the low rates have now been in effect for record long periods. But the rates of six European central banks were higher at the end of the year than at the beginning, the banks in each case taking steps to defend their currencies at a time when they were losing gold. As the influence of low shortterm money rates has penetrated into the long-term markets a number of important conversions of long-term securities, particularly the obligations of governments and other public authorities, have become possible and were carried through during the year. If a comparison be made of the relative positions of money rates in different countries it is evident that the significance of the official bank rates varies considerably from country to country. Account must particularly be taken of the structure of the banking system and the absence or presence of some outside market. In France bank rate is the uniform rate applied for discounts throughout the country, whereas, for example, in England actual transactions at bank rate are extremely rare, the rate for seven days' advances (the usual method of accommodating the market) being generally at % percent above bank rate. In Sweden, on the other hand, the banks may rediscount at ^ per- 451 cent below the published rate of 2% percent. In addition, numerous other rates besides the official discount rate are quoted by central banks: in France inter alia for advances for 30 days against government paper with less than two years to run; in Poland there is a special rate for export bills; in Lithuania differential rates are quoted for import bills of exchange and for export and industry; in Latvia credit institutions are able to rediscount at V2 percent below the rate of discount for private entities, etc. In addition, central banks normally quote a rate for three months' advances 1 percent or more above the discount rate, the former rate being to some extent assimilated to the long-term rate of interest as advances tend to be at longer term than discounts and are not self-liquidating in the same way. And in practice the effectiveness of the rates quoted by the central bank at any given time will depend upon the funds in the hands of the banking system and the open market. Nevertheless, with all these differences in mind, it is believed that the comparisons made in the preceding paragraphs help to give a representative picture of the trend and fluctuations of short-term money rates in the world. The downward trend of short-term interest rates has continued in the phase of the conjuncture through which the world is at present passing, the interruptions to the main theme which have been experienced in Europe being rather in the nature of episodes which do not in themselves change the more fundamental development. The low rates are a natural result of a drawn out depression characterized by little demand for new funds; the downward readjustment has been assisted in many countries by central bank policy and other interventions. Cheap money has been a necessary preparatory condition for conversions of long-term securities, desirable not only as a means of alleviating the budget but for more general reasons. Although there is still little sign of a general hardening of rates, it should be remembered that a change in credit conditions has in the past often followed a rise in gold production and an increase in government spending (as, for instance, in the twenty years before the great war). It remains essential that central banks preserve their freedom of action in the use of the dis- 452 FEDERAL RESERVE BULLETIN count weapon for the maintenance of currency stability and a sound credit position. For the past fours years there has in general been a decided downward trend in longterm yields which has brought the London rate from about 5 to around 3 percent, the New York rate from 4 to 2*4-3 percent, while in Berlin the rate fell below 5 percent in 1935 compared with over 12 percent early in 1932. The yield of the 3 percent perpetual rente in Paris stood around 4 percent at the end of 1935—for a year to the spring of 1934 the yield was 4 ^ percent; the improvement in the spring and late autumn of 1934 which nearly brought the rate down to SY2 percent was interrupted by the disturbing events of 1935. The conversion of the remaining $8,200,000,000 Liberty Bonds outstanding in the United States was completed in 1935 with the results shown below: Conversion of Liberty bonds Into new bonds Into short-term notes Cash repayments... Total called Amount Per cent $5, 060, 000, 000 1, 890,000,000 1, 250,000, 000 62 23 15 8, 200, 000, 000 100 The rates at which bonds and notes have been issued declined throughout the series of operations, the latest conversion offer in October 1935 being of 2% percent 10-12 year bonds and 1^2 percent SV^-year notes. The completion of these operations leaves (apart from the short-term debt) no further maturities of government bonds within the next five years, the earliest callable issue being a small amount of 3% percent bonds 19401943. Most of the government bonds now outstanding mature in more than eight years and many are not callable within ten years. The yield of all outstanding Treasury bonds of over eight years' maturity fell below 2.6 percent in July 1935, a record for all time. Thus, although in the past five years the total debt of the United States has been nearly doubled, the service charge has risen only 50 percent, being kept down by conversions and by the very low current rate of interest on short-term securities. The following table shows the evolution of the direct Federal government debt of the United States (exclusive of governmental JUNE 1936 corporations and credit agencies) arranged according to maturity: [In thousand million dollars] Federal Government debt of the United States Bonds maturing in over five years Short-term debt l _ __ _ . Gross debt. Treasury net balance in general fund Net debt- .. Previous Lowest De- De- Dehighest post-war cem- cem- cember August Decem- ber ber 1919 ber 1930 1932 1934 1935 17,0 9,6 12,1 3,9 14,2 6,6 13,0 15,5 14,7 15,8 26,6 16,0 20,8 28,5 30,5 1,1 0,3 0,2 2,6 2,2 25,5 15,7 20,6 25,9 28,3 1 Including matured and other debt payable on presentation and bonds called for repayment or conversion. At the present time over half of the gross debt of approximately $30,000,000,000 is due within five years: of the increase of $14,000,000,000 since 1930, $12,000,000,000 has been in the form of securities with under five years' maturity. Although no further conversions of bonded debt are possible within the next five years, Treasury operations on a large scale will remain necessary to raise funds for the refunding from time to time of recurring maturities of Treasury notes and bills and for the financing of any government expenditure over and above current revenue. In the middle of March 1936 the United States Treasury1 offered $1,250,000,000 of new 2% and l /^ percent securities mostly for cash subscription, the largest operations of this type since the war period, in preparation for the payment of the Soldiers' Bonus. The extreme liquidity of the market is shown by the fact that cash applications alone reached $8,460,000,000. It has been authoritatively estimated that of the total debt of $28,700,000,000 outstanding at the end of the fiscal year June 30, 1935, $15,000,000,000 or 53 percent was held by banks in the United States; of the increase of $1,650,000,000 during the 19341935 fiscal year the banks took over 90 percent. It is probable that 60 percent of the government securities held by member banks of the Federal Reserve System mature within five years. The year 1935 has seen important issues on public account in Germany for the consolidation of employment creation and other short-term bills outstanding in the market, the total issues and announcements on official account during the year amounting to some RM 2,350,000,000. Early in the year RM JUXE 1936 FEDERAL RESERVE BULLETIN 500,000,000 41/2 percent Reich 28-year bonds were taken up at 9814 by the savings banks and Girozentralen. After the mortgage bond and loan conversion in the spring had been accomplished and the capital market had settled down, further consolidations became possible. In the late summer a RM 500,000,000 issue of 10-year 4i/2 percent Reich Treasury certificates at 98% was made to the public, this being the first Reich loan offered for public subscription since 1929. In order to avoid disturbing the money market payments were distributed over a three months' period. It was announced in August that a further RM 500,000,000 of Reich bonds would be taken over by the savings banks on the same terms as the previous issue, the first tranche having been absorbed without difficulty. In addition, the private insurance institutions also invested part of their current revenue in Reich loans, the amount being in the neighborhood of RM 350,000,000 on conditions which have not been published. Further, in December 1935 it was announced that the German railway company was issuing RM 500,000,000 41/2 percent 8-year Treasury certificates at 98i/2, of which RM 400,000,000 were to consolidate short-term debts, the remainder to be used for Reichsbank investments. The total amount to be applied to the consolidation of short-term bills on the market amounts therefore to RM 2,250,000,000. The Reichsbank Annual. Report states that in the long-term capital market generally interest 1 has been alinost universally reduced to A /^ percent with the result that the annual savings on public and private account amount to some RM 500,000,000. The savings banks have played an active part in taking up the new issues and it is interesting therefore to show the reconstitution of savings in the German savings banks since the financial crisis of 1931. The preponderating part of the assets of the savings banks consists of mortgages and, to a much smaller extent, loans to local authorities. Of the total assets of over RM 13,000,000,000 only about RM 1,500,000,000 consists of Reich government securities. In England the capital market was active during the year 1935, the total issues being £182,000,000 against £161,000,000 in 1934. The present total is only half of the peak year, 1928, but is double the lowest year, 1931. The long-term rate of interest reached 453 its lowest point in January 1935 when 2V2 percent irredeemable consols touched 94, the highest price ever reached by this security, and business was done in Wfa percent War Loan (1952) at 110. The outstanding event of the year was the successful Treasury borrowing early in December when £200,000,000 21/2 percent 20/25-year bonds were issued at 96i/2 and £100,000,000 1 percent 5year bonds were issued at 98, both amounts being oversubscribed within a few hours. The nominal rates of interest of these two issues are low records in English financial history. About £200,000,000 of the proceeds were applied for the redemption of maturing long-term debt while the balance was applied to retire part of the floating debt. In France the capital market has been subject to a number of adverse factors. Besides the uncertainty caused in the spring of 1935 by the devaluation of the belga, the Paris market has suffered, as indeed during the past two or three years, from the continuous financing of budget deficits and extraordinary expenditure which have raised the total public debt by Ffcs 64,000,000,000 to Ffcs 340,000,000,000 from the end of 1930 to the end of 1935, while the accumulated deficits of the common fund of the railways, covered by obligations issued by the companies, amounted to Ffcs 19,000,000,000 in the same period. In view of the export and hoarding of French capital Treasury borrowing has been all of short-term character: in the spring of 1936 advantage was taken of the cheaper market rates in London to borrow £40,000,000 for three (or maximum nine) months in sterling. Among the important measures included in the economy decrees of July 1935, the Laval government cut all government expenditure by 10 percent including interest on rentes, bonds and other obligations of the State. In addition, the decrees provided for the payment by anticipation (after four weeks' notice) of all or any civil or commercial debt contracted before July 17, 1935, and represented by transferable securities. The object of this measure was to allow conversions to be made which might otherwise be held up through the fact that the securities to be converted might not be due for repayment; but the decree does not apply to rentes and other government debt. Important conversions of internal debt have also taken place in a number of other 454 FEDERAL RESERVE BULLETIN JUNE 1936 countries. In Belgium the first conversion ticular applications and, if occasion arises, of public debt since 1895 was made during on the principles which govern the restricthe year. State, municipal and provincial tions, although he stated that no radical loans amounting to a global total of nearly alteration of the ban was at present contemBfcs 40,000,000,000 have been converted to plated. Stockholm has continued to take up a uniform interest level of 4 percent, while issues by governments in neighboring counfurther measures concerning the lowering tries; in particular a Kr. 20,000,000 3i/2 perof the interest rate on Bfcs 25,000,000,000 cent 15-year loan issued at 9 6 ^ in January of mortgage credits and the constitution of 1936 for account of the Norwegian governa central mortgage institution have been put ment was considerably oversubscribed in one into operation early in January 1936. A hour. The extraordinary redemption and repaPolish government conversion operation applying to Zl. 600,000,000 covered all internal triation of foreign bonds, especially of Euroloans (with one or two minor exceptions) pean and other dollar bonds, has continued floated before 1933 which were consolidated during the year under review, particularly into a 4 percent 45-year loan in January in the cases of Belgian and Finnish bonds, 1936. In Spain and Portugal important in- but at probably a somewhat slower pace than ternal conversions of government securities in recent years. It would also seem as if have been carried out reducing interest rates fairly large amounts of bonds originally roughly from a 6-6 V2 percent level to 3V2-4V2 issued in the United States had been bought percent. In Czechoslovakia a 10 percent cut by foreign investors in other than the debtor of the interest on internal government loans countries. Of the $7,500,000,000 nominal at the end already subject to a 15 percent coupon tax foreign dollar bonds outstanding x has been made from January 1, 1936, as part of 1935, it has been estimated that on acof a plan providing for the unification of the count of repatriation and resales abroad government debt and the reduction of inter- only $4,500,000,000 or 60 percent are held in the United States, although information est rates in general. Capital issues on foreign account show on this subject is very incomplete. To debtor little sign of expansion. In the United States countries with slender monetary reserves foreign issues in 1935 amounted to nearly and a difficult export position such repatria$80,000,000 mostly for Canada, compared tions are naturally a great strain and in the with $10,000,000 in 1934. In March and case of Hungary a decree issued in January April 1936 two Norwegian government 4i/2 1936 prohibits the importation of Hungarian percent long-term issues for conversion pur- securities from abroad except with the apposes, together nearly $50,000,000, were suc- proval of the National Bank. If those countries are excepted which cessfully made in New York. In London stand to each other in a special relationship, foreign issues attained only £21,000,000 for instance, the members of the British against £42,000,000 in 1934, in each case as, the cheap money policy has only in about 80 percent being for Empire countries. aEmpire, few instances led to conversions of foreign Refunding and conversion issues on overseas issues lower rates of interest. It is true account amounted to £72,000,000 of which that intocases transfer difficulties special £62,000,000 was for the Empire: India, New arrangements of have been made to provide for Zealand and Australia were the chief benefi- the reduction of rates effectively paid or for ciaries from conversions; in the case of the payment of interest by means of new Australia the eleventh conversion since Oc- bonds. But these arrangements are only tober 1932 was made in January 1936, bring- temporary expedients. Concerning the quesing the total converted to some £182,000,000 tion of concluding more durable agreements, with an annual saving of about £2,500,000. it is of importance to remember that the The ban on foreign issues in the London of international long-term indebtedmarket which dates from 1932 has since been volume ness has, redemptions and repatriations, somewhat relaxed with regard to issues for been very by much reduced in recent years; the countries in the sterling area and issues cal- international debt position, therefore, begins culated to produce direct benefit to British industry. In April 1936 the Chancellor ap- 1 Bulletin of Institute of International Finance (of New York) pointed a committee to advise him on par- issued early in April, 1936. JUNE 1936 FEDERAL RESERVE BULLETIN 455 to be of more manageable proportions, the country, but it is possible to recognize some total debt outstanding being much below broad categories: the high figure which was reached when the (I) In the first class may be placed those liquidity crisis of 1931 put an abrupt end to measures which referred almost expractically all new foreign financing. In this clusively to the powers and working of field no recovery is as yet visible; in fact, the central banks' organization. Steps international business is increasingly being have thus been taken to give greater settled on a cash basis. Difficulties are found elasticity to legal cover provisions, to in judging the credit position of would-be enable the central banks to dispose borrowers in foreign countries and in overmore fully of their accumulated recoming the obstacles which the many clearserves. Mention of a number of the ing arrangements put in the way of the measures taken to date was made in ordinary working of the credit machinery; the last annual report. On May 1, the monetary uncertainty also acts as a de1935, an amendment to the statutes terrent to the development of credit connecof the Bank of Danzig reduced the tions. De facto maintenance of exchange legal minimum of gold and foreign exrates, while of great help to trade, does not change to be held against notes and seem to provide a sufficient basis for the reother demand liabilities from 40 to 30 establishment of credit transactions, especipercent. A decree of January 13, ally when these are of a long-term character. 1936, makes certain changes in the statutes of the National Bank of BulRECENT DEVELOPMENTS IN CENTRAL AND garia: the legal minimum cover COMMERCIAL BANKING against the note issue and other demand liabilities is reduced from 33% Seven years of depression involving an unto 25 percent.; as was the case with precedented fall in commodity prices, serithe Reichsbank in 1931, the progresously affecting the market value of real sive tax and automatic increases of assets, and extensive movements of funds in bank rate, envisaged in the statutes search of liquidity and safety have everywhen the cover falls below the prewhere submitted the banking structure to scribed percentage, are now abolished. severe strains. It is in only relatively few At the annual general meeting of the countries that the existing banking organiBank Polski held on February 20, zation was so strongly established and main1936, a number of modifications in the tained such a degree of liquidity that it could statutes of the bank were approved by pass, if not unscathed at least unassisted, the shareholders, in particular a rethrough the crisis. Experience has shown duction in the capital of the bank from that nowhere have the authorities been able 150,000,000 to 100,000,000 zlotys; the to abstain from intervention if faced with Zl. 50,000,000 represents the particiserious difficulties in domestic banking. pation made at 150 percent by the When a breakdown threatened, measures of State, at the time of the Stabilization immediate relief had often to be improvised Loan, and which the bank will repurand in particular State aid was given to chase at the same price of Zl. 75,000,supplement normal credit facilities. But the 000 by an equivalent reduction of the necessity of attacking the evil at its roots State debt to the bank. provided the urge for the adoption of re- (II) In certain other countries changes in forms designed to strengthen the permanent the banking structure have been conbanking machinery and prevent as far as cerned almost exclusively with the possible the repetition of errors which recent commercial banks, leaving unaltered events revealed. the standing and the current funcSome of the temporary measures were tions of the central bank. That has clearly required only while exceptional presbeen the case in Rumania, Switzerland sure prevailed; others have been incorpoand Belgium, and the same can in the main be said also about the German rated, sometimes in a modified form, in perwas adopted in the summer of 1935, manent legislation. Executive and legislative reforms. The new Belgian legislation action varies naturally from country to 456 FEDERAL RESERVE BULLETIN while the new banking laws in Germany and Switzerland were promulgated in the previous year; thus some experience of their working has already been obtained. (Ill) In other countries, notably the United States, the Argentine and Italy, the changes introduced have aimed at a thorough overhauling of the whole credit organization affecting both the central banking institutions and the private banks. In the Argentine the reforms included the creation of a new central bank; in the United States the new Banking Act of 1935 made the most fundamental revision of the Federal Reserve Act since its adoption in 1913; and in Italy the Banca d'ltalia was transformed into a bankers' bank, in connection with a reform changing the legal status of the country's major credit institutions. It would, however, he taking too narrow a view of the recent banking legislation to regard it simply as the product of an emergency situation. In many respects this legislation is the outcome of experience over a number of years, often connected with deep-rooted changes in methods of financing domestic and foreign business; or it reflects currents of ideas which have grown gradually stronger. Typical of the new developments of a longer term trend is the creation of central banks in countries which cannot be said to have experienced any acute credit difficulties during the depression. Besides that in the Argentine, new central banks have been established in New Zealand, Canada and British India, and in several countries some already existing banking organization is either gradually, or by definite legislative act, being transformed into a central bank working on modern lines, by the elimination of private business and concentration upon the task of regulating the credit and currency volume. Information on these developments has been given in previous annual reports of this bank. For the year 1935 it should be added that on April 1 the new Reserve Bank of India was inaugurated, on which day it took over the control of the Issue department from the Government and the management of the public debt and government accounts from the Imperial Bank; on July 4 the first official JUNE 1936 bank rate in the country (of 3^2 percent reduced in November to 3 percent) was announced and on July 5 the scheduled banks lodged their statutory deposits. As in the Argentine the creation of a central bank made it possible to clear away the somewhat rigid mechanism of the Conversion Office, so in India the central bank took over the gold (at the old price without revaluation) and sterling assets of the gold standard and paper currency reserves, which previously assured the external and internal convertibility of the currency, £7,500,000 sterling being retained, however, to constitute the new silver redemption fund. The balance-sheet of the bank at the end of the year 1935 shows in the Issue department 4,400,000 rupees of gold and 6,600,000 rupees of sterling against the note issue of 17,200,000 rupees, giving a proportion of 57 percent, while a further 1,700,000 rupees of sterling were held in the banking department. The various exchange, cotfimercial and indigenous banks of India are subject to no new law except the provisions of the Reserve Bank Act directly affecting them; by section 42 of the act the scheduled banks are bound to maintain a balance with the Reserve Bank of not less than 5 percent of demand liabilities and 2 percent of time liabilities in India; the scheduled banks make returns showing demand and time liabilities and various other assets in India to the Reserve Bank which the bank compiles and publishes weekly as a consolidated statement. It should also be mentioned with regard to the position of the central banks that legislation has been introduced (and in part already adopted) to provide for the Stateownership of the Nationalbank i Kj0benhavn (which is to be transformed into the Danmarks Nationalbank), the Reserve Bank of New Zealand and the Bank of Canada. Even though provisions are being made to guarantee a certain measure of autonomy to the central banks, this development is contrary to the principles adopted at the London Conference in 1933 as to the maintenance and strengthening of the independence of central banking organizations. Experience has shown how important it is for monetary authorities to be free from political pressure; but such freedom does not mean that central banks are precluded from collaborating with government departments. Indeed, their position as bankers of the government JUNE 1936 FEDERAL RESERVE BULLETIN makes such collaboration an integral part of their functions. Both with regard to the magnitude of the emergency measures and the scope of the permanent reorganization, the most important developments are to be found in the United States. It is still too early, however, to draw a definite line between the temporary and the permanent innovations. Certain emergency measures have definitely served their purpose as, for example, the provisions for the opening of the banks after the banking crisis in the spring of 1933 and the restrictions on dealing in foreign exchange imposed at that time. Other measures apparently also of an emergency character have not been liquidated: the Reconstruction Finance Corporation formed under President Hoover in January 1932, although it was able to reduce its outstanding loans under the original act (sec. 5) during 1935 from $1,296,000,000 to $970,000,000, has had further functions added to its sphere of activity, and its total loans, purchases and allocations (including the loans mentioned above) rose from $4,362,000,000 to $4,926,000,000 during the year; also President Roosevelt declared in January 1936 that the emergency under which the dollar had been reduced in weight by 40.94 percent continued to exist and he reserved his powers for a further year to alter the gold weight of the dollar within the limits of 40 to 50 percent. But as recovery proceeds temporary measures become of less weight while permanent measures of reform, based on the experience of the emergency and of the past in general, grow in importance. The new Banking Act of 1935 determines and concentrates responsibility for the national credit policy; restrictions which were found hampering in the emergency period are permanently removed; and certain measures, some of which were originally framed to meet the emergency, are made permanent. The Federal Reserve Board is reconstituted under the name Board of Governors of the Federal Reserve System. From February 1, 1936, the Secretary of the Treasury and the Comptroller of the Currency ceased to be ex-officio members and the Board consists of seven members appointed by the President. The general qualifications and method of selection of the members of the Board remain unchanged but the full term 457 of office is lengthened from 12 to 14 years, members being ineligible for reappointment. The chairman and vice-chairman are designated by the President for a 4-year period, thus giving these positions a definite tenure. Open market operations are under the control of a committee consisting of the seven members of the Board of Governors and five representatives of the Federal Reserve banks, an arrangement which gives both the Board and the regional banks representation in the determination of open market policy, and places fixed and unescapable responsibility for the policy on one statutory body. A line of action once adopted by the Open Market Committee, the individual Reserve banks have no authority to decline participation; it becomes the policy of the system. Purchases and sales of United States Government obligations may be made only in the open market (as indeed they have always been in practice). Records must be kept by the Board of all actions of the Open Market Committee and the Board on all questions of policy, and these records showing the action taken, the votes in connection therewith, and the underlying reasons for such actions will be published in the annual report of the Board. Apart from open market operations, authority over all major instruments of credit control, viz. changes in discount rates, in member bank reserve requirements and margins prescribed for loans on securities, is vested in the Board of Governors. The local autonomy of the Reserve banks is preserved as regards their dealings and relations with the member banks in their respective districts, but the ultimate responsibility for the national credit policy rests on the Board of Governors in Washington. The local Reserve banks must submit to the Board the rates they wish to establish in their districts and these rates cannot become effective without the approval of the Board which, with the Federal Reserve banks, must review the rates at least once every two weeks. The law also clarifies and alters the authority of the Board of Governors to change member bank reserve requirements. Under the Thomas amendment to the Agricultural Relief Act (adopted in 1933) reserve requirements could be changed only when an emergency was declared to exist owing to credit expansion, and then only with the approval of the President of the United States: 458 FEDERAL RESERVE BULLETIN changes may now be made by a vote of four members of the Board "in order to prevent injurious credit expansion or contraction," provided that the reserve requirements shall not be reduced below those at present in force nor increased to more than double. The emergency provision from the GlassSteagall Act of February 1932 authorizing a Reserve bank to make advances to its member banks on any security suitable to the Reserve bank (but not eligible under the old Act) is liberalized and made permanent. These advances, no longer considered exceptional, are to be made at a rate of interest at least one-half of 1 percent higher than the highest discount rate in effect at the Reserve bank in question and the maturity of the advance may not exceed four months. The permanent adoption of these powers constitutes a recognition of the fact that rigid technical provisions with regard to eligibility hampered the Reserve System in a period of crisis and failed to protect the banking system from collapse; it also recognizes that the scope of operations of the member banks has changed and that eligible paper under the old definition forms a decreasing proportion of the assets of the banks. Besides the reorganization of the Board, administrative changes with regard to the Reserve banks include the creation of the posts of president and vice-president, the chief executive officers, appointed for a term of five years by the local board of directors subject to approval by the Board of Governors in Washington, which thus has an opportunity of approving the Reserve banks' chief executives without impairing the essential regional autonomy of the banks. Under the old law there was no provision for an executive head of the banks although in practice the local boards had selected executive officers and designated them as governors. Various emergency measures are thus made permanent law but there are others which though important are not included. For example, the Glass-Steagall Act, which was passed in 1932 at a time when the System was under pressure of withdrawals of funds, heavy gold losses and extensive hoarding of notes, authorized the Reserve banks to hold United States Government obligations as supplementary cover for the note issue, thus greatly increasing the "free gold" of the System. Although a similar provision JUNE 1936 was included in the original draft of the new law, it was eliminated in the act as passed in 1935 so that the Federal Reserve note issue is still subject to the Federal Reserve Act of 1913 modified for the time being by the Glass-Steagall Amendment which remains in force under Presidential proclamation until March 1937. The new law makes permanent the Federal Deposit Insurance Corporation, originally created under the Banking Act of 1933. Title I of the new law lays down the conditions for the insurance of deposits up to the amount of $5,000 for any one depositor, the assessment rate being fixed at one-twelfth of 1 percent per annum on total deposits. This measure makes a step towards the unification of the Federal Reserve System by requiring that all banks with deposits of $1,000,000 or more must become members of the System by 1942 in order to retain the benefit of deposit insurance. By June 1935 90 percent of the banks in the country were insured, the Corporation's liability covering $18,000,000,000 out of the $41,000,000,000 deposits of the insured banks. The Banking Act of 1935 also includes a number of other measures regarding the banks of the country. The provisions under which national banks are permitted to make real estate loans are liberalized, the percentage of the value a real estate loan may cover being raised from 50 to 60 percent and the term of the loan from 5 to 10 years: real estate loans may be made up to an aggregate amount equal to 100 percent of a bank's unimpaired capital and surplus (previously 25 percent) or 60 percent (previously 50 percent) of time and savings deposits, whichever is greater—previous geographical restrictions are also removed. "The liberalization of real estate provisions" comments the FEDERAL RESERVE BULLETIN "will make it easier for the member banks to participate in the financing of building activity, the resumption of which is an essential factor in recovery . . . The danger for banks is not in making real estate loans as such, but in making poor loans of any kinds. The field of real estate loans offers considerable opportunity for the proper investment of bank funds." Every national bank is required gradually to build up its surplus fund until it equals the amount of its common stock. The new law contains certain regulations regarding the computation of required re- JUNE 1936 FEDERAL RESERVE BULLETIN serves; in particular member banks are now required to maintain the same reserves against United States government deposits as against other deposits, whereas previously no such reserves were necessary. Other provisions are also made with regard to the payment of deposit and interest, postal savings accounts and interlocking bank directorates. The new central bank in the Argentine, which opened in May 1935, was created as part of a comprehensive plan for the reorganization of the monetary and banking system of the country: three autonomous bodies, the Conversion Office, the Rediscount Committee and the Amortization Board, and two funds, the Foreign Currencies Fund and the Exchange Profits Fund, were incorporated in the central bank or ceased their functions; the gold reserve taken from the Conversion Office was revalued and the book profit allocated; a new Liquidation Institute was formed to take over the frozen assets of the banks and a law on the banks was put into force. Under the old law of 1899 the monetary system was very rigid, gold movements producing an automatic effect on the volume of the note circulation, a system of much inconvenience to a country like the Argentine subject to wide fluctuations of the trade balance although, in practice, a number of makeshift measures brought some mitigation. The new central bank under the law of March 28, 1935, has as its first object "to concentrate sufficient reserves to moderate the consequences of fluctuations in exports and investments of foreign capital, on currency, credit and commercial activity, in order to maintain the value of the currency" and the new regulations are designed to give the system the elasticity necessary for such a policy to be carried out. From 1929 to 1935 the Argentine peso declined to about 46 percent of its old parity and when the central bank took over the gold of the Conversion Office (together with its note liabilities) the gold was revalued on this basis, although the provisions in the law for redemption of notes in gold or foreign exchange were expressly suspended until further decree. The "gold in vaults" shown in the first balance-sheet of the new bank on May 31, 1935, amounted to 1,224,000,000 pesos, the revaluation having produced a profit of 663,000,000 pesos. This profit, 459 made up to 700,000,000 pesos from other sources, was utilized by the government as to 10,000,000 pesos to provide half of the subscribed capital of the central bank, as to 10,000,000 pesos to constitute the capital of the Liquidation Institute; a further 380,000,000 pesos provided the Institute with the funds to purchase frozen assets from the banks, thus enabling them to reconstitute their cash balances and to comply with the minimum cash reserve; the remaining 300,000,000 pesos was applied as to 150,000,000 pesos to the amortization of the government's direct debt to the Banco de la Nacion, 140,000,000 pesos for repayment of Treasury bills outstanding, while the balance was deposited in the central bank. The floating debt of the government which at the beginning of 1932 stood at 1,200,000,000 pesos had been reduced by consolidations, repayments and the profit on the gold revaluation to 110,000,000 pesos at the end of 1935. The general banking law stipulates that the private banks must hold cash reserves equal to at least 16 percent of demand deposits and 8 percent of time deposits and two-thirds of these reserves must be concentrated at the central bank (which may, however, temporarily exempt any bank in special circumstances and for short periods). Interest paid by the private banks on demand deposits must be at least 3 percent below the minimum rediscount rate of the central bank and on savings deposits at least 1 percent below the same rate. Certain operations which might affect adversely the liquidity of the banks are prohibited. Each bank is bound to render a confidential monthly return to the central bank which publishes a summary without divulging the details of individual establishments and the central bank is given power to request any further confidential information or amplification of the data given. The banks are also subject to periodical inspection by officers sent from the central bank. The statutes of the Central Bank of the Argentine Republic give the bank the monopoly of note issue in the country and stipulate that a gold and foreign exchange reserve of at least 25 percent must be held against notes and demand liabilities, while no dividend may be paid if the proportion falls for more than two or three months below 33 percent; foreign exchange may not exceed one-fifth of the total reserve nor 460 FEDERAL RESERVE BULLETIN count as to more than 10 percent of the legal proportion. Half of the subscribed capital of 20,000,000 pesos was provided by the banks in the country having a capital of at least 1,000,000 pesos and half by the government (without voting rights) from the revaluation profits. The banks maintain cash balances at the central bank as provided also in the banking law and the most important government business is taken over from the Banco de la Nacion. The central bank is governed by a full-time President and Vice-President, designated by the Chief Executive in agreement with the Senate from candidates proposed by the meeting of shareholding banks, and twelve directors, mainly representing banking interests but including an agriculturist, a livestock producer, a business man, a manufacturer and a government representative. Not more than three foreigners may be on the board at the same time. The institution is essentially a bankers' and Government bank having no direct relations with the public. Rediscounts and loans may be made for the member banks and temporary advances to the Government up to 10 percent of the average cash receipts from revenue of the previous three years. The first balance-sheet of the bank showed, besides the gold taken over from the Conversion Office, 123,000,000 pesos of foreign exchange and gold abroad received from the Foreign Exchange Fund and consisting mainly of gold held in London. The utilization of the revaluation profit to repay debt and unfreeze the banks has naturally given liquidity to the market and the central bank has as yet no rediscount portfolio. (The cash holdings of the commercial banks were 827,000,000 pesos at the end of 1935 as compared with 485,000,000 a year earlier.) The only domestic earning assets of the central bank consisted of 400,000,000 pesos of National Treasury 3 percent, consolidated bons which the bank is permitted to sell on the market to absorb excess funds. In fact, during the first two months of its operations the central bank sold 250,000,000 pesos of its holding of Treasury bons but had repurchased some 70,000,000 pesos by the end of 1935. The first return showed a reserve of gold and foreign exchange of 140 percent, of the note issue and 72 percent, of total sight liabilities, ratios which have not greatly changed since that time. No change has JUNE 1936 been made in the official rate of exchange, the price paid for export bills, which was pegged to sterling at 15 to £ in January 1934, while the free rate fluctuates around 17 to 18. In Europe, the most drastic innovations have been made in Italy. The adverse movement of Italian foreign trade, particularly the falling off of exports, led already in 1934 to restrictions being placed on imports, and foreign exchange operations were limited to the real requirements of industry and trade or of persons travelling abroad. In the first half of 1935 further import restrictions were imposed and a superintendent of foreign exchanges appointed, depending directly from the Prime Minister, to regulate the allocation of foreign exchange according to the provisions in force and to coordinate the services in control of exports and imports. In July, the obligation of the Banca d'ltalia to maintain a 40 percent, cover in gold and foreign exchange was temporarily suspended, allowing recourse to the gold reserve for the settlement of outstanding foreign .commercial debts amounting to some 500,000,000 lire, a figure lower, however, than Italian credits frozen abroad. In August 1935 it was decided to make compulsory the surrender to the National Exchange Institute, acting on behalf of the Treasury, of all foreign credits, which were to be paid in cash at the rate of the day of the decree. Also all foreign securities and Italian securities issued abroad and held by Italians, possession of which had already been declared under the decree of December 8, 1934, were to be purchased by the Institute against 5 percent, nine-year Treasury bonds. The special conditions obtaining from October 1935 onwards hastened the process of centralization, and from that month the publication of statistical data was suspended. Thus, the regular returns of the Banca d'ltalia have ceased (but the figures relating to the end of December 1935 were published at the meeting of the General Assembly of the Banca d'ltalia). By decree of November 11, 1935, the Foreign Exchange Institute, acting on behalf of the Treasury, received a monopoly for the purchase abroad of gold and was empowered to purchase gold within the Kingdom at the average price for gold on the international markets. Acting for the Treasury through the agency of the Banca d'ltalia gold was purchased from the public at 15.50 JUNE 1936 FEDERAL RESERVE BULLETIN lire per gramme compared with 12.62 lire, the rate corresponding to the official parity of the currency: gold could also be received on deposit at 5 percent interest. The decree of March 12, 1936, makes "provisions for the protection of savings and the regulation of credit" by the constitution of an Office of Inspection directly dependent from a committee of ministers of which the Prime Minister is chairman and including the ministers of Finance, Agriculture and Forests, and Corporations. The Office of Inspection, of which the Governor of the Banca d'ltalia is the head, has wide powers of supervision over all the banks of whatever description in the Kingdom. In particular, the Office of Inspection may order periodical or exceptional inspection; authorize the issuing of bonds and shares when these are offered by credit establishments subject to control; authorize the admission to the Stock Exchange of bonds and shares; and take decisions, binding for the banks, relating to the limit of interest rates on deposits and for advances, the repartition of investments with regard either to liquidity or to the different branches of economic activity, the relation between net assets and liabilities and the possible forms of employment of surplus funds, the minimum percentage of profits to be placed to reserves, etc. The Banca d'ltalia is transformed into an "Institution under Public Law" (Istituto di Diritto Pubblico) and will confine its rediscount operations to the banks of: the country, leaving commercial and private banking business to them. Advances on securities will, however, be made to the banks or the public, On March 31, 1936, Governor Azzolini presided over the last general meeting of private shareholders. The capital of 500,000,000 lire, in shares of 1,000 lire, paid up as to 300,000,000 lire or 600 lire per share, will be repaid at 1,300 lire per share, representing the paid-up capital and the proportionate value of the reserves. The new capital of 300,000,000 lire fully paid will be subscribed and held entirely by the savings and other banks and the insurance companies. As was already the case with the Banco di Napoli and the Banco di Sicilia, the three large banks, the Banca Commerciale Italiana, the Credito Italiano and the Banco di Roma, have been given the position of 461 "Banks under Public Law"; in consequence, their shares must be registered and be the exclusive property of Italian nationals and firms. These banks, as well as other credit establishments, are subject to the supervision of the Office of Inspection. For the regulation of credit at long and short term a committee of ministers and, under it, the Inspection Office, concentrate all the functions relating to credit institutions previously divided between the different ministries. It has further been decided that the Istituto Mobiliare Italiano, whose President will be the Governor of the Banca d'ltalia, shall absorb the functions of the "Consorzio per Sovvenzioni su Valori Industriali" and Section "A" of the "Istituto per la Ricostruzione Industriale". The new banking laws in the United States, the Argentine and Italy embrace both the central banking organization and the private banks; in Belgium, on the other hand, the new measures are concerned almost exclusively with the private banking structure. The emergency situation which arose in Belgium during the first quarter of 1935 and which led to the devaluation of the currency on April 1, 1935, was characterized by an outflow of funds that deprived the banks of the most liquid part of their assets and brought up, apart from the general question of banking reform, the particular question of some additional mechanism in the market to provide further liquidity. It was not, however, until after the devaluation when the reflux of funds had already relieved the pressure on the banks that the Royal decree of June 13, 1935, was promulgated, creating the Institute of Rediscount and Guarantee. The institute is formed for five years with the possibility of prolongation for periods of five years, with a capital of 200,000,000 Belgian francs, 20 percent, paid, subscribed by the banks, and with all its operations up to Bfcs. 2,000,000,000 guaranteed by the State. The institute may take over from banks and others sound but not necessarily liquid assets at a rate of interest not more than one percent, above the highest rate for discounts or advances against public securities of the National Bank. Bills carrying the signature of the institute may be discounted by the National Bank under the usual conditions applicable to discountable paper. The institute is administered by a committee composed of a president and five 462 FEDERAL RESERVE BULLETIN directors nominated by the King. In this way it is possible for the commercial banks to mobilize assets not otherwise eligible at the central bank, while the securities issued by the institute provide a suitable investment for short-term banking funds, so that the surplus resources of the market would generally be fully utilized before recourse were had to the National Bank. At the same time, it is not necessary for the National Bank to depart from its traditional practices and regulations as laid down by its statutes. In addition to these liquidity measures the banking question was dealt with in a more comprehensive way through the promulgation of a new law on July 9, 1935, governing the activities of the commercial banks. The term "bank" is defined and all institutions entitled to use the term must be inscribed with a newly-instituted Banking Commission. A bank's capital must be at least Bfcs. 10,000,000 wholly paid up (private banking firms however at least 2,000,000 francs) and reserves must be invested in Government or certain other public securities. The provision in the law of August 1934 prohibiting the banks from holding participations (shares, bonds, etc.) in commercial or industrial firms other than banks is re-enacted. Exception is made where the bank acts as issuing house for the securities in question when firm participations may be held for a maximum of six months. The most far-reaching provisions of the new law are due to the creation of an autonomous Banking Commission whose expenses will be paid by the National Bank, by whom also its secretariat is provided. The Commission consists of a president and six members appointed by Royal decree, two nominated directly by the King and two each from lists submitted by the banks and by the National Bank and the Institute of Rediscount and Guarantee. The Commission is charged generally with the application of the new law and enjoys extensive powers. A corps of inspectors is created which reports to the Commission upon legal or other irregularities and the Commission may also charge the National Bank with special enquiries. Further, the Commission, with the approval of the Ministers of Finance and of Economic Affairs, may determine for the banks the proportion which must exist (a) between cash and other easily mobilizable JUNE 1936 assets and liabilities at sight or short term, and (b) between the capital and reserves of the bank on the one hand and either the total of all deposits or of all liabilities at sight or short term on the other. The Commission may also by a two-thirds majority vote, in agreement with the National Bank and the Office de Redressement Economique and with the approval of the Ministers of Finance and of Economic Affairs, fix the maximum rate of interest applicable to specifically designated categories of credit operations. The banks registered with the Commission must make monthly returns in a specified form to the National Bank which publishes a combined statement of the banks every three months. The Banking Commission is also given wide powers and duties of supervision over the issue market. The Commission must be informed two weeks in advance of any proposed issue of securities to the public with a statement in prescribed form giving all relevant details as to the object of the issue etc. (This also applies to securities guaranteed by the Government, the Belgian Congo, provinces and communes, and to foreign issues of Belgian concerns.) If the Banking Commission considers any private domestic issue to be of a nature to disturb the market it may recommend a reduction of the total or the spreading of the emission over a period of time. If the question is not settled amicably, the Banking Commission may forbid the issue for a period not exceeding three months and may publish its decision. If the Banking Commission considers the conditions of a proposed issue to be such as to mislead investors as to the nature of the business or the rights attaching to the securities, the Commission may, if the issuing house does not take account of its expressed opinion, forbid the issue for three months and may publish its decision; if the issue is then made the Minister of Finance, on the request of the Banking Commission, may prohibit the quotation of the securities on the stock exchange. The Commission may at any time demand information as to the results of issues made during the previous six months (while regular issuing houses make an annual return of issues made by them). It will be seen that, although its powers are extensive, almost all the functions of the Banking Commission are facultative and rest JUNE 1936 FEDERAL RESERVE BULLETIN on the combined judgment of its members. It is particularly intended not to disturb the principle of the prime responsibility of the banks towards their depositors and shareholders and there is thus no provision for such measures as deposit insurance. In Germany, the new law of December 5, 1934, regarding the credit system was put into application; certain modifications were made of a more practical character, suggested by the experience gained during the year. Outside the field of purely private banking, two events should be mentioned. Arrangements for the centralisation of the note issue came into force at the end of 1935 when the privilege of the four private noteissuing banks expired. Their circulation, then amounting only to RM 158,000,000, is to be withdrawn while their gold reserves, amounting together to RM 75,000,000, have already been taken over provisionally by the Golddiskontbank, the ultimate destination of this gold being still undecided. A further concentration of the German banking system results from a law of October 1935 placing the ten State banks, of which the Prussian State Bank (Seehandlung) is by far the most important, under the direct supervision of the Reich Minister of Economic Affairs, at present also the President of the Reichsbank. These banks had been founded in the formerly autonomous States within the country and enjoyed special privileges; the Minister of Economic Affairs is now authorized to exercise supervision over the banks and to change their statutes. 1935, the first year during which the Swiss banks have been working under the provisions of the new general banking law, has been a period of great difficulty. It may be recalled that the big banks doing international business in the six years up to 1930 had experienced a period of unexampled expansion, their balance-sheet totals being nearly doubled. But from 1930 this movement was abruptly reversed and in the five years to the end of 1934 the seven larger banks suffered withdrawals of funds which, together with other compressions of liabilities, reduced the total of the combined balance-sheet by 50 percent. This reduction represented an enormous pressure on the banks in a period of falling prices, a proportion of the assets, varying greatly from bank to bank, being frozen abroad. The new law which came into force on March 1, 1935, con- 463 tains special provisions under which a partial moratorium (prolongation of maturity dates) may be granted by the Federal Council if it is considered that all creditors are in fact covered 100 percent, by the assets and the interest service can be maintained throughout the moratorium. Two of the larger banks have taken advantage of these stipulations: the Basler Handelsbank was allowed a partial moratorium for two years from June 11, and Leu & Co. for three months from December 30, 1935, the latter period having been prolonged for a further six months. Other smaller banks have also been in difficulties during the year but only one has been granted the special conditions mentioned above. (In April 1936 the Federal Council issued regulations complementary to the Banking Law to facilitate the reorganization of banks of a certain importance in order to avoid ordinary bankruptcy procedure. The validity of these regulations expires at the end of 1937.) The Banking Commission created by the new bank law, which has generally to supervise the carrying out of the law and is particularly responsible to satisfy itself that the accounts of the banks are properly audited, has commenced its functions. Under the law the National Bank was given the power to review increases of interest rates on "Kassenscheine" with the banks but no power to dictate what rates they were to apply. The Annual Report of the National Bank mentions that during the year the withdrawals of funds from the market tended to produce an influence on the rate of interest on "Kassenscheine" and in order to guard against any unjustified increases the National Bank, in accordance with Article 10 of the law, called a meeting of the banks on June 13 to review the question; the majority of banks agreed with the National Bank that the rates fixed in October 1933 should not be exceeded unnecessarily. But the increasing yield on first-class securities made it impossible for a number of banks to maintain the old rates in force. Up to the end of the year the National Bank received notice of 91 increases of interest rates, most of them being, however, of a minor character. As the National Bank remarks, experience has again shown that economic laws are more powerful than any artificial measures which may be applied. 464 FEDERAL RESERVE BULLETIN Summing up the developments in commercial banking during the year it may be said that although difficulties are still experienced in some countries there are signs in others of emergence from the troubles of recent years. Symptomatic of the improvement are the repayments made by United States banks to the Reconstruction Finance Corporation, the regained liquidity of the Belgian banks, the rapid repayment of the emergency credit granted to the Skandinaviska Kredit Aktiebolaget in Sweden at the time of the Kreuger crisis and the resumption of dividends by the big German banks for the first time since 1931. In some countries there has also been an increase of advances to industry and commerce reflecting recovery in business and a more active use of bank credit, not only for the purchase of Government securities but also the financing of a larger volume of trade and production. The new laws which have been passed in a number of countries have in general two main purposes. In order to protect the security of deposits, regulations have been made with the aim of preserving the liquidity and solvency of the banks. At the same time, for reasons of general credit policy, advantage has been taken of the passage of the new laws to give greater power to the central bank or some authority in close connection with the bank for the supervision of the credit machinery. It should be understood that also in a great many countries where no changes in banking laws have been made, an evolution has occurred in the actual practice of the existing credit institutions; the effective position of the central banks has increased in authority and leadership in relation to their markets, and the best-managed commercial banks have observed in their liquidity and investment policy, irrespective of any binding provisions, the principles which the new legislation embodies. More attention is given to these matters, for the experience of the past few years has everywhere made manifest the fundamental importance of having a satisfactorily functioning credit system. CONCLUSION The past year has been one of great difficulties and many disappointments but it has not been without its more hopeful side. A greater degree of exchange stability has been JUNE 1936 maintained than at any time since 1931. International trade has shown signs of increasing and prices of primary products which had fallen to unprecedented low levels have again begun to rise under the influence of reviving demand. The depression with which we have been struggling these seven years has created difficult problems, particularly with regard to unemployment; but it has also helped to solve certain problems which caused great concern only a few years ago. International indebtedness both at long and short term has been greatly reduced; interest rates, with some temporary exceptions, are lower than they have been since the war; and gold production has risen to a degree eliminating all fears of a scarcity and even creating the prospect of an abundance, which, on account of its magnitude and possible repercussions, will need careful watching and handling. Technically the situation holds out hopes of better times. But will these hopes materialize? We all know that purely economic and financial considerations are alone not decisive but that the turn of affairs will be very largely influenced by political developments. In practically every country there is a rising tide of expenditure, leading to increased taxation where the burden is shouldered immediately, and, where the mounting charges are met by borrowing, resulting in an increasing weight of debt, which mortgages the future and may have an adverse influence on the position of the capital and money markets. The increase in expenditure is largely for armaments and is the consequence of the tense situation which weighs so heavily on the minds of the peoples. Absence of international agreement threatens to retard an improvement in economic conditions which otherwise might be reasonably expected; a number of outstanding economic and financial problems, thorny though they may be, are capable of solution, given a better spirit of understanding between the nations. It must be clearly realized that the technical machinery of which the Bank for International Settlements is a part cannot render full service so long as political tension creates an atmosphere in which no effective progress can be made towards an improvement of the monetary and economic conditions of the world. JUNE 465 FEDERAL RESERVE BULLETIN 1936 BALANCE SHEET OF THE B A N K FOR INTERNATIONAL SETTLEMENTS AS OF MAR. 31, 1936, AND MAR. 31, 1935 [In thousands of Swiss francs at par] Assets I. Gold in bars II. Cash on h a n d a n d on current account with banks III. Sight funds at interest IV. Rediscountable bills and acceptances: (1) Commercial bills and bankers' acceptances (2) Treasury bills V. Time funds at interest, not exceeding 3 months VI. Sundry bills and investments: (1) Treasury bills (2) Railway and Postal Administration bills and sundry investments VII. Other assets (1) Guaranty of central banks on bills sold (2) Sundry items 1936 1935 24,198 11,008 9,601 12,960 2,639 15, 465 150,250 188,279 148.451 213,976 338, 529 362,427 36, 033 37, 482 100,006 88, 403 126, 838 131,945 226, 844 220, 348 10,461 6, 235 6,383 12, 619 Liabilities I. Capital: Authorized and issued 200,000 shares valued at 500,000,000 Swiss gold francs of which 25 percent paid up II. Reserves: (1) Legal reserve fund (2) Dividend reserve fund. (3) General reserve fund.-- III. Long-term deposits: (1) Annuity trust account (2) German Government deposit (3) French Government deposit (Saar)_. (4) French Government guarantee fund. IV. Short-term and sight deposits (various currencies) : fl) Central banks for their own account: (a) Not exceeding 3 months (b) Sight _. 1936 1935 125,000 125, 000 3,324 5, 845 11, 690 2,672 4,866 9,732 20, 859 17,271 154,340 77,170 2,031 61, 930 154, 294 77,147 2,031 61, 930 295,471 295, 401 113, 277 26,020 108,014 23,711 139,297 131,725 2,985 11,334 2,947 22, 751 14,319 25, 698 83 813 2, 036 2,220 10,461 (2) Central banks for the account of others: (a) Not exceeding 3 months (b) Sight (3) Other depositors: (a) Not exceeding 3 months 1 (b) Sight 4,255 V. Sight deposits (gold) VI. Miscellaneous (1) Guaranty on commercial bills sold.. (2) Sundry items 19, C 36, 511 6,278 30, 382 36, 651 VII. Surplus: Profit for the financial year ended Mar. 31 Total assets.. 660, 783 659, 829 Total liabilities.. 10,921 36, 511 9,194 13, 046 660, 783 659, 829 i Between 3 and 6 months in 1935. B. I. S. NOTE.—The whole of the short-term and sight deposits in various currencies (Item IV—Liabilities) are more than covered by immediately available assets either in the currencies of the deposits or in currencies free from exchange restrictions, and of the long-term commitments the French Government deposit (Saar) (Item III—3) is similarly covered, while the French Government guarantee fund (Item III—4) is represented by assets available, in accordance with Article X I I I of the Trust Agreement, in currencies which are free and based upon the gold or gold exchange standard. The remaining long-term commitments (Items III—1 and 2) which are recorded in a restricted currency (although Item III—1 may possibly be claimed to be rapyable on some other basis), are covered by assets of the same currency, the gold value of a substantial part of which is specially guaranteed. The capital, reserves, and surplus are represented partly by assets in free currencies but principally by assets in countries where exchange restrictions now prevail and do not permit of free conversion of their currencies into gold or other currencies; however, as to these assets an important part is secured by special contracts guaranteeing their gold value and in one case specifically permitting their transfer. Moreover, under Article X of the Hague Agreement of January 1930, the signatories thereto declared the Bank to be immune from any "prohibition or restriction of export of gold or currency and other similar interferences, restrictions or prohibitions." 466 FEDERAL RESERVE BULLETIN JUNE 1936 MEMBER BANK RESERVES, RESERVE BANK CREDIT, AND RELATED ITEMS [In millions of dollars] Reserve bank credit outstanding Date Bills Bills discounted bought U. S. Government securities Other Reserve Total bank credit Monetary gold stock Treasury currency Member bank reserve balances Treasury Other cash and Non- FedMoney deposits in cirmem- eral xxrit h witn culaber de- Reserve Excess Federal tion posits acTotal (estiReserve counts mated) banks End of month figures: 1935—April 30 May 31 June 30 July 31 Au?. 31 Sept. 30 Oct. 31 Nov. 30 Dec. 31 6 8 6 7 11 10 6 6 5 5 5 5 5 5 5 5 5 5 2,430 2,430 2, 433 2,430 2,432 2,430 2,430 2,430 2,431 27 26 37 23 37 32 40 39 45 2,468 2,469 2,480 2,465 2,485 2,477 2,482 2,480 2,486 8,710 8,858 9,116 9,144 9,203 9,368 9,693 9,920 10,125 2,544 2,525 2,506 2,510 2,398 2,386 2,400 2,438 2,476 5,478 5, 540 5, 568 5,518 5,629 5,683 5,713 5,846 5,882 2,996 2,969 2, 968 2,991 2, 694 2,740 2,657 2,619 3,110 271 254 325 253 198 304 299 284 255 263 257 261 257 260 250 258 253 253 4,715 4,832 4,979 5,100 5,305 5, 254 5, 648 5,835 5,587 2,253 2,318 2,414 2,513 2,708 2,600 2,970 3,100 2,844 1936—Jan. 31 Feb. 29 Mar. 31 Apr. 30 M a y 30 9 7 8 5 5 5 5 5 5 3 2,430 2,430 2,430 2,430 2,430 35 40 31 34 35 2,479 10,182 2,482 10,167 2,474 10, 184 2,475 10, 225 2,474 P10, 401 2,493 2,499 2,504 2, 500 P2, 490 5,737 5, 846 5,877 5,886 P5, 952 3.001 2,937 3,607 3, 213 P3, 101 304 327 332 356 337 253 254 259 260 255 5,860 5,784 5,087 5,486 5,719 3,084 2,986 2,305 2,664 2,866 8 7 7 6 7 5 5 5 5 5 2,431 2,430 2, 430 2,430 2,430 24 31 30 19 23 2,468 2, 473 2,472 2,460 2,465 9,119 9,123 9,127 9,135 9,144 2,504 2, 503 2,501 2,503 2,510 5,619 5,551 5,530 5,496 5,518 3,002 2,932 3,086 3,134 2,991 312 302 302 265 253 258 263 258 258 257 4,900 5,052 4,924 4,945 5,100 2,320 2,456 2,340 2,335 2,513 Wednesday figures: 1935—July 3 July 10 July 17 July 24 July 31 Aug. Aug. Aug. Aug. 7 14 21 28 6 6 7 9 5 5 5 5 2,430 2, 430 2,430 2,430 34 36 26 26 2,476 2,477 2,468 2,471 9,158 9,184 9,189 9,197 2,477 2,437 2,421 2,408 5, 550 5,558 5,574 5,573 2, 932 2.775 2, 722 2,683 253 251 230 213 261 259 260 260 5,115 5, 254 5,291 5,346 2,547 2,667 2, 682 2,749 Sept. Sept. Sept. Sept. 4 11 18 25 11 11 10 10 5 5 5 5 2,430 2,430 2,430 2, 430 25 34 27 29 2,472 2, 479 2,472 2,474 9,209 9,219 9,240 9,297 2,395 2,391 2,390 2,382 5, 650 5,638 5,632 r 5, 626 2,746 2, 629 2,839 2,778 193 186 244 262 259 248 250 250 5,228 5,388 5,136 5,236 2,643 2,790 2, 527 2,592 2 9 16 _ 23 30 10 10 9 7 6 5 5 5 5 5 2,430 2,430 2,430 2,430 2,430 24 34 52 31 33 2,470 2,478 2,496 2,472 2,474 9,414 9,463 9,584 9,629 9,686 2,399 2,396 2,404 2,397 2,401 5,688 5,698 5,696 5,684 5,686 2,814 2,747 2,693 2,694 2,665 306 313 307 292 296 251 250 254 254 260 5,224 5,330 5,534 5,575 5,653 2,569 2,694 2,878 2,900 2,981 Oct. Oct. Oct. Oct. Oct. Nov. Nov. Nov. Nov. 6 _ 13 20_.__ 27 7 9 5 6 5 5 5 5 2,430 2,430 2,430 2,430 21 49 31 32 2,462 2,492 2,471 2,472 9,714 9,747 9,804 9, 874 2,401 2,399 2,409 2,421 5, 754 5, 746 5, 739 5.820 2,655 2,641 2,648 2,625 236 249 262 282 260 257 253 252 5,671 5,746 5,782 5,789 2, 993 3,052 3,069 3.051 Dec. Dec. Dec. Dec. Dec. 4 11 18 24 31 5 6 7 7 5 5 5 5 5 5 2,430 2,430 2,430 2,431 2,431 29 33 41 81 45 2,470 2,474 2,483 2,523 2,486 10,009 10,068 10,098 10,115 10,125 2,442 2, 447 2,458 2,464 2,476 5,843 5,841 5,902 5,991 5,882 2,626 2,558 3,161 3,156 3,110 283 280 281 266 255 262 270 258 259 253 5,905 6,040 5, 437 5,429 5,587 3,173 3,304 2, 706 2,693 2,844 1936—Jan. Jan. Jan. Jan. 8 15 22 29 5 5 6 7 5 5 5 5 2,430 2,430 2,430 2,430 35 45 36 28 2,476 2,485 2,477 2,470 10,144 10,158 10,172 10,179 2,476 2,492 2,498 2,492 5,783 5,722 5,704 5, 693 3,049 3,018 3,093 3,031 265 284 296 301 253 253 253 254 5,745 5,859 5,802 5,863 3,002 3.095 3.030 3,087 10 8 7 7 5 5 5 5 2,430 2,430 2,430 2,430 44 65 64 33 2,489 2,508 2,505 2,475 10,168 10,155 10,160 10,163 2,491 2,496 2,499 2,502 5,742 5,763 5,771 5,775 2,958 2,993 2,979 2,949 324 364 327 323 255 254 255 254 5,869 5,784 5,832 5,839 3.089 3.007 3,045 3,062 Feb. Feb. Feb. Feb. 5 12.. 19...:. 26 Mar. Mar. Mar. Mar. 4 11 18 25 6 5 6 6 5 5 5 5 2,431 2,430 2,430 2,430 34 33 44 45 2,475 2,473 2,485 2,485 10,167 10,170 10,173 10,177 2,506 2,503 2, 503 2,502 5,848 5,840 5.841 5,837 2,898 2,909 3,587 3,667 321 337 328 340 269 274 261 261 5,813 5,786 5,144 5,059 3,043 3,003 2,388 2,315 Apr. Apr. Apr. Apr. Apr. 1 8 15 22 29 7 6 6 5 5 5 5 5 5 5 2,430 2,430 2,430 2,430 2,430 34 38 35 35 32 2,477 2,479 2,477 2,475 2,472 10,185 10,190 10, 200 10, 209 10, 221 2,504 2,505 2, 502 2,501 2,501 5,884 5,906 5,877 5,860 5,859 3,614 3,502 3,374 3,269 3,208 331 346 335 355 362 259 258 260 260 259 5,077 5, 161 5,333 5,442 5,506 2,338 2,384 2,548 2,640 2,686 May May May May 6 13 20 27 5 5 5 5 5 5 5 4 2,430 2,430 2,430 2,430 38 30 30 26 2.478 2,469 2,470 2,466 10, 10, 10, 10, 2,497 2,496 2,493 2,494 5,912 5,888 5, 896 5,902 3,175 3,161 3,138 3.116 345 351 353 326 259 257 258 256 5,532 5,611 5,694 5,747 2,697 2,774 2,859 2,901 248 302 375 388 r Revised. pPreliminary. NOTE.—For description of figures in this table and discussion of their significance, see BULLETIN for July 1935, pp. 419-429. Reprints of article, together with all available back figures, may be obtained upon request from Division of Research and Statistics. Back figures are also shown in Annual Report for 1934 (table 4) and for excess reserves in BULLETIN for August 1935, pp. 499-500 .JUNE 467 FEDERAL RESERVE BULLETIN 1936 ASSETS AND LIABILITIES OF FEDERAL RESERVE BANKS; ALSO FEDERAL RESERVE NOTE STATEMENT, MAY 30, 1936 [In thousands of dollars] Total Boston New York Phila- Cleve- Rich- AtlanSt. delChicago Louis ta phia land mond Minneapolis KanSan sas Dallas FranCity cisco ASSETS Gold certificates on hand and due from U. S. Treasury Redemption fund—Federal Reserve notes Other cash Total reserves Bills discounted: For member banks For nonmember banks, etc Total bills discounted Bills bought: Payable in foreign currencies Industrial advances U. S. Government securities: Bonds Treasury notes Treasury bills Total Government securities . . . Other Reserve bank credit: Other securities Due from foreign banks Reserve bank float (uncollected items in excess of deferred availability items) Total Reserve bank credit outstanding Federal Reserve notes of other banks. _ Uncollected items not included in float Bank premises All other assets Total assets 7,824,035 477,104 3,162, 847 392, 601 562, 997 242, 746 199,072 1, 571, 364 206, 293 157,240 211,138 137,680 502,953 13, 061 2,322 295, 258 27, 705 1, 033 94* 78! 38' 81, 562 39, 297 27, 943 19,392 1,908 9, 808 992 659 36, 774 13, 637 267 1.058 6, 854 16.476 8,132,354 507,131 3, 245, 442 432, 284 591, 88f 202 923 210, 788 1,608, 797 220, 922 5,437 11 45: 3,382 446 5,448 457 3,382 446 3,076 30, 274 224 2,942 1,091 7,389 316 5,199 110 2 293 1,793 120 3, 772 228. 672 143,321 515,828 156 120 8 458 156 128 458 185 61 1,430 8' 993 87 1, 677 217 1,595 108 789 38: 2. 130 265, 847 17,956 1, 545, 908 103, 259 618, 648 36, 462 68,473 20, 755 23.973 12, 834 11,019 480, 307 116,012 143, 3,41? 76, 773 65,91f 180, 603 40, 353 50, 640 27,109 23, 275 28,415 169,985 122.764 2,430,403 157, 677 729, 383 177,120 218, 025 321, 164 123,200 75,734 116,844 181 237 4,309 22 334 2, 473,928 161,651 18, 690 550, 773 48,052 41,731 116,716 381 55, 852 3,113 281 2,490 100,209 1, 131 13, 492 14,652 13,013 81,20r 45,276 76,735 28, 499 15, 80PJ 27,096 I —- 27 10 - 1 , 127 8: 565 2, 508 743, 830 182,934 219,053 121,765 103,682 2,287 4, 485 804 1,217 1,100 147, 306 38, 345 53, 814 43, 381 25. 847 10, 851 5,080 6, 525 2,91^ 2, 281 1,614 30, 767 3,704 1,066 1,457 460 2,246 5,181 10,629 185 19,347 21,918 55,910 131,115 19,743 46. 298 95,000 199,331 181 16 1,422 -1,831 324, 149 123, 554 76, 826 119,662 398 201,424 1,421 710 2, 853 75, 66; 22, 570 15.547 4. 830 2, 453 1,531 277 451 11,265,528 728, 409 4,182, 681 663,151 873, 991 434,341 'H5, 275 2,016,842 371,197 259, 426 1,808 24, 593 3, 580 368 468 260,146 '47, 601 LIABILITIES F. R. notes in actual circulation 3, 794, 589 342, 680 Deposits: Member bank—reserve account._. U. S. Treasurer—general accountForeign bank . Other deposits 5, 719,490 517,941 53, 523 283,173 Total deposits Deferred availability items Capital paid in Surplus (sec. 7) Surplus (sec. 13b) Reserve for contingencies All other liabilities 6, 574, 127 550, 773 130, 792 145, 501 26,513 34,111 9,122 Total liabilities Ratio of total reserves to deposit and Federal Reserve note liabilities combined (percent) Commitments to make industrial advances FEDERAL RESERVE NOTE STATEMENT Notes issued to Federal Reserve banks by Federal Reserve agents Collateral held by agents as security for notes issued: Gold certificates on hand and due from U. S. Treasury Eligible paper U. S. Government securities Total collateral 795, 832 285, 286 369, 611 171,034 161,817 :, 586 2, 695, 364274, 076 375, 489 163,144 99,044 177,169 25, 259 35, 947 35,895 33,189 18,453 5,081 2,430 1, 933 5,137 226,311 2,425 3,641 10,133 1,539 879,018 162,454 113,978 143,245 75, 766 293, 868 980,610 132, 89, 805 171,73*' 120,322 352,903 28, 433 32, 330 25, 494 25. 42f< 31,395 35, 765 6, 407 1, 657 1, 326 1,599 1,602 3,811 2, 606 9, 586 4,4' 1,600 1, 666 13,566 3,117,297 306, 011 418,942 205,110 144, 299 1,018,056 175,984 121,102 200,361 154,985 406, 045 147, 306 38,345 53, 814 43, 381 25, 847 75, 667 22, 570 15,54: 29, 091 18.760 24, 593 4,712 50, 866 12, 315 12,624 12, 022 3, 764 2. 979 3, 951 3,802 10, 154 4, 22P 5,186 50, 825 13,406 14, 371 9, 645 5, 616 21,350 4, 655 3,149 3,613 3,783 3, 448 7,744 4, 231 1,007 1, 003 1,142 1,121 754 1, 391 546 1,252 3,111 1,272 8, 849 3,000 1,463 7, 573 893 844 1,328 1,849 2, 516 511 3, 962 557 205 331 221 470 326 197 1, 765 11,265,528 728,409 4,182, 681 663,151 873, 991 434, 341 345,275 2,016,842 371,197 259, 426 382, 468 260,146 747, 601 78.4 78.2 25, 070 2,817 82.9 10, 302 73.1 75.1 69.9 84.8 65.3 69.9 66.5 322 1,516 2,388 79 1,831 94 467 677178, 296 54; 4,410 4, 049, 212 361, 720 880, 262 295, 900 384, 678180, 4, 032, 523 376,000 457 4,078 65, 000 890, 706 296, 000 387, 500185, 000 147, 685 16 60 446 2,047 48 35, 000 915, 000 148,632 120,000 149,000 84,000 333, 000 112 155 121 431 185 22, 000 8,000 4,101, 601 376,457 892, 753 296, 446 387, 548185,016 182, 745 915, 000 170, 744 120, 155 157,121 912, 200 169, 768118,044 155, 542 83,101 329,024 84, 431 333,185 468 FEDERAL RESERVE BULLETIN JUNE 1936 PRINCIPAL ASSETS AND LIABILITIES OF THE FEDERAL RESERVE BANKS, BY WEEKS [In thousands of dollars] Total Total reserves: May 6 May 13 May 20 May 27 Total bills discounted: May 6 May 13 May 20 _. _ _. May 27 Bills bought, payable in foreign currencies: May 6 May 13 May 20 May 27 Industrial advances: May 6 May 13 May 20 May 27 U. S. Government securities: May 6 May 13 May 20 May 27 Total Reserve bank credit outstand ing: May 6 May 13 May 20 . May 27 Boston New York Phila- Cleve- Richdelphia land mond Atlanta Chicago MinSt. Louis neapolis Kansas City San Dallas Francisco 1, 528, 271 235, 745165, 000 241 565 146, 284 510,225 8,038,801 535, 340 3,158,110 439, 277 578, 672 284, 054 216, 258 3 0 3,58,10 145,132 531,413 8,067, 213 535 1 5 0 624 535, 783 783 33,150, 624431 431,774 774581, 629 279, 492 211, 2901, 552,112 232, 202 173, 217 242, 545 , ,225, 766 429 ,715 9096 , 265,395 207, 590 1,564,358 223,622 167, 249 230; 8,088,197 526000 1,941 148, 687 519, 778 8,147, 548 526,000 3, 225, 766 429, 715 5 1 7 69 , ,8 , 1, 617, 028 230, 963165,915 229, i, 042145,428 523, 779 516,031 3, 229, 514 429, 422 589, 710 262, 455 208, 261 141 4,584 991 355 315 344 349| 2,878 130 4,781 146 383 318 362 346 128 4,749 176 377 122 520 2,960 172 128 458 427 185 2,951 381 4,828 4,676 4,677 4,544 4,299 350 350 339 320 1,734 1,735 1,682 1,585 30,170 29,963 30, 487 30, 462 2,853 2,845 2, 850 2,942 7,682 7,513 7,492 7,396 473 473 460 436 441 441 429 406 191 191 185 174 164 164 159 150 581 581 565 534 87 87 87 87 61 61 61 61 133 133 129 122 133 133 129 122 328 328 319 302 2,133 2,118 2,114 2,130 520 520 565 565 1,459 1,464 1,459 1,461 943 941 996 993 1,728 1,723 1,720 1,717 1,141 1,140 1,589 1,595 199,331 199,331 199,331 199,331 2, 430,336 157, 677 2,430, 259 157, 677 2, 430, 247 157, 677 2,430, 255 157, 677 824 5, 245 1,810 3,832 3,830 811 5, 249 799 5, 247 1*878 3,778 5, 215 1,878 3,772 729, 383 177,120 218,025 116, 716 100, 209 "i, 209 729, """,383 177,120 218,025 116,716 100, 729,, 383 177,120 218, 025116,716 100, 209 729, 383 177,120 218, 025 116, 716 100,209 321,164 123,:,200 321,164 123, 200 321,164 123, 200 321,164 123, 200 75,667 116,844 75, 590 116,844 75, -" 578 578 116,844 75,586 116,844 95,000 95,000 95, "" 000 95,000 2, 478, 224 161, 582 2, 469, 411 161,378 2, 469, 91 161, 277 2, 466,190 160,351 743, 749 184, 761 220, 414121,880 102,120 744,368 185:137 220, 032 123, 982102, 210 745, 301 185, 197 219, 538 "" 121,185102, 278 742, 632 185,151 220,462 l: .21,611 101,150 328,359 324,380 323,113 321,' 122,889 122,957 122,031 121, 842 77,990 118,432 76,936 117, 740 307 117, 732 77,""" 76, 972 118, 466 95,444 200,604 94,983 "' """ 195,308 94,?"" 360 200, 596 95, 179 200, 472 3, 778,880 343,407 3, 762,028 341,240 3, 760, 729340, 735 3, 758, 973341,204 786,980 279,161 369,148 171, 421 162,009 777, 855 281, 884 372, 229172, 558 161,039 778,893 280,666 370, 0, 485 ~~ 171,001 161,372 776, 519 282, 243 371 1, 474 170,025 159, 725 873,322 162,253 115, 303 146, 361 76, 333 293,182 871,831 160, 987 113, 974 142,039 75, 404 290,988 " 848 290, 904 873, 247 """ 925 114,426 142,227 75, 874, 411 160, 472 114, 428 141, 962 75, 223 291, 286 LIABILITIES Federal Reserve notes in circulation: May 6 May 13 May 20 . _ May 27 Deposits: Member bank—reserve account: May 6 May 13 May 20 _ . May 27 U. S. Treasurer—general account: May 6 May 13 May 20 . May 27 Foreign bank: May 6 May 13 May 20 May 27 Other deposits: May 6 May 13 May 20 May 27 Commitments to make industrial advances: May 6 May 13 May 20 May 27 , 685 363, , 616190, 205 110, 460 216 280, 5, 531,998 288,944 2,, 524, ,117 271, 5,611,072 292, 404 2,, 561117 271 462 462 369, 369 686186, 301 109, 733 561, 175,109 103,992 5, 694,009 283,,250 2, , , 758 274, 734 371, 734 , 668, 480 274, 540 377, 878 167, 016 102, 420 5,747, 228 273, 217 17 2,675, 675 902, 254 144, 937 913,! 144, 503 935, 052 134, 220 986,851 144,484 82, 550 173,505 119,678 350,948 93, 374 176, 526 123, 729 368, 261 88, 482 167, 363 122, 776 368, 539 89, 275 168, 858 121, 987 365, 222 621,759 577, 985 513,104 544,183 33, 229 31,174 32,188 32, 603 263,145 228,066 191, 605 201,184 30, 715 29, 642 25, 639 26, 574 34, 873 29, 234 23, 456 30,911 29, 794 30, 591 27,103 34,187 32, 854 29, 825 31, 394 32, 961 32, 925 42,069 30, 825 32,800 36, 283 34, 271 35, 384 31, 787 32, 238 30, 318 29, 033 27,662 32, 022 32, 274 30, 253 28, 520 33, 214 29,148 32, 243 32, 205 30,467 31,373 23,981 32, 789 81,851 84, 226 85, 482 54, 493 5,967 6,239 6,239 4,087 7,499 7,841 7,841 5,137 7,419 7,757 7,757 5,081 3, 548 3,710 3,710 2,430 2,822 2,951 2, 951 1,933 9,354 9,780 9,780 6,407 2,419 2,529 2,529 1,657 1,935 2,024 2,024 1,326 2,337 2,443 2,444 1,599 2,338 2,445 2,445 1,602 5,564 5,818 5,818 3,811 263,437 266, 517 267, 384 271,122 5,279 6,005 4,771 5,189 30, 649 30, 689 31, 944 19, 423 217, 936 221,829 222, 758 222, 901 2,044 1,921 1,904 1,846 1,843 1,783 2,739 2,595 2,035 1,858 1,549 1,973 1,950 1,881 2,176 4,:" 3,422 3,091 2,891 2,681 7,445 7,437 7,349 7,995 4,638 4,411 4,407 4,543 919 2,090 1,750 1,774 2,026 13,900 12,408 l', 566 13, 524 1,570 13, 775 25, 842 26,014 25, 297 25,095 2,918 2,917 2,897 2,812 10,333 10,330 10, 391 10, 342 328 326 326 326 1,516 1,522 1,515 1,515 2,403 2,398 2,389 2,388 374 374 298 297 1,932 1,929 1,835 1,831 102 94 94 91 590 590 480 467 582 582 581 547 4,685 4,873 4,412 4, 397 469 FEDERAL RESERVE BULLETIN JUNE 1936 INDUSTRIAL ADVANCES AND COMMITMENTS UNDER SECTION 13b OF THE FEDERAL RESERVE ACT, JUNE 19, 1934, TO MAY 27, 1936 [Amounts in thousands of dollars] Date (last Wednesday of each month) Applications rec- Applications approved to date by Federal Reserve banks (with and ommended for without conditions) approval by Industrial AdviApplications sory Commitreceived to date Federal FinancExpired, ing Federal Reserve tees to date instirepaid, Reserve Approved (with and withtution bank Total bank but not or with- particiout conditions) commitadvances ments com- drawn by pations outpleted * applioutoutcant standing standing standing1 Number Amount Number Amount Number Amount 1934—Dec. 26 5,053 187, 696 1,122 54, 531 984 49, 634 13, 589 8,225 20,966 5,558 1,296 1935—Jan. 30 _ Feb. 27 Mar. 27 Apr. 24 May 29 June 26 July 31 Aug. 28 Sept. 25 Oct. 30 Nov. 27 Dec. 31 (Tuesday) 5,283 5,595 5,897 6,130 6,428 6,618 6,863 7,029 7,195 7,388 7,500 7,615 195, 710 205, 581 217, 756 225, 900 245, 078 263, 482 271, 768 278,022 292, 747 299,927 302,331 306, 708 1,341 1,432 1,521 1,633 1,734 1,815 1,907 1,970 2,009 2,083 2,134 2,176 73,470 76, 575 79, 490 86, 374 90, 799 102,331 109, 603 112, 629 121,837 126,192 130, 502 132, 460 1,168 1,268 1,364 1,467 1,571 1,646 1,739 1,786 1,834 1,901 1,948 1,993 64, 518 72, 525 76, 441 81,134 86, 282 88, 778 103,633 107, 244 115,350 118,378 121,947 124,493 17, 493 19,163 20, 785 26, 206 26, 977 27, 518 28, 354 29, 447 30,132 32, 719 32, 634 32,493 11, 739 13, 963 15, 732 16,908 19, 425 20, 579 23,022 26,314 26, 892 27, 057 28,002 27,649 26, 362 26, 591 23, 552 16,956 13, 850 11,248 19, 735 15, 319 18, 791 13, 357 13,466 11,548 7,160 10, 727 13,900 17,185 21, 802 24, 900 26,911 29,556 32,475 36, 565 38, 952 44,025 1,764 2,081 2,472 3,879 4,228 4,533 5,611 7,0 8,680 8,893 8,778 1936—Jan. 29 Feb. 26 Mar. 2.5 Apr. 29 May 27_ ___ 7,714 7,831 7,934 8,046 8,113 311,081 315, 081 319, 595 323, 669 329,316 2,212 2,245 2,294 2,338 134, 243 135, 320 138, 450 140,104 141, 749 2,023 2,049 2,097 2,139 2,162 125,810 126, 643 129, 580 131,195 132, 549 32, 483 32,129 30,947 30,800 30, 958 27, 004 25, 866 25,421 25, 576 25, 095 10, 888 10,434 11,008 9,730 9,343 46, 736 50, 636 54,654 57,351 59, 512 7,578 7,550 7,737 7,641 2,374 1 Includes applications approved conditionally by the Federal Reserve banks and under consideration by applicant. Does not includefinancinginstitution guaranties of advances and commitments made by Federal Reserve banks. NOTE.—On May. 27, 1936, there were 80 applications amounting to $8,820,901 under consideration by the Industrial Advisory Committees and the Federal Reserve banks. 2 MATURITY DISTRIBUTION OF BILLS AND SECURITIES HELD BY RESERVE BANKS [In thousands of dollars] Total Bills discounted: May 6 May 13 May 20 May 27 Bills bought in open market: May 6 May 13 May 20 May 27 Industrial advances: May 6 May 13 May 20 May 27 U. S. Government securities: May 6 May 13 May 20 May 27 Other securities: May 6 May 13 May 20 May 27 Within 15 days 16 to 30 days 31 to 60 days 61 to 90 days 703 588 91 days Over 6 to 6 months months 4,584 4,781 4,749 4,828 2,877 3, 044 2, 910 2, 956 32 615 612 718 709 782 221 226 4, 676 4, 677 4,544 4,299 556 574 432 561 445 315 275 2,145 401 506 815 3,274 3,282 3,022 607 30,170 29, 963 30, 487 30,462 1,669 1, 652 1,600 1,526 232 255 241 224 557 521 573 629 767 760 749 675 1,899 1,945 2,069 2, 055 25,046 24,830 25, 255 25, 353 27,106 24,000 20, 400 20,080 20,400 20,080 67, 263 71, 497 103,586 115,847 68,489 67, 882 744 762 728 070 313,975 305,386 313,945 328, 206 1, 820, 525 1,829,184 1,821, 422 1,809, 520 430, 430, 430, 430, 336 259 247 255 181 181 181 181 144, 135, 138, 133, 220 247 301 338 181 181 181 181 470 FEDERAL RESERVE BULLETIN JUNE 1936 MEMBER BANK RESERVE BALANCES, BY CLASSES OF BANKS [Averages of daily figures. In millions of dollars] Total reserves held Month or week Excess reserves Total—all member banks New York City i 1935— April May June July August September. _ _ October November December 1936—January February March3 April 4,436 4,778 4,979 4,970 5,232 5,243 5,469 5,757 5,716 5,780 5,808 5,420 5,300 1,715 1,813 1,969 1,938 2,306 2,320 2,460 2,563 2,541 2,593 2,579 2,271 2,163 1,831 2,031 2,092 2,072 1,989 2,023 2,101 2,253 2,239 2,209 2,231 2,171 2.181 890 935 918 960 937 900 908 941 935 978 998 978 956 Week ending (Friday): 1936—Mar. 6 Mar. 13 Mar. 20 Mar. 27 5,782 5,773 5,316 5,059 2,530 2, 394 2,194 2,084 2,257 2,350 2,134 2,029 Apr. Apr. Apr. Apr. 5,084 5,150 5,283 5,408 2,162 2,127 2,133 2,169 2, 005 2,085 2,192 2,272 3 10 17 24 Other reserve cities "Country' banks Total—all member3 banks Other reserve cities New York Cityi 'Country" banks 2 2,025. 6 2,296.9 2, 437. 6 2, 385. 2 2, 635. 8 2, 628. 0 2,819.7 3,061. 2 2, 982. 7 3, 032. 7 3, 037. 8 2,653. 3 2, 509. 7 723.0 797.5 915.3 867.6 1,214.2 1,177. 3 1,308. 8 1, 392. 7 1, 350. 4 1, 395. 4 1,360.1 1,055. 8 939.9 878.4 1,038. 4 1, 079. 0 1, 037. 5 956.4 979.5 1, 035. 2 1,162.1 1,133.1 1, 090. 4 1,110.5 1,054. 2 1, 058. 3 424.3 461.0 443.4 480.1 465.3 471.2 475.7 506.4 499.2 547.0 567.3 r 543. 3 511.5 995 1,029 988 945 3,003. 0 2,997.0 2, 547. 0 2, 313. 0 1, 303. 9 1,166. 2 974.8 894.0 1,140. 4 1, 230.1 1,014.6 911.7 559.0 601.0 558.0 507.0 917 938 957 967 2,325. 0 2, 393. 0 2, 501. 0 2,613.0 944.1 910.7 913. 2 945.0 904.7 971.9 1,064. 5 1,138. 5 476. 0 510.0 523.0 530.0 r r Revised. 1 Central reserve city banks only. 2 Weekly figures of excess reserves of all member banks and of country banks are estimates. 3 For total reserves and estimated excess reserves of all member banks during the following month, see table on p. 466. Back figures.—See Annual Report for 1934 (table 67). MEMBER BANK RESERVE BALANCES, BY DISTRICTS [Averages of daily figures. In millions of dollars] New York Boston Total Excess Total Excess Philadelphia Total Excess Cleveland Total Excess Richmond Total Excess Atlanta Total Excess 1935—April May June July August September October. __ November. December. 295.7 296.6 291.3 303.2 296.4 305.8 303.5 318.8 336.5 161.8 161.2 154.4 162.0 157.9 167. 5 164.7 179.9 196.0 1, 920. 8 2, 031. 0 2,169. 7 2,148. 4 2, 507. 2 2, 518. 1 2, 655. 7 2, 769. 5 2, 756. 4 810.5 896. 3 997.0 956. 5 1, 294. 4 1, 261. 2 1, 389. 1 1,483. 0 1, 448. 9 221.5 221.3 226.6 225.8 232.3 242.5 262. 1 268.6 266.3 92.4 89.8 91.4 88.4 95.9 106.9 123.2 128.7 124.1 308. 6 320.3 299. 8 309.3 316. 1 330. 2 327.8 358.8 335.8 157.4 162. 3 139.0 147.0 153.3 171.7 170.4 198.3 172.9 142.4 149. 6 144.3 151. 3 156.9 159.5 163.2 169.1 170.0 70.5 76.2 70.5 76.7 81.9 87.4 89. 1 94.0 93.6 85.6 84.2 86.5 104.3 101.7 102.8 104.7 109.1 108.3 27.7 26.4 29.0 47.1 44.5 46. 1 45.9 48.9 45.9 1936—January. __ February.. March April 375. 8 368.5 324.3 299. 6 234.1 225.4 179.9 153.8 2, 823.1 2, 821. 5 2,495. 3 2, 392. 1 1, 509. 0 1, 486. 4 1,163. 4 1, 049. 6 294.3 283.2 295.2 292.5 149.3 137.8 149.4 143.9 339.3 349. 9 355.9 379.3 176.7 187.2 190.8 170.2 176.8 193.8 180.5 92.7 99.1 118.1 105.4 111.6 120.6 118.9 112.8 48.9 58.9 56.3 48.0 Chicago Total Excess St. Louis Total Excess Minneapolis Total Excess Kansas City Total Excess Dallas Total San Francisco Excess Total Excess 1935—April May June July August September. October. _. November. December. 685.4 893.3 950. 1 868.0 778. 6 742.9 784.0 880.0 880.4 368.4 549.8 596. 5 504.2 419.7 388.5 423.0 504.7 502.9 124.9 111.9 137.9 157.6 144.6 147.4 163.8 168.9 165.0 56.4 41.5 67.8 86.2 74.3 77.7 92.4 95.8 90.9 96.3 101.6 113.0 118.3 115.1 104.9 106.0 108.2 104.2 48.2 54.1 63.6 68.7 67.9 60.7 59.0 60.3 55.8 175.1 186.4 181.9 181.0 173.8 172.8 170.5 171.0 171.8 92.1 100.3 93.2 92.3 87.3 90.2 87.4 88.1 89.6 113.2 107.6 109.0 118.2 120.8 106.7 107.3 116.5 119.5 56.0 50.6 51.6 59.8 61.0 51.7 51.0 59.4 62.4 266.9 274.0 268.7 284.9 288.7 309.2 319.9 318.7 301.4 84.1 88.6 83.6 96.3 97.8 118.3 124. 3 120.0 1936—January... February.. March April 793.9 802.5 773.7 778.0 412.3 414.5 390.0 403.0 157. 8 165.6 150.0 142.0 83.4 91.5 76.7 68.1 110.5 121.9 116.1 82.4 62.4 74.2 69.3 35.8 175.8 175.4 168.1 162.4 95.5 96.4 128.4 127.9 128.8 124.5 71. 1 72.0 72.0 67.0 299.0 294.3 300.3 354.2 94.6 '98.6 145.4 r Revised 97.2 JUNE FEDERAL RESERVE 1936 471 BULLETIN KINDS OF MONEY IN CIRCULATION [Outside Treasury and Federal Reserve banks. In millions of dollars] End of month Total i Gold certificates Standard silver dollars Treasury notes of 1890 Silver certificates Subsidiary silver Federal Federal Reserve Reserve bank notes notes United States notes Minor coin National bank notes 1935—May June July August September October.... November. December. 5,540 5,568 5,518 5, 629 5,683 5,713 5,846 5,882 119 117 115 114 112 111 110 109 695 701 702 739 756 773 812 828 296 297 298 298 302 306 309 312 125 125 125 126 127 128 130 131 281 285 280 283 286 281 284 275 3,159 3,223 3,232 3,362 3,439 3,495 3,612 3,667 747 704 654 596 553 514 487 458 1936—January. __ February.. March April May P 5,737 5, 846 5,877 5, 886 5,952 107 106 104 103 102 809 841 864 886 914 303 304 307 309 312 129 129 131 132 133 259 254 245 249 265 3, 598 3,696 3,727 3. 726 3, 760 436 421 406 391 378 Preliminary. Back figures.—See Annual Report for 1934 (table 49). PAPER CURRENCY OF EACH DENOMINATION IN CIRCULATION [Outside Treasury and Federal Reserve banks. Total 1 End of month $1 $2 $10 $20 In millions of dollars] $100 $50 $500 1,000 1935—April May June July August September October... November. December. 5, 028 5, 087 5,114 5, 063 5, 172 5, 220 5, 245 5, 374 5,404 411 420 419 415 424 433 435 448 460 749 760 760 755 778 788 787 815 815 1, 266 1,290 1,296 1,273 1,324 1,334 1,337 1,380 1,373 1, 300 1,309 1,309 1,289 1, 313 1,321 1,329 1,354 1,359 340 343 349 344 347 349 354 356 358 580 588 598 596 598 603 610 617 627 116 115 116 116 116 118 119 120 122 230 225 225 231 233 232 233 234 239 1936—January _._ February.. March April 5,272 5,379 5,405 5,411 434 434 439 442 782 802 804 804 1,333 1,373 1,378 1,379 1,332 1, 360 1, 361 1, 360 355 361 362 360 627 633 641 643 122 123 125 126 240 243 247 249 $5,000 $10,000 Unassorted 2 11 5 4 11 12 11 5 10 1 Total of amounts shown by denominations less unassorted amounts in Treasury and Federal Reserve banks. Includes $1,000,000 of currency of unknown denominations reported by the Treasury as destroyed. Back figures.—See Annual Report for 1934 (table 50). 2 TREASURY CURRENCY SHIPMENTS AND RECEIPTS OF UNITED STATES PAPER CURRENCY OUTSTANDING [Held by Treasury and Federal Reserve banks and in circulation, I n millions of dollars] [By selected banks in New York City. In thousands of dollars] Standard End of month 1935—May June July . August September October November December. - Total 2,525 2, 506 2, 510 2,398 2,386 2,400 2,438 2,476 1936—January 2,493 February__ 2,499 March 2,504 April 2,500 2,490 Mayp silver Subdollars sidiary and silver silver bul-1 lion 850 859 884 905 940 997 Federal Minor United ReStates coin serve notes bank notes National bank notes 1, 066 1,124 313 313 315 316 317 320 322 328 132 133 134 134 134 134 135 136 347 347 347 347 347 347 347 347 88 84 81 78 75 72 70 68 795 769 750 619 573 530 499 473 1,172 1,197 1,218 1,230 1,236 328 328 329 330 330 137 137 137 138 138 347 347 347 347 347 64 62 59 57 55 446 429 413 398 384 1 Includes silver held against silver certificates amounting to $1,106,000,000 on May 31, 1936. p Preliminary. Month 1935—May June July August September October November. December1936—January... February.March April May 1 ShipReceipts ments to from Europe Europe 1,012 191 286 282 721 2, 536 4,203 603 748 13 1, 757 3, 095 3,852 Net receipts 1,612 1, 451 2, 261 2, 289 1,157 864 782 851 600 1,260 1, 975 2,007 436 1, 672' 3,421 248 2,743 3,317 3,109 938 1, 685 1, 995 3,304 1, 352 2, 157 2,167 Net shipments. For description and back figures see BULLETIN for January 1932, pp. 7-9. 472 FEDERAL RESERVE BULLETIN JUNE 1936 GOLD STOCK AND GOLD MOVEMENTS IN THE UNITED STATES ANALYSIS OF CHANGES IN MONETARY GOLD STOCK MOVEMENT OF GOLD TO AND FROM UNITED STATES l [In millions of dollars] [In thousands of dollars] Year or month Gold stock at end of year or month Increase Net in gold gold stock import Net release from earmarki 1936 Other factors 2 May From or to— April January-May ImExImImExExports ports ports ports ports ports 41.6 41.1 2,986.1 Belgium 1 4,003 1,541 England _ 5,042 48 11, 642 2.8 France 8,391 153.3 149.4 1.1 1935—January 133,157 1,564 138,248 17,180 .2 12.3 Germany February 135.3 122.8 2 8,527 7 March 8,567 40.4 13.0 -.7 28.1 Netherlands 8 751 8 752 3 765 8,710 143.4 148.6 -2.3 - 2 . 9 Switzerland April 0 9.6 Union of Soviet 8,858 -1.5 148.1 140.0 May 25.8 1.0 9,116 257.1 230.4 Socialist ReJune _ ._ 12.1 -.4 9,144 27.9 16.2 1,043 814 5,760 publics July 5 11 236 3 25 660 1.8 August 9,203 59.5 46.0 11.7 Canada 1 700 37 7.3 Central America 1.0 September . 9,368 165.0 156.7 1,629 358 268 October 9,693 325.2 315.3 -1.9 11.8 Mexico 4 322 321 713 7 551 6 .6 9,920 226.7 210.6 15.5 Argentina 5 November 1.3 December 10,125 205.2 190.0 13.9 Chile 303 3,545 1,249 1,742 5,585 2,100 .2 148.0 Colombia 10,125 1,887. 2 1, 739.0 Year 184 1,874 Ecuador _ 501 Peru 239 647 1,296 57.2 -1.7 13.3 Uruguay 10,182 1936—January 45.6 10,167 -15.5 -16.6 -9.5 10.6 Venezuela 56 48 244 February 1.0 5.5 March 10,184 17.2 10.7 Australia 1,029 8,748 651 -.2 April 10, 225 41.0 28.1 13.1 British India 9,720 5,106 26, 571 9.6 China and Hong May -3.2 10,401 176.3 170.0 Kong ___ 385 3,148 847 Dutch East Indies Japan p Preliminary. 1,735 7,785 Philippine Islands2 1,716 1 90 241 791 Gold released from earmark at Federal Reserve banks less gold All other countries . placed under earmark (with allowance when necessary for changes in 169, 957 5 28, 106 51 258,841 26, 346 Total golda earmarked abroad for account of Federal Reserve banks). Figures are derived from preceding columns and indicate net result of such factors as domestic production, movements into and out of 1 nonmonetary use, imports and exports that do not affect gold stock Figures represent customs valuations which, with some exceptions, during the month or year, and increment resulting from reduction in are at rate of $35 a fine ounce. 2 weight of gold dollar. Includes all movements of unreported origin or destination. Back figures—See table, p . 497, and Annual Report for 1934 (tables 46 Back figures.—See Annual Report for 1934 (table 44). and 47). 1932 1933 1934 4,226 4,036 8,238 52.9 -190.4 4,202. 5 -446. 2 -173.5 1,133. 9 457.5 -58.0 82.6 473 FEDERAL RESERVE BULLETIN J U N E 1936 ALL BANKS IN THE UNITED STATES [Comprises all national banks in the continental United States and all State commercial banks, trust companies, mutual and stock savings banks and such private and industrial banks as are included in abstracts issued by State banking departments. Also includes, during the period June 1934-June 1935, private banks which, pursuant to the provisions of sec. 21 (a) of the Banking Act of 1933, submitted condition reports to the Comptroller of the Currency. Under the amended provisions of Sec. 21 (a) private banks no longer report to the Comptroller of the Currency. For comparative figures of private banks included in the figures from June 1934 to December 1935, see Federal Reserve Bulletin for December 1935, p. 883, and May 1936, p. 398.] DEPOSITS, EXCLUSIVE OF INTERBANK DEPOSITS NUMBER OF BANKS [In millions of dollars] Nonmember banks Member banks Nonmember banks Total Call date Total National Other Mutual nonState savings member banks banks All banks Call date Member banks Mutual savings banks Other nonmember banks 1931—Sept. 29 Dec. 31 21, 294 19, 966 7,599 7,246 6,653 6,368 946 878 1600 597 13,095 12,123 1931—Sept 29 Dec. 31 49,152 45, 821 29, 469 27, 432 i 10,017 10,105 9,666 8,284 1932—June 30 Sept. 30 Dec. 31 19,046 18,794 18, 390 6,980 6,904 6,816 6,145 6,080 6,011 835 824 805 594 1594 594 11, 472 1932—June 30 Sept. 30 11, 2^6 Dec. 31 10, 980 41, 963 41, 942 41, 643 24, 755 24, 903 24, 803 10,020 i 10,020 10,022 7,188 7,020 6,818 1933—June 30 2 Oct. 25 3 Dec. 30 14,519 5,606 5,818 6,011 4,897 5,052 5,154 709 766 857 576 37,998 23, 338 23, 453 * 23, 771 9,713 4,946 9,708 5,026 1934 15,011 Mar. 5 3 June 30 Oct. 17 3 Dec. 31 579 8,421 1933—June 30 2 Oct. 2 5 3 . Dec. 30 . 38, 505 53 30 17 3 31 5,288 5,417 5,461 5,462 918 958 972 980 578 8,882 16,039 6,206 6,375 6,433 6,442 579 9,018 1934—Mar June Oct. Dec. 16,024 15, 994 15,904 15, 836 6,422 6,410 6,400 6,387 5,446 5,425 5,403 5,386 976 985 997 1,001 579 571 571 570 9,023 9,013 8,933 8,879 1935—Mar. 4 . . June 29 Nov. 1 Dec. 31 6,377 5, 375 1,002 15, 835 1935—Mar. 4 June 29 Nov. 1 Dec. 31 8,337 1936—Mar. 4 3 44, 770 25, 26, 27, 28, 44,455 45, 766 47, 522 48, 964 28, 589 29, 496 31,072 32,159 41,870 _ 1936—Mar 4 ;! 293 615 484 943 9,780 5,475 9,828 6,000 9,837 9,920 9,936 9,963 6,029 6,350 6, 513 6,842 31, 774 For footnotes see table below. For footnotes see table below LOANS AND INVESTMENTS [In millions of dollars] All banks Mutual savings banks Call date Total 1931—Sept. 29 Dec. 31 1932—June 30 Sept. 30 . . Dec. 31 1933—June 3032 Oct. 25 Dec. 30 . .. 1934-Mar. 5 3 June 30 Oct. 17 3 Dec. 31 1935—Mar. 4 June 29 Nov. 1 Dec. 31 Nonmember banks Member banks .. . Loans Investments Total Investments Total Loans Investments Other nonmember banks Total Loans Investments 53, 365 49,704 33, 750 31,305 19, 615 18, 399 33,073 30,575 20, 874 19, 261 12,199 11,314 i 10, 506 10,488 i 6,169 6,218 i 4, 337 4,270 9,786 8,641 6,707 5,827 3,079 2,814 46,071 45, 852 44, 946 27, 834 26, 985 26,063 18,237 18, 867 18, 883 28,001 28,045 27, 469 16, 587 15, 924 15, 204 11,414 12,121 12, 265 10, 316 i 10,316 10,182 6,130 i 6,130 6,079 4,186 i 4,186 4,103 7,755 7,491 7,295 5,117 4,931 4,780 2,637 2,560 2,515 40,076 22, 203 17, 872 11,928 11,894 12, 386 4,103 5,246 3,404 1,841 18, 342 12, 858 13,059 12,833 5,941 21, 977 24, 786 24,953 25, 220 10,044 40,319 9,985 5,906 4,079 5,115 3,238 1,877 12, 706 12, 523 12, 293 12,028 13, 842 14, 652 15, 267 16,122 9,904 5,648 4,256 5,423 3,108 2,315 9,782 5,491 4, 231 5,526 2,955 2,571 2,963 3,003 2,997 2,944 2,738 2,777 2,856 2,985 42, 502 21, 278 21, 224 _. 43, 458 20, 473 22,984 26, 548 27,175 27, 559 28,150 __ 43,747 44, 416 45,008 45, 717 20,394 20, 272 20,140 20, 329 23, 353 24,145 24,868 25, 388 28, 28, 29, 29, 1936—Mar. 4* Loans 271 785 301 985 11, 953 11, 928 11,841 12,175 16,318 16,857 17,460 17,810 30, 288 12, 099 18,189 9,775 9,852 9,854 9,804 5,478 5,341 5,302 5,210 4,297 4,511 4,552 4,594 5,701 5, 779 5,853 5,929 12 Figures of preceding call carried forward. Beginning June 30,1933, all figures (other than for mutal savings banks) relate to licensed banks only, with some exceptions as to nonmember banks. 3 Nonmember bank figures not available. * Prior to Dec. 30, 1933, member-bank figures include interbank deposits not subject to immediate withdrawal, which aggregated $103,000,000 on that date. Back figures.—See Annual Report for 1934 (tables 60 and 61). 474 FEDERAL RESERVE BULLETIN JUNE 1936 ALL MEMBER BANKS—LOANS AND INVESTMENTS [In millions of dollars] Loans to customers (except banks) Call date Total loans and investments Total Open-market loans Purchased paper To ReLoans broport- OtherTo wise to kers others Real ing seoutAcon estate banks' cured banks ceptside securiComown loans accept- and New merances Bills ties unseYork cial ances cured pay- payable paper City' able in abroad bought United States Investments U.S. Government obligations Loans to Other brosecurikers in Total ties New Fully York guarDirect City* mteed TOTAL—ALL MEMBER BANKS 1933—June 30 2 Oct. 25 Dec. 30 1934—Mar. 5 J u n e 30 Oct. 17 Dec. 31 1935—Mar. 4 June 29 Nov. 1 _ . Dec. 31 1936—Mar. 4 29, 985 30, 288 11,337 11,523 11,315 11,093 10,804 10, 782 10, 509 10,420 10, 369 10,465 10, 548 10, 460 7,133 6, 971 6,995 7.351 7, 666 7, 545 7,761 7, 783 8,303 8, 167 8,418 8,802 2,297 2,436 2,395 2, 321 2,202 2,294 2,202 2,198 2,146 2,185 2,196 2,215 9,780 9,951 10,157 10,816 11,054 11,367 11,609 11,739 11,743 12, 313 12,647 12, 601 4,846 4,912 4,797 4,669 4,586 4, 562 4, 459 4,436 4,425 4, 522 4,599 4,527 7,873 8,031 8, 068 8,381 8,456 8, 649 8,780 8,749 8,739 8,821 8,919 8,885 4,194 4,175 4,123 4,103 4,016 3,926 3,849 3, 786 3,798 3,758 3, 754 3, 716 24, 786 24, 953 25, 220 26, 548 27,175 27, 559 28,150 28, 271 28, 785 29, 301 3,752 2.372 178 3, 631 2,364 166 3,606 2, 359 164 3,480 2,382 208 3,309 2,357 167 3,158 2,297 187 3,110 2,273 184 3,031 2, 250 192 2, 931 2,277 179 2,885 2,279 196 2,893 2,284 211 2,832 2,301 192 257 213 250 210 229 232 207 135 159 169 156 330 297 287 225 153 149 155 133 119 94 291 303 223 350 264 276 256 235 201 154 181 164 1,075 1,084 1,009 965 1,108 1,024 1,054 1,085 1,114 1,096 1,112 162 143 146 112 68 66 63 52 48 35 42 29 224 233 170 276 225 232 210 203 183 135 158 141 129 120 103 79 53 55 65 56 50 40 39 36 4,857 5,092 4,972 4,817 4,721 4,932 4,708 4,748 4,834 4, 963 5,006 4,960 788 748 840 855 1,082 802 843 875 975 841 1,047 1,089 1,928 1,894 2,386 3, 842 4,652 5, 267 6,122 6,318 6,857 7,460 7,810 8,189 6,887 6,801 7, 254 8,667 9,137 9,186 9,906 9,821 9,871 .0,080 0, 501 0, 564 720 624 706 687 883 631 662 678 930 828 1,018 1,043 3, 709 3,501 3,542 3, 932 4,265 4,300 4,602 4,628 4,983 4,968 4,985 5,355 2, 551 2,320 2,362 2,768 3,053 2,954 3,246 3,200 3, 462 3,340 3,425 3, 602 51 91 78 89 115 151 135 142 126 124 132 130 58 4,621 100 4,645 112 5,000 138 5,763 154 6,104 123 6,423 131 6,764 134 6, 933 26 7, 093 10 7,589 22 7,824 31 7,845 2,867 2,889 3,209 3, 954 4,102 4,240 4,551 4, 601 4.478 4, 865 5,136 5,090 27 46 34 54 72 95 92 109 116 132 135 145 3, 598 3,748 3,845 4,148 4,283 4,545 4,756 4,757 4,780 4, 903 5,002 4,989 1,469 1,592 1,683 1,946 1,982 1,992 2,108 2,020 1,931 1,874 1,940 1,873 87 164 132 157 200 253 232 255 247 260 272 181 3 276 709 989 1,200 1, 558 1,764 1,768 1,880 5,041 5,093 5,132 4,995 3 5, 239 5,372 5,227 5,298 5,427 5,615 5,541 5,745 105 3 157 237 278 298 348 405 401 505 1,158 1,181 1,179 1,059 1, 056 1,109 1,078 1,131 1,174 1,223 1,159 1,248 75 3 94 257 356 453 658 751 744 745 1,754 1,757 1,790 1,734 1, 908 1,926 1,857 1,878 1,957 1,973 1, 944 2,011 NEW YORK CITY 4 1933—June 30 2 Oct. 25 Dec. 30 1934—Mar. 5 June 30 Oct. 17 Dec. 31 1935—Mar. 4 June 29 Nov. 1 Dec. 31 1936—Mar. 4 1,044 985 989 826 820 805 783 775 793 792 157 149 148 156 156 150 139 139 138 136 140 148 120 179 130 171 144 159 164 145 82 101 107 10 OTHER RESERVE CITIES 1933—June 30 J Oct. 25 Dec. 30 1934—Mar. 5 J u n e 30 Oct. 17 Dec. 31 1935—Mar. 4 June 29 Nov. 1 Dec. 31 1936—Mar. 4 111 117 106 101 138 102 118 113 120 107 123 132 1,590 1,542 1,524 1, 465 1,388 1,319 1,294 1, 261 1,216 1,209 1,206 1,174 1,160 1,144 1,151 1,158 1,145 1,120 1,108 1,093 1,120 1,117 1,109 1,110 1,915 2,033 1,937 1,870 1,853 1,956 1,873 1,909 1,917 2,034 2,100 2, 056 1,117 1,104 1,092 1,077 1,039 1,012 996 966 932 902 894 865 1,055 1,070 1,061 1,068 1,056 1,026 1,026 1,018 1,020 1,026 1,035 1,043 2,005 1,984 1,952 1, 937 1,903 1,868 1,810 1, 785 1,831 1,815 1,810 1,791 3 COUNTRY BANKS 1933—June 30 2 Oct. 25 Dec. 30 1934—Mar. 5 June 30 Oct. 17 Dec. 31 1935-Mar. 4 June 29 Nov. 1 Dec. 31 1936—Mar. 4____ 1 2 3 3 25 215 355 448 553 609 623 630 2,129 2,156 2,162 2,202 3 2, 276 2,337 2,293 2,289 2,296 2,419 2,439 2,486 Loans (secured by stocks and bonds) to brokers and dealers in securities. Beginning June 30, 1933, figures relate to licensed banks only. An estimated small amount of Home Owners' Loan Corporation bonds fully guaranteed by the United States Government is included in 'Other securities" on this date. * Central Reserve city banks. Back figures.—See BULLETIN for November 1935, pp. 722 and 723, or reprint, which may be obtained from Division of Research and Statistics. JUNE 475 FEDERAL RESERVE BULLETIN 1936 ALL MEMBER BANKS—RESERVES, DEPOSITS, AND BORROWINGS [In millions of dollars] Demand deposits Call date ReBalserves with Cash ances with Fedin doeral vault mesRetic serve banks 1 banks Time deposits Cash items Certi- IndiInterbank reportfied vided as and Unituals, in offied partcers' procnerStates PubDolic checks, ships, ess For- Gov- funds cash of col- meseign corerntic letters poralecof tion 2 banks banks ment tions, credit, etc. etc.3 Interbank IndiDevidmand uals, BorrowdeposPospartPub- tal ner- ings its ad- Dolic sav- ships, justed 4 mesFor- funds ings cortic eign porabanks banks tions, etc. TOTAL—ALL MEMBER BANKS 1933—June 30 s . . . Oct. 25 Dec. 30 1934—Mar. 5 June 30. Oct. 17 Dec. 31 1935—Mar. 4 June 29 Nov. 1 Dec. 31 1936—Mar. 4 2,235 2,651 2,678 3,148 3,819 3,976 4,082 4,518 4,933 5,662 5,573 5,784 405 447 471 486 473 550 609 534 537 541 665 624 2,008 1,917 2, 031 2,376 2,760 2,929 3,149 3,386 3,396 3, 760 3,776 3,970 1,485 1,060 1,132 1,159 1,057 1,407 1,903 1,475 1,183 1,756 2,255 1,718 3,057 2,990 3,139 3,676 4,070 4,466 4, 569 5,095 4,978 5, 558 5, 696 6,148 145 117 129 173 155 136 147 169 273 361 444 394 806 918 967 1,790 1,658 1,143 1,636 1,270 779 650 844 600 ,087 ,106 ,320 ,425 ,598 ,680 ,799 1,861 2,091 2,251 2,139 2,173 657 465 378 549 372 590 838 741 417 686 882 779 11,830 11, 873 12,109 12, 252 13, 349 14, 449 14, 951 14, 872 16, 206 17, 327 18, 035 17, 927 12, 089 12, 384 12, 674 13, 066 14, 261 15,312 15, 686 15, 999 17, 530 18, 509 18, 801 19,161 89 87 83 92 122 135 134 145 136 132 151 152 1 6 7 7 8 4 7 8 5 6 5 5 300 270 301 305 333 294 294 290 285 310 361 344 7,803 7,971 7,957 8,258 8,763 8,916 9,020 9,203 9,462 9,671 9, 680 9,784 191 188 143 91 35 24 13 17 9 9 6 11 101 90 93 91 97 84 103 86 133 109 111 108 874 553 476 631 415 666 1,069 810 447 873 1,133 829 1, 255 1,215 1,200 1,402 1,591 1,689 1,798 2,047 1,983 2,203 2,338 2,527 127 100 112 154 135 116 126 147 248 327 410 363 332 379 422 843 802 559 792 572 369 219 224 140 96 71 141 109 167 201 229 190 354 468 323 260 461 299 167 368 154 360 540 500 149 413 524 496 4,676 4,513 4,494 4,422 4,894 5,107 5,370 5,329 5,924 6,104 6,479 6,471 4,358 4,330 4,325 4,268 4,800 5,001 5,069 5,209 5,979 6,112 6,193 6,398 22 1 1 1 5 6 7 7 3 7 7 4 4 4 4 4 10 14 13 12 8 4 4 6 13 12 11 110 106 107 105 69 65 56 44 27 3 3 671 680 620 600 649 623 591 595 567 680 591 586 8 31 5 209 172 204 206 234 199 206 211 203 218 266 251 394 382 371 349 260 197 187 167 118 84 79 72 3,299 3,339 3,364 3,495 3, 727 3,793 3,875 3,985 4,139 4,168 4,210 4,260 16 21 16 8 86 87 83 87 87 87 84 75 76 78 83 82 285 293 300 301 256 210 210 188 162 140 136 95 3,833 3,953 3,973 4,163 4,388 4,500 4,554 4,623 4,756 4,824 4,879 4,938 167 136 123 83 35 17 13 14 9 8 788 781 778 755 585 472 452 399 307 227 218 167 NEW YORK CITY 6 1933—June 30 5 Oct. 25 Dec. 30 1934—Mar. 5 June 30 Oct. 17 Dec. 31 1935—Mar. 4 June 29 Nov. 1 Dec. 31 1936— Mar. 4 846 968 903 1,170 1,417 1,443 1,576 1,856 1,935 2,590 2,541 2,493 1 1 1 1 OTHER RESERVE CITIES 1933—June 30 5 Oct. 25 Dec. 30 1934—Mar. 5 June 30 Oct. 17 Dec. 31. 1935—Mar. 4___ June 29 Nov. 1 Dec. 31 1936—Mar. 4 937 1,154 1,202 1,293 1,633 1,685 1,683 1,746 2,079 2,172 2,105 2,274 156 172 198 189 194 228 247 231 250 251 295 298 1,205 1, .142 1,169 1,333 1,559 1,590 1,750 1,873 1,856 2,038 1,989 2,106 462 389 484 393 468 552 627 502 544 662 887 703 1, 575 1,545 1, 685 1,993 2,178 2,431 2,429 2,684 2,649 2,955 2,943 3,188 356 425 434 766 682 458 666 546 319 335 483 366 437 455 557 613 700 692 767 826 872 889 915 949 124 98 126 107 132 132 193 151 164 167 231 177 4, 578 4,727 4,822 4.823 5,305 5,871 5,992 5,901 6,522 7,128 7,302 7,204 4,677 4,892 5,021 5,150 5,670 6,143 6, 324 6,376 7,013 7,523 7,562 7,628 59 74 72 80 106 117 117 128 119 115 134 135 452 529 573 685 769 848 822 916 920 900 927 1,017 203 232 225 230 216 258 275 246 236 237 305 268 702 685 769 951 1,105 1,257 1,296 1,427 1,406 1,613 1,676 1,757 149 118 172 135 174 189 207 163 192 221 235 187 228 230 254 281 300 345 342 364 347 399 415 433 116 114 111 181 174 125 178 152 90 95 137 93 555 579 622 702 731 787 804 845 865 895 901 965 72 68 85 74 85 98 106 90 104 106 127 106 2,576 2,633 2,793 3,007 3,150 3,472 3,589 3,642 3,761 4,095 4,254 4,252 3,054 3,162 3,328 3,648 3,792 4,168 4,292 4,414 4,538 4,875 5,047 5,136 12 10 11 15 17 16 17 16 17 16 17 1 1 1 1 1 1 1 1 COUNTRY BANKS 1933—June 30 s Oct. 25 Dec. 30 1934—Mar. 5 June 30 Oct. 17 Dec. 31 1935—Mar. 4 June 29 Nov. 1 Dec. 31 1936—Mar. 4 7 1 Prior to Dec. 31, 1935, excludes balances with private banks to the extent that such balances were reported in "Other assets." Since Oct. 25, 1933, includes time balances with domestic banks which on that date amounted to $69,000,000 and which prior to that time were reported in "Other assets." 2 Does not include cash items in process of collection reported in balances with domestic banks. Prior to Dec. 31, 1935, includes cash items on hand3 but not in process of collection, amounting on that date to $16,000,000. Includes "Due to Federal Reserve banks (transit account)", known as "Due to Federal Reserve banks (deferred credits)" prior to Dec. 31, 1935.4 Demand deposits other than interbank and U. S. Government, less cash items reported as in process of collection and, prior to Dec. 31, 1935, less 5cash items reported on hand but not in process of collection. Beginning June 1933 figures relate to licensed banks only. 6 Central reserve city banks. Back figures.—See BULLETIN for November 1935, pp. 724-726, or reprint, which may be obtained from Division of Research and Statistics. 476 FEDERAL RESERVE BULLETIN JUNE 1936 REPORTING MEMBER BANKS IN 101 LEADING CITIES [Monthly data are averages of weekly figures. In millions of dollars] Open-market loans Loans to customers (except banks) Investments Reserve Balwith Cash ances Fedwith in Other eral vault domesRetic securi- serve banks 3 Fully ties banks Direct guaranteed U. S. Government obligations Total loans and investments Total 193.5—May 1936—January February March April May 19,814 20,928 21,053 21,445 21, 745 21,832 6,715 6,723 6,659 6,810 6,932 6,967 177 176 174 196 215 212 2,129 2,071 2,056 2,076 2,077 2,078 1,126 1,142 1,143 1,147 1,141 1,146 3,283 3,334 3,286 3,391 3,499 3,531 129 70 69 73 70 82 395 364 352 345 351 333 844 923 901 995 1,008 973 11,731 12, 848 13,072 13, 222 13,384 13, 477 7,853 8.599 8,708 8,737 8,767 8,877 787 1,155 1,194 1,247 1,273 1,286 3,091 3,094 3,170 3,238 3,344 3,314 3,820 4,773 4,782 4,363 4,180 4,577 301 354 356 366 370 378 2,043 2,336 2,335 2,334 2,262 2,283 Mar. 4 Mar. 11 Mar. 18 Mar. 25. Apr. 1 Apr. 8 Apr. 15 Apr. 22 Apr. 29 May 6 May 13 May 20 May 27 21,206 _ 21, 326 21, 637 21,611 21, 621 21,731 21, 796 21, 783 21, 795 21, 897 21,820 21, 799 21, 814 6,758 6,793 6,842 6,850 6,962 6,962 6,929 6,910 195 202 200 189 220 213 219 214 209 212 208 213 2,060 2,067 2,090 2,087 2,103 2,098 2,062 2,059 2,063 2,083 2,080 2,079 2,070 1,148 1,146 1,146 1,150 1,144 1,143 1,140 1,140 1,141 1,146 1,146 1,147 1,146 3, 355 3,378 3,406 3,424 3,495 3,508 3,508 3,497 3,485 3,509 3,519 3,556 3, 542 83 77 88 70 66 62 67 101 100 62 65 341 349 346 343 352 353 352 351 346 341 336 332 322 1,003 1,062 979 934 990 984 1,023 1,009 1,032 1,020 969 964 940 13,040 13,054 13, 387 13, 407 13, 229 13,362 13, 426 13,451 13, 452 13,485 13, 462 13,446 13,515 8,634 8,588 8,865 8,859 8,643 8,791 8,796 8,805 8,802 8,847 8,872 4,723 4,632 4,089 4,008 3,866 4,052 4,216 4,348 4,416 4,458 4,537 4,623 4,690 360 376 362 366 356 375 365 372 382 370 383 369 8,920 1,224 3,182 1,244 3,222 1,257 3,265 1,265 3,283 1,265 3,321 1,267 3,304 1,276 3,354 1,277 3, 369 1,281 3,369 1,278 3,360 1,289 3,301 1,285 •3,293 1,290 3,305 2,401 2,419 2,287 2,230 2,198 2,234 2,316 2,310 2,252 2,242 2,250 2,319 2,319 7,682 7,937 8,061 8,391 8,547 8,585 2,089 2,036 2,025 2,089 2,121 2,141 737 730 734 750 747 750 128 128 130 135 132 133 1,166 1,119 1,100 1,141 1,175 1,186 197 173 161 158 164 144 801 895 873 960 4,520 4,799 4,969 5,145 5,259 5,324 3,227 3,346 3,430 3,479 3,511 3,647 259 399 434 519 551 545 1,034 1,054 1,105 1,147 1,197 1,132 1,739 2,498 2,484 2,138 1,968 2,234 79 77 79 74 8,296 8,457 8,410 8,400 8, 533 8,514 8,556 8,561 8,571 8,635 8,550 8,561 8,595 2,097 2,069 2,095 2,096 2,120 2,148 2,118 2,117 2,101 2,134 2,133 2,159 2,140 742 744 758 755 758 763 737 740 739 754 750 750 748 135 135 135 136 134 134 131 131 130 133 133 133 133 1,158 1,128 1,138 1,141 1,165 1,184 1,183 1,179 1,164 1,177 1,179 1,204 1,185 155 159 160 158 168 165 163 163 159 153 145 141 134 5,046 5,169 5,160 5,203 5,237 5,222 5,264 5,284 5,289 5,302 5,282 5,314 5,396 3,451 3,522 3,466 3,476 3,485 3,499 3,506 3,523 3,545 3,581 3,618 3,655 3,734 479 1,116 511 1,136 537 1,157 549 1,178 550 1,202 549 1,174 559 1,199 549 1,212 548 1,196 542 1,179 548 1,116 543 '1,116 546 1,116 2,390 2,225 1,989 1,949 1,892 1,910 1,972 2,009 2,056 2,119 2,212 2,294 2,313 75 79 78 78 86 77 83 76 74 81 71 71 73 12,132 12,991 12,992 13,054 13,198 13, 247 4,626 4,687 4,634 4,721 4,811 4,826 119 117 113 133 148 140 1,392 1,341 1,322 1,326 1,330 1,328 1,014 1,013 1,012 1,009 1,013 2,117 2,215 2,186 2,250 2,324 2,345 191 191 187 187 189 7,211 8,049 8,103 8,077 8,125 8,153 4,626 5,253 5,278 5,258 5,256 5,230 528 756 760 728 722 741 2,057 2,040 2,065 2,091 2,147 2,182 2,081 2,275 2,298 2,225 2,212 2,343 256 301 305 315 319 326 1,972 2,260 2,256 2,257 2,183 2,209 12, 910 _ 12, 869 13, 227 13, 211 13, 088 13, 217 13, 240 13, 222 13,224 13, 262 13, 270 13, 238 13, 219 4,661 4,724 4,747 4, 754 4,842 4,814 4,811 4,793 4,797 4,816 4,820 4,836 4,832 133 140 136 125 157 146 152 147 141 142 137 141 140 1,318 1,323 1,332 1,332 ],345 1,335 1,325 1,319 1,324 1,329 1,330 1,329 1,322 1,013 1,011 1,011 1,014 1,010 1,009 1,009 1,009 1,011 1,013 1,013 1,014 1,013 2,197 2,250 2,268 2,283 2,330 2,324 2,325 2,318 2,321 2,332 2,340 2,352 2,357 186 190 186 185 184 188 189 188 187 188 190 191 7,994 7,885 8,227 8,204 7,992 8,140 8,162 8,167 8,163 8,183 8,180 8,132 8,119 5,183 5,066 5,399 5,383 5,158 5,292 5,290 5,282 5,257 5,266 5,254 5,213 5,186 745 733 720 716 715 718 717 728 733 736 741 742 744 2,066 2,086 2,108 2,105 2,119 2,130 2,155 2,157 2,173 2,181 2,185 2,177 2,189 2,333 2, 407 2,100 2,059 1,974 2,142 2,244 2,339 2,360 2,339 2,325 2,329 2,377 311 324 313 315 308 324 315 321 327 320 330 318 334 2,326 2,340 2,209 2,152 2,112 2,157 2,233 2,234 2,178 2,161 2,179 2,248 2,246 Date or month AcTo Loans cept- Loans broTo Other to ances kers others Real- loans banks and to broout- on se- estate in com- kers to side New Total mer- York loans custo-2 New curicial ties mers York paper Cityi Cityi bought TOTAL—101 CITIES .,950 6,953 6,995 6,972 NEW YORK CITY 1935—May 1936—January February March A.pril May Mar. 4 Mar. 11. . . Mar. 18 Mar. 25 Apr. 1 Apr. 8 Apr. 15 Apr. 22 Apr. 29 May 6 May 13 May 20 May 27 1,027 946 978 922 918 OUTSIDE NEW YORK CITY 1935—May 1936—January February March April May Mar. 4 Mar. 11 Mar. 18 Mar. 25 Apr. 1 Apr. 8 Apr. 15 Apr. 22 Apr. 29 May 6 May 13 May 20 May 27 r Revised. 1 Loans (secured by stocks and bonds) to brokers and dealers in securities. Includes reporting banks' own acceptances. Figures reported prior to 1936 excluded a certain amount of time balances and balances with private banks; the amount excluded on Dec. 31, 1935, was approximately $38,000,000 at all weekly reporting member banks. For other figures and note, see next page. 2 8 JUNE 477 FEDERAL RESERVE BULLETIN 1936 REPORTING MEMBER BANKS IN 101 LEADING CITIES—Continued [Monthly data are averages of weekly figures. In millions of dollars] Date or month Cash items reported as Other in proc- assets ess of collection l Time deposits Demand deposits Total assets Interbank Total liabilities United Certified States Domes- Foreign Govern- checks, Other tic etc. ment banks banks Demand deposits—adusted 2 Interbank DoFor- Other mestic eign banks banks Borrowings Other Capiliabil- tal acities count TOTAL—101 CITIES 1935—May 1936—January February March April May Mar. 4 Mar. 11 Mar. 18 Mar. 25 Apr. 1 Apr. 8 Apr. 15 Apr. 22 Apr. 29 May 6 May 13 May 20 May 27 1,270 1,335 1,277 1,413 1,526 1,269 28, 714 31, 056 31,140 31, 255 31, 437 31,715 4,628 5,485 5,512 5,516 5,351 5,346 213 427 397 376 356 375 891 654 545 646 758 752 553 537 493 580 576 420 13, 090 14, 622 14, 848 14, 714 14, 932 15, 220 12, 373 13,824 14,064 13, 881 13, 982 14,371 130 135 135 133 133 131 4,970 4,892 4,893 4,923 4,971 5,051 719 796 807 838 822 874 3,506 3,503 3,505 3,512 3,527 3,541 1,437 1,546 1,369 1,300 1,744 1,263 1,850 1,346 1,428 1,283 1,341 1,241 1,210 31, 469 31, 646 31, 062 30,844 31,138 30, 990 31, 887 31, 504 31, 666 31, 633 31,710 31,714 31, 801 5,739 5,699 5,375 5,252 5,297 5,292 5,487 5,379 5,299 5,361 5,360 5,344 5,317 387 380 373 366 370 359 351 350 348 374 377 377 374 511 510 785 777 774 760 755 751 752 754 752 754 747 620 664 527 508 699 486 692 474 528 479 392 415 393 14, 783 14, 923 14,613 14,539 14, 623 14, 667 15,154 15,059 15,158 15, 064 15, 221 15,216 15, 379 13,966 14, 041 13, 771 13, 747 13,578 13, 890 13,996 14,187 14, 258 14, 260 14, 272 14, 390 14, 562 134 133 134 133 133 135 133 133 132 130 132 131 132 4,911 4,931 4,922 4,921 4,909 4,956 4,958 4,985 5,047 5,076 5,056 5,043 5, 028 877 795 815 789 803 821 833 865 850 871 892 884 3,512 3,511 3,513 3,513 3,518 3,523 3,527 3,533 3,532 3,540 3,544 3,538 3,543 NEW YORK CITY 708 670 627 737 789 565 580 472 472 465 478 494 10, 825 11,706 11, 774 11,859 11,912 12, 004 1,913 2,359 2,336 2,343 2,292 2,303 189 398 368 347 325 345 435 180 143 164 197 196 383 348 317 409 390 261 5,537 6,101 6,295 6,229 6,366 6,478 5,211 5,779 5,985 5,901 5, 968 6,175 618 540 537 542 547 581 271 314 312 348 321 1,469 1,462 1,463 1,463 1,466 1,470 753 848 688 660 978 567 1,036 623 741 608 573 550 528 471 468 457 463 485 467 472 471 495 505 502 482 485 12,034 12,129 11,671 11,601 12,022 11,586 12,169 11, 791 11,992 11,998 11,961 12,009 12, 049 2,466 2,451 2,270 2,187 2,233 2,240 2,376 2,317 2,293 2,291 2,318 2,323 2,278 357 349 343 337 339 329 319 318 318 343 347 347 344 131 131 198 197 198 198 198 196 196 196 196 198 194 438 486 361 352 5,950 5,953 5,831 520 301 356 313 236 256 241 6,265 6,315 6,158 6,177 6,416 6,225 6,437 6,316 6,437 6,421 6,440 6,456 6,596 537 543 541 546 546 533 532 545 576 602 583 578 561 370 377 318 326 314 301 318 326 345 356 364 379 363 1,467 1,461 1,461 1,462 1,464 1,465 1,466 1,468 1,467 1,472 1,473 1,468 1,468 17, 889 858 19, 350 19,366 19, 396 876 19, 525 882 19,711 871 19, 435 879 19, 517 861 19,391 866 19, 243 868 19,116 868 19, 404 872 19, 718 874 19, 713 898 19, 674 878 19, 635 877 19, 749 881 19, 705 19, 752 2,715 3,126 3,176 3,173 3,059 3,043 456 474 402 482 561 556 170 189 176 171 186 159 7,553 8,521 8,553 8,485 8,566 8,742 7,162 8,045 8,079 7,980 8,014 8,196 130 135 135 133 133 131 4,352 4,352 4,356 4,381 4,424 4,470 448 482 495 490 501 508 2,037 2,041 2,042 2,049 2,061 2,071 3,273 3,248 3,105 3,065 3,064 3,052 3,111 3,062 3,006 3,070 3,042 3,021 3,039 380 379 587 580 576 562 557 555 556 558 556 556 553 182 178 166 156 210 200 172 173 172 166 156 159 152 8,518 8,016 8,088 7,940 7,878 7,651 7,946 8,075 8,193 8,206 8,134 8,169 8,228 8,253 134 133 134 133 133 135 133 133 132 130 132 131 132 4,374 4,388 4,381 4,375 4,363 4,423 4,426 4,440 4,471 4,474 4,473 4,465 496 500 477 489 475 502 503 507 520 494 507 513 521 2,045 2,050 2,052 2,051 2,054 2,058 2,061 2,065 2,065 2,068 2,071 2,070 2,075 1935—May 1936—January February March April... May Mar. 4 Mar. 11 Mar. 18 Mar. 25 Apr. 1 Apr. 8 Apr. 15 Apr. 22 Apr. 29 May 6 May 13 May 20 May 27 5,927 5,944 5,921 5,994 6,052 6,126 6,103 6,162 6,309 OUTSIDE NEW YORK CITY 1935—May 1936—January February March April May Mar. 4 Mar. 11 Mar. 18 Mar. 25 Apr. 1 Apr. 8 Apr. 15 Apr. 22 Apr. 29 May 6 May 13 May 20 May 27 562 665 650 676 737 704 684 698 681 640 766 696 814 723 687 675 768 8,455 8,362 8,207 8,442 8,717 8,743 8,721 8,643 8,781 8,760 8,783 4,467 1 Does not include cash items in process of collection reported in balances with domestic banks. Prior to 1936, includes a relatively small amount of cash items on hand but not in process of collection. 2 Demand deposits other than interbank and U. S. Government, less cash items reported as in process of collection and prior to 1936, less cash items reported as on hand but not in process of collection. NOTE.—For back figures and description of figures see BULLETIN for November 1935, pp. 711-738, or reprint, which may be obtained from the Division of Research and Statistics. See also p. 876 of BULLETIN for December 1935 and Annual Report for 1932 (tables 78-82). 478 FEDERAL RESERVE BULLETIN JUNE 1936 REPORTING MEMBER BANKS IN 101 LEADING CITIES ASSETS AND LIABILITIES BY DISTRICTS AND FOR NEW YORK CITY AND CHICAGO [In millions of dollars] City Federal Reserve District Total Loans and investments, total: May 6 May 13 May 20 May 27 L Loans to brokers and dealers in New York: May 6 May 13 May 20 May 27 Loans to brokers and dealers outside New York: May 6 May 13 May 20 May 27 Loans on securities to others (except banks): May 6 May 13 May 20 May 27 Acceptances and commercial paper bought: May 6 May 13 May 20 May 27 Loans on real estate: May 6 May 13 May 20 May 27 Loans to banks: May 6 May 13 May 20 May 27 Other loans: May 6 May 13 May 20 May 27 U . S. Government direct obligations: May 6 May 13 May 20 May 27 Obligations fully guaranteed by U. S. Government: May 6 May 13 May 20 May 27 Other securities: May 6 May 13 May 20 May 27 Reserve with Federal Reserve bank: May 6 May 13 May 20 May 27 Cash in vault: May 6 May 13 May 20 May 27 . . • Revised. 21, 897 21, 820 21, 799 21,814 MinNew PhilaCleve- Rich- Atlan- Chica- St. delBoston York ta go Louis neapphia land mond olis 1,218 1,219 1, 221 1,239 1, 020 969 964 940 9,512 9,418 9,426 9,462 1,177 1,177 1,173 1,168 1,802 1,803 1,801 1,801 597 599 579 582 537 539 539 535 2,838 2,842 2,829 2,807 632 635 374 373 376 378 Kansas City 627 631 641 645 San Dallas Francisco 445 446 442 2,138 2,138 2,134 2,130 New York Chicago 8,635 8,550 8,561 8,595 1,874 1,867 1,859 1,852 978 922 918 991 932 928 904 212 208 213 214 2,083 2,080 2,079 2,070 36 36 45 43 154 153 153 153 900 895 895 893 146 146 146 145 213 213 213 214 208 209 209 201 341 336 332 322 162 155 150 143 6 6 6 6 1,146 1,146 1,147 1,146 248 248 248 248 185 185 185 185 22 22 23 22 101 100 62 65 67 29 31 4 4 4 4 1 1 1 1 10 10 10 136 136 136 136 412 415 418 422 107 107 107 108 200 201 199 1,506 1,498 1, 477 1,455 242 243 245 232 3,509 3, 519 3, 556 3,542 306 312 8,847 8,872 8,868 8,920 402 402 408 418 1,278 1,289 1,285 1, 290 148 148 148 140 2 2 2 2 22 22 22 22 153 146 141 134 17 16 15 14 16 16 16 16 22 22 21 22 367 367 367 367 133 133 133 133 15 15 15 15 4 4 4 4 1 1 1 1 1 1 1 1 67 29 31 124 121 122 121 129 129 131 131 125 126 126 126 360 362 366 361 144 145 145 148 237 237 245 246 168 168 166 165 687 683 678 677 1,177 1, 179 1,204 1, 185 270 270 272 279 3,581 3, 618 3,734 1,003 995 979 969 144 146 149 150 542 548 543 546 92 93 92 94 125 126 126 131 368 369 366 365 1,179 1, 116 1,116 1, 116 288 287 292 103 101 90 102 115 118 110 111 226 240 246 245 2,119 2,212 2,294 2,313 622 639 664 691 11 12 11 12 11 12 11 12 19 19 18 19 50 53 51 55 35 36 35 37 178 178 182 181 207 210 209 210 106 106 107 107 3,815 3, 850 3,964 321 320 315 311 845 844 844 842 281 261 262 18 18 18 18 570 576 571 576 103 102 100 100 65 65 65 67 158 158 156 158 51 51 53 54 43 46 46 45 3, 360 3, 301 '3, 293 3, 305 171 171 169 169 1, 367 1,300 1,300 1,300 310 314 314 315 262 262 261 261 401 402 401 406 107 108 107 108 4,458 4,537 4,623 4,690 228 233 226 215 2,246 2,290 2,386 2,398 194 185 189 189 269 272 274 279 130 127 117 112 763 776 794 849 370 383 369 389 122 121 121 122 64 67 64 70 14 15 14 15 31 33 31 33 16 18 17 18 58 60 58 62 •3, 885 754 750 750 748 24 24 24 23 1,319 1,322 1,346 1,327 r 170 170 169 170 10 •3, 655 479 FEDERAL RESERVE BULLETIN JUNE 1936 REPORTING MEMBER BANKS IN 101 LEADING CITIES—Continued ASSETS AND LIABILITIES BY DISTRICTS AND FOR NEW YORK CITY AND CHICAGO—Continued [In millions of dollars] Federal Reserve District Total Balances with domestic banks: May 6 May 13 May 20 May 27 Other assets: May 6 May 13 May 20 . May 27 Demand deposits—adjusted: May 6 May 13 May 20 May 27 Time deposits: May 6 May 13 May 20, May 27 U. S. Government deposits: May 6... May 13 May 20 May 27 Interbank deposits, domestic: May 6 May 13 May 20 May 27 Interbank deposits, foreign: May 6 May 13 May 20 May 27 Borrowings: May 6 May 13 May 20 May 27 Other liabilities: May 6 May 13 May 20 May 27 Capital account: May 6 May 13 May 20 May 27 City MinNew Phila- Cleve- Rich- Atlan- Chica- St. neapBoston York del- land mond ta Louis olis go phia 2,242 2, 250 2,319 2,319 134 133 133 124 190 167 173 175 1,383 1,379 1,363 1,379 77 76 77 77 575 572 552 555 14, 260 14, 272 14, 390 14, 562 968 977 975 5,076 5,056 5,043 5,028 146 151 152 152 215 222 224 229 148 151 177 178 111 111 112 112 143 144 144 143 392 394 422 429 118 116 116 113 39 39 39 42 106 107 107 112 24 24 24 24 KanSan sas Dallas Francisco City 264 273 267 261 171 173 177 177 234 242 250 252 81 71 71 73 187 205 207 18 18 18 19 25 25 25 25 27 27 27 27 253 255 257 259 505 502 482 485 73 73 73 76 789 795 811 6,126 6,103 6,162 6,309 1,379 1,398 1,438 1,459 6,592 6,668 6,811 744 744 749 749 981 992 992 997 379 382 381 382 293 297 296 300 2,042 2,070 2,109 2,143 381 384 376 356 236 246 247 250 433 455 447 448 329 338 339 336 298 299 297 297 995 975 970 953 274 275 274 272 715 715 717 718 194 194 194 194 171 171 171 171 815 816 817 818 174 174 174 175 119 119 119 119 144 144 145 144 119 118 115 119 754 752 754 747 16 16 16 16 229 229 231 226 57 57 57 57 58 58 58 58 41 40 40 40 43 44 43 43 138 137 138 136 3 3 3 3 19 18 18 18 27 28 27 27 5,491 5,492 5,475 5,449 231 226 225 218 2,357 2,384 2,388 2,344 296 292 289 287 324 326 324 329 201 200 198 196 191 189 187 182 774 764 755 767 111 107 106 108 355 351 353 352 171 169 171 169 348 352 352 350 3 3 3 3 1 1 1 1 1 1 1 1 5 5 5 5 377 392 377 22 22 22 22 15 15 15 16 224 224 223 223 334 334 335 335 379 382 381 378 850 871 892 884 26 25 27 26 3,540 3,544 3,538 3,543 231 231 231 231 1,604 1,605 1,600 1,599 346 347 348 349 230 227 227 243 New ChicaYork go 1 1 1 1 602 583 578 561 462 462 462 462 114 113 114 114 196 196 198 194 101 101 101 101 250 257 252 254 2,291 2,318 2,323 2,278 581 571 567 571 11 10 10 10 347 351 351 348 4 4 4 4 326 340 345 347 356 364 379 363 32 34 32 34 322 323 323 324 1,472 1,473 1,468 1,468 231 232 232 232 1,058 1,056 1,050 1,048 480 FEDERAL RESERVE BULLETIN JUNE 1936 BANKS SUSPENDED AND NONLICENSED BANKS PLACED IN LIQUIDATION OR RECEIVERSHIP DURING 1935 AND JANUARY-MAY, 1936 [Preliminary figures] Nonlicensed banks placed in liquidation or receivership 2 Licensed banks suspended i Deposits 3 (in thousands of dollars) Number of banks Year 1935 National banks State bank members Year 1935 __ JanuaryMay 1936 Year 1935 JanuaryMay 1936 JanuaryMay 1936 Y e a r 1935 4 *6 5,313 4 ^oTiTneniber insured bants Other nonmember banks Total JanuaryMay 1936 Deposits 3 (in thousands of dollars) Number of banks 6,499 * 8,613 22 8 23 1 3,847 998 3,251 428 48 9 14, 306 16,630 34 24 10,158 3,679 58 9 29,418 16,630 1 Includes banks placed on a restricted basis. 2 Includes nonlicensed banks absorbed or succeeded by other banks. Deposits of licensed member banks suspended are as of dates of suspension; deposits of nonlicensed national banks placed in liquidation or receivership are as of dates of conservatorship; deposits of nonlicensed State bank members placed in liquidation or receivership are as of the nearest call dates prior to liquidation or receivership; and deposits of nonmember banks are based on the latest data available at the time of the reported closing of the banks. * Includes 5 banks with deposits of $7,395,000 in 1935, which did not receive licenses following the banking holiday and withdrew from the Federal Reserve System before being placed in liquidation. Back figures.—See Annual Report for 1934 (tables 79-84). 3 POSTAL SAVINGS SYSTEM BANK DEBITS [In millions of dollars] [Debits to individual accounts. Amounts in millions of dollars] April New York City _ Outside New York City Federal Reserve districts: Boston New York Philadelphia Cleveland _ Richmond Atlanta Chicago __ _ _ St. Louis ~M. inneapolis Kansas Citv Dallas San Francisco Total March April 1 140 17, 285 17, 497 19,629 17,866 15, 905 r 15, 645 11 7 10 13 7 15 21 5 9 15 10 18 1,928 17, 903 1,456 1,879 604 717 4,673 822 600 987 568 2 645 2,064 20, 200 1,549 1,664 618 740 5,091 845 542 974 604 2 604 1,684 16, 568 1,480 1,544 565 697 4,164 757 530 887 495 r 2 177 141 34, 783 37, 496 r Revised. Back figures.—See Annual Report for 1934 (table 78). Assets 1935 1936 Number of centers End of month Depositors' Cash balin deances Total U. S. Government securities Ditory rect banks Total obligations 1935—January February March.. April „ May June.. . _. __ July . August r September 3 1 , 549 October November December 1936—January February March. April p Guarteed obligations Cash, refunds, etc.1 ,201 L, 205 , 203 ,200 ,205 , 205 ,189 L, 192 ,192 ,196 , 199 ,201 1,232 1,237 1,232 1,231 1,237 1,236 1,221 1,224 1,224 1,230 1,234 1,237 509 491 478 452 412 385 364 348 319 306 294 287 614 633 691 685 709 777 111 780 805 824 853 853 467 467 508 539 562 630 630 633 658 677 706 706 147 166 183 146 147 147 147 147 147 147 147 147 109 113 63 94 116 74 80 96 100 100 87 97 ,208 ,214 1,241 1,248 248 225 876 876 709 710 167 166 117 147 pi, 215 p Preliminary, i Includes working cash with postmasters, 5-percent reserve fund and miscellaneous working funds with the Treasurer of the United States, accrued interest on bond investments, and accounts due from late postmasters. Back figures.See BULLETIN for August 1935, p. 502. 481 FEDERAL RESERVE BULLETIN JUNE 1936 ACCEPTANCES, COMMERCIAL PAPER, AND BROKERS' BORROWINGS BANKERS' ACCEPTANCES, BY HOLDERS BANKERS' ACCEPTANCES, BY CLASSES (DOLLAR ACCEPTANCES) (DOLLAR ACCEPTANCES) [In millions of dollars] [In millions of dollars] Held by Fed- Held by accepting eral Reserve banks banks End of month Total outstanding 1934—January February... March April May June July August September.. October November. _ December. _ 771 750 685 613 569 534 516 520 539 562 561 543 1935—January February.. _ March April May June July August... -. September. _ October November.. December. _ 516 493 466 413 375 343 321 322 328 363 387 397 1936—January February.. _ March April 384 377 359 344 Held For acby For count others Own Bills own of foraceign Total bills bought count correspondents 4 5 5 4 3 2 1 1 1 105 56 23 3 0) 0) 0) 0) 0) 0) 0) 0) 0) 0) 0) 0) 0) 0) End of month Based on imTotal ports into U.S. 567 581 576 536 507 480 472 483 503 516 517 497 255 266 252 236 226 220 222 222 223 245 252 243 312 315 324 299 281 260 250 261 280 271 265 254 95 108 81 70 59 53 42 37 35 45 44 46 1934—JanuaryFebruary.. March April May June July August September. October.._. November. December. 771 750 685 613 569 534 516 520 539 562 561 543 485 452 423 391 356 317 296 292 301 339 358 368 238 217 197 178 162 154 148 145 148 178 182 247 235 226 214 193 163 148 147 154 161 175 185 30 41 43 22 19 26 24 30 27 24 29 29 1935—January... February.. March April May June July August September October.... November. December. 516 493 466 413 375 343 321 322 328 363 387 397 92 101 103 107 102 99 102 102 106 105 107 353 340 321 310 181 172 150 143 172 168 171 167 31 37 38 34 1936—January... February.. March April 384 377 359 344 108 114 113 111 i Less than $500,000. Source. For acceptances outstanding (and held by accepting banks), American Acceptance Council. Back figures.—See Annual Report for 1933 (table 100). 103 103 100 97 94 Based on exports from U.S. Based on goods stored in United States (warehouse credits) or shipped between domestic points Based on goods stored in Dollar foreign excounchange tries or shipped between foreign points 225 203 186 164 150 145 135 140 138 147 148 140 277 261 226 186 164 141 138 147 166 184 195 193 175 184 168 158 152 148 144 141 137 133 127 119 133 123 122 114 100 94 86 81 77 75 84 94 179 166 134 96 76 57 47 52 66 98 111 110 114 109 106 83 79 82 84 84 94 94 91 84 86 87 89 57 Source: American Acceptance Council. Back figures—See Annual Report for 1933 (table 97). BROKERS' BORROWINGS COMMERCIAL PAPER OUTSTANDING l [As reported b y dealers. E n d of month 1932 [Net borrowings on demand and on time in New York City reported by members of the New York Stock Exchange. In millions of dollars] I n millions of dollars] 1933 1934 1935 1936 From private From banks banks, brokers, and trust com- foreign banking panies agencies, etc. Total End of month January F e b r u a r y . _. March 108 103 106 85 84 72 108 117 133 171 177 182 April May June 108 111 103 64 60 73 139 142 151 173 173 159 July August September. 100 108 110 97 107 123 168 188 192 164 177 183 October NovemberDecember.. 113 110 81 130 133 109 188 178 166 180 178 • 172 i Includes some finance company paper sold in the open market. Back figures.—See Annual Report for 1934 (table 76). 178 176 180 1935 January February.. March 1936 1935 1936 1935 1936 825 816 773 925 924 997 758 750 706 891 888 956 67 66 67 34 36 41 May 805 793 808 1,064 970 762 759 776 1,028 934 43 34 32 35 36 August . . September... _ _ 769 772 781 741 750 759 28 22 22 October November December 792 846 938 772 821 907 20 25 31 April June July ._ Back figures.—See Annual Report for 1934 (table 75). 482 FEDERAL RESERVE BULLETIN JUNE 1936 FEDERAL RESERVE BANK DISCOUNT RATES Advances secured by Rediscounts and advances un- Advances under sec. der sees. 13 and 13a of the Fed- 10 (b) of the Federal eral Reserve Act Reserve Act Discounts and ad- direct obligations of vances under par. 3 the United States of sec. 13 of the Federal (last paragraph of Reserve Act sec. 13 of the Federal Reserve Act) Federal Reserve Bank In effect Rate June 1 beginning— Feb. Feb. Jan. May May Jan. Jan. Jan. May May May Feb. Boston New York Philadelphia. . Cleveland Richmond Atlanta Chicago St. Louis Minneapolis. _ Kansas City._ Dallas.. _. San Francisco 8,1934 2.1934 17,1935 11,1935 9.1935 14,1935 19,1935 3,1935 14,1935 10,1935 8,1935 16,1934 Previous rate 2l/2 2 2V2 2V2 In effect Rate June 1 beginning— 2 2V2 2 2V2 2V2 2V2 ly2 2V2 2Y2 2V2 Sept. 20,1935 Oct. 10,1935 Nov. 2,1935 Oct. 19,1935 Sept. 23,1935 Sept. 14,1935 Sept. 20,1935 Oct. 3,1935 Oct. 29,1935 Aug. 26,1935 Oct. 8,1935 Sept. 20,1935 In effect Rate June 1 beginning— Rate June 1 Aug. 11,1932 Aug. 10,1932 Aug. 12,1932 July 24,1934 5 5H July 16,1934 Mar. 20,1934 5 Aug. 13,1932 6 July 10,1934 Aug. 10,1932 July 10,1934 Sept. 8,1932 Sept. 2,1932 In effect >eginning— Oct. Feb. Oct. May Feb. Mar. Oct. Feb. Apr. May Mar. Oct. 20,1933 8,1934 20.1933 11,1935 19.1934 17, 1934 16,1933 21.1935 15.1933 10,1935 12.1934 19,1933 RATES ON INDUSTRIAL ADVANCES BUYING RATES ON ACCEPTANCES [Approved by the Board of Governors of the Federal Reserve System, under Sec. 13(b) of the Federal Reserve Act as amended June 19, 1934. Percent per annum except as otherwise specified. In effect June 1, 1936] [Buying rates at the Federal Reserve Bank of New York] Maturity Advances to financing institutions— Federal Reserve Bank Boston New York___. PhiladelphiaCleveland Richmond Atlanta Chicago St. Louis Minneapolis. _ Kansas City_. Dallas San Francisco 1 2 Advances Commit- 1-15 days.... direct to 16-30 days... ments industrial On porto make 31-45 days... or com- tion for On re- advances 46-60 days... mercial or- which maining 61-90 days... ganizations institu- portion 91-120 days.. tion is 121-180 days obligated 3^-6 4-6 4-6 4^-6 6 6 5-6 6 4-6 5-6 5-6 3 3 3 3K2 1-2 l 4-5 (2) 4 4-6 5 13 4-6 5 5-6 1-2 43^ 4H 4^-5 4H-5 zA 4 4 3-4 4 5-6 4-5 Authorized rate 1 percent above prevailing discount rate. Same as to borrower but not less than 4 percent. * Flat charge. Rate in effect be- Previous effect on Inginning— rate June 1 Oct. 20, 1933 ....do ....do .._.do....do ....do _ ....do NOTE.—Rates on prime bankers' acceptances. Higher rates may be charged for other classes of bills. Back figures.—See Annual R e p o r t for 1934 (table 51). 1-2 483 FEDERAL RESERVE BULLETIN J U N E 1936 MONEY RATES AND BOND YIELDS OPEN-MARKET RATES IN NEW YORK CITY [Percent per annum] RATES CHARGED CUSTOMERS BY BANKS IN PRINCIPAL CITIES [Weighted averages of prevailing rates] Prevailing rate o n - Average rate o n - Aver1928 1929 1930 1931 1932 1933 1934 1935 1936 age Prime Prime Stock- Stock ex- u. s. yield on Month or week com- bankexchange call Treas- U. S. New York City: mercial ers' change loans ury 273- TreasJanuary 4.56 5.74 5.64 4.24 4.71 4.12 3.58 2.83 2.64 paper, accept- time day bills u r y February 4.44 5.73 5.35 4.31 4.71 4.11 3.43 2.90 2.56 4 to 6 ances, loans, offered 3-5 year March 4.59 5.81 5.22 4.20 4.7: 4.88 3.31 2.64 2.61 90 XT-.™ Re- within notes i 4.72 5.85 4.91 4.17 4.69 4. April 3.39 2.61 2.54 months 90 days days IN 6W newal period 4.97 5.88 4.74 4.11 4.55 4.24 3.42 2. May 2.51 5.09 5.93 4. 4.13 4.61 4. 10 3.30 2.66 June 5.38 5.88 4.48 4.05 .42 3.93 3.30 2.61 July 1935 5.56 6.05 4.41 3.97 L45 3.97 3.33 2.67 August 5.63 6.06 4.29 3.93 September 30 3.79 3.26 2.72 .25 .25 .15 1.12 May 5.63 6.08 4.26 4.27 M K October 3.76 3.28 2.72 % .25 .25 .13 1. 14 June A 5.56 y% November 5. 3.52 3.22 2.77 4.17 4.67 % .07 1. 16 July Vs 5.63 5.74 A K .25 .25 December 3.48 3.18 2.61 .10 1.22 August y8 M .25 .25 .25 .22 .25 1.43 September Vs Year K 5. 15 5.88 4.02 3.33 2.70 3/ .29 .20 October 1.37 8 other northern and K .29 l .75 . 14 .75 1.29 November *A eastern cities: y8 .75 .09 l t December Vs . 75 1.26 January 4.73 5.87 5.88 4.61 5.07 4. 4.65 4.08 3.62 February 4.76 5.86 5.66 4.63 5.13 4.84 4.49 4.02 3.63 1936 4.81 5.91 5.47 4.62 5.14 5.39 4.52 4.05 3.60 March 4.91 6.00 5.22 4.57 5.10 5. April 4.52 3.99 3.47 .75 l .10 .75 1.21 January h Vs 5.04 6.09 5.13 4.55 5.14 4.99 4.39 3.88 3.45 May .75 .08 .75 l 5.36 February Vs 1.15 5.13 6.02 4.49 4.30 3.78 June 5.06 4.97 h Z l .75 .11 .75 Vs 1.09 March A 5.57 6.08 4.81 4.48 5.05 4.82 4.15 3.87 July 1 .75 .75 .10 l 1.10 April -. _ 5.59 5.12 6.11 4.47 4.12 3.79 August 4.79 4. K 3 .93 .93 .18 1.09 May A Vs 5.80 6.24 4.74 4.48 5.03 4.65 4.11 3.75 September 5.80 6.25 4.75 4.62 4.96 4.51 4. 13 3.75 October Week ending: 5.82 6. 12 4. 4.87 4.88 4.54 4.08 3.63 November 3. .75 .75 .10 l 5.91 5.94 4.68 4.91 4. 3.67 December Mar. 7 Vs 4.59 3. 1.05 .75 .75 .10 l Mar. 14.... 1. 11 Vs 3, .75 .75 .12 l Mar. 2 1 — 1.13 5.34 6.04 5.07 4.61 5.05 4.83 4.29 3.86 Year H /% .75 .75 .13 i Mar. 28—. 1.12 27 southern and A H .75 .75 .11 l *A Apr. 4 Vs 1.12 western cities: % .75 .75 .10 l A Apr. 11__._ 1.07 5.53 January 6. 12 5.50 5.61 5. 5.40 4.95 4.47 H .75 .75 .09 l *A Apr. 18 Vs 1.09 5.53 February 6.05 5.43 5.61 5.56 5.39 4.84 4.51 Z .75 .75 .09 l A Apr. 25 1.09 5.54 5.40 5.64 5. March 5. 5.40 4.85 4.44 .75 .75 .13 l \ May 2 1.10 5.54 April 5.86 5.36 5.63 5.68 5.34 4.80 4.40 X .75 .75 .19 l May 9 1.11 5.56 May 5.75 5.26 5.64 5. 5.28 4.79 A .18 May 16___1.09 IK 1.00 1.00 5.67 June 5.69 5.34 5.62 5.62 5.19 4.76 % .20 % May 23—_ IK 1.00 1.00 1.08 5.77 July 5.63 5.30 5.63 5.54 5.07 4.58 % l .22 Mav3CL___ 1.09 % IK 1.00 1.00 5. August 5.58 5.28 5.68 5.53 5.05 4.63 A 5.82 September 5.55 5.32 5.63 5.55 5.04 4.51 5.38 5.56 5.50 5.05 4.55 5.87 October 5.54 i For description of average and back figures, see M a y Bulletin, p. 317 5.90 4.51 November 5.50 5.53 5.55 5.42 4. Back figures.—See Annual Report for 1934 (tables 54 and 55), except 5.91 4.55 December 5.43 5.56 5.60 5.43 4. for average yield on U. S. Treasury 3-5 year notes. Year 5.70 6.14 5.72 5.39 5.62 5.56 5.17 i.t i v% Back figures—See Annual Report for 1934 (table 57). BOND YIELDS1 Corporate i U. S. Treas- Year, month, or date Municipal (high 3 grade) By ratings Aaa 7-11 N u m b e r of issues 1933 average 1934 a v e r a s e 1935 average 1935—May - - - - - - - - - - - - - June July August September October November December 1936—January February March April May May May May May - - - - - _ - - - -- 6 13 20 27 - - - - - - ... . 3.31 3. 10 2.70 2.61 2.61 2.59 2.66 2.78 2.77 2.73 2.73 2.68 2.62 2.54 2.51 2.50 2.51 2. 50 2.47 2.48 By groups Total A Aa Industrial Baa Railroad 15 120 30 30 30 30 40 40 4.71 3.95 3.16 3.27 3.25 2.95 2.87 3.08 3. 16 3.02 2.97 2.93 2.86 2.78 2.76 2.76 2.77 2.76 2.77 2.75 5.88 4.96 4.58 4.64 4.59 4.54 4.54 4.52 4.52 4.45 4.38 4.23 4. 15 4.15 4.17 4.16 4.16 4.17 4.15 4.14 4.49 4.00 3.74 3.74 3.72 3.70 3.77 3.80 3.79 3.75 3.72 3.66 3.62 3.61 3.60 3.58 3.57 3.59 3.56 3.56 5.23 4.44 4.13 4. 18 4.18 4. 15 4. 15 4. 11 4.10 4.03 3.97 3.85 3.80 3.77 3.79 3.74 3.75 3.75 3.73 3.72 6.09 5.08 4.62 4.66 4.62 4.54 4.57 4.56 4.57 4.53 4.44 4.31 4.24 4.23 4.26 4.25 4.25 4.25 4.24 4.23 7.76 6.32 5.81 5.99 5.86 5.77 5.69 5.62 5.63 5.50 5.37 5. 10 4.93 4.99 5.04 5.08 5.08 5.07 5.07 5.04 5.32 4.52 4.25 4.29 4.31 4.26 4.26 4.24 4.20 4.13 4.09 3.93 3.88 3.84 3.84 3.80 3.81 3.82 3.79 3.77 6.06 4.96 4.95 5.11 4.99 4.97 4.95 4.91 4.97 4.90 4.73 4.50 4.32 4.35 4.41 4.42 4.43 4.43 4.41 4.39 Public utility . 40 6.25 5 40 4.53 4.52 4 48 4.40 4 42 4.41 4.39 4 33 4.31 4.26 4.25 4.27 4.27 4.26 4.26 4 25 4.25 4.25 2 i Monthly data are average «»of daily or weekly figures. Average of yields of all outstanding bonds due or callable after 8 years. 3 Standard Statistics Co. « Moody's Investors' Service. Since the early part of 1934 less than 40 industrial bonds have been included owing to the fact that the number of industrial bonds with Aaa ratings has been reduced from 10 to 4 and with Aa ratings from 10 to 3. Back figures—See Annual Report for 1934 (table 94). 484 FEDERAL RESERVE BULLETIN JUNE 1936 BOND PRICES 1 Year, month, or date U. S. Treasury2 Number of issues. Municipal (highgrade) 3 STOCK PRICES i Corporate3 Total Indus- Railtrial road Utility 60 20 20 1933 average 1934 average 1935 average 102.5 103.5 106.0 87.1 97.3 109.4 73.4 84.5 69.2 81.9 88.2 70.5 83.8 79.4 1935—May June July August September. October November. December.. 106.8 107.0 107.3 106. 5 104.7 104.9 105.3 105.2 107.5 107.8 112.9 114.4 110.7 109.4 111.6 112.6 87.1 88.3 89.2 89.9 90.4 89.8 91.1 92.5 87.3 87.3 88.5 89.0 89.'4 89.8 90.8 91.0 76.5 79.3 78.8 79.6 80.6 78.4 79.8 83.1 1936—January February. _. March April May 105.8 106.3 106.6 107. 0 107.1 113.2 114.4 116.0 116.2 116.2 95.3 97.2 96.6 95.9 95.5 92.5 93.0 92.1 91.2 90.6 107.0 107.1 107.4 107.3 116.1 116.3 116.1 116.4 95.5 95.4 95.6 95.9 90.8 90.7 90.5 90.7 May May May May 7-11 6 13 20 27 Year, month, or date 20 Preferred Common stocks (index, 1926=100)3 stocks (industrial highIndus- Rail- Utility grade) " Total road trial Number of issues 20 ••419 104.8 120.7 133.8 63 •72 78 97.4 1935—May 98.4 June 100.2 July 100.9 August 101.0 September101.0 October 102.7 November. 103.1 December.. 134.8 134.0 134.8 135.4 135.0 134.8 136.9 137.0 73 76 79 83 85 '85 '93 '95 87 '91 95 98 '99 '107 '109 88.7 93.6 92.7 91.6 90.8 104.7 1936—January 105.1 February... 105.1 March 104.8 April 105.0 May 137.3 138.7 139.6 138.8 138.6 ••100 '106 109 '109 101 '115 '121 125 '125 116 '97 103 103 '102 95 90.9 90.5 91.0 91.9 104.8 104.9 105.3 105.2 138.2 138.5 138.7 138.8 102 101 101 104 118 116 116 119 93 95 80.6 1933 average 87.8 1934 average 98.2 1935 average May May May May 6 13 20 27 '32 '347 '40 78 69 '71 '64 70 '73 '81 82 '81 '90 r 1 2 Monthly data are averages of daily or weekly figures. ' Revised. Average prices of all outstanding bonds due or callable after 8 years. 12 Monthly data are averages of daily or weekly figures. » Prices derived from average yields. Average derived prices. Source.—U. S. Treasury bonds, based on price quotations from Treas3 Number of issues revised to represent more accurately the stocks ury Department; for other bonds, Standard Statistics Co. included; monthly averages revised to include Wednesday figures by Back figures.—See Annual Report for 1934 (table 93); for U. S. Treasury weeks ending within the month. bonds, see May BULLETIN, p. 317. Source.—Standard Statistics Co. Back figures.—See Annual Report for 1934 (table 93). CAPITAL ISSUES [In millions of dollars] ?or refunding For new capital Year or month Total (new and refunding) 1926 1927 1928 1929 1930 1931 1932 1933 1934 1935 1935—May. __ June July— Aug.... Sept.... Oct Nov Dec 1936—Jan Feb.... Mar.... April. _. May... Domestic Domestic Total (domestic and foreign) State Total municipal Federal agencies2 and Corporate Total 7,359 9,774 9,898 11, 513 7,619 4,038 1,751 1,063 2,160 r 4, 672 6,314 7, 556 8,040 10, 091 6,909 3,089 1,194 720 1,386 ' 1 , 486 5,189 6,219 6,789 9,420 6,004 2,860 1,165 70S 1,386 1,438 1,344 1, 475 1,379 1, 418 1,434 1,235 762 483 803 884 91 87 64 0 87 75 77 64 405 150 3,754 4,658 5, 346 8,002 4,483 1,551 '472 512 640 '424 436 '362 '380 417 '87 58 134 '198 177 '145 116 231 86 58 134 152 177 144 116 231 41 44 79 36 132 56 82 124 402 302 '768 ' 1 , 050 413 122 107 130 '177 112 115 107 130 177 112 50 89 60 49 68 Bonds and Foreign1 Stocks notes Total (domestic and foreign) State Total Corporate nici- Federal agen-2 cies Total Bonds and and mupal notes Foreign1 Stocks 1,087 1,474 2,961 5,924 1, 503 311 20 120 35 69 1,125 1,337 1,251 671 905 229 29 12 0 '48 '1,044 '2, 218 1,858 1,422 '709 949 '557 '343 '774 '3,186 881 1,978 1,620 1, 387 527 893 498 283 765 3,160 22 35 36 13 53 21 87 37 136 309 40 93 0 0 0 51 93 26 317 987 820 1,850 1,584 1,374 474 821 319 219 312 1,864 687 1,586 1,054 542 451 789 315 187 312 1,782 133 264 530 833 23 32 4 32 0 81 163 241 238 325 161 178 404 2,667 3,184 2,385 2,078 2,980 1,239 305 40 144 334 0 0 0 85 0 15 0 40 45 14 55 30 45 73 33 67 39 14 27 29 42 70 30 48 6 0 28 n 384 454 '506 '227 259 217 '264 '186 384 454 506 208 259 213 261 186 35 19 9 28 15 10 26 4 267 319 11 (3) 13 24 17 81 82 115 487 180 231 179 217 101 82 115 482 156 230 164 216 85 0 0 5 24 1 16 1 16 0 0 0 18 0 4 4 0 0 4 11 0 6 65 13 59 128 38 61 4 46 102 13 4 10 13 26 24 '280 195 '637 '873 302 240 195 614 843 302 38 8 69 53 31 (3) 201 181 536 530 267 201 170 525 492 252 (3) 11 11 38 16 40 0 23 30 3 3 3 19 0 0 '46 0 1 0 0 7 0 '0 0 6 9 199 4 182 56 59 60 9 26 0 ' Revised. Includes issues of noncontiguous U. S. Territories and Possessions. Includes publicly offered issues of Federal land banks, Federal intermediate credit banks, Federal Farm Mortgage Corporation, and Home Owners' Loan Corporation. a Less than $500,000. Sources—-For domestic issues, Commercial and Financial Chronicle; for foreign issues, U. S. Department of Commerce. Monthly figures subject to revision. Back figures.—See Annual Report for 1934 (table 92) for figures of new issues—annual and quarterly basis. 1 2 JUNE 485 FEDERAL RESERVE BULLETIN 1936 TREASURY FINANCE UNITED STATES GOVERNMENT DEBT MATURITIES [In millions of dollars] VOLUME AND K I N D OF SECURITY [In millions of dollars] Total E n d of period (gross debt) 19,487 22, 539 27,053 June 1932 June 1933 June 1934 Interest bearing Total 19,161 22,158 26, 480 Bonds 14, 250 14, 223 16,510 Notes 1,465 4,780 6,932 Certif- Bills icates 2,831 2,200 1., 635 616 954 1,404 1935 May June July August September. __ October November December __. 28, 639 28, 701 29,123 29,033 29,421 29,462 29,634 30, 557 27, 738 27, 645 27,923 27,956 28, 432 28, 380 28,617 29, 596 15,157 14,936 14, 576 14, 715 14,300 13,998 14,008 14, 672 10,471 10, 501 11,065 11,036 11, 929 11,929 11,957 12, 274 157 156 254 252 251 250 249 247 1,953 2,053 2,028 1,952 1,952 2,204 2,404 2,404 1936 January February March April May 30,516 30, 520 31,459 31, 425 31, 636 29,618 14,688 29, 646 14, 713 30, 591 15, 981 30, 601 16,005 30, 823 16, 030 12, 272 12, 270 12, 400 12, 383 12, 381 254 258 258 259 258 2,404 2,405 1,953 1,953 2,153 Noninterest bearing Interest-bearing debt outstanding May 29, 1936 326 381 Total 573 Obligations maturing: Before July 1, 1936 July 1-Sept. 30, 1936 _ 901 Oct. 1-Dec. 31, 1936 1,056 Jan. 1-Mar. 31, 1937 1,200 Apr. 1-June 30, 1937 1,076 July 1-Dec. 31, 1937 989 1938 1,081 1939 1,017 1940 961 1941 _ 1943 1945 . 899 1946 874 1947 868 1948 825 After 1948 1814 Other obligations 2 __ Total Bonds 1 Notes Certificates 30,823 16,030 12, 381 258 887 1,579 1,209 829 502 817 1,946 2,762 2,854 1,511 898 1,401 1,519 1,697 1,036 8,185 1,190 834 898 1,401 1,519 1,697 1,036 8,185 460 2,153 200 701 851 401 687 878 358 429 502 817 1,946 2,762 2,854 677 471 Bills 258 i Issues classified as of date of final maturity; most issues callable at »• Revised, i Includes $438,000,000 of Government liability for retirement of earlier dates; postal-savings bonds only issues callable before 1940. 2 national bank and Federal Reserve bank notes, as a result of deposit Includes United States savings bonds and such issues as postalof funds by banks; this compares with $815,000,000 on July 31, 1935, savings bonds and notes, retirement-fund notes, and adjusted-serviceand $636,000,000 on May 31, 1935. certificate series, in which special funds are invested. SUMMARY OF TREASURY OPERATIONS [On basis of daily statement of United States Treasury. In millions of dollars] General and special funds Expenditures 2 Receipts Recovery and relief 3 Income taxes Miscellaneous All inter- other nal revenue Total 746 818 1,099 858 1,470 1,657 1,044 4,681 6,745 6,802 2,715 31, 277 757 1,984 4,004 821 -2, 325 '3, 657 1,844 2,342 645 1,020 1,515 '294 -2. 602 -3, 630 -3, 002 +445 -5 +835 + 1 , 720 +613 -741 +3, 052 +4, 514 +1, 648 630 2,725 845 3,337 3, 587 1,116 23 246 254 464 23 279 24 299 231 421 30 235 19 234 434 228 228 35 218 43 752 412 231 36 256 35 1,339 1,519 1,846 137 138 165 219 143 153 142 153 138 132 291 152 158 755 972 625 86 72 91 56 47 53 74 52 55 43 48 43 63 6,012 6,062 6,140 542 740 673 508 563 624 487 591 456 496 570 614 558 635 702 618 24 119 8 27 101 104 10 107 19 31 131 72 3,581 3, 232 3,035 r 347 425 347 289 245 286 262 247 241 301 214 314 291 1,694 2,084 953 178 258 114 158 142 145 127 97 64 43 11 33 21 526 938 1,786 78 82 88 e 9 87 123 130 148 225 218 254 1,361 -3, 287 209 -2, 725 296 -2, 553 r 92 -296 85 -277 146 -394 139 -210 16 -143 19 -389 4 -253 2 -157 6 49 -228 -277 40 6 51 +181 -383 22 -302 7 +831 +1,160 +515 -625 +135 +517 +348 +22 +99 -115 -77 -52 -17 -314 +78 +324 +23 -325 +42 -39 +8 +774 +64 - 2 0 5 +37 -237 - 2 2 + 1 , 099 -424 y QA +3, 616 +1, 585 +2, 936 -30 +63 +419 -87 +389 +40 + 172 +923 -41 Period Total Fiscal year ending June: 1933 1934 1935 11 months ending: May 1934 M a y 1935 M a y 1936 1935—May June July August September October November December 1936—January.^ February March April May General * Trust acor decounts, Increase crease during etc. s Excess excess period of reof receipts ceipts (+) or (+) or exexpendi- pendiGeneral tures tures fund Gross balance debt 2,080 3,116 3,800 Inter- All est on other public debt 1, 796 2,128 2, 487 r 170 197 318 193 217 234 216 237 197 164 226 228 258 Total All Relief Public works other4 259 264 +7 +3 +939 -34 +211 r Revised. 2 Excludes public-debt retirement. i3 Includes processing taxes, customs, andexpenditures miscellaneous receipts.only net expenditures Prior to July 1933, recovery and relief included of the Reconstruction Finance Corporation; other items subsequently classified as recovery and relief expenditures were included in general expenditures. 4 Includes expenditures classified by the Treasury as agricultural aid, aid to home owners, and miscellaneous, which includes direct loans and expenditures of the Reconstruction Finance Corporation. 6 Includes also increment resulting from reduction in the weight of the gold dollar, receipts from seigniorage, expenditures chargeable against increment on gold (other than for retirement of national-bank notes), and beginning June 1935 transactions 6in checking accounts of certain special governmental agencies whose balances were transferred on May 31, 1935, to these accounts. Excess of credits. 486 FEDERAL RESERVE BULLETIN JUNE 1936 GOVERNMENTAL CORPORATIONS AND CREDIT AGENCIES, APRIL 30, 1936 [Based on compilation by U. S. Treasury Department from reports received from organizations concerned. In millions of dollars] Financed wholly from Government funds Com- Public AgriculReconstruction modity Works tural Finance Credit Admin- credit Other istra- instituCorpo- Corpotion ration ration tions Financed partly from Government funds Farm Other Home mortmortfarm gage Other gage credit institu- institu- institutions tions tions Total Total April Mar. April 30,1936 31,1936 30,1935 ASSETS Loans and preferred stock: Loans to financial institutions Preferred stock, etc Home mortgage loans Farm mortgage loans Other agricultural loans All other loans Total loans and preferred stock Cash __ United States direct obligations Obligations of Government credit agencies: Fully guaranteed by U. S 1 456 845 106 7 2,960 (1) 4 567 852 2,960 2,949 705 1,176 578 856 2,952 2,943 707 1,137 836 871 2,590 2,777 492 1,018 2,949 9 828 292 2,137 3 292 3 Production credit association class A stock Accounts and other receivables.. All other assets 35 4 Total assets other than interagency 2 2,179 39 146 215 39 4 3 362 88 24 IS 24 2 133 133 74 2 10 0) 306 16 0) 150 166 14 s 198 688 219 (i) 2,949 94 40 219 19 93 3,073 79 8 4 29 301 9,209 319 470 9,173 340 470 8,584 336 469 2 85 8 101 214 26 216 27 220 47 4 63 3 148 4 5 74 273 513 74 268 489 77 168 370 3,367 420 3,379 444 11,099 11,055 10, 272 28 4,696 1,382 328 4,676 1,375 332 3,707 1,788 218 (2) 141 142 0) LIABILITIES Bonds, notes, and debentures: Guaranteed by United States . 252 Other liabilities (including reserves) 28 0) 3 24 1,411 2 1, 214 142 163 3 4 3,033 4 99 Total liabilities other than interagency 2 280 0) 3 24 2,767 166 3,136 29 6,406 6,383 5,714 Other 2 . . (i) 0) Excess of assets over liabilities, excluding interagency transactions.. Privately owned interests 1,899 306 150 163 664 600 152 254 2 242 29 416 163 4,693 346 4,672 344 ",559 335 U. S. Government interests.._ 1,899 306 150 163 664 448 252 213 253 4,347 4,328 4,224 1 Less than $500,000. * Excludes $761,000,000 of Federal land bank bonds held by Federal Farm Mortgage Corporation. »Includes $87,000,000 of unclassified assets of Federal savings and loan associations. * Includes unissued bonds covering loans in process. * Corresponding figure for Feb. 29, and March 31, 1936 corrected to read $192,000,000 and $194,000,000 respectively. NOTE.—For explanation of table and back figures see BULLETIN for April 1936, p. 220. RECONSTRUCTION FINANCE CORPORATION LOANS AND INVESTMENTS [Amounts outstanding. In thousands of dollars] M a y 31, 1935 Nov. 30, 1935 Dec. 31, 1935 Jan. 31, 1936 Feb. 29, 1936 Mar. 31, 1936 Apr. 30 1936 681, 416 48,183 871, 449 22,140 413, 414 137, 550 17, 678 25, 815 84 15, 753 533,769 47,880 879,348 22, 524 412, 765 174,373 37, 335 45,488 1,947 115,238 524,127 47,909 871, 760 22, 246 396, 250 147,563 40,013 50,025 2,283 154,001 497,289 47, 573 877, 679 21, 994 393,712 154,947 43, 686 51, 790 1,858 124,689 474,596 46, 730 861, 749 21,910 390, 202 156, 592 46,488 51,853 3,876 154,242 423,061 46,820 850,986 21,873 389,239 160,951 . 48, 287 53,420 3,917 151, 593 410, 383 46, 053 851, 620 8,623 394,168 164, 891 50,194 54,713 3,587 143, 838 1 403,148 46,092 846, 614 8,684 393,154 174,149 50, 779 55, 228 3,518 129, 634 Total loans and investments, other than interagency-. 2, 233, 483 2, 270,669 2,256,177 2,215,216 2, 208,238 2,150,148 2,128,071 2,110, 999 Loans to financial institutions Loans on preferred stock of banks and insurance companies._ Preferred stock, capital notes, and debentures Agricultural loans _ Loans to railroads (including receivers) _ _ Loans for self-liquidating projects Loans to industrial and commercial businessesLoans to drainage, levee, and irrigation districts Other loans. Securities purchased from Public Works Administration Loans to Federal land banks Loans to Commodity Credit Corporation. _ Capital stock of Commodity Credit Corporation Capital stock of, and loans to R. F. C. Mortgage Co Preferred stock of Export-Import banks Total loans and investments.. 66, 398 55, 530 50,108 265,994 45, 074 267,541 35, 819 297,091 35,215 297,449 34, 723 297,279 34, 365 291,961 10, 000 12, 500 13, 555 10,000 14, 721 10,000 15, 523 10,000 15,952 10,000 16, 725 10,000 17, 623 10,000 33, 948 172,800 97,000 18,429 10,000 2,377,912 2,610,324 2, 593, 513 2,573,649 2,566,854 2, 508,875 2, 482, 020 2, 443,175 p Preliminary. 1 Includes $149,,000,000 of loans for distribution to depositors of closed banks. NOTE.—For explanation of table and back figures, see April BULLETIN, p. 220. M a y 29, 1936? 487 FEDERAL RESERVE BULLETIN J U N E 1936 FARM CREDIT ADMINISTRATION LOANS AND DISCOUNTS OUTSTANDING, BY INSTITUTIONS [In thousands of dollars] Farm mortgage loans by i— Federal intermediate credit bank loans to and discounts for— Regional agricultural Other credit cor- financing Land porations, instituFederal Bank production tions, land banks Commis- credit asexcept sioner sociations, cooperaand banks tives for cooperatives 2 End of month 1933—December. 1934—December. 1935—April May June July August September. October.—. November. December. 1936—January.... February.. March April 1,232, 707 1,915, 792 1,975, 737 1,998, 228 2,016, 825 2,023,859 2,036,067 2,047,390 2,058, 693 2,065,620 2,071,925 2,066,308 2,058, 512 2,059,978 2,061, 881 70, 738 616,825 696,834 716, 243 733, 489 742.897 754, 502 765,319 777, 214 785.898 794, 726 802, 782 810,811 817.899 823,110 73, 263 99,675 124,315 129,954 130, 559 128,851 125,137 115, 426 100, 634 100,343 104, 706 105,457 110,806 122,849 132, 715 60,989 55,672 55, 832 56,897 57, 759 58,864 58, 761 55, 661 49,114 46,867 46,490 46,045 46, 679 48,045 50,015 Loans to cooperatives by— EmerProduc- Regional gency agricultion credit tural cred- crop and associadrought it corpotions loans rations 27 60,852 93,025 101,269 106,688 110,030 109,020 101,427 92, 573 91, 522 94,096 96,240 103,002 116, 392 127, 511 144, 636 87,102 78, 351 76,508 72, 765 68,670 64,582 59, 225 *51, 656 46,220 43,400 41,489 40, 510 39,617 38, 665 89,811 110,186 161,178 192,476 196, 250 196, 732 195,943 192,182 182, 678 175,438 172,489 170,072 168, 700 167,826 175,151 Federal intermediate credit banks 15,211 30,050 26,420 10,028 5,023 5,539 4,755 4,084 3,221 2,731 2,241 2,117 2,074 1,685 Banks for Agriculcoopertural atives, Marketincluding ing Act Central revolvBank ing fund 18,697 27,851 30,119 31, 741 23,937 25,037 31,455 43,140 48,179 51, 246 50,013 46, 566 42, 720 41,083 40,015 157, 752 54,863 49, 761 47,456 49,422 49,196 46,497 46,714 46, 074 44,688 44,433 44,286 44,155 44,306 43, 523 * Does not include loans by joint stock land banks, which are now in liquidation. 2 Some of the loans made by the regional agricultural credit corporations and the banks for cooperatives and most of the loans made by the production credit associations are discounted with the Federal intermediate credit banks. The amounts in this column are thus included in the 3 columns under those headings. Such loans are not always discounted in the same month in which the original credit is extended. LOANS OUTSTANDING, BY INSTITUTIONS OBLIGATIONS FULLY GUARANTEED BY THE UNITED STATES x [Loans in thousands of dollars] AMOUNTS OUTSTANDING, BY AGENCIES FEDERAL HOME LOAN BANK BOARD [In millions of dollars] Home mortgage loans by— Federal savings and loan associations 2 End of month Federal home End of month loan Home bank Number of Owners' Loans reported loans to Loan Cor-l associations member poration institu- 1933—December. New Convert- tions 3 1934—September. Re- associ- ed assoOctober... Total port- ations ciations November. ing D ecember. 1932—December 1933—December... 105, 920 1934—D ecember.. _ 2,196,988 59 639 455 10, 758 58,976 838 85, 442 86, 658 613 623 655 691 758 828 851 851 881 20,800 24,081 27,070 32,850 37, 345 44,072 53, 362 54, 703 60,103 112,847 123, 741 138,129 146,161 192, 959 219, 980 239, 263 240, 777 255, 580 74,011 75, 836 79, 233 80,877 86,025 90, 432 95, 595 97,089 102, 795 898 60, 457 269,186 898 64,092 272, 554 980 74, 915 291, 491 P980 P81, 499 P296, 337 102,800 102,942 103, 358 105, 972 1935—April May June July August September._ October November._ December... 2, 578,883 2, 620,119 2,660, 677 2, 702, 247 2, 747,022 2, 788, 203 2, 838, 086 2, 886,013 2, 940,029 778 808 851 894 922 949 979 1,002 1,023 1936—January February March April 2,984,438 3,014, 423 3,040,137 3, 060, 029 1,044 1,061 1,078 1,102 Total Federal ReconHome Farm Owners' struction Finance Mortgage Loan Corpora- Corpora- Corporation 3 tion tion 2 180 180 1,875 2,596 2,823 3,063 733 805 878 980 1,543 1,695 1,834 246 248 249 249 1935—January. __ February.March April May June July August September October. _. November. December. 3,300 3,480 3,590 3,660 3,728 4,123 4,205 4,248 4,369 4,421 4,460 4,494 1,041 1,089 1,124 1,154 1,188 1,226 1,274 1,282 1,368 1,382 1,387 1,387 2,009 2,140 2,215 2,256 2,290 2,647 2,682 2,716 2,748 2,786 2,819 2,855 250 251 251 250 250 250 249 250 253 253 253 252 1936—January... February._ March April 4,562 4,630 4,654 4,676 1,399 1,407 1,407 1,411 2,911 2,970 2,995 3,013 253 253 252 252 896 1 Principal amount of obligations guaranteed as to interest and principal. 2 Excludes obligations guaranteed as to interest only. 1 Loans closed. 3 Excludes obligations held by U. S. Treasury and reflected in the 2 No monthly reports prior to September 1934; they now exclude public debt. Figure for December 1933 includes notes given in purchase largely new associations recently chartered and inactive associations. 3 Includes loans to Federal savings and loan associations, all of which of gold which were retired in February 1934. are members, and a negligible amount to others than member institutions. p Preliminary. 488 FEDERAL RESERVE BULLETIN JUNE 1936 PRODUCTION, EMPLOYMENT, AND TRADE [Index numbers; 1923-25 average=100. The terms "adjusted" and "unadjusted" refer to adjustment for seasonal variation] Construction contracts awarded (value) 2 Industrial production i * Year and month Manufactures Total Minerals Total Residential All other Factory employment 3 FacDepartment tory Freight-car sales* pay loadings 4 * store (value) rolls 3 Unad- Ad- Unad- Ad- Unad- A d - Unad- Ad- Unad- Ad- Unad- Ad- Unad- Unad- A d - Unad- A d - UnadAdjusted justed justed justed justed justed justed justed justed justed justed justed justed justed justed justed justed justed justed 83 87 67 85 101 95 104 108 108 111 119 98 81 64 76 79 90 1919 1920 1921 1922 1923 1924 1925 1926 1927 1928 . 1929 1930 . 1931 1932 1933 .._ 1934 1935 77 89 70 74 105 96 99 108 107 106 115 99 84 71 82 86 91 84 87 67 86 101 94 105 108 106 112 119 95 80 63 75 78 90 63 63 56 79 84 94 122 129 129 135 117 92 63 28 25 32 37 44 30 44 68 81 95 124 121 117 126 87 50 37 13 11 12 21 79 90 65 88 86 94 120 135 139 142 142 125 84 40 37 48 50 107 108 82 91 104 97 99 101 99 99 105 92 77 64 69 79 82 97 117 76 81 103 96 101 104 102 102 109 89 68 46 49 62 70 84 91 79 87 100 97 103 106 103 78 94 87 88 98 99 103 106 107 108 111 102 92 69 67 75 79 • 103 106 92 75 56 58 62 63 1933 Mar April May 59 66 78 91 100 91 84 76 72 75 60 67 79 91 96 90 85 78 72 69 56 65 77 93 102 91 83 76 70 73 58 68 80 92 97 89 84 76 70 67 81 73 79 85 91 91 87 81 82 86 74 65 77 83 90 95 94 89 85 81 14 14 16 18 21 24 30 37 48 57 14 16 19 21 24 25 30 35 42 45 8 10 11 13 13 12 12 12 13 13 8 11 13 14 13 12 12 12 12 11 18 17 20 23 28 33 45 57 76 93 18 19 24 27 32 36 45 53 66 73 59 60 63 67 73 77 78 78 76 75 59 60 63 67 72 76 80 80 76 75 37 39 43 47 51 57 59 59 56 55 50 53 55 62 65 61 60 58 59 63 48 51 55 61 66 65 68 66 60 56 57 64 67 68 70 75 69 69 66 70 50 68 67 64 48 59 73 77 75 121 78 81 84 86 86 84 76 73 71 74 75 88 77 83 87 88 89 84 73 73 73 75 74 78 76 80 82 85 86 83 74 72 69 72 74 85 75 82 86 89 89 84 71 71 70 73 73 76 88 92 100 90 88 87 84 80 82 81 81 90 86 89 91 81 86 86 84 83 87 87 84 85 49 44 33 32 26 26 27 27 29 31 31 31 40 38 33 36 32 31 30 28 30 29 28 25 12 12 11 12 11 12 12 10 11 12 11 12 10 10 12 14 13 13 12 10 11 12 11 10 80 70 51 48 38 38 39 40 44 46 48 47 64 60 50 54 47 46 44 43 45 43 41 36 75 78 81 82 83 82 80 79 74 77 77 79 73 78 81 82 83 81 79 80 76 78 77 78 54 61 65 67 67 65 61 62 58 61 60 63 64 64 66 62 63 64 61 59 59 57 59 64 58 61 63 60 63 64 63 63 67 64 60 56 71 71 78 74 77 74 73 77 75 73 74 78 57 59 73 73 77 70 51 60 79 82 83 135 91 89 88 86 85 86 86 87 90 95 90 88 86 86 84 84 86 87 91 92 90 79 88 97 84 85 92 100 95 96 27 28 26 27 27 30 35 38 43 48 60 67 22 24 26 30 32 35 39 40 44 45 53 53 12 14 16 18 21 24 25 24 25 25 26 26 10 13 16 22 25 26 25 24 25 25 25 22 39 39 35 33 32 36 43 50 58 66 88 101 43 50 54 59 62 76 79 81 82 83 82 81 80 81 82 82 84 85 86 79 81 83 83 81 80 80 82 84 85 85 85 64 69 71 71 69 66 65 70 72 75 75 95 94 96 97 87 89 98 84 81 87 93 92 101 32 33 34 38 104 88 91 91 89 87 86 83 87 90 97 97 96 64 65 65 61 61 63 58 60. 62 64 66 71 58 61 62 59 61 63 60 64 70 73 67 62 74 75 82 73 76 80 80 78 81 77 81 84 59 61 71 79 76 76 55 61 86 86 91 145 98 94 93 P100 95 95 96 P103 95 93 97 P105 103 110 95 105 99 106 89 94 61 52 47 47 50 44 47 53 25 25 26 30 21 22 28 35 90 73 63 60 73 62 62 67 85 84 84 85 83 83 84 85 70 70 66 69 70 63 65 62 66 71 79 80 88 81 P88 63 66 77 85 P88 June July Aug Sept Oct. Nov Dec. 1934 Jan. Feb Mar ApriL__. May June July Aug Sept Oct. Nov Dec 1935 Jan Feb Mar ApriL_._ May June July Aug Sept Oct Nov... Dec Jan Feb Mar r 97 r r 91 91 91 87 ' 85 88 91 95 98 104 97 91 93 P99 r 83 87 89 96 98 May 39 • r 76 r 73 r 73 76 78 r p Preliminary. Revised. * Average per working day. 1 For indexes of groups and separate industries see pp. 489-490; for description see BULLETIN for February and March 1927. 2 3-month moving average of F. W. Dodge Corporation data centered at second month; for description see BULLETIN for July 1931, p. 358. 3 The indexes for factory employment and pay rolls unadjusted for seasonal variation are compiled by the Bureau of Labor Statistics. For description and back figures see BULLETIN for May 1934, pp. 270-271. For description and back figures for the seasonally adjusted index of factory employment compiled by F. R. Board of Governors see BULLETINS for June 1934, pp. 324-343, and December 1935, p. 888. For current indexes of groups and separate industries see pp. 491-492. Underlying figures are for pay-roll period ending nearest middle of month. * For indexes of groups see p. 494. Back figures.—See Annual Report for 1934 (tables 95 and 100). JUNE 489 FEDERAL RESERVE BULLETIN 1936 INDUSTRIAL PRODUCTION, BY INDUSTRIES (ADJUSTED INDEXES) [Index numbers of the Board of Governors; adjusted for seasonal variation. 1923-25 average=100] 1935 1936 Industry Apr. Manufactures—Total. 86 IRON AND STEEL.. Pig iron. _. Steel ingots..-. TEXTILES Cotton consumption Wool Consumption Machinery activity i Carpet and rug loom activity i Silk deliveries '85 '109 131 '91 '79 117 FOOD PRODUCTS Slaughtering and meat packing.. Hogs Cattle.. Calves Sheep Wheat flour Sugar meltings 113 157 May 84 June July Aug. Sept. 84 Oct. 104 65 90 103 71 106 56 67 53 53 70 102 85 124 153 100 82 122 148 107 71 116 105 82 128 156 108 76 133 104 85 132 160 110 83 113 106 95 112 127 108 74 134 113 99 126 146 121 78 132 74 67 44 92 106 151 91 75 74 69 46 93 115 154 76 76 50 107 119 159 73 78 78 76 50 107 124 144 82 81 82 57 111 117 154 88 78 61 124 80 Dec. 95 81 60 83 78 74 54 94 108 161 83 Nov. Jan. Feb. 97 91 67 83 63 85 Mar. Apr. 100 77 102 106 98 118 134 118 72 112 111 108 114 125 122 66 119 105 106 107 117 114 102 99 111 120 117 75 91 100 100 96 105 99 68 107 82 79 54 107 118 148 86 83 80 54 110 126 145 84 92 92 84 61 111 120 152 91 124 84 77 52 109 109 145 87 83 61 109 115 151 92 90 89 68 114 116 134 88 95 64 125 133 60 124 60 127 62 132 60 131 '125 3 179 '110 0 129 '90 0 141 '109 1 138 124 119 124 105 103 95 118 137 118 103 96 103 122 127 95 85 '110 121 107 93 94 77 103 109 97 95 85 115 117 59 47 225 49 161 58 178 71 211 100 105 95 68 102 PAPER AND PRINTING: Newsprint production— Newsprint consumption. 59 119 64 121 124 60 118 58 120 62 127 '104 9 91 '85 14 56 '99 10 21 '94 3 15 '77 2 35 1 64 115 98 93 88 120 126 114 100 98 87 119 123 104 97 90 104 106 109 109 95 89 86 121 118 105 93 91 77 114 113 104 94 90 83 115 110 105 97 98 74 119 110 109 105 105 84 124 111 51 185 55 155 58 162 52 44 167 47 179 52 193 200 97 84 73 85 91 92 92 80 81 103 105 95 101 153 194 91 96 100 87 160 204 94 104 100 166 214 99 105 97 87 168 220 91 100 92 84 219 93 103 100 91 172 223 92 110 102 95 176 227 95 110 103 97 176 225 94 115 106 100 173 220 86 121 104 106 214 94 121 96 104 172 215 94 130 98 103 168 210 98 119 105 100 178 223 104 119 116 112 91 75 78 56 79 82 55 83 86 60 92 96 62 102 105 80 104 106 84 133 137 102 142 147 104 116 120 90 82 84 64 77 80 62 138 67 193 134 66 186 138 67 193 140 70 196 130 67 178 129 69 175 138 70 190 191 147 73 205 148 73 208 148 75 207 140 71 193 152 74 214 84 81 87 93 92 110 95 105 71 131 53 73 63 51 79 97 133 53 79 55 47 55 62 134 50 58 36 133 54 81 60 59 58 65 135 62 84 59 71 '75 48 140 62 80 68 75 71 48 144 44 82 67 68 '78 71 146 80 70 148 92 93 143 70 48 146 84 63 150 TRANSPORTATION EQUIPMENT: Automobiles Locomotives Shipbuilding LEATHER AND PRODUCTS Tanning Cattle hide leathers.... Calf and kip leathers._. Goat and kid leathers.. Boots and shoes '93 1 CEMENT AND GLASS: Cement Glass, plate NONFERROUS METALS: 2 Tin deliveries! FUELS, MANUFACTURED: Petroleum refining Gasoline l Kerosene Fuel oil! Lubricating oil L.. Coke, byproduct RUBBER TIRES AND TUBES.. Tires, pneumatic Inner tubes TOBACCO PRODUCTS.. Cigars Cigarettes Minerals—Total. Bituminous coal... Anthracite Petroleum, crude.. Iron ore Zinc Lead Silver 87 '61 69 130 73 91 70 93 i Without seasonal adjustment. * Includes also lead and zinc; see "Minerals." P Preliminary. ' Revised. NOTE.—For description see BULLETINS for February and March, 1927. For latest revisions see BULLETINS for March 1932, pp. 194-196, and September 1933, pp. 584-587. Series on silk-loom activity and on production of book paper, wrapping paper, fine paper, box board, mechanical wood pulp, chemical wood pulp, paper boxes, and lumber, usually published in this table, are in process of revision. 490 FEDERAL RESERVE BULLETIN JUNE 1936 INDUSTRIAL PRODUCTION, BY INDUSTRIES (UNADJUSTED INDEXES) [Index numbers of the Board of Governors; without seasonal adjustment. 1923-25 average=100] 1936 1935 Industry Apr. Manufactures—Total May June July Aug. Sept. Oct. Nov. Dec. Jan. Feb. Mar. Apr. 91 87 85 83 87 89 96 98 '95 95 93 97 P105 74 56 76 72 57 73 66 53 68 64 50 65 79 58 81 83 60 85 85 65 87 89 70 91 90 69 92 83 67 85 87 64 89 94 67 96 111 82 114 100 '91 '107 127 '91 '79 116 101 88 117 141 99 80 110 95 79 114 133 107 71 103 97 75 119 139 108 76 126 99 77 126 149 110 83 117 106 92 115 133 108 74 141 116 102 134 161 121 78 132 111 101 124 146 118 72 116 105 100 114 126 122 66 106 110 111 108 120 114 66 112 108 106 117 131 117 75 98 102 105 98 107 99 68 103 103 112 88 90 95 68 101 76 69 52 85 123 148 80 93 78 72 52 91 122 158 78 99 73 66 45 86 110 147 80 89 74 66 41 92 111 154 77 102 74 68 38 104 109 160 78 88 81 74 37 119 119 168 97 86 86 84 49 129 123 170 99 74 86 87 60 123 120 146 93 67 82 91 71 115 120 142 81 52 92 96 81 112 112 154 89 82 82 75 57 96 101 136 93 91 86 78 62 95 116 137 86 113 85 80 61 101 126 126 80 110 60 127 65 124 64 123 58 105 56 107 62 125 61 132 63 134 63 137 61 119 60 125 61 138 61 141 '134 g 88 '107 13 71 '112 10 27 '98 3 22 69 2 51 '28 1 64 '77 1 35 '124 4 105 '125 3 138 108 o '93 0 100 '124 1 107 149 92 112 95 93 79 119 123 105 95 93 83 110 112 100 95 88 100 106 104 107 95 86 100 113 115 116 95 90 93 111 130 120 100 94 96 121 132 115 103 101 88 124 123 104 103 104 80 122 105 106 102 100 81 127 108 109 99 97 85 116 116 '113 99 101 78 '114 122 110 92 95 69 105 '122 107 95 95 76 114 115 50 205 65 169 71 165 63 168 57 169 59 181 59 193 58 192 46 202 29 201 29 174 42 194 70 235 97 84 73 85 91 92 92 80 81 103 105 95 101 Petroleum refining Gasoline Kerosene Fuel oil Lubricating oil Coke, byproduct 153 194 90 96 100 87 160 204 90 104 100 89 166 214 92 105 97 85 167 220 85 100 92 81 169 219 88 103 100 88 173 223 94 110 102 93 176 227 100 110 103 97 176 225 101 115 106 102 174 220 93 121 104 107 170 214 96 121 96 105 172 215 96 130 98 106 168 210 95 119 105 103 178 223 103 119 116 114 RUBBER TIRES AND TUBES 103 107 75 96 99 68 95 99 65 81 84 57 91 94 68 97 99 80 91 93 76 99 103 75 99 102 75 107 110 82 89 92 67 85 87 67 127 63 175 136 68 188 150 73 212 152 73 215 139 70 192 143 79 193 148 85 200 140 82 189 119 55 168 141 56 204 135 65 188 132 64 183 140 70 195 79 88 97 84 85 92 100 95 96 99 106 89 94 51 72 130 60 71 132 80 73 62 50 71 85 136 105 76 56 46 50 51 137 102 75 57 62 57 36 136 109 75 57 59 61 65 139 119 79 56 68 82 62 141 105 78 70 74 80 50 143 37 82 70 73 '83 69 142 88 75 142 98 99 140 70 40 145 71 65 150 86 70 68 89 63 81 82 64 100 90 60 99 95 69 IRON AND STEEL Pig iron.. Steel ingots . _. _ _. TEXTILES Cotton consumption Wool Consumption Machinery activity Carpet and rug loom activity.. Silk deliveries FOOD PRODUCTS Slaughtering and meat packing.. Hogs . . . Cattle Calves... Sheep Wheat flour Sugar meltings ._ PAPER AND PRINTING: Newsprint production Newsprint consumption TRANSPORTATION EQUIPMENT: Automobiles Locomotives Shipbuilding LEATHER AND PRODUCTS. Tanning Cattle hide leathers Calf and kip leathers Goat and kid leathers Boots and shoes _._ _. CEMENT AND GLASS: Cement Glass, plate NONFERROUS METALS: l Tin deliveries.._ FUELS, MANUFACTURED: Tires, pneumatic Inner tubes TOBACCO PRODUCTS Cigars Cigarettes Minerals—Total Bituminous coal Anthracite Petroleum, crude Iron ore Zinc Lead Silver ._ _ 78 57 49 i Includes also lead and zinc; see "Minerals." * Preliminary. ' Revised. NOTE.—For description see BULLETINS for February and March 1927. For latest revisions see BULLETINS for March 1932, pp. 194-196, and September 1933, pp. 584-587. Series on silk-loom activity and on production of book paper, wrapping paper, fine paper, box board, mechanical wood pulp, chemical wood pulp, paper boxe s, and lumber, usually published in this table, are in process of revision. JUNE 491 FEDERAL RESERVE BULLETIN 1936 FACTORY EMPLOYMENT AND PAY ROLLS, BY INDUSTRIES [Adjusted to Census of Manufactures through 1931. 1923-25 average=100] Factory employment Adjusted for seasonal variation Industry and group 1936 April Without seasonal adjustment Without seasonal adjustment 1936 1935 March Factory pay rolls April April 1935 March April 1936 April 1935 March April 84.9 '84.2 '82.4 85.1 '84.1 '82.6 77.9 '76.3 70.8 77.9 78.1 56.1 75.3 54.8 59.5 102.0 65.3 95.4 145.9 76.1 •75.7 55.5 76.5 '54.3 57.7 98.8 62.3 96.9 142. 6 71.1 72.2 46.8 77.6 54.0 49.7 94.7 56.0 87.9 130.2 79.1 79.7 56.7 77.9 55.2 60.1 104.9 64.5 95.8 144.4 77.1 '77.4 55.2 79.2 '55.1 58.4 100.1 60.9 93.9 142. 2 72.2 73.7 47.3 80.3 54.4 50.2 97.4 55.3 88.3 128.9 73.9 79.2 37.2 64.8 52 A 43.8 85.5 54.7 94.3 146.7 '73.8 34.9 '63.4 50.5 '42.6 '84.4 '49.9 94.5 140. 0 59.4 62.3 26.3 60.1 46.3 33.8 73.7 39.8 85.4 121.5 MACHINERY i 97.0 132.6 75.3 118.4 82.4 104.4 239.0 70.3 94.9 129.6 72.3 114.3 80.4 102.1 248.8 69.7 86.0 91.6 70.9 96.0 73.1 80.7 231.2 65.3 96.2 140.4 75.3 120.3 83.8 105.9 188.6 70.8 93.6 138.7 72.3 116.2 81.5 104.5 186.1 71.0 85.1 97.0 70.9 97.5 74.3 81.8 182.4 65.8 86.3 172.5 68.6 91.1 75.4 97.5 118.0 62.5 82.2 171.0 63.7 88.7 71.6 97.4 109.7 64.6 67.6 108.8 58.4 69.6 58.0 67.8 107.0 51.6 TRANSPORTATION EQUIPMENT1 98.7 108.0 57.6 30.9 93.7 '96.3 106. 3 57.3 '27.4 '86.1 99.1 113.5 54.7 31.8 70.0 104.3 114.1 62.2 31.4 100.3 111.1 56.8 '27.6 '90.7 104.8 119.9 59.1 32.3 74.6 110.3 121.7 70.0 15.1 95.6 '96.1 105. 4 62.0 12.9 '85.0 102.7 117.1 65.1 15.0 62.0 59.4 66.0 59.0 '60.4 65.8 r 60.0 52.6 65.6 51.6 59.9 66.0 59.4 '60.1 65.8 '59.7 52.9 65.6 52.0 60.6 62.5 60.6 '63.1 63.6 '63.2 50.7 60.4 50.1 87.6 85.3 77.1 65.4 86.7 109.7 '87.2 '84.6 '78.3 66.1 '87.6 105.1 '82.4 80.4 69.3 71.6 75.5 106.1 88.7 86.8 78.0 65.5 88.5 112.8 '86.9 '79.1 66.6 '89.5 109.1 '83.4 81.8 70.1 71.7 77.1 109.1 74.0 70.8 74.7 48.7 63.5 101.1 '73.9 '69.9 72.5 52.2 '65.6 '96.4 '64.7 64.1 59.0 51.2 49.8 '88.0 56.3 74.7 48.2 37.7 '55.9 73.7 47.6 '37.3 52.4 71.1 39.4 35.0 55.6 72.1 48.5 37.5 '54.5 72.4 47.0 '36.1 51.7 68.6 39.7 34.8 46.3 56.2 41.2 29.7 '44.6 55.7 39.2 '28.0 37.5 49.2 27.7 23.7 57.1 36.4 52.6 95.6 70.5 55.2 '35.2 47.3 '94. 1 52.7 27.4 50.3 92.7 72.3 57.7 36.7 52.3 97.1 71.6 54.1 '32.5 44.3 '94.9 '71.2 53.2 27.6 50.0 94.2 73.4 46.9 25.8 38.3 92.1 56.9 '43.5 '22.4 31.8 '89.1 '57.6 39.3 16.3 31.9 82.7 53.4 TEXTILES AND 1PRODUCTS1 94.9 91.3 77.5 90.8 108.8 112.8 63.9 89.2 99.1 96.1 123.7 61.4 109.7 94.6 91.6 78.4 '89.6 107.3 113.0 63.0 93.1 '97.4 '94.2 122.8 63.0 105.5 96.0 92.7 77.0 91.5 111.8 112.2 70.0 88.4 99.2 97.7 122.3 63.4 105.6 96.1 91.9 79.6 90.4 111.5 114.9 64.8 87.8 101.7 93.1 136.3 67.4 108.4 97.2 93.3 80.9 '91.6 111.9 114.9 64.7 93.0 101.9 '96.1 133.8 70.8 105.5 97.2 93.3 79. 1 91.9 114.6 114.3 71.0 87.0 101.8 94.7 134.8 69.6 104.3 80.0 78.3 69.2 77.1 96.0 110.5 53.5 67.3 78.7 67.8 101.1 63.0 105.9 '84.3 '80.0 70.4 '77.8 95.7 112.5 53.5 71.5 '87.6 '80.7 108.7 76.2 104.7 82.4 78.0 74.2 74.0 95.7 110.3 59.6 66.5 86.4 82.5 103.9 70.0 104.4 LEATHER AND PRODUCTS . 87.0 85.2 94.7 86.9 85.4 93.4 92.2 91.7 94.3 86.4 84.3 94.9 89.0 87.4 95.6 91.5 90.8 94.5 69.9 62.4 94.5 75.5 69.7 93.8 79.1 75.1 91.4 100.5 115.3 72.4 92.: 77.7 73.5 71.6 83.4 82.4 102.2 115.2 73.6 108.8 76.9 74.6 68.8 82.4 80.4 102. 4 113.6 71.8 103. 4 85.4 75.3 71.9 84.2 84.4 94.1 113.5 71.0 68.2 70.6 72.4 68.8 80.7 81.8 92.0 112.9 68.0 56.6 73.9 73.7 61.8 '80.5 79.6 '95.4 111.8 70.4 '76.5 77.6 74.2 69.1 81.5 83.8 87.7 100.4 56.5 78.8 60.5 63.8 57.6 73.6 73.9 87.5 100.9 55.7 70.8 66.6 67.7 53.2 '74.1 75.8 '85.9 95.5 54.7 '83.7 64.7 62.5 55.5 74.3 76.2 Total IRON AND STEEL AND PRODUCTS* Blast furnaces and steel works Cast-iron pipe Cutlery and edge tools Hardware Steam, hot-water heating apparatus, etc Stoves Structural metal work Tin cans, etc Wirework... Agricultural implements Electrical machinery, etc Engines, turbines, etc Foundry and machine-shop products.. Machine tools Radios and phonographs. Textile machinery Automobiles _._ Cars, electric and steam railroad. Locomotives Shipbuilding RAILROAD REPAIR SHOPS.. Electric railroads Steam railroads NONFERROUS METALS AND PRODUCTS 1 . Brass, bronze, and copper Lighting equipment Silverware and plated ware Smelting and refining Stamped and enameled ware LUMBER AND PRODUCTS1. Furniture Lumber, mill work Lumber, sawmills STONE, CLAY, AND GLASS PRODUCTS1 . Brick, tile, and terra cotta Cement.. __ _ Glass Pottery... A. Fabrics Carpets and rugs.. Cotton goods Dyeing and finishing Knit goods Silk and rayon goods Woolen and worsted goods.. l B. Wearing apparel Clothing, men's Clothing, women's Millinery Shirts and collars Boots and shoes. _ Leather FOOD PRODUCTS 1 Baking Butter.. Canning and preserving.. Confectionery Flour Ice cream __ Slaughtering and meat packing.. Sugar refining, cane. .. ' Revised. 1 Includes current statistics for one or more industries not shown separately. 492 FEDERAL RESERVE BULLETIN J U N E 1936 FACTORY EMPLOYMENT AND PAY ROLLS, BY INDUSTRIES—Continued [Adjusted to Census of Manufactures through 1931. 1923-25 average=100] Factory employment Adjusted for seasonal variation Industry and group April TOBACCO PRODUCTS Chewing and smoking tobacco and snuff Cigars and cigarettes. _ _ PA*PER AND PRINTING Boxes, paperPaper and pulp . Book and job printing Printing, newspapers and periodicals _ __ CHEMICALS AND PETROLEUM PRODUCTS 1 A. Chemical group, except petroleum l Chemicals Druggists' preparations Explosives. _ Fertilizers Paints and varnishes Rayon and allied products __ Soap— B. Petroleum refining _. RUBBER PRODUCTS 1 __ . Rubber boots and shoes Rubber tires and inner tubes Without seasonal adjustment 1936 . 1935 March April 1936 Factory pay rolls April Without seasonal adjustment 1935 March April 1936 April 1935 March April 56.2 67.2 54.8 56.4 63.6 55.4 57.7 70.8 56.0 55.4 65.2 54.1 55.9 66.0 54.6 56.8 68.7 55.3 42.6 64.4 39.8 44.9 66.2 42.2 43 1 64.9 40.3 99.0 86.7 110.3 89.7 103.2 97.9 85.8 109.6 87.9 102.4 97.3 88.2 109.8 87.7 99.1 98.6 84.3 110.3 89.1 103.5 98.2 84.7 109.6 89.0 102.6 96.9 85.7 109.8 87.1 99.4 91.1 78.8 96.2 81.8 98.5 90. 5 79.7 94.9 81.9 97.4 84 6 78.1 87.3 77. 1 90.5 107.6 107.2 108.3 100.2 87.8 74 4 111.4 331.1 95.7 109.4 110.3 110.7 106.9 96.9 90.7 109 8 '107. 3 352.0 96.0 108. 6 108.1 108.0 106.3 100.7 87.1 83 7 108.8 334.9 101.4 108.3 110.7 111.0 109.0 98.4 85.3 138.0 111.9 331.1 96.8 109.4 112.1 113.2 '108.1 99.0 89.4 141.4 '108.1 352.0 96.4 '107. 5 111.5 112.3 106.9 98.9 84.6 155 3 109.2 334.9 102.7 108.3 101.3 101.2 104.9 98.0 77.7 123.9 100.7 254.9 93.6 101.7 '102. 4 '102. 2 '103.0 100.0 86.0 123 6 95.9 267.3 95.0 '103.0 95.9 95.6 96.2 97.7 69.3 119,9 91.9 242.7 97.0 96.9 82.1 62.4 67.0 •73.7 r 60.9 '54.3 '83.4 ••55.3 82.1 59.8 68.1 '72.7 '58.9 '53.2 '83.6 '52.9 74.9 74.0 52.0 63.2 '63.0 '52.3 '47.4 71.2 43.8 65.4 73.6 ' Revised. * Includes current statistics for one or more industries not shown separately. NOTE.—The indexes for factory employment and pay rolls unadjusted for seasonal variation are compiled by the Bureau of Labor Statistics. For description and back figures see BULLETIN for May 1934, pp. 270-271. For description and back figures for the seasonally adjusted index of factory employment compiled by the F . R. Board of Governors, see BULLETIN for June 1934, pp. 324-343, and December 1935, p. 888. Underlying figures are for pay-roll period ending nearest middle of month. April 1936 figures are preliminary, subject to revision. REVISED INDEXES OF FACTORY EMPLOYMENT AND PAY ROLLS [1923-25 average = 100] Factory employment Adjusted for seisonal variation 1935 Dec. Total Transportation equipment Automobiles _ . Lumber and Products Lumber, sawmills . ... . . . __ .__ 1936 Jan. Feb. Mar. Factory pay rolls Without seasonal adjustment Without seasonal adjustment 1935 1935 Dec. 1936 Jan. Feb. Mar. Dec. 1936 Jan. Feb. Mar. 85.6 84.8 83.8 84.2 84.6 82.9 83.1 84.1 76.4 72.7 72.7 76.3 111.0 128.0 54.5 35.8 103.1 117.4 54.8 36.0 96.7 108.7 54.6 35.8 96.3 106.3 55.9 37.3 103.3 118.1 54.5 35.1 101.8 116.3 52.9 34.4 99.1 112.0 53.1 34.3 100.3 111. 1 54.5 36.1 102.2 115.9 44.2 25.9 94.8 106.8 41.1 25.2 85.3 93.6 41.1 24.4 96.1 105.4 44.6 28.0 493 FEDERAL RESERVE BULLETIN JUNE 1936 CONSTRUCTION CONTRACTS AWARDED, BY TYPES OF CONSTRUCTION [Figures for 37 States east of the Rocky Mountains, as reported by the F. W. Dodge Corporation. Value of contracts in millions of dollars] Total Residential Factories Commercial Public works and public utilities 1935 1935 Month January February March April 1^1 ay June July August September October November December Year 1935 1936 99.8 75.0 122.9 124.0 126 7 148.0 159.3 168.6 167.4 200.6 188.1 264.1 204.8 142.1 199.0 234.8 1,844. 5 1935 22.4 16.6 32.2 42.2 44 9 49.8 48.4 40.5 41.8 55 1 39.7 45.1 1936 37.4 31.2 '55.2 67.2 478.8 1936 1935 7.1 7.8 6.5 6.3 9 8 9.5 14.6 10.6 6.0 12 0 8.9 9.9 9.0 13.4 18.4 25.5 108.9 CONSTRUCTION CONTRACTS AWARDED, BY DISTRICTS 10.8 9.2 12.2 15.2 13 9 15.0 15.8 17 3 13.6 16.6 12.8 12.0 1936 15.5 12.6 17.3 24.3 164.5 44.4 27.8 46.3 40.5 31 4 39 1 53 9 69 5 76 1 86 3 80 3 94.5 1936 76.9 48.3 62.3 73.4 690.2 Educational 1935 1936 3.7 5.8 10.4 8.3 9 0 17 7 9 2 8 7 4 3 9 2 24 7 62.6 _ 39.5 21.1 19.2 23.2 _ _ _ 173.5 All other 1935 11.4 7.9 15.4 11.5 17 7 16 8 17 4 21 9 25 6 21 3 21 7 40.1 1936 26.5 15.5 26.6 21.3 _ _ . 228.7 COMMERCIAL FAILURES, BY DISTRICTS [Figures reported by Dun & Bradstreet. Amounts in thousands of dollars] fFigures for 37 States east of the Rocky Mountains, as reported by the F. W. Dodge Corporation. Value of contracts in thousands of dollars] Number1 Liabilities 1 Federal Reserve 1936 1935 district 1935 1935 1936 1936 Federal Reserve district Apr. Mar. Apr. Apr. Boston New York Philadelphia Cleveland Richmond Atlanta Chicago St. Louis Minneapolis Kansas City Dallas Total (11 districts) 19,952 45,128 14,810 24,184 19, 230 20, 275 37, 402 16, 761 8,561 10, 940 17, 562 13, 031 42, 737 10, 739 17, 555 17,136 13, 279 '38, 273 14, 007 7,201 10, 520 14, 501 8,523 27, 557 4,579 11, 298 14, 999 9,335 24, 549 8,689 234,806 198, 978 124, 020 4,176 4,231 Boston.. ._ New York Philadelphia Cleveland.. __ _ Richmond Atlanta Chicago. St. Louis __. . Minneapolis _ Kansas City. Dallas San Francisco Total Mar. Apr. Apr. Mar. Apr. 80 273 47 61 37 29 104 25 25 35 17 97 82 296 44 65 50 29 115 41 23 47 25 129 120 329 49 80 45 38 115 42 39 40 32 154 1,688 4,542 476 1,452 437 1,634 1,725 296 221 226 520 940 961 6,850 429 1,035 504 411 1,877 511 395 1,709 219 1,370 1,428 5,405 1,068 1,037 295 297 2,361 471 516 704 403 2,544 830 946 1,083 14,157 16, 271 16, 529 i N e w series, excluding failures of real estate a n d insurance brokers, holding a n d finance companies, shipping agents, tourist companies, a n d transportation terminals which were included in figures published in this table prior to 1936. D a t a b y m o n t h s for 1934 a n d 1935 available at the Division of Research and Statistics. 494 FEDERAL RESERVE BULLETI N J U N E 1936 MERCHANDISE EXPORTS AND IMPORTS [In millions of dollars] Merchandise imports» Merchandise exports i Excess of exports Month 1932 January February March . __ April . May June . __ ___ July _ August September October _ November December . _ _ Year . 1933 1934 1935 1936 1932 1933 1934 1935 1936 1932 1933 1934 1935 199 182 195 136 131 131 96 84 95 136 133 158 167 152 177 187 193 199 15 23 24 25 18 13 37 30 33 9 11 8 11 -11 -4 193 127 112 110 88 107 122 147 155 136 171 171 157 202 9 20 4 17 7 —2 33 6 34 —6 —5 13 p—9 150 154 155 121 102 108 172 163 191 176 163 185 r 135 132 114 105 114 120 179 160 171 164 165 170 P 107 109 132 144 131 160 162 172 191 173 172 199 79 91 98 143 155 147 127 120 132 177 169 162 27 17 34 1 —23 13 34 52 60 —3 3 37 153 139 132 193 184 193 206 195 171 221 270 223 105 104 97 151 129 134 130 151 132 189 169 187 48 34 35 42 56 59 77 44 38 32 100 36 1,611 1,675 2,133 '2,283 1,323 1,450 1,655 2,048 288 225 478 235 r P 1936 r p Preliminary. Revised. i Including both domestic and foreign merchandise. i General imports, including merchandise entered for immediate consumption and that entered for storage in bonded warehouses. Back figures.—See BULLETIN for January 1931, p. 18, and for March 1932, p. 160. FREIGHT-CAR LOADINGS, BY CLASSES DEPARTMENT STORES—SALES, STOCKS [Index numbers; 1923-25 average-100] [Index numbers based on value figures; 1923-25 average—100] 1936 1935 Apr. Dec. Jan. Feb. Mar. Apr. Month Adjusted for seasonal variation Total Coal Coke Grain and grain products. _ Livestock Forest products Ore Miscellaneousl Merchandise 61 63 49 74 41 33 49 67 63 71 74 68 62 39 45 58 86 66 70 78 73 70 38 42 62 79 64 70 97 79 68 33 36 62 74 62 66 63 55 85 41 40 64 77 62 Without seasonal adjustment Total . Coal Coke Grain and grain products __ Livestock Forest products Ore Miscellaneous! Merchandise 59 53 46 57 38 35 25 69 65 62 79 73 61 39 37 14 67 62 63 88 80 67 39 38 15 63 60 65 106 89 66 31 37 15 63 60 Index of stocks (end of month) Index of sales i 62 60 56 72 35 42 15 73 63 Adjusted Without Adjusted Without for seasonal seasonal for seasonal seasonal variation adjustment variation adjustment 1935 1936 1935 1936 1935 1936 1935 1936 January. __ February.. March 79 58 62 67 April.. May.. June._ 81 68 July ..__ August September October November. December.. Year.. 61 57 67 77 91 145 79 64 p Preliminary. * Based throughout on figures of daily average sales—with allowance for changes from month to month in number of Saturdays and Sundays and for 6 holidays: New Year's Day, Memorial Day, Independence i In less-than-carload lots. Day, Labor Day, Thanksgiving Day, and Christmas. Adjustment for Based on daily average loadings. Source of basic data: Association of seasonal variation makes allowance in March and April for the effects upon sales of changes in the date of Easter. American Railroads. Back figures.—See BULLETIN for April 1935, pp. 254-255, and Annual Report for 1934 (table 95). Back figures—See BULLETIN for February 1931, pp. 108-109. 495 FEDERAL RESERVE BULLETIN J U N E 1936 WHOLESALE PRICES, BY GROUPS OF COMMODITIES [Index of Bureau of Labor Statistics. Year, month, or week 1929 1930 1931 1932 1933 1934 1935 Farm products Foods 95.3 86.4 73.0 64.8 65.9 74.9 80.0 104.9 88.3 64.8 48.2 51.4 65.3 78.8 99.9 90.5 74.6 61.0 60.5 70.5 83.7 91.6 85.2 75.0 70.2 71.2 78.4 77.9 109.1 100.0 86.1 72.9 80.9 86.6 89.6 90.4 80.3 66.3 54.9 64.8 72.9 70.9 83.0 78 5 67.5 70.3 66.3 73.3 73.5 100.5 92.1 84.5 80.2 79.8 86.9 86.4 95.4 89.9 79.2 71.4 77.0 86.2 85.3 94.2 89.1 79.3 73.5 72.6 75.9 80.5 94.3 92.7 84.9 75.1 75.8 81.5 80.6 82.6 77.7 69.8 64.4 62.5 69.7 68.3 79.4 80.1 80.2 79.8 79.4 80.5 80.7 80.5 80.6 80.9 78.3 80.4 80.6 78.3 77.1 79.3 79.5 78.2 77.5 78.3 81.9 84.5 84.1 82.8 82.1 84.9 86.1 85.0 85.1 85.7 77.3 77.2 77.6 78.0 78.0 77.9 77.8 78.3 78.8 78.7 85.4 86.3 88.3 88.9 89.3 89.6 90.9 93.6 95.0 95.4 69.4 69.2 69.4 70.1 70.2 70.9 71.8 72.9 73.4 73.2 73.0 72.8 73.1 74.2 74.7 74.1 73.0 73.4 74.5 74.6 85.7 85.9 86.6 86.9 86.4 86.6 86.6 86.5 86.9 86.8 84.9 84.6 84.8 85.3 85.2 85.4 85.9 86.1 85.8 85.5 81.5 81.0 81.2 80.7 78.7 78.6 80.2 81.1 81.2 80.6 80.7 80.7 80.6 80.5 80.4 80.5 80.5 80.6 81.0 81.0 69.2 68.7 68.7 68.4 67.7 67.3 67.1 67.5 67.4 67.5 80.6 80.6 79.6 79.7 78.2 79.5 76.5 76.9 83.5 83.2 80.1 80.2 78.8 79.0 78.9 78.9 97.1 96.1 94.9 94.6 71.7 71.0 70.8 70.2 75.1 76.1 76.2 76.7 86.7 86.7 86.6 86.6 85.7 85.5 85.3 85.7 80.5 80.1 79.3 ^8.5 81.4 81.5 81.4 81.5 67.8 68.1 68.3 68.6 80.9 80.5 80.2 80.2 80.5 80.4 80.6 80.8 79.9 79.7 79.2 79.3 79.3 79.2 79.5 79.7 79.6 79.1 78.6 78.1 78.2 78.4 79.3 78.3 78.1 78.1 79.5 79.4 79.9 81.6 78.4 77.7 76.4 76.7 76.8 76.3 76.9 77.4 77.8 77.1 76.2 74.4 75.0 75.9 85.8 84.6 82.9 82.7 83.2 82.9 84.0 84.3 82.2 81.4 79.7 79.9 79.7 79.7 80.2 81.1 80.4 79.1 78.0 77.4 77.5 78.4 78.8 78.8 78.9 79.0 79.1 79.1 79.0 79.0 79.1 79.0 79.0 78.8 78.8 78.8 79.0 79.1 79.0 78.9 78.9 78.8 78.7 78.8 96.6 97.7 97.8 97.7 97.5 97.1 97.0 96.5 96.2 95.7 95.5 95.3 95.3 95.1 95.1 95.2 95.2 94.9 94.9 94.8 94.3 94.3 72.9 72.4 71.0 70.8 70 9 70.7 70.6 70.5 70.3 70.4 70.4 70.4 70.4 70.1 69.9 69 9 69.7 69.7 69. 6 69.5 69.2 69.2 75.5 75.4 76.4 77.0 77 1 77.2 76.9 77.2 77.4 77.3 77.2 76 7 76.7 76.8 77.6 77 5 77.4 77.3 77.2 76.9 76.8 76.8 85.9 86.0 86.0 86.1 86 0 86.0 86.0 85.9 85.9 86.0 85.9 85 9 85.7 85.9 85.9 86 0 86.0 86.0 86.0 85.7 85.7 85.7 85.2 85.2 85.2 85.3 85.4 85.2 85.3 85.2 85.2 85.0 85.1 85.1 85.2 85.3 85.4 85.4 85.5 85.5 85.6 85.5 85.6 85.7 2$0 1 i$0.2 82.2 82.4 82.2 82.3 82.3 82.8 82.8 82.8 82.8 82.7 82.6 82.6 82.7 82.7 82.8 82.8 82.8 82.8 82.8 82.8 82.8 82.9 67.5 67.8 67.8 67.8 67.9 67.9 68.0 68.0 68.2 68.2 68.2 68.2 68.2 68.2 68.3 68.6 68.6 68.6 68.4 69.2 69.1 69.1 . 1935—March April May June July August _ ._ September October November December 1936—January February March April Week ending— 1936—Jan. 4 Jan.11 Jan. 18 Jan. 25 Feb. 1 Feb. 8 Feb. 15 Feb. 22 Feb. 29 ._ Mar. 7 Mar. 14 Mar. 21 Mar. 28 Apr. 4 Apr. 11 Apr. 18 Apr. 25 May 2 May 9 M a y 16 M a y 23 M a y 30 Other commodities All commodities . . _ . Hides and Textile Fuel and Metals Building Chemileather cals and lighting and metal products products materials products materials drugs Total 1935 1936 F A R M PRODUCTS: Grains Livestock and poultr y Other farm products Butter, cheese, and nnilk Cereal products ... . Fruits and vegetables Meats FOODS: Other foods Apr. Jan. Feb. Mar. A p r . 87.9 85.9 74.5 78.9 89.1 70.8 78.3 90.3 72.7 75.6 88.3 69.1 73.9 88.3 70.4 84.9 84.2 93.3 '92. 1 67.3 62.2 94 3 94 9 76.2 75.5 85.7 80.3 85.8 65 1 89 7 72.4 78.8 84.2 67.8 91 0 72.4 62.4 92 1 78.1 M E T A L S AND M E T A L PRODUCTS: Boots and shoes Hides and skins Leather Other leather products 97.2 100.5 100. 5 ] 00 4 100 3 71.2 100. 5 96.7 91.0 90.1 74 9 87.3 86 0 85 0 84 5 84.6 95.3 95.4 95.4 95.4 Clothing 78.5 81.8 61.6 27.6 73.1 67.5 80.8 80.4 61.8 33.5 81.4 67.8 75.5 95.4 88 7 87.8 88 0 51.0 82 3 82 6 98.7 100.1 92 7 93 7 83.1 86.2 83 2 82.1 54.4 55.7 T E X T I L E PRODUCTS: F U E L AND LIGHTING MATERIALS: r House- Miscelfurnish- laneous ng goods 1936 Subgroups H I D E S AND L E A T H E R PRODUCTS: Cotton goods Knit goods Silk and rayon Woolen and worsted goods.._ Other textile products $0 3 i$0.6 i$0.5 $0.2 79.9 79.9 79.7 79.4 79.0 79.0 79.1 79.1 79.0 78.9 78.2 77.8 77.5 77.3 77.3 77.4 1935 Subgroups Anthracite Bituminous coal Coke Electricity . Gas Petroleum products. 1926=100] 80.7 78.1 62.0 31.6 82.8 67.2 80 7 77.1 62.1 30.9 83.8 67.2 80 8 76.2 62.0 30.1 82.2 67.5 82 5 80 0 99.4 96.8 93 7 93 7 84.4 84.4 56.0 ~57.~9 Agricultural imnlp.mp.nts Iron and steelMotor vehicles Nonferrous metals . _ BUILDING M A T E R I A L S : Brick and tile Cement Lumber Paint materials Plumbing and heating Structural steel Other building materials CHEMICALS AND DRUGS* Chemicals Drugs and Pharmaceuticals Fertilizer materials Mixed fertilizers HOUSEFURNISHING GOODS: Furnishings Furniture Auto tires and tubes Cattle feed Paper and pulp Rubber crudeOther miscellaneous MISCELLANEOUS: ... Apr. Jan. Feb. Mar. Apr. 93.6 86.0 93.6 68.2 94.6 87.1 93.6 69.7 94.9 86.9 93.6 69.7 94.2 86.3 94.0 69.9 94.2 86.3 94.0 70.4 89.7 94 9 79 9 79.2 67.1 92 0 89.4 88.4 95.5 82 2 79.6 71.7 92.0 90.2 88.4 95.5 82 3 79.5 73.8 92.0 89.5 88.9 95.5 82 6 79.2 73.8 92.0 88.5 89.0 95.5 83.2 79.3 73.8 92.0 89.1 87.2 73.8 66 0 72 9 87.6 74.0 64.4 68.8 87.0 73.2 64. 5 68.8 85.9 73.0 64 8 68.3 85.5 73.2 64.6 64.5 84 2 77.1 84.8 77.9 85.0 77.9 84.9 77.9 85.0 78.0 46.3 104 9 80 4 23 7 79.0 45.0 68 6 79.8 29 8 80.4 45.0 68 1 79.9 32 0 80.6 45.0 67 9 80.3 32 9 80.6 45.0 74.0 80.5 33 0 80.6 Revised. Back figures.—For monthly and annual indexes of groups, see Annual Report for 1934 (table 100); indexes of subgroups available at Bureau of Labor Statistics. For weekly indexes covering 1934, see Annual Report for 1934 (table 101). 496 FEDERAL RESERVE BULLETIN JUNE 1936 INTERNATIONAL FINANCIAL STATISTICS GOLD RESERVES OF CENTRAL BANKS AND GOVERNMENTS [In millions of dollars] End of month Total i (50 countries) Europe United States Canada Total (27 countries) Austria Belgium Bulgaria Czechoslovakia Denmark England Germany France 1935—April May June July August September. October November. December.. 21,861 21,473 21,678 21, 675 21,759 21, 926 22,313 22, 225 22,391 8,710 8,858 9,116 9,144 9,203 9,368 9,693 9,920 10,125 187 189 188 188 193 186 186 188 189 11, 279 10, 714 10, 670 10,636 10,664 10, 678 10, 714 10, 394 10, 348 518 605 634 624 612 604 609 615 611 112 112 113 113 113 113 113 113 112 1,587 1,587 1,588 1,588 1,593 1,595 1,604 1,628 1,648 5,366 4,759 4,708 4,726 4, 756 4,770 4,773 4,388 4,395 33 35 38 38 38 35 36 1936—January.... February. _. March April May 22,399 p 22,465 p 22, 514 10,182 10,167 10,184 10, 225 10, 401 186 186 184 187 188 10, 296 10, 358 10, 379 600 593 586 581 610 112 112 113 113 1,652 1,653 1,653 1,670 1,701 4,324 4,362 4,348 4,106 3,781 31 29 29 28 Europe—Continued End of month Greece Hungary Italy Nether- Norway! Poland Portu- Ruma- Spain Sweden Switzerlands land gal nia 1935—April May June. _. July August September October November. December. 519 519 498 468 419 379 2 351 351 2 270 439 440 427 380 402 365 401 427 438 1936—January... February.. March April May 270 270 270 270 270 455 463 486 483 465 61 66 75 75 84 84 84 84 84 97 97 97 97 97 89 86 84 84 68 Latin America End of month 1935—April May June— July August September _ October November. _ December.. 106 106 107 107 108 108 108 109 109 741 741 741 741 741 734 734 735 735 109 110 110 111 735 735 726 726 1936—January February... P 6 4 1 P636 March April P635 R.3 446 390 391 421 446 448 453 455 454 403 420 420 420 420 420 441 441 444 20 20 20 20 20 20 20 20 20 444 444 438 20 P20 P20 P20 other Yugo- 6counslavia tries 56 57 57 57 59 62 62 63 63 748 748 748 748 748 839 839 839 454 472 493 495 63 65 67 p 67 Asia and Oceania 4 Total ArTotal CoUru- other (7 India Japan (10 Chile lom- MexPeru guay Java counico coun- gencounbia tries tries) tries) tina 597 616 611 609 611 613 636 636 639 160 161 161 , 162 ! 162; 165 174 180 185 I 194 j 200 i 206 ! 209 ! u.s.s. Africa Total 2 New TurZea- key other (4 F counland tries tries) 2 t South other Africa countries 82 82 76 74 74 74 74 74 74 23 25 26 26 27 28 30 29 30 801 800 802 797 798 797 800 803 807 275 275 275 275 275 275 275 275 275 400 403 407 410 413 416 418 422 425 286 295 291 301 290 284 284 284 284 55 55 55 55 55 55 55 55 55 214 223 220 230 219 212 212 212 212 17 17 17 17 17 17 17 17 17 74 74 30 30 P31 P31 804 810 815 P818 275 275 275 275 428 431 433 435 293 303 316 55 55 55 55 221 231 244 189 17 17 17 P 17 P74 P74 P261 p Preliminary. See notes under Italy, U. S. S. R., and Mexico. Bank of Italy suspended regular publication of its statement after Oct. 20, 1935. Figure as of that date is given for October and November 1935.3 The figure for December and subsequent months is that published in the Annual Report of the Bank of Italy for December 31, 1935. Figures for March 1935, or September 1935, carried forward for subsequent months for which no figures have been reported. 4 Figure for March 1935 carried forward for subsequent months for which no figures have been reported. NOTE.—The countries for which figures are not shown separately are in Europe: Albania, Danzig, Estonia, Finland, Latvia, and Lithuania; in Latin America: Bolivia, Brazil, Ecuador, Guatemala; in Asia and Oceania: Australia and Siam; and in Africa: Algeria and Belgian Congo. For back figures and for full description of this table, see BULLETIN for May 1932, pp. 311-318, June 1933, pp. 368-372; December 1934, p. 801; and November 1935, p. 758. 1 2 497 FEDERAL RESERVE BULLETIN JUNE 1936 GOLD PRODUCTION [In thousands of dollars] Production reported monthly Year or month Estimated world production Africa Total South Africa Rhodesia Far East North and South America Colom- Chile Austra- Japan West Belgian United lia Africa Congo Canada States Mexico bia India $1=25-8/10 grains of gold 9/10 fine; i. e., an ounce of fine gold=$20.67 1929.. 1930. 1931.. 1932.. 1933.. 404,969 430, 725 461, 592 499, 241 524, 390 359,347 373,154 394,399 421, 656 420,093 215, 242 221, 526 224,863 238, 931 227,673 11,607 11,476 11,193 12,000 13,335 4,297 4,995 5,524 5,992 6,623 2,390 2,699 3,224 3,642 3,631 887,845 711, 260 963,369 722,970 PI, 042, 271 P769, 471 385, 474 366, 795 377,090 22, 578 24, 264 25,477 11,214 12,153 13, 625 6,148 6,549 7,159 39,862 43, 454 55,687 62, 933 60,968 45,835 47,123 49, 524 50,626 52,842 13, 463 13,813 12, 866 12, 070 13,169 2,823 3,281 4,016 5,132 6,165 683 428 442 788 3,009 8,712 9,553 12,134 14,563 16, 790 7,508 6,785 6,815 6,782 6,919 6,927 8,021 8,109 8,198 8,968 $1=15-5/21 grains of gold 9/10 fine; i. e., an ounce of fine gold=$35 1933.. 1934.. 1935.. 1935—April May June July. _ August September. October.... November. December.. 1936—January February.. March April 103,224 89,467 22, 297 104,023 107,632 23,135 114, 816 124,116 P23, 866 10,438 12,045 11,517 5,094 8,350 9,251 28, 428 15,183 30, 447 16, 354 31,117 r 20,043 2,637 2,533 2,623 2,635 2,844 2,939 2,923 3,279 3,423 1,568 1,717 1,844 1,610 1,669 1,674 1,779 1, 785 1,866 938 954 937 958 961 949 974 953 966 770 2,690 918 2,801 2,882 918 918 P 2,882 1,595 1,843 p 1, 750 P 1, 750 971 920 p 920 P 920 76, 511 82, 715 86, 485 94,913 96, 062 96,949 100, 596 94,449 P 90,499 60,028 62,932 63,002 67,030 67,178 68, 066 69,013 65,866 P 70,316 30,301 32,072 31,089 32, 458 32, 667 31, 472 32, 596 31,671 31,829 2,052 2,177 2,101 2,150 2,155 2,009 2,403 2,205 2,272 1,106 1,162 1,095 1,095 1,152 1,160 1,249 1,181 1,174 594 627 588 615 631 590 614 614 542 8,599 9,423 10,002 9,988 10,303 9,813 10, 560 10, 261 10, 756 8,573 9,623 9,588 11, 793 10, 603 12,108 12, 703 10,883 13,158 1,750 1,048 1,166 2,181 2,532 3,287 1,671 1,115 P 2, 590 1,015 945 857 1,001 1,125 978 1,035 981 834 895 651 1,113 546 536 1,088 506 937 905 P 83,362 P 82,464 86, 423 p 86, 571 p 65, 779 64, 681 67, 539 67, 387 32, 275 31, 290 32, 709 31, 990 P 2,320 2,201 2,359 2, 310 1,221 1,164 1,326 P 1, 470 592 574 P574 P574 9,714 9,325 10,469 P 10,150 10,195 9,650 10,969 11,062 P P P P 2,100 P 2,835 P 1,645 P 2, 205 P 1,335 1,159 1,018 1,155 P P P p Preliminary. ' Revised. NOTE.—For monthly figures back to January 1929 and for explanation of table see BULLETIN for April 1933, pp. 233-35, February 1934, p. 108, November 1934, p. 737, February 1936, p. 107, and April 1936, p. 284. For annual figures of world production back to 1873 see Annual Report of Director of the Mint for 1935, pp. 107-108. Figures for Canada beginning January 1935 are subject to official revision. GOLD MOVEMENTS [In thousands of dollars at approximately $35 afineounce] United States Year or month 1934 i 1935 1935—February. March April May June... July August September __ October November December ... . 1936—January February March. _ April May 1 _ Net imports from or net exports (—) to: Total net imports or net exports England 1,131,994 1, 739,019 499,870 315, 727 260, 223 934, 243 122, 772 13, 003 148, 608 140, 016 230, 373 16 229 45, 983 156,719 315, 347 210,567 190,010 63, 424 -187 1,481 1,689 938 31 5 37,114 109, 954 7.101 8,600 45, 766 56 32, 510 124,052 194, 298 45, 643 -16,635 5,480 28,055 169, 952 Switzer- Canada Mexico France Belgium Netherlands land 40 40,423 156, 977 180,141 145,388 5,786 3,514 - 2 , 8 9 0 -17,180 -1,792 13 1,493 1,564 4,003 133,157 8,902 3 3 Colombia British India China and Hong Kong 16,944 10,899 76,820 75, 268 16, 452 9,431 28, 935 56, 453 359 334 313 507 448 438 1,127 640 1,125 1,007 1,605 2,711 3,972 4,596 3,962 3,215 6 515 3,711 5,141 4,817 3 956 8,774 10,170 5,185 5,154 5,819 5,357 94,348 227,185 12,402 968 86, 829 95,171 1,466 339 5,346 4,449 10, 968 3,053 8,734 5 770 5,398 15,069 9. 368 5 865 9,060 729 833 923 948 679 722 753 699 762 880 748 2,112 1,407 2 1,752 522 2,139 2,924 167 1 750 1 1,746 28 28 6,671 19,821 12, 359 8,913 11,108 10, 745 273 • 1, 677 11, 232 1, 695 764 659 772 713 4,322 1,743 11, 744 1,176 740 1,742 2,100 5,106 9,720 385 847 94, 890 3 885 22,061 975 28, 277 37,811 17, 605 2,676 4,727 1 - 3 , 421 —343 8,751 629 30, 270 13, 667. All other countries Differs from official customhousefiguresin which imports and exports for January 1934 are valued at approximately $20.67 a fine ounce 498 FEDERAL RESERVE BULLETIN JUNE 1936 GOLD MOVEMENTS—Continued [In thousands of dollars at approximately $35 a fine ounce] England Net imports from or net exports (—) to: Year or month 1934 1935 Total net imports or net exports () United States France 716,269 369,747 -497,166 -435, 502 348,190 142,137 1934—December. 27,215 -22,489 1,769 1935—January... February,. March April...... May _ June July .August September. October. __ November. December. - 4 , 279 - 3 6 , 566 66, 557 36, 529 146, 289 118,067 16, 289 39,016 -36,086 -36,158 18, 286 40, 811 1936—January.._ February.. March April May? Germany Belgium Netherlands 121,017 - 4 , 726 -13,585 -17,476 32, 575 10,796 -1,087 South Amer- Canada British India ica 17, 568 8,832 26, 316 16, 565 Straits Settle- Australia ments South Africa, Rhodesia, West Africa All other countries 206,711 181, 627 4,1 3,198 41, 790 37, 981 335, 253 404, 295 92, 737 22,020 2,797 310 241 17,882 128 4,126 23, 469 - 7 9 , 628 4, 270 -74,127 -17,739 26, 612 66 - 2 0 , 533 -33,348 - 3 , 247 69,128 -18,547 86, 926 - 1 , 1 4 1 - 5 , 719 -12,871 - 5 , 697 -81,032 - 5 , 663 -87,929 - 2 , 739 - 3 3 , 744 25,198 -22,075 910 -349 36 8,780 -951 28 2,145 51 53 - 1 , 9 9 2 33, 237 266 - 1 , 0 1 3 5,780 209 - 1 , 9 6 2 -593 - 9 4 3 -11,601 118 -11,888 - 4 , 416 82 1,642 -26 2 -36 23 217 - 1 , 1 3 6 68 - 2 0 , 204 50 -27 114 381 2,057 1,195 152 410 292 261 287 322 2,535 461 480 28 1,798 1, 798 24,046 19,093 15,457 16, 249 2,962 7,159 5,663 26,102 25,301 11,900 12,857 14,838 12 88 296 693 484 429 405 420 70 134 56 54 4,066 3,067 2, 685 1,920 2,838 1,969 5,375 4,148 3,662 3,414 2,842 1,995 37, 231 -3,124 11,105 18, 669 6,503 12, 661 17, 658 20, 823 11,143 55, 847 6,933 42, 473 33, 532 - 8 , 731 35, 512 -11,032 29,949 - 8 , 683 44, 995 -7,644 33, 325 - 4 , 353 7,265 42,442 3,202 - 3 , 253 6,738 12, 710 26,026 94 -591 78 33 - 7 , 569 173 99 -13,354 92 -1,409 4,295 - 1 , 3 8 3 1,915 -17,433 1,946 311 138 430 145 394 11,035 11, r 10, 896 9,413 11,151 56 5,958 4,090 899 1, 566 1,889 2,037 2,574 3,329 610 39,852 26, 454 31,033 55,108 52, 636 41,974 -12,059 38, 649 1,136 3,440 47, 666 77,137 - 9 , 465 70, 827 - 1 0 , 226 2,970 424 2,696 3,570 2,831 449 64 1,893 1,792 1, 558 3,409 2,179 France Year or month Total net imports or net exports (-) Net imports from or net exports (—) to: United States England 1934 1935 -408,961 -817,309 -242,363 -909, 665 -351, 729 -120,053 1935—January.._ February.. March April May June July August September. October.... November. December. 7,796 -32,479 19,118 99, 395 -195,876 - 3 9 3 , 551 -12,206 50,770 26,482 -68,693 -246, 615 -71,450 -15,376 - 5 0 , 314 648 - 2 8 , 566 -77,803 -223,070 414 14 - 2 3 , 688 -157,153 -258, 554 - 7 6 , 217 - 2 , 931 8,670 14, 676 38,332 - 5 3 , 283 -110,834 -13,150 4,905 8,811 -72 -15,060 -117 1936—January.... February.. M a r c h P__. April P 40,393 23,375 13,923 -57,613 -890 2,364 12, 209 - 6 , 234 -4,695 - 2 , 740 -5,915 -12,241 Germany Belgium Italy -17, ( -186,937 91,021 195, 369 115 1 3 -474 -594 -190 —1 -1,990 -700 -9,178 11 -595 -994 -2,497 - 3 , 851 - 2 6 , 395 -109,195 - 5 6 , 265 -45 -1,148 27, 224 4,597 - 8 , 235 -10,133 25, 755 2,636 -221 2,037 -1 -40 -5 1,495 -13,165 31,036 -13,592 -406 620 2,093 27,417 5,561 89,062 35,433 9,834 18, 299 Netherlands 74,995 21,183 249 -201 3,907 -885 -1,101 -650 25, 759 -132 5,221 -11,245 357 -789 -43 -8,138 - 2 7 , 604 Poland 1,371 7,227 -206 -6 -12 1,995 2 391 -180 -482 -917 -898 7,539 -127 -330 -174 -175 South Africa 746 10, 241 1 9,482 Switzerland All other countries 23, 648 176, 420 - 1 7 , 276 2,493 1,231 11, 975 7,r~~ 111, 292 44, 621 - 3 , 431 1,295 -3,418 236 -1,172 1,100 4,702 300 -629 -137 -1,379 1,667 321 -1,981 -290 606 900 2,397 719 8,110 6,992 3,619 1,060 -411 -940 18,791 748 p Preliminary. i $9,079,000 imported by France from Spain in March 1936. NOTE.—-Great Britain.—In some oases the annual aggregates of the official monthly figures differ somewhat from the revised official totals published for the year as a whole. 499 FEDERAL RESERVE BULLETIN JUNE 1936 GOLD MOVEMENTS—Continued [In thousands of dollars at approximately $35 a fine ounce] Germany Year or month Netherlands Net imports from or net exports (—) Total net imports or net exports England France Nether- Switz- U.S. lands erland S. R. -90, 920 -109, 386 -42, 907 -28,114 42,969 7,394 5,180 13, 225 1934 1935 1935—Jan.. Feb.. Mar. April. May. JuneJuly. Aug.. Sept. Oct.. Nov. Dec. 28: 295 11: 735 6,666 2,876 9,525 4,769 4,355 10, 566 780 2,004 1936—Jan.. Feb.. Mar. April - 2 , 584 -1,307 -258 -1,201 163 85, 390 6,376 -49 -17 -87 275 4 3,972 142 7,058 5 591 83 75 -107 87 237 1,014 810 693 480 2,532 680 810 -23 46 -9 -162 26 12 4,113 17 4,014 1,116 67 671 45 -60 -4,343 - 2 , 510 -2,054 -19 3 -189 647 -322 2,932 77 63 25 22 67 -49 -19 -50 -206 1,057 4,504 33 A 4 5 6 745 418 44 1,100 to: Net imports from or net exports (—) to: Total net imports All or net other exports coun() tries United States England Total net imports or net exports () 12 218 241 71 91 517 94 54 -276 -93 45 -18,300 -2, r 510 -120, 492 -5,080 -14,797 -26,102 - 4 , 514 - 3 7 , 290 -13,080 38,746 4,749 131 16, 967 10, 425 35,806 31,083 118 186 Mar April May June July Aug Sept Oct Nov Dec 1936—Jan Feb Mar April France Belgium Italy - 4 6 , 065 -12,784 -45,955 - 2 9 , 235 18,397 19, 431 -230, 788 647 -54, 858 -181,725 - 1 3 , 940 25, 542 1934. ... 1935.__. 1935—Jan Feb England - 5 , 640 1,417 9,328 5,845 1,367 -934 - 2 , 330 -216 -17 - 5 1 -2,108 5 -6, i 324 -31,619 -17,878 49 549 3 1,610 64 -38 107 3,017 163 1,085 -332 -2,088 - 4 , 344 -16,117 -16,148 -107,021 - 3 8 , 514 «2,684 2,998 1,273 -24 881 - 3 , 227 -4,166 2,462 6,571 21,413 22, 570 -195 -518 -841 -131 - 6 , 783 - 5 , 705 - 3 , 492 7,292 -4,125 -15,025 -17,830 -139, 633 _ - 6 3 , 229 _ All Bel- Switz- other gium erland countries - 1 5 , 605 -2,495 37 - 9 7 , 632 -2,810 - 1 9 , 259 - 2 9 , 215 - 3 , 221 110 -161 -352 64 77 -159 -1,299 617 -93 1,066 -20, 890 -20, 966 - 2 1 0 20,081 -1,562 277 162 - 2 8 9 1,375 667 - 8 6 2 3,379 15, 702 - 2 1 , 909 - 4 6 2 9,563 - 1 5 2 - 9 , 436 -86 2,900 2,861 249 - 1 6 0 - 4 0 , 868 133 514 - 1 , 3 3 9 -2,046 -10,373 275 20,084 10,564 - 2 3 9 11, 248 -3,026 5,334 -149 -561 3,435 574 1,761 7,664 12,842 1,384 170 -40 192 14, 291 -339 -3 - 3 1 2 13, 693 31, 428 - 1 , 568 73 2,608 3,956 27 -197 -136 -862 71 113 -8 -23 9 -114 -86 -52 617 163 319 -15 -210 227 2,283 488 2 199 183 -11 -474 -47 -66 564 181 569 -166 -929 British India Net imports from or net exports (—) to: United States Ger- 3,934 -122, 664 -46,040 -31,038 - 7 8 , 610 25, 716 9,285 -4, 784 905 -198, 549 -221, 245 18, 397 - 4 1 , 260 - 5 , 1 4 2 48,004 -1,257 Switzerland Year or month France 472 225 415 7 - 5 , 972 -8, 651 4, 734 2,110 303 -74 i 16 21 3,312 1,343 1,849 4,724 47 9,496 1,821 9,612 1,724 21, 537 -3 6,970 All Neth- other erlands countries Total net imports or net exports () Net imports from or net Gold exports (—) to: United States England All other countries India 2,580 1,500 - 2 3 0 , 720 -82,183 -144,185 -4,352 11,222 342 - 6 , 7 9 5 -161,872 -17,364 -145, 541 n, 032 11,393 -218 -90 428 -202 207 1,041 - 4 , 475 -409 - 7 6 0 153 - 3 5 2 262 -3,455 519 3,430 -766 184 241 - 2 , 344 -49 825 -139 - 6 8 2 -137 1,377 567 29 1 -16,334 - 1 7 , 746 -18,439 - 3 , 675 - 6 , 604 -3,824 -22,383 -25,464 -11,400 -11,160 -14,540 -10,303 34 -13,809 -9,846 -16 -7,667 1,917 v-10, 298 8,413 -1,249 -15,293 -2,367 -15,108 10 -6, 309 -2,648 -1, 330 -1, 573 -1,199 -559 -122 -18,585 - 3 , 831 - 6 , 558 -4,078 - 2 1 , 575 -18,922 -9,117 -10,032 -13,199 - 9 , 243 208 -271 '146 155 653 254 -818 -233 365 202 232 139 -12,888 -9,616 - 7 , 258 -362 -230 -287 Change in: production Re- Private serves holdin in 2 ings in India 946 903 955 938 954 937 958 961 949 974 953 966 India' 173 -219, 671 -150,472 -15,386 -16,844 -17,479 - 2 , 737 - 5 , 650 -2,887 -21,425 -24, 503 -10,451 -10,186 -13,587 - 9 , 337 971 920 -12,838 -8,926 P920 P920 P - 6 , 747 P-9,378 r v Preliminary. Revised. i $8,444,000 imported by Switzerland from Czechoslovakia in April 1936. » Through March 1935 gold held by Government; subsequently, gold held by Reserve Bank of India to which Government gold was transferred. ' Figures derived from preceding columns; net imports plus production minus increase in reserves in India. NOTE.—Germany, Netherlands, and Switzerland.—In some cases the annual aggregates of the official monthly figures differ somewhat from the revised offiicial totals published for the year as a whole. German gold movements by individual countries, beginning with January 1936, are subject to official revision. 500 FEDERAL RESERVE BULLETIN J U N E 1936 CENTRAL BANKS Bank of England (Figures in millions of pounds sterling) Assets of banking department Gold (in issue depart-1 ment) Discounts and advances Cash reserves Coin Notes Liabilities of banking department Securities Note circulation Deposits Bankers' Public Other liabilities Other 1935—Mar. 27.. Apr. 24.. May 29.. June 26_. July 31... Aug. 28.. Sept. 25_. Oct. 3C_. Nov. 27_. Dec. 25_. 192.5 192.6 192.6 192.7 192.8 193.4 193.6 194.7 197.6 200.1 71.1 59.4 62.2 55.9 44.5 53.8 55.4 54.8 56.3 35.5 5.6 5.8 5.3 10.2 10.8 12.9 12.4 11.2 9.5 8.5 99.0 97.4 96.7 108.6 100.7 93.5 95.4 98.2 98.4 94.7 381.4 393.2 390.4 396.9 408.3 399.6 398.2 399.9 401.3 424.5 96.6 98.1 88.0 102.4 75.7 96.9 87.2 82.5 90.9 72.1 20.1 7.6 23.1 16.2 24.4 9.4 19.5 26.2 19.7 12.1 41.2 39.6 36.0 38.8 38.5 36.5 39.0 38.6 36.5 37.1 18.3 17.7 17.8 18.0 18.1 18.2 18.3 17.7 17.8 18.0 1936—Jan. 29._. Feb. 26._ Mar. 25.. Apr. 29 _. May 27.. 200.5 200.6 200.6 202.7 206.4 63.3 60.7 54.1 45.9 40.3 18.8 11.0 5.0 8.3 6.7 94.0 96.2 97.0 114.0 104.7 397.1 400.0 406.5 416.9 426.1 106.0 106.2 83.6 104.7 78.3 15.9 8.8 18.0 7.5 19.8 36.7 35.5 37.0 39.0 36.7 18.2 18.2 18.3 17.7 17.8 Assets Liabilities Deposits Loans o n - Bank of France (Figures in millions of francs) Gold Foreign Domestic exchange bills Shortterm Government securities 1935—Mar. 29. Apr. 26.. May 31.. June 28.. July 26.. Aug. 30.. Sept. 27. Oct. 30_. Nov. 29. Dec. 27.. 82,635 80,933 71, 779 71,017 71, 277 71, 742 71, 952 71, 990 66,191 66, 296 ,017 ,066 2,150 ., 210 ,240 :,236 ,232 .,262 L, 385 if328 4,170 4,280 7,137 8,021 7,301 7,575 8,060 8,373 11,005 9,712 20 10 937 735 692 543 192 371 1,090 573 1936—Jan. 31.. Feb. 28.. Mar. 27. Apr -24 . May 29? 65, 223 65, 789 65, 587 61,937 57,022 ,324 ^,309 ,297 ,305 ,427 9,210 9,758 12,053 14, 392 19,381 932 671 623 797 Other securities Negotiable securities Other assets Note circulation Government 3,141 3,267 3,253 5,833 5,805 5,805 5,805 5,805 5,800 5,800 5,800 5,800 5,800 8,074 7,967 8,691 7,999 8,077 8,212 8,023 7,939 8,032 7,879 83,044 82,352 82, 776 82,099 81,128 82,240 82,399 83,306 82, 447 81,150 3,668 3,703 2,771 2,983 3,241 3,244 3,051 2,862 2,826 2,862 16, 213 15,145 12, 315 10,969 11,090 10, 666 10,848 10,647 9,361 8,716 1,943 1,954 2,008 2,013 2,105 2,062 2,060 2,059 2,136 2,113 3,350 3,250 3,325 3,349 3,380 5,708 5,708 5,708 5,708 5,708 8,724 8,186 8,028 8,193 (2) 81, 503 81,239 83,197 82, 557 84, 705 2,798 2,854 2,889 2,722 1,850 8,088 8,706 8,434 7,895 6,910 2,119 2,134 2,148 2,334 (2) 3,119 3,094 3,371 3,277 3,171 3,103 Liabilities Assets Reichsbank Reserves (Figures in millions of reichsmarks) Gold Foreign exchange Securities Other Treasury bills (and Security bills loans checks) Eligible as note cover Other 1935—Mar. 30_. Apr. 30.. May 31.. June 29.. July 3 1 . . Aug. 31.. Sept. 30_ Oct. 31_. Nov. 30. Dec. 31.. 3,799 3,861 3,732 3,879 3,833 4,000 4,144 4,058 4,096 4,498 427 373 338 337 337 340 346 345 346 349 330 328 324 324 324 324 324 316 315 315 1936—Jan. 3 1 . . Feb. 29.. Mar. 31. Apr. 30. M a y 30P. 3,884 4,026 4,201 4,353 4,606 349 348 336 240 219 315 315 321 319 319 Other assets Note circulation NOTE.—For explanation of table see BULLETIN for February 1931, pp. 81-83, and July 1935, p. 463. Deposits Other liabilities 701 739 775 781 814 781 770 868 922 853 3,664 3,711 3,810 3,895 3,878 4,032 4,143 4,159 4,186 4,285 1,032 830 837 824 838 845 860 879 911 913 923. 861 771 702 648 4,098 4,177 4,267 4,348 4,430 679 652 768 688 729 891 914 782 798. 807 v Preliminary. 1 Issue department also holds securities and silver coin as cover for fiduciary issue, which is fixed by law at £260,000,000. Figures not yet available. 2 Other Other liabilities 922 952 770 819 743 743 774 728 806 JUNE 501 FEDERAL RESERVE BULLETIN 1936 CENTRAL BANKS—Continued [Figures as of last report date of month] 1936 Central bank April N a t i o n a l B a n k of Albania (thou- ! sands of francs): ; Gold Foreign exchange Loans and discounts Other assets Note circulation Demand deposits Other liabilities Central B a n k of t h e A r g e n t i n e I R e p u b l i c 1 (millions of pesos): Gold at home. 1, 224 Gold abroad and foreign exchange ' 111 Negotiable Government bonds i 226 Other assets 140 Note circulation 1,021 Deposits: Member bank 451 Government 190 Other. 9 Other liabilities.. 31 C o m m o n w e a l t h B a n k of A u s 2 tralia (thousands of pounds ): ; Issue department: Gold and English sterling '. 16,003 Securities ; 40,341 Banking department: Coin, bullion, and cash 1, 225 London balances 19,314 Loans and discounts i 10, 642 Securities : 35, 657 ! Deposits.. 63,902 Note circulation , 48,045 A u s t r i a n N a t i o n a l B a n k (millions ' of schillings): Gold Foreign bills Domestic bills Government debts Note circulation Deposits N a t i o n a l B a n k of B e l g i u m (millions of belgas): Gold 3,429 Domestic and foreign bills 1, 247 Loans to State 160 Note circulation 4,255 : Deposits 750 C e n t r a l B a n k of Bolivia (thousands of bolivianos): Gold at home and abroad 22, 243 ! Foreign exchange 8,640 Loans and discounts i 7, 230 Securities: ; National Government 388, 202 Other I 2, 921 Note circulation 156, 534 Deposits 225,162 B a n k of Brazil (millions of milreis): i Cash i Correspondents abroad Loans and discounts Note circulation i Deposits. N a t i o n a l B a n k o f Bulgaria (mil- I lions of leva): i Gold. i 1, 591 Net foreign exchange in reserve.._i —128 Total foreign exchange • 386 Loans and discounts i 1,372 Government obligations ! 2, 671 Note circulation \ 2, 252 Other sight liabilities I 2,094 1935 March February 7,556 18, 349 3,170 5,031 11, 679 10, 681 11, 746 7,556 7,121 18, 406 22, 448 3,233 2,398 4,647 3,232 11, 720 14, 022 10, 780 10, 669 11, 342 10, 507 1,224 1,224 121 202 143 141 190 145 447 191 405 249 11 47 45 16,003 39,351 1936 Central bank April 15, 994 15,994 35,173 32,802 1,152 846 26, 513 18, 575 32, 664 11,127 14, 044 11, 970 35, 657 35, 707 35, 873 70, 890 69, 680 83, 533 47,045 47,045 48, 550 243 81 218 624 929 234 243 82 220 624 931 233 242 43 234 624 925 209 3,319 1,182 160 4,163 3,359 1,201 160 4,072 830 2,931 1,115 166 3,813 22,011 8,022 7,575 21, 294 7,752 7,943 12, 098 9,581 14, 338 388, 723 328, 054 2,921 2,877 3,346 152, 521 149,819 107, 954 228, 000 229,490 208, 467 281 367 2,935 10 3,216 264 307 2,885 20 3,116 331 146 2,858 20 2,717 1,591 -103 364 1,184 2,671 2,373 1,763 1,591 -100 440 1,226 2,671 2,113 2,131 1,568 -72 428 624 2,698 2,173 1,958 April B a n k of C a n a d a (thousands of Canadian dollars): Gold 179,951 Sterling exchange \ 1,681 United States exchange 7,6 Advances to Government... Government securities: 28, 602 2 years or less 82,323 Over 2 years Other assets 8,794 Note circulation . „„, Total deposits |2U, . . Chartered banks (187, 447 Government 23,915 Other liabilities 7,054 Central B a n k of Chile (millions of jsos): Gold and foreign exchange in reserve Loans and discounts Government debt Note circulation Deposits Central B a n k of China 3 (millions of j yuan): " ! Gold i. Silver,... _. j. Foreign exchange !. Due from domestic banks !. ! Loans and discounts . Securities L Other assets I. Note circulation •-I-Deposits—Government. Bank \ Other ! Other liabilities \ B a n k of t h e R e p u b l i c of C o l o m b i a ! (thousands of pesos): | Gold at home and abroad 29, 789 Foreign e x c h a n g e . . . \ 5,738 Loans to member banks j 1,477 Note circulation ! 42,824 Deposits ___! 30,633 N a t i o n a l B a n k o f Czechoslovakia I (millions of koruny): Gold ! 2, 694 Foreign balances and currency. _ _; 44 Loans and advances j 1,436 Note circulation i 5, 509 Deposits. 647 D a n i s h N a t i o n a l B a n k (millions of kroner): Gold 118 27 Foreign bills, etc 71 Loans and discounts Note circulation 382 60 Deposits Bank of D a n z i g (thousands of gulden): Gold 4 20, 783 Foreign exchange of the reserve 4 . _ 1,723 6,317 Other foreign exchange 15,038 Loans and discounts Note circulation 2,651 Deposits Central B a n k of Ecuador (thousands of sucres): Golds Foreign exchange Loans and discounts Note circulation Deposits... _ ._ March 1935 February April 180,417 180, 565 106,936 387 96 557 7,097 8,355 13, 212 29, 661 26,125 28, 373 81,144 82, 540 115,014 5,132 4,527 5,135 85, 518 84, 605 93, 692 210, 868 212,006 169, 379 188, 203 186, 933 156,833 21,116 23, 989 11, 907 6,202 6,156 6,847 142 90 706 595 274 142 79 706 578 281 142 91 713 540 347 51 211 74 104 213 310 47 254 305 292 30 130 51 161 90 102 181 323 45 225 275 284 38 132 24 115 14 53 89 184 61 93 237 51 16 144 30, 830 3,658 887 41,315 31, 500 30, 974 4,168 1,208 41, 532 31,880 24,130 3,352 6,521 35, 528 24, 306 2,692 47 1,413 5,413 778 2,690 73 914 5,210 534 2,687 307 1,069 5,500 865 118 28 73 371 80 118 19 73 375 67 133 19 73 370 20, 766 2,021 5,976 15,893 28, 274 3,879 20, 761 1,631 5,491 15, 785 27, 698 2,990 13, 204 253 83 31, 098 38, 563 639 31, 568 6,181 39, 757 47, 370 15,160 15,156 12,852 53, 731 42, 490 22, 678 1 Bank commenced operations May 31, 1935. 2 Beginning March 1936 all items valued by bank in Australian currency; previously valued partly in Australian currency, partly in sterling. 3 Items for issue and banking departments consolidated < Parity of gulden reduced May 2, 1935, from $0.3296 to $0.1899. a By law of Dec. 18, 1935, gold in vault revalued at rate of 9.968331 sucres per gram of fine gold. 502 FEDERAL RESERVE BULLETIN JUNE 1936 CENTRAL BANKS—Continued [Figures as of last report date of month] 1936 March February 6,545 2,558 5,016 6,545 3,269 5,385 6,545 4,125 5,963 6,545 2,500 4,148 39, 555 5,309 21, 246 6,185 23, 384 8,169 38, 819 5,867 21, 639 6,310 23,611 8,327 38, 024 5,683 22, 240 6,657 23,141 8,303 35,069 3,213 18, 982 8,055 16, 608 7,831 12,917 4,345 484 6,842 1,882 14, 800 8,279 3, 392 12, 855 4,550 680 6,912 1,992 15,394 8, 255 3,340 12,818 3,957 798 6,996 1,923 15, 667 7,531 3,295 11,921 2,719 152 7,531 1,415 14, 799 5,675 3,265 34,125 2,463 21, 453 41,887 14, 345 10, 224 2,682 34,124 2,450 22, 229 41, 700 14, 018 10, 625 2,869 34,130 2,046 22, 471 41, 278 18, 594 9,393 2,464 28, 809 5,126 13, 601 38, 576 9,920 8,408 2,108 501 501 489 323 1,355 83 892 1,546 689 1,328 87 865 1, 520 657 1, 263 85 766 1, 445 589 1,386 85 797 1,431 463 3,334 5,140 4,172 5,791 5,949 256 3,339 5,155 4,172 5,670 5,953 275 3,358 4,873 3,281 5, 521 5,401 251 3,669 2, 763 3,284 5, 664 3,761 119 79 31 499 80 111 390 109 104 171 79 33 514 80 102 391 121 104 166 79 33 526 81 90 393 122 104 163 79 22 527 58 68 369 78 109 172 444 683 234 591 1,707 444 673 244 594 1,688 444 673 244 587 1,671 444 486 431 502 1,669 246 194 40 50 8 65 365 109 268 231 278 202 193 123 51 6 86 360 110 51 5 75 353 108 51 5 184 87 102 March February April 513 914 533 1,367 657 511 1,222 397 1,657 474 709 659 1,332 439 85 2 61 154 24 2 65 156 22 111 1 60 172 33 46 7 51 61 38 48 101 46 6 50 59 39 39 101 46 7 50 58 37 38 103 46 5 59 74 39 49 106 53 21 80 107 50 51 19 87 109 47 41 22 89 106 47 46 6 104 99 53 710 1 152 766 137 714 1 152 781 121 2 154 750 130 645 1 246 871 63 2,802 24,225 2,088 10, 240 17, 272 8,585 8,584 1,602 2,802 24,830 2,069 10,153 17, 903 8,992 8,789 1,645 2,802 23,113 2,012 9,855 16, 445 10, 671 5,676 1,628 2,802 22, 089 2,314 9,434 16,183 3, 833 12. 342 1,588 185 76 195 364 5 89 185 46 202 357 4 75 185 41 203 346 4 83 135 55 221 322 6 79 48, 813 57,951 84, 855 18, 610 43,099 59, 993 72, 349 26, 395 445 17 750 979 163 508 19 688 946 910 445 370 1,046 2,005 970 906 463 295 1,048 2, 032 881 10, 884 9 5,399 2,688 10,956 10, 502 91 5,802 2,880 April April B a n k of Japan (millions of yen): Gold Advances and discounts Government bonds Notes issued Total deposits Bank of Java (millions of florins): Gold Foreign bills Loans and discounts Note circulation Deposits... ... B a n k of Latvia (millions of lats): Gold Foreign exchange reserve Bills Loans Note circulation Government deposits Other deposits B a n k of L i t h u a n i a (millions of litu): Gold Foreign exchange 2 , Loans and discounts 2_ | Note circulation i Deposits | N e t h e r l a n d s B a n k (millions of flor- j ins): I Gold Foreign bills.. Loans and discounts Note circulation ! Deposits I Reserve B a n k of New Z e a l a n d | (thousands of pounds): Gold Sterling exchange Other assets Note circulation Demand deposits Bank Government Other liabilities B a n k of N o r w a y (millions of kroner) : Gold_._ Foreign balances and bills Domestic credits Note circulation Foreign deposits l Total deposits Central Reserve Bank of Peru (thousands of soles): Gold and foreign exchange Bills Note circulation Deposits. Bank of Poland (millions of zlotys): Gold.. Foreign exchange Loans and discounts Note circulation Other sight liabilities Bank of Portugal (millions of escudos): Gold.. Other reserves Discounts and advances Government obligations Note circulation Other sight liabilities National Bank of R u m a n i a (millions of lei): Gold Foreign exchange of the reserve... Loans and discounts Special loans 3— State debt 515 820 554 1,317 580 381 15 809 1,010 148 427 26 736 979 155 10, 971 10, 929 5,553 2,474 11,151 5,509 2,594 11,179 * Items for issue and banking departments consolidated. * Beginning with July, 1935, foreign exchange includes foreign bills previously reported with loans and discounts. 1 Agricultural and urban loans in process of liquidation. 1935 Central bank April N a t i o n a l B a n k of E g y p t 1 (thousands of pounds): Gold_ Foreign exchange Loans and discounts British, Egyptian, and other Government securities Other assets Note circulation Deposits—Government Other. Other liabilities C e n t r a l Reserve B a n k of El Salvad o r (thousands of colones): Gold Foreign exchange Loans and discounts Government securities Other assets Note circulation Other sight liabilities | Other liabilities \ Bank of E s t o n i a (thousands of I krooni): Gold I Net foreign exchange | Loans and discounts Note circulation Deposits—Government Bank Other B a n k of F i n l a n d (millions of markkaa): Gold Balances abroad and foreign credits Foreign bills Domestic bills Note circulation Other sight liabilities B a n k of G r e e c e (millions of drachmas): Gold and foreign exchange Loans and discounts Government obligations Note circulation Other sight liabilities Liabilities in foreign exchange N a t i o n a l B a n k of H u n g a r y (millions of pengos): Gold Foreign bills, etc Loans and discounts Advances to Treasury Other assets Note circulation Deposits Certificates of indebtedness Miscellaneous liabilities Reserve B a n k of I n d i a (millions of rupees) : Issue department: Gold at home and abroad Sterling securities Indian Gov't securities Rupee coin Note circulation Banking department: Notes of issue d e p a r t m e n t . __ Balances abroad Loans to Government Investments Other assets Deposits—Go vernment _ _ Bank Other liabilities 1936 1935 Central bank 503 FEDERAL RESERVE BULLETIN JYNE 1936 CENTRAL BANKS—Continued [Figures as of last report date of month] 1936 Central bank National Bank of Rumania—Con. Other assets Note circulation Demand deposits Other liabilities South African Reserve Bank (thousands of pounds): Gold Foreign bills Domestic bills Note circulation Deposits—GovernmentBank Other Bank of Spain (millions of pesetas): Gold Silver Balances abroad Loans and discounts Note circulation Deposits _ Bank of Sweden (millions of kronor): Gold Foreign assets Domestic discounts and advancesGovernment securities Other assets Note circulation Total deposits Bank Government Other liabilities Swiss National Bank (millions of francs): Gold Foreign balances and bills 1935 1935 Central bank April March Febru- 11,941 22,401 8,580 11,110 11,871 11, 751 9,548 Loans and discounts. 23, 056 22,127 21, 786 Note circulation 7,856 8,479 7,860 Demand deposits 11,169 11, 081 9,549 Central Bank of the Republic of April April April Swiss National Bank—Continued 22, 931 29, 644 28,074 25, 976 9,446 5,208 5,206 6,313 99 161 277 148 13,068 13, 585 14, 251 12, 317 4,481 7,269 1,615 3,051 21, 508 26, 444 32, 834 24, 656 3,995 2,941 1,378 3,765 i Liabilities of banking department. March February 2,228 676 300 2,668 5,354 1,068 2,228 689 311 2,584 5,171 1,105 2,253 694 280 2,352 5,197 1,180 2,269 698 284 2,665 4,577 923 461 565 39 29 190 780 391 161 193 111 454 588 45 29 186 795 401 226 146 105 440 607 45 29 177 756 442 237 174 100 352 612 46 138 114 675 485 1,516 12 1,509 14 1,445 13 1, 365 31 101 Turkey (millions of pounds): Gold Foreign exchange Loans and discounts Investments Other assets Note circulation Deposits Other liabilities Bank of the Republic of Uruguay (thousands of pesos): Issue department: Gold and silver Note circulation Banking department: Cash reserves Loans and discounts Other assets. DepositsDemand Time Ministry of Finance Other Other liabilities National Bank of the Kingdom of Y u g o s l a v i a (millions of dinars): Gold Foreign exchange Loans and discounts Advances to State Note circulation Other sight liabilities 143 1,311 403 152 1,319 411 234 1,274 466 195 1,319 30 19 14 188 24 163 39 72 30 17 13 188 25 165 36 70 30 16 17 188 24 166 37 72 28 13 4 187 25 159 31 69 41,091 84, 395 41, 091 82, 865 73,978 37,124 94, 557 56,885 38, 452 93, 785 55, 738 51, 052 97, 055 43,603 31, 973 41, 874 20, 994 20, 738 72,988 31,615 41, 595 22,021 20, 737 72,007 33,023 39, 407 2,793 42, 509 1,490 313 1,642 2, 272 4,904 1,481 1,480 325 1,676 2,272 4,930 1,472 1,282 239 1,787 2,290 4,435 1,236 1,497 307 1,617 2,272 4,824 1, 553 (See BULLETIN for December 1935.) BANK FOR INTERNATIONAL SETTLEMENTS [In thousands of Swiss francs] 1936 1935 Liabilities April Gold in bars Cash on hand and on current account with banks ______ Demand funds at interest._. _ . Mar. 31 Total Other assets: Guaranty of central banks on bills sold Sundry items Total assets April April 23, 200 24,198 15, 094 Demand deposits (gold) - __ 9,538 14,094 9,601 12, 960 2,285 15,121 Short-term deposits (various currencies) : Central banks for own account: Demand Time—Not exceeding 3 months Total Central banks for account of others: Demand Time—Not exceeding 3 months Other depositors: Demand Time—Not exceeding 3 months Long-term deposits: Annuity trust account German Government deposit French Government guaranty fundFrench Government deposit (Saar). Rediscountable bills and acceptances (at cost): Commercial bills and bankers' acceptances Treasury bills Total . Time funds at interest—Not exceeding 3 months Sundry bills and investments: Maturing within 3 months: Treasury bills Sundry investments Between 3 and 6 months: Treasury bill* Sundry investments Over 6 months: Treasury bills Sundry investments 1935 1936 Assets 137,125 188, 792 150, 250 188, 279 132, 441 222, 058 325, 917 338, 529 354, 499 38, 952 36, 033 34, 099 27,158 61, 993 36, 303 61, 701 32, 633 65, 264 21, 385 63,683 13,411 30,607 29,478 31, 783 51, 583 1,694 50, 292 34, 530 26,188 35, 354 227, 496 226, 844 220, 700 6,213 6,566 6,235 6,383 6,073 4,376 660, 783 652, 246 " 651, 976 Total Capital paid in Reserves: Legal reserve fund Dividend reserve fund __ General reserve fund Other liabilities: Guaranty on commercial bills sold_ Sundry items Total liabilities Mar. 31 April 19,309 19, 088 12, 038 23, 606 108, 075 26, 020 113,277 26, 652 106, 875 131,681 139, 297 133, 527 7,679 2,989 11,334 2,985 10, 967 2,950 522 684 813 83 1,458 2,109 154,764 77,382 61,930 2, 031 154, 340 77,170 61,930 2,031 154, 764 77, 382 61, 930 2,031 296,106 295, 471 296,106 125, 000 125, 000 125, 000 3,324 5,845 11, 690 3,324 5,845 11. 690 2,672 4,866 9,732 6,265 40,882 6,278 39,576 6,155 44,666 651,976 660, 783 652, 246 504 FEDERAL RESERVE BULLETIN JUNE 1936 COMMERCIAL BANKS [Figures are as of end of month, except those for England, which are averages of weekly figures] Liabilities Assets England (Figures in millions of pounds sterling) Money at Cash call and Bills disreserves short counted notice Securities Loans to customers Deposits Other assets Total Demand* Time 1 Other liabilities 10 clearing banks 1935—August.... September. October... November. December. 1936—January... February._ March April 213 208 204 214 221 220 221 210 220 149 147 141 147 159 155 151 155 154 287 299 297 293 322 337 288 249 264 615 619 626 621 605 601 601 605 607 205 205 213 214 231 218 218 221 224 768 766 in 778 784 791 804 829 843 2,013 2,024 2,036 2,040 2,091 2,092 2 053 2,038 2,082 1,068 1,080 1,064 1,080 1,140 899 903 921 918 924 224 221 224 227 231 230 231 230 229 2,164 2,123 2,108 2,154 1,166 1,125 1,123 1,145 937 940 951 974 242 242 241 240 11 clearing banks 2 1936—January.. February March.._. April..... 228 229 217 227 159 157 162 161 1935—August..._ September. October. __ November. December. 1936—January... February.. March Cash reserves 4,211 4,075 3,996 3,909 3,739 3,451 3,431 3,587 Due from Bills discounted banks 2,399 2,364 2,413 2,759 2,484 2,563 2,528 2,617 17, 226 17, 585 17, 692 16, 529 16,141 16,601 16, 470 16,135 815 828 854 868 227 227 230 233 Liabilities Deposits Other assets Loans 7,592 7,450 7,505 7,718 8,025 7,765 8,006 7,700 Total 1,414 1,489 1,620 1,751 1,900 1,086 1,101 1,222 Demand 27, 916 28,016 28,101 27,406 26,859 26, 859 26,903 26, 522 28, 589 28, 684 28,800 28,110 27, 553 27, 548 27,603 27,194 (5 large Berlin banks. Figures in mil- Cash lions of reichsmarks) reserves Due from banks Bills dis- Loans counted Securities Other assets 700 672 Total Demand Time Credits obtained from Other liabilities 341 341 314 316 2,221 2,035 2,167 2,162 2,899 2,918 2,889 2,884 1,019 1,061 1,033 1,027 992 996 993 983 5,464 5,382 5,408 5,376 2,419 2,436 2,451 2,435 3,045 2,947 2,957 2,941 705 701 686 1,454 1,463 1,463 1,449 134 128 186 136 306 307 317 301 2,294 2,275 2,285 2,429 2,847 2,900 2,890 2,847 1,003 987 982 973 958 945 935 916 5,460 5,472 5,544 5,595 2,480 2,409 2,560 2,585 2,980 3,063 2,985 3,010 659 652 651 644 1,423 1,417 1,399 1,363 Liabilities Deposits payable in Canada excluding interbank deposits Entirely in Canada 228 223 235 22G 228 220 224 227 228 955 965 945 874 864 862 142 157 132 151 141 150 151 154 145 1,041 1,103 1,116 1,137 1,155 1,207 1,265 1,316 1,314 Other Note circulation Total 473 464 476 453 485 472 444 459 478 123 123 121 124 111 112 118 117 114 2,065 2,131 2,151 2,174 2,180 2,144 2,152 2,197 2,229 Demand 631 687 685 699 694 645 635 665 1 Excluding deposits of the National Bank relating to offices outside England, which are included in the total. District Bank included beginning January 1936. Combined monthly balance sheet not published for December. NOTE —For back figures and explanation of table see BULLETIN for October 1933, pp. 639-646, and June 1935, pp. 388-390 2 3 3,995 4,043 4,158 4,226 4,399 3,568 3, 595 3,677 151 195 156 139 Security loans abroad and net Securi(10 chartered banks. Figures in milties Other due lions of Canadian dollars) Cash from Security loans reserves loans and dis- foreign counts banks 1935—August September. October.... November. December. 1936—January... February. _ March April Other liabilities 257 236 268 329 337 349 338 391 673 669 699 704 Deposits Assets Canada Own acceptances Time Liabilities Assets Germany 1935—August September.. October November.. December3. 1936—January February.._ March April 630 629 635 637 Assets France (4 large banks. Figures in millions of francs) 346 295 252 268 Other liabilities Time 1,434 1,444 1,465 1,474 1,486 1,499 1,517 1,532 1,536 728 734 744 748 745 745 761 783 767 JUNE 505 FEDERAL RESERVE BULLETIN 1936 DISCOUNT RATES OF CENTRAL BANKS [Percent per annum] Central bank of— Date effective In effect July 19, 1935 July 19 July 25 July 26 Aug 3 Aug 9 Au°" 12 Sept. 9 Sept. 17 Oct 17 Oct 22 Nov 5 Nov. 14 Nov. 15 Nov. 22 . Nov 26 Jan 2, 1936 Jan.10 Jan 16 Feb. 4 Feb 7 Mar. 28 May 7 _ May 18 May 30 _ „ ___ June 4 In effect June 4,1936. England 2 GerFrance many 4 3H 33^ SwitzerItaly Netherland lands 3K 6 5 4H 5 ... 5 4H 3^ 4 5 6 5 4 3 2lA 3^ 5 6 2 ±V2 4 6 Central bank of— Rate June 4 India Italy Japan Java _ Latvia Lithuania... Netherlands. New Zealand _ Norway Peru Poland Portugal _ _ Rumania South Africa Spain Sweden SwitzerlandTurkey U. S. S. R... Yugoslavia 3 4H 3.29 4 VA 6 4H 4 33^ 6 5 4K 4H 33^ 5 23/6 VA 5lA 8 5 Date effective Nov. Mar. July May July Aug. Mar. Jan. July 16, 1933 1, 1936 10, 1935 16, 1935 5, 1932 15, 1935 11, 1935 8, 1936 18, 1933 Jan. 1, 1936 Oct. 21, 1935 Aug. 22, 1935 Nov. 30, 1932 July 5, 1934 June 30, 1932 Oct. 1, 1935 Dec. 3, 1934 May 7, 1936 Sept. 22, 1932 Oct. 14, 1933 Aug. 29, 1935 Date effective Nov. May Apr. July Jan. Apr. June 28, 1935 18, 1936 7, 1936 1, 1935 1, 1933 1, 1930 4, 1936 Aug. May May Oct. May Dec. May July Dec. May Mar. Mar. Feb. 1, 1934 24, 1933 20, 1932 26, 1933 7, 1936 15, 1934 15, 1933 15, 1935 1, 1933 3, 1935 2, 1933 22, 1927 1, 1935 Changes since May 7: Italy—May 18, down from 5 to 43^ percent; Netherlands—-May 30, up from 2lA to VA percent; June 4, up from 3H to 2V2 43^ percent. 33^ *A 4^ Rate June 4 Albania 7V2 Argentina &A Austria zy2 Belgium 2 Bolivia 6 Bulgaria 6 Canada 23^ Chile Colombia.._ 3 | - 4 | 4 Czechoslovakia 3 Danzig 5 Denmark.__ 3H Ecuador 4 El Salvador5 England _-. 2 Estonia 4H Finland.. _ 4 France 6 Germany .__ 4 7 Greece. Hungary 4 3 5 3 Central bank of— MONEY RATES IN FOREIGN COUNTRIES [Percent per annum] England (London) Month Bankers' Treasury acceptances, bills, 3 3 months months Netherlands (Amsterdam) Germany (Berlin) Bankers' Day-to-day allowance money on deposits Private discount rate Money for Day-to-day 1 month money Private discount rate Money for 1 month 1935-April May June July August September. October. __ November. December. 3.38 3.09 3.00 3.00 3.00 3.02 3.04 3.01 3.00 3.60 3.10 2.93 2.97 3.00 3.07 3.26 3.10 3.23 3.64 3.17 3.16 3.10 3.06 3.21 3.13 3.07 3.15 3.65 3.78 4.42 3.25 4.78 5.48 4.70 3.15 3.20 3.26 2.96 3.83 2.77 4.72 5.65 5.00 3.00 3.08 1936—January. __ February. . March April 3.00 3.00 3.00 3.00 3.09 2.97 3.07 3.04 2.81 2.77 2.99 2.83 2.37 1.31 1.20 1.19 2.29 1.63 1.68 1.27 Month Switzerland Belgium (Brussels) France (Paris) Italy (Milan) Private discount rate Private discount rate Private discount rate Private discount rate 1935-April May June July August September. October. __ November. December. 1.80 2.39 2.60 2.79 2.47 2.40 2.37 2.44 2.50 2.38 2.12 1.88 1.88 1.88 1.88 1.88 1.88 1.88 2.14 2.56 5.72 4.06 3.06 2.85 2.71 3.89 5.89 3.50 3.50 3.50 3.50 4. 17 4.87 5.00 5.00 5.00 1936—January. __ February.. March April 2.48 2.37 2.26 2.25 1.52 1.45 1.38 4.26 3.81 3.74 5.03 5.00 5.00 5.00 5.00 Sweden (Stockholm) Hungary Prime Loans up commer- Day-to-day to 3 money cial paper months 4 4 4 4 V2V2 2H4M -7 -7 -7 -7 4 -634 -6K 4 "" ' 23^-43/2 2X 2H 2% V2A 2K-4K 2yAy Japan (Tokyo) Call Discounted money bills overnight 5.11 5.11 5.11 5.11 5.11 5.11 5.11 5.11 5.11 2.54 2.40 2.45 2.45 2.60 2.62 2.69 2.78 2.69 5.11 5.11 5.11 2.64 2.56 2.87 NOTE.—For explanation of table see BULLETIN for November 1928, pp. 794-796; April 1927, p. 289; July 1929, p. 503; November 1929, p. 736, and May 1930, p. 318. 506 FEDERAL RESERVE BULLETIN JUNE 1936 FOREIGN EXCHANGE RATES [Average of noon buying rates for cable transfers in New York. In cents per unit of foreign currency] Year or month Argentina (peso)* 95.1274 1929 83. 5050 1930 66. 7375 1931 ... 58. 4433 1932 s 72. 8009 1933 33. 5793 1934 32. 6585 1935 32. 5572 1935—May 32. 8687 June 33.0262 July 33.1204 August September _ 32. 8563 32. 7140 October November.. 32. 8152 December. _ 32. 8542 33. 0742 1936—January February. __ 33. 3291 33.1346 March 32.9541 April 33.1114 May Year or month 1929 1930 1931 1932 1933 1934... 1935 1935—May. June July AugustSeptember _ October November.. December.. 1936—January February... March April 1929 1930 1931 1932 . . 1933 1934 1935 1935—May __. June July August September _ October November. _ December. _ 1936—January February... March AprilMay 480.83 458. 60 351. 50 279. 93 337.07 400. 95 388. 86 387. 55 391. 28 393. 31 394. 52 391. 52 389. 61 390. 90 391. 28 394. 50 398. 06 396. 01 393. 72 396. 09 14.0575 14. 0891 14.0227 13.9599 15. 4478 18. 7930 18. 8309 18. 7680 18. 8821 18. 9148 18. 9405 18. 8453 18.8117 18. 7753 18. 7828 18. 8320 18. 9708 18. 8548 18. 7242 18. 7222 498.0689 498. 6002 465.1111 359. 5406 434. 3908 516.8549 502. 6007 501.1845 505. 9839 508. 3151 509. 5780 505. 5597 503. 2065 504. 9614 505. 3533 508. 8316 512.7045 509. 6623 506. 7796 485. 6879 486. 2126 453. 4990 350. 6067 423. 6821 503. 9302 490.1761 488. 7755 493. 4922 495. 7659 496. 9880 493.0654 490. 7834 492. 4950 492. 8772 496. 2696 500.0469 497.0675 494. 2682 496. 9742 2.5160 2. 5169 2. 3875 1. 5547 1. 8708 2. 2277 2.1627 2.1543 2.1782 2.1859 2.1907 2.1742 2.1645 2.1719 2.1745 2.1890 2. 2063 2.1928 2.1807 2.1901 Brazil (milreis)i 13.9124 11. 8078 13. 9524 10. 7136 13. 9285 7.0290 13.9137 7.1223 17. 8996 7. 9630 23.2867 8. 4268 18. 4241 8. 2947 16. 9461 8. 2797 16. 9393 8. 3122 16.9117 8. 3146 16. 8878 8. 3657 16. 8618 8. 3378 16. 8468 8. 3791 16. 8946 8. 3792 16. 8565 8. 3902 16.9355" 8.4167 17.0416 8. 3803 16. 9787 8. 4871 16. 9146 8. 5564 16. 9378 8. 5755 E g y p t England Finland France (pound) (pound) (markka (franc) May Year or month AusAustria Beltralia gium (schil(pound) 2 ling)! (belga) 3.9161 3. 9249 3. 9200 3. 9276 5. 0313 6. 5688 6. 6013 6. 5883 6. 6121 6. 6242 6. 6262 6. 5908 6. 5892 6. 5862 6. 5986 6. 6251 6.6810 6.6338 6. 5898 6. 5858 Germany (reichsmark) 23. 8086 23. 8541 23. 6302 23.7492 30.5179 39.3751 40.2575 40. 2472 40. 4072 40. 3538 40. 3456 40.2278 40.2251 40.2251 40.2167 40. 3966 40.6870 40. 4389 40.2383 40. 2845 Bulgaria Canada (lev)i (dollar) 0. 7216 .7209 .7163 .7193 1. 0039 1. 2852 1. 2951 1. 2756 1. 3070 1.3149 1. 3332 1. 2935 1. 3239 1. 3404 1. 3309 1. 3446 1. 3380 1. 2902 1. 2812 1. 2844 99.2472 99. 8424 96. 3528 88.0896 91. 9587 101.0060 99.4933 99. 8977 99. 9078 99. 8322 99.7799 99. 2563 98. 5800 98.9236 99. 0453 99. 9297 100.1136 99. 8421 99. 5019 99. 8060 Greece Hong (drach- Kong ma) (dollar) 1. 2934 1. 2959 1. 2926 .8320 .7233 .9402 .9386 .9340 .9423 .9442 .9437 .9384 .9391 .9390 .9383 .9424 .9509 .9457 .9389 .9338 47.1669 33. 8530 24. 3305 23.4604 29. 4516 38.7156 48.2173 59. 3095 57. 5162 53.0310 50. 3262 50. 0547 48. 9702 36. 4772 32. 7016 32. 2051 32. 7955 32. 5619 32. 5247 32. 4629 Chile (peso)i China Colombia (yuan) (peso)i DenCuba Czechoslovakia mark (peso) (koruna) (krone) 96. 5512 96. 4930 96. 5697 95. 2750 81. 6966 61. 7799 56.0110 55.0634 54.4068 52. 9692 53. 2263 55. 9846 57.3115 56. 5948 57.0300 57. 3900 58. 2683 57. 2235 57.0023 57. 0044 99.9647 99. 9515 99.9295 99. 9409 99. 9464 99.9362 99. 9198 99. 9204 99. 9182 99. 9194 99.9185 99. 9200 99. 9200 99. 9200 99.9200 99. 9231 99. 9209 99. 9025 99. 9025 99.9000 India sary 1 (rupee) (pengo) Italy (lira)* Japan (yen) M e x i c o Netherlands (peso) (florin) 17.4414 17.4939 17. 4522 17. 4460 22. 3598 29. 5746 29.6023 29.4356 29. 5062 29.6809 29. 7010 29. 6240 29. 6367 29. 6242 29. 6185 29. 6778 29.7856 29.6168 29. 4781 29.4241 5. 2334 5. 2374 5. 2063 5.1253 6. 7094 8. 5617 8. 2471 8. 2253 8. 2566 8. 2259 8. 2074 8.1409 8.1243 8.1024 8. 0750 8. 0276 8.0373 7. 9830 7. 8936 7. 8560 46.0997 49. 3898 48. 8509 28.1112 25. 6457 29. 7153 28. 7067 28. 7295 28. 9931 29.1510 29. 3192 28. 9378 28. 6687 28.6828 28. 7386 28. 9932 29.1299 28. 9381 28. 8688 29.0754 48.1830 47.1331 »35. 4919 31. 8500 28.1025 27. 7423 27.7779 27.7882 27. 7781 27. 7660 27. 7521 27. 7558 27. 7631 27. 7673 27. 7675 27. 7677 27. 7691 27.7666 27. 7679 27.7625 12.0601 12. 0785 12.0669 7. 9079 7. 6787 10.1452 5. 0833 5.1000 5. 0996 5. 0990 5.0633 5. 0515 5. 0694 5. 0950 5.0937 5. 0950 5. 0950 5. 0930 5. 0853 5. 0775 41.9007 29.9166 22.4369 21. 7357 428. 5979 34. 0937 36. 5707 41.0979 40. 4002 38. 6791 36.8645 37. 6226 35. 6091 29. 6485 29.4496 29.6594 29. 9116 29. 8243 29. 7339 29. 6900 Hun- 36. 2020 36.0672 33.6895 26. 3468 31. 8159 37.8793 36. 9640 36.8602 37.1944 37. 3467 37.4849 37. 2082 37.0217 37.1419 37. 2008 37.4606 37. 7344 37. 5101 37. 3153 37. 5038 2. 9609 2. 9640 2.9619 2. 9618 3. 8232 4. 2424 4.1642 4.1683 4.1828 4.1729 4.1571 4.1363 4.1411 4.1363 4.1433 4.1602 4.1936 4.1637 4.1359 4.1432 New Portu- Ruma- South Spain Straits UruSettle- Sweden SwitzerZealand N o r w a y Poland gal nia land Turkey guay Africa m e n t s (krona) (franc) (pound) (peso)i (pound) 2 (krone) (zloty) (escudo) (leu) (pound) 2 (peseta) (dollar) 483. 21 468. 22 415. 29 320.19 340.00 402.46 391. 26 389.90 393. 54 395. 65 396. 86 393. 69 391. 86 393. 74 394. 32 397. 53 401.15 399.08 396. 80 399. 02 1 1 3 26 6827 26. 7598 25. 0546 18.0039 21.4292 25. 3161 24. 6268 24.5563 24.7910 24.9062 24.9482 24. 7710 24. 6570 24. 7399 24. 7605 24. 9316 25.1214 24. 9735 24. 8335 24. 9689 11.1940 11. 2051 11.1970 11.1823 14.4135 18. 8460 18. 8824 18.8426 18.9146 18.9574 18.9567 18.8450 18. 8361 18.8249 18.8486 18. 9311 19.1315 18. 9623 718.8262 7 18. 7922 4. 4714 4. 4940 4.2435 3.1960 3.9165 4. 6089 4. 4575 4. 4407 4.4856 4. 5095 4. 5153 4.4868 4. 4703 4.4787 4.4854 4. 5120 4. 5489 4. 5155 4. 5092 4.5115 0.5961 .5953 .5946 .5968 .7795 1. 0006 .9277 1.0057 1.0078 1.0004 .9351 .8077 .7965 .7899 .7879 .7879 .7632 .7377 .7330 . 7309 483. 27 483. 79 480. 76 476. 56 414. 98 498. 29 484. 66 483. 34 488.06 490. 61 488. 74 488. 42 485. 63 487. 08 487.44 490. 83 494. 51 491. 56 488. 76 491. 59 14.6833 11. 6670 9. 5453 8. 0438 10. 7189 13. 6150 13. 6783 13. 6522 13. 6982 13. 7259 13.7296 13. 6569 13. 6537 13. 6477 13.6704 13.7274 13.8412 13. 7450 13. 6540 13. 6454 56.0117 55. 9639 52. 4451 40. 3970 49. 2320 59. 0052 57.1733 56. 8942 57. 3762 57. 5466 57. 8282 57. 6180 57.4404 57.6071 57. 6112 58. 0574 58. 5530 58.2430 57. 9389 58. 2400 26.7839 26. 8543 25. 2540 18.4710 22.0324 25.9815 25. 2710 25.1988 25. 4408 25. 5583 25.6227 25.4219 25. 3030 25. 3877 25.4092 25. 5829 25. 7779 25. 6258 25. 4817 25. 6194 19. 2792 19. 3820 19.4009 19. 4049 24.8355 32. 3663 32.4972 32. 3230 32. 6800 32. 7474 32. 7180 32. 5042 32. 5326 32.4449 32. 4323 32. 6622 33.0330 32.8206 32. 5800 32. 3905 48.4105 47.0608 47.1814 47. 2854 60.4396 79.0472 80.3123 80.5269 80. 6688 80.6550 80. 8063 80.2667 80. 2442 80.2674 80.1536 80. 6850 81.3030 80.8184 80. 2835 98. 6294 85. 8650 55. 3572 47.0639 60. 3360 79. 9562 80. 2513 80.0946 80.3547 80.4841 80. 5377 80.1204 80.1885 80.1500 80.2075 79. 9466 80.2582 80.0216 79. 7692 79. 7200 26. 6802 26. 7650 25.0581 18. 8317 19. 0709 22. 4998 21.8834 21.8175 22. 0458 22.1303 22.1848 22.0112 21. 9092 21. 9834 22. 0012 22.1526 22. 3211 22.1898 22. 0644 22.1838 40.1622 40. 2251 40. 2298 40. 2949 51. 7209 67.3831 67. 7147 67.6195 67.8743 67. 9862 67. 7819 67.5556 67 7416 67. 8024 67. 7696 68.1734 68. 6769 68. 3526 67. 8854 67. 6335 Yugoslavia (dinar) 1. 7591 1. 7681 1. 7680 1.6411 1. 7607 2. 2719 2. 2837 2. 2737 2. 2913 2. 2965 2. 2973 2. 2823 2. 2834 2.2858 2. 2886 2. 2991 2. 3196 2. 3030 2.2882 2. 2866 Partly or wholly nominal since April 1933. Partly or wholly nominal since April 1934. Paper peso, equivalent to 44 percent of gold peso, quoted in place of latter beginning Dec. 13, 1933. Average for 1933 is for gold peso for Jan. 1-Dec. 10. 4 Beginning Apr. 10,1933, new yuan, containing 23.4934 grams of pure silver, quoted in place of old yuan, containing 23.9025 grams of pure silver. Average for 1933 is for new yuan for Apr. 10-Dec. 31; average for old yuan for Jan. 1-Apr. 9 was 20.2103 cents. • Nominal from Nov. 23, 1935, to Apr. 1,1936, inclusive. • Silver peso quoted in place of gold peso beginning July 30,1931. Average for 1931 is for silver peso for July 30-Dec. 31. Average for gold peso for Jan. 2-July 29 was 47.6510 cents. » Nominal beginning Apr. 28, 1936. 507 FEDERAL RESERVE BULLETIN JUNE 1936 PRICE MOVEMENTS IN PRINCIPAL COUNTRIES WHOLESALE PRICES—ALL COMMODITIES [Index numbers] United States Year or month 1926 ._ 1927 1928 1929 1930 1931 1932 _ 1933 1934 1935 _ - France (1926 = 100) (1913 = 100) 100 95 97 95 86 73 65 66 75 80 100 98 96 96 87 72 67 67 72 72 100 88 86 86 88 90 695 642 645 627 554 502 427 398 376 338 134 138 140 137 125 111 97 93 98 102 602 495 462 445 383 328 304 280 273 237 225 226 220 181 153 161 180 178 186 106 103 102 100 90 76 65 63 63 62 79 80 79 80 80 80 79 81 81 81 81 81 71 72 72 73 72 72 72 72 72 73 73 73 88 88 87 88 88 88 88 88 90 91 91 91 350 343 335 336 340 330 322 330 332 342 348 354 101 101 101 101 101 101 102 102 102 103 103 103 277 278 288 296 302 308 310 323 330 182 184 184 182 182 180 180 183 189 194 194 192 62 62 6L 61 61 61 61 61 62 63 63 63 81 81 80 80 73 73 72 72 92 92 92 92 359 372 376 371 104 104 104 104 192 191 191 192 62 62 62 61 _ _ _ 1935—January February __ March April ... May June July August September October November December 1936—January February March April _ _ Netherlands England (1930 = 100) ._ _ Italy Germany (1913 = 100) (1913 = 100) Japan Canada (1926 = 100) (October 1900=100) (1926-30 = 100) WHOLESALE PRICES—GROUPS OF COMMODITIES [Indexes for groups included in total index above] United States (1926=100) Year or month 1926 ._ 1927 1928 . 1929, ._ 1930 1931 1932 1933 1934 1935 Farm products ... 1935—January February March April May June July . August September October _ _ November December 1936—January February March April _ ._ Foods Other commodities E n g l a n d (1930 = 100) Foods 100 99 106 105 88 65 48 51 65 79 100 97 101 100 91 75 61 61 71 84 100 94 93 92 85 75 70 71 78 78 100 89 88 83 85 87 78 79 78 80 81 78 77 79 80 78 78 78 80 83 82 85 84 83 82 85 86 85 85 86 78 77 77 77 78 78 78 78 78 78 79 79 78 80 77 77 84 83 80 SO 79 79 79 79 88 87 87 F r a n c e (1913 = 100) IndusFarm Indus- Agricultural trial and food trial products products products products Provisions Industrial raw Indusfinand semi- trial ished finished products products 150 147 129 132 138 134 129 133 130 678 697 669 579 130 113 125 113 132 120 96 86 75 76 84 103 89 88 91 92 159 157 150 136 118 113 110 119 351 339 329 325 324 307 292 311 322 331 338 350 350 346 340 345 353 351 347 347 341 351 357 356 100 100 99 100 101 102 103 104 104 104 105 105 81 81 83 84 84 86 85 85 84 84 84 84 92 92 91 91 91 91 91 91 92 93 93 93 119 120 120 120 119 119 119 119 119 119 119 119 364 391 396 385 355 356 358 359 105 105 105 105 84 85 85 85 93 94 94 94 120 120 120 120 793 100 87 . 85 87 90 90 581 599 584 579 526 542 482 420 393 327 87 87 85 85 86 86 85 86 88 89 88 89 89 89 88 89 90 89 90 90 90 92 93 93 89 93 94 94 94 Sources.—See BULLETIN for March 1931, p. 159, March 1935, p. 180, and October 1935, p. 678. G e r m a n y (1913 = 100) 464 380 380 361 348 104 91 87 96 102 132 134 508 FEDERAL RESERVE BULLETIN JUNE 1936 PRICE MOVEMENTS IN PRINC:iPAL COUNTRIES—Continued RETAIL FOOD PRICES COST OF LIVING [Index numbers] Year or month United States England (July 1914=100) France (July 1914=100)2 Germany (191314=100) 80 161 156 157 154 145 131 126 120 122 125 113 113 112 124 125 124 109 100 98 86 146 153 153 156 146 131 116 113 118 120 1926 . _ . 1927 1928 1929 1930 1931 1932 1933 1934 1935 81 81 82 80 80 80 80 82 82 119 118 120 126 126 125 128 131 131 85 86 86 83 81 81 85 87 88 119 120 121 123 123 121 120 120 121 1935—April 82 81 80 80 131 130 129 126 90 91 91 90 122 122 122 122 1936—January February (1923-25= 100)1 1926 1927 1928 1929 1930 1931 1932 1933 1934 1935 105 100 82 68 /I 1935—April ___ May June July August Rftptp.mber October November December 1936—January February March. April [Index numbers] United States Year or month (192325=100) 103 102 100 99 97 89 80 76 78 81 May June July August September October November. December.__ _ March April 80 81 81 _ 81 England (July 1914=100) 170 164 166 164 158 148 144 140 141 143 139 139 140 143 143 143 145 147 147 147 147 146 144 France Germany (Jan.-June (19131914=100)2 14=100) 142 148 152 154 148 136 121 118 121 123 103 104 105 113 118 116 107 106 105 98 122 123 123 124 125 123 123 123 123 99 95 97 124 124 124 124 99 i Since August 1933 the Bureau of Labor Statistics has published biweekly indexes. Figures given are for the date nearest 15th of month. Index represents prices converted to gold basis of 1914. Sources.—For both retail food prices and cost of living: United States—Bureau of Labor Statistics, Department of Labor; England—Ministry of Labour; Germany—Statistisches Reichsamt; France—For retail food prices, Statistique Ge'ne'rale, and for cost of living, Commission d'Studes relatives au cout de la vie a Paris. 8 SECURITY PRICES [Index numbers except as otherwise specified] Common stocks (1926 average = 100) Bonds United States (average price) Year or month Number of issues 60 1926 1927 1928 1929 1930 1931 1932 1933 1934 1935 1935—April May June July August September October November December 1936—January, February March.. April . _ __ _ _ _ _ _ __ England France G e r m a n y (December (1913 aver- (average1 1921 = 100)1 age = 100) price) 87 36 139 97.0 98.9 98.7 95.7 98.3 96.1 81.1 84.0 * 96.T* 102.3 110 0 110.7 112.3 110.2 111.8 108.4 113.2 119.7 ~*27.5 129.9 57.4 71.7 80.8 85.1 95.8 96.9 88.6 81.3 82.1 83.5 85.5 81.4 83.3 2 83.4 3 67.1 82.5 90.7 95.3 100.0 101.2 102.2 104.2 104.2 103.1 101.9 103.5 104.5 131.3 131.3 130.3 131.5 129.8 124.3 125.5 128.9 129.5 84.8 82.4 82.8 82.4 83.9 82.7 82.1 78.8 79.1 106.5 107.8 108.4 107.9 130.1 131.0 130.2 131.5 78.9 77.9 75.2 75.8 United States 421 England l 278 100 0 107.0 115.9 119.5 102.6 78.9 67.9 78.6 85.7 86.3 95.1 95.3 95.3 95.3 95.4 95.1 94.9 94.9 94.9 100 0 118.3 149.9 190.3 149.8 94 2 48.4 63.4 72.5 78.5 67.5 73.1 76.0 79 4 83.3 85.0 86.1 94.2 95.7 95.1 95.2 95.3 95.3 101.7 106.7 108.7 106.6 France 300 Germany 329 100 0 145.0 136.1 122.8 100.2 2 78.0 *50.3 61.7 71.1 82.9 83.8 86.0 86.9 86.9 88.3 84.7 84.6 88.9 90.2 100 0 123.2 178.1 217.6 187.6 132.2 105.2 99.6 83.3 79.7 79.8 88.0 82.4 77.7 79.0 76.4 77.3 76.8 77.3 93.1 95.2 94.1 95.5 83.7 86.7 84.1 82.8 84.2 86.0 85 6 88.3 81.9 83.5 86.0 86 8 87.6 85.0 83.5 82.1 81.9 1 Annual indexes are unweighted averages of monthly indexes. 2 Exchange closed from July 13 to Sept. 2, 1931, and from Sept. 19,1931, to Apr. 11, 1932. Index for 1931 represents average of months JanuaryJune; index for 1932 represents average of months May-December. Sources.—See BULLETIN for February 1932, p. 121, and June 1935, p. 394. FEDERAL RESERVE DISTRICTS KANSAS CITY KANS. OKLA. Oklahoma City — BOUNDARIES OF FEDERAL RESERVE DISTRICTS — BOUNDARIES OF FEDERAL RESERVE. BRANCH TERRITORJES FEDERAL RESERVE BANK CITIES • FEDERAL RESERVE BRANCH CITIES O FEDERAL RESERVE BANK AGENCY
@FedFRASER