Annual Report of the Federal Reserve Board, 1938

TWENTY-FIFTH ANNUAL REPORT OF THE BOARD OF GOVERNORS OF THE FEDERAL RESERVE SYSTEM COVERING OPERATIONS FOR THE YEAR 1938 UNITED STATES OF AMERICA WASHINGTON: 1939 Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

BOARD OF GOVERNORS OF THE FEDERAL RESERVE SYSTEM December 31, 1938 MARRINER S. ECCLES, Chairman RONALD RANSOM, Vice Chairman M. S. SZYMCZAK CHESTER C. DAVIS JOHN K. MCKEE ERNEST G. DRAPER 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 J. P. DREIBELBIS, Assistant General Counsel GEORGE B. VEST, Assistant General Counsel B. MAGRUDER WINGFIELD, 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, Assistaiit Director, Division of Research and Statistics LAUCHLIN CURRIE, Assistant Director, Division of Research and Statistics EDWARD L. SMEAD, Chief, Division of Bank Operations J. R. VAN FOSSEN, Assistant Chief, Division of Batik 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 0. E. FOULK, Fiscal Agent JOSEPHINE E. LALLY, Deputy Fiscal Agent Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

CONTENTS TEXT OF REPORT PAGE Foreword 1 Summary 2 Composition of the Banking System and Trends in Banking 2 Public Supervision of Banks 2 Relation Between Supervisory and Credit Policies 4 Nature and Function of Bank Reserves 4 The Banking System Today 6 Composition of the Banking System 6 Changes in Character of Banking 7 Laws and Jurisdictions to Which Banks Are Subject 8 Discriminatory Federal* Laws 10 Bank Supervision „. . 11 Allocations of Authority 11 Confusion and Conflict of Authority \ . 12 Relation Between Supervisory and Credit Policies 16 The Problem of Reserves 18 Reserves and Credit Regulation 18 Sources of Reserves 19 Long-view Problem Raised by Excess Reserves 21 Course of Business in 1938 22 Gold and Capital Movements 25 Banking and Credit Conditions in 1938 27 Earnings and Expenses of the Federal Reserve Banks 29 Branches and Agencies of the Federal Reserve Banks 32 Industrial Advances 32 Credits to Foreign Central Banks . 33 Building Operations of the Federal Reserve Banks 33 Federal Reserve Interdistrict Collection System 33 Agreements of Nonmember Banks Under Securities Exchange Act of 1934 34 Amendments to the Federal Reserve Act 34 Changes in Regulations of the Board of Governors 35 Regulation of the Federal Open Market Committee 36 Revised Form of Condition Report 36 Bank Examinations , 36 Trust Powers of National Banks 39 Holding Company Affiliates 39 Foreign Banking Corporations 40 Foreign Branches of Member Banks 40 Meetings of the Federal Open Market Committee 41 Meetings of the Federal Advisory Council 41 Appointment of Ernest G. Draper as a Member of the Board of Governors of the Federal Reserve System 41 Changes in Board Staff 41 Board Expenditures * 41 Change in Form of Publication of Annual Report ...... . 42 in Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

TABLES PAGE No. 1. Statement of Condition of the Federal Reserve Banks (in Detail) December 31, 1938 45-46 No. 2. Maturity Distribution of Bills and United States Government Securities Held by Federal Reserve Banks 47 No. 3. Statement of Condition of Each Federal Reserve Bank at End of 1937 and 1938 48-51 No. 4. Volume of Operations in Principal Departments of Federal Reserve Banks, 1934-1938 53 No. 5. Earnings and Expenses of Federal Reserve Banks During 1938 54-55 No. 6. Current Earnings, Current Expenses, and Net Earnings of Federal Reserve Banks and Disposition of Net Earnings, 1914-1938 56-57 No. 7. Federal Reserve Bank Discount, Interest, and Commitment Rates and Buying Rates on Acceptances 58 No. 8. Maximum Rates on Time Deposits 59 No. 9. Member Bank Reserve Requirements , 60 No. 10. Member Bank Reserve Balances, Reserve Bank Credit, and Related Items—End of Year 1918-1938 and End of Month 1938 61 No. 11. All Member Banks—Condition on September 28, 1938, by Classes of Banks 62-63 No. 12. All Member Banks—Classification of Loans, Investments, and Capital Stock on September 28, 1938, by Classes of Banks 64-65 No. 13. Number of Banks and Branches in United States, 1933-1938 66 No. 14. Analysis of Changes in Number of Banks and Branches During 1938 67 No. 15. Money Rates, Bond Yields, and Stock Prices 68 No. 16. Business Indexes 69 APPENDIX Record of Policy Actions—Board of Governors 73-75 Record of Policy Actions—Federal Open Market Committee 76-84 Recommendations of the Federal Advisory Council to the Board of Governors of the Federal Reserve System 85-86 Comparison of Some of the Federal Statutory Provisions Regulating the Business of Different Classes of Banks 87-88 Revision in Bank Examination Procedure 89-90 Revised Regulation Issued by the Comptroller of the Currency on Purchases of Investment Securities 91-93 Directory of the Board of Governors of the Federal Reserve System 94 Salaries of Officers and Employees of the Board of Governors of the Federal Reserve System 95-99 Receipts and Disbursements of the Board of Governors of the Federal Reserve System for the Year 1938 100 Statement of Expenses of the Board of Governors of the Federal Reserve System, 1938 101 Directory of the Federal Open Market Committee 102 Directory of the Federal Advisory Council 103 Chairmen, Directors, Presidents and First Vice Presidents of Federal Reserve Banks 104-107 Number and Salaries of Officers and Employees of Federal Reserve Banks. . 108 State Bank and Trust Company Members 109-117 Description of Federal Reserve Districts 117-122 Federal Reserve Branch Territories 123-124 Map of Federal Reserve Districts 125 Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

LETTER OF TRANSMITTAL BOARD OF GOVERNORS OF THE FEDERAL RESERVE SYSTEM, Washington, January 27, 1939. THE SPEAKER OF THE HOUSE OF REPRESENTATIVES. Pursuant to the requirements of section 10 of the Federal Reserve Act, as amended, I have the honor to submit the Twenty-fifth Annual Report, prepared by direction of the Board of Governors of the Federal Reserve System, covering operations during the calendar year 1938. Yours respectfully, M. S. ECCLES, Chairman. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

ANNUAL REPORT OF THE BOARD OF GOVERNORS OF THE FEDERAL RESERVE SYSTEM FOREWORD The present, when our banking system is under no stress, is an appropriate time to present to Congress a picture of the banking problems of today. The Board is convinced that it would be derelict in the discharge of its responsibilities if it failed to call to the attention of Congress such defects in our banking machinery, from the monetary, credit, and supervisory point of view, as still exist, notwithstanding the important improvements that have been made by Congress in recent years. This is a necessary first step in preparing the ground for such further improvements, within the general framework of our State and national banking systems, as Congress may deem advisable in order to enable the banking mechanism better to withstand stresses and strains to which it may be subjected in the future as it has been in the past. This report is confined to a discussion of major problems in the banking field and no attempt has been made to cover all the matters in this field that require consideration at this time. The Board stands ready to offer all the assistance in considering this subject that Congress may desire and that the Board is able to contribute. Banking is a business vested with a public interest. The current financial needs of commerce, industry, and agriculture are met largely through the individual actions of the 15,000 separate banks in operation in this country. The volume of their loans and investments has a direct relationship to the volume of business activity, and the deposits created by these loans and investments, as they pass from hand to hand, are the medium through which the bulk of the nation's payments are made. Successful operation of our banking institutions is, therefore, necessary to the orderly functioning of the nation's business. It is not merely the concern of those who have invested their money in the banking business, nor merely of those who have entrusted their deposits to the banks. It is also a matter of public concern, both because of the importance of safeguarding deposits and because of the part that the banks play in maintaining the flow of goods and services through the channels of production and distribution, from the farm, the forest, and the mine to the ultimate consumer. Interference with the orderly functioning of banks, whether through bank failures or otherwise, results in the elimination of an Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

2 ANNUAL REPORT OF BOARD OF GOVERNORS habitual source of financial assistance on which the banks' customers have relied, and in the loss or tying up of deposits belonging to the depositors who have made their business and personal plans in the assurance that they have this money at their disposal. The degree of eagerness of banks to extend credit and their ability to do so have an important influence on the course of business, because these factors result in an expansion or a contraction of loans and investments, and in changes in the volume of deposits, which are the country's principal medium of exchange. SUMMARY Composition of the Banking System and Trends in Banking.—At the present time our banking system, as considered in this report, consists of about 15,000 banks. National banks, which are chartered by the Federal Government, constitute about one-third of the number, and nearly all the rest are chartered by the forty-eight State authorities. All of the national banks and about 10 percent of the State banks are members of the Federal Reserve System, and these members hold 70 percent of total bank deposits and 85 percent of deposits at commercial banks. All but about 1,500 banks are insured by the Federal Deposit Insurance Corporation, which covers deposits up to $5,000 for each depositor. Of the total of approximately $60,000,000,000 of bank deposits at the present time, 45 percent is at national banks, 25 percent at State member banks, and the remainder at nonmember banks. Although about 85 percent of all bank depositors are protected in whole or in part by Federal deposit insurance, only about 38 percent of the aggregate amount of deposits is covered. Since 1921 the number of banks has been approximately cut in two, principally by bank failures, which have resulted in losses to depositors of over $2,000,000,000. While the amount of bank deposits at present is larger than it has been at any previous time, and while in general the country has ample and in some localities excessive banking facilities, there may be some localities that do not have adequate banking service. The nature of bank operations and the composition of bank assets have been greatly changed in recent years. Commercial borrowing at banks has declined. In the last decade, with the growth of the public debt, securities of the United States Government have become an increasingly important part of bank portfolios and now constitute over one-third of their total earning assets. Public Supervision of Banks.—Its Growth and Pattern.—Recognition of the public interest in banking is indicated by the fact that banks have been subject to public supervision for nearly a hundred years. Banking legislation, State and national, has reflected the cumulative results of attempts by various governmental authorities to meet competitive conditions and specific situations and emergencies. As a consequence, the Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

FEDERAL RESERVE SYSTEM 3 development of the mechanism of supervision has been piecemeal in character and not in accordance with comprehensive plans made with reference to the country's banking needs taken as a whole. From this process the banking picture emerges as a crazy quilt of conflicting powers and jurisdictions, of overlapping authorities and gaps in authority, of restrictions making it difficult for banks to serve their communities and make a living, and of conditions making it next to impossible for public authorities to apply adequate restraints at a time and in conditions when this may be in the public interest. A chart showing the confusion of jurisdictions under which the banks function appears on page 9. Discriminations.—Different classes of banks are subject to different laws and jurisdictions, and these differences in many cases constitute competitive disadvantages, particularly for national banks and other members of the Federal Reserve System. The Board of Governors and the officers of the Federal Reserve banks strive to encourage eligible nonmember banks to become members of the Federal Reserve System, yet there are provisions of law that tend to discourage membership since they apply to member and not to nonmember banks. Among such provisions, for example, are those that restrict banks in charging exchange, prescribe the minimum capital for the establishment of banks and branches, establish requirements for reserves against deposits, and limit the character of bank investments.1 Supervisory Responsibility Diffused.—Forty-eight State authorities and the Federal Government share the responsibility for bank supervision. Within the Federal Government authority over the banks is scattered among several agencies. The Comptroller of the Currency has the responsibility for the chartering and closing of national banks and the primary responsibility for their examination and supervision. The Federal Reserve System has some degree of supervision over all member banks, but in matters relating to national banks the primary responsibility is with the Comptroller, and in those pertaining to State member banks it is with State supervisory authorities. The Federal Deposit Insurance Corporation has definite responsibilities in regard to all insured banks and exercises its supervisory powers particularly in the case ? of insured banks which are not members of the Federal Reserve System. The Treasury Department, under the emergency laws of 1933, still has the responsibility for licensing member banks and for approval of the purchase of bank stock by the Reconstruction Finance Corporation. This Corporation, because of its authority to make loans to banks and to purchase preferred stock and debentures from them, has proprietary and contractual powers of supervision over such banks as receive loans or capital from the Corporation. As a consequence of this diffusion of authority, the banks themselves 1 Provisions of law that also result in discrimination include restrictions on interlocking directorates, on loans to officers, and on other matters discussed on pages 10 and 11. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

4 ANNUAL REPORT OF BOARD OF GOVERNORS are frequently confused about the agency with which they must deal and by the variety of regulations. While cooperative arrangements have been worked out among the various governmental agencies by which banks are generally not subjected to separate examinations by more than one authority, the power to examine banks is possessed by several agencies and this power can be used. There are many regulations relating to various banking operations, the responsibility for which is divided between several authorities. For example, the power to determine maximum rates of interest to be paid on time deposits is divided between the Board of Governors of the Federal Reserve System and the Federal Deposit Insurance Corporation. The same division exists in connection with enforcement of the law prohibiting the paying of interest on demand deposits. The power of granting and supervising the exercise of trust powers by national banks is divided between the Board of Governors and the Comptroller of the Currency. There are many other similar instances. As a consequence of the diffusion of responsibility and diversity of authority over the banks there is often uncertainty of decision and delay in action where promptness is important in the public interest. Problem of Uniformity in Examination Policy.—Diffusion of authority has also been responsible for difficulties in establishing uniform policies in connection with bank examinations. While a voluntary agreement has been worked out between the three principal Federal supervisory agencies—the Comptroller of the Currency, the Federal Deposit Insurance Corporation, and the Board of Governors—the permanence of this arrangement depends on continuous agreement between the agencies on the policies involved, and its effectiveness depends on a uniform interpretation of the policies adopted. The interpretation, however, may vary from time to time in accordance with the points of view of those responsible for the policies of the three agencies. Relation Between Supervisory and Credit Policies.—The Board wishes to raise a broad question as to the relationship that should exist between general credit policies and policies pursued in the examination and supervision of banks. There have been times in the past when these policies have worked in opposite directions, with a consequent aggravation of deflationary and inflationary trends. This report presents for consideration the problem whether and, if so, by what method examination policies could be so harmonized with credit policies as to become jointly a stabilizing force in the national economy. Nature and Function of Bank Reserves.—The Federal Reserve System's power to influence credit conditions as an aid to greater economic stability arises largely out of its ability to regulate the volume of member bank reserves. This subject was discussed at length in the Annual Report for 1936. To state it briefly, under our system member banks are obliged to keep reserves in amounts equal to a definite proportion of their deposit lia- Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

FEDERAL RESERVE SYSTEM 0 bilities. Consequently, in order to extend more credit, a bank must have reserves in excess of its existing requirements or be able to obtain such reserves. By increasing or decreasing the amount of reserves available to the banks, the Federal Reserve authorities may encourage or discourage the expansion of bank credit, particularly at times when the banks have a limited amount of unused reserves. Changes in the amount of unused reserves of member banks can be effected by the System through purchases or sales of United States Government securities in the open market, through discounts for member banks at the discount rate, and through changes in reserve requirements. Growth of Reserves in Recent Years.—Bank reserves, however, are influenced also by developments over which the System has no control, such as gold imports and issues of silver certificates by the Treasury. Since the amount of money that remains in circulation is determined by the people's habits and needs for cash and not by the amount of currency issued, currency of any kind issued not in direct response to current needs of the public is deposited in the banks and is added to bank reserves. In considering the problems of credit regulation in the future, the banking authorities are faced with the effects of the rapid growth of bank reserves in recent years. In the five years from 1933 to 1938 this growth has amounted to $6,000,000,000, due to additions to the gold stock and the issuance of silver certificates by the Treasury. When gold comes into the country and the Treasury purchases it, the funds thus released by the Treasury come into possession of the banks and become bank reserves, and when silver certificates are issued by the Treasury this also adds an equivalent amount to the reserves of member banks. The amount of reserves needed by banks has been augmented by the increase in reserve requirements and by the growth in deposits, but their reserves now exceed requirements by $3,600^000,000. This amount of excess reserves can be more than doubled, even without further gold imports or silver purchases, through disbursement by the Treasury of amounts equivalent to the gold it holds in the Stabilization Fund and elsewhere, by a reduction of its unusually large balances with the Federal Reserve banks, and by the issuance of silver certificates against the free silver bullion now in the Treasury's possession. This leaves out of consideration the Treasury's authority to issue United States notes. The Treasury can also absorb member bank reserves by increasing its cash holdings and its Federal Reserve balances. Under existing conditions the Treasury's powers to influence member bank reserves outweigh those possessed by the Federal Reserve System. System's Powers to Control Excess Reserves.—Under the present law the Federal Reserve System can absorb excess reserves only to the extent of approximately $800,000,000, the amount by which it can increase Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

b ANNUAL REPORT OF BOARD OF GOVERNORS member bank reserve requirements, and the additional amounts that could be taken up by such sales out of its portfolio of $2,560,000,000 of Government securities as may be in the public interest. After the System had done all in its power to absorb excess reserves, a considerable amount would remain at the disposal of the banks. In view of the many changes in bank assets and in money market conditions that have occurred in recent years, only experience can determine at what level of excess reserves banks will be responsive to Federal Reserve policy. It is clear, however, that the present and prospective volume of excess reserves may at some time become the basis of an injurious credit expansion. If this should develop, the Federal Reserve System with its present powers might not be in a position to carry out the mandate of Congress to prevent such an expansion. The Board is convinced that there is no immediate prospect of excessive expansion of bank credit and no reason to change the present policy of monetary ease adopted for the purpose of facilitating recovery. It believes, however, that the present is an appropriate time to review our banking, credit, and monetary system in order that Congress may consider such changes and improvements as appear desirable. THE BANKING SYSTEM TODAY Composition of the Banking System.—A brief statement about the number and size of the different types of banks that exist today, and the changes that have occurred in recent years in the character of the banking business, will supply a background for the banking picture with reference to which banking laws and banking administration will be considered in this report. Our banking system is the result of an evolutionary development. At the time of the passage of the National Bank Act in 1863, all incorporated banks were under State authority. After establishment of the national banking system, supervision of a large part of the country's commercial banking resources passed to the Federal Government. Upon this composite structure of national and State banks was superimposed in 1913 the Federal Reserve System, which extended Federal supervision to such State banks as joined the System. In 1933 the organization of the Federal Deposit Insurance Corporation extended Federal supervision to all banks having Federal insurance of deposits. The number and deposits of the principal groups of banks as of June 30, 1938, are shown in the following table. The total includes all commercial banks and trust companies in the United States and some private banks, as well as mutual and stock savings banks and a few so-called industrial banks. The figures do not include institutions which may engage in some banking operations but which are not generally considered as being primarily banks. For example, security brokers, land Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

FEDERAL RESERVE SYSTEM BANKING STRUCTURE OF THE UNITED STATES June 30, 1938 Percent of total Number Gross deposits1 banks (in millions Number of dollars) of Deposits banks All banks 15,287 59,044 100 100 Insured banks: National 5,242 26,763 34 45 State member 1,096 14,546 7 25 Insured nonmember 7,437 7,123 49 12 Noninsured banks 1,512 10,612 10 18 1 Include interbank deposits. banks, building and savings and loan associations, mortgage companies, finance companies, and credit agencies owned in whole or in part by the Federal Government are not included. In this table, so arranged as to show the four principal groups of banks from the supervisory point of view, the first two groups together comprise all member banks of the Federal Reserve System, and the first three together all represent banks insured by the Federal Deposit Insurance Corporation. The table shows that 41 percent of all banks are members of the Federal Reserve System, that they hold 70 percent of deposits, that 90 percent of all banks are insured, and that these insured-banks hold 82 percent of all deposits. Of the total amount of bank deposits about 38 percent is covered by Federal deposit insurance. Ten percent of the banks with 18 percent of deposits are noninsured banks. Most of the deposits of noninsured banks are in about 600 mutual savings and private banks. Leaving these out, all but 900 commercial banks with $900,000,000 of deposits are covered by Federal deposit insurance. The number of banks in operation at present is only about one-half as large as in 1921. Through failures and consolidations the number of banks has been reduced from 30,000 to 15,000. The banks which suspended held deposits of about $8,500,000,000, of w7hich about one-fourth has been lost to depositors. The aggregate volume of deposits of the banking system, however, has generally grown, except in the three years from 1930 to 1933, and at the end of 1938 was larger than at any previous time. Changes in Character of Banking.—The character of the banking business has undergone considerable change in the past twenty years. Increasing use of the corporate form of business enterprise, together with the growth in the importance of large concerns and in the custom of meeting corporate financial needs through security issues or out of retained earnings, has resulted in a decline in the extent to which business Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

o ANNUAL REPORT OF BOARD OF GOVERNORS relies upon banks for commercial loans. There has also been in recent years an increase in the amount of savings deposited in banks, which has placed on the banks the responsibility for the investment of these funds. During recent years, with the decrease in demand for commercial loans and the increase in funds held by banks, there has been a pronounced change in the nature of bank assets. Holdings of Government and other securities and loans on real estate have increased, while commercial loans have diminished in importance. Banks have been forced to find outlets for the funds through channels other than those which were customary in former days and this has been reflected in revisions of banking laws relating to mortgages, of regulations applicable to bank investments, and a liberalization of the basis of borrowing from the Federal Reserve banks. Laws and Jurisdictions to Which Banks Are Subject.—As has been pointed out above, the banks of the country, viewed in relation to the laws and supervisory authorities to which they are subject, can be divided into four groups: (1) National banks; (2) State bank members of the Federal Reserve System; (3) Nonmember State banks covered by Federal deposit insurance; and (4) Noninsured State banks. Of these four groups of banks the first three are covered by Federal deposit insurance. The network of laws and regulations to which these banks are subject is illustrated by the chart on page 9. Summarizing the matter briefly, and in reverse order, noninsured State banks are subject to only a few Federal banking laws and are almost entirely controlled by State laws and authorities. Insured nonmember banks are subject to State laws and to such Federal banking laws as apply to all banks whose deposits are covered in whole or in part by Federal deposit insurance. State bank members of the Federal Reserve System are subject to three sets of laws: State laws; Federal laws connected with Federal deposit insurance; and other Federal laws applicable to members of the Federal Reserve System. National banks are governed by Federal banking laws, some applicable to them as banks chartered by the Federal Government, some as members of the Federal Reserve System, and some because they are insured by the Federal Deposit Insurance Corporation. Out of this complicated network of independent laws and overlapping jurisdictions and authorities arise many discriminations against one or another group of banks. When national laws are compared with State laws the comparison has to be made with 48 different sets of laws. It is obvious that such a comparison cannot be made in detail within the scope of this report. Some of the outstanding differences between the various laws in effect have to do with capital requirements for the organization of banks, with the character of loans and investments permitted, with amounts permissible to be loaned to an individual, with Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

PRINCIPAL BANK SUPERVISORY RELATIONSHIPS FEDERAL GOVERNMENT 48 STATES STATE BANK SUPERVISORY AUTHORITIES TREASURY BO F AR . D R O . F S Y G S OV T E E R M NORS CO C M U P R O T F R R T E H O N E L C L Y ER IN F D S E E U D P R E O A R S N A I C T L E RECO F N IN S A T N R C U E CTION CORPORATION CORPORATION FISCAL POLICY OPEN MARKET OPERATIONS GOLD AND RESERVE SILVER POLICY REQUIREMENTS STAB F I U LI N Z D ATION RE P D O IS L C IC O Y UNT OPERATIONS • MAJOR RELATIONSHIPS • INCIDENTAL RELATIONSHIPS NATIONAL BANKS ( MEMBERS) yb deretrahC esneciL XI ? nimaxE o ropeRtimbuS •X3 STATE eriubay sevreseR Sn s cr tcejbuS "S1 tuA 1 tsurT foesicrexE XI TJ rusnI stisopeD MEMBER morfworroB 1 latipoC lleS >» s jog i a I s CD BANKS gnitoV.A .C .H yb deretr 1 yb denin 2 o UJ stropeR ti>7 >. -o 1 rr 11 INSURED c sno 2 buS ir dezir 1 ? surT fo esic 3 derusnI stisj Q. & morf worroB o a> ussI !atipaC lleS TJ N JC rarB NONMEMBER NON1NSURED BANKS BANKS Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

10 ANNUAL REPORT OF BOARD OF GOVERNORS the establishment of brandies, and with the charging of exchange on checks. Discriminatory Federal Laws.—Some of the principal laws that result in competitive advantages for one group of banks as compared with the others may be mentioned. The statements refer only to discriminations in the Federal laws between member banks and nonmember insured banks. There may be cases where laws in some States provide for restrictions on State banks similar to those imposed by Federal laws on member banks. Member banks are required by statute to remit at par to the Federal Reserve bank for all checks drawn against the member bank and collected through the Federal Reserve bank. Nonmember banks can make exchange charges on checks forwarded to them for collection. In many cases such exchange charges constitute an important source of revenue for small banks. Member banks are required to have a fixed minimum capital in accordance with the size of the town in which they are located, while for insured nonmember banks there is no fixed Federal requirement and each case is considered on its merits by the Federal Deposit Insurance Corporation. There is also an important discrimination against member banks in the matter of capital requirements in connection with authority to establish branches. Member banks must keep wTith the Reserve banks reserve balances against their deposit liabilities in proportions determined by the Federal Reserve Act and the Board of Governors, while nonmember banks are governed in this matter by State laws which in most cases require smaller reserves. The character of investments eligible for purchase by member banks is subject to Federal regulation while nonmember banks are not subject to this particular regulation. Provisions in the Clayton Act which regulate and restrict the service of persons in various capacities in more than one bank with a view to preventing concentration of banking power are applicable to member banks but not to nonmember banks. In view of the fact that obtaining the services of influential and capable directors is an important and a difficult task for banks, the greater freedom of choice in this respect possessed by nonmember banks works to the disadvantage of membership in the System. Member banks are subject to many restrictions and regulations, not applicable to other banks, in respect to the affiliates with which they may be connected. This is a matter of importance principally in connection with membership in banking groups controlled by holding companies. Member banks, but not other banks, are also subject to Federal laws by authority of which officers and directors may be removed by the Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

FEDERAL RESERVE SYSTEM 11 Board of Governors in cases of continued violation of law or continued unsafe or unsound practices. This provision of law was designed to strengthen the hand of supervisory authorities in promoting sound banking conditions, short of taking steps that would result in the suspension of the bank. Member banks, but not other banks, are subject to Federal restrictions and limitations regarding loans to officers. A list of all Federal statutory provisions that do not apply uniformly to all banks subject to Federal supervision is too lengthy for the report. A partial list appears in the Appendix on page 87. The application of some of these laws singly or in combination tends to discourage membership in the Federal Reserve System. Specific instances have come to the attention of the Board of Governors during the past year. A number of national banks have recently surrendered their national charters and taken State charters because they can operate branches with less capital under State law; a number of State banks which desire to join the Federal Reserve System have been prevented from doing so because they have branches and do not have the capital required by Federal law for the operation of branches by State member banks; and a number of banks have threatened to withdraw from the System rather than give up valued directors because of the provisions of the Clayton Act. Many State banks in the Mississippi Valley and the South Atlantic States refrain from joining the Federal Reserve System because members of the System are required to be members of the par clearance system while nonmember banks may deduct exchange charges. There have been withdrawals from the Federal Reserve System for which the same reason was given. These are but a few illustrations of the many ways in which the Federal banking laws discourage membership in the Federal Reserve System and encourage banks to continue to operate as nonmember banks. BANK SUPERVISION Allocations of Authority.—Not only do laws regulating bank operations differ for different groups of banks, but banks are also subject to a number of different supervisory authorities and to diverse regulations issued and enforced by such authorities. Supervision and regulation of banks differ materially from State to State as well as between banks that are chartered by States and those that are chartered by the Federal Government. Even within the Federal Government there is extensive diversity, overlapping, and confusion of jurisdiction in the regulation and supervision of different groups of banks. There are five Federal agencies engaged in bank supervision. Prior to 1933, Federal supervision of the commercial banking system, in so far as it was subject to such supervision, was in the hands of the Comptroller Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

12 ANNUAL REPORT OF BOARD OF GOVERNORS of the Currency and the Federal Reserve Board. Since 1933 there has been added the Federal Deposit Insurance Corporation, which exercises broad supervisory powers. Certain powers of the Reconstruction Finance Corporation also give it a measure of responsibility for the operation of banks, and the Secretary of the Treasury, through the exercise of authority under the President's emergency powers, licenses the operation of member banks and has authority to exercise other regulatory powers. Broadly speaking, the function of the Comptroller of the Currency is to charter and supervise national banks and, when necessary, to appoint conservators or to close and supervise the liquidation of national banks. When the Comptroller closes a bank, however, on account of its inability to meet the demands of its depositors, he is required to appoint the Federal Deposit Insurance Corporation as receiver. The Federal Reserve System has authority to supervise and examine all banks that are members of the System and to lay down requirements for admission of State banks to membership. But in relation to national banks its authority is parallel to a considerable extent with that of the Comptroller of the Currency, and in regard to State banks with those of State supervisory authorities. When banks receive national charters from the Comptroller, they become members of the Federal Reserve System, without any action by the Board of Governors, and State banks, while they can join the System only with its approval, bring with them charter rights obtained from State authorities. The supervisory functions of the Federal Deposit Insurance Corporation revolve around the insurance of deposits of banks that are insured and the termination of this insurance. Supervisory functions of the Federal Deposit Insurance Corporation relating to State insured banks parallel to some extent the functions exercised by State authorities and as to national banks and State member banks duplicate to some extent the functions of the Comptroller of the Currency and the Federal Reserve System. National banks chartered by the Comptroller of the Currency and State banks admitted to membership in the Federal Reserve System are all insured by the Federal Deposit Insurance Corporation. The supervisory activities of the Reconstruction Finance Corporation occur in connection with the purchase and ownership of preferred stock and capital notes and debentures of banks. These activities are not based directly on legal requirements but indirectly on the proprietary and contractual relationships between the Corporation and the banks. Confusion and Conflict of Authority.—In many matters there are divisions of authority, both in the law vesting the authority and in its exercise. For instance, the Comptroller of the Currency issues regulations defining and governing the purchase of investment securities by national banks. The regulations, however, are applicable also to State member Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

FEDERAL RESERVE SYSTEM 13 banks but not to insured nonmember banks. The Comptroller of the Currency enforces the regulations with respect to national banks and the Reserve System enforces them with respect to State member banks. A similar situation exists in relation to the exercise of trust powers by national banks. Authority to grant trust powers and to issue regulations rests with the Board of Governors. Supervision over the exercise of these powers and over compliance with these regulations, however, is in the hands of the Comptroller of the Currency. Confusion and conflict of authority exist also in the matter of regulation of interest to be paid by banks on deposits. Payment of interest on demand deposits is prohibited for all insured banks, including national banks, State member banks, and insured nonmember banks. This would appear to be a simple matter. But application of the definition of interest to particular cases is not simple and has many implications. It has, for example, an important bearing on the practice of city banks in absorbing expenses and exchange charges on items collected for country correspondents in return for the maintenance of balances. There is, however, no single authority having power to administer this law. In regard to member banks it is administered by the Board of Governors and in regard to nonmember insured banks by the Federal Deposit Insurance Corporation. The Federal Deposit Insurance Corporation enforces its own regulation, but the Board's regulation, in so far as it applies to national banks, is administered by the Comptroller of the Currency. Determination of the maximum rate of interest to be paid on time deposits is made for member banks by the Board of Governors and for nonmember insured banks by the Federal Deposit Insurance Corporation. The Federal Reserve System is charged with the administration of the law regarding holding company affiliates of member banks; but the same holding company sometimes controls national banks supervised primarily by the Comptroller of the Currency, State member banks supervised principally by the States and the Federal Reserve System, nonmember insured banks supervised principally by the States and the Federal Deposit Insurance Corporation, and non-banking corporations which are required to submit to examinations and to furnish reports of condition to the Federal Reserve System or the Comptroller of the Currency but usually are not subjected to any further supervision by bank supervisory agencies. Such situations involve additional overlapping, conflicts, and gaps in authority. The conflicts of authority in bank supervision cause much confusion and delay and not infrequently prevent prompt action in cases where quick decision is necessary to prevent losses to the public and to remedy critical situations. In one case, for example, an excessively long period of time elapsed between initiation of negotiations and the final consummation of a plan Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

14 ANNUAL REPORT OF BOARD OF GOVERNORS fQr the relief of a dangerous banking situation in an overbanked community in which were located two State member banks and a national bank, all in an unsatisfactory condition. The lapse of time was largely due to the fact that the plan for working out the situation had to be satisfactory not only to the local interests and to the State banking authorities, but to the following Federal agencies: the Reconstruction Finance Corporation, which purchased preferred stock in the new bank organized to succeed the three; the Secretary of the Treasury, who had first to request the Reconstruction Finance Corporation to subscribe to the preferred stock and then had to license the new bank; the Federal Deposit Insurance Corporation, which made a loan to the national bank; the Comptroller of the Currency, whose cooperation was necessary in order that the national bank might be included in the program; and the Federal Reserve bank of the district and the Board of Governors, in connection with the admission of the new bank to membership in the System. Officials and examiners of all these agencies were participants in numerous conferences, both at Washington and in the field. In the case of another national bank, while the Federal Deposit Insurance Corporation was preparing to institute proceedings to terminate the bank's insurance, which might be expected to end in the appointment of the Federal Deposit Insurance Corporation as receiver, the Comptroller of the Currency filed a certificate with the Board of Governors instituting proceedings against the president of the bank to remove him from office under authority granted by the Banking Act of 1933. The Board then initiated a hearing but, while this proceeding was under way, the Comptroller of the Currency found it necessary to appoint a conservator. After the conservator was appointed, the Board proceedings were concluded and the president of the bank was removed from office. Subsequently the conservator was supplanted by the Federal Deposit Insurance Corporation as receiver. There are cases of banks threatening to give up national charters in order to escape regulation and supervision by the Comptroller of the Currency; of other banks threatening to retire from the Federal Reserve System in order to escape regulation and supervision by the Reserve System; and of still other banks threatening to join the Federal Reserve System in order to escape some requirements or conditions imposed by the Federal Deposit Insurance Corporation. In practice there is less confusion in many of the supervisory activities of the Comptroller of the Currency, the Federal Reserve System, and the Federal Deposit Insurance Corporation than in the authority under which these agencies act. Bank examinations are an example. Generally speaking, national banks are examined only by the Comptroller of the Currency; the Federal Reserve System has power to examine all member banks but does not examine national banks and examines State member banks in cooperation with State authorities, and State member banks Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

FEDERAL RESERVE SYSTEM 15 are not examined by either the Comptroller of the Currency or the Federal Deposit Insurance Corporation; the Federal Deposit Insurance Corporation in cooperation with State authorities examines the insured State banks which are not members of the Reserve System. The Federal Deposit Insurance Corporation has power to examine national banks, with the permission of the Comptroller of the Currency, and State member banks, with the permission of the Board of Governors. Such examinations, however, are seldom made. State banks belonging to the Reserve System and insured nonmember banks are examined by Federal, as well as by State, authorities but the extent of duplication in this respect is reduced through arrangements for joint or alternating examinations. In practice, therefore, the effect of these conflicting authorities to examine banks has been minimized by agreement by which the Federal agencies accept each other's examinations, but the authority, nevertheless, exists and can be used. Somewhat the same situation exists as regards condition, dividend, and other reports, and their publication. The Comptroller of the Currency, the Federal Deposit Insurance Corporation, and the Reserve System all have powers and responsibilities in this field. They all maintain, in addition to examination departments, statistical organizations, and here again only agreements moderate the bad effects of duplicate and conflicting requirements. While duplication in reports and examinations by different Federal agencies is largely avoided by cooperative arrangements, nevertheless delays and difficulties arise from the overlapping of responsibility. Even after an agreement is reached, there may be, and in fact, there are, differences of interpretation of the procedure, formula, or policy agreed upon. For example, after lengthy negotiations a voluntary agreement between the agencies in connection with examination policy was reached last summer.1 The effectiveness of this agreement, however, depends, in the first place, on the continuance of cooperation between the agencies and, in the second place, on the nature of interpretations placed by the different agencies on the agreed principles of examination. A similarity of interpretation is difficult to attain because the agencies have different responsibilities and, therefore, different approaches to the problem. The Comptroller of the Currency is primarily a supervisory and examining agency and is interested principally in matters affecting the status of individual banks. The Federal Deposit Insurance Corporation is primarily an insurance agency and is, therefore, primarily concerned about the protection of the insurance fund. The Board of Governors, in addition to its supervisory responsibilities, is concerned with national credit and monetary policies, and is, therefore, interested in supervisory policies 1 See pages 37 and Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

16 ANNUAL REPORT OF BOARD OF GOVERNORS that are in conformity with credit policies. Such policies must look not only to the status of individual banks and the safeguarding of the interests of depositors, but also to the maintenance of sound credit conditions in the aggregate and a sound banking system, without which credit policies cannot be effectively put into operation. While the ultimate objective of all the agencies concerned is a sound banking condition and an unimpeded flow of funds to finance commerce, industry, and agriculture, the different points of approach to the problem by the different agencies inevitably lead to differences in emphasis in the interpretation of principles of policy. RELATION BETWEEN SUPERVISORY AND CREDIT POLICIES The agreement upon examination procedure which has been mentioned marks a cooperative forward step by the agencies concerned. The fundamental question as to what should be the relationship between the administration of national credit policies and of bank examination and supervision, however, still remains and is of so vital importance as to deserve careful consideration by Congress. Criticism has been directed in recent years at supervising authorities for the influence they have exercised towards the curtailment of credit at times when such curtailment has been contrary to prevailing national credit policies and has tended to retard economic recovery. There are wide differences of opinion on this subject and it deserves full and fair exploration and consideration. Some of the questions that may be considered in this connection are here presented: What effect does bank supervision have on changes in the outstanding volume of bank credit? W^hat influence do examinations have on the expansion or contraction of credit during the different phases of the business cycle? Should examination policy be so directed as to contribute to the protection of the general economy from the effects of undue expansion or contraction of credit? What distinction, if any, exists between the considerations upon which a sound national credit policy should be based and the measures that should be taken to insure the soundness of individual banks? Is harmony between examination policies and credit policies necessary to the discharge of the responsibilities of the agencies vested with authority to determine these policies? Consideration should be given to the question whether examiners' appraisals of loans and investments based on current conditions and market quotations may at times accelerate the downward spiral of a depression or delay recovery; also whether at other times examiners, Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

FEDERAL RESERVE SYSTEM 17 in passing on loans which may be currently collectible, fail to take into consideration the existence of a tendency towards unsound credit conditions and to exert a restraining influence on boom conditions. This may result from the fact that in a period of decline current quotations may merely reflect the temporary absence of a fair market, and may understate intrinsic values, while in a boom period market quotations may reflect speculative expectations rather than true values. May efforts of supervisory agencies to produce increased bank liquidity at times of low business activity and depressed markets have unanticipated and unintended adverse effects upon the local community, and may these local effects, when aggregated, exert'a general deflationary influence on business and credit conditions in the country as a whole? In considering relationships between examination policies and general credit policies, it would be desirable to determine whether bank supervisory authorities should exert their influence to encourage extension of sound credit by banks at times when they have funds available and when such extension of credit may be helpful to the national economy; and, on the other hand, whether at times of unduly rapid growth of bank credit the influence of these agencies should be exerted to discourage banks from freely making loans, even of the kinds that ordinarily could be made with apparent safety by a particular bank. This question involves consideration of the relationship between the extension of credit at certain times by particular banks and the broader and longer-range problem of nationwide credit expansion. Consideration might also be given to the possible effect on the general economy of rigid definitions of the character of loans and investments that may be made by banks. May such definitions cause unnecessary liquidation at certain times and result in the holding of idle funds at other times? Has the problem of definition of assets that banks may acquire been affected by changes that have been made in recent years in the laws, regulations, and conditions governing assets on which banks can borrow from the Federal Reserve banks? Can agencies charged with the responsibility of determining general policies that affect the extension of credit by banks discharge this responsibility unless examinations, which affect the policies and practices of individual banks, are in harmony with these general credit policies? The bank examiner in the field deals with local situations. He attempts to appraise assets in the light of such information as is available to him and values must be determined in many cases by local conditions. These conditions may relate to the position of the particular bank being examined or of the particular community. It is a problem of great complexity to find means by which this local procedure, when multiplied by the thousands of banks throughout the country, can be brought into conformity with national policies. Can the examination policies of the several Federal supervisory agen- Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

18 ANNUAL REPORT OF BOARD OF GOVERNORS cies be further coordinated to promote effective functioning of the entire banking system, making it a force toward increased national economic stability? Furthermore, can the responsibilities vested in the Federal agencies and the agencies of the 48 States charged with the examination and supervision of their respective State banks also be properly coordinated to the same end? It seems hardly possible to consider any of these questions singly. If they are considered as a whole and studied in the light of the past history of bank examination, of existing banking and credit conditions, and of the objectives to be sought, answers should be found which will go far toward producing a sounder and more flexible banking system. THE PROBLEM OF RESERVES Reserves and Credit Regulation.—The Federal Reserve System's power to influence the volume and cost of bank credit arises largely out of its authority over member bank reserves. Under our system member banks are obliged to keep an amount equal to a prescribed proportion of their deposit liabilities in the form of reserve balances with the Federal Reserve banks. Reserve requirements for nonmember banks are determined by State authorities and are generally lower in effect than those prescribed for member banks. In order to extend more credit without themselves borrowing, member banks must have reserves in excess of their legal requirements. By increasing or decreasing the amount of reserves available to the banks, therefore, the Federal Reserve System can encourage or discourage the expansion of bank credit and bank deposits, particularly at a time when banks have little or no unused reserves. For a complete exposition of the functions of reserves and of reserve requirements, reference is made to the Board's Annual Report for 1936. The usual situation in years gone by, when the pressure for credit expansion was considerable and the volume of reserves limited, was for the banks generally to have no reserves in excess of legal requirements. In other words the banks were at all times practically loaned up. An aggregate increase in their loans and investments, therefore, involved borrowing from the Federal Reserve banks in order to acquire additional reserves. When the banks are borrowing, they are less willing to make loans and they become subject to the discount rate and to other measures of regulation of their operations under provisions of the Federal Reserve Act. When the System wished to encourage the expansion of bank credit, it could take the initiative in increasing bank reserves by buying Government securities in the open market, which would place at the disposal of banks funds with which to pay off debt at the Reserve banks or to expand their own credit. On the other hand, when the System wished to restrain expansion, it could sell Government securities, thereby taking money out of the market and reducing reserves to the point where banks Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

FEDERAL RESERVE SYSTEM 19 would have to borrow in order to expand. By further sales the System could reduce member bank reserves even below the amount needed to maintain the existing aggregate volume of loans and investments, and put the banks in a position of having the alternative of borrowing from the Reserve banks or contracting their loans and investments. This was the main line of action in encouragement and restraint as long as the banks did not have a volume of reserves far in excess of their current needs. In recent years banks have had continuously a large amount of excess reserves. This is true at present, notwithstanding the fact that, in accordance with authority under the Banking Act of 1935, reserve requirements have been increased by approximately 75 percent above the percentages stated in the statute. The entire technique of influencing changes in the volume of bank credit needs to be reconsidered in the light of changed banking and money market conditions. It is probable that the increased importance of holdings of Government securities and the shrinkage of the Streetloan account, through which individual banks were in the habit of making adjustments in their position in response to changing commercial demands, as well as other changes in the situation, have made the banking system more responsive than formerly to measures of restraint. One influence in this direction would come from the fact that sales of Government securities by the Reserve System, in addition to their effects on bank reserves, would have a direct effect on the capital market of which these securities now constitute an important part. The large holdings by the banks of such securities make the banks more sensitive to changes in bond prices. For these reasons it may not prove necessary in the future, as it has been in the past, for banks to be without excess reserves and actually to be borrowing from the Reserve banks in order to make them responsive to restraining influences. Only experience can determine to what extent these changes in conditions have altered the effectiveness of existing methods of regulation. There is no doubt, however, that such a volume of excess reserves as is held by the banks today and as is likely to be at their disposal in the near future presents an important problem to the country's credit and monetary authorities. Sources of Reserves.—Since the end of 1933 reserve balances of member banks have increased three-fold and at the end of 1938 totaled $8,700,000,000, of which $3,200,000,000 were excess reserves. As shown in the table, this growth in reserves has been due principally to the extraordinary inflow of gold from abroad. The country's monetary gold stock in dollars has increased during the five years by $10,500,000,000, of which $2,800,000,000 represents the effect of revaluation and $7/700,- 000,000 additions of new gold from abroad and from domestic mines. A portion of this additional gold is still held by the Treasury in the Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

20 ANNUAL REPORT OF BOARD OF GOVERNORS Stabilization Fund and otherwise and some of it was used to retire national bank notes in a manner that did not add to member bank reserves. FACTORS OF CHANGE IN MEMBER BANK RESERVES December 30, 1933, to December 31, 1938 (Approximate figures, in millions of dollars) Additions due to: Gold operations 7,422 Issue of silver certificates '. 1,221 Total additions 8,643 Deductions due to increase in money in circulation, growth in Treasury and nonmember deposits at Federal Reserve banks, etc 2,648 Total increase in member bank reserves 5,995 Increase in required reserves due to: Increase in percentage requirements 2,342 Increase in member bank deposits 1,307 Increase in excess reserves 2,346 Changes in reserve position from December 30, 1933, to December 31. 1938: Total reserves Increased from 2,729 to 8,724 Required reserves Increased from 1,870 to 5,519 Excess reserves Increased from 859 to 3,205 Of the inflow of gold from abroad, about two-thirds has resulted from the movement of foreign capital to the United States. Large and erratic movements of floating capital from country to country at a time of political uncertainty and financial disorganization have been one of the most disturbing factors in the financial fabric of post-war years. Such movements are not like capital movements for long-term investment or seasonal movements in connection with foreign trade, nor like movements in response to differences in interest rates, which have long been a part of the international financial mechanism. Large and sudden capital withdrawals tend to cause contraction of credit and to retard business activity in the country from which the capital is withdrawn. At the other end, accumulation of foreign funds in the money market which appears for the time to offer the best security or the greatest opportunity for profit is disturbing to the monetary and credit systems of the country where this market is located. These movements accentuate speculative changes in the security market and create either a condition of artificial monetary ease or the need of absorbing excess reserves at public or private expense. International capital movements account for the greater part of the reserve problem with which this country has to contend. In addition to the gold inflow another source of reserves amounting to $1,200,000,000 has been the issuance by the Treasury of silver coin and certificates in connection with domestic and foreign silver purchases. Additions to member bank reserves from the above sources have been absorbed to the extent of $2,600,000,000 by increases in the demand for currency and through growth of Treasury and nonmember bank deposits at the Federal Reserve banks. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

FEDERAL RESERVE SYSTEM 21 As a net result of all these developments and transactions, $6,000,- 000,000 was added to member bank reserves in the five years 1934-1938. Of this amount $3,650,000,000 was absorbed by increases in required reserves, due both to the increase in the prescribed ratios of reserves to deposits and to the growth in the banks' deposit liabilities. Excess reserves of member banks increased by $2,350,000,000 and at the end of 1938 were $3,200,000,000. In the early weeks of 1939, with a return flow of currency from circulation and a decline in Treasury balances, excess reserves increased to $3,600,000,000. A continuation of gold inflow and of silver purchases would further add to excess reserves. The volume of excess reserves now in existence, furthermore, can be greatly increased by actions of the United States Treasury. By disbursements of funds equivalent to the gold held in the Stabilization Fund and elsewhere, by reduction of its unusually large balances with the Federal Reserve banks, and by the use of its authority to issue silver certificates against silver bullion now in its possession, the Treasury could more than double existing excess reserves of member banks. In addition, the Treasury has authority to issue up to $3,000,000,000 of United States notes which would also be added to member bank reserves. The Treasury also has power to absorb member bank reserves; it can do so by increasing its cash holdings and Federal Reserve balances. With these powers and the general gold and silver policies in the hands of the Treasury, its power to influence the volume of member bank reserves under existing conditions outweighs that of the Federal Reserve System. Long-view Problem Raised by Excess Reserves.—In considering the problem of reserves at this time the Board wishes to emphasize that the long-view problem created by the existing large volume of bank deposits and bank reserves is distinct from the immediate problem of making ample bank credit available for the expansion of business from current levels. In recent years it has been the policy of the Government and of the Federal Reserve System to encourage the expansion of credit. This has constituted the so-called policy of monetary ease, which has been directed at keeping banks supplied with an abundant volume of reserves, so as to encourage them to expand their loans and investments. This policy has been one of the factors in the creation of the existing large volume of deposits in the hands of business enterprises and of individual and corporate investors, and has resulted in reducing interest rates to the lowest level in history. It has been reflected in a decline in the carrying charges on mortgage debt for farmers and urban householders, has enabled many corporations to refund their debt at lower rates, and has lightened the cost of current financing to commerce, industry, and agriculture. Nor is there any immediate reason for considering a reversal of this Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

22 ANNUAL REPORT OF BOARD OF GOVERNORS policy. There is nothing in the present monetary or banking situation that would point to a proximate danger of injurious credit expansion. It is in such a period as this, however, when there is no call for quick action to meet emergency situations, that problems that may arise in the future should be analyzed and the efficiency of existing machinery appraised. It is from this point of view that the System's existing powers to absorb excess reserves should be considered. Member banks at present have excess reserves of $3,600,000,000, and this total may be doubled in the future. To absorb these reserves the System has the power to raise reserve requirements by $800,000,000 and to make sales out of its portfolio of United States Government obligations, which amounts to $2,560,- 000,000. The use of these available means of absorbing reserves, to the extent that it may be in the public interest to do so, would still leave the banks with a volume of excess reserves upon which it would be possible for an injurious credit expansion to develop. The ability of the banks greatly to expand the volume of their credit without resort to the Federal Reserve banks would make it possible for a speculative situation to get under way that would be beyond the power of the System to check or control. The Reserve System would, therefore, be unable to discharge the responsibility placed upon it by Congress or to perform the service that the country rightly expects from it. In view of this situation the Board has deemed it its duty to point out to Congress the present and prospective reserve position of our banking system and the limitations on the powers of the System to regulate it. COURSE OF BUSINESS IN 1938 Business activity, which had declined sharply in the latter part of 1937, recovered considerably in 1938. Early in the year, while output in some lines was still declining, residential building started to increase, and about the middle of the year industrial activity generally began a rapid advance that continued until the end of the year. The decline in national income had not been so sharp as that in industrial production, and during most of 1938 consumption was at a more rapid rate than production. As a consequence, inventories of industrial products which had accumulated in 1937 wTere substantially reduced. In the spring of 1938 the Administration announced a program of action for the purpose of encouraging economic recovery. As a part of this program the Treasury discontinued the inactive gold account, and the Board reduced by one-eighth the percentage of reserve requirements for member banks. As a result of these actions, together with a large inflow of gold from abroad, member banks near the end of the year had a larger amount of funds available for investment than at any previous time. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

FEDERAL RESERVE SYSTEM 23 Loans by banks to trade and industry declined during the year, while their investments increased by a corresponding amount, so that the total volume of outstanding bank credit showed little change. The gold inflow, however, had resulted in a sharp increase in bank deposits. At the end of the year deposits belonging to the public and available for use in business or for investment were at new high levels. The banks, therefore, are in a position to contribute to recovery by easily meeting such legitimate demands for funds as may develop. The rate of turnover of existing deposits, however, continues to be unusually low. Development of Business Recovery.—Output at factories and mines, as measured by the Board's seasonally adjusted index shown on the chart, was 79 in the first quarter and 77 in the second quarter of 1938, as compared with a level of 116 in the first eight months of 1937. Activity on the railroads was also reduced and in other public utilities, particularly the electric power industry, output was below the levels of early 1937. Construction activity was in reduced volume though residential building, INDUSTRIAL PRODUCTION ADJUSTED FOR SEASONAL VARIATION, 1923-25 AVERAGE =100 140 140 120 100 1920 1922 1924 1926 1928 1930 1932 1934 1936 Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

24 ANNUAL REPORT OF BOARD OF GOVERNORS in contrast to other lines, began to increase early in the year. Owing primarily to the continued depressed condition of industry, security prices and prices of industrial materials, which had shown a sharp decrease in the latter half of 1937, declined somewhat further in the early part of 1938. Prices of farm products and foods also showed a further decline. Income receipts of individuals in the first half of 1938 were at a lower level than in the first three quarters of 1937 but the reduction was much less than in industrial activity and industrial payrolls. Decreases in payrolls in trade and in the service industries and declines in farm income were considerably smaller, and there were sharp increases in governmental relief and benefit payments. Reflecting the smaller decline in income, consumer purchases, although reduced, continued at a level substantially higher than production of consumers' goods, and consequently there was a continuous reduction in inventories of finished consumers' goods, which had been large. There were reductions also in inventories of many semifinished materials previously accumulated. Supplies of raw materials, however, remained large. Early in the spring, although incomes were still declining, residential building rose more than seasonally, stimulated by reductions in costs, particularly financing costs. At the end of the year residential building contracts, on a seasonally adjusted basis, were at the highest level since 1929. Contracts for non-residential construction also increased to the end-of-1929 level, reflecting principally an increase in public projects. By the middle of 1938 a few other major industries had begun to show increases in activity, and evidence was accumulating that inventories had been materially reduced. In June prices of stocks and lowergrade bonds began a rapid advance and prices of speculative industrial materials also rose considerably. Subsequently there was a general and rapid increase in industrial activity. In December the Board's index of industrial production reached 104, the volume of freight-car loadings was substantially higher than in the summer, and electric power production was at about the highest level previously reached. Increases in output were at first most pronounced in industries producing nondurable goods, particularly textiles. Steel production, which had been at less than a third of capacity in the first half of the year, also increased sharply during July and August, and there were moderate increases in many other lines. After August output of nondurable manufactures showed little further increase. Steel production advanced further, reaching a rate of somewhat over 60 percent of capacity in November, and there were marked increases in output of automobiles and related products, which earlier had been in small volume. In other lines recovery was not so rapid as in the textile, automobile, and steel industries. Activity in the machinery industry had increased only slightly by the end of the year. In the railroad equipment industry operations remained at an unusually low level. Mineral production increased Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

FEDERAL RESERVE SYSTEM 25 only gradually, owing partly to the fact that stocks of both metals and fuels continued large in relation to current consumption. Accompanying the general rise in activity, there were marked increases in employment, payrolls, and national income. Unemployment, however, continued in large volume and relief expenditures remained at the high levels reached in midsummer. Payrolls increased more than employment, owing to an increase in the average number of hours worked. Reflecting largely the increase in payrolls, income receipts began to increase in the summer and by the end of the year had advanced to within five percent of the level in the middle of 1937. The volume of retail trade also rose and toward the end of the year was only moderately below the level prevailing during most of 1937. Prices of a number of industrial materials advanced after the middle of June, while finished industrial products continued to decline in price and farm products and foods showed little change. The general level of wholesale prices declined slightly and at the end of the year was at 77 percent of the 1926 average as compared with about 80 during most of 1935 and 1936, prices of industrial commodities being slightly higher than in that period and farm products and foods considerably lower. In agriculture, harvests of principal crops in 1938 were abundant and, with large supplies on hand and reduced demand expected from both domestic and foreign sources, prices of crops were at the lowest levels in recent years. Output of livestock and products was larger than in 1937 and, with lower consumer incomes, prices were considerably below the high level reached in the previous year. Farm income from marketings was about 13 percent smaller than in 1937, but Government payments were larger and total cash farm income in the calendar year 1938 was estimated at $7,600,000,000. This was 11 percent less than in 1937, when farm income was the highest since 1929. At the close of 1938 the volume of industrial production and of the movement of goods from producers appeared to be close to the level of current consumption in most lines. Expenditures by industry on plant and equipment continued at a low level, however, and further sustained business recovery seemed to depend largely on a substantial increase in these outlays with accompanying further growth in consumption. GOLD AND CAPITAL MOVEMENTS The year 1938 was marked by a reversal of the gold outflow that developed in the final quarter of 1937. At that time, with the onset of business depression and declining prices in this country, the possibility that the United States might once more resort to devaluation of the dollar began to be discussed abroad and there were large-scale withdrawals of foreign short-term balances. In three months foreigners withdrew $500,000,000 net from their accounts in American banks, an amount roughly equivalent to the volume of funds accumulated during the pre- Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

26 ANNUAL REPORT OF BOARD OF GOVERNORS ceding spring when a reduction in the price of gold was widely anticipated. The altered economic situation in the United States led also to the development of an excess of merchandise exports amounting to about $100,000,000 a month in the final quarter of 1937. Increased agricultural output in the United States resulted in larger exports and smaller imports of certain agricultural commodities, and the business recession was reflected in sharply reduced imports of industrial raw materials. Although payment for the excess of merchandise exports absorbed more than half the dollar balances that were being offered in the exchange market, the total volume of balances withdrawn was such that the United States lost a substantial amount of gold. The outward gold movement did not continue long in 1938. Repatriation of foreign funds diminished while the excess of merchandise exports was maintained close to the level of $100,000,000 a month reached in 1937. For about two months these opposing factors were about in balance in the exchange market, and little gold moved. With the German entry into Austria in March, however, the outflow of funds from the United States was sharply curtailed and ceased to offset the continuing surplus of merchandise exports, with the result that there was an inflow of gold at the rate of about $40,000,000 a month from March through July. In the second half of the year there was pronounced recovery in American business conditions. The British position, meanwhile, had been somewhat weakened by industrial recession at home and by less favorable conditions in the foreign trade of the United Kingdom and of those British Empire and other countries that customarily hold the bulk of their international reserves in London. The shift in the position of these areas was in part a consequence of the extensive decline that had occurred in American purchases of industrial raw materials and grains. Toward the end of July the withdrawal of European short-term money from the United States largely ceased, and early in August foreigners began to send their funds back to this country. The inflow of capital was small at first, but as the Czech crisis developed in August the movement of funds was intensified, and during the critical September weeks it reached unprecedented proportions. The inflow continued on a substantial scale through October and thereafter intermittently to the end of the year. During these developments the international flow of funds served to reinforce the influence of the surplus of merchandise exports, with the result that the United States gained about $1,450,000,000 of foreign gold in a period of five months. Most of the capital inflow that began in August represented a transfer of funds from the United Kingdom. Part of these funds were owned by British nationals but to a large extent they represented foreign shortterm money that had previously been accumulated in London. It is probable that British gold losses were by far the largest experienced Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

FEDERAL RESERVE SYSTEM 27 since suspension of the gold standard in 1931. Between the end of March and the end of September, the only dates in 1938 for which figures are available, the gold holdings of the British Stabilization Fund declined $730,000,000, and in the last quarter there were undoubtedly substantial further declines. Sterling exchange rates declined from over $5.00 at the beginning of 1938 to below $4.70 in the last few weeks of the year. Early in January 1939 the Bank of England transferred to the Fund gold valued at about $1,650,000,000, thus raising the resources available for the support of sterling. Other countries appear to have lost little gold in the latter part of 1938. For a while in August there was a substantial movement of capital from France to England. This movement was associated with internal French difficulties and was largely brought to a halt with reiteration by the French Government on August 21 that the franc would not be permitted to fall below 179 francs to the pound, the limit of depreciation established by the Government in May, and that there would be no exchange control. There was little subsequent movement of capital out of France, and beginning in November, when the Government adopted additional measures to deal with the country's economic and financial difficulties, there was a substantial repatriation of capital. BANKING AND CREDIT CONDITIONS IN 1938 In 1938 the volume of bank deposits, following a slight decline in 1937, resumed the growth which has been the general trend since 1933. At the end of the year the combined total of deposits at all banks, excluding interbank deposits, and of currency in circulation outside banks was about $58,500,000,000/ a larger amount than at any previous time. Bank deposits and bank reserves were each increased during the year by about $1,700,000,000, principally as the result of gold imports. Partly because of the increase in bank reserves resulting from gold acquisitions and partly because of the reduction by the Board of Governors of $750,000,000 in reserve requirements, excess reserves of member banks increased in 1938 by about $2,000,000,000. Early in December excess reserves of member banks at $3,500,000,000 were larger than at any previous time. After the middle of December they were reduced substantially by a temporary increase in Treasury deposits at the Reserve banks and by withdrawals of currency by the public to meet requirements for the holiday season. At the close of the year excess reserves were about $3,200,000,000. In January 1939 they increased again to a new high level. 1 The composition of this figure differs from that of the figure of $59,044,000,000 for gross deposits of all banks in the United States on June 30, 1938, given in the table on page 7 of this report. The figure here given is partly an estimate and represents the current means of payment in the hands of the public plus their savings deposited in banks and in the Postal Savings system and the deposits of the United States Government; it includes, therefore, in addition to bank deposits, Postal Savings deposits and money in circulation outside banks but, to avoid double counting, excludes interbank deposits and checks in process of collection shown on the books of banks. The figures given on page 7 are designed to show the relative importance of the different groups of banks in the banking structure and include all types of deposits in banks without adjustment. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

28 ANNUAL REPORT OF BOARD OF GOVERNORS Little Change in Bank Loans and Investments.—Additions to deposits and reserves of member banks in 1938 resulted largely from gold acquisitions and were not accompanied by increases in bank loans and investments. This was largely due to a limited demand for loans and a small supply of new investments of the types most commonly purchased by banks. With the decline in business activity and reduction in inventories during the first half of 1938 loans to commerce and industry were reduced, and the demand for new loans of this type was smaller than in 1936 and 1937, when bank loans had increased substantially. The improvement in business in the latter part of 1938 was not accompanied by increases in inventories and did not occasion additional short-term borrowing by commerce and industry. The decline in the stock market, which began in 1937 and continued through the early months of 1938, resulted in a reduction in brokers7 advances to their customers and consequently in bank loans to brokers. The subsequent advance in stock prices was accompanied by some increase in the use of credit, but brokers' loans continued at a lower level than in 1937. Banks outside the larger cities showed a steady, although small, increase in their real estate loans in the course of the year. In the first half of 1938 when bank holdings of investments declined, new security issues both public and private were in small volume. In that period, the outstanding amount of publicly-offered direct obligations of the United States Government was reduced, as the Treasury used previously accumulated balances to meet the excess of current expenditures over receipts and also to retire open-market debt. The reduction was in Treasury notes and bills, which are largely held by banks, while offerings of bonds, which are purchased to a greater extent by investors other than banks, increased. Bank holdings of direct Government obligations, therefore, declined somewhat in the first half of 1938. Later in the year, when there were increased offerings of Treasury securities, banks again increased their holdings of these obligations. Near the middle of the year they also increased their holdings of obligations guaranteed by the United States when offerings of short-term issues were made by Government agencies. Bank holdings of obligations of States and local governments increased during the year. Holdings of corporate securities showed little change; member banks in general reduced holdings of railroad and other public utility securities in the first half of the year, while in the third quarter, the latest period for which detailed bank figures are available, there was some increase in corporate investments of banks, accompanying an increase in the volume of new corporate issues. Increase in Idle Funds.—With the small change in total loans and investments of banks and the large growth in reserves, the supply of idle funds of banks increased considerably in 1938. For the banking system as a whole these idle funds are represented by excess reserves Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

FEDERAL RESERVE SYSTEM 29 with the Federal Reserve banks, while for individual banks they may be represented by the total of excess reserves and excess balances with other banks. Deposits of other domestic banks at member banks increased during the year to a new high level of over $6,500,000,000. Most of the growth in deposits, other than interbank, during 1938 was at New York City banks, with some growth at banks in other cities, and but little increase at country banks. In addition outside banks placed a part of their funds on deposit with New York City banks, with the result that the largest part of the increase in excess reserves during the year was in New York City. The growth of deposits in 1938 was not accompanied by an increase in their use by depositors. The estimated rate of turnover of deposits for all banks, other than mutual savings banks, as measured by the ratio of checks drawn to outstanding deposits, was at the exceptionally low level of about 13 times per annum in 1938. This rate had been about 15 in other recent years and averaged 20 in the period 1922-1926 and 27 in 1929. Reflecting the abundant supply of funds, there was a further small decline during 1938 in both short- and long-term money rates on the open market and in rates charged bank customers. At the end of the year Treasury notes of 3-5 year maturity were yielding less than one percent, long-term United States Government bonds about 2V> percent, and the highest grade corporate bonds about 3 percent. EARNINGS AND EXPENSES OF THE FEDERAL RESERVE BANKS Current earnings of the Federal Reserve banks in 1938 amounted to $36,300,000, or $5,000,000 less than in 1937. This decrease in earnings reflected principally a decrease of $4,600,000 in earnings on United EARNINGS AND EXPENSES OF FEDERAL RESERVE BANKS DURING 1938 AND 1937 I In thousands of dollars] 1938 1937 Current earnings 36,261 41,233 Current expenses: Net operating expenses 25,557 25,295 Assessments for Board's expenses 1,725 1,748 Cost of Federal Reserve currency 1,629 1,758 Total 28,911 28,801 Current net earnings 7,350 12,432 Additions to current net earnings 9,827 3,359 7,595 4,990 Deductions from current net earnings 2,232 •il,631 Net additions 9,582 10,801 Net earnings 120 177 Payment to United States Treasury (sec. 13b) 8,019 7,941 Dividends paid -419 67 Transferred to surplus (sec. 13b) 1,862 2,616 Transferred to surplus (sec. 7) 1 Net deductions. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

30 ANNUAL REPORT OF BOARD OF GOVERNORS States Government securities, which amounted to $34,400,000 in 1938. Net earnings of the Federal Reserve banks, available for dividends and transfers to surplus, were $9,600,000 in 1938, a decrease of $1,200,000 from 1937. Combined earnings, expenses, net earnings, and distribution of net earnings of the Federal Reserve banks for 1938 as compared with 1937 are shown in the table on page 29. Net operating expenses in 1938, amounting to $25,557,000, were $262,000 more than in 1937. Total current expenses, including assessments for expenses of the Board of Governors and the cost of Federal Reserve currency, were $110,000 more than in the previous year. The principal items of expenses are shown in the following table: CURRENT EXPENSES OF FEDERAL RESERVE BANKS DURING 1938 AND 1937 [In thousands of dollars] 1938 1937 Operating expenses: Salaries and Retirement System contributions. 19,837 19,412 Postage and expressage 3,226 3,288 Taxes on bank premises 1,433 1,392 Depreciation on bank buildings 1,172 1,298 Printing, stationery, and supplies 752 770 Telephone and telegraph 472 536 Allother 2,753 2,547 Total 29,645 29,243 Less reimbursements for certain fiscal agency and other expenses... 4,088 3,948 Net operating expenses 25,557 25,295 Assessment for expenses of Board of Governors. 1,725 1,748 Cost of Federal Reserve currency 1,629 1,758 Total current expenses., 28,911 28,801 As shown in the table on the preceding page, current net earnings amounted to $7,350,000 in 1938, or $5,082,000 less than in 1937. This decrease resulted primarily from a decrease of $4,972,000 in total current earnings. Additions to current net earnings in 1938 were $9,827,000, including $8,276,000 profits on sales of United States Government securities. Deductions from current net earnings in 1938 were $7,595,000. This included $5,046,000 for contributions by the Federal Reserve banks to the Retirement System for the purpose of completing payments on account of service of employees rendered prior to the establishment of the Retirement System, which heretofore had been scheduled to be completed by the end of 1939, and $848,000 for losses and reserves for estimated losses on industrial advances. Net earnings amounted to $9,582,000 in 1938, as compared with $10,801,000 in 1937. All Federal Reserve banks paid dividends to member banks at the rate of 6 percent per annum on paid-in capital stock as provided in the Federal Reserve Act. Dividend payments totaled $8,019,000 in 1938, compared with $7,941,000 in 1937. Payments to the United States Treasury under provisions of section 13b of the Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

FEDERAL RESERVE SYSTEM 31 Federal Reserve Act relating to industrial advances amounted to $120,000 in 1938 and $177,000 in 1937. The remainder of the net earnings of the Federal Reserve banks, transferred to surplus accounts, amounted to $1,443,000 in 1938 and $2,683,000 in 1937. Gross and net earnings during the year 1938 and the distribution of net earnings of each Federal Reserve bank are shown in the following table: FINANCIAL RESULTS OF OPERATIONS OF THE FEDERAL RESERVE BANKS DURING 1938 R F b e e d a se n e r r k v a e l ea G rn ro in s g s s ear N n e in t gs ( P T s to e a r c e y . U a m s . 1 u e 3 S r n b y . t ) Div p i a d i e d nds T t ( r o s a e n s c u s . f r 1 e p r 3 l r u b e s ) d T t r o ( a s n s e s u c f r . e p r 7 l r u ) e s d Boston $2,690,183 $749,527 $1,544 $564,369 $183,614 New York 10,706,348 3,290,671 3,056,972 -$286,745 520,444 Philadelphia 3,151,090 1,052,956 83,968 734,562 4,735 229,691 Cleveland 3,490,621 1,049,626 227 799,145 250,254 Richmond 1,915,952 200,875 297,732 -115,893- 19,036 Atlanta ... 1,502,189 253,701 267,368 -17,409 3,742 Chicago 3,954,026 1,090,958 20,714 791,007 206 279,031 St Louis 1,564,278 254,607 1,796 234,488 18,323 Minneapolis 1,100,472 373,298 1,005 174,231 198,0Q2 Kansas City 1,840,455 260,690 10,270 249,901 519 Dallas 1,330,456 232,260 236,294 -4,034 San Francisco 3,015,358 772,785 613,068 159,717 Total 36,261,428 9,581,954 119,524 8,019,137 -419,140 1,862,433 Total earnings on bills and securities were $4,900,000 less in 1938 than in 1937. The reduction in earnings was a net result of an increase of $48,000,000 in daily average holdings of bills and securities and a decrease from 1.59 percent to 1.37 percent in the average rate of earnings. Average daily holdings of bills and securities, together with average rates and amounts of earnings thereon during the last four years, are shown in the following table: EARNINGS ON BILLS AND SECURITIES [Amounts in thousands of dollars] Total disc B o i u ll n s ted op b e o n u B g m il h l a t s r i k n et U G s n o e i v t c e u e d r r n it S m ie ta e s t n e l t s I a n d d v u a s n t c ri e a s l Daily average holdings: 1935 2,469,542 7,306 4,922 2,430,864 26,450 1936 2,469,688 6,135 3,725 2,430,657 29,171 1937 2,542,545 13,749 3,390 2,503,865 21,541 1938 2,590,597 8,739 543 2,564,877 16,438 Earnings: 1935 41,473 156 36 39,797 1,484 1936 36,909 108 30 35,184 1,587 1937 40,352 212 24 39,025 1,091 1938 35,404 124 3 34,446 831 Average rate of earnings (percent): 1935 1.68 2.14 .73 1.64 5.61 1936 1.49 1.76 .81 1.45 5.44 1937 1.59 1.54 .71 1.56 5.06 1938 1.37 1.42 .48 1.34 5.05 1 Figures for 1935 and 1936 include $43,000 and $122,000, respectively, of securities guaranteed as to both principal and interest by the United States. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

32 ANNUAL REPORT OF BOARD OF GOVERNORS BRANCHES AND AGENCIES OF THE FEDERAL RESERVE BANKS In accordance with action taken by the Boards of Directors of the Federal Reserve Banks of Atlanta and San Francisco, with the approval of the Board of Governors, the agency of the Federal Reserve Bank of Atlanta located at Havana, Cuba, and the branch of the Federal Reserve" Bank of San Francisco located in Spokane, Washington, were discontinued effective October 1, 1938, As of the same date, ten counties in northern Idaho and four counties in southwestern Washington were transferred from the Seattle Branch to the Portland Branch of the Federal Reserve Bank of San Francisco. Effective November 1, 1938, Calhoun and Refugio Counties, Texas, were transferred from the San Antonio Branch to the Houston Branch of the Federal Reserve Bank of Dallas. INDUSTRIAL ADVANCES By the Act of June 19, 1934, Congress authorized Federal Reserve banks under certain circumstances to extend credit for the purpose of furnishing working capital to established businesses. For the period from June 19, 1934, to December 28, 1938, the Federal Reserve banks received 9,336 applications amounting to $398,898,000. Of these applications 2,653 were approved, amounting to $175,011,000. A somewhat greater number of applications was received in 1938 than in 1937 and there was also an increase in applications approved. Owing to repayments of previous advances, however, the amount of loans outstanding declined slightly during the year. Figures for applications and amounts outstanding by years are as follows: [Amounts in thousands of dollar^ Advances and commitments Applicatiois received Applications approved outstanding at Year end of year Number Amount Number Amount Amount 1934 5,108 190,798 1,020 52,257 24,348 1935 2,507 115,910 973 72,236 60,142 1936 764 35,991 287 15,336 45 293 1937 . 298 20,593 126 11,158 30,977 1938 659 35,606 247 24,024 29,916 Total 9,336 398,898 2,653 175,011 On Wednesday, December 28, 1938, the Federal Reserve banks held $15,688,000 of industrial loans and had outstanding commitments to purchase such loans made by banks amounting to $14,162,000. The largest amount of advances and commitments outstanding under this authority at any one time was about $61,000,000 in December 1935. The credits that have been extended by the Federal Reserve banks under this authority, either directly to business or in cooperation with banks and other financing institutions, vary in size from $250 up to amounts Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

FEDERAL RESERVE SYSTEM 33 of several millions of dollars. Loans have been approved for a wide variety of enterprises. CREDITS TO FOREIGN CENTRAL BANKS The share of the Federal Reserve banks in the credit to the National Bank of Hungary granted in 1931 amounted to $2,055,000 at the end of 1938 as compared with $2,282,000 a year earlier. The terms of the renewal agreement of 1937, mentioned in the Board's annual report for that year (p. 35), were carried out in full by the National Bank of Hungary. A loan of $80,000 secured by gold was granted to a foreign central bank in January 1938 under an authorization by the Board of Governors in the same month. The loan was repaid in full in February, in advance of the date of maturity. There were no further loans of this type during the year and none outstanding at the close of the year. BUILDING OPERATIONS OF THE FEDERAL RESERVE BANKS The new banking quarters of the Helena Branch of the Federal Reserve Bank of Minneapolis were completed and occupied in June 1938. In August 1938 the Federal Reserve Bank of Dallas purchased a lot and building adjoining the Houston Branch building. All Federal Reserve banks and their branches, except the Cincinnati, Charlotte, Portland, and Seattle branches, are housed in buildings owned by the banks. FEDERAL RESERVE INTERDTSTRICT COLLECTION SYSTEM The number of banks on the Federal Reserve par list at the end of 1938 was 11,973, comprising all of the 6,338 member banks and 5,635 INTERDTSTRICT COLLECTION SYSTEM Nonmember banks, other than mutual Member banks savings banks 1 Federal Reserve district On par list Not on par list Dec. 31, Dec, 31, 1938 1937 Dec. 31, Dec. 31, Dec. 31, Dec. 31, 1938 1937 3938 1937 United States. 6,338 i,341 5,635 5,800 2,760 r 2,776 Boston 356 357 169 169 New York.. 772 776 288 r 290 Philadelphia 655 655 ' 258 263 Cleveland 624 622 617 624 Richmond 406 405 314 r 321 335 343 Atlanta 320 324 90 94 690 683 Chicago 787 769 1,515 1,568 218 220 St. Louis 391 392 727 762 437 436 Minneapolis 461 469 156 171 710 722 Kansas City 734 733 964 985 178 177 Dallas 544 547 283 288 161 161 San Francisco 288 292 254 265 29 32 r Revised. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

34 ANNUAL REPORT OF BOARD OF GOVERNORS nonmember banks. The number of nonmember banks (other than mutual savings banks) not on the par list was 2,760. Banks on the par list pay, without deduction of exchange charges, such checks drawn upon them as are presented or forwarded for payment by the Federal Reserve banks. During the year the number of nonmember banks on the par list decreased by 165, principally because of a reduction in the number of such banks in operation, and the number of banks not on the par list decreased 16. Of the banks which were not on the par list at the beginning of the year, 71 went out of existence during 1938 and 10 were added to the par list. During the year, 28 nonmember banks withdrew from the par list, 25 newly organized banks opened as non-par banks, and 12 member banks became nonmember non-par banks. This gross addition of 65 to the number of non-par banks during 1938 took place principally in three Federal Reserve districts, namely, Atlanta 23, St. Louis 14, and Minneapolis 11. The net increase in the number of non-par banks in the Atlanta district was 7 and in the St. Louis district 1, while in the Minneapolis district there was a net reduction of 12 in the number of such banks. As will be seen from the table, all of the banks in the Boston, New York and Philadelphia districts and all but two banks in the Cleveland district, were on the Federal Reserve par list at the end of 1938. At the end of the year the distribution of the number of non-par banks by States was as follows: Minnesota 410, Georgia 254, Mississippi 175, Tennessee 169, Nebraska 163, North Carolina 163, Wisconsin 161, Alabama 130, Arkansas 129, North Dakota 125, South Carolina 121, Iowa 108, Texas 105, Missouri 105, Louisiana 104, South Dakota 92, Florida 84, Virginia 45, and twelve other States 117. AGREEMENTS OF NONMEMBER BANKS UNDER SECURITIES EXCHANGE ACT OF 1934 Under Section 8 (a) of the Securities Exchange Act of 1934 and the Board's Regulation T, brokers and dealers subject to the Act may not borrow in the ordinary course of business from a nonmember bank on registered securities (other than exempted securities) unless such nonmember bank has signed an agreement with and in the form prescribed by the Board of Governors of the Federal Reserve System. At the end of the year there were 152 nonmember banks with such agreements in force. AMENDMENTS TO THE FEDERAL RESERVE ACT Renewal of Loans to Executive Officers of Member Banks.—By Act of Congress approved April 25, 1938, section 22 (g) of the Federal Reserve Act was amended so as to permit loans made to an executive officer of a member bank prior to June 16, 1933, to be renewed or extended, subject to the other provisions of the law, for periods expiring not later than June 16, 1939 (instead of June 16, 1938, as the law had previously provided). Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

FEDERAL RESERVE SYSTEM 35 Waiver of Double Liability of Stockholders of Closed Insured Banks. —By an Act of Congress approved May 25, 1938, section 12B of the Federal Reserve Act was amended to provide for the waiver by the Federal Deposit Insurance Corporation, in connection with the liquidation of closed insured banks, of any claim it might otherwise have by reason of the so-called double liability of stockholders of such banks in States in which double liability has not already been abolished by statute. Loans by Federal Deposit Insurance Corporation to Insured Banks.— By an Act of Congress approved June 16, 1938, section 12B of the Federal Reserve Act was amended to make permanent the authority of the Federal Deposit Insurance Corporation to make loans to or purchase assets from insured banks in order to facilitate mergers or consolidations of insured banks and reduce or avert threatened losses to the Corporation. CHANGES IN REGULATIONS OF THE BOARD OF GOVERNORS The regulations of the Board of Governors were amended and revised during the year 1938 in the following respects: Reduction in Reserve Requirements of Member Banks.—On April 15, 1938, the Board of Governors issued a new supplement to its Regulation D reducing reserve requirements on all classes of deposits for all member banks, effective at the opening of business on April 16, 1938. Under the new supplement, every member bank is required to maintain on deposit with the Federal Reserve bank of its district a balance equal to 5 percent of its time deposits plus: 12 percent of its net demand deposits if not in a reserve or central reserve city, 17% percent of its net demand deposits if in a reserve city, and 22% percent of its net demand deposits if in a central reserve city, except that banks in outlying districts of reserve or central reserve cities may be permitted by the Board of Governors to maintain lesser reserves against their demand deposits. Interlocking Bank Directorates under the Clayton Act.—In September, 1938, the Board of Governors adopted an amendment to its Regulation L, effective February 1, 1939, eliminating the words "Morris Plan bank'7 from subsection (a) of section 3 of the regulation. The effect of this action was to revoke the permission which the Board had previously granted in the regulation to any private banker or any director, officer, or employee of a member bank to serve as a director, officer or employee of not more than one Morris Plan bank or similar institution, in cases where such service would otherwise have been prohibited. However, by action effective November 7, 1938, the regulation was amended to permit a relationship of this kind which was lawfully existing on .January 31, 1939, to continue until August 1, 1939. At the same time, the Board also adopted an amendment to its regulation affecting a number of other interlocking directorate relationships which would have become unlawful on February 1, 1939. This amendment permits any such relationship which was lawfully existing on Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

36 ANNUAL REPORT OF BOARD OF GOVERNORS August 23, 1935, and which would otherwise have become unlawful on February 1,1939, to continue as to not more than two banks until August 1, 1939. The reasons for the Board's actions are set forth in the statement appearing in the record of policy actions on page 75. Extension of Credit by Brokers, Dealers, and Members of National Securities Exchanges.—Effective March 21, 1938, the Board of Governors amended its revised Regulation T in certain technical respects in order to facilitate transactions involving withdrawals from special omnibus accounts, shipments of securities in connection with special cash accounts, or financing of odd-lot dealers in special miscellaneous accounts. REGULATION OF THE FEDERAL OPEN MARKET COMMITTEE Effective March 1,1938, the Federal Open Market Committee amended its regulation relating to open-market operations of Federal Reserve banks in certain details regarding the purchase and sale of Government securities and the making of reports by the Federal Reserve banks of other open-market operations. REVISED FORM OF CONDITION REPORT During the year the Office of the Comptroller of the Currency, the Federal Deposit Insurance Corporation, and the Board of Governors of the Federal Reserve System worked out a revised form for the use of banks in submitting condition reports to Federal banking authorities. Detailed instructions were also prepared for the purpose of assisting banks in compiling their. reports of condition. This standardization of the condition report and of the accompanying instructions was the result of work and negotiations extending over several years, after consultation with several groups outside the Federal agencies. The revised form of report was adopted by each of the Federal agencies in an essentially standardized form for use beginning with the December 31, 1938, call for condition reports. In addition, the executive committee of the National Association of Supervisors of State Banks approved the report form and recommended that, insofar as practicable, it be adopted by State banking departments. BANK EXAMINATIONS Federal Reserve Banks.—Each of the 12 Federal Reserve banks was examined during the year by the Board's Division of Examinations. Foreign Banking Corporations.—The head office of the one banking corporation now in active operation organized under the provisions of section 25 (a) of the Federal Reserve Act to engage in foreign or international banking was examined during the year by the Board's Division of Examinations. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

FEDERAL RESERVE SYSTEM 37 State Member Banks.—State member banks are subject, under the provisions of the Federal Reserve Act, to examinations made by direction of the Board of Governors of the Federal Reserve System or of the Federal Reserve banks by examiners selected or approved by the Board of Governors. The policy approved by the Board of Governors for examinations pursuant to such provisions is that at least one regular examination of each State member bank, including its trust department, be made during each calendar year by examiners for the Federal Reserve banks. The general practice is to make one examination a year of each State member bank. Almost all of such examinations made during the past year were in cooperation with the State banking authorities pursuant to the policy of making joint examinations wherever practicable in order to avoid duplication of examinations and to minimize inconvenience to the banks examined. Revised Examination Procedure.—An important development during the year in the field of bank examination and supervision was the revision of procedure in bank examinations agreed to by the Secretary of the Treasury, the Board of Governors of the Federal Reserve System, the Directors of the Federal Deposit Insurance Corporation, and the Comptroller of the Currency. The revised procedure as announced by the Secretary of the Treasury is published in the appendix to this report. The agreement was reached in the summer and the revised procedure was made effective in September after the examination report forms had been revised to give effect to the changed procedure. Representatives of the National Association of Supervisors of State Banks were consulted in regard to the program and the Executive Committee of the Association agreed in principle with the program as adopted. The revised procedure has been made effective in many States and is being made effective in whole or in part in others. The principal changes in the examination procedure were the abandonment of the "slow" classification of assets and recognition of the principle that bank investments should be considered in the light of inherent soundness rather than on the basis of day-to-day market fluctuations. The "slow" classification had long been a source of irritation, complaint, and misunderstanding. By its very name it emphasized liquidity but the term was a misnomer inasmuch as the "slow" classification did not include all loans of longer maturities. The exact meaning of the term was not clear, nor could a substitute term be found to express clearly what was intended by the classification. Accordingly the old classifications of "slow," "doubtful," and "loss" as used in reports of examinations were discontinued and numerical classifications were adopted with the reports of examination containing definitions of the types of assets to be included in each classification. Under the new designations the principle is clearly recognized that in making loans Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

38 ANNUAL REPORT OF BOARD OF GOVERNORS banks should be encouraged to place emphasis upon soundness and intrinsic value rather than upon liquidity or quick maturity, and the examiners are expected to follow this principle in their examinations. With respect to the appraisal of investment securities, the revised examination procedure is based on the view that the soundness of the banking system depends in the last analysis upon the soundness of the country's business and industrial enterprises and should not be measured by current market quotations which often fail to reflect true appraisals of intrinsic worth. Under the revised procedure, as formerly, stocks and defaulted securities are grouped separately and net depreciation in such issues based on current market prices is classified as loss to be charged off. Other securities, however, are divided into two groups which might be considered, broadly, as (1) securities of investment character, and (2) securities having distinctly or predominantly speculative characteristics. Appreciation or depreciation in securities in the first group is disregarded, and banks are permitted to carry these securities at book value with proper provision for amortization of premiums. Banks are also not required to charge off on their books any depreciation in securities in the second group. Such securities, however, are appraised in the report of examination on the basis of the average market price for 18 months preceding examination and in the computation of adjusted # capital account of the bank, as shown in the report of examination, 50 percent of the net depreciation figured on such average basis is deducted. By separating appraisal of bank investments from current market quotations it was hoped that banks would be encouraged to purchase securities for true worth. The revised procedure also recognized the need for conservation of profits from the sale of securities, emphasized the necessity for the maintenance of adequate reserves to provide for possible losses in securities and other assets, and reaffirmed the position against the practice of speculation in securities. In considering the question of bank examination and supervision recognition was given to the great changes which have occurred during the past 20 years in the composition and character of bank assets, the substantial decrease in the holdings of short-term, self-liquidating commercial paper, and the great increase in the holdings of investment securities, both in aggregate amount and as compared with total assets. As a result of these developments, banks find it necessary to look, to a considerable extent at least, for other forms of loans to replace the lost volume of short-term commercial loans and to treat the security account more as a permanent investment account than as a means for the temporary investment of idle funds. Changes made by the Banking Act of 1935 in the law regarding advances by Federal Reserve banks and the revised regulation on this matter issued in 1937 by the Board of Governors were designed to assist banks to meet these changed conditions. The new policies with respect to bank examination and super- Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

FEDERAL RESERVE SYSTEM 39 vision were framed with the same end in view. The revised examination procedure does not represent a relaxation of standards. It was worked out as a measure which, with its emphasis upon fundamental soundness of assets of every type, would further the maintenance of a sound banking system and enable banks better to serve their depositors and their communities. TRUST POWERS OF NATIONAL BANKS During the year 1938 ten national banks were granted authority by the Board to exercise one or more trust powers under the provisions of. section 11 (k) of the Federal Reserve Act. This figure includes two banks which previously had been granted certain trust powers and during the year were granted one or more additional powers; it also includes two banks which previously had been authorized to exercise restricted trust powers and during the year were granted full trust powers. In addition, the Board granted full trust powers contingent upon the conversion of an existing State bank into a national banking association, which conversion, however, had not been effected by the end of the year. The Board also granted one national bank restricted authority to administer a specific trust account. During the year ten operating national banks surrendered their trust powers and ten other national banks which had been granted trust powers were placed in voluntary liquidation. On December 31, 1938, 1,883 national banks held permits to exercise trust powers. A list of such banks, with indication of the power or powers each bank is authorized to exercise, will be supplied to those requesting it. In addition 13 national banks had authority at that time to exercise restricted trust powers only. The term "restricted trust powers" as used above refers to powers granted a bank to acquire certain trust accounts but not to acquire other fiduciary business. Such restricted powers have been granted to enable a newly organized, consolidated, or converted institution to acquire the trust business held by a predecessor bank or banks, or to enable a bank to administer certain specific trust accounts, when, in the light of all the facts and circumstances in the particular case, such action was deemed warranted. HOLDING COMPANY AFFILIATES During the year 1938 the Board acted upon the applications for voting permits submitted by holding company affiliates of member banks in accordance with the provisions of section 5144 of the Revised Statutes and section 9 of the Federal Reserve Act, and authorized the issuance of three permits for general purposes and one permit for limited purposes. Under the authority of section 301 of the Banking Act of 1935, the Board determined that four organizations were not engaged directly or indirectly as a business in holding the stock of, or managing or con- Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

40 ANNUAL REPORT OF BOARD OF GOVERNORS trolling, banks, banking associations, savings banks or trust companies, and that, therefore, they were not holding company affiliates except for the purposes of section 23A of. the Federal Reserve Act. FOREIGN BANKING CORPORATIONS During the year the number of corporations organized under State law and operating under agreements entered into with the Board pursuant to the provisions of section 25 of the Federal Reserve Act relating to the investment by member banks in stock of corporations engaged principally in international or foreign banking was increased from three to four. Bankers Company of New York, an affiliate of Bankers Trust Company, New York, a member bank, entered into such an agreement in connection with the Board's approval of the application of the member bank to invest in stock of such corporation. The three other corporations operating under agreements entered into with the Board in previous years pursuant to the provisions of section 25 of the Federal Reserve Act are: International Banking Corporation, which is affiliated with the National City Bank of New York; First of Boston International Corporation, which is affiliated with the First National Bank of Boston; and French American Banking Corporation, which is owned by the Guaranty Trust Company of New York, the First National Bank of Boston, and the Comptoir National D'Escompte of Paris. The Chase Bank, which commenced business in 1930 and is affiliated with the Chase National Bank of New York, is the only banking corporation in active operation organized under the provisions of section 25 (a) of the Federal Reserve Act to engage in international or foreign banking. Two of the five corporations referred to above have no foreign branches. The other three corporations operate, either directly or through subsidiary corporations, 11 foreign branches or offices distributed as follows: in England, 3; France, 3; Spain, 2; China, 2; Hong Kong, 1. FOREIGN BRANCHES OF MEMBER BANKS During the year the following member banks established foreign branches with the permission of the Board of Governors in accordance with the provisions of section 25 of the Federal Reserve Act: The Central Hanover Bank and Trust Company of New York established an additional branch in London; the Chase National Bank of New York established a branch in Balboa, Canal Zone; and the National City Bank of New York established branches in Balboa and Cristobal, Canal Zone. During the year the National City Bank of New York discontinued operation of its branch in Genoa, Italy. At the end of the year, seven member banks were operating a total of 101 branches or offices located in 66 cities in 23 foreign countries or dependencies or insular possessions of the United States. Of the 101 Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

FEDERAL RESERVE SYSTEM' 41 branches and offices, four national banks were operating 90, and three State bank members were operating 11. The foreign branches were distributed geographically as follows: Argentina 10 Dominican Republic 6 Panama 4 Belgium 3 England 13 Peru 1 Brazil 4 France 2 Philippine Islands . . 1 Canal Zone 4 Hong Kong 1 Puerto Rico 7 Chile 2 India 4 Straits Settlements . 1 China 7 Italy 1 Uruguay 1 Colombia 3 Japan 4 Venezuela 1 Cuba 20 Mexico I MEETINGS OF THE FEDERAL OPEN MARKET COMMITTEE Meetings of the Federal Open Market Committee were held in Washington on the following dates in 1938: February 28-March 1, April 21- 22, April 29, August 2, September 21 and December 30. The executive committee of the Federal Open Market Committee met from time to time throughout the year as occasion required. A record of actions taken by the Committee on questions of policy relating to open-market operations is published in the appendix to this report. MEETINGS OF THK FEDERAL ADVISORY COUNCIL Four meetings of the Federal Advisory Council were held in Washington during 1938 on the following dates: February 14-15, May 16-17, September 19-20, and November 28-29. Recommendations of the Federal Advisory Council to the Board of Governors are published in the appendix to this report. APPOINTMENT OF ERNEST G. DRAPER AS A MEMBER OF THE BOARD OF GOVERNORS OF THE FEDERAL RESERVE SYSTEM Effective March 30, 1938, Ernest G. Draper, of Connecticut (Second Federal Reserve District), was appointed as a member of the Board of Governors of the Federal Reserve System for the unexpired portion of the term of fourteen years from February 1, 1936, which was made vacant by the resignation of Joseph A. Broderick on September 30, 1937. CHANGES IN BOARD STAFF Charles S. Hamlin, member of the Federal Reserve Board and of the Board of Governors from August 10, 1914, to February 1, 1936, and Special Counsel to the Board of Governors since February 4, 1936, died on April 24, 1938. Effective March 29, 1938, George W. Blattner resigned as Assistant Director of the Division of Research and Statistics. BOARD EXPENDITURES The total cost of conducting the work of the Board during the year 1938 was $1,707,503.67. This is exclusive of expenditures in the amount Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

42 ANNUAL REPORT OF BOARD OF GOVERNORS of $106,972.50 made in connection with the new building erected by the Board. For the general expenses of the Board two assessments were levied against the Federal Reserve banks aggregating $1,724,922.40 or about one-half of one percent of their average paid-in capital and surplus for the year. Under an arrangement with the Federal Reserve Bank of Cleveland the accounts of the Board were audited twice during the course of the year 1938 by the Auditor of the Federal Reserve Bank of Cleveland, who certified them to be correct. CHANGE IN FORM OF PUBLICATION OF ANNUAL REPORT This Annual Report of the Board of Governors of the Federal Reserve System will be issued in one edition and not in two editions as has been customary with Annual Reports. In previous years a brief edition of the Report has contained the text and the records of policy actions, and the complete edition which appeared later included in addition a large number of statistical tables and some other appendix material. This year's Report contains only a few of the statistical tables and omits some of the appendix material previously published. The additional material previously included in the complete edition of the Annual Report will be made available in the Federal Reserve Bulletin or in some other form. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

TABLES 43 Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

FEDERAL RESERVE SYSTEM 45 No. 1.—STATEMENT OF CONDITION OF THE FEDERAL RESERVE BANKS (IN DETAIL) DECEMBER 31, 19381 ASSETS Amounts in the column to the right are those shown in the Board's weekly statement, their components being shown in the column to the left. (In thousands of dollars) Gold certificates with Federal Reserve agents 4,888,000 Gold certificates in interdistrict settlement fund with Board of Governors 5,389,276 Gold certificates held by banks 1,510,444 Gold certificates on hand and due fromU. S. Treasury 11,787,720 Redemption fund—Federal Reserve notes 9,873 11,787,720 Total gold reserves Other cash: United States notes 87,418 Silver certificates 256,215 Standard silver dollars 2,823 National and Federal Reserve bank notes 1,885 Subsidiary silver, nickels and cents 19,872 Total other cash , 368,213 Total reserves 12,165,806 Bills discounted: Secured by U. S. Government obligations, direct or fully guaranteed: Discounted for member banks 2,099 Other bills discounted: For member banks 1,872 Total bills discounted 3,971 Bills bought—payable in foreign currencies 549 Industrial advances 15,644 U. S. Government securities: Bonds., . . 840,893 Treasury notes 1,156,947 Treasury bills 566,175 TotalU. S. Government securities , 2,564,015 Total bills and securities 2,584,179 Due from foreign banks 172 Federal Reserve notes of other Reserve banks 32,570 Uncollected items: Transit items 661,304 Exchanges for clearing house 17,911 Other cash items 31,634 Total uncollected items 710,849 Bank premises 44,350 Other assets: Miscellaneous assets acquired account industrial advances. 1,410 Industrial advances past due 1,606 Other bills and securities past due 2,058 Claims account closed banks 2,502 Total 7,576 Lessreserves 4,486 Net 3,090 Interest accrued 7,243 Premium on securities 29,875 Deferred charges 368 Suspense account and miscellaneous assets 4,175 Total other assets. 44,751 Total assets 15,582,677 before closing books at end of year. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

46 ANNUAL REPORT OF BOARD OF GOVERNORS No. 1.—STATEMENT OF CONDITION OF THE FEDERAL RESERVE BANKS (IN DETAIL) DECEMBER 31, 19381—Continued LIABILITIES Amounts in the column to the right are those shown in the Board's weekly statement, their components being shown in the column to the left. (In thousands of dollars) Federal Reserve notes outstanding (issued to Federal Reserve banks) 4,790,047 Held by issuing Federal Reserve banks and branches 324,316 Forwarded for redemption 13,907 Federal Reserve notes in actual circulation (including notes held by Treasury and by Federal Reserve banks other than issuing bank) 4,451,824 Deposits: Member bank—reserve account 8,723,226 U. S. Treasurer—general account 923,195 Foreign bank 199,211 Other deposits: Nonmember clearing account 101,794 Officers' checks 51,469 Federal Reserve exchange drafts 288 All other 87,864 Total other deposits 241,415 Total deposits 10,087,047 Deferred availability items 694,217 Other liabilities: Accrued dividends unpaid 824 Unearned discount 9 Discount on securities 28 Reserves for estimated losses on bills and securities 207 Suspense account and miscellaneous liabilities 2,512 Total other liabilities 3,580 Total liabilities 15,236,668 CAPITAL ACCOUNTS Capital paid in 134,575 Surplus (sec. 7) 147,739 Surplus (sec. 13b) 27,683 Other capital accounts: Reserve for contingencies 32,221 Earnings: Gross earnings 36,261 Current expenses 28,911 Current net earnings 7,350 Add—profit and loss 4,460 Deduct: , Dividends accrued since closing of books 8,019 Net earnings available for depreciation allowances, reserves and surplus 3,791 Total other capital accounts 36,012 Total liabilities and capital accounts 15,582,677 1 Before closing books at end of year. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

FEDERAL RESERVE SYSTEM 47 No. 2.—MATURITY DISTRIBUTION OF BILLS AND UNITED STATES GOVERNMENT SECURI- TIES HELD BY FEDERAL RESERVE BANKS [In thousands of dollars Bills bought in U. S. Government Bills discounted open market Industrial advances securities Maturity within Dec. 28, Dec. 29, Dec. 28, Dec. 29, Dec. 28, Dec. 29, Dec. 28, Dec. 29, 1938 1937 1938 1937 1938 1937 1938 1937 15 days 5,845 10,697 1,784 1,334 105,340 24,385 16 to 30 days 321 395 179 438 579 302 88,872 33,296 31 to 60 days 202 582 106 400 596 577 198,570 68,350 61 to 90 days 175 414 264 1,989 387 438 154,893 265,085 91 days to 6 months.. 406 728 1,290 1,431 103,697 381,170 6 months to 1 year... 31 31 3,891 3,490 173,142 213,895 1 year to 2 years 4,423 5,502 390,654 283,389 2 years to 5 years 2,738 5,217 588,699 593,739 Over 5 years 760,148 700,706 Total 6,980 12,847 549 2,827 15,688 18,291 2,564,015 2,564,015 Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

No. 3.—STATEMENT OF CONDITION OF EACH FEDERAL RESERVE BANK AT END OF 1937 AND 1938 fin thousands of dollars] Total Boston New York Philadelphia Cleveland Richmond 1937 1938 1937 1938 1937 1S38 1937 1938 1937 1938 1937 1938 ASSETS Gold certificates on hand and due from U. S. Treasury. 9 119,891 11787,720 503,090 660,319 3,586,484 5,115,945 474,890 546,461 672,135 783,882 294,125 356,645 Redemption fund—Federal Reserve notes 9,436 9,873 804 328 1,124 1,226 501 1,236 659 810 921 1 Other cash 351,688 368,213 35,260 36,112 78,420 103,924 26,940 29,221 27,622 23,751 25,919 21,917 S3 Total reserves 9,481,015 12165,806 539,154 696,759 3,666,028 5,221,095 502,331 576,918 700,416 808,443 320,965 379,784 W s Bills discounted: Secured by U.S.Government obligations, direct Ot o h r e r f u b ll i y ll s g d u i a s r c a o n u t n e t e e d d 3 6 , ,4 3 8 8 1 5 2 1 , ,8 0 7 9 2 9 5 1 5 0 1 0 9 2,8 3 0 1 4 6 8 2 0 4 4 1 1,4 6 9 5 8 5 4 7 7 0 3 4 4 1 7 9 8 5 1 5 9 4 1 2 3 5 4 5 0 1 5 5 4 3 O3 Total bilh discounted 9,866 3,971 651 41 3,120 1,045 2,153 1,177 673 245 595 207 to Bills bought in open market 540 549 41 41 212 215 55 56 50 51 23 Industrial advances 18,049 15,644 2,729 1,945 4,412 3,879 3,627 3,120 879 618 1,768 1,466 S3 O U.S. Government securities: Bonds 751,539 840,893 54,751 63?87 216,814 267,426 63,561 73,057 73,157 84,554 39,394 39,461 Treasury notes . 1,154,997 1,156,947 84 144 87,073 333,211 367,938 97,685 100,515 112,432 116,335 60,540 54 Treasury bills 657,479 566,175 47,899 42,611 189,679 180,058 55,607 49,189 64,002 56,931 34,462 26,569 Total U. S. Government securities 2,564,015 2,564,015 186,794 192,971 739,704 815,422 216,853 222,761 249,591 257,820 134,396 120,321 S3 Due fr T om ot a f l o b re il i l g s n a b n a d n s k e s curities ?,592,4 1 7 7 0 9 ?,584,1 1 7 7 9 2 190s n 1 f\ 3 1P499 1 8 3 747,44 6 8 8 820,56 6 1 5 222,68 1 8 8 227,11 1 4 7 251,19 1 3 7 258,73 1 4 6 136,782 8 199 018 7 o Federal Reserve notes of other Federal Reserve banks 30,211 32,570 412 757 5,292 5,337 1,662 2,081 1,984 1,966 2,886 2,946 Uncollected items 693,487 710,849 65419 69,88? 195,811 207,064 54,588 54,506 64,245 74,509 53,628 47 Bank premises . .. 45,C27 42,768 3,001 2,945 9,973 9,038 4,826 4,699 6,215 6,017 2,700 621 Other assets 37,241 44,348 2,239 2,893 10,808 13,388 4,305 4,637 4,057 5,018 2,231 2,508 Total assets 12,879,630 15,580,692 800,453 968,247 ! 4,635,428 6,276,548 790,418 869,972 1,028,127 1,154,703 519,200 556,924 Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

LIABILITIES Federal Reserve notes in actual circulation *. 4,283,611 4,451,824 285,413 I 384,130 ; 964,902 1,029,296 ; 318,035 i 320,562 , 433,328 ; 427,467 209,905 208,287 Deposits: Member bank—reserve account 7,026,809 8,724,050 402,354 392,294 i 3,071,762 4,460,340 365,046 374,231 470,054 477,880 220,566 231,576 U. S. Treasurer—general account 142,390 923,225 7,103 81,324 ! 39,295 212,295 1,092 58,155 ! 12,477 116,296 10,888 48,507 Foreign bank 171,750 199,211 12,665 14,360 ; 71,369 17,002 19,545 15,961 18,349 7,460 8,576 Other deposits 235,743 241,512 4,044 4,251 189,134 188,479 2,269 6,899 ! 3,210 7,228 3,599 2,033 Total deposits 7,576,692 10,087,998 426,166 4S2.229 3,361,083 4,932,483 385,409 I 458.830 501,702 ! 619,753 242,513 290,692 Deferred availability items 674,000 694,217 64,886 67,897 189,511 194,382 53,747 i 57,591 - 61,336 i 75,047 51,996 43,155 Other liabilities including accrued dividends.. 4,109 2,998 175 977 1,214 1,092 | 664 | 219 i 134 116 108 Total liabilities 12,538,412 15,237,037 776,845 944,431 4,516,473 6,157,375 ! 758,283 j 837,647 s 990.585 11,122,401 504,530 542,242 CAPITAL ACCOUNTS Capital paid in 132,744 134,575 9,386 9,411 51,058 51,043 I 12.258 12,213 13,036 ! 13,546 4,896 5,005 Surplus (sec. 7) 147,739 149,152 9,900 10,083 51,943 52,463 I 13,466 13,696 14,323 I 14,323 4,964 4,883 Surplus (sec. 13b) 27,683 27,264 2,874 2,874 i 7,744 7,457 I 4,411 4,416 1,007 ! 1,007 3,409 3,293 Other capital accounts 33,052 32,664 1,448 1,448 I 8,210 8,210 2,000 2,000 3,176 i 3,426 1,401 1,401 Total liabilities and capital accounts 12,879,630 15,580,6 800,453 968,247 4,635,428 6,276,548 790,418 869,972 ;1,028,127 j1,154,703 519,200 556,924 Contingent liability on bills purchased for foreign correspondents 1,666 124 6 582 -27 166 7 156 j 7 73 3 Commitments to make industrial advances 12,928 14,272 1,671 1,297 4,755 2,677 173 1,525 753 ! 2,234 1,623 1,282 FEDERAL RESERVE NOTE STATEMENT | Federal Reserve notes: Issued to Federal Reserve bank by Federal Reserve agent 4,661,627 4,790,047 322,502 408,865 i 1,089,215 ! 1,134,257 340,801 340.668 ! 464,655 j 451,834 226,302 222,006 Held by Federal Reserve bank - 378,016 338,223 37,089 24,735 | 124,313 j 104,961 22,766 20,106 j 31,327 | 24,367 16,397 13,719 In actual circulation * 4,283,611 4,451,824 285,413 384,130 964,902 1,029,296 318,035 320,562 • 433,328 427,467 209,905 208,287 Collateral held by agent for notes issued to banks: Gold certificates on hand and due from U. S. Treasury 4,728,632 4,888,000 341,000 420,000 1,100,000 i 1,155,000 I 347,000 345,000 ! 467,000 ! 457,000 226,000 230,000 Eligible paper 1 8,954 3,397 589 3,085 997 1,767 827 ! 568 j 232 595 207 U. S. Government securities I 25,000 Total collateral held 4,762,586 4,891,397 341,589 420,036 i 1,103,085 1,155,997 I 348,767 i 345,827 j 467,568 j 457,232 226,595 230,207 For footnote see end of table. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

No. 3.—STATEMENT OF CONDITION OF EACH FEDERAL RESERVE BANK AT END OF 1937 AND 1938—Continued [In thousands of dollars] Atlanta Chicago St. Louis Minneapolis Kansas City Dallas San Francisco 1937 1938 1937 1938 1937 1938 1937 1938 1937 1938 1937 1938 1937 1938 ASSETS Gfold certificates on hand and due from U.S. Treasury.. 230573 275 267 1,760,008 2,200,214 282 455 316,830 185,747 241,452 266,709 304,342 181,832 210,498681,843 775,865 Redemption fund—Federal Reserve notes 1,535 583 695 629 792 843 446 606 543 509 236 191 1,180 1,690 Other cash 17,174 15526 43,691 51,557 16,105 19,634 9,672 7,786 24,560 14,773 14,149 14,400 32,176 29,612 Total reserves 249,282 291,376 1,804,394 2,252,400 299,352 337,307 165,865 249,844 291,812 319,624 196,217 225,089715,199 807,167 F Bills discounted: Secured by U. S. Government obligations direct or fully guaranteed 399 7* 150 55 99 43 154 74 17 4 145 63 Other bills discounted 638 111 79 74 1 45 175 91 932 567 26 20 13 34 Total bills discounted 960 186 229 199 93 45 175 134 1,086 641 43 94 158 ' 97 Bills bought in open market 19 19 65 68 3 2 2 2 16 16 16 16 38 39 Industrial advances 128 825 70C 415 237 21 637 964 464 268 946 775 1,522 1,348 3d U. S. Government securities: O Bonds 32 8Q9 34,979 82,655 90 644 969 35 on 94,339 18,633 36,717 37,140 29,231 30 913 65,059 66,476 Treasury notes 50.559 47 163 127,026 194 714 50,670 48 187 37 399 25,636 56,426 51,101 44,926 49,531 99,986 91,463 Treasury bills 28,780 23,080 72,310 61,031 28,844 23,581 21,285 12,546 32,120 25,007 25,574 20,814 56,917 44,758 TotalU. S. Government securities 112,238 104,522 281,991 276,389 112,483 106,791 83,009 56,815 125,263 113,248 99,731 94,258221,962 202,697 O Total bills and securities .... 113 345 105 55? 282,985 977 001 119 746 106,859 83,893 57,915 126,829 114,173 100,736 95,073223,680 204,181 Due from foreign banks 6 6 21 21 3 3 2 2 5 5 5 5 13 12 2 F U e n d c e o r l a le l c R te e d se i r t v e e m n s otes of other Federal Reserve banks , 1 9 3 4 ,5 9 3 5 6 3 9 3 4 ,4 8 4 8 3 7 8 4 6 , , 4 6 7 8 G 8 9 5 5 ,8 9 8 1 6 5 98 1, ,7 9 7 7 0 3 9 2 9 ,9 8 3 3 1 8 18 1,9 0 2 7 0 8 1 1 6 , , 4 8 2 8 8 9 3 1 6, ,5 46 3 3 1 3 1 2 , , 4 6 5 2 3 4 27 1, , 0 9 2 8 5 1 95 1,3 6 0 9 8 9 3 3 6 , , 5 8 2 6 0 3 3 3 2 , , 0 0 3 7 4 3 2 Bank premises ! 2,119 2,076 4,589 3,964 2,341 2,291 1,477 1,524 3,159 3,089 1,281 1,261 3,346 3,243 Other assets 1,504 1,809 3,332 4,349 1,367 1,679 1,229 1,096 1,572 1,779 1,369 1,565 3,228 3,627 o Total assets .... 394,745 429,149 2,186,479 2,639,536 446,552 480,908 302,394 328,698 461,371 472,747 328,614 349,923985,8491,053,337 Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

LIABILITIES Federal Reserve notes in actual circulation1. 162,016 151,3981 993,3621 996,72l| 182,088 183,131! 137,570 136,857 167,924 171,390 ,374j 81,375 342,694) 361,210 Deposits: Member bank—reserve account 181,212 188,709 1,011,438 1,299,880 204,984 209,543 126,011 113,568 233,775 227,796 190,570| 183,468 549,,0371 564,765 U. S. Treasurer—general account 6,396 41,110 27,967 176,765| 8,779 35,3i 4,339 43,294 9,086 24,886 4,004! 38,428 10,964! 46,810 Foreign bank 6,072 6,980 20.124 23,734! 5,2051 5,983) 3,990 4r 5,031 5,784 5,03l| 5,784 12,317i 14,160 Other deposits 2,201 4,168 2,499 1,658! 5,817 5,093 3,228 3,779 420 1,476 2,677 2, "" 16,645i 13,762 Total deposits 195,881 240,967 1,502,0371 224,785 255,974! 137,568 165,228 248,312 259,942 202,282 230,366 588,963! 639,497 Deferred availability items 24,126 24,190 96,322 29,282 31,361 18,082 17,480 35,254 31,468 29.003J 27,254 30,036! 28.070 Other liabilities including accrued dividends. 362 153 199 102 51 1781 95 101 46 126 37 184! 122 Total liabilities 382,385 2,595,279 436,257 470,517! 293,398 319,660 451,591 462,846 317,785 339,032 961,877:1,028,899 CAPITAL ACCOUNTS Capital paid in 4,401 4,495 12,920 13,488 3,! 3,946| 2,893 2,903 4,091 4,212 3,891! 3,961 10,046i 10,352 Surplus (sec. 7) 5,626 5,630 22,387 22,666 4,667 4,685| 3,153 3,153 3,613 3,613 3,892j 3,892 9,805i 9,965 Surplus (sec. 13b) 730 713! 1,429 1,429 545 545 1,001 1,001 1,142 1,142 1,270 l,266i 2,1211 2,121 Other capital accounts 1,603 1,603 7,340 6,674 1,215 1,215; 1,949 1,981 934 934 1,776' 1,772| 2,000 2,000 Total liabilities and capital accounts 394,745 429,1491 2,186,479 2,639,536 446,552 480,9081 302,394! 328,698; 461,37l! 472,747 328,614! 349,923 985,849)1,053,337 Contingent liability on bills purchased for foreign correspondents 59 3 197 9 51 2 2| 49 2 121 j 6 Commitments to make industrial advances 345 157... 58 176 548 212! 111 658 3,001, 3,578 on FEDERAL RESERVE NOTE STATEMENT EC Federal Reserve notes: Issued to Federal Reserve bank by Federal Reserve agent 182,457, 166,266 1,027,633 1,031,415 197,086 200,495 142,887 142,702 178,936 180,418 97,094! 89,921392,059; 421,200 Held by Federal Reserve bank 20,441 14,868 34,271 34,694 14,'— 17,364 5,317 5,845 11,012 9,028 10,720| 8,546 49,365i 59,990 In actual circulation 1... 162,016 151,398 993,362 6,721 182,0 183,13l| 137,570 136,857 167,924 171,390 86,374 81,375 342,694 361,210 & Collateral held by agent for notes issued to banks: Gold certificates on hand and due from U. S. Treasury 166,000 169,000 l,055,00G 1,050,000 200,632 207,000! 140,500 143,500 182,000 185,000 9,500 92,500 404,000 434,000 Eligible paper 731 1571 229| 129 23 I 99 82 1,067 627 43 24 158 79 U. S. Government securities 20,000 5,000 Total collateral held... 186,731 169,157 1,055,2291 1,050,129 200,655 207,000 145,599| 143,582| 183,067 185,6 99,543| 92,5241404,158! 434,079 1 Includes Federal Reserve notes held by the U.S. Treasury or by a Federal Reserve bank other than the issuing bank. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

FEDERAL RESERVE SYSTEM 53 No. 4.—VOLUME OF OPERATIONS IN PRINCIPAL DEPARTMENTS OF FEDERAL RESERVE BANKS, 1934-1938 [Number in thousands; amounts in thousands of dollars] 1934 1935 1936 1937 1938 NUMBER OF PIECES HANDLED i Bills discounted: Applications Notes discounted Advances made Industrial advances: Advances made Commitments to make industrial advances .6 Bills purchased in open market for own account 2 1 .2 Currency received and counted 2,067,835 2,148,485 232,980 2,257,892 2,089,987 Coin received and counted 2,565,164 2,590,859 665,190 2,730,387 2,676,248 Checks handled 818,847 885,190 009,264 1,044,553 1,098,115 Collection items handled: U. S. Government coupons paid 2 21,555 22,633 18,806 18,566 17,802 All other 7,436 7,119 6,968 6,705 6,389 Issues, redemptions, and exchanges by fiscal agency department: U. S. Government direct obligations 5,281 6,838 27,919 3,456 Allother (3) 3,742 1,538 661 575 Transfer of funds 1,125 982 951 980 853 AMOUNTS HANDLED Bills discounted: Notes discounted 45,781 9,622 6,886 16,187 10,472 Advances made 668,580 219,924 160,714 516,852 Industrial advances: 226,687 Advances made 14,884 28,479 8,519 4,932 Commitments to make industrial ad- 6,500 vances 11,443 29,223 12,583 6,978 Bills purchased in open market for own ac- 11,217 count 75,903 31,446 25,207 25,252 Currency received and counted 9,932,601 9,837,681 10,059,637 10,199,559 2,781 Coin received and counted 298,297 275,608 276,323 287,708 8.883,728 Checks handled 179,544,488 202,989,742 234,417,787 255,453,609 271,128 Collection items handled: 232,090,217 U. S. Government coupons paid 2 699,325 751,916 798,925 865,465 854,273 All other 6,742,974 7,948,641 7,089,008 6,159,828 5,321,443 Issues, redemptions, and exchanges by fiscal agency department: U. S. Government direct obligations 29,941,049 30,755,611 25,198,825 19,304,020 24,450,791 Allother 3,346,189 2,223,136 1,691,863 2,581,611 Transfer of funds , 73,077,156 80,483,190 87,001,630 94,596,861 82,219,749 1 2 or more checks, coupons, etc., handled as a single item are counted as 1 "piece." 2 Includes coupons from obligations guaranteed by the United States. 3 Figures not available. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

No. 5.—EARNINGS AND EXPENSES OF FEDERAL RESERVE BANKS DURING 1938 Tot; Boston Y N o e r w k d P e h lp il h a i - a C l l a e n v d e- m Ri o c n h d - Atlanta Chicago L S ou t. is M ap in o n li e s - City Dallas Francisco CURRENT EARNINGS ed bills $123,751 $8,675 $27,125 $26,303 $10,200 $9,042 $12,995 $3,522 $2,895 $2,659 $7,927 $4,800 $7,608 id bills 9 197 1,025 268 240 112 91 325 9 7 76 76 185 yernment securities. 34,446,249 2,558,374 10,331,266 2,936,032 3,350,196 1,762,671 1,459,159 3,747,602 1,528,595 1,018,540 1,645,531 1,267,076 2,841,207 il advances 830 105,641 201,166 168,118 38,490 82,454 9,032 27,192 9,096 52,880 j271 48,186 68,285 ments to make industrial ad- 60Q 11,158 41,053 1,565 15,267 15,075 1,042 293 5,857 1,704 11,851 1,445 56,299 695,397 6,138 104,713 18,804 76,228 46,598 19,870 175,092 17,826 24,682 154,799 8,873 41,774 tal current earnings 36,261,428 2,690,183 10,706,348 3,151,090 3,490,621 1,915,952 1,502,189 3,954,026 1,564,278 1,100,472 1,840,455 1,330,456 3,015,358 CURRENT EXPENSES g expenses: :ies: Officers $2,280,757 $117,000 $516,911 $123,519 $172,449 $139,904 $154,619 $252,949 $177,875 $105,113 $168,321 $132,800 $219,297 employees. 16,632,415 1,063,791 4,388,286 1,278,294 1,505,268 941,228 875,447 2,015,279 904,777 531,072 895,756 872,769 1,360,448 •ement System contribuns for current service 923,714 55,535 240,453 69,309 80,631 53,854 46,326 109,228 54,701 31,547 56,647 47,276 78,207 o w lfees 140,002 14,999 62,104 9,956 10,006 274 3,573 636 5,000 11,852 1,022 9,222 11,358 > Jtors' fees and expenses 136,715 6,004 7,065 7,546 7,186 15,360 6,867 11,991 11,765 23,405 7,816 18,826 ral Advisory Council, fees d expenses 14,712 1,160 750 740 723 893 1,021 1,350 1,261 1,197 1,398 3,350 eling expenses (other than of •ectors and members of Fedd Advisory Council) 288,7' 14,831 47,296 26,109 25,047 23,148 21,833 29.589 22,744 25,914 13,846 12,915 25,527 O a,ge and expressage 3,225,927 354,273 542,002 277,260 291,""" 253,756 196,795 388,481 151,812 122,: 216,027 162,322 269,066 o Dhone and telegraph 472,249 22,870 93,082 30,341 27,160 44,190 30,566 34,161 18,555 42,951 34,347 48,723 ting, stationery and supplies. 751,650 72,449 141,237 45,303 45,755 48,443 77,331 42,766 44,797 42,916 64,524 ia r r r a i t i n y n e s e s u h r i a o p n n m c e e c n u t r s rency and se- 2 24 3 8 0 , , 5 0 5 9 3 2 3 1 5 6 , ,8 2 5 8 1 2 4 4 2 1 , , 1 98 7 5 2 2 2 5 0 , , 2 7 6 7 5 9 2 6 1 0 9 7 , , , 6 5 6 9 5 1 2 6 2 1 1 5 6, , 7 0 7 8 1 0 1 1 2 6 , , 3 9 6 3 6 4 2 20 4 , , 3 4 9 8 2 6 1 5 9 , , 4 1 4 96 2 1 7 8 , , 2 8 0 78 8 22 9, , 1 8 8 8 1 2 1 7 6 , , 6 7 6 24 7 2 21 3 , , 1 7 0 4 9 7 o w 125 s on bank premises 1,433,128 156,114 439,425 69,767 125,822 68,014 59,318 169,552 53,251 69,270 90,960 32,388 99,247 w t e , c h ia e t a io t, n p o o n w b er a , n a k n b d u w ild ra i t n e g r 1, 3 1 6 7 7 1 , ,9 8 4 5 0 8 2 5 8 5 , , 1 8 6 3 5 2 1 6 9 0 8 , , 5 0 8 2 6 7 1 3 2 4 6 , , 9 5 2 3 2 2 2 4 0 3 6 , , 6 4 3 4 2 8 2 7 2 9 , , 1 502 4 22 2 , , 2 5 8 4 5 8 1 4 3 0 9 , , 8 9 1 5 0 3 5 2 1 2 , , 2 0 0 3 6 2 2 1 7 6 , ,9 4 8 2 1 4 3 7 0 2 , , 2 6 5 9 2 6 6 21 8 , , 0 6 2 4 6 8 1 2 0 5 3 , , 0 1 9 2 9 4 irs and alterations to bank ilding 135,499 2,381 21,720 11,143 9,697 4,253 23,166 9,556 12,000 11,855 8,126 6,155 15,447 152,154 34 782 73,075 16,482 4,359 3,120 375 127 1,680 52,120 iture and equipment 450,685 31,147 69,866 33,184 17,755 8,375 113,514 "72^ 893 16,447 12,726 24,556 35,791 14,431 ther 588,300 32,517 67,370 66,121 45,735 31,246 55,810 75,968 40,936 33,462 35,399 38,526 65,210 tal operating expenses 29,645,149 2,081,235 6,986,275 2,281,080 2,768,879 1,754,779 1,757,779 3,465,557 1,630,807 1,089,364 1,758,148 1,552,386 2,518,860 reimbursements for certain ;al agency and other expenses.. 4,088,200 205,027 632,559 203,576 262,468 239,530 507,636 607,435 339,597 168,163 211,130 448,329 262,750 Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

Net operating expenses 25,556,949| 1,876,208 6,353,716 2,077,504 2,506,411 1,515,249 1,250,143 2,858,122 1,291,210 921,201 1,547,018 1,104,057 2,256,110 Assessment for expenses of Board of Governors 1,724,924 123,925 618,656 168,420 159,503 74,329 60,262 206,080 50,857 39,436 49,634 50,734 123,088 Federal Reserve currency: Original cost 1,449,692 154,418 326.467 139,334 116,599 87,177 61,997 226,993 63,239 46,619 57,558 27,802 141,489 Cost of redemption 180,043 11,117 36,960 12,595 15,145 12,460 15,733 26,807 9,961 4,667 8,270 9,353 16,975 Total current expenses 28,911,608 2,165,668 7,335,799 2,397,853 2,797,658 1,689,215 ,135 3,318,002 1,415,267 1,011,923 1,662,480 1,191,946 2,537,662 PROFIT AND LOSS Current earnings (above) 36,261,428 2,690,183 10,706,348 3,151,090 3,490,621 1,915,952 1,502,189 3,954,026 1,564,278 1,100,472 1,840,455 1,330,456 3,015,358 Current expenses (above) 28,911,608 2,165,668 7,335,799 2,397,853 2,797,658 1,089,215 1,388,135 3,318,002 1,415,26: 1,011,923 1,662,480 1,191,946 2,537,662 Current net earnings 7,349,820 524,511 3,370,549 753,237 #2,963 226,737 114,054 636,024 149,011 88,549 177,975 138,510 477,696 Additions to current net earnings: Profits on sales of U. S. Government securities 8.275, 594,408 2,316,015 696,803 816,488 437,837 355,444 932,997 385,083 281,351 416,446 324,310 718,715 Allother 1,551,356 57,864 82,600 23,632 22,460 33,882 370, 704,144 10,532 203,930 8,028 15,736 17,865 Total 9,827,253 652,272 2,398,615 720,435 8,948 471,719 726,127 1,637,141 395,615 485,281 424,474 340,046 736,580 Deductions from current net earnings: Losses and reserves for losses on industrial advances (net) 847,715 69,145 448,500 30,000 20,000 161,248 20,904 25,000 27,500 45,418 Special reserves and charge-offs on bank premises 1,579,749 736,840 317,597 516,149 9,163 Prior service contributions to Retirement System (final payment) 5,045,756 357,600 1,282,107 386 439,812 314,088 187,6 665,997 289,800 166,088 341,520 218,616 395,496 Allother 121,""" 515 11,046 3 22,473 22,245 60,2 61 219 281 239 180 577 Total 7,595,119 427,260 2,478,493 420,' 482,285 497,581 1,182,207 290,019 200,532 341,759 246,296 441,491 Net additions to current net earnings.., 2,232,134 225,012 -79,878 299,' 356,663 -25,8 139,647 454,934 105,596 284,749 82,715 93,750 295,089 Net earnings 9,581,954 749,527 3,290,671 1,052,956 1,049,626 200,875 253,701 1,090,958 254,607 373,298 260,690 232,260 772,785 PaidU. S. Treasury (sec. 13b) 119,524 1,544 83 22' 20,714 1,796 1,005 10,270 Dividends paid 8,019,137 564,: 3,056,972 734 799,145 297,732 267,368 791,007 234,488 174,231 249,901 236,294 613,068 Transferred to surplus (sec. 13b) -419,140 -286,745 4 -115,893 -17,409 206 -4,034 Transferred to surplus (sec. 7) 1,862,433 520,444 229 250,254 19,036 3,742 279,031 18,323 198,062 519 Surplus (sec. 7), Jan. 1,1938 147.737,758 1,899,737 51,942,50513,465 4,322,790 4,963,636 5,625,948 22,386,972 4,667,175 3,153,414 ,612,681 3,891,870i 1,805,134 Addition, as above 1,862,433 183,614 520,444 229 250,254 19,036 3,742 279,031 18,323 198,062 519 159,717 Transferred to reserves for contingencies -448,835 -250,254 -198,062 -519 Surplus (sec. 7), Dec. 31, 1938 149,151,356 10,083,351 52,462,949,13,695,587J14,322,790J 4,982,6721 5,629,690 22,666,003 4,685,4 3,153,414 3,612,681 3,891,870 1,964,851 OX Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

No. 6.—CURRENT EARNINGS, CURRENT EXPENSES, AND NET EARNINGS OF FEDERAL RESERVE BANKS AND DISPOSITION OF NET EARNINGS, 1914-1938 1 Earnings and expenses \ Disposition of net earnings Direct Federal Reserve bank charges Current earnings e C x u p r e r n e s n e t s Net earnings J Div p i a d i e d nds p F a r T i a d r n e c t a o h s i u s U r e y . t S 2 a . x Pa ( T i S d e r e c t a o . s 1 u U 3 r . b y ) S. T t ( r o S a e n s c s u . f r e 1 p r 3 l r u b e s ) d T t r o ( a S n s e s u c f r . e p r 7 l r u ) e s d to (S s e u c r . p 7 l ) u 3 s All Federal Reserve banks: 1914-15 2,173,252 2,320,586 -141,459 217,463 1916 5,217,998 2,273,999 2,750,998 1,742,774 1917 16,128,339 5,159,727 9,579,607 6,801,726 1 134 234 1 134 234 1918 67,584,417 10,959,533 52,716,310 5,540,684 48,334,341 1919 102,380,583 19,339,633 78,367,504 5,011,832 2,703,894J 70,651,778 1920 181,296,711 28,258,030 149,294,774 5,654,018 60.724.742 82,916,014 PI 1921 122,865,866 34,463,845 82,087,225 6,119,673 5Q Q74.4fifi 15,993,086 o 1922 50,498,699 29,559,049 16,497,736 6,307,035 10,850,605 -659,904 1923 50,708,566 29,764,173 12,711,286 6,552,717 3,613,056 2,545,513 1924 38,340,449 28,431,126 3,718,180 6,682,496 113,646 -3,077,962 1925 41,800,706 27,528,163 9,449,066 6,915,958 59,300 2,473,808 1 19 9 2 2 7 6 4 4 7 3 , , 5 02 9 4 9 , , 4 5 8 9 4 5 2 2 7 7 , , 3 5 5 1 0 8 , , 1 4 8 4 2 3 1 13 6 , , 0 6 4 1 8 1 , , 2 7 4 4 9 5 7 7 , , 3 7 2 5 9 4 , , 1 5 6 3 9 9 2 8 4 1 9 8 , , 5 1 9 5 1 0 8 5 , , 4 0 6 4 4 4 , , 4 1 2 1 6 9 500,000 ocd 1928 64,052,860 26,904,810 32,122,021 8,458,463 2,584,659 21,078,899 1929 .... 70,955,496 29,691,113 36,402,741 9,583,913 4,283,231 22,535,597 5d 1930 36,424,044 28,342,726 7,988,182 10.268.598 17,308 -2,297,724 o 1931 29,701,279 27,040,664 2,972,066 10.029,760 -7,057,694 1932 50,018,817 26,291,381 22,314,244 9.282.244 2|6iiJ4is 11,020,582 1933 49,487,318 29,222,837 7,957,407 8,874,262 -916,855 1934 48,902,813 29,241,396 15,231,409 8,781,661 -60,323 6,510,071 139,299,557 1935 42,751,959 31,577,443 9,437,125 8,504,974 297,667 27,062 607,422 1936 37,900,639 29,874,023 8,512,433 7,829,581 ! 227,448 102,880 352,524 1937 41,233,135 28,800,614 10,801,247 7,940,966 176,625 67,304 2,616,352 731^313' 1938 36,261,428 28,911,608 9,581,954 8,019,137 119,524 -419,140 1,862,433 448,835 Total—1914-1938 1,277,309,453 588,825,104 610,012,050 170,203,643 1 149.138.300 821,264 4 -282,217 290,131,060 140,979,705 Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

Aggregate for each Federal Reserve bank 1914- 1938: Boston 85,713,786 1 42,448,433 40,019,745 12,506,225 7,111,395 91,692 -3,155 20,313,588 10,230,237 New York 376,149,532 | 142,847,720 219,350,873 56,564,019 68,006,262 82,987 -294,553 94,992,158 42,529,211 Philadelphia 99,677,356 1 44,929,839 50,824.882 16,438,106 5,558,901 293,888 217,517 28,316,470 14.620,883 Cleveland 113,480,456 j 54,093,484 51,046!564 17,161,031 4,842,447 36,868 -8,156 29,014,374 14,691,585 Richmond 60,681,223 31,851,115 | 24,260,350 7,330,372 6,200,189 66,714 -127,888 10,790,963 5,808,291 Atlanta 59,931,097 j 27,234,959 | 25,912,854 6,095,809 8,950,561 9,066 -44,304 10,901,722 5,272,032 Chicago 178,283,567 i 77,374,851 87,984,849 20,150,063 25,313,526 95,059 11,681 42,414,520 19,748,517 St. Louis 55,002,897 I 30,273,117 18,886.921 6,231,290 2,755,629 5,948 -1,505 9,895,559 5,210,059 Minneapolis 41,561,657 I 21,719,217 17,013.462 4,339,764 5,202,900 34,319 -6,583 7,443,062 4,289,648 KansasCity 61,081,497 1 36,191,932 | 20,601,670 5,810,201 6,939,100 31,223 -3,622 7,824,768 4.212,086 Dallas..... 45,302.840 i 26.685,104 14,425.102 5,526,091 560,049 73,500 14,255 8,251,207 4,359,338 San Francisco 100,443,545 ! 53,175,333 ! 39,684,778 12,050,672 7,697,341 -35,904 19,972,669 10,007,818 1 Current earnings less current expenses, plus other additions and less other deductions. 2 The Banking Act of 1933 eliminated the provision in the Federal Reserve Act requiring payment of a franchise tax. 3Direct charges to surplus (sec. 7) represent amounts transferred to reserves for contingencies, except as follows: 1927—$500,000, depreciation on bank premises; 1934—$139,299,- 557, cost of Federal Deposit Insurance Corporation stock purchased by Federal Reserve banks. 4In 1935 the Federal Reserve Bank of Boston credited $1,810 and the Federal Reserve Bank of St. Louis charged $1,176 direct to surplus (sec. 13b). Total payments received from the Secretary of the Treasury under section 13b of the Federal Reserve Act to the end of 1938 and credited to surplus (sec. 13b) amounted to $27,546,311. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

58 ANNUAL REPORT OF BOARD OF GOVERNORS No. 7.—FEDERAL RESERVE BANK DISCOUNT, INTEREST, AND COMMITMENT RATES AND BUYING RATES ON ACCEPTANCES (Percent per annum] In effect December 31, 1938 B to o n s- Y N o e r w k P p d h h e i i l l a - a- C la le n v d e- m Ri o c n h d - la A n t t - a C ca h g i o - L S ou t. is n M o e l a i i n p s - - K C s a a it n s y - Dallas F c S i r s a a c n n o - Rediscounts for and advances to member banks under sees. 13 and 13a of the Federal Reserve Act1.. IX 1 IX IX ix \lA ix ix IX IX IX Advances to member banks under sec. 10(b) of the Federal Reserve Act 2 2 2 2 2 2 2 2 2 2 2 Advances to individuals, partnerships or corporations, secured by direct obligations of the United States (last paragraph of sec. 13 of the Federal Re- Ad s v e a rv n e c e A s ct d ) irect to indus- 4 3K 4 2V 2 4 4 3 2y 2 2M 4 trial or commercial organizations under sec. 13b of the Federal Reserve Act 33/2-6 4-6 4-6 4^-6 6 5-6 5-6 4-5M 6 4-6 5-6 5-6 Advances to financing institutions under sec. 13b of the Federal Reserve Act. On portion for which institution is obli- On g a r t e e m d aining portion.. 3 4 3 -5 (3) 3^ 4 4 - - 6 6 5 5 (2 5 ) - 2 6 K v/ 2 4 4 ^ ^- -5 5. 4 5 4 -6 3 4 - - 4 5 Commitments to make adv th a e n c F e e s d e u r n a d l e R r e s s e e r c v . e 1 A 3b c t o . f .. li-l 1-2 H-2 1 1-2 x 1-2 4 1 4 1 X-2 Minimum buying rates on prime bankers' accept- (6) WX (4)J4-2 ance 1 s -1 p 5 a y d a a b y l s e * in dollars.. (6) ""x (6) (6) (6) (6) (6) (6) (6) (6) 16- 30 days (fi) 31- 45 days X 46- 60 days Y 61- 90 days X 2 91-120 days ZA 121-180 days 1 Rates indicated also apply to United States Government securities bought under repurchase agreement. 2 Authorized rate 1 percent above prevailing discount rate. 3 Same as to borrower but not less than 4 percent. «Flat charge. 5 This rate also applies to acceptances bought under repurchase agreement, which agreements are always for a period of 15 days or less. 6 The same minimum rates in effect at the Federal Reserve Bank of New York apply to purchases, if any, made by other Federal Reserve Banks. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

FEDERAL RESERVE SYSTEM 59 No. 8.—MAXIMUM RATES ON TIME DEPOSITS Maximum rates that may be paid by member banks as established by the Board of Governors under provisions of Regulation Q [Percent per annum] Nov. 1, 1933, Feb. 1, 1935, In effect to to beginning Jan. 31, 1935 Dec. 31, 1935 Jan. 1, 1936 Savings deposits Postal Savings deposits Other time deposits payable in: 6 months or more 2H 90 days to 6 months 2H Less than 90 days NOTE.—Maximum rates that may be paid by insured nonmember banks as established by the Federal Deposit Insurance Corporation, effective February 1, 1936, are the same as those in effect for member banks. In some States the maximum rates established by the Board and the Federal Deposit Insurance Corporation are superseded by lower maximum rates established by State authority. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

60 ANNUAL REPORT OF BOARD OF GOVERNORS No. 9.—MEMBER BANK RESERVE REQUIREMENTS [Percent of deposits] Classes of deposits and banks J A un u e g . 2 1 1 5 , , 1 1 9 9 1 3 7 6 - A F u e g b . . 1 2 6 8 , , 1 1 9 93 36 7 - M Ap a r r . . 3 1 0 , , 1 1 9 9 3 3 7 7 - M Ap a r y . 1 1 5 , , 1 1 9 9 3 3 7 8 - Ap a r n . d 1 6 a , f 1 te 9 r 38- On net demand deposits: Central reserve city.. Reserve city Country 12M 12 On time deposits: All member banks... 5 Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

FEDERAL RESERVE SYSTEM 61 No. 10.—MEMBER BANK RESERVE BALANCES, RESERVE BANK CREDIT, AND RELATED ITEMS—END OF YEAR 1918-1938 AND END OF MONTH 1938 [In millions of dollars] Member Reserve bank credit mtstanding bank reserve End of T u re ry as- Treas- Treas- Non- Other balances year cur- Money ury ury mem- Federal or month U.S. Gold rency in cash deposits ber Re- Bills Gov- Other stock 2 out- circu- hold- with de- serve c d o i u s n - t- bo B u il g ls ht m er e n n - t s R er e v - e Total s i t n a g n d 3 - lation ings4 b F a . n R ks . posits 5 cou a n c t - s 6 Total c E es x s - 7 ed secur-c b re a d n i k t i ities 1918 1,766 287 239 206 2,498 2,873 1,795 4,951 288 51 121 118 1,636 51 1919 2,215 574 300 203 3,292 2,707 1,707 5,091 385 31 101 208 1,890 68 1920 2,687 260 287 120 3,355 2,639 1,709 5,325 218 57 23 298 1,781 1921 1,144 145 234 40 1,563 3,373 1,842 4,403 214 96 27 285 1,753 "99 1922 618 272 436 79 1.405 3,642 1,958 4,530 225 11 29 276 1,934 1923 723 355 134 27 1,238 3,957 2,009 4,757 213 38 23 275 1,898 14 1924 320 387 540 54 1,302 4,212 2,025 4,760 211 51 39 258 2,220 59 1925 643 374 375 67 L,459 4,112 1,977 4,817 203 16 29 272 2,212 —44 1926 637 381 315 49 1,381 4,205 1,991 4,808 201 17 65 293 2,194 —56 1927 582 392 617 64 1,655 4,092 2,006 4,716 208 18 26 301 2,487 63 1928 1,056 489 228 35 1,809 3,854 2,012 4,686 202 23 27 348 2,389 —41 1929 632 392 511 48 1,583 3,997 2,022 4,578 216 29 30 393 2,355 —73 1930 251 364 729 29 1,373 4,306 2,027 4,603 211 19 28 375 2,471 96 1931 638 339 817 59 1,853 4,173 2,035 5,360 222 54 110 354 1,961 -33 1932 235 33 1,855 22 2,145 4,226 2,204 5,388 272 8 43 355 2,509 576 1933 98 133 2,437 20 2,688 4,036 2,303 5,519 284 3 132 360 2,729 859 1934 7 6 2,430 20 2,463 8,238 2,511 5,536 3,029 121 189 241 4,096 1,814 1935 5 5 2,431 45 2,48610,125 2,476 5,882 2,566 544 255 253 5,587 2,844 1936 2,430 64 2,50011,258 2,532 6,543 2,376 244 259 261 6,606 1,984 1937 . . 10 1 2,564 38 2,61212,760 2,637 6,550 3,619 142 407 263 7,027 1,212 1938 Jan... 12 1 2,564 16 2,59312,756 2,655 6,320 3,648 150 388 260 7,237 1,383 Feb. . 10 2,564 15 2,59012,776 2,668 6,334 3,594 180 423 257 7,248 1,415 Mar.. 13 1 2,580:- 17 2,61112,795 2,679 6,355 3,550 316 315 262 7,287 1,546 Apr. . 9 1 2,564 21 2,59412,869 2,690 6,397 2,195 1,320 355 263 7,623 2,548 May . 9 1 2,564 9 2,58212,919 2,702 6,467 2,263 1,157 390 261 7,665 2,568 June. 8 1 2,564 23 2,59612,963 2,713 6,461 2,303 860 363 261 8,024 2,875 July. 7; 1 2,564 18 2,58913,017 2,721 6,452 2,348 721 384 257 8,164 3,022 Aug. . 7 1 2,564 14 2,58513,136 2,731 6,504 2,480 720 313 255 8,179 2,941 Sept.. 8 1 2,563 29 2,60013,760 2,739 6,622 2,810 853 356 260 8,198 2,869 Oct. . 7 1 2,564 14 2,58614,065 2,751 6,700 2,770 535 424 260 8,713 3,227 Nov.. 7 1 2,564 13 2,58414,312 2,773 8,787 2,689 484 574 259 8,876 3,383 Dec. . 4 1 2,564 33 2,60114,512 2,798 6,856 2,706 923 441 260 8,724 3,205 1 Includes Government overdrafts in 1918, 1919, and 1920; includes industrial advances outstanding since July 1934. 2 By proclamation of the President, dated January 31, 1934, the weight of the gold dollar was reduced from 25 8/10 grains to 15 5/21 grains, nine-tenths fine. Between January 31, 1934, and February 1, 1934, the gold stock increased $2,985,000,000, of which $2,806,000,000 was the increment resulting from the reduction in the weight of the gold dollar and the remainder was gold which had been purchased by the Treasury previously but not added to the gold stock. The increment was covered into the Treasury as a miscellaneous receipt, and appeared together with the new gold as a General Fund asset. These transactions were also reflected in an increase in the item "Treasury cash." The increment arising from United States gold coin turned in by the public after January 31, 1934, was also added to both gold stock and Treasury cash at the time of receipt. The increment from this source amounted to about $7,000,000, from February 1 to December 31, 1934, to about $1,000,000 in 1935, to $1,800,000 in 1936, to $1,200,000 in 1937, and to $500,000 in 1938. 3 Comprises outstanding United States notes, national bank notes, silver bullion, Treasury notes of 1890, standard silver dollars, subsidiary silver and minor coin, and the Federal Reserve bank notes for the retirement of which lawful money has been deposited with the Treasurer of the United States, including the currency of these kinds that is held in the Treasury and the Federal Reserve banks as well as that in circulation. 4 Cash (including gold bullion) held in the Treasury excepting (a) gold and silver held against gold and silver certificates and (b) amounts held for the Federal Reserve banks. 5 Item includes all deposits in Federal Reserve banks except Government deposits and member bank reserve balances. 6 This item is derived from the condition statement of the Federal Reserve banks by adding capital, surplus, other capital accounts, and "other liabilities, including accrued dividends," and subtracting the sum of bank premises and "other assets." 7 Represents excess of total reserve balances over reserves required to be held by member banks against their deposits. Figures not available prior to 1929 except on call dates, and since April 1933 are for licensed member banks only. For required reserves and changes in the percentages of requirements see table 9. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

No. 11.—ALL MEMBER BANKS—CONDITION ON SEPTEMBER 28, 1938, BY CLASSES OF BANKS [Amounts in thousands of dollars] m b e a A m n l k l b s er n m b a e t a A i m n o l k b n l s e a r l m b S e a A t m n a l t k b l e s er Ne C w e m n Y t e o r m a rk l b r e e r s e b r a v C n e h k i c s c i a ty go m R b e e c a s m i n e ty k r b v s e e r C m b o e a u m n n k b tr s e y r ASSETS Loans (including overdrafts) 12,937,437 8,279,991 4,657,446 3,145,571 522,128 4,870,278 4,399,460 United States Government direct obligations 10,712,818 6,894,508 3,818,310 3,153,144 920,999 4,088,180 2,550,495 Securities fully guaranteed by United States Government 2,298,477 1,566,795 731,682 833,725 126,250 742,758 595,744 Other securities 5,678,157 3,765,510 1,912,647 1,222,088 319,386 1,724,610 2,412,073 Total loans and investments 31,626,889 20,506,804 11,120,085 8,354,528 1,888,763 11,425,826 9,957,772 Customers' liability on account of acceptances 112,965 56,935 56,030 86,007 3,039 22,553 1,366 Banking house, furniture, and fixtures 968,380 629,412 338,968 222,287 21,319 337,951 386,823 Other real estate owned 335,567 152,284 183,283 31,552 5,946 126,135 171,934 Reserve with Federal Reserve banks 8,192,978 4,666,085 3,526,893 3,743,377 855,865 2,311,284 1,282,452 Cash in vault 774,887 567,053 207,834 69,881 31,821 322,438 350,747 Balances with private banks and American branches of foreign banks 42,488 28,911 13,577 2,001 11,449 26,142 2,896 Demand balances with banks in New York City 1,583,009 1,182,828 400,181 44,373 148,900 848,862 540,874 Demand balances with other domestic banks 2,234,373 1,759,255 475,118 44,773 36,105 958,865 1,194,630 Time balances with other domestic banks 77,156 61,776 15,380 36 1,220 27,849 48,051 Balances with banks in foreign countries 73,374 34,001 39,373 56,430 2,163 11,954 2,827 Due from own foreign branches 1,261 1,261 1,261 Cash items in process of collection 1,460,367 893,143 567,224 578,872 98,656 594,967 187^872 Cash items not in process of collection 8,235 6,074 2,161 464 21 3,018 4,732 Acceptances of other banks and bills sold with endorsement 27,633 7,576 20,057 25,914 12 1,455 252 Securities borrowed 1,370 203 1,167 1,100 270 Other assets 198,227 101,377 96,850 61,026 18,035 75,481 43,685 Total assets 47,719,159 30,654,978 17,064,181 13,322,621 3,123,314 17,096,041 14,177,183 LIABILITIES Demand deposits—Total 30,308,304 19,073,215 11,235,089 10,687,630 2,390,931 10,625,422 6,604,321 Individuals, partnerships, and corporations 20,438,710 12,632,896 7,805,814 7,128,070 1,454,904 6,842,674 5,013,062 United States Government 707,267 451,966 255,301 180,797 61,771 356,450 108,249 States, counties, and municipalities 2,079,830 1,595,925 483,905 196,118 204,129 710,658 968,925 Banks in United States 6,088,093 3,899,879 2,188,214 2,497,641 635,607 2,556,773 398,072 Banks in foreign countries 456,517 204,163 252,354 404,655 10,262 39,213 2,387 Certified and officers' checks, cash letters of credit and travelers' checks, etc 537,887 288,386 249,501 280,349 24,258 119,654 113,626 Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

Time deposits—Total 11,462,315 7,974,726 3,487,589 722,749 459,483 4,576,591 5,703,492 Individuals, partnerships, and corporations— Evidenced by savings passbooks 9,398,613 6,573,099 2,825,514 402,455 390,256 3,736,540 4,869,362 Certificates of deposit 724,377 560,373 164,004 29,253 14,849 194,849 485,426 Open accounts 544,378 250,453 293,925 214,242 32,554 236,912 60,670 Christmas savings and similar accounts 121,292 85,015 36,277 7,177 944 40,824 72,347 Postal savings 69,605 59,697 9,908 23,258 46,347 States, counties, and municipalities 464,427 340,467 123,960 "63^538' 20^850 233,228 146,811 Banks in United States 130,009 97,788 32,221 210 30 107,240 22,529 Banks in foreign countries 9,614 7,834 1,780 5,874 3,740 Total deposits 41, HO, 619 27,047,941 14,722,678 11,410,379 2,850,414 15,202,013 12,307,813 Secured by pledge of loans and/or investments 2,759,620 2,045,399 714,221 367,895 217,783 1,316,044 857,898 Not secured by pledge of loans and/or investments 39,010,999 25,002,542 14,008,457 11,042,484 2,632,631 13,885,969 11,449,915 Due to own foreign branches 117,432 101,385 16,047 117,432 Agreements to repurchase securities sold 1,502 1,206 296 185' 1^317 Bills payable and rediscounts 12,499 9,122 3,377 '"i',m 10,829 Acceptances of other banks and bills sold with endorsement 27,633 7,576 20,057 25,914 12 M55 252 Acceptances executed for customers 109,060 55,334 53,726 84,749 2,514 20,618 1,179 Acceptances executed by other banks for reporting banks 12,354 6,903 5,451 7,211 773 4,121 249 Securities borrowed 1,370 203 1,167 1,100 270 Interest, taxes, and other expenses accrued and unpaid 96,208 60,381 35,827 15,533 9^203 "47,325' 24,147 Dividends declared but not yet payable and amounts set aside for undeclared dividends and for accrued interest on capital notes and debentures 35,817 21,028 14,789 13,386 803 18,057 3,571 ta- Other liabilities 124,781 45,718 79,063 56,430 3,585 37,866 26,900 rn Capital notes and debentures 48,144 48,144 556 26,738 20,850 Capital stock1 (for par value see next table) 2,377,484 " i," 565^288' 812,196 561,860 " " 126^500' 769,907 919,217 Surplus 2,046,844 1,124,903 921,941 803,015 67,175 632,274 544,380 Undivided profits—net 645,543 432,133 213,410 157,943 27,051 220,879 239,670 Reserves for contingencies 274,395 163,074 111,321 65,395 35,234 109,832 63,934 Retirement fund for preferred stock and capital notes and debentures 17,474 12,783 4,691 48 50 4,771 12,605 Total liabilities (including capital account) 47,719,159 30,654,978 17,064,181 13,322,621 3,123,314 17,096,041 14,177,183 Net demand deposits 25,038,348 15,240,703 9,797,645 10,019,612 2,107,796 8,225,937 4,685,003 Demand deposits—adjusted2 21,596,060 13,624,064 7,971,996 7,025,665 1,584,635 7,078,019 5,907,741 Number of banks 6,341 5,239 1,102 36 13 344 5,948 1 Represents in the ease of: National banks, (1) the par value of capital stock or (2) the net book value of the entire capital account, whichever was the smaller, as reported by individual banks; State member banks with capital notes and debentures outstanding, (1) the par value of common stock or (2) the net book value of the entire capital account less capital notes and debentures and reserves for contingencies and for retirement of capital notes and debentures, whichever was the smaller, as reported by individual banks; State member banks which do not have capital notes and debentures outstanding, (1) the aggregate of the retirable value of preferred stock and the par value of common stock or (2) the net book value of the entire capital account less reserves for contingencies and for retirement of preferred stock, whichever was the smaller, as reported by individual banks. 2Demand deposits other than interbank and United States Government, less cash items reported as in process of collection. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

No. 12.—ALL MEMBER BANKS—CLASSIFICATION OF LOANS, INVESTMENTS, AND CAPITAL STOCK ON SEPTEMBER 28, 1938, BY CLASSES OF BANKS [In thousands of dollars] m b e a A m n l k b l s er n m b a e a t A m i n o l k b l n s e a r l m b S e a A t m n a l t k b l e s er Ne C w e m Y nt e o r m a rk l b r e e r s e b r a v C n e h k i c s c i a ty go m R b e e c a s m i n e ty k r b v s e e r C m b o e a u m n n k b tr s e y r Loans—Total 12,937,437 8,279,991 4,657,446 3,145,571 522,128 4,870,278 4,399,460 3 Acceptances of other banks payable in United States . 86,972 36,146 50,826 78,961 122 5,817 2,072 Bills, acceptances, etc., payable in foreign countries . 13,206 7,668 5,538 2,798 450 8,758 1,200 Commercial paper bought in open market 271,474 188,473 83,001 6,885 14,798 99,285 150,506 Loans to banks . ... 126,038 55,634 70,404 95,435 111 21,944 8,548 w Loans on securities exclusive of loans to banks—Total . 3,302,422 1,855,166 1,447,256 1,265,945 142,900 1,088,518 805,059 To brokers and dealers in New York . 531,339 184,299 347,040 512,143 12,037 7,159 To brokers and dealers elsewhere . 181,469 104 763 76,706 51,654 31,445 84,126 14,244 Toothers 2,589,614 1,566,104 1,023,510 702,148 111,455 992,355 783,656 Real estate loans: On farm land 275,220 222,159 53,061 265 216 95,440" 179,299 On other real estate 2,386,034 1,437,105 948,929 131,480 9,674 1,121,447 1,123,433 Reporting banks' own acceptances . . . 111,918 67,851 44,067 64,512 2,871 42,161 2,374 All other loans (including overdrafts) 6,364,153 4,409,789 1,954,364 1,499,290 350,986 2,386,908 2,126,969 United States Government direct obligations—Total 10,712,818 6,894,508 3,818,310 3,153,144 920,999 4,088,180 2,550,495 Q Treasury bonds maturing on or before December 31, 1949 2 803,359 1,723,638 1,079,721 788,068 141,628 1,176,830 696,833 Treasury bonds maturing after December 31, 1949 3,832,847 2,664,317 1,168,530 772,347 468,798 1,568,737 1,022,965 o Other United States bonds 56,529 46,690 9,839 76 211 6,161 50,081 Treasury notes 3,706,625 2,306,661 1,399,964 1,341,796 309,662 1,289,656 765,511 Treasury bills 313,458 153,202 160,256 250,857 700 46,796 15,105 Securities fully guaranteed by U. S. Government—Total 2,398,477 1,566,795 731,682 833,725 126,250 742,758 595,744 CO Reconstruction Finance Corporation . . . .. 425,576 284,680 140,896 223,652 98,150 61,453 42,321 Federal Farm Mortgage Corporation 419,168 321,174 97,994 74,736 5,108 175,957 163,367 Home Owners' Loan Corporation 1,292,947 860,596 432,351 478,492 9,381 444,630 360,444 Other Government corporations and agencies ... 160,786 100,345 60,441 56,845 13,611 60,718 29,612 Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

Other securities—Total 5,678,157 3,765,510 1,913,647 1,333,088 319,386 1,734,610 3,413,073 Obligations of: States, counties, municipalities, etc 2,301,977 1,489,724 812,253 494,442 143,454 768,877 895,204 Public utilities . .. .. ... 772,612 555,506 217,106 114,152 42,756 174,267 441,437 Railroads 826,415 588,280 238,135 142,411 24,200 194,794 465,010 Federal land banks ... 126,395 104,090 22,305 3,260 15,039 48,545 59,551 Intermediate credit banks 150,276 92,469 57,807 92,502 8,136 41,932 7,706 Joint-stock land banks. 15,476 12,048 3,428 227 333 3,792 11,124 Territorial and insular possessions 15,515 10,387 5,128 540 903 5,959 8,113 Real estate corporations .. . 53,518 25,158 28,360 14,464 1,613 22,353 15,088 Other domestic corporations 693,621 483,405 210,216 128,371 35,890 201,255 328,105 Stock of: Federal Reserve banks 134,120 81,173 52,947 40,579 5,810 42,993 44,738 Real estate corporations 58,903 39,976 18,927 1,620 749 40,993 15,541 Banks and banking corporations 72,215 28,625 43,590 22,607 504 36,881 12,223 Other domestic corporations ... 273,138 127,539 145,599 110,375 26,336 90,895 45,532 Foreign securities: Central governments 98,129 69,424 28,705 40,447 5,923 24,493 27,266 Provincial, State, and municipal governments 47,570 31,841 15,729 9,452 5,824 11,296 20,998 Other foreign securities 38,277 25,865 12,412 6,639 1,916 15,285 14,437 Par value of capital stock—Total 3,360,147 1,569,657 790,490 547,901 136,500 766,438 919,308 First preferred * 317,675 242,775 74,900 9,507 25,700 109,391 173,077 Second preferred * 25,166 17,171 7,995 8,150 17,016 Common .. .. . . . 2,017,306 1,309,711 707,595 538^394' "" 100^800' 648,897 729,215 xRetirable value exceeds par value, as follows: National banks, First preferred stock—by $18,088,000. Second preferred stock—by $1,860,000; State banks, First preferred stock—by $37,177,000. Second preferred stock—by $2,552,000. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

66 ANNUAL REPORT OF BOARD OF GOVERNORS No. 13.—NUMBER OF BANKS AND BRANCHES IN UNITED STATES, 1933-1938 [Figures for 1938 are preliminary] Member banks Nonmember banks Other than mutual savings and private End of year figures Total banks National State M sav u i t n u g a s l Private 2 Insured 1 ins N ur o e t d 1 NUMBER OF BANKING OFFICES 1933 17,940 6,275 1,817 9,041 704 103 1934 19,196 6,705 1,961 39, 579 705 246 1935 19,153 6,715 1,953 8,556 1,088 698 143 1936 19,066 6,723 2,032 8,436 1,043 693 139 1937 18,927 6,745 2,075 8,340 997 691 79 1938 18,781 6,723 2,105 8,226 963 4 689 5 75 NUMBER OF BANKS (HEAD OFFICES) 1933 15,029 5,154 857 8,341 579 98 1934 16,063 5,462 980 7,693 1,108 579 241 1935 15,869 5,386 1,001 7,728 1,046 570 138 1936 15,667 5,325 1,051 7,588 1,004 565 134 1937 15,387 5,260 1,081 7,449 '960 563 74 1938 15,200 5,224 1,114 7,316 922 555 69 NUMBER OF BRANCHES6 1933 2,911 1,121 960 700 125 5 1934 3,133 1,243 981 778 126 5 1935 3,284 1,329 952 828 42 128 5 1936 3,399 1,398 981 848 39 128 5 1937 3,540 1,485 994 891 37 128 5 1938 .. 3,581 1,499 991 910 41 134 6 'Revised. federal deposit insurance did not become operative until January 1, 1934. 2 The figures for December 1934 include 140 private banks which reported to the Comptroller of the Currency under the provisions of Section 21(a) of the Banking Act of 1933. Under the provisions of the Banking Act of 1935, private banks no longer report to the Comptroller of the Currency and, accordingly, only such private banks as report to State banking departments are in the figures shown for subsequent years. 3 Separate figures not available for branches of insured and not insured banks. 4 Comprises 49 insured banks with 18 branches and 506 uninsured banks with 116 branches. 5Comprises 2 insured banks with no branches and 67 uninsured banks with 6 branches. e The number of branches in head-office cities and outside head-office cities, respectively, were as follows In head-office cities Outside head-office cities 1933 1,784 1,127 1934 1,776 1,357 1935 1,754 1,530 1936 1,749 1,650 1937 1,757 1,783 1938 1,743 1,838 Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

FEDERAL RESERVE SYSTEM 67 No. 14.—ANALYSIS OF CHANGES IN NUMBER OF BANKS AND BRANCHES DURING 1938 [Preliminary figures] Member banks Nonmember banks Other than mutual savings and Total private banks National State Mutual Private savings _ Not Insured insured ANALYSIS OF BANK CHANGES Number of banks on December 31, 1937 15,387 5,260 1,081 7,449 r960 563 74 Increases in number of banks: Primary organizations (new banks)l +39 +1 +22 +16 Reopenings of suspended banks +2 ""+r +1 Decreases in number of banks: Suspensions -55 -i -i -46 -4 i -2 Voluntary liquidations 2 -68 A -37 -23 -2 2 Consolidations, absorptions, etc -105 -26 • —6" -58 -9 -5 -1 Inter-class bank changes: Conversions— State into national +6 -5 -1 Fede N ra a l t i R o e n s a e l rv in e t o m S e t m at b e erships 3 -12 +12 Admissions of State banks +49 -47 _2 Withdrawals of State banks -5 +5 Federal deposit insiirance 4 Admissions of State banks +21 -21 Withdrawals of State banks -5 +5 Net increase or decrease in number of banks -187 -36 +33 -133 -38 -8 -5 Number of banks on December 31, 1938 15,200 5,224 1,114 7,316 922 555 69 ANALYSIS OF BRANCH CHANGES Number of branches on December 31, 1937 3,540 1,485 994 891 37 128 5 Increases in number of branches: De novo branches +52 +7 +6 +34 +3 +1 +1 Banks converted into branches +44 +17 +20 +2 +5 Decreases in number of branches: Suspension of parent bank -1 -1 Voluntary liquidation of parent bank — 1 Otherwise discontinued -53 -9 -19' —24" Inter-class branch changes: Branches of nonmember banks which became branches of State member banks5.. +10 -10 Net increase or decrease in number of branches ' +41 +14 o +19 +4 +6 +1 Number of branches on December 31, 1938 3,581 1,499 991 910 41 134 6 r Revised. 1 Exclusive of new banks organized to succeed operating banks. 2 Exclusive of liquidations incident to the succession, conversion and absorption of banks. 3 Exclusive of conversions of national banks into State bank members, or vice versa, as such conversions do not affect Federal Reserve membership. 4Exclusive of conversions of member banks into insured nonmember banks, or vice versa, as such conversions do not affect Federal Deposit Insurance Corporation membership. 6 Includes 8 branches of insured nonmember banks which became State member banks, and 2 branches of an insured nonmember bank which was absorbed by a State member bank. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

68 ANNUAL REPORT OF BOARD OF GOVERNORS No. 15.—MONEY RATES, BOND YIELDS, AND STOCK PRICES1 O (p p e N e r n e c - w e m n t Y a r p o k e r e r k t a r C n a i n t t e u y s m 2 in ) (perc B e o n n t d p y er ie a ld n s n 3 um) Common stock prices4 (1926= 100) Year and month Prime Corporate com- U.S. U.S. m pa 4 e p r - c e 6 i r a , l T b u r i e r l y a ls s- T n u r o e r t a y e s s - T U u re . r a y S s . - Aaa Baa Total In tr d i u al s- R ro a a i d l- u P t u i b li l t i y c months Number of issues 4-6 2-6 30 30 420 348 32 40 1919 5 56 4 73 5 49 7 25 70 7 72 6 70 1 60 3 1920 7.54 5.32 6.12 8.20 64.2 66.1 63.9 54.5 1921 6 56 5.09 5.97 8.35 55.2 51.6 61.8 57.8 1922 4.48 4.30 5.10 7.08 67.7 64.7 72.7 70.9 1923 5.01 4.36 5.12 7.24 69.0 66.6 71.9 73.8 1924 3 88 4.06 5.00 6.83 72.8 69.6 76.7 78.9 1925 4 03 3.86 4 88 6 27 89 7 88 4 89 5 94 9 1926 4.34 3.68 4.73 5.87 100.0 100.0 100.0 100.0 1927 4 11 3 34 4 57 5 48 118 3 118 5 119 1 116 0 1928 4.86 3.33 4.55 5.48 149.9 154 3 128.5 148 9 1929 5.85 3.60 4.73 5.90 190.3 189.4 147.3 234.6 1930 3 59 3 29 4 55 5.90 149 8 140 6 124 9 214 6 1931 . 2 63 1 40 3 34 4 58 7.62 94.7 87 4 72 5 148 7 1932 2.73 0.88 3.68 5.01 9.30 48.6 46.5 26.4 79.1 1933 1.72 0.52 2*66 3.31 4.49 7.76 63.0 65.7 37.7 78.1 1934 1 02 0 26 2 12 3 12 4.00 6 32 72 4 81 1 41 5 68 9 1935 .76 0.14 1.29 2.79 3.60 5.75 78.3 90.8 34.0 71.4 1936.... .75 0.14 1.11 2.65 3.24 4.77 111.0 127.3 51.2 104.3 1937 95 0 45 1 40 2 68 3 26 5 03 r111.8 131 3 «• 49 3 ' 94 8 1938 .81 0.05 0.83 2.56 3.19 5.80 83.3 99.4 26.1 73.2 1937 January . .... % 0 36 1.18 2 47 3.10 4.49 126.0 146.3 55.6 113.2 February H 0.38 1.22 2.46 3.22 4.53 129.5 151.7 57.9 110.7 March vA 0 58 1 44 2 60 3.32 4.68 129.9 152 6 62.8 105.7 April 1.00 0.70 1.59 2.80 3.42 4.84 124.5 146.5 60.1 100.7 May .... 1 00 0 65 1.48 2 76 3.33 4 84 116 3 136 7 57.1 94.1 June 1.00 0.56 1.54 2.76 3.28 4.93 113.6 134.0 53.9 91.3 July 1.00 0.49 1.44 2 72 3.25 4.91 117.8 130.4 52.1 95.9 August 1 00 0 52 1 45 2 72 3.24 4 92 120 5 143 5 50.9 97.0 September 1.00 0.53 1.50 2.77 3.28 5.16 106.4 126.2 42.6 89.2 October 1 00 0 34 1 42 2 76 3 27 5.52 91.4 107 4 35.4 81 3 November 1 00 0.15 1.31 2.71 3.24 5.82 82.9 96.1 31.4 79.5 December . .. 1 00 0 10 1 27 2 67 3.21 5.73 82.2 95.2 31.2 78 8 1938 January . . .... 1 00 0 10 1.13 2.65 3.17 5.89 81.6 95.7 29.0 75.7 February 1 00 0 08 1 09 2 64 3.20 5.97 80.7 95.7 28.3 71.2 March %-l 0 07 1.01 2.64 3.22 6.30 77.9 92.7 25.5 68.5 April 0.08 0.94 2.62 3.30 6.47 70.7 84.2 20.9 64.0 Mav %-\ 0 03 0 77 2 51 3.22 6.06 73.9 87.4 21.8 69.5 June .. ... %-\ 0 02 0.67 2.52 3.26 6.25 73.1 86.4 20.5 69.2 July M 0.05 0.70 2.52 3.22 5.63 88.0 105.3 27.3 76.5 August % 0 05 0 71 2 51 3.18 5.49 89.5 108.0 27.8 75.0 September H-H 0 10 0 82 2 58 3.21 5.65 86.0 103.9 25.5 72.2 October 0.02 0.68 2.48 3.15 5.36 91.1 109.6 28.1 77.4 November Vs-SA 0.02 0.71 2.50 3.10 5.23 94.7 113.6 30.0 80.9 December 0.01 0.67 2.49 3.08 5.27 92.0 110.6 28.8 77.9 'Revised 1 Annual data are averages of monthly figures. 2 For commercial paper, monthly data are prevailing rates; for Treasury bills, the average rates on new issues within period; and for Treasury notes the averages of daily figures for 3- to 5-year issues. Treasury bill series comprises 90-day bills to February 16, 1934; 182-day bills from February 23, 1934 to February 23, 1935; 273-day bills fromMarch 1, 1935 to October 15, 1937; bills maturing about March 16, 1938, from October 22 to December 10, 1937; and 91-day bills thereafter. 3 Monthly data are averages of daily figures. U.S. Treasury bond yields are averages of all outstanding bonds due or callable after 12 years. Corporate average yields are as published by Moody's Investors Service; until 1928 each rating group included 15 bonds; since the early part of 1934 there have been less than 30 bonds in the Aaa group owing to the limited number of suitable issues in the industrial and railroad groups. 4 Standard Statistics Co. Monthly data are averages of Wednesday figures. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

FEDERAL RESERVE SYSTEM 69 No. 16.—BUSINESS INDEXES * [Adjusted for seasonal variation, 1923-1925 average—100] Construction con- Industrial production tracts awarded (value)2 F to a r c y - F to a r c y - Fr c e a i r ght m p D a e e r n t - t - W c s h o a o m l l - e e- i t n i N c o a o n - a m l e Year and month Total u m D a f a u b a n l r c - e - - m N d a a o u bl r n n - e - - M er i a n l - s Total d R e e n s ti i a - l ot A h l e l r m p e l e m o n y - t - rolls* l i o n a g d s - ( s s v a t a l o l e r u s e e) ( p m 1 r 1 o 9 i 0 d 2 c 0 i e 6 ) s t = * y ( m 1 p 1 e 9 a 0 n 2 y 0 t 9 - ) s = tures ufactures 1919 83 83 86 77 63 44 79 107 98 84 78 139 1920 87 92 83 89 63 30 90 107 117 91 94 154 1921 67 53 79 70 56 44 65 82 76 78 87 I 98 1922 85 80 93 74 79 68 88 91 81 85 88 97 1923 101 102 100 105 84 81 86 104 103 100 98 101 1924 95 92 96 96 94 95 94 96 96 "98 99 98 1925 104 106 104 99 122 124 120 100 101 103 103 104 1926 108 110 106 108 129 121 135 102 104 107 106 100 1927 106 101 110 107 129 117 139 100 102 104 107 95 1928 111 112 112 106 135 126 142 100 104 104 108 97 1929 119 122 117 115 117 87 142 106 110 107 111 95 100 1930 96 89 101 99 92 50 125 92 89 92 102 86 93 1931 81 59 99 84 63 37 84 78 68 74 92 73 80 1932 64 33 88 71 28 13 40 66 47 55 69 65 63 1933 76 50 98 82 25 11 37 73 50 58 67 66 58 1934 79 57 97 86 32 12 48 86 65 62 75 75 66 1935 90 76 102 91 37 21 50 91 74 64 79 80 71 1936 105 99 110 105 55 37 70 98 86 75 88 81 82 1937 110 107 110 115 59 41 74 106 102 78 92 86 88 1938 P86 P65 P100 P98 P64 P45 P80 P87 P78 62 85 79 P82 1937 January 114 112 117 111 63 45 77 105 94 80 93 86 85 February 116 113 119 116 62 47 75 106 100 82 95 86 86 March 118 113 120 128 56 45 64 107 106 83 93 88 88 April 118 117 119 115 53 44 61 108 109 84 93 88 88 May 118 120 116 117 56 44 66 109 110 80 93 87 88 June 114 112 115 115 61 42 77 108 107 78 93 87 89 July 114 122 108 112 67 44 86 109 105 80 92 88 89 August 117 126 110 113 62 40 81 109 108 79 93 88 90 September 111 114 107 116 56 37 71 107 104 78 94 87 89 October 102 101 100 113 52 36 65 105 105 76 93 85 88 November 88 74 94 109 56 32 76 101 93 71 91 83 87 December 84 60 95 115 61 30 87 95 84 67 89 82 86 1938 January 80 56 93 108 52 26 73 90 75 65 90 81 84 February 79 54 94 103 51 32 66 89 77 62 88 80 83 March 79 54 93 103 46 33 56 87 77 60 86 80 83 April 77 53 91 101 52 37 65 85 75 57 83 79 81 May 76 51 93 91 51 37 62 84 73 58 78 78 80 June 77 50 95 92 54 42 64 82 71 58 82 78 81 July 83 58 102 93 59 49 68 83 71 61 83 79 81 August 88 64 108 95 66 53 77 85 77 62 83 78 82 September 91 69 107 97 78 56 96 87 81 64 86 78 82 October 96 84 106 99 82 57 102 88 84 68 84 78 82 November 103 95 110 102 96 56 128 90 84 69 89 78 84 December P104 P92 P113 PI 08 P98 P57 P132 P91 P87 69 89 77 P85 *Without seasonal adjustment. P Preliminary. 1 Indexes compiled by the Board of Governors of the Federal Reserve System, except for indexes of wholesale commodity prices and factory payrolls, compiled by the United States Bureau of Labor Statistics, and the index of income payments, compiled by the United States Department of Commerce. Descriptions and back figures for the Board's indexes may be obtained from the Division of Research and Statistics. 2Three-month moving average, centered at second month, based on F. W. Dodge Corporation data for 37 Eastern States. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

APPENDIX 71 Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

RECORD OF POLICY ACTIONS—BOARD OF GOVERNORS MEETING ON MARCH 17, 1938 Members present: Mr. Ransom, Vice Chairman; Mr. Szymczak, Mr. Davis. Amendment No. 1 of Revised Regulation T, Extension and Maintenance of Credit by Brokers, Dealers, and Members of National Securities Exchanges. By unanimous vote, Regulation T was amended effective March 21, 1938, (1) to allow a broker under Section 4(b) to permit withdrawals from omnibus accounts even though, as a result of the transactions in the account on the da}r of the withdrawal, additional margin is required in the account; (2) to extend the seven-day period provided in section 4(c) relating to special cash accounts, by the number of days required for shipments of securities but not more than an additional seven days; and (3) to permit a creditor under section 4(f) to finance for an odd-lot dealer, without being subjected to the standard margin requirements, the transactions of such a person in his capacity as an odd-lot dealer. The Board was of the opinion that, in order to meet certain operating difficulties which were being experienced by some of those subject to the regulation, the regulation could be liberalized in these respects without affecting adversely the purposes for which it was adopted. MEETING ON APRIL 15, 1938 Members present: Mr. Eccles, Chairman; Mr. Ransom, Vice Chairman; Mr. Szymczak, Mr. McKee, Mr. Davis, Mr. Draper. Reduction in Reserve Requirements of Member Banks. It was voted unanimously at this meeting, for the purpose of reducing reserve requirements of member banks, to adopt, effective at the opening of business on April 16, 1938, a revised supplement to Regulation D, Reserves of Member Banks, requiring that each member bank maintain on deposit with the Federal Reserve bank of its district reserve balances equal to 12 percent of its net demand deposits if the bank be not located in a reserve or central reserve city, YIV2 percent of its net demand deposits if the bank be located in a reserve city, and 22% percent of its net demand deposits if the bank be located in a central reserve city, plus 5 percent of its time deposits. It was estimated that as a result of this reduction in reserve requirements excess reserves of member banks would increase by about $750,- 000,000. This action had been agreed upon by the members of the Board as a part of the program announced by the President of the 73 Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

74 ANNUAL REPORT OF BOARD OF GOVERNORS United States on April 14, 1938, for the encouragement of business recovery. Although there had been excess reserves in amounts considered ample to meet all probable needs of agriculture, commerce and business, the volume of business activity had declined with such rapidity as to produce injurious deflationary effects upon commodity prices, the capital market, and industry generally. In these circumstances and in view of the other steps proposed to be taken in the Government's program for encouraging business recovery, the Board decided that a reduction in reserve requirements of member banks might be helpful, as a part of a concerted effort by the Government to carry out the purposes of this program, by assuring the continued availability of ample funds for meeting business requirements and thereby preventing injurious credit contraction. MEETING ON AUGUST 31, 1938 Members present: Mr. Ransom, Vice Chairman; Mr. Szymczak, Mr. McKee, Mr. Davis, Mr. Draper. Amendment to Regulation L, Interlocking Bank Directorates under the Clayton Act, to Discontinue Permission Granted to a Private Banker or a Director, Officer or Employee of a Member Bank to Serve a Morris Plan Bank or Similar Institution. By unanimous vote, subsection 3 (a) of Regulation L, Interlocking Bank Directorates Under the Clayton Act, was amended, effective February 1, 1939, to discontinue the permission granted by that subsection to a private banker or a director, officer or employee of a member bank to serve a Morris Plan bank or similar institution. When the regulation containing the permission above referred to was adopted in January 1936 it appeared that Morris Plan banks were not generally engaged in the same classes of business as commercial banks. Since that time, however, there has been an increasing tendency on the part of commercial banks to enter the personal loan field and on the part of Morris Plan banks to accept deposits subject to check as well as time and savings deposits and to make commercial loans. In the opinion of the Board the development of this tendency has made undesirable the creation of additional interlocking directorates of this type or the continuation of those in existence, in view of the general purpose of the prohibition against interlocking directorates contained in section 8 of the Clayton Act as amended by the Banking Act of 1935. The Board decided to make this action effective February 1, 1939, because of the fact that the statute makes unlawful the continuance after that date of certain other existing interlocking relationships. MEETING ON NOVEMBER 7, 1938 Members present: Mr. Eccles, Chairman; Mr. Ransom, Vice Chairman; Mr. Szymczak, Mr. McKee, Mr. Davis, Mr. Draper. Amendments to Regulation L, Interlocking Bank Directorates under the Clayton Act. By unanimous vote: (1) Subsection 3 (a) of Regulation L, Interlocking Bank Directorates Under the Clayton Act, was amended, effective immediately, to permit any private banker or any di- Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

FEDERAL RESERVE SYSTEM 75 rector, officer, or employee of a member bank of the Federal Reserve System who is lawfully serving as a director, officer, or employee of a Morris Plan bank or similar institution on January 31, 1939, to continue such service until August 1, 1939. (2) A new subsection (e) was added at the end of Section 3 of Regulation L to provide that any director, officer, or employee of any member bank of the Federal Reserve System who, on August 23, 1935 (date of approval of the Banking Act of 1935), was lawfully serving at the same time as a private banker or as a director, officer, or employee of any other bank, banking association, savings bank, or trust company and whose services in such capacities had been continuous since such date, may continue, until August 1, 1939, to serve such member bank and not more than one other such bank, banking association, savings bank, trust company or private banker. The reasons for the Board's action were set forth in the following statement: The Board believes that the principles of Section 8 of the Clayton Act, which relate to interlocking bank directorates, are in the public interest and should be applied to all classes of banks. The law is now discriminatory in that it applies only to cases involving member banks of the Federal Reserve System or private banks. The Board does not believe that there should be discrimination in any respect among classes of banks subject to Federal authority. In view of the fact that less than a month will elapse between the convening of the new Congress and February 1, 1939, on which date certain existing relationships would terminate, the Board has exercised its discretion under the law, as to such relationships involving not more than two banks, to extend this time to August 1, 1939. This action was taken for the purpose of calling the matter to the attention of Congress when it convenes, with a recommendation that the existing discrimination between member banks and nonmember banking institutions be removed so that the provisions of the law will apply alike to all banks under Federal authority. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

RECORD OF POLICY ACTIONS—FEDERAL OPEN MARKET COMMITTEE MEETING ON MARCH 1, 1938 Members present: Mr. Eccles, Chairman; Mr. Harrison, Vice Chairman; Mr. Szymczak, Mr. McKee, Mr. Ransom, Mr. Davis, Mr. Sinclair, Mr. Newton, Mr. Schaller, Mr. Peyton. Authority (1) to Replace Maturing Securities and to Make Shifts of Securities in the System Open Market Account and (2) to Increase or Decrease System Open Market Account. By unanimous vote, the Committee instructed the executive committee, until otherwise instructed by the Federal Open Market Committee, to direct the replacement of maturing securities in the system open market account with other Government securities and to make such shifts between maturities in the account as may be necessary in the proper administration of the account, provided that the amount of securities maturing within two years be main-, tained at not less than $1,000,000,000 and that the amount of bonds having maturities in excess of five years be not over $850,000,000 nor less than $500,000,000. The Committee also voted unanimously to authorize the executive committee upon written, telephonic, or telegraphic approval of a majority of the members of the Federal Open Market Committee, and until otherwise directed by the Committee, to direct the purchase in the open market from time to time of sufficient amounts of Government securities to meet the requirements of commerce, business, and agriculture by keeping at member banks an aggregate volume of excess reserves adequate for the continuance of the System's policy of maintaining credit conditions conducive to economic recovery; and to authorize the executive committee, upon written, telephonic, or telegraphic approval of a majority of the members of the Committee, and until otherwise directed by the Committee, to direct a reduction of the holdings of such securities, to the extent that their retention- was found to be unnecessary for the purpose of this action. It was understood, however, that the executive committee was not authorized to increase or decrease by more than $300,000,000 the amount of securities held in the system open market account. In the opinion of the Committee the existing amount of excess reserves of member banks was not too large in view of the low volume of business activity, declining prices, and business uncertainty and, therefore, no useful purpose would be achieved at this time by reducing the amount of the securities held by the System. It was agreed, however, that provision should be made for prompt action in purchasing securities, when approved by a majority of the Committee for the purpose of keeping at member banks an aggregate volume of excess reserves adequate for the continuance of the system's policy of maintaining credit conditions conducive to economic recovery, and that similar provision should be made 76 Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

FEDERAL RESERVE SYSTEM 77 for the sale of securities to the extent that their retention would be unnecessary for this purpose. It was agreed also that the existing authority of the executive committee to replace maturing securities and to make shifts of securities in the account should be continued in order to enable the executive committee to meet changing market conditions and to improve the distribution of maturities in the account. MEETING ON APRIL 22, 1938 Members present: Mr. Eccles, Chairman; Mr. Harrison, Vice Chairman; Mr. Szymczak, Mr. McKee, Mr. Ransom, Mr. Davis, Mr. Draper, Mr. Sinclair, Mr. Newton, Mr. Schaller, Mr. Peyton. Authority to Replace Maturing Securities and to Make Shifts of Securities in the System Open Market Account. The following resolution was presented by Mr. Harrison, who moved its adoption: aIn view of the fact that the present and prospective amounts of excess reserves of member banks are tending to make it more difficult for the System, by means of shifts in the maturities in the open market account, to exercise its influence towards orderliness in the Government securities market VOTED that, until otherwise authorized or directed by the Committee, and in addition to the authority to make shifts in the maturities in the system open market account, the executive committee be authorized to permit fluctuations in the total amount of the account in order more effectively, with the means available and in the light of current conditions, to exert its influence towards orderly conditions in the Government bond market, provided, however, that the account shall not be increased or decreased by more than $200,000,000 from the present level of the account," The presentation of the foregoing resolution followed a detailed discussion of developments in connection with the recently announced Government program for the encouragement of business recovery, including the release of gold held in the inactive gold account of the Treasury, the reduction made by the Board of Governors of the Federal Reserve System as of April 16, 1938, in reserve requirements of member banks, and a reduction in the amounts of current weekly offerings by the Treasury of Treasury bills for sale in the market. Mr. Harrison presented his resolution on the ground that in all the circumstances the executive committee should have authority to permit some flexibility in the system open market account by allowing some reduction in the amount of the account if that should seem desirable as a factor in restraining a disorderly rise in the market just as in the past, by purchases of securities, it had exerted its influence toward maintaining an orderly market on a decline. In his opinion, some reasonable reduction in the account at such a time should not be interpreted as a reversal of the policy of the Government with respect to excess reserves and probably would serve to make the market less vulnerable in the future. As a substitute for Mr. Harrison's resolution, a motion was made and carried unanimously that the executive committee be instructed to direct the replacement of Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

78 ANNUAL REPORT OF BOARD OF GOVERNORS the next maturing Treasury bills in the system open market account with Treasury bills or notes having maturities not to exceed two years, provided that such securities could be purchased without paying a premium above a no-yield basis, with the understanding that another meeting of the Federal Open Market Committee would be held next week. Thereupon, by unanimous vote, the Committee instructed the executive committee, until otherwise instructed by the Committee and subject to the limitations contained in the motion previously adopted on this date with respect to the next maturing Treasury bills in the account, to direct the replacement of maturing securities in the system open market account with other Government securities and to make such shifts between maturities in the account as may be necessary in the proper administration of the account, provided that the amount of securities maturing within two years be maintained at not less than $1,000,000,000 and that the amount of bonds having maturities in excess of five years be not over $850,000,000 nor less than $500,- 000,000. The foregoing actions were taken by the Committee on the ground that the question of general policy to be followed by the Committee required further study in the light of actual developments during an interval before another meeting of the Committee, which it was agreed should be held the following week and, therefore, that during such interval there should be no change in the size of the system account except to the extent that it might prove to be impossible to replace maturing securities without paying a premium over a no-yield basis for replacement securities maturing within two years. MEETING ON APRIL 29, 1938 Members present: Mr. Eccles, Chairman; Mr. Harrison, Vice Chairman; Mr. Szymczak, Mr. McKee, Mr. Ransom, Mr. Davis, Mr. Draper, Mr. Sinclair, Mr. Newton, Mr. Peyton, Mr. Martin (alternate for- Mr. Schaller). Authority (1) to Replace Maturing Securities and to Make Shifts of Securities in the System Open Market Account and (2) to Increase or Decrease the System Open Market Account. It was moved that the following resolutions be adopted:- "That the executive committee be directed, until otherwise directed by the Federal Open Market Committee, to arrange for the replacement of maturing securities in the system open market account with other Government securities and for such shifts in maturities as may be necessary in the proper administration of the account, provided (1) that maturing Treasury bills shall be replaced only with Treasury bills or notes maturing within two years to the extent that they can be purchased without paying a premium over a no-yield basis; (2) that, subject to the foregoing limitation, the amount of securities in the account maturing within two years be maintained at not less than $1,000,000,000; and (3) that the amount of bonds in the account having maturities in Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

FEDERAL RESERVE SYSTEM 79 excess of five years be maintained at not less than $500,000,000 nor more than $850,000,000. "That, in addition to such authority as may be contained in other resolutions of the Federal Open Market Committee and until otherwise directed by the Committee, the executive committee be authorized, upon written, telephonic or telegraphic approval of a majority of the members of the Federal Open Market Committee, to arrange for the purchase or sale (which would include authority to allow maturities to run off without replacement) of Government securities in the open market from time to time for the system open market account to such extent as the executive committee shall find to be necessary for the purpose of exercising an influence toward maintaining orderly market conditions, provided (1) that the total amount of securities in the account be not increased or decreased by more than $125,000,000, and (2) that the amount of bonds in the account having maturities over five years be maintained at not less than $500,000,000 nor more than $850,000,000." Mr. Harrison moved as a substitute for the above motion that the following resolution be adopted: 'That until otherwise authorized or directed by the Federal Open Market Committee the executive committee be authorized (a) to make such shifts in maturities in the system open market account as may be necessary in the proper administration of the account, and (b) to permit fluctuations in the total amount of the account in order more effectively with the means available and in the light of current conditions to exert its influence toward maintaining orderly conditions in the market, provided (1) that the amount of securities in the account maturing within two years be maintained at not less than $1,000,000,000, (2) that the amount of bonds in the account having maturities in excess of five years be maintained at not less that $500,000,000 nor more than $850,000,000, and (3) that the total amount of the account be not increased or decreased by more than $200,000,000 from the present level of the account." The substitute motion was put by the Chair and lost, the members voting as follows: "aye," Messrs. Harrison, McKee and Sinclair; "no," Messrs. Eccles, Szymczak, Ransom, Davis, Draper, Newton, Peyton and Martin. The original motion was put by the Chair and carried unanimously. Mr. Harrison's substitute resolution was offered on the ground that it might become increasingly difficult for the system to exercise an influence toward orderly conditions in the market by means of shifts in maturities in the account; that further replacement of maturing securities with short maturities might accentuate the existing abnormalities in short and long term rates; than an effort to exert an influence toward orderly market conditions at this time was important if we were to avoid a too rapid or extensive rise in bond prices which might make the market vulnerable to later reactions; that a reduction in the account at this time, especially if it resulted merely from a failure to replace maturities and if effected for the purpose of exercising the Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

80 ANNUAL REPORT OF BOARD OF GOVERNORS system's influence toward the maintenance of orderly market conditions, should not be interpreted as in conflict with or as counteracting the Government's recent program to increase excess reserves; and that in order to meet its responsibility more effectively under prevailing conditions the executive committee should have authority to sell securities or allow maturities to run off without replacement. The majority voted against the substitute motion on the ground that a reduction in the system account would effect a corresponding reduction of excess reserves of member banks from the amount that would exist otherwise; that such action at this time would be regarded as inconsistent with the Government's announced program and particularly with the action of the Board of Governors in reducing reserve requirements; and that such action should not be taken unless there were developments subsequent to this meeting which would require a reconsideration of the general policy, in which event another meeting of the Committee should be called. The unanimous action of the full Committee on the original motion was taken in the light of the position of the majority on the substitute resolution, it being agreed that in these circumstances the executive committee should have the usual authority to replace maturing securities and to make shifts of securities in the account subject to the limitation that maturing Treasury bills should be replaced only with Treasury bills or notes maturing within two years to the extent that they could be purchased without paying a premium over a no-yield basis; and that in order to meet unforseen conditions that might arise in the interval before another meeting of the full Committee could be convened, the executive committee should be in position to act promptly with approval of a majority of the full Committee to increase or decrease the system account as circumstances might warrant. MEETING ON AUGUST 2. 1938 Members present: Mr. Eccles, Chairman; Mr. Harrison, Vice Chairman; Mr. Szymczak, Mr. McKee, Mr. Ransom. Mr. Davis, Mr. Draper, Mr. Sinclair, Mr. Schaller, Mr. Newton, Mr. Peyton. Authority (1) to Replace Maturing Securities and to Make Shifts of Securities in the System Open Market Account and (2) to Increase or Decrease the System Open Market Account. Upon motion duly made and seconded, and by unanimous vote, the following resolutions were adopted: "That the executive committee be directed, until otherwise directed by the Federal Open Market Committee, to arrange for the replacement of maturing securities in the system open market account with other Government securities and for such shifts in maturities as may be necessary in the proper administration of the account, provided (1) that maturing Treasury bills shall be replaced only with Treasury bills or notes to the extent that they can be purchased without paying a premium over a no-yield basis; (2) that, subject to the foregoing limitation, the amount of securities in the account maturing within two years be maintained at not less than $1,000,000,000; and (3) that the amount of bonds in the account having maturities in excess of five years be maintained at not less than $500,000,000 nor more than $850,000,000. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

FEDERAL RESERVE SYSTEM 81 "That, in addition to such authority as may be contained in other resolutions of the Federal Open Market Committee and until otherwise directed by the Committee, the executive committee be authorized, upon written, telephonic or telegraphic approval of a majority of the members of the Federal Open Market Committee, to arrange for the purchase or sale (which would include authority to allow maturities to run off without replacement) of Government securities in the open market from time to time for the system open market account to such extent as the executive committee shall find to be necessary for the purpose of exercising an influence toward maintaining orderly market conditions, provided (1) that the total amount of securities in the account be not increased or decreased by more than $125,000,000, and (2) that the amount of bonds in the account having maturities over five years be maintained at not less than $500,000,000 nor more than $850,000,000." The members of the Committee agreed that the resolutions containing instructions to the executive committee which were adopted at the previous meeting of the full Committee should be renewed and for the same reasons, but that the new resolutions should contain a modification with respect to the replacement of maturing Treasury bills. In June, 1938, considerable difficulty was experienced in replacing maturing bills with Treasury obligations maturing within two years (as required by the authority granted at the meeting of the Federal Open Market Committee on April 29) without paying a premium over a no-yield basis for the new securities and it appeared that further replacements with Treasury bills and notes within the two-year limitation would be extremely difficult if not impossible without paying such a premium for the replacement securities. In these circumstances the members of the Federal Open Market Committee (except Mr. Davis who was absent), on July 1, 1938, agreed to waive, until otherwise directed by the Committee, the requirement contained in the first resolution adopted at the meeting of the Committee on April 29 that Government securities purchased in replacement of maturing Treasury bills have maturities within two years and this action was ratified by unanimous vote at the meeting of the Committee on August 2. As it was thought that there might be a continuation of the difficulties in obtaining replacement securities with maturities up to two years without paying a premium over a no-yield basis the Committee decided that the resolution adopted at this meeting authorizing replacement of maturing securities should provide that maturing bills be replaced with bills and notes without limitation as to maturity, but only to the extent that they could be obtained without paying a premium over a no-yield basis. MEETING ON SEPTEMBER 21, 1938 Members present: Mr. Harrison, Vice Chairman; Mr. Szymczak, Mr. McKee, Mr. Ransom, Mr. Davis, Mr. Sinclair, Mr. Newton, Mr. Schaller, Mr. Peyton. Authority (1) to Replace Maturing Securities and to Make Shifts of Securities in the System Open Market Account and (2) to Increase or Decrease the System Open Market Account. Upon motion duly made and seconded, the following resolutions were adopted by unanimous vote: Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

82 ANNUAL REPORT OF BOARD OF GOVERNORS 'That the executive committee be directed, until otherwise directed by the Federal Open Market Committee, to arrange for the replacement of maturing securities in the system open market account with other Government securities and for such shifts in maturities as may be necessary in the proper administration of the account, provided (1) that maturing Treasury bills shall be replaced only with Treasury bills or notes to the extent that they can be purchased without paying a premium over a no-yield basis; (2) that, subject to the foregoing limitation, the amount of securities in the account maturing within two years be maintained at not less than $1,000,- 000,000; and (3) that the amount of bonds in the account having maturities in excess of five years be maintained at not less than $500,000,000 nor more than $900,000,000. "That, in addition to such authority as may be contained in other resolutions of the Federal Open Market Committee and until otherwise directed by the Committee, the executive committee be authorized, upon written, telephonic or telegraphic approval of a majority of the members of the Federal Open Market Committee, to arrange for the purchase or sale (which would include authority to allow maturities to run off without replacement) of Government securities in the open market from time to time for the system open market account to such extent as the executive committee shall find to be necessary for the purpose of exercising an influence toward maintaining orderly market conditions, provided (1) that the total amount of securities in the account be not increased or decreased by more than $200,000,000, and (2) that the amount of bonds in the account having maturities over five years be maintained at not less than $500,000,000 nor more than $900,000,000." The resolutions were adopted for the reasons which prompted the Committee in adopting the resolutions containing the existing instructions to the executive committee. However, it was felt that the authority granted to the executive committee to increase or decrease the system account upon written, telephonic or telegraphic approval of a majority of the members of the full Committee should be enlarged for the reason that, while it appeared that the immediate possibility of war in Europe had diminished, there was considerable uncertainty in the situation which might result in the necessity for emergency action before another meeting of the full Committee could be held. In view of these circumstances, the limit placed in the second resolution upon such action was increased to $200,000,000. For the same reason the maximum limit on the amount of bonds in the account having maturities over five years was increased to $900,000,000 in both the first and second resolutions. MEETING ON DECEMBER 30, 1938 Members present: Mr. Eccles, Chairman; Mr. Harrison, Vice Chairman; Mr. Szymczak, Mr. McKee, Mr. Ransom, Mr. Davis, Mr. Draper, Mr. Sinclair, Mr. Schaller, Mr. Peyton, Mr. Leach (alternate for Mr. Newton). Authority (1) to Replace Maturing Securities and to Make Shifts of Securities in the System Open Market Account and (2) to Increase or Decrease System Open Market Account. Upon motion duly made and seconded, the following resolutions were adopted, Messrs. Harrison, Szymczak, McKee, Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

FEDERAL RESERVE SYSTEM 83 Davis, Sinclair, Schaller, Peyton and Leach voting "aye" and Messrs. Eccles, Ransom and Draper voting "no." "That the executive committee be directed until otherwise directed by the Federal Open Market Committee, (1) to arrange for the replacement of maturing Treasury bills in the system open market account with other Treasury bills or Treasury notes, or, from time to time, to allow such bills to mature without replacement or pending subsequent replacement (a) when market conditions are such as to make it impossible to procure other bills or notes without paying a premium over a no-yield basis, or (b) when such notes are not obtainable without undue disturbance to the market; (2) to arrange for the replacement of maturing Treasury notes and bonds in the system open market account with other Government securities; and (3) to arrange for such shifts in maturities in the system open market account as may be necessary in the proper administration of the account; provided, (a) that the amount of securities in the account maturing within two years be maintained at not less than $1,000,000,000; (b) that the amount of bonds in the account having maturities in excess of five years be maintained at not less than $500,000,000 nor more than $900,000,000; and (c) that, if Treasury bills in the account are allowed to mature without replacement, the total amount of securities in the account be not decreased by more than $200,000,000. "That, in addition to such authority as may be contained in other resolutions of the Federal Open Market Committee and until otherwise directed by the Committee, the executive committee be authorized, upon written, telephonic or telegraphic approval of a majority of the members of the Federal Open Market Committee, to arrange for the purchase or sale (which would include authority to allow maturities to run off without replacement) of Government securities in the open market from time to time for system open market account to such extent as the executive committee shall find to be necessary for the purpose of exercising an influence toward maintaining orderly market conditions, provided (1) that the total amount of securities in the account be not increased by more than $200,000,000 nor decreased by more than $200,000,000 including such decreases as may result from allowing Treasury bills in the account to mature without replacement, and (2) that the amount of bonds in the account having maturities over five years be maintained at not less than $500,000,000 nor more than $900,000,000." This action was taken in continuation of the existing policy of the Committee, the reasons for which have been stated in connection with resolutions adopted at previous meetings. In adopting this resolution, however, certain changes were made in the provisions bearing upon the replacement of maturing Treasury bills held in the System account, for reasons which are set forth in the following press statement, which was approved by the Committee following the adoption of the resolution: "The Federal Open Market Committee announced, following a meeting today, that weekly statements of the total holdings in the Federal Reserve System's Open Market .Account may at times show some fluctuation depending upon conditions in the market affecting the Committee's ability to replace maturing Treasury bills Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

84 ANNUAL REPORT OF BOARD OF GOVERNORS held in its portfolio. The volume of Treasury bills available on the market has declined materially during the year and, owing to the large and increasing demand, such bills are already selling either on a no-yield basis or at a premium above a no-yield basis. It has, therefore, become difficult and in some weeks impossible for the System to find sufficient bills on the market to replace those that mature. Short-term notes are also selling on a no-yield basis and longer-term notes have at times been difficult to obtain. In these circumstances, it may be necessary from time to time to permit bills held in the portfolio to mature without replacement, not because of any change in Federal Reserve policy but solely because of the technical situation in the market. Because no change in Federal Reserve policy is contemplated at this time, maturing bills will be replaced to the extent that market conditions warrant." On this statement Mr. Ransom requested that he be recorded as not voting, in view of his vote against the resolution in the form in which it was adopted by the Committee. It having been necessary for Mr. Draper to leave the meeting before the action was taken, he advised the Committee's Secretary later that he desired to be recorded as approving the press statement in view of the action of the Committee on the resolution. All the other members of the Committee voted in favor of the statement. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

RECOMMENDATIONS OF THE FEDERAL ADVISORY COUNCIL TO THE BOARD OF GOVERNORS OF THE FEDERAL RESERVE SYSTEM MAY 17, 1938 Topic: Unification of Bank Examinations. RECOMMENDATION: The Federal Advisory Council has given careful consideration to the views of the Board of Governors of the Federal Reserve System on the subject of the classification of loans in reports of bank examiners and the treatment of investment portfolios in such reports. It is the sense of the Council that the general plan as to the classification of loans which is now followed should be continued; that the heading "slow" should be altered, but that in Column 1 there should be brought together loans not presently considered doubtful or losses, but of a type which a bank would not and should not currently make, and that the total of such loans should be brought together in the Recapitulation Sheet. "Doubtful" and "Loss" columns should be continued as at present. The Council also believes that the entire investment portfolio of all banks should be listed, priced, and totaled and that this information is necessary if the directors of banks generally are to have an adequate picture of the banks' condition. This is particularly true since at the present time the investment portfolio of the average bank represents a large percentage of its total assets. The Council also feels that the difference between market value and carrying value in the case of all defaulted bonds, stocks, and non-defaulted bonds of low grade should be set up as loss or doubtful. Unless the market value of the total investment portfolio is in excess of carrying value, the bank should be required either to set up adequate reserves to cover depreciation on such items, or to charge it off. The Council does not believe that market depreciation in securities of high grade should be set up as "loss" or "doubtful" by the examiners. It does believe, however, that where such market depreciation exists, that unless the total market value of the investment portfolio is in excess of its carrying value, the examiners should use their influence to have the bank set up reserves sufficient to bring the carrying value of the investment portfolio down to at least market value. The bank should be given amply reasonable time to create such reserves. The Council believes that the Comptroller's regulations regarding marketability and character of investment securities which a bank can purchase should be liberalized and that all reference to classification by manuals should be omitted therefrom. The Council would further favor an amendment of the law so as to remove the requirement of marketability from investment securities which a bank could purchase. The Council believes that the examiners could and should see that banks in making investments do not acquire 85 Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

86 ANNUAL REPORT OF BOARD OF GOVERNORS an undue percentage of non-marketable investments in relation to their total assets and capital funds. NOVEMBER 29, 1938 Topic: Assignment of Claims on the United States. RECOMMENDATION : The Federal Advisory Council requests the Board of Governors of the Federal Reserve System to recommend to the proper authorities an amendment to that part of section 3477 of the Revised Statutes of the United States which is Title 31 U.S.C.A., Sec. 203, which makes null and void all transfers and assignments of any claims on the United States. The amendment should permit the assignment of claims where legitimate credit has been extended, excepting in those cases where claims arise in consequence of torts, tax refunds, or the like. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

COMPARISON OF SOME OF THE FEDERAL STATUTORY PROVISIONS REGULATING THE BUSINESS OF DIFFERENT CLASSES OF BANKSl I. Federal statutory provisions applicable to national banks ONLY. Restrictions on real estate loans. Regulations governing exercise of trust powers. Restrictions on acting as insurance agent. Restrictions on acting as real estate loan broker. Requirement that one-tenth of earnings be transferred to surplus until surplus equals common capital. Prohibition against holding "other real estate" for more than five years. Limitations on total loans to one borrower.2 Restrictions on absorption of another bank. Limitations on indebtedness which bank may incur. II. Federal statutory provisions applicable to all member banks, but NOT to nonmember insured banks (standards not necessarily uniform between national banks and State member banks). Regulations governing purchase of investment securities. Prohibition against purchasing stocks and engaging in underwriting of investment securities and stocks. Restrictions on loans to executive officers. Restrictions on dealings with directors. Prohibition against paying preferential rate of interest on deposits of directors, officers, etc. Restrictions on interlocking directorates or other interlocking relations with other banks. Restrictions on interlocking directorates or other interlocking relations with securities companies. Prohibition against bank having less than 5 or more than 25 directors. Provision authorizing supervisory authority to remove officers or directors for continued violations of law or continued unsafe or unsound practices. Prohibition against affiliation with securities company. Restrictions on holding company affiliates. Restrictions of bank stock representing stock of other corporations. Limitations on loans to affiliates. Limitations on investment in bank premises. Minimum capital requirements. Minimum capital requirements for branches. 1 There are a few Federal banking laws which apply to all banks including noninsured banks. Among them are provisions of law restricting the receipt of deposits by nonbanking institutions, including securities companies; those regulating loans for the purpose of purchasing or carrying securities registered on national securities exchanges; and those granting certain tax advantages in connection with the operation of a common trust fund if operated in conformity with the regulations of the Board of Governors. 2 Loans in excess of the limit fixed by the National Banking Act may not be discounted with a Federal Reserve bank by a State member bank but that part of a loan which is not excessive may be discounted by a national bank. 87 Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

88 ANNUAL REPORT OF BOARD OF GOVERNORS Prohibition against loaning on or purchasing own stock. Restrictions on withdrawal of capital and payment of unearned dividends. Requirement that reserves specified in Federal Reserve Act be maintained. Prohibition against making loans or paying dividends while reserves deficient. Requirements in connection with par clearance collection system. Prohibition against false certification of checks. Limitations on acceptance powers. Prohibition against acting as agent for nonbanking institutions in making loans to brokers or dealers in securities. Limitations on loans to one borrower on stocks or bonds. Limitations on aggregate loans to all borrowers on stocks or bonds. Limitations on deposits with nonmember banks. III. Federal statutory provisions applicable to member banks and to nonmember insured banks (standards not necessarily uniform between national banks, State member banks, and insured nonmember banks). Restrictions on establishment of branches. Restrictions on consolidating or merging with noninsured bank, assuming liability for such bank's deposits, or transferring assets to such bank for assumption of deposits. Restrictions on payment of interest on deposits. Restrictions on paying time deposits before maturity or waiving notice before payment of savings deposits. Prohibition against payment of dividends while delinquent on deposit insurance assessment. Prohibition against loans or gratuities to bank examiners. Provision authorizing supervisory authority to publish examination report if bank does not follow recommendation based thereon. Provision authorizing supervisory authority to require that bank provide protection and indemnity against burglary, defalcation and similar insurable losses. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

REVISION IN BANK EXAMINATION PROCEDURE Following is description of the revision of procedure in bank examinations as agreed to by the Secretary of the Treasury, the Board of Governors of the Federal Reserve System, the directors of the Federal Deposit Insurance Corporation, and the Comptroller of the Currency: The Classification of Loans in Bank Examinations.—The present captions of the classification units, namely, "Slow," "Doubtful," and "Loss" are to be abandoned. The classification units hereafter will be designated numerically and the following definitions thereof will be printed in examination reports: I. Loans or portions thereof the repayment of which appears assured. These loans are not classified in the examination report. II. Loans or portions thereof which appear to involve a substantial and unreasonable degree of risk to the bank by reason of an unfavorable record or other unsatisfactory characteristics noted in the examiner's comments. There exists in such loans the possibility of future loss to the bank unless they receive the careful and continued attention of the bank's management. No loan is so classified if ultimate repayment seems reasonably assured in view of the sound net worth of the maker or endorser, his earning capacity and character, or the protection of collateral or other security of sound intrinsic value. III. Loans or portions thereof the ultimate collection of which is doubtful and in which a substantial loss is probable but not yet definitely ascertainable in amount. Loans so classified should receive the vigorous attention of the management with a view to salvaging whatever value may remain. IV. Loans or portions thereof regarded by the examiner for reasons set forth in his comments as uncollectible and as estimated losses. Amounts so classified should be promptly charged off. Present practice will be continued under which the totals of II, III and IV above are included in the recapitulation or summary of examiners' classifications. Fifty percent of the total of III above and all of IV above will be deducted in computing the net sound capital of the bank. The Appraisal of Bonds in Bank Examinations.— Neither appreciation nor depreciation in Group I securities will be shown in the report. Neither will be taken into account in figuring net sound capital of the bank. Group I securities are marketable obligations in which the investment characteristics are not distinctly or predominantly speculative. This group includes general market obligations in the four highest grades and unrated securities of equivalent value. The securities in Group II will be valued at the average market price 89 Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

90 ANNUAL REPORT OF BOARD OF GOVERNORS for eighteen months just preceding examination and 50 percent of the net depreciation will be deducted in computing the net sound capital. Group II securities are those in which the investment characteristics are distinctly or predominantly speculative. This group includes general market obligations in grades below the four highest, and unrated securities of equivalent value. Present practice will be continued under which net depreciation in the securities in Group III and Group IV is classified as loss. Group III securities: Securities in default. Group IV securities: Stocks. Present practice will be continued under which premiums on securities purchased at a premium must be amortized. Present practice of listing all securities and showing their book value will be continued. The Treatment of Securities Profits in Bank Examinations.—Until losses have been written off and adequate reserves established, the use of profits from the sale of securities for any purpose other than those, will not be approved. Present practice will be continued under which estimated losses must be charged off. Present practice will be continued under which the establishment and maintenance of adequate reserves, including reserves against the securities account, are encouraged. Present practice will be continued under which speculation in securities is criticised and penalized. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

REVISED REGULATION ISSUED BY THE COMPTROLLER OF THE CURRENCY ON PURCHASES OF INVESTMENT SECURITIES By virtue of the authority vested in the Comptroller of the Currency by paragraph Seventh of Section 5136 of the Revised Statutes, the following regulation is promulgated: SECTION I (1) An obligation of indebtedness which may be purchased for its own account by a national bank or State member bank of the Federal Reserve System, in order to come within the classification of "investment securities" within the meaning of paragraph Seventh of said Section 5136, must be a marketable obligation, i.e., it must be salable under ordinary circum- .stances with reasonable promptness at a fair value; and with respect to the particular security, there must be present one or more of the following characteristics: (a) A public distribution of the securities must have been provided for or made in a manner to protect or insure the marketability of the issue; or, (b) Other existing securities of the obligor must have such a public distribution as to protect or insure the marketability of the issue under consideration; or, (c) In the case of investment securities for which a public distribution as set forth in (a) or (b) above cannot be so provided, or so made, and which are issued by established commercial or industrial businesses or enterprises, that can demonstrate the ability to service such securities, the debt evidenced thereby must mature not later than ten years after the date of issuance of the security and must be of such sound value or so secured as reasonably to assure its payment; and such securities must, by their terms, provide for the amortization of the debt evidenced thereby so that at least 75 percent of the principal will be extinguished by the maturity date by substantial periodic payments: Provided, That no amortization nee'd be required for the period of the first year after the date of issuance of such securities. (2) Where the security is issued under a trust agreement, the agreement must provide for a trustee independent of the obligor, and such trustee must be a bank or trust company. (3) All purchases of investment securities by national and State member banks for their own account must be of securities "in the form of bonds, notes, and/or debentures, commonly known as investment securities"; and every transaction which is in fact such a purchase must, regardless of its form, comply with this regulation. SECTION II (1) Although the bank is permitted to purchase investment securities" for its own account for purposes of investment under the provisions 91 Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

92 ANNUAL REPORT OF BOARD OF GOVERNORS of Revised Statute 5136 and this regulation, the bank is not permitted otherwise to participate as a principal in the marketing of securities. (2) The statutory limitation on the amount of the "investment securities7' of any one obligor or maker which may be held by the bank, is to be determined on the basis of the par or face value of the securities, and not on their market value. (3) The purchase of ''investment securities" in which the investment characteristics are distinctly or predominantly speculative, or the purchase of securities which are in default, either as to principal or interest, is prohibited. (4) Purchase of an investment security at a price exceeding par is prohibited, unless the bank shall: (a) Provide for the regular amortization of the premium paid so that the premium shall be entirely extinguished at or before the maturity of the security and the security (including premium) shall at no intervening date be carried at an amount in excess of that at which the obligor may legally redeem such security; or (b) Set up a reserve account to amortize the premium, said account to be credited periodically with an amount not less than the amount required for amortization under (a) above. (5) Purchase of securities convertible into stock at the option of the issuer is prohibited. (6) Purchase of securities convertible into stock at the option of the holder or with stock purchase warrants attached is prohibited if the price paid for such security is in excess of the investment value of the security itself, considered independently of the stock purchase warrants or conversion feature. If it is apparent that the price paid for an otherwise eligible security fairly reflects the investment value of the security itself and does not include any speculative value based upon the presence of a stock purchase warrant or conversion option the purchase of such a security is not prohibited. (7) As to purchase of securities under repurchase agreement, subject to the limitations and restrictions set forth in the law and this regulation: (a) It is permissible for the bank to purchase "investment securities" from another under an agreement whereby the bank has an option or a right to require the seller of the securities to repurchase them from the bank at a price stated or at a price subject to determination under the terms of the agreement, but in no case less than the value at the time of repurchase. (b) It is permissible for the bank to purchase "investment securities" from another under an agreement whereby the seller or a third party guarantees the bank against loss on resale of the securities. (c) It is not permissible for the bank to purchase "investment securities" from another under an agreement whereby the seller reserves the right or the option to repurchase said securities itself or through its nominee at a price stated or at a price subject to deter- Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

FEDERAL RESERVE SYSTEM 93 mination under the terms of the agreement, notwithstanding the fact that the bank may also, under such agreement, have the right or option to compel the seller to repurchase the securities at a price stated or at a price subject to determination under the terms of the agreement. (8) As to repurchase agreements accompanying sales of securities, (a) It is permissible for the bank selling securities to another to agree that the bank shall have an option or right to repurchase the securities from the buyer at a price stated or at a price subject to determination under the terms of the agreement, but in no case in excess of the market value at the time of repurchase. (b) It is not permissible for the bank selling securities to another to agree that the purchaser shall have the right or the option to require the bank to repurchase said securities at a price stated or at a price subject to determination under the terms of the agreement, notwithstanding the fact that the bank may also, under such agreement, have the right or option to repurchase the securities from the buyer at a price stated or at a price subject to determination under the terms of the agreement. In view of the fact that some banks may have bought or sold securities under a form of agreement which is prohibited by this regulation, the bank should either terminate or modify same so as to conform to this regulation, where such action may lawfully be taken. Existing agreements of the prohibited type must not be renewed. EXCEPTION The restrictions and limitations of this regulation do not apply to securities acquired through foreclosure on collateral, or acquired in good faith by way of compromise of a doubtful claim or to avert an apprehended loss in connection with a debt previously contracted, or to real estate securities acquired pursuant to Section 24 of the Federal Reserve Act, as amended. This regulation supersedes prior regulations governing the purchase of "investment securities" and is effective from and after July 1, 1938. Signed and promulgated this 27th day of June, 1938. MARSHALL R. DIGGS Acting Comptroller of the Currency Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

DIRECTORY OF THE BOARD OF GOVERNORS OF THE FEDERAL RESERVE SYSTEM (December 31, 1938) MARRINER S. ECCLES, of Utah, Chairman RONALD RANSOM, of Georgia, Vice Chairman M. S. SZYMCZAK, of Illinois JOHN K. MCKEE, of Ohio CHESTER C. DAVIS, of Maryland ERNEST G. DRAPER, of Connecticut 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. J. P. DREIBELBIS, Assvitayxt General Counsel. GEORGE B. VEST, Assistant General Counsel. B. MAGRUDER WINGFIELD, 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. EDWARD 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. 94 Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

SALARIES OF OFFICERS AND EMPLOYEES OF THE BOARD OF GOVERNORS OF THE FEDERAL RESERVE SYSTEM (December 31, 1938) OFFICES OF MEMBERS OF THE BOARD Lawrence Clayton, assistant to the Chairman $15,000.00 Elliott Thurston, special assistant to the Chairman 13,000.00 1 at $4,200 4,200.00 5 at $3,300 16,500.00 1 at $2,300 2,300.00 1 at $2,200 2,200.00 1 at $2,000 2,000.00 1 at $1,800 1,800.00 1 at $1,720 1,720.00 1 at $1,500 1,500.00 1 at $1,440 1,440.00 2 at $1,380 2,760.00 1 at $1,080 1,080.00 Total 65,500.00 OFFICE OF THE SECRETARY Chester Morrill, secretary $15,000.00 L. P. Bethea, assistant secretary 8,000.00 S. R. Carpenter, assistant secretary 7,500.00 J. C. Noell, assistant secretary 7,500.00 1 at $3,100 3,100.00 1 at $3,000. 3,000.00 2 at $2,900 5,800.00 1 at $2,800 2,800.00 3 at $2,700 8,100.00 1 at $2,500 2,500.00 1 at $2,400 2,400.00 4 at $2,100 8,400.00 1 at $2,040 2,040.00 1 at $2,000 2,000.00 1 at $1,980 1,980.00 1 at $1,920 1,920.00 2 at $1,800 3,600.00 1 at $1,720 1,720.00 5 at $1,620 8,100.00 3 at $1,600 4,800.00 3 at $1,560 4,680.00 2 at $1,500 3,000.00 1 at $1,440 1,440.00 1 at $1,380 1,380.00 2 at $1,320 2,640.00 7 at $1,200 8,400.00 1 at $1,140 1,140.00 2 at $1,080 2,160.00 Service Functions: 1 at $2,400 *2,400.00 1 at $2,280 *2,280.00 1 at $2,200 2,200.00 2 at $1,920 *3,840.00 1 at $1,900 1,900.00 3 at $1,860 *5,580.00 3 at $1.800 5,400.00 95 Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

9G ANNUAL REPORT OF BOARD OF GOVERNORS OFFICE OF THE SECRETARY—continued 1 at $1,680 1,680.00 2 at $1,660 3,320.00 1 at $1,620 1,620.00 1 at $1,600 1,600.00 1 at $1,560 1,560.00 1 at $1,500 *1,500.00 1 at $1,500 1,500.00 1 at $1,440 1,440.00 2 at $1,380 2,760.00 1 at $1,320 1,320.00 2 at $1,200 *2,400.00 1 at $1,140 1,140.00 3 at $1,080 3,240.00 1 at $5.00 per calendar day §282.86 Building Operation and Maintenance: Felix E. Spurney, building manager. . . . 5,000.00 1 at $3,400 3,400.00 1 at $2,400 2,400.00 1 at $2,060 2,060.00 1 at $1,920 1,920.00 2 at $1,900 3,800.00 2 at $1,600 3,200.00 13 at $1,500 19,500.00 1 at $1,440 1,440.00 1 at $1,380 1,380.00 2 at $1,320 2,640.00 5 at $1,200 6,000.00 8 at $1,140 9,120.00 2 at $1,080 2,160.00 1 at $900 900.00 1 at $688.60 25 at $626 tl5,650.00 1 at $3.00 per working day §81.00 Total 255,402.46 Less salaries of telegraph operators. . . 18,000.00 237,402.46 OFFICE OF GENERAL COUNSEL Walter Wyatt, general counsel $15,000.00 J. P. Dreibelbis, assistant general counsel 10,000.00 George B. Vest, assistant general counsel 10,000.00 B. M. Wingfield, assistant general counsel . 9,000.00 Kit Williams, assistant counsel 7,500.00 John C. Baumann, assistant counsel 6,000.00 Joseph T. Owens, assistant counsel 6,000.00 G. Howland Chase, assistant counsel 5,750.00 Alfred K. Cherry, assistant counsel 5,750.00 1 at $4,500 4,500.00 1 at $4,200 4,200.00 1 at $3,300 3,300.00 2 at $3,000 6,000.00 1 at $2,800 2,800.00 *The salaries of ten employees in the telegraph office aggregating $18,000 are regarded as an expense of the Federal Reserve Leased Wire System and as such are prorated among the Federal Reserve banks and the Board with the other expenses of the Leased Wire System. X Annual compensation based on a 4-hour working day at the rate of 55 cents an hour. f Annual compensation based on a 4-hour working day at the rate of 50 cents an hour. Digitized for FR§A AScEtRua l amount paid. http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

FEDERAL RESERVE SYSTEM 97 OFFICE OF GENERAL COUNSEL—continued 1 at $2,200. 2,200.00 3 at $2,100. 6,300.00 1 at $2,000. 2,000.00 1 at $1,960 1,960.00 5 at $1,800. 9,000.00 3 at $1,740. 5,220.00 1 at $1,440. . 1,440.00 1 at $1,380.. 1,380.00 Total .. 125,300.00 DIVISION OF RESEARCH AND STATISTICS E. A. Goldenweiser, director of division $15,000.00 Woodlief Thomas, assistant director 9,000.00 L. B. Currie, assistant director 8,500.00 Walter R. Gardner, senior economist 7,500.00 Frank R. Garfield, senior economist 6,000.00 Alan R. Sweezy, senior economist 5,600.00 George Terborgh, senior economist 5,600.00 Susan Burr Litchfield, senior economist 5,400.00 Leroy M. Piser, senior economist 5,400.00 Roman L. Home, senior economist 5,000.00 3 at $4,600 13,800.00 1 at $4,400 4,400.00 1 at $4,200 4,200.00 1 at $4,100 4,100.00 1 at $4,000. ... 4,000.00 4 at $3,600 ... 14,400.00 3 at $3,500 . . 10,500.00 1 at $3,200. ... 3,200.00 2 at $3,100.. 6,200.00 5 at $3,000 15,000.00 1 at $2,700 2,700.00 1 at $2,600 2,600.00 3 at $2,400. ... 7,200.00 at $2,300 9,200.00 at $2,200 8,800.00 3 at $2,100. 6,300.00 3 at $2,000. 6,000.00 4 at $1,900. 7,600.00 6 at $1,800. 10,800.00 7 at $1,780. 12,460.00 3 at $1,700. 5,100.00 1 at $1,660. 1,660.00 5 at $1,620. 8,100.00 2 at $1,600. 3,200.00 5 at $1,540. 7,700.00 4 at $1,440. 5,760.00 1 at $1,400. 1,400.00 1 at $1,320. 1,320.00 2 at $1,200. 2,400.00 1 at $1,140 1,140.00 1 at $1,080. 1,080.00 1 at 600.00 Total 265,920.00 DIVISION OF BANK OPERATIONS E. L. Smead, chief of division. . .^ 15,000.00 John R. Van Fossen, assistant chief 8,500.00 J. E. Horbett, assistant chief 7,500.00 L. S. Myrick, technical assistant 6,200.00 Bray Hammond, technical assistant 5,400.00 1 at $4,800 4,800.00 Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

98 ANNUAL REPORT OF BOARD OF GOVERNORS DIVISION OF BANK OPERATIONS—continued 1 at $4,400 4400 00 } 2 at $4,000 . .. 8,00000 1 at $3,900 3,900.00 1 at $3,800 3,800.00 1 at $3,200 3,200.00 1 at $3,100 3,100.00 1 at $3,000 3,000.00 1 at $2,900. . 2,900.00 1 at $2,800 2,800.00 3 at $2,700 8,100.00 1 at $2,500 2,500.00 2 at $2,400 4,800.00 1 at $2,200 2,200.00 2 at $2,000 4,000.00 3 at $1,800 5,400.00 3 at $1,740 5,220.00 1 at $1,700 1,700.00 5 at $1,680 8,400.00 1 at $1,620 1,620.00 2 at $1,600 3,200.00 1 at $1,560 1,560.00 2 at $1,320 2,640.00 1 at $1,080 1,080.00 Total 134,920.00 DIVISION OF EXAMINATIONS Leo H. Paulger, chief of division 15,000.00 R. F. Leonard, assistant chief . 10,000.00 C. E. Cagle, assistant chief 8,500.00 L. A. A. Siems, Federal reserve examiner \ . . 7,500.00 M. R. Wilkes, Federal reserve examiner 6,600.00 H. O. Koppang, Federal reserve examiner 6,500.00 R. B. Chamberlin, Federal reserve examiner 6,000.00 Edwin R. Millard, Federal reserve examiner 6,000.00 Geo. S. Sloan, Federal reserve examiner 6,000.00 Dwight L. Crays, Federal reserve examiner 5,500.00 William B. Pollard, Federal reserve examiner 5,500.00 Clarence C. Hostrup, Federal reserve examiner 5,300.00 Fred A. Nelson, Federal reserve examiner 5,300.00 C. S. Barker, assistant Federal reserve examiner 5,200.00 J. B. Crosby, Federal reserve examiner 5,200.00 Elisha L. Brien, Jr., Federal reserve examiner 5,000.00 Laurence H. Jones, Federal reserve examiner 5,000.00 1 at $4,900 4,900.00 2 at $4,800 9,600.00 2 at $4,600 9,200.00 1 at $4,500 4,500.00 1 at $4,400 4,400.00 3 at $4,300 12,900.00 1 at $4,200 4,200.00 2 at $4,000 8,000.00 1 at $3,700 3,700.00 2 at $3,600 7,200.00 3 at $3,400 10,200.00 1 at $3,300 3,300.00 1 at $2,900 2,900.00 1 at $2,800 2,800.00 3 at $2,700 8,100.00 1 at $2,600 2,600.00 1 at $2,500 2,500.00 2 at $2,400 4,800.00 1 at $2,300 2,300.00 4 at $2,100 8,400.00 Digitized for FR2A SatE R$2 ,000 4,000.00 http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

FEDERAL RESERVE SYSTEM 99 DIVISION OF EXAMINATIONS—continued 3 at $1,900 5,700.00 1 at $1,820 1,820.00 1 at $1,800 1,800.00 2 at $1,740 3,480.00 1 at $1,560 1,560.00 1 at $1,460 1,460.00 2 at $1,320 2,640.00 Total 253,060.00 DIVISION OF SECURITY LOANS Carl E. Parry, chief of division 10,000.00 Philip E. Bradley, assistant chief 7,500.00 2 at $3,600 7,200.00 1 at $2,400. . . . 2,400.00 : 1 at $2,300 2,300.00 1 at $2,100 2,100.00 1 at $1,800 1,800.00 1 at $1,140 1,140.00 Total 34,440.00 OFFICE OF FISCAL AGENT Oliver E. Foulk, fiscal agent 4,500.00 Josephine E. Lally, deputy fiscal agent 2,600.00 Total 7,100.00 Grand Total . .... 1,123,642.46 Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

RECEIPTS AND DISBURSEMENTS OF THE BOARD OF GOV- ERNORS OF THE FEDERAL RESERVE SYSTEM FOR THE YEAR 1938 Special fund account: Balance January 1, 1938: Available for general expenses of the Board $187,536.37 Available for expenses chargeable to Federal Reserve banks 107,267.53 Total $294,803.90 RECEIPTS Available for general expenses of the Board: Assessments on Federal Reserve banks for general expenses of the Board $1,724,922.40 Reimbursements for leased wire service 29,228.82 Subscriptions to the Federal Reserve Bulletin 6,324.42 Miscellaneous receipts, refunds, and reimbursements 5,762.34 Total receipts available for general expenses of the Board $1,766,237.98 Available for expenses chargeable to Federal Reserve banks: Assessments on Federal Reserve banks for: Cost of printing Federal Reserve notes $1,143,588.60 Expenses of leased wire system (telegraph) 66,261.51 Expenses of leased telephone lines 28,395.59 Expenses of the Federal Reserve Issue and Redemption Division (office of Comptroller of the Currency) 57,221.77 Miscellaneous expenses 6,751.37 •Total receipts available for expenses chargeable to Federal Reserve banks $1,302,218.84 Total receipts 3,068,456.82 Total available for disbursement 3,363,260.72 DISBURSEMENTS For general expenses of the Board: Expenses of 1937 paid in 1938 $69,971.00 Expenses of 1938 (per detailed statement) $1,707,503.67 Less accounts unpaid December 31, 1938 20,188.89 Expenses of 1938 paid during the year 1,687,314.78 Expenses of leased wire service, reimbursable 29,081.97 Miscellaneous refunds and reimbursable expenses 4,463.20 Total disbursements for general expenses of the Board $1,790,830.95 For expenses chargeable to Federal Reserve banks: Cost of printing Federal Reserve notes 1,170,208.60 Expenses of leased wire system (telegraph) 66,261.51 Expenses of leased telephone lines 28,395.59 Expenses of Federal Reserve Issue and Redemption Division (office of Comptroller of theCurrency) 57,221.77 Miscellaneous expenses 7,312.27 Total disbursements for expenses chargeable to Federal Reserve banks.. 1,329,399.74 Transfers from special fund account to building account 73,619.26 Total disbursements and transfers 3,193,849.95 Balance in special fund account December 31, 1938: Available for general expenses of the Board 89,324.14 Available for expenses chargeable to Federal Reserve banks 80,086.63 169,410.77 Building account: Balance January 1, 1938 $32,738.61 Transfers from special fund account 73,619.26 Miscellaneous receipts 614.63 Total 106,972.50 Disbursements 106,972.50 Balance 0.00 100 Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

FEDERAL RESERVE SYSTEM 101 STATEMENT OF EXPENSES OF THE BOARD OF GOVERNORS OF THE FEDERAL RESERVE SYSTEM, 1938 PERSONAL SERVICES Salaries $1,209,649.26 Retirement System contributions for current service 54,889.18 Sub-total $1,264,538.44 Retirement System contributions for prior service 163,370.88 TotalPersonal Services $1,427,909.32 NON-PEESONAL SERVICE Traveling Expenses $ 75,910.79 Postage andExpressage 1,220.01 Telephone and Telegraph 63,666.68 Printing andBinding 45,792.55 Stationery and Supplies 20,044.49 Furniture andEquipment 26,751.99 Books and Subscriptions 5,357.91 Light, Heat, Power and Water. 24,419.75 Repairs and Alterations to Building 2,852.41 Rental and Repairs (Furniture andEquipment) 2,377.48 Medical Service and Supplies 493.58 Insurance '. 2,621.14 Miscellaneous 8,085.57 Total Non-Personal Services $ 279,594.35 GRAND TOTAL $1,707,503.67 Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

DIRECTORY OF THE FEDERAL OPEN MARKET COMMITTEE (December 31, 1938) MARRINER S. ECCLES, Chairman GEORGE L. HARRISON, Vice Chairman CHESTER C. DAVIS ERNEST G. DRAPER JOHN K. MCKEE OSCAR NEWTON J. N. PEYTON RONALD RANSOM G. J. SCHALLER JOHN S. SINCLAIR M. S. SZYMCZAK CHESTER MORRILL, Secretary S. R. CARPENTER, Assistant Secretary WALTER WYATT, General Counsel J. P. DREIBELBIS, Assistant General Counsel E. A. GOLDENWEISER, Economist JOHN H. WILLIAMS, Associate Economist ALLAN SPROUL, Manager oj System Open Market Account 102 Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

DIRECTORY OF THE FEDERAL ADVISORY COUNCIL (December 31, 1938) OFFICERS President, WALTER W. SMITH Vice President, HOWARD A. LOEB Secretary, WALTER LICH TEN STEIN EXECUTIVE COMMITTEE WALTER W. SMITH WINTHROP W. ALDRICH HOWARD A. LOEB LEWIS B. WILLIAMS THOMAS M. STEELE EDWARD E. BROWN MEMBERS District No. 1.—THOMAS M. STEELE, President, First National Bank & Trust Company of New Haven, Connecticut. District No. 2.—WINTHROP W. ALDRICH, Chairman, The Chase National Bank of the City of New York, New York, New York. District No. 3.—HOWARD A. LOEB, Chairman, Tradesmens National Bank & Trust Company, Philadelphia, Pennsylvania. District No. 4.—LEWIS B. WILLIAMS, Chairman, The National City Bank, Cleveland, Ohio. District No. 5.—ROBERT M. HANES, President, Wachovia Bank and Trust Company, Winston-Salem, North Carolina. District No. 6.—EDWARD BALL, C/O Barnett National Bank Building, Jacksonville, Florida, District No. 7.—EDWARD E. BROWN, President, The First National Bank of Chicago, Chicago, Illinois. District No. 8.—WALTER W. SMITH, President, First National Bank in St. Louis, St. Louis, Missouri. District No. 9.—JOHN CROSBY, Vice President, Farmers and Mechanics Savings Bank, Minneapolis, Minnesota. District No. 10.—C. Q. CHANDLER, Chairman, First National Bank in Wichita, Wichita, Kansas. District No. 11.—R. E. HARDING, President, The Fort Worth National Bank, Fort Worth, Texas. District No. 12.—PAUL S. DICK, President, United States National Bank, Portland, Oregon. 103 Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

104 ANNUAL REPORT OF BOARD OF GOVERNORS CHAIRMEN, DIRECTORS, PRESIDENTS AND FIRST VICE PRESIDENTS OF FEDERAL RESERVE BANKS (December 31, 1938) DISTRICT NO. 1—BOSTON DISTRICT NO. 4—CLEVELAND F. H. CURTISS, chairman and Federal Reserve E. S. BURKE, JR., chairman and Federal Reserve agent, H. S. DENNISON, deputy chairman, agent, G. C. BRAINARD, deputy chairman, R. A. YOUNG, president, W. W. PADDOCK, first M. J. FLEMING, president, F. J. ZURLINDBN, vice president first vice president Term Term Directors expires Directors expires Dec. 31 Dec. 31 Class A: Allan Forbes, Boston, Mass 1938 Class A: L. A. Dodge, Damariscotta, Me 1939 F.F. Brooks, Pittsburgh, Pa 1938 L. S. Reed, Waterbury, Conn 1940 B.R.. Conner, Ada, Ohio 1939 Class B: H.B . McDowell, Sharon, Pa 1940 P. R. Allen, E. Walpole, Mass 1938 Class B: E. J. Frost, Boston, Mass 1939 G.D. Crabbs, Cincinnati, Ohio.... 1938 E. S. French, Boston, Mass 1940 J.E. Galvin, Lima, Ohio 1939 Class C: R.P. Wright, Erie, Pa 1940 F. H. Curtiss, Boston, Mass 1938 Class C: H. S. Dennison, Framingham, Mass 1939 E. S.Burke, Jr., Cleveland, Ohio... 1938 H.I. Harriman, Boston, Mass 1940 R.E. Klages, Columbus, Ohio 1939 G.C. Brainard, Youngstown, Ohio 1940 DISTRICT NO. 2—NEW YORK CINCINNATI BRANCH O. D. YOUNG, chairman and Federal Reserve B. J. LAZAR, managing director agent, BBARDSLEY RTJML, deputy chairman, G. L. HARRISON, president, ALLAN SPROUL, first vice president B. J. Lazar, Cincinnati, Ohio 1938 J. J. Rowe, Cincinnati, Ohio 1938 Alexander Thomson, Hamilton, Ohio 1938 Class A: W. H. Courtney, Lexington, Ky 1939 O. A. Thompson, Norwich, N. Y S. B. Sutphin, Cincinnati, Ohio 1939 W. F. Ploch, Long Beach, N. Y W. C. Potter, New York, N. Y Class B: PITTSBURGH BRANCH W. C. Teagle, New York, N. Y R. T. Stevens, New York, N. Y P. A. BROWN, managing director T. J. Watson, New York, N. Y Class C: P. A. Brown, Pittsburgh, Pa 1938 Beardsley Ruml, New York, N. Y G. T. Ladd, Pittsburgh, Pa 1938 E.E. Day, Ithaca, N. Y S. W. Harper, Wheeling, W. Va 1938 O.D. Young, New York, N. Y Clarence Stanlev, Pittsburgh, Pa... 1939 H. S. Wherrett, Pittsburgh, Pa 1939 BUFFALO BRANCH DISTRICT NO. 5—RICHMOND R. M. O'HARA, managing director ROBERT LASSITER, chairman and Federal Reserve agent, W. G. WYSOR, deputy chairman, HUGH R. M. O'Hara, Buffalo, N. Y LEACH, president, J. S. WALDEN, JR., first vice F. F. Henry, Buffalo, N. Y president M. B. Folsom, Rochester, N. Y F. J. Coe, Niagara Falls, N. Y Class A: F. A. Prole, Batavia, N. Y L.E. Johnson, Alderson, W. Va 1938 Howard Kellogg, Buffalo, N. Y C. E. Rieman, Baltimore, Md 1939 W. A. Dusenbury, Olean, N. Y J. C. Braswell, Rocky Mount, N. C 1940 Class B: Edwin Malloy, Cheraw, S. C 1938 DISTRICT NO. 3-PHILADELPHIA C. C. Reed, Richmond, Va 1939 J.H.Hanna, Washington, D.C 1940 R. L. AUSTIN, chairman and Federal Reserve Class C: agent, T. B. MCCABE, deputy chairman, J. S. Donald Sherwood, Baltimore, Md 1938 SINCLAIR, president, F. J. DRINNEN, first vice W. G. Wysor, Richmond, Va 1939 president Robert Lassiter, Richmond, Va 1940 Class A: Joseph Wayne, Jr., Philadelphia, Pa 1938 BALTIMORE BRANCH G. W. Reily, Harrisburg, Pa 1939 W. R. MILFORD, managing director J. B. Henning, Tunkhannock, Pa 1940 Class B: A. W. Sewall, Philadelphia, Pa 1938 I W. R. Milford, Baltimore, Md 1938 J. C. DeLaCour, Camden, N. J 1939 W. F. Thomas, Westminster, Md 1938 C. F. C. Stout, Camden, N. J 1940 L. S. Zimmerman,Baltimore,Md... 1938 Class C: C. P. McCormick, Baltimore, Md.... 1939 R. L. Austin, Philadelphia, Pa 1938 M. M. Prentis, Baltimore, Md 1939 T. B. McCabe, Chester, Pa. 1939 James Dixon,Easton, Md 1940 Francis Biddle, Philadelphia, Pa 1940 W. F. Roberts, Baltimore, Md 1940 Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

FEDERAL RESERVE SYSTEM 105 DISTRICT NO. 5—RICHMOND—Continued DISTRICT NO. 6—ATLANTA—Continued CHARLOTTE BRANCH NEW ORLEANS BRANCH W. T. CLEMENTS, managing director L. M. CLARK, managing director Term Term Directors expires Directors expires Dec. 31 Dec. 31 W. T. Clements, Charlotte, N. C 1938 L. M. Clark, New Orleans, La 1938 G. S. Harris, Lancaster, S. C 1938 H. Holmes, Yazoo City, Miss 1938 C. L. Cobb, Rock Hill, S. C 1938 Alexander Fitz-Hugh, Vicksburg, Miss 1938 Christie Benet, Columbia, S. C 1939 E.E. Soulier, Lafayette, La B. M.Edwards, Columbia, S. C 1939 H. G. Chalkley, Jr., Lake Charles, La T.E. Hemby, Charlotte, N. C 1940 O. G. Lucas, New Orleans, La 1940 G. M. Wright, Great Falls, S. C 1940 Vacancy 1940 DISTRICT NO. 7—CHICAGO DISTRICT NO. 6—ATLANTA .— > chairman and Federal Reserve F. IT. NEELY, chairman and Federal Reserve agent. R. E. WOOD, deputy chairman. G. J. agent, , deputy chairman, OSCAR SCHALLER, president, H. P. PRESTON, first vice NEWTON, president, R. S. PARKER, first vice president president Class A: F.D.Williams, Iowa City, Iowa 1938 Class A: . • W. J. Cummings, Chicago, 111 1939 G. J. White, Mount Dora, Fla E. R. Estberg, Waukesha, Wis 1940 R. G. Clay, Atlanta, Ga Class B: W. D. Cook, Meridian, Miss N. H.Noyes, Indianapolis, Ind 1938 Class B: M. W. Babb, Milwaukee, Wis 1939 «E. T. George, New Orleans, La S. T. Crapo, Detroit, Mich 1940 J. A. McCrary, Atlanta, Ga Class C: Fitzgerald Hall, Nashville, Tenn R.E. Wood, Chicago, 111 1938 Class C: Vacancy 1939 F. H. Neely, Atlanta, Ga F. J. Lewis, Chicago, 111 1940 J. F. Porter, Columbia, Tenn R. C. Harris,New Orleans, La DETROIT BRANCH R. H. Buss, managing director BIRMINGHAM BRANCH R. H. Buss, Detroit, Mich 1938 P. L. T. BEAVERS, managing director J. M. Dodge, Detroit, Mich 1938 L. W. Watkins, Manchester, Mich 1938 D F P J. . . o C M L n . a . . P l T M d e . r C o B s o o o e d m n a y v s e , , e r B T r , s u B i , r s B i m c r i a m i r l n m o i g n o i h g s n a a h g m , a h A m , a l A m , a A l , a A la la 1 1 1 1 9 9 9 9 3 3 3 3 9 8 8 8 W H A J. . . . E C L S . . . . D M P M a ie a v c r r i L s d s o u h s n o c a a , l n l s D , , , B D e D t a e r e y t o t r r i o C o t, i i i t t M t , , y M , M i c M i h i c c h i h ch 1 1 1 1 9 9 9 9 3 3 4 4 9 9 0 0 Howard Gray, New Market, Ala 1939 E. L. Norton, Birmingham, Ala 1940 J. S. Coleman, Birmingham, Ala 1940 DISTRICT NO. 8—ST. LOUIS W. T. NARDIN, chairman and Federal Reserve agent, , deputy chairman, W. McC. MARTIN, president, F. G. HITT, first vice JACKSONVILLE BRANCH president G. S. VARDEMAN, Jr., managing director Class A: J. G. Lonsdale, St. Louis, Mo 1938 M. B. Nahm, Bowling Green, Ky 1939 G. S. Vardeman, Jr., Jacksonville, Fla.. G. R. Corlis, Anna, 111 1940 W. R. McQuaid, Jacksonville, Fla Class B: R. H. Gamble, Jacksonville, Fla M. P. Sturdivant, Glendora, Miss 1938 G. J. Avent, Jacksonville, Fla J. W. Harris, St. Louis, Mo 1939 Howard Phillips, Orlando, Fla H. C. Couch, Pine Bluff, Ark 1940 G. J. White, Mount Dora, Fla Class C: B. W. Haynes, Jacksonville, Fla J. R. Stanley, Evansville, Ind 1938 W. T. Nardin, St. Louis, Mo 1939 Oscar Johnston, Scott, Miss 1940 NASHVILLE BRANCH LITTLE ROCK BRANCH J. B. FORT, Jr., managing director A. F. BAILEY, managing director J. B. Fort, Jr., Nashville, Tenn A. F. Bailey, Little Rock, Ark 1938 C. W. Bailey, Clarksville, Tenn H. H. Tucker, Little Rock, Ark 1938 C. B. Austin, Greeneville, Tenn P. R. McCoy, Stuttgart, Ark 1938 F. M. Farris, Nashville, Tenn F. K. Darragh, Little Rock, Ark 1939 W. E. McEwen, Williamsport, Tenn J. H. Penick, Little Rock, Ark 1939 E. W. Palmer, Kingsport, Tenn A. E. McLean, Little Rock, Ark 1940 G. N. Bass, Decherd, Tenn I. N. Barnett, Jr., Batesville, Ark 1940 Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

106 ANNUAL REPORT OF BOARD OF GOVERNORS DISTRICT NO. 8—ST. LOUIS—Continued DISTRICT NO. 10—KANSAS CITY—Continued LOUISVILLE BRANCH DENVER BRANCH F. D. RASH, managing director J. E. OLSON, managing director Term Term Directors expires Directors expires Dec. 31 Dec. 31 F. D. Rash, Louisville, Ky 1938 J.E. Olson,Denver, Colo 1938 J. B. Hill, Louisville, Ky 1938 T. A. Dines, Denver, Colo 1938 W. R. Cobb, Louisville, Ky 1938 J. B. Grant, Denver, Colo 1938 W. P. Paxton, Paducah, Ky 1939 Wilson McCarthy, Denver, Colo 1939 J. 0. Sanders, Huntingburg, Ind 1939 R. H. Davis, Denver, Colo 1939 A. H.Eckles, Hopkinsville, Ky 1940 A. K. Mitchell, Albert, N. M 1940 P. B. Gaines, Carrollton, Ky 1940 W. C. Kurtz, Grand Junction, Colo 1940 MEMPHIS BRANCH OKLAHOMA CITY BRANCH W. H. GLASGOW, managing director C. E. DANIEL, managing director W. H. Glasgow, Memphis, Tenn 1938 Willis Pope, Columbus, Miss 1938 W J. . H R . . S K h i e n r g ar , d M , e S m he p r h a i r s d , , T M en is n s 1 19 9 3 3 9 8 C L. . D E. . E D d a g n i i n el g , t O on k , l a P h o o n m ca a C C i i t t y y , , O O k k l l a a 1 19 9 3 3 8 8 D. W. Brooks, Memphis, Tenn 1939 Clarence Roberts, Oklahoma City, Okla 1938 B. A. Lynch, Blytheville, Ark 1940 F. T. Chandler, Chickasha, Okla 1939 R. C. Branch, Pecan Point, Ark 1940 T. S. Hanna, Oklahoma City, Okla 1939 Lee Clinton, Tulsa, Okla 1940 S. W. Hayes, Oklahoma City, Okla 1940 DISTRICT NO. 9-MINNEAPOLIS W. B. GEERY, chairman and Federal Reserve J. N. OMAHA BRANCH PEYTON, president, 0. S. POWELL, first vice president L. H. EARHART, managing director Class A: H. R. Kibbee, Mitchell, S.D 1938 L. H.Earhart, Omaha, Nebr 1938 H. C. Hansen, Churchs Ferry, N. D 1939 R. E. Campbell, Lincoln, Nebr 1938 M. 0. Grangaard, Minneapolis, Minn 1940 G. H. Yates, Omaha, Nebr 1938 Class B: W. D. Clark, Omaha, Nebr 1939 J.E. O'Connell, Helena, Mont 1938 H. L. Dempster, Beatrice, Nebr 1939 A. P. Funk, LaCrosse, Wis 1939 W. H. Schellberg, Omaha, Nebr 1940 W. 0. Washburn, St. Paul, Minn 1940 G. A. Bible, Rawlins, Wyo 1940 Class C: W. B. Geery, Minneapolis, Minn 1938 W. C. Coffey, St. Paul, Minn 1939 W. D. Cochran, Iron Mountain, Mich 1940 DISTRICT NO. 11—DALLAS J. H. MERRITT, chairman and Federal Reserve HELENA BRANCH , B. A. MCKINNEY, president, R. R. GILBERT, first vice R. E. TOWLB, managing director president R.E.Towle, Helena, Mont 1938 Class A: J.E. O'Connell, Helena, Mont 1938 Alf Morris, Winnsboro, Tex 1938 A. R. McDermott, Billings, Mont 1938 E. H. Winton, Fort Worth, Tex 1939 Peter Pauly, Deer Lodge, Mont 1939 P.E. Hooks, Itasca, Tex 1940 H. D. Myrick, Square Butte, Mont 1939 Class B: J. D. Middleton, Greenville, Tex 1938 T T? TVTilnm Wnpn TPV 1939 H. C. Wiess, Houston, Tex 1940 DISTRICT NO. 10—KANSAS CITY Class C: J. H. Merritt, Dallas, Tex 1938 J. J. THOMAS, chairman and Federal Reserve Jay Taylor, Amarillo, Tex 1939 agent, R. B. CALDWELL, deputy chairman , G. H. Vacancy. 1940 HAMILTON, president, C. A. WORTHINGTON, first vice president EL PASO BRANCH Class A- E. E. Mullaney, Hill City, Kans 1938 J. L. HERMANN, managing director John Evans, Denver, Colo 1939 F. W. Sponable, Paola, Kans 1940 Class B: L.E. Phillips, Bartlesville, Okla 1938 J. L. Hermann, El Paso, Tex 1938 W. D. Hosford, Omaha, Nebr 1939 F. R. Coon, Deming, N. M 1938 J. M. Bernardin, Dawson, N. M 1940 F. M. Hayner, Las Cruces, N. M 1938 Class C: S. D. Young, El Paso, Tex 1939 J. J. Thomas, Kansas City, Mo 1938 R.E. Sherman,El Paso, Tex 1939 E. P. Brown, Davey, Nebr 1939 J. B. Martin, Tucson, Ariz 1940 R. B. Caldwell, Kansas City, Mo 1940 C. N. Bassett, El Paso, Tex 1940 Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

FEDERAL RESERVE SYSTEM 107 DISTRICT NO. 11—DALLAS—Continued DISTRICT NO. 12—SAN FRANCISCO—Con. HOySTON BRANCH LOS ANGELES BRANCH W. D. GENTRY, managing director W. N. AMBROSE, managing director Term Term Directors expires Directors expires Dec. 31 Dec. 31 W. D. Gentry, Houston, Tex 1938 W. N. Ambrose, Los Angeles, Calif 1938 S. R. Lawder, Houston, Tex. 1938 V. H. Rossetti, Los Angeles, Calif 1938 H. Renfert, Galveston, Tex 1938 W. S. Rosecrans, Alhambra, Calif 1938 Sam Taub, Houston, Tex 1939 C. E. Brouse, Riverside, Calif 1939 P.B.Doty, Beaumont,Tex 1939 C.V.Newman, Santa Ana, Calif 1939 G. G. Chance, Bryan, Tex 1940 J. W. Neal, Houston, Tex 1940 PORTLAND BRANCH SAN ANTONIO BRANCH R. B. WEST, managing director M. CRUMP, managing director R. B. West, Portland, Ore 1938 R. S. Smith, Eugene, Ore 1938 M. Crump, San Antonio, Tex 1938 A. E.Engbretsen, Astoria, Ore 1938 J. K. Beretta, San Antonio, Tex 1938 N. A.Davis, Walla Walla, Wash 1938 Vacancy 1938 E. B. MaeNaughton, Portland, Ore 1939 E. F. Flato, Corpus Christi, Tex 1939 G. T. Gerlinger, Portland, Ore 1939 G. C. Hollis, Eagle Pass, Tex 1939 C. M. Bartholomew, Austin, Tex 1940 Dolph Briscoe, Uvalde, Tex 1940 SALT LAKE CITY BRANCH W. L. PARTNER, managing director DISTRICT NO. 12—SAN FRANCISCO , chairman and Federal Reserve W. L. Partner, Salt Lake City, Utah 1938 agent, ST. GEORGE HOLDEN, deputy chairman, John Thomas, Gooding, Idaho 1938 W. A. DAY, president, IRA CLERK, first vice O. W. Adams, Salt Lake City, Utah 1938 president H. S. Auerbach, Salt Lake City, Utah 1939 F. P. Champ, Logan, Utah 1939 Class A: T. H. Ramsay, San Francisco, Calif 1938 SEATTLE BRANCH Keith Powell, Salem, Ore 1939 C.K.McIntosh.SanFrancisco,Calif 1940 C. R. SHAW, managing director Class B: W. G. Volkmann, San Francisco, Calif... 1938 R. H. Taylor, Los Angeles, Calif 1939 C. R. Shaw, Seattle, Wash 1938 E. H. Cox, San Francisco, Calif 1940 FredNelson, Seattle, Wash 1938 Class C: B. N. Phillips, Port Angeles, Wash 1938 Vacancy 1938 N. A. Telyea, Spokane, Wash 1938 Carlyle Thorpe, Los Angeles, Calif 1939 G. H. Greenwood, Seattle, Wash 1939 St. George Holden, San Francisco, Calif.. 1940 C. F. Larrabee, Bellingham, Wash 1939 Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

108 ANNUAL REPORT OF BOARD OF GOVERNORS NUMBER AND SALARIES OF OFFICERS AND EMPLOYEES OF FEDERAL RESERVE BANKS (December 31, 1938) Employees, except those Employees F se e r d v e e r a B l a R n e k - s A al n a n ry u a o l f Other officers a w re h o t r o s e e im b s a a b n l u a k r r s i e e d s a w re h o t r o s e e i b m s a a b n l u k a r r s i e e d s Total (including President branches) Num- Annual Num- Annual Num- Annual Num- Annual ber salaries ber salaries ber salaries ber salaries Boston $30,000 9 $87,000 606 $923,000 101 $129,930 717 $1,169,930 New York 50,000 39 439,800 1,941 3,769,082 329 585,000 2,310 4,843,882 Philadelphia 25,000 10 94,200 668 1,104,796 104 162,392 783 1,386,388 Cleveland 25,000 18 147,400 845 1,375,662 109 186,365 973 1,734,427 Richmond 21,000 17 120,000 512 760,392 151 193,642 681 1,095,034 Atlanta 25,000 20 129,420 386 507,960 347 424,328 754 1,086,708 Chicago 35,000 22 210,000 1,038 1,659,764 470 672,775 1,531 2,577,539 St. Louis 20,000 21 159,100 495 686,244 152 210,295 669 1,075,639 Minneapolis 25,000 13 82,600 249 396,131 105 150,249 368 653,980 Kansas City 25,000 18 141,700 460 716,950 143 210,282 622 1,093,932 Dallas 30,000 14 102,800 358 582,958 236 315,892 609 1,031,650 San Francisco 25,000 26 188,300 692 1,150,949 183 278,911 902 1,643,160 Total 330,000 227 1,902,320 8,250 13,633,888 2,430 3,520,061 10,919 19,392,269 Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

FEDERAL RESERVE SYSTEM 109 STATE BANK AND TRUST COMPANY MEMBERS Following is a list of the 1,114 State bank and trust company members of the Federal Reserve System on December 31, 1938. DISTRICT NO. 1 (42 banks) DISTRICT NO. 2—Continued CONNECTICUT (5 banks) NEW JERSEY—continued Hartford Phoenix State Bank & Trust Jersey City Commercial Trust Co. of New Co. Jersey New' Haven Union & New Haven Trust Co. New Jersey Title Guarantee & Torrington Brooks Bank & Trust Co. Trust Co. Waterbury Colonial Trust Co. Linden Linden Trust Co. Waterbury Trust Co. Montclair Bank of Montclair Montclair Trust Co. MAINE (5 banks) Morristown Morristown Trust Co. Augusta Depositors Trust Co. Newark Clinton Trust Co. Bangor Merrill Trust Co. Columbus Trust Co. Bar Harbor .. ., Bar Harbor Banking & Trust Federal Trust Co. Co. Fidelity Union Trust Co. Ellsworth Union Trust Co. Franklin-Washington Trust Co. Sanford Sanford Trust Co. Merchants & Newark Trust Co. United States Trust Co. MASSACHUSETTS (29 banks) West Side Trust Co. Arlington Menotomy Trust Co. Nutley Bank of Nutley Boston New England Trust Co. Passaic Bank of Passaic & Trust Co. Old Colony Trust Co. Peoples Bank & Trust Co. Pilgrim Trust Co. Paterson Hamilton Trust Co. State Street Trust Co. Perth Amboy .... First Bank & Trust Co. United States Trust Co. Plainfield .. * Mid-City Trust Co. Bridgewater Bridgewater Trust Co. Plainfield Trust Co. Brookline N Co o u rf n o t l y k B C a o n u k n t & y T T r r u u s s t t C C o o . . Rahway R St a a h t w e a T y ru T s r t u C st o. Co. Cambridge Harvard Trust Co. Ridgefield Park .. . Ridgefield Park Trust Co. B. M. C. Durfee Trust Co. Rochelle Park Rochelle Park Bank Fall River Fall River Trust Co. Rutherford Rutherford Trust Co. Gloucester Safe Deposit South Orange South Orange Trust Co. Gloucester Trust Co. Summit Summit Trust Co. Greenfield .. Franklin County Trust Co. Tenafly Tenafly Trust Co. Holyoke Hadley Falls Trust Co. Westfield Peoples Bank & Trust Co. Hyannis Hyannis Trust Co. Westfield Trust Co. Lynn Security Trust Co. Milton Blue Hill Bank & Trust Co. NEW YORK (124 banks) N N Q S S Sp a o u o e l r m w i r e i n w n m e t c g o r o y v f n o i i e d ll l e d N Q N S S N p o o u a e T r m i w u r i n r w n m e u t c g o r o s y k v f n t o i e i e d l a T l l T C e g d r T r o u u T r . T s u s t r r S t s u u t a C s s C f t t e o C o . . o C C . o o D . . eposit A A A A A r m d l m c b a a i a s m t d t n y e e s y v rd il a le m C F C S B M i t i i a r a o t t n i i s t n z z k e t t e e g n n T o B o s s f r m a u n A & B e s k t r a m y F n o C i k a t f C y o rm v o . A i u l e l n l b r e t s a y n T y T r r u u s s t t C Co o . . Union Trust Co. Avoca Bank of Avoca Taunton Bristol County Trust Co. Batavia Genesee Trust Co. Wellesley Hills ... Wellesley Trust Co. Belmont State Bank of Belmont Winchester Winchester Trust Co. Binghamton Marine Midland Trust Co. Worcester Worcester County Trust Co. Riasdell Bank of Blasdell Brooklyn (see New York) NEW HAMPSHIRE (1 bank) Buffalo Liberty Bank Con way Carroll County Trust Co. Manufacturers & Traders Trust Co. RHODE ISLAND (2 banks) Marine Trust Co. Providence Industrial Trust Co. Canandaigua . .. . Ontario County Trust Co. Canaseragn Canaseraga State Bank Union Trust Co. Canisteo First State Bank DISTRICT NO. 2 (173 banks) Cattaraugus' Bank of Cattaraugus Center Moriches . Center Moriches Bank NEW JERSEY1 (49 banks) Chatham State Bank of Chatham Hayonne Bayonne Trust Co. Chester-town Chester-Schroon-Horicon Bank Bloomfield Bloomfield Bank & Trust Co. Clymer Clymer State Bank ' < Community Trust Co. Cohocton Cohocton State Bank Bogota Bank of Bogota De Ruyter De Ruyter State Bank Boonton Boonton Trust Co. Dunkirk Dunkirk Trust Co. Carteret Carteret Bank & Trust Co. Ellenburg Depot State Bank of Ellenburg Cranford Cranford Trust Co. Elmira Chemung Canal Trust Co. Dover Dover Trust Co. Endicott Endicott Trust Co. Dunellen Peoples Trust Co. Union Trust Co. East Orange . Savings Investment & Trust Evans Mills Peoples Bank Co. Farmingdale Bank of Farmingdale Elizabeth . . . Central Home Trust Co. Floral Park Floral Park Bank & Trust Co. Elizabethport Banking Co. Fredonia Citizens Trust Co. Fort Lee Fort Lee Trust Co. Garden City Garden City Bank & Trust Co. Franklin Sussex County Trust Co. Geneva Geneva Trust Co. Glen Ridge .... Glen Ridge Trust Co. Gloversville Trust Co. of Fulton County Glen Rock Glen Rock Bank Great Neck Bank of Great Neck Hackensack Hackensack Trust Co. Hamburg Peoples Bank of Hamburgh Peoples Trust Co. of Bergen Hammondsport . . Bank of Hammondsport County Hicksville Bank of Hicksville Digitized for 1 F RExAcSluEsivRe of part of State located in another district. http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

110 ANNUAL REPORT OF BOARD OF GOVERNORS DISTRICT NO. 2—Continued DISTRICT NO. 2—Continued NEW YORK-continued NEW YORK—continued Ithaca .. Tompkins County Trust Co. Watertown .. .Northern New York Trust Co. Jamestown .... .. Bank of Jamestown Watkins Glen .Watkins State Bank Johnson City.. ..Workers Trust Co. Westbury .... . Bank of Westbury Trust Co. Katonah .. Northern Westchester Bank Westhampton Kingston .. Kingston Trust Co. Beach . Seaside Bank Lackawanna .. .. American Bank West New Little Falls ... .. Herkimer County Trust Co. Brighton ... . West New Brighton Bank Locke .. Citizens Bank White Plains. . Citizens Bank Lowville .. Lewis County Trust Co. County Trust Co. Malone .. Peoples Trust Co. Massena ing d Mayville ..State Bank of MMaayvil._ DISTRICT NO. 3 (66 banks) Middletown .. . Orange County Trust Co. Millbrook .... .Bank of Millbrook DELAWARE (4 banks) Mineola . Nassau County Trust Co. Wilmington Equitable Trust Co. Mount Kisco.. .Trust Co. of Northern West- Industrial Trust Co. chester Security Trust Co. Mount Vernon . Fleetwood Bank Wilmington Trust Co. Mount Vernon Trust Co. New York . Amalgamated Bank NEW JERSEY * (5 banks) Bankers Trust Co. Camden Camden Trust Co. Bank of the Manhattan Co. Hightstown Hightstown Trust Co. Bank of New York Princeton Princeton Bank & Trust Co. Bank of Yorktown Riverside Riverside Trust Co. Brooklyn Trust Co. Swedesboro Swedesboro Trust Co. Central Hanover Bank & Trust Co. PENNSYLVANIA i (57 banks) Chemical Bank & Trust Co. Allentown Liberty Bank & Trust Co. City Bank-Farmers Trust Co. Bloomsburg Bloomsburg Bank - Columbia Clinton Trust Co. Trust Co. Colonial Trust Co. Carlisle Carlisle Trust Co. Continental Bank & Trust Co. Chester Chester-Cambridge Bank & Corn Exchange Bank Trust Co. Trust Co. Federation Bank & Trust Co. Clearfield Clearfield Trust Co. Fifth Avenue Bank Danville Montour County Trust Co. Fulton Trust Co. Du Bois Union Banking & Trust Co. Guaranty Trust Co. Easton Easton Trust Co. Irving Trust Co. East Petersburg...East Petersburg State Bank Lawyers Trust Co. Egypt Farmers Bank Manufacturers Trust Co. Harrisburg Central Trust Co. Marine Midland Trust Co. Dauphin Deposit Trust Co. Merchants Bank Hazleton Markle Banking & Trust Co. New York Trust Co. Peoples Savings & Trust Co. Pan American Trust Co. Traders Bank & Trust Co. Pennsylvania Exchange Bank Honesdale Wayne County Savings Bank Schroder Trust Co. Houtzdale Houtzdale Trust Co. Trade Bank of New York Huntingdon Grange Trust Co. United States Trust Co. Jenkintown Jenkintown Bank & Trust Co. Niagara Falls . .Power City Trust Co. Lancaster Farmers Bank & Trust Co. North Collins. .Bank of North Collins Northern Bank & Trust Co. Ogdensburg .Ogdensburg Trust Co. Lemoyne Lemoyne Trust Co. Olean .Olean Trust Co. Lewistown Lewistown Trust Co. Oneida , .Madison County Trust & De- Littlestown Littlestown State Bank posit Co. Lock Haven Lock Haven Trust Co. Ontario . State Bank of Ontario Lykens Miners Bank & Trust Co. Orchard Park .. .Bank of Orchard Park Mahanoy City Merchants Banking Trust Co. Oriskany Falls . . First Trust & Deposit Co. Middletown Citizens Bank & Trust Co. Ossining . Ossining Trust Co. Mount Carmel Liberty State Bank & Trust Pearl River.... . State Bank of Pearl River Co. Perry . Citizens Bank Myerstown Myerstown Trust Co. Pleasantville ... . Mount Pleasant Bank & Trust Nanticoke Peoples Bank Co. New Oxford Farmers & Merchants Bank Port Chester.... .Mutual Trust Co. of West- Norristown Montgomery Trust Co. chester County Norristown-Penn Trust Co. Rochester .Central Trust Co. Orrstown Orrstown Bank Lincoln-Alliance Bank & Trust Paoli Paoli Bank & Trust Co. Co. Philadelphia Fidelity-Philadelphia Trust Co. Rome .Rome Trust Co. First Trust Company Sag Harbor .Peconic Bank Gimbel Bros. Bank & Trust Co. Salamanca . Salamanca Trust Co. Girard Trust Co. Saratoga Springs.. Adirondack Trust Co. Integrity Trust Co. Sayville .Oystermen's Bank & Trust Co. Ninth Bank & Trust Co. Schenectady .Schenectady Trust Co. Pennsylvania Co. for Insur- Sea Cliff . State Bank of Sea Cliff ances on Lives and Granting Smithtown Branch. Bank of Smithtown Annuities Southampton .Southampton Bank Provident Trust Co. Spring Valley . Ramapo Trust Co. Prospect Park Interboro Bank & Trust Co. Stony Brook . Bank of Suffolk County Quakertown Quakertown Trust Co. Syracuse . First Trust & Deposit Co. Re'ading Reading Trust Co. Syracuse Trust Co. Schnecksville Schnecksville State Bank Tarrytown .Washington Irving Trust Co. Schuylkill Haven.. Schuylkill Haven Trust Co. Utica .First Citizens Bank & Trust Co. Steelton Steelton Bank & Trust Co. Warsaw .Wyoming County Bank & Tamaqua Peoples Trust Co. Trust Co. Temple Temple State Bank Digitized for 1 F ERxAclSusEivRe of part of State located in another district. http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

FEDERAL RESERVE SYSTEM 111 DISTRICT NO. 3—Continued DISTRICT NO. 4—-Continued PENNSYLVANIA—continued KENTUCKY—continued Wilkes-Barre Wilkes-Barre Deposit & Sav- Newark Licking County Bank ings Bank Newark Trust Co. Williamsport West Branch Bank & Trust New Lexington.... Perry County Bank Co. New Philadelphia. Ohio Savings & Trust Co. Wyomissing Peoples Trust Co. Norwalk Huron County Banking Co. York Guardian Trust Co. Norwood Norwood-Hyde Park Bank & York Trust Co. Trust Co. Oak Harbor Oak Harbor State Bank Co. DISTRICT NO. 4 (114 banks) Oberlin Oberlin Savings Bank Co. KENTUCKY1 (6 banks) P O o rr m v e il r l o e y F O a r r rv m il e l r e s S B a a v n i k n gs & B S a a n v k ings Co. Covington Peoples-Liberty Bank & Trust Rittman Rittman Savings Bank Co. Russellville Rank of Russellville Co. Lexington Bank of Commerce St. Marys Home Banking Co. Security Trust Co. Sandusky Western Security Bank Paris Bourbon-Agricultural Bank & Shelby '. Citizens Bank Trust Co. Shiloh Shiloh Savings Bank Co. Peoples Deposit Bank & Trust Toledo Commerce Guardian Bank Co. Morris Plan Bank Richmond State Bank & Trust Co. Ohio Citizens Trust Co. Toledo Trust Co. OHIO (81 banks) Utica Utica Savings Bank Co. Akron Firestone Park Trust & Sav- Van Wert Peoples Savings Bank ings Bank Wakeman Wakeman Bank Co. First-Central Trust Co. Wellington First Wellington Bank Apple Creek Apple Creek Banking Co. Wooster Commercial Banking & Trust Archbold Peoples State Bank Co. Co. Ashland Ashland Bank & Savings Co. Yellow Springs... .Miami Deposit Bank Bellevue Union Bank & Savings Co. Youngstown Dollar Savings & Trust Co. Bellville Farmers Bank Brecksville Brecksville Bank PENNSYLVANIA i (23 banks) Canal Winchester.. Peoples Bank Co. Aliquippa Woodlawn Trust Co. Canton Geo. D. Harter Bank Ambridge Economy Bank Castalia Castalia Banking Co. Beaver Beaver Trust Co. Celina Commercial Bank Co. Dormont Dormont Savings & Trust Co. Christiansburg Farmers & Merchants Bank Erie Security-Peoples Trust Co. Co. Homestead Monongahela Trust Co. Cincinnati Central Trust Co. McKeesport Peoples City Bank Fifth-Third Union Trust Co. Meadville Crawford County Trust Co. Peoples Bank & Savings Co. New Brighton Beaver County Trust Co. Provident Savings Bank & New Castle Lawrence Savings & Trust Co. Trust Co. Paint Borough Southern Ohio Savings Bank (Scalp Level & Trust Co. P. O.) Merchants & Miners Bank Western Bank & Trust Co. Pittsburgh Allegheny Trust Co. Cleveland Cleveland Trust Co. Allegheny Valley Bank Lorain Street Bank Colonial Trust Co. Union Bank of Commerce Co. Commonwealth Trust Co. Columbiana Union Banking Co. Homewood Bank Columbus Fifth Avenue Savings Bank Co. Peoples-Pittsburgh Trust Co. Conneaut ,. Citizens Banking & Savings Co. Potter Title & Trust Co. Conneaut Banking & Trust Co. Union Trust Co. Cortland Cortland Savings & Banking Somerset Somerset Trust Co. Co. Turtle Creek Turtle Creek Bank & Trust Co. Coshocton Peoples Bank & Trust Co. Warren Warren Bank & Trust Co. Danville Commercial & Savings Bank Windber Windber Trust Co. Co. Delphos Commercial Bank WEST VIRGINIA i (4 banks) Peoples Bank Sistersville First-Tyler Bank & Trust Co. Delta Peoples Savings Bank Co. Wheeling Citizens Mutual Trust Co. East Liverpool.... Potters Bank & Trust Co. Security Trust Co. Elyria Elyria Savings & Trust Co. Wheeling Dollar Savings & 1 Savings Deposit Bank & Trust Trust Co. Co. Fayette Fayette State Savings Bank Co. DISTRICT NO. 5 (69 banks) Findlay Ohio Bank & Savings Co. Geneva Geneva Savings & Trust Co. DISTRICT OF COLUMBIA (4 banks) Gibsonburg Home Banking Co. Washington American Security & Trust Co. Hillsboro Hillsboro Bank & Savings Co. National Savings & Trust Co. Hubbard Hubbard Banking Co. Union Trust Co. Leesburg Citizens Bank & Savings Co. Washington Loan & Trust Co. Lyons Farmers State Bank Madison Citizens Bank MARYLAND (11 banks) Mansfield Farmers Savings & Trust Co. Baltimore Baltimore Commercial Bank Marengo Marengo Banking Co. Calvert Bank Martins Ferry .... Peoples Savings Bank Co. Commonwealth Bank Mason First-Mason Bank Fidelity Trust Co. Massillon Ohio-Merchants Trust Co. Maryland Trust Co. Middletown .... First American Bank & Trust Union Trust Co. of Maryland Co. Cambridge County Trust Co. of Maryland Minster Minster State Bank Ellicott City Commercial & Farmers Bank Mount Blanchard. Citizens Bank Forest Hill Forest Hill State Bank Mount Vernon Knbx County Savings Bank Hagerstown Hagerstown Trust Co. Napoleon Community Bank Salisbury Farmers & Merchants Bank Digitized for 1 F ERxAclSusEivRe of part of State located in another district. http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

112 ANNUAL REPORT OF BOARD OF GOVERNORS DISTRICT NO. 5—Continued DISTRICT NO. 6—Continued NORTH CAROLINA (9 banks) ALABAMA—continued Charlotte American Trust Co. Selma Peoples Bank & Trust Co. Concord Citizens Bank & Trust Co. Thomaston Planters Bank & Trust Co. Edenton Bank of Edenton Winfield Winfield State Bank Marshall Citizens Bank York Bank of York Tryon Tryon Bank & Trust Co. Washington Bank of Washington FLORIDA (4 banks) Wilmington Peoples Savings Bank <fe Trust Fort Lauderdale... Broward Bank & Trust Co. Co. Marianna Citizens State Bank Wilmington Savings & Trust Ocala Commercial Bank & Trust Co. Co. St. Petersburg.... Union Trust Co. Winston-Salem ... Wachovia Bank & Trust Co. GEORGIA (20 banks) SOUTH CAROLINA (4 banks) Adairsville Bank of Adairsville Bishopville Peoples Bank Atlanta Trust Co. of Georgia Charleston Carolina Savings Bank Augusta Georgia Railroad Bank & Chester Commercial Bank Trust Co. Hartsville Bank of Hartsville Bainbridge Citizens Bank & Trust Co. Blackshear Blackshear Bank VIRGINIA (26 banks) Brunswick Brunswick Bank & Trust Co. Abingdon Farmers Exchange Bank Canton Bank of Canton Amelia Union Bank & Trust Co. Columbus Columbus Bank & Trust Co. Blackstone Citizens Bank & Trust Co. Merchants & Mechanics Bank Chase City Peoples Bank & Trust Co. Commerce Northeastern Banking Co. Farmville Planters Bank & Trust Co. Lawrenceville Brand Banking Co. Front Royal Bank of Warren Lincolnton Farmers State Bank Glade Spring Bank of Glade Spring Millen Bank of Millen Halifax Bank of Halifax Monroe Farmers Bank Kenbridge Bank of Lunenburg Pelham Farmers Bank Lacrosse Bank of Lacrosse Savannah Citizens Bank & Trust Co. Lawrenceville Farmers & Merchants Bank Savannah Bank & Trust Co. Lynchburgj Lynchburg Trust & Savings Soperton Bank of Soperton Bank Swainsboro Central Bank Montross Peoples Bank Tifton Bank of Tifton Petersburg Petersburg Savings & American Trust Co. LOUISIANA1 (5 banks) Powhatan Bank of Powhatan Alexandria Rapides Bank & Trust Co. Richmond Bank of Commerce & Trusts Lake Charles Lake Charles Bank & Trust Co. Mechanics & Merchants Bank New Orleans American Bank & Trust Co. State-Planters Bank & Trust Louisiana Savings Bank & Co. Trust Co. Rural Retreat Peoples Bank Slidell Bank of Slidell Smithfield M I e n rc c. hants & Farmers Bank, MISSISSIPPI1 (1 bank) South Hill Citizens Bank, Inc. Forest Bank of Forest Suffolk American Bank & Trust Co. Farmers Bank of Nansemond TENNESSEE (6 banks) Tazewell Farmers Bank of Clinch Valley Carthage Citizens Bank & Trust Co. Williamsburg Peninsula Bank & Trust Co. Chattanooga American Trust & Banking Co. Winchester Union Bank Greeneville Greene County Bank Hartsville Bank of Hartsville WEST VIRGINIA i (15 banks) Knoxville Commercial Bank & Trust Co. Berwind ...." Berwind Bank Nashville Commerce Union Bank Buffalo Buffalo Bank Charleston Kanawha Banking & Trust Co. Kanawha Valley Bank DISTRICT NO. 7 (253 banks) Hurricane Putnam County Bank Lewisburg Greenbrier Valley Bank ILLINOIS i (62 banks) Martinsburg Peoples Trust Co. Argenta Gerber State Bank Parsons Tucker County Bank Bloomington Corn Belt Bank Petersburg Potomac Valley Bank Peoples Bank Rainelle Bank of Rainelle Blue Island State Bank of Blue Island Romney Bank of Romney Bushnell Farmers & Merchants State St. Albans Bank of St. Albans Bank St. Marys Pleasants County Bank Byron Rock River Community Bank Spencer Traders Trust & Banking Co. Chicago Amalgamated Trust & Sav- Summersville Farmers & Merchants Bank ings Bank Drexel State Bank Hamilton State Bank DISTRICT NO. 6 (52 banks) Harris Trust & Savings Bank Kaspar-American State Bank ALABAMA (16 banks) Lake Shore Trust & Savings Aliceyille Aliceyille Bank & Trust Co. Bank Birmingham Birmingham Trust & Savings Lake View Trust & Savings Co. Bank Clanton Peoples Savings Bank Main State Bank Clayton Bank of Commerce Mercantile Trust & Savings Columbiana Columbiana Savings Bank Bank Cullman Parker Bank & Trust Co. Metropolitan State Bank Dothan Dothan Bank & Trust Co. Metropolitan Trust Co. Eutaw Merchants & Farmers Bank of Northern Trust Co. Greene County Chicago Personal Loan & Savings Bank Guin Marion County Banking Co. Sears-Community State Bank Marion Junction... Marion Junction State Bank State Bank of Clearing Oneonta Citizens Bank Uptown State Bank Pine Apple Bank of Pine Apple Cowden State Bank of Cowden Digitized for1 FERxAcluSsEivRe of part of State located in another district. http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

FEDERAL RESERVE SYSTEM 113 DISTRICT NO. 7—Continued DISTRICT NO. 7-—Continued ILLINOIS—continued IOWA—continued Elburn Kane County Bank & Trust Lineville Lineville State Bank Co. Maquoketa Jackson State Savings Bank Eureka .. State Bank of Eureka Mason City United Home Bank & Trust Evanston Evanston Trust & Savings Bank Monticello Monticello State Bank State Bank & Trust Co. Moorhead Moorhead State Hank Fairbury Fairbury State Bank M11scatine Central State Bank Free port State Bank of Freeport Muscat inn Bank & Trust Co. Fulton Fulton State Bank Newton Jasper County Savings Bank Galesburg ... Farmers & Mechanics Bank Osage Home Trust & Savings Bank Geneva State Bank of Geneva Ottumwa Union Bank & Trust Co. Joy Joy State Bank Riceville Riceville State Bank Kankakee ... City Trust & Savings Bank Royal Home State Bank Kewanee Peoples State Savings Bank Shenandoah Security Trust & Savings Bank Lostant Farmers State Bank Storm Lake Security Trust & Savings Bank Mattoon Central Illinois Trust & Sav- Templeton Templeton Savings Bank ings Bank Washington Washington State Bank McHenry ... West McHenry State Bank Williams Williams Savings Bank Metamora .. Metamora State Bank MICHIGAN i (116 banks) Milford Citizens State Bank Momence . . Parish Bank & Trust Co. Adrian Adrian State Savings Bank Morrison ... Smith Trust & Savings Bank Commercial Savings Bank Niantic State Bank of Niantic Lenawee County Savings Bank Niles Center Niles Center State Bank Albion Commercial & Savings Bank Oak Park .. Oak Park Trust & Savings Algonac Algonac Savings Bank Bank Alpena Alpena Savings Bank Petersburg . . Schirding State Bank Alto Farmers State Bank Riverdale ... First Trust & Savings Bank Ann Arbor Ann Arbor Savings & Com- Rochester ... Rochester State Bank mercial Bank Rushville . .. Rushville State Bank State Savings Bank Shannon First State Bank Armada ,. Armada State Bank Shelbyville . Shelby County State Bank Bay City ,. Bay City Bank Springfield .. Springfield Marine Bank Peoples Commercial & Savings Thomson ... Thomson State Bank Bank Tolono Bank of Tolono Belleville ..Peoples State Bank Citizens Bank Berrien Springs . Berrien Springs State Bank Tuscola Tuscola State Bank Big Rapids . Big Rapids Savings Bank Walnut Citizens State Bank Blanchard Blanchard State Bank Washington Danforth Banking Co. Blissfield .....Blissfield State Bank Wenona First State Bank Bronson Peoples State Bank Wheaton Gary-Wheaton Bank Brown City Brown City Savings Bank Wheaton Trust & Savings Capac Capac State Savings Bank Bank Cass City Cass City State Bank Wilmette Wilmette State Bank Pinney State Bank Cassopolis Cass County State Bank INDIANA (18 banks) Charlevoix Charlevoix County State Bank Auburn Auburn State Bank Charlotte Eaton County Savings Bank Columbia City ... Citizens State Bank Chelsea Chelsea State Bank Connersville Fayette Bank & Trust Co. Chesaning Chesaning State Bank Darlington Farmers & Merchants State Oarkston Clarkston State Bank Bank Coloma State Bank of Coloma Elkhart St. Joseph Valley Bank Coopersville Coopersville State Bank Greencastle First-Citizens Bank & Trust Corunna Old Corunna State Bank Co. Croswell State Bank of Croswell Hartford City Citizens State Bank Davison Davison State Bank Hebron Citizens Bank Detroit Detroit Bank Indianapolis Fletcher Trust Co. Industrial Morris Plan Bank Jamestown Citizens State Bank United Savings Bank Kokomo Union Bank & Trust Co. Dundee Monroe County Bank Mohawk Mohawk State Bank Ecorse Ecorse Savings Bank Monticello State & Savings Bank Farmington Farmington State Bank Muncie Merchants Trust & Savings- Fennville Old State Bank Co. Fenton State Savings Bank Poland Poland-State Bank Flint Citizens Commercial & Sav- South Bend First Bank & Trust Co. ings Bank Tipton Farmers Loan & Trust Co. Genesee County Savings Bank Valparaiso First State Bank Fountain Fountain State Bank Frankenmuth Frankenmuth State Bank IOWA (33 banks) Fremont Fremont State Bank Algona* Iowa State Bank Old State Bank Security State Bank Gagetown .. State Savings Bank Avoca Avoca State Bank Grand Haven .. Grand Haven State Bank Blencoe Blencoe State Bank Peoples Savings Bank Cedar Falls Union Bank & Trust Co. Grand Rapids ..Old Kent Bank Cherokee Cherokee State Bank Grandville ..Community State Bank Churdan First State Bank Greenville ..Commercial State Savings Davenport Davenport Bank & Trust Co. Bank Des Moines Bankers Trust Co. First State Bank of Greenville Fairneld Towa State Bank & Trust Co. Grosse Pointe .. Grosse Pointe Bank Fontanelle State Savings Bank Harbor Springs Emmet County State Bank Fort Dodge The State Bank Hillsdale Hillsdale State Savings Bank Fort Madison .... Fort Madison Savings Bank Holland Holland State Bank Glenwood Glenwood State Bank Peoples State Bank Holstein Holstein State Bank Holly First State & Savings Bank Ida Grove Ida County State Bank Howell First State & Savings Bank Digitized for 1 F RExAcSluEsivRe of part of State located in another district http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

114 ANNUAL REPORT OF BOARD OF GOVERNORS DISTRICT NO. 7—Continued DISTRICT NO. 8 (77 banks) MICHIGAN—continued ARKANSAS (7 banks) Imlay City Imlay City State Bank Batesville Citizens Bank & Trust Co. Jackson Jackson City Bank & Trust Blytheville Farmers Bank & Trust Co. Co. Fordyce Fordyce Bank & Trust Co. Jonesville Grosvenor Savings Bank Little Rock W. B. Worthen Co. Kingston Kingston State Bank Russellville Bank of Russellville Lakeyiew Bank of Lakeview Peoples Exchange Bank Lansing American State Savings Bank Waldron Bank of Waldron Bank of Lansing Lapeer Lapeer Savings Bank ILLINOIS i (17 banks)' Lawrence Home State Bank Breese State Bank of Breese Lowell State Savings Bank Chester First State Bank Manchester Peoples Bank Columbia Monroe County Savings Bank Union. Savings Bank & Trust Co. Manistee Manistee County Savings East St. Louis.... Union Trust Co. Bank Edwardsville Bank of Edwardsville Marcellus G. W. Jones Exchange Bank Emngham Effingham State Bank Marshall Commercial Savings Bank Eldorado C. P. Burnett & Sons, Bankers Mason Farmers Bank Greenville State Bank of Hoiles & Sons Midland Chemical State Savings Bank Highland State & Trust Bank Milan Peoples State Bank Hillsboro Montgomery County Loan & Milford Oakland County State Bank Trust Co. Monroe Dansard State Bank Hoyleton Hoyleton State & Savings Montague Farmers State Bank Bank Mount Clemens .. Mount Clemens Savings Bank Jacksonville Elliott State Bank Mount Pleasant .. Exchange Savings Bank Johnston City ... Johnston City State Bank Isabella County State Bank Litchfield Litchfield Bank & Trust Co. New Baltimore ... Citizens State Savings Bank OTallon First State Bank New Haven New Haven Savings Bank Rich view Rich view State Bank North Branch Pioneer Bank Steelevillle State Bank of Steeleville Onsted Onsted State Bank KENTUCKY i (7 banks) Oxford Oxford Savings Bank Petoskey First State Bank Danville Boyle Bank & Trust Co. Pigeon Pigeon State Bank Hartford Citizens Bank Pinconning Pinconning State Bank Hopkinsville Planters Bank & Trust Co. Richmond Macomb County Savings Bank Louisville Kentucky Title Trust Co. Romeo Romeo Savings Bank Lincoln Bank & Trust Co. Royal Oak Guardian Bank Louisville Trust Co. Saginaw Saginaw State Bank Owensboro First - Owensboro Bank & St. Charles St. Charles State Bank Trust Co. St. Glair Commercial & Savings Bank MISSISSIPPI1 (1 bank) St. Johns State Bank of St. Johns Saugatuck Fruit Growers State Bank Indianola Peoples Bank Sebewaing Farmers & Merchants State MISSOURI1 (45 banks) Bank South Haven Citizens State Bank Camdenton Camden County Bank First State Bank Carrollton Carroll County Trust Co. Sparta Sparta State Bank Clayton St. Louis County Bank Spring Lake Spring Lake State Bank Clinton Union State Bank Springport Springport State Savings Bank Farmington United Bank Traverse City Traverse City State Bank Fulton Callaway Bank Trenton Trenton State Bank Glasgow Glasgow Savings Bank Vassar State Bank of Vassar Hannibal Farmers & Merchants Bank Wayne Wayne State Bank & Trust Co. Whitehall State Bank of Whitehall Lancaster Schuyler County State Bank Williamston Peoples State Bank Lebanon State Savings Bank Wyandotte Wyandotte Savings Bank Luxemburg (St. Yale Yale State Bank Louis P. O.)....Lemay Ferry Bank Zeeland Zeeland State Bank Maplewood Peoples State Bank Marshall Wood & Huston Bank WISCONSIN i (24 banks) Memphis Bank of Memphis Moberly City Bank & Trust Co. Antigo Fidelity Savings Bank Mechanics Bank & Trust Co. Burlington Bank of Burlington Monroe City Monroe City Bank Chilton Commercial Bank Normandy Normandy State Bank Edgerton Tobacco Exchange Bank Pine Lawn Pine Lawn Bank Green Bay Peoples Trust & Savings Bank St. Louis Baden Bank Green Lake Green Lake State Bank Bremen Bank & Trust Co. Kaukauna Bank of Kaukauna Cass Bank & Trust Co. Manitowac Manitowoc Savings Bank Chippewa Trust Co. Markesan Markesan State Bank Easton-Taylor Trust C«. Mayville State Bank of Mayville Jefferson Bank & Trust Co. Milwaukee American State Bank Jefferson-Gravois Bank Marshall & Ilsley Bank Lindell Trust Co. West Side Bank Manchester Bank Platteville State Bank of Platteville Manufacturers Bank & Trust Sauk City Farmers & Citizens Bank Co. Sheboygan Bank of Sheboygan Mercantile-Commerce Bank & Citizens State Bank Trust Co. South Milwaukee.. Home State Bank Mississippi Valley Trust Co. Sturgeon Bay Bank of Sturgeon Bay Mound City Trust Co. Viroqua State Bank of Viroqua North St. Louis Trust Co. Waupaca Farmers State Bank Northwestern Trust Co. Waupun State Bank of Waupun Plaza Bank Wausau Citizens State Bank Southern Commercial & Sav- Whitewater First Citizens State Bank ings Bank Digitized for 1F ERxAclSusEivRe of part of State located in another district. http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

FEDERAL RESERVE SYSTEM 115 DISTRICT NO. 8—Continued DISTRICT NO. 9—Continued MISSOURI—continued SOUTH DAKOTA—continued St. Louis Southwest Bank Mobridge Citizens Bank Tower Grove Bank & Trust Presho Farmers & Merchants State Co. Bank United Bank & Trust Co. Sturgis Bear Butte Valley Bank St. Louis County. Gravois Bank Toronto Bank of Toronto Sedalia Sedalia Bank & Trust Co. Woonsocket Sanborn County Bank Vandalia Vandalia State Bank Versailles Bank of Versailles WISCONSIN1 (4 banks) Washington Franklin County Bank Boyceville Bank of Boyceville Webster Groves... Webster Groves Trust Co. Glenwood City.... First State Bank Rhinelander Merchants State Bank DISTRICT NO. 9 (71 banks) Tomahawk Bradley Bank MICHIGAN 1 (9 banks) Escanaba State Savings Bank DISTRICT NO. 10 (70 banks) Ewen State Bank of Ewen Gladstone Gladstone State Savings Bank COLORADO (11 banks) Iron Mountain .. Commercial Bank Brighton Brighton State Bank Iron River Miners' State Bank Del Norte Rio Grande County Bank L'Anse Commercial Bank Delta Colorado Bank &• Trust Co. Menominee Commercial Bank Denver Central Savings Bank & Trust Sault Ste. Marie.. Central Savings Bank Co. Sault Savings Bank International Trust Co. MINNESOTA (13 banks) Eaton Eaton Bank Fort Morgan Farmers State Bank Aurora . .. ... State Bank of Aurora Haxtun Haxtun State Bank Caledonia . ... Sprague State Bank La Junta Colorado Savings & Trust Co. Cannon Fa ... Security State Bank Sterling Commercial Savings Bank Chatiield . ... Root River State Bank Yuma Farmers State Bank Clinton ... ... Clinton State Bank Houston .. ... Security State Bank KANSAS (18 banks) Owatonna ... Security Bank & Trust Co. Plainview ... Peoples State Bank Abilene Citizens Bank Rushmore ... First State Bank Great Bend American State Bank St. Cloud ... Zapp State Bank Hiawatha Morrill & Janes Bank Springfield ... Farmers & Merchants State Hutchinson Hutchinson State Bank Bank Kansas City Riverview State Bank State Bank of Springfield Liberal Citizens- State Bank Wadena ... Wadena County State Bank Luray Peoples Statei Bank Ness City First State Bank MONTANA (24 banks) Oakley Farmers State Bank Anaconda Daly Bank & Trust Co. Osage City Citizens State Bank Belt Belt Valley Bank Pratt Peoples Bank Big Timber Citizens Bank & Trust Co. Sedan Sedan State Bank Billings Security Trust & Savings St. Marys St. Marys State Bank Bank Sylvan Grove Sylvan State Bank Bozeman .. Gallatin Trust & Savings Bank Tonganoxie First State Bank Security Bank & Trust Co. Topeka Fidelity Savings State Bank Butte .... Metals Bank & Trust Co. Waken eld Farmers & Merchants State Cascade .. Stockmens Bank Bank Choteau .. Citizens State Bank Winfield The State Bank D Co ee lu r m L b o u d s ge D Y e el e l r o w L s o t d o g n e e B B an a k n k & Trust Co. MISSOURI 1 (10 banks) Dent on ... Farmers State Bank Albany Gentry County Bank Fromberg . Clarks Fork Valley Bank Carthage Bank of Cathage Glasgow .. Farmers-Stockgrowers Bank Craig Bank of Craig Great Falls Montana Bank & Trust Co. Kansas City Commerce Trust Co. Helena .... , Union Bank & Trust Co. Merchants Bank Laurel .... Yellowstone Bank King City First State Bank Libby First State Bank Lamar Barton County State Bank Richey ... First State Bank Rich Hill Security Bank Ronan .... Ronan State Bank St. Joseph Empire Trust Co. Terry State Bank of Terry South St. Joseph.. First St. Joseph Stock Yards Townsend State Bank of Townsend Bank Victor .... Farmers State Bank Worden ... Farmers State Bank NEBRASKA (14 banks) SOUTH DAKOTA (21 banks) Alma Harlan County Bank Bancroft Citizens Bank Alcester State Bank of Alcester Blair Washington County Bank Alpena Bank of Alpena Chappell Deuel County State Bank Arlington Citizens State Bank Hartington Bank of Hartington Belle Fourche Bank of Belle Fourche Lexington Farmers State Bank Belvidere Belvidere State Bank North Platte McDonald State Bank Buffalo First State Bank Pawnee City Citizens State Bank Burke Burke State Bank Rushville Union State Bank Faith Farmers State Bank Scribner Farmers State Bank Flandreau Farmers State Bank Stromsburg Stromsburg Bank Freeman Merchants State Bank Valley Bank of Valley Fulton Fulton State Bank Wahoo Wahoo State Bank Huron Farmers & Merchants Bank Wallace Farmers State1 Bank Madison Security Bank & Trust Co. Mclntosh Security State Bank NEW MEXICO i (2 banks) Miller Hand County State Bank Mitchell Commercial Trust & Savings Aztec Citizens Bank Bank Taos First State Bank 1 Exclusive of part of State located in another district. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

116 ANNUAL REPORT OF BOARD OF GOVERNORS DISTRICT NO. 10—Continued DISTRICT NO. 11—Continued OKLAHOMA i (6 banks) TEXAS—continued Ada Oklahoma State Bank Shamrock Farmers & Merchants State Garber Bank of Garber Bank Okarche First Bank of Okarche Shiro Farmers State Bank Purcell First State Bank Silsbee Silsbee State Bank Stroud First State Bank Sinton Commercial State Bank Woodward Bank of Woodward Spearman First State Bank Thorndale Thorndale State Bank WYOMING (9 banks) Tomball Guaranty Bond State Bank Evanston Stockgrowers Bank Turkey Farmers & Merchants State Lusk Lusk State Bank Bank Mountain View Uinta County State Bank Wellington Wellington State Bank Newcastle First State Bank Wharton Security Bank & Trust Co. Saratoga Saratoga State Bank Wharton Bank & Trust Co. Sundance Sundance State Bank Winters Winters State Bank Wheatland State Bank of Wheatland Stock Growers Bank Worland Farmers State Bank DISTRICT NO. 12 (68 banks) DISTRICT NO. 11 (59 banks) ARIZONA1 (1 bank) Buckeye Buckeye Valley Bank ARIZONA^ (1 bank) Tucson Southern Arizona Bank & CALIFORNIA (15 banks) Trust Co. Carmel Bank of Carmel LOUISIANA1 (2 banks) F L a o i n rf g ie l B d each S F o a l r a m n e o r s C o & u n M ty e r B ch a a n n k ts Bank Minden Minden Bank & Trust Co. Los Angeles California Bank Shreveport Continental-American Bank & California Trust Co. Trust Co. Union Bank & Trust Co. NEW MEXICO i (3 banks) Newman Bank of Newman Oakland Bank of Commerce Carlsbad American Bank Pasadena Citizens Commercial Trust & Deming Mimbres Valley Bank Savings Bank Logan McFarland Bros. Bank First Trust & Savings Bank OKLAHOMA i (1 bank) Salinas Monterey County Trust & Savings Bank Atoka Atoka State Bank San Francisco American Trust Co. TEXAS (52 banks) Wells Fargo Bank & Union Trust Co. Bay City Bay City Bank & Trust Co. San Rafael Bank of San Rafael Beaumont Security State Bank & Trust Santa Paula Citizens State Bank Co. Beeville State Bank & Trust Co. IDAHO (10 banks) Bremond First State Bank Brownfield Brownfield State Bank Aberdeen Bank of Aberdeen Bryan First State Bank & Trust Co. Arco Butte County Bank Celina First State Bank Boise First Security Bank of Idaho Clarendon Farmers State Bank Hazelton Hazelton State Bank Clifton Farmers State Bank Kellogg First State Bank Dalhart Citizens State Bank Malad City J. N. Ireland & Co., Bankers De Kalb State Bank of De Kalb Orofino Bank of Orofino Del Rio Del Rio Bank & Trust Co. Richfield First State Bank Dodsonville Soda Springs Largilliere Co., Bankers (P. O.) Dodson)..First State Bank Twin Falls Twin Falls Bank & Trust Co. East Bernard Union State Bank Eden Eden State Bank OREGON (7 banks) Ferris! Farmers & Merchants State Bank Albany Bank of Albany Forney Forney State Bank Beaverton First Security Bank Franklin First State Bank Dallas Dallas City Bank Gatesville Guaranty Bank & Trust Co. Gold Beach Curry County Bank Gonzales Gonzales State Bank Halsey Halsey State Bank Goose Creek Citizens State Bank & Trust Myrtle Point Security Bank Co. Oakland E. G. Young & Co. Bank Hamilton Hamilton Bank & Trust Co. Houston Citizens State Bank UTAH (20 banks) lola Iola State Bank Brigham State Security Bank Kirkland First State Bank Cedar City Bank of Southern Utah Kosse First State Bank Ephraim Bank of Ephraim Ladonia Farmers & Merchants State Gunnison Gunnison Valley Bank Bank Helper Helper State Bank Llano Moore State Bank Kaysville Barnes Banking Co. Loraine First State Bank Logan Cache Valley Banking Co. Madisonville Farmers State Bank Nephi Commercial Bank Matador First State Bank Ogden Commercial Security Bank Mathis First State Bank Price Carbon Emery Bank Maypearl First State Bank Provo Farmers & Merchants Bank McAllen City State Bank & Trust Co. Salina First State Bank Mount Pleasant... Guaranty Bond State Bank Salt Lake City Tracy Loan & Trust Co. Pearsall Security State Bank Utah Savings & Trust Co. Rails Security State Bank & Trust Walker Bank & Trust Co. Co. Spanish Fork Bank of Spanish Fork Richardson Citizens State Bank Commercial Bank Roscoe Roscoe State Bank Springville Springville Banking Co. Rusk Farmers & Merchants State Vernal Bank of Vernal Bank & Trust Co. Uintah State Bank Digitized for FREAxcSluEsRiv e of part of State located in another district. http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

FEDERAL RESERVE SYSTEM 11? DISTRICT NO. 12—Continued DISTRICT NO. 12—Continued WASHINGTON (15 banks) WASHINGTON—continued Almira . Almira State Bank Ritzville Rit zville State Bank Cashmere . Cashmere Valley Bank Rockford Farmers & Merchants Bank Coulee City Security State Bank Seattle Seattle Trust & Savings Bank Kelso . Cowliti Valley Bank Selah Selah State Bank Lacrosse ... . First State Bank Spokane Washington Trust Co. Pomeroy . Pomeroy State Bank Uniontown Farmerss Slate Bank Pullman, . Pullman State Bank Wilbur State Bank of Wilbur Puyallup . Citizens State Bank DESCRIPTION OF FEDERAL RESERVE DISTRICTS Land area Population Federal Reserve district (square July 1, 1937 miles) (estimated) No. 1—Boston 61,345 8,178,000 No. 2—New York 51,886 16,756,000 No. 3—Philadelphia... 36,846 8,009,000 No. 4—Cleveland 73,424 11,737,000 No. 5—Richmond 152,316 12,028,000 No. 6—Atlanta 248,226 12,085,000 No. 7—Chicago 190,513 18,863,000 No. 8—St. Louis 194,810 10,413,000 No. 9—Minneapolis... 414,004 5,452,000 No. 10—Kansas City., 480,438 8,155,000 No. 11—Dallas 386,116 7,337,000 No. 12—San Francisco 683,852 10,244,000 Total 2,973,776 129,257,000 FEDERAL RESERVE DISTRICTS DISTRICT NO. 1-BOSTON 61,345 8,178,000 Connecticut (excluding Fairfield County) 4,189 1,322,000 Maine 29,895 856,000 Massachusetts 8,039 4,426,00C New Hampshire 9,031 510,00C Rhode Island 1,067 681,000 Vermont 9,124 383,000 DISTRICT NO. 2—NEW YORK 51,886 16,756,000 Connecticut (Fairfield County) 631 419,000 New Jersey 3,601 3,378,000 Counties of— Bergen Hunterdon Morris Sussex Essex Middlesex Passaic Union Hudson Monmouth Somerset Warren New York 47,654 12,959,000 DISTRICT NO. 3—PHILADELPHIA 36,846 8,009,000 Delaware 1,965 261,000 New Jersey 3,913 965,000 Counties of— Atlantic Cape May Gloucester Ocean Burlington Cumberland Mercer Salem Camden Pennsylvania (eastern part) 30,968 6,783,000 Counties of— Adams Clinton Lebanon Philadelphia Bedford Columbia Lehigh Pike Berks Cumberland Luzerne Potter Blair Dauphin Lycoming Schuylkill Bradford Delaware McKean Snyder Bucks Elk Mifflin Sullivan Cambria Franklin Monroe Susquehanna Cameron Fulton Montgomery Tioga Carbon Huntingdon Montour Union Center Juniata Northampton Wayne Chester Lackawanna Northumberland Wyoming Digitized for FRACSlEeaRrfi eld Lancaster Perry York http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

118 ANNUAL REPORT OF BOARD OF GOVERNORS FEDERAL RESERVE DISTRICTS-Continued Land area Population Federal Reserve district (square July 1, 1937 miles) (estimated) DISTRICT NO. 4—CLEVELAND 73,424 .11,737,000 Kentucky (eastern part^ 17,614 1,395,000 Counties of— Bath Fleming Lawrence Nicholas Bell Floyd Lee Owsley Boone Garrard Leslie Pendleton Bourbon Grant Letcher Perry Boyd Greenup Lewis Pike Bracken Harlan Lincoln Powell Breathitt Harrison McCreary Pulaski Campbell Jackson Madison Robertson Carter Jessamine Magoffin Rockcastle Clark Johnson Martin Rowan Clay Kenton Mason Scott Elliott Knott Menifee Whitley Estill Knox Montgomery Wolfe Fayette Laurel Morgan Woodford Ohio 40,740 6,733,000 Pennsylvania (western part) 13,864 3,393,000 Counties of— Allegheny Crawford Indiana Venango Armstrong Erie Jefferson Warren Beaver Fayette Lawrence Washington Butler Forest Mercer Westmoreland Clarion Greene Somerset West Virginia (northern part) 1,206 216,000 Counties of— Brooke Marshall Tyler Hancock Ohio Wetzel DISTRICT NO. 5—RICHMOND 152,316 12,028,000 District of Columbia. 62 627,000 ^laryland 9,941 1,679,000 North Carolina 48,740 3,492,000 South Carolina 30,495 1,875,000 Virginia 40,262 2,706,000 West Virginia (southern nart,) 22,816 1,649,000 Counties of— Barbour Hardy Mingo Roane Berkeley Harrison Monongalia Summers Boone Jackson Monroe Taylor Braxton Jefferson Morgan Tucker Cabell Kanawha Nicholas Upshur Calhoun Lewis Pendleton Wayne Clay Lincoln Pleasants Webster Doddridge Logan Pocahontas Wirt Fayette McDowell Preston Wood Gilmer Marion Putnam Wyoming Grant Mason Raleigh Greenbrier Mercer Randolph Hampshire Mineral Ritchie DISTRICT NO. 6—ATLANTA 248,226 12,085,000 Alabama.. 51,279 2,895,000 Florida 54,861 1,670,000 Georgia 58,725 3,085,000 Louisiana (southern part") 26,891 1,444,000 Parishes of— Acadia Evangeline Rapides Tangipahoa Allen Iberia St. Bernard Terrebonne Ascension Iberville St. Charles Vermilion Assumption Jefferson St. Helena Vernon Avoyelles Jeff erson Davis St. James Washington Beauregard Lafayette St. John the Bap- WestBaton Calcasieu La Fourche tist Rouge Cameron Livingston St. Landry West Feliciana East Baton Orleans St. Martin Rouge Plaquemines St. Mary East Feliciana Pointe Coupee St. Tammany Mississippi (southern part) 25,519 969,000 Counties of— Adams Harrison Lawrence Scott A mite Hinds Leake Sharkey Claiborne Issaquena Lincoln Simpson Clarke Jackson Madison Smith Copiah Jasper Marion Stone Covington Jefferson Neshoba Walthall Forrest Jefferson Davis Newton Warren Franklin Jones Pearl River Wayne George Kemper Perry Wilkinson Greene Lamar Pike Yazoo Digitized for FRAHSaEnRco ck Lauderdale Rankin http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

FEDERAL RESERVE SYSTEM 119 FEDERAL RESERVE DISTRICTS—Continued Land area Population Federal Reserve district (square July 1, 1937 miles) (estimated) DISTRICT NO. 6—ATLANTA—Continued. Tennessee (eastern part) 30,951 2,022,000 Counties of— I Anderson Giles McMinn Scott Bedford Grainger Macon Sequatchie Bledsoe Greene Marion Sevier Blount Grundy Marshall Smith Bradley Hamblen Maury Stewart Campbell Hamilton Meigs Sullivan Cannon Hancock Monroe Sumner Carter Hawkins Montgomery Trousdale Cheatham Hickman Moore Unicoi Claiborne Houston Morgan Union Clay Humphreys Overton Van Buren Cocke Jackson Perry Warren Coffee Jefferson Pickett Washington Cumberland Johnson Polk Wayne Davidson Knox Putnam White De Kalb Lawrence Rhea Williamson Dickson Lewis Roane Wilson Fentress Lincoln Robertson Franklin Loudon Rutherford DISTRICT NO. 7.-CHICAG0 190,513 18,863,000 Illinois (northern part} 35,448 6,597,000 Counties of— Boone Ford Livingston Rock Island Bureau Fulton Logan Sangamon Carroll Grundy McDonough Schuyler Cass Hancock McHenry Shelby Champaign Henderson McLean Stark Christian Henry Macon Stephenson Clark Iroquois Marshall Tazewell Coles Jo Daviess Mason Vermilion Cook Kane Menard Warren Cumberland Kankakee Mercer Whiteside DeKalb Kendall Moultrie Will DeWitt Knox Ogle Winnebago Douglas Lake Peoria Woodford Du Page La Salle Piatt Edgar Lee Putnam Indiana (northern part} 26,707 2,821,000 Counties of— Adams Fountain La Porte Ripley Allen Franklin Madison Rush Bartholomew Fulton Marion St. Joseph Benton Grant Marshall Shelby Blackford Hamilton Miami Starke Boone Hancock Monroe Steuben Brown Hendricks Montgomery Tippecanoe Carroll Henry Morgan Tipton Cass Howard Newton Union Clay Huntington Noble Vermillion Clinton Jasper Ohio Vigo Dearborn Jay Owen Wabash Decatur Jennings Parke Warren DeKalb Johnson Porter Wayne* Delaware Kosciusko Pulaski Wells Elkhart Lagrange Putnam White Fayette Randolph Whitley Iowa 55,586 2,552,000 Michigan (southern p*irt) 40,789 4,512,000 Counties of— Alcona Eaton Lapeer Ogemaw Allegan Emmet Leelanau Osceola Alpena Genesee Lenawee Oscoda Antrim Gladwin Livingston Otsego Arenac Grand Traverse Macomb Ottawa Barry Gratiot Manistee Presque Isle Bay Hillsdale Mason Roscommon Benzie Huron Mecosta Saginaw Berrien Ingham Midland St. Clair Branch Ionia Missaukee St. Joseph Calhoun Iosco Monroe Sanilac Cass Isabella Montcalm Shiawassee Charlevoix Jackson Montmorency Tuscola Cheboygan Kalamazoo Muskegon Van Buren Clare Kalkaska Newaygo Washtenaw Clinton Kent Oakland Wayne Crawford Lake Oceana Wexford Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

120 ANNUAL REPORT OF BOARD OF GOVERNORS FEDERAL RESERVE DISTRICTS—Continued Land area Population Federal Reserve district (square July 1, 1937 miles) (estimated) DISTRICT NO. 7— CHICAGO—Continued Wisconsin (southern part) 31,983 2,381,000 Counties of— Adams Green Lake Marquette Sheboygan Brown Iowa Milwaukee Vernon Calumet Jackson Monroe Walworth Clark Jefferson Oconto Washington Columbia Juneau Outagamie Waukesha Crawford Kenosha Ozaukee Waupaca Dane Kewaunee Portage Waushara Dodge Lafayette Racine Winnebago Door Langlade Richland Wood Fond du Lac Manitowoc Rock Grant Marathon Sauk Green Marinette Shawano DISTRICT NO. 8—ST. LOUIS 194,810 10,413,000 Arkansas 52,525 2,048,000 Illinois (southern part1) - - - 20,595 1,281,000 Counties of— Adams Franklin Macoupin Randolph Alexander Gallatin Madison Richland Bond Greene Marion St. Clair Brown Hamilton Massac Saline Calhoun Hardin Monroe Scott Clay Jackson Montgomery Union Clinton Jasper Morgan Wabash Crawford Jefferson Perry Washington Edwards Jersey Pike Wayne Emngham Johnson Pope White Fayette Lawrence Pulaski Williamson Indiana (southern part) 9,338 653,000 Counties of— Clark Greene Martin Spencer Crawford Harrison Orange Sullivan Daviess Jackson Perry Switzerland Dubois Jefferson Pike Vanderburg Floyd Knox Posey Warrick Gibson Lawrence Scott Washington Kentucky (western part) 22,567 1,525,000 Counties of— Adair Crittenden Hopkins Ohio Allen Cumberland Jefferson Oldham Anderson Daviess Larue Owen Ballard Edmonson Livingston Russell Barren Franklin Logan Shelby Boyle Fulton Lyon Simpson Breckinridge Gallatin McCracken Spencer Bullitt Graves McLean Taylor Butler Grayson Marion Todd Caldwell Green Marshall Trigg Calloway Hancock Meade Trimble Carlisle Hardin Mercer Union Carroll Hart Metcalfe Warren Casey # Henderson Monroe Washington Christian Henry Muhlenberg Wayne Clinton Hickman « Nelson Webster Mississippi (northern part) 20,843 1,054,000 Counties of— Alcorn De Soto Monroe Tate Attala Grenada Montgomery Tippah Benton Holmes Noxubee Tishomingo Bolivar Humphreys Oktibbeha Tunica Calhoun Itawamba Panola Union Carroll Lafayette Pontotoc Washington Chickasaw Lee Prentiss Webster Choctaw Lefiore Quitman Winston Clay Lowndes Sunflower Yalobusha Coahoma Marshall Tallahatchie Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

FEDERAL RESERVE SYSTEM 121 FEDERAL RESERVE DISTRICTS-Continued Land area Population Federal Re3erve district (square July 1, 1937 miles) (estimated) DISTRICT NO. 8.-ST. LOUIS-Continued. Missouri (eastern part) 58,206 2,981,000 Counties of— Adair Douglas Maries Reynolds Audrain Dunklin Marion Ripley Barry Franklin Mercer St. Charles Benton Gasconade Miller St.Clair Bollinger Greene Mississippi St. Francois Boone Grundy Moniteau St. Louis Butler Harrison Monroe St. Louis City Caldwell Henry Montgomery Ste. Genevieve Callaway Hickory Morgan Saline Camden Howard New Madrid Schuyler Cape Girardeau Howell Oregon Scotland Carroll Iron Osage Scott Carter Jefferson Ozark Shannon Cedar Johnson Pemiscot Shelby Chariton Knox Perry Stoddard Christian Laclede Pettis Stone Clark Lafayette Phelps Sullivan Cole Lawrence Pike Taney Cooper Lewis Polk Texas Crawford Lincoln Pulaski Warren Dade Linn Putnam Washington Dallas Livingston Rails Wavne Daviess Macon Randolph Webster Dent Madison Ray Wright Tennessee (western pjirt) 10,736 871,000 Counties of— Benton Fayette Henry Shelby Carroll Gibson Lake Tipton Chester Hardeman Lauderdale Weakley Crockett Hardin McNairy Decatur Haywood Madison Dyer Henderson Obion DISTRICT NO. 9.—MINNEAPOLIS 414,004 5,452,000 Michigan (northern part) 16,691 318,000 Counties of— Alger Dickinson Keweenaw Me no mi nee Baraga Gogebic Luce Ontonagon Chippewra Houghton Mackinac Schoolcraft Delta Iron Marquette Minnesota 80,858 2,652,000 ^Montana 146,131 539,000 North Dakota . 70,183 706^000 South Dakota 76,868 692,000 Wisconsin (northern part) 23,273 545,000 Counties of— Ashland Dunn Oneida Sawyer Barron Ea a Claire Pepin Taylor Baytield Florence Pierce Trempealeau Buffalo Forest Polk Vilas Burnett Iron Price Washburn Chippewa La Crosse Rusk Douglas Lincoln St. Croix DISTRICT NO. 10—KAN,sAS CITY 480,438 8,155,000 Colorado 103,658 1,071,000 Kansas 81,774 1,864,000 Missouri (western part) 10,521 1,008,000 Counties of— Andrew Cass Holt Nodaway Atchison Clay Jackson Platte Barton Clinton Jasper Vernon Bates DeKalb McDonald Worth Buchanan Gentry Newton Nebraska 76,808 1,364,000 Mew Mexico (northern part) 48,359 231,000 Counties of— Bernalillo Mora San Miguel Valen Colfax Rio Arriba Santa Fe Harding Sandoval Taos McKinley San Juan Union Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

122 ANNUAL REPORT OF BOARD OF GOVERNORS FEDERAL RESERVE DISTRICTS—Continued Land area Population Federal Reserve district (square July 1, 1937 miles) (estimated) DISTRICT NO. 10.-KANSAS CITY-Continued. Oklahoma (northwestern narti 61,770 2,382,000 Counties of— Adair Ellis Logan Pontotoc Alfalfa Garfield Love Pottawatomie Beaver Garvin McClain Roger Mills Beckham Grady Mclntosh Rogers Blaine Grant Major Seminole Caddo Greer Mayes Sequoyah Canadian Harmon Murray Stephens Carter Harper Muskogee Texas Cherokee Haskell Noble Tillman Cimarron Hughes Nowata Tulsa Cleveland Jackson Okfuskee Wagoner Comanche Jefferson Oklahoma Washington Cotton Kay Okmulgee Washita Craig Kingfisher Osage Woods Creek Kiowa Ottawa Woodward Custer Latimer Pawnee Delaware Le Flore Payne Dewey Lincoln Pittsburg Wyoming 97,548 235,000 DISTRICT NO. 11—DALLAS 386,116 7,337,000 Arizona (southeastern r»artA 23,412 120,000 Counties of— Cochise Greenlee Pima Santa Cruz Graham Louisiana (northern part") 18,518 688,000 Parishes of— Bienville De Soto Madison Tensas Bossier East Carroll Morehouse Union Caddo Franklin Natchitoches Webster Caldwell Grant Ouachita West Carroll Catahoula Jackson Red River Winn Claiborne La Salle Richland Concordia Lincoln Sabine New Mexico (southern nart") 74,144 191,000 Counties of— Catron Eddy Lincoln Sierra Chaves Grant Luna Socorro Curry Guadalupe Otero Torrance De Baca Hidalgo Quay Dona Ana Lea Roosevelt Oklahoma (southeastern nart,^ 7,644 166,000 Counties of— Atoka Choctaw Johnston Marshall Bryan Coal McCurtain Pu3hmataha Texas 262,398 6,172,000 DISTRICT NO. 12.-SAN FRANCISCO.. 683,852 10,244,000 Arizona (northwestern narM 90,398 292,000 Counties of— Apache Maricopa Navajo Yavapai Coconino Mohave Pinal Yuraa Gila California 155,652 6,154,000 Idaho . .. 83,354 493,000 Nevada 109,821 101,000 Oregon 95,607 1,027,000 Utah 82,184 519,000 Washington 66,836 1,658,000 Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

FEDERAL RESERVE SYSTEM 123 FEDERAL RESERVE BRANCH TERRITORIES (December 31, 1938) BUFFALO BRANCH (District No. 2).—The 10 most westerly counties of New York State, as follows: Monroe Orleans Allegany . Wyoming Chautauqua Genesee Erie Cattaraugus Livingston Niagara CINCINNATI BRANCH (District No. 4).—That part of Kentucky in Federal Reserve district No. 4, and the following 25 counties in southern Ohio: Adams Clermont Greene Meigs Ross Athens Clinton Hamilton Miami Scioto Brown Darke Highland Montgomery Vinton Butler Fayette Jackson Pike Warren Clark Gallia Lawrence Preble Washington PITTSBURGH BRANCH (District NO. 4).—Those portions of the States of Pennsylvania and West Virginia included in Federal Reserve district No. 4. BALTIMORE BRANCH (District No. 5).—The State of Maryland and the following 30 counties of West Virginia: Barbour Grant Lewis Pendleton Taylor Berkeley Hampshire Marion Pleasants Tucker Braxton Hardy Mineral Preston Upshur Calhoun Harrison Monongalia Randolph Webster Doddridge Jackson Morgan Ritchie Wirt Gilmer Jefferson Nicholas Roane Wood CHARLOTTB BRANCH (District No. 5).—The following counties in the States of North Carolina and South Carolina: NORTH CAROLINA Alexander Caldwell Hay wood McDowell Swain Alleghany Catawba Henderson Mecklenburg Transylvania Ashe Cherokee Iredell Mitchell Union Avery Clay Jackson Polk Watauga Buncombe Cleveland Lincoln Rowan Wilkes Burke Gaston Macon Rutherford Yancey Cabarrus Graham Madison Stanly SOUTH CAROLINA Abbeville Edgefield Lancaster Newberry Saluda Aiken Fair-field Laurens Oconee Spartanburg Anderson Greenville Lexington Pickens Union Cherokee Greenwood McCormick Richland York Chester BIRMINGHAM BRANCH (District No. 6).—The State of Alabama except the following counties: Mobile, Baldwin, Russell, Pike, Barbour, Coffee, Dale, Henry, Covington, Geneva, and Houston, and towns and cities in Lee and Chambers counties located on or south of the Atlanta & West Point Railroad and the Western Railway of Alabama. JACKSONVILLE BRANCH (District No. 6).—The entire State of Florida. NASHVILLE BRANCH (District No. 6).—That part of the State of Tennessee included in Federal Reserve district No. 6 with the exception of the city of Chattanooga. NEW ORLEANS BRANCH (District No. 6).—Those parts of the States of Louisiana and Mississippi located in Federal Reserve district No. 6, and the counties of Mobile and Baldwin in Alabama. SAVANNAH AGENCY (District No. 6).—Savannah, Ga. DETROIT BRANCH (District No. 7).—The following 19 counties in the State of Michigan: Bay Ingham Livingston Saginaw Tuscola GGe nesee JJakc kson MMabc omb SSialn ilac Washtenaw Hillsdale Lapeer Monroe St. Clair Wayne Huron Lenawee Oakland Shiawassee LITTLE ROCK BRANCH (District No. 8).—The State of Arkansas except the following counties-: Baxter Craighead Greene Mississippi Sebastian2 Benton1 Crawford Lawrence Phillips Sharp Boone Crittenden Lee Poinsett Washington Carroll Cross Madison Randolph Woodruff Clay Fulton Marion St. Francis and except also the towns of DeValls Bluff (Prairie County), Mena (Polk County), and Newport (Jackson County). 1 Town of Gentry assigned to Little Rock Branch. 2 Town of Mansfield assigned to Little Rock Branch. LOUISVILLE BRANCH (District No. 8).—That part of the State of Kentucky included in Federal Reserve District No. 8, with the exception of the town of Morganfield (Union County), and the following 14 counties in the State of Indiana: Clark Floyd Jefferson Orange Switzerland Crawford Harrison Lawrence Perry Washington Dubois1 Jackson Martin2 Scott 1 Except the towns of Ferdinand and Holland. Digitized for 2F ERxAceSptE Rth e town of Loogootee. http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

124 ANNUAL REPORT OF BOARD OF GOVERNORS MEMPHIS BRANCH (District No. 8).—Those parts of the States of Mississippi and Tennessee included in Federal Reserve District No. 8, with the exception of Union City (Obion County) Tennessee and Paris (Henry County) Tennessee, and the following 10 counties in the State of Arkansas: Craighead Cross Lee Phillips St. Francis Crittenden Lawrence Mississippi Poinsett Woodruff also the town of DeValls Bluff (Prairie County), Arkansas. HELENA BRANCH (District No. 9).—The entire State of Montana. DENVER BRANCH (District No. 10).—The entire State of Colorado and that part of the State of New Mexico included in Federal Reserve District No. 10. OKLAHOMA CITY BRANCH (District No. 10).—That part of the State of Oklahoma located in Federal Reserve District No. 10. OMAHA BRANCH (District No. 10).—The entire States of Nebraska and Wyoming. EL PASO BRANCH (District No. 11).—That part of the States of Arizona and New Mexico located in Federal Reserve District No. 11, and the following 14 counties in the State of Texas: Andrews Ector Jeff Davis Midland Ward Crane El Paso Loving Pecos Winkler Culberson Hudspeth Martin Reeves HOUSTON BRANCH (District No. 11).—The following 43 counties in the southeastern part of the State of Texas: Anderson Cherokee Jackson Nacogdoches Shelby Angelina Colorado Jasper Newton Trinity Austin Fayette Jefferson Orange Tyler Bastrop Fort Bend Lavaca Polk Victoria Brazoria Galveston Lee Refugio Walker Brazos Grimes Liberty Sabine Waller Burleson Hardin Madison San Augustine Washington Calhoun Harris Matagorda San Jacinto Wharton Chambers Houston Montgomery SAN ANTONIO BRANCH (District No. 11).—The following 52 counties in the State of Texas: Aransas De Witt Jim Hogg Llano_ Starr Atascosa Dimmit Jim Wells Live Oak Terrell Bandera Duval Karnes Mason Travis Bee Edwards Kendall Maverick Uvalde Bexar Frio Kenedy McMulIen Val Verde Blanco Gillespie Kerr Medina Webb Brewster Goliad Kimble Nueces Willacy Brooks Gonzales Kinney Presidio Wilson Caldwell Guadalupe Kleberg Real Zapata Cameron Hays La Salle San Patricio Za valla Comal Hidalgo Los ANGELES BRANCH (District No. 12).—That part of the State of Arizona located in Federal Reserve District No. 12, and the following counties in California: Imperial Los Angeles Riverside San Diego Ventura Inyo Orange San Bernardino Santa Barbara PORTLAND BRANCH (District No. 12).—The entire State of Oregon, and the town of Ilwaco and the following nine counties in the State of Washington: Asotin Columbia Garfield Skamania Walla Walla Clark Cowlitz Klickitat Wahkiakum Also, the following counties in the State of Idaho: Benewah Boundary Idaho Latah Nez Perce Bonner Clearwater Kootenai Lewis Shoshone SALT LAKE CITY BRANCH (District No. 12).—The entire State of Utah and the following counties in Idaho and Nevada: IDAHO Ada Bonneville Custer Jerome Payette Adams Butte Elmore Lemhi Power Bannock Camas Franklin Lincoln Teton Bear Lake Canyon Fremont Madison Twin Falls Bingham Caribou Gem Minidoka Valley Blaine Cassia Gooding Oneida Washington Boise Clark Jefferson Owyhee NEVADA Clark Elko Lincoln White Pine SEATTLE BRANCH (District No. 12).—The entire State of Washington except the town of Ilwaco and the following nine counties which are affiliated with the Portland Branch: Asotin Columbia Garfield Skamania Walla Walla Clark Cowlitz Klickitat Wahikiakum Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

FEDERAL RESERVE DISTRICTS •H BOUNDARIES OF FEDERAL RESERVE DISTRICTS .—iH BOUNDARIES OF FEDERAL RESERVE BRANCH TERRITORIES (APPROXIMATE IN THE ST. LOUIS DISTRICT) ($ FEDERAL RESERVE BANK CITIES • FEDERAL RESERVE BRANCH CITIES O FEDERAL RESERVE BANK AGENCY Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

INDEX Acceptances: Page Buying rates 58 Member bank holdings, Sept. 28, 1938 64 Assets and liabilities. (See Condition statements.) Bank directorates, Interlocking: Regulation L, amendments: Policy action of Board of Governors on , 74 Summary of changes 35 Bank examinations: Conflict of authority 14 Federal Advisory Council recommendations 85 Procedure revised: Description of 89, 90 Discussion of 4, 15, 37-39 Relation between examination policies and credit policies 4, 17 Report on banks examined 36 Uniformity in examination policy. Problem of 4 Bank mergers. (See Banks: Consolidations, absorptions, etc.) Bank supervision: Allocation of authority 11 Chart of principal bank supervisory relationships 9 Confusion and conflict of authority 12 Discriminations in 3 Examination policy, Problem of uniformity in 4 Growth and pattern 2 Relation between examination, supervision and credit policies 4 Relation between supervisory and credit policies 16 Responsibility diffused 3 Bankers' acceptances. (See Acceptances.) Banking and financial legislation: Federal Deposit Insurance Corporation: Authority to make loans to or purchase assets from insured banks. Pub. res. no. 116, 75th Congress. 35 Double liability of stockholders waived. Pub. no. 544, 75th Congress. . 35 Federal statutory provisions regulating banks: Discussion of discriminatory Federal laws 10 List of * 87 > Laws and jurisdictions to which banks are subject 8 Loans to executive officers of member banks extended. Pub. no. 492, 75th Congress 34 Banking developments in 1938, Discussion of 27 Banking offices: Number of, 1933-1938 66 Banking structure in United States, June 30, 1938 7 Banking system: Changes in character of banking 7 Composition of 2, 6 Discriminatory Federal laws 10 Laws and jurisdictions to which banks are subject 8 Banks: Branches: Number of: 1933-1938 66 1938, Analysis of changes in 67 Consolidations, absorptions, etc 67 Loans to, by member banks: Sept. 28, 1938 64 Number of: 1933-1938 66 1938, Analysis of changes in 67 Suspensions 67 ; (See also Federal Reserve banks; Member banks; National member banks; Nonmember banks; State member banks.) 127 Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

128 INDEX Bills: Page Bought in open market by Federal Reserve banks: All banks combined: 1918-1938, End of year figures 61 1938, End of month figures 61 Dec. 31, 1938 45 Each bank, end of year figures 48 Earnings on 54 Volume of operations 53 Discounted by Federal Reserve banks: All banks combined: 1918-1938, End of year figures 61 1938, End of month figures 61 Dec. 31, 1938, in detail : 45 Each bank, end of year figures 48 Earnings on 54 Volume of operations 53 Federal Reserve bank holdings: Maturity distribution 47 Blattner, George W., resigned as Assistant Director of Division of Research and Statistics of the Board of Governors 41 Board of Governors of Federal Reserve System: Annual Report, Change in form of publication 42 Bank examination procedure, revised: Description of 89, 90 Discussion of 4, 15, 37-39 Bank examinations 14 Bank supervision 3, 11 Blattner, George W., resigned 41 Condition report form revised 36 Directory of 94 Draper, Ernest G., appointed member 41 Expenses -. 41, 100 Hamlin, Charles S., Death of 41 Holding company affiliates supervision 13 Interest on deposits, Regulation of 13 Investment securities regulation, Enforcement of 12 Policy actions: Regulation D, Reserve requirements 73 Regulation L, Interlocking directorates 74 Regulation T, Margin requirements for brokers 73 Power to control excess reserves 5 Receipts and disbursements 100 Salaries of officers and employees 95-99 Bonds: Appraisal of bonds in bank examinations 89 United States Government. {See United States Government securities.) Yields: Monthly and yearly figures 68 Branch banks: Foreign 40 Number of: 1933-1938 66 1938, Analysis of changes in 67 Brokers and dealers in securities: Loans to, by member banks: Sept. 28, 1938 64 Building contracts. {See Construction contracts.) Business and credit conditions: Discussion of • • • 22-25, 27 Capital: Federal Reserve banks: All banks combined, Dec. 31, 1938 46 Each bank, end of year figures 48 Capital movements to United States: Discussion of 25 Digitized for FREAffSecEtR on bank reserves 20 http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

INDEX 129 Capital stock: Pase Member banks: Sept. 28, 1938 ..... 65 Dec. 31, 1938 . . 63 Car loadings, Freight. (See Freight-car loadings.) Central reserve city member banks: Assets and liabilities, Dec. 31, 1938: Chicago 62 New York City 62 Classification of loans, investments and capital stock, Sept. 28, 1938 64 Charts: Industrial production 23 Principal bank supervisory relationships 9 Check clearing and collection: Par list, number of banks on 33 Volume of operations at Federal Reserve banks 53 Claims on the United States, Federal Advisory Council recommendation on assignment of 86 Clayton Act: "Morris Plan bank" under amendment of Regulation L, Board of Governors 35, 74 Coin received and counted by Federal Reserve banks 53 Commercial paper: Discount rates, open market 68 Member bank holdings, Sept. 28, 1938 64 Commitment rates: Federal Reserve banks 58 Comptroller of the Currency: Bank examination procedure, revised: Description of 89, 90 Discussion of 4, 15, 37-39 Bank examinations 14 Bank supervision 3, 11 Condition report form revised 36 Interest on deposits regulation, Enforcement of 13 Investment securities regulation: Enforcement of 12 Revision of 91-93 Condition statements: Federal Reserve banks: All banks combined; Dec. 31, 1938 45 Each bank, end of year figures 48 Member banks: Sept. 28, 1938 64 Dec. 31, 1938 62 Revised form of condition reports 36 Consolidations, absorptions, etc. (See Banks: Consolidations, absorptions.) Construction contracts awarded: Discussion of 24 Indexes of value of 69 Corporations, Foreign banking. (See Foreign banking corporations.) Country member banks: Assets and liabilities, Dec. 31, 1938 62 Classification of loans, investments, and capital stock, Sept. 28, 1938 64 Credit, Bank: Federal Reserve: 1918-1938, End of year figures 61 1938, End of month figures 61 Credit policies: Relation between examination policies and credit policies 4, 17 Relation between supervisory and credit policies 16 Reserves and credit regulation 18 Currency: Circulation. (See Money in circulation.) Received and counted by Federal Reserve banks 53 Department store sales (value) index 69 Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

130 INDEX Deposits: Page All banks in U. S.: Discussion of 27, 29 Federal Reserve banks: All banks combined, Dec. 31, 1938 46 Each bank, end of year figures 48 Interest on. (See Interest on deposits, Interest rates.) Member banks: Dec. 31, 1938.. 63 Nonmember deposits in Federal Reserve banks: 1918-1938, End of year figures 61 1938, End of month figures 61 Reserves required against. (See Reserve requirements.) Savings: Payment of interest on. (See Interest on deposits.) Velocity of: Discussion of . 29 Directorates, Interlocking. (See Bank directorates, Interlocking.) Discount rates: Federal Reserve banks 58 • Dividends: Federal Reserve banks 55, 56 Member banks 63 Double liability of stockholders: Federal Deposit Insurance Corporation waiver of. Pub. no. 544, 75th Congress 35 Draper, Ernest G., appointed member of Board of Governors of Federal Reserve System 41 Durable goods production index 69 Earnings and expenses: Federal Reserve banks: All banks combined 56 Discussion of 29-31 Each bank 54 Edge Act corporations: Examination of 36 List of 40 Employment, Factory: Discussion of 25 Indexes 69 Examinations. (See Bank examinations.) Executive officers of member banks: Loans to: Public act, amended, extending period to June 16, 1939 34 Expenses: Board of Governors of Federal Reserve System 100 Federal Reserve banks 54, 56 Factory employment. (See Employment, Factory.) Federal Advisory Council: Directory of 103 Meetings 41 Recommendations to Board of Governors: May 17, 1938. Unification of bank examinations 85 Nov. 29, 1938. Assignment of Claims on the United States 86 Federal Deposit Insurance Corporation: Authority to make loans to or purchase assets from insured banks. Pub. res. no. 116, 75th Congress 35 Bank examination procedure, revised: Description of 89, 90 Discussion of 4, 15, 37-39 Bank examinations 14 Bank supervision 3, 11 Condition report form revised . 36 Double liability of stockholders waived. Pub. no. 544, 75th Congress 35 Interest on deposits, Regulation of 13 Membership changes 67 Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

INDEX 131 Federal Open Market Committee: Pase Directory of 102 Meetings 41 Policy actions 76-84 Press statement 83 Regulation relating to open-market operations amended 36 Federal Reserve Act: Amendments, 75th Congress: Double liability of stockholders waived by Federal Deposit Insurance Corporation. Pub. no. 544 35 Federal Deposit Insurance Corporation to make loans to or purchase assets of insured banks. Pub. res. no. 116 35 Loans to executive officers of member banks extended. Pub. no. 492.. . 34 Federal Reserve agents: List of 104-107 Federal Reserve banks: Agencies: Havana Agency of Federal Reserve Bank of Atlanta discontinued.... 32 Assessment for expenses of Board of Governors 55 Branches: Directors, List of 104-107 Spokane branch of Federal Reserve Bank of San Francisco discontinued 32 Building operations 33 Chairmen, List of 104-1Q7 Directors, List of 104-107 Dividends paid: All banks combined 56 Each bank 55 Earnings and expenses: All banks combined 56 Discussion of 29-31 Each bank 54 Employees, number and salaries 108 Presidents, List of 104-107 Profit and loss account 55 Retirement system contributions 54 Salaries of officers and employees 54, 108 Volume of operations 53 Federal Reserve branch banks. (See Federal Reserve banks: Branches.) Federal Reserve districts: Area, square miles 117-122 Branch territories: Changes in 32 Counties comprising '. 123 Map showing outline 125 Population 117-122 Federal Reserve notes: Circulation 48 Collateral security 48 Issued 48 Redemption fund: All banks combined, Dec. 31, 1938 45 Each bank, end of year figures 48 Federal Reserve System: Membership changes 67 Fiduciary powers of national banks. (See Trust powers of national banks.) Financial conditions. (See Business and credit conditions.) Financial legislation. (See Banking and financial legislation.) Foreign banking corporations: Examination of 36 List of ' 40 Foreign banks: Central banks: Credits to, by Federal Reserve banks 33 Deposits of, held by Federal Reserve banks: All banks combined, Dec. 31, 1938 46 Each bank, end of year figures 48 Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

132 INDEX Page Franchise tax paid by Federal Reserve banks to Government, 1917-1932 56 Freight-car loadings: Indexes . . 69 Gold: Movements : Discussion of 25 Discussion of effect on bank reserves 20 Stock, Monetary in U. S.: 1918-1938, End of year figures 61 1938, End of month figures 61 Gold certificates: Federal Reserve bank holdings: All banks combined, Dec. 31, 1938 45 Each bank, end of year figures 48 Government bonds. (See United States Government securities.) Hamlin, Charles S., Death of 41 Havana Agency of Federal Reserve Bank of Atlanta discontinued 32 Holding company affiliates: Conflict of authority in supervision of 13 Permits granted 39 Hungary, National Bank of: Syndicate Credits Agreement carried out 33 Idle funds, Discussion of 28 Income: Agricultural: Discussion of . . 25 Payments: Discussion of 24, 25 Indexes 69 Industrial advances of Federal Reserve banks: All banks combined, Dec. 31, 1938. . 45 Commitments 48 Discussion of 32 Each bank, end of year figures 48 Earnings on 54 Maturity distribution 47 Rates • 58 Volume of operations 53 Industrial production. (See Production, Industrial.) Interdistrict collection system: Membership in : 33 Volume of operations at Federal Reserve banks 53 Interest on deposits: Regulation of 13 Interest rates: Federal Reserve banks 58 Open market, in N.Y.C 68 Time deposits 59 (See also Discount rates.) Interlocking bank directorates. (See Bank directorates, Interlocking.) Investments: Classification in bank examinations: Description of 89 Discussion of 37-39 Comptroller of the Currency regulation: Enforcement of 12 Revision of 91-93 Member banks: Sept. 28, 1938 64 Discussion of 28 (See also Loans and investments.) Laws and legislation. (See Banking and financial legislation.) Liabilities. (See Condition statements.) Loans: Classification in bank examinations: Digitized for FRASEDRe scription of 89 http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

INDEX 133 Loans—Continued. Pa^e Classification in bank examinations—Continued. Discussion of 37-39 Industrial. (See Industrial advances of Federal Reserve banks.) Real estate. (See Real estate loans.) Security. (See Securities: Loans on.) Total for member banks: Sept. 28, 1938 64 Loans and investments: Member banks: Sept. 28, 1938 64 Dec. 31, 1938 C62^, Discussion of , "28' Margin requirements: Brokers and dealers in securities. Regulation T: Agreement of nonmember banks under Sec. 8(a) of Securities Exchange Act of 1934 , 21 Amendment 36 Policy action of Board of Governors on 73 Maturities: Bills held by Federal Reserve banks. (See Bills: Federal Reserve bank holdings.) United States Government securities held by Reserve banks. (See United States Government securities: Federal Reserve bank holdings.) Member banks: Bills discounted for. (See Bills: Discounted by Federal Reserve banks.) Branches, Foreign . 40 Condition of. (See Condition statements.) Deposits. (See Deposits.) Earnings and expenses. (See Earnings and expenses.) Loans and investments. (See Loans and investments.) National banks. (See National member banks.) Reserves. (See Reserves.) State banks. (See State member banks.) Minerals production index 69 Monetary gold stock. (See Gold: Stock, Monetary.) Monetary legislation. (See Banking and financial legislation.) Monetary policy, Discussion of 21 Money in circulation: 1918-1938, End of year figures 61 1938, End of month figures 61 Money rates: Discussion of 29 Open market, in N. Y. C 68 Morris Plan and industrial banks: "Morris Plan bank" under amendment of Regulation L, Board of Governors 35, 74 Mutual savings banks: Banking offices, 1933-1938 66 Branches: 1933-1938 . 66 1938, Analysis of changes in 67 Number of: 1933-1938 .. 66 9 1938, Analysis of changes in 67 National Association of Supervisors of State Banks: Executive Council approved revised form of condition reports 36 National income. (See Income.) National member banks: Assets and liabilities, Dec. 31, 1938 62 Banking offices, 1933-1938 66 Branches: Number of: 1933-1938 66 1938, Analysis of changes in 67 Classification of loans, investments and capital stock, Sept. 28, 1938 64 Number of: Digitized for FRASER 1933-1938 68 http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

134 INDEX National member banks—Continued. Pase Number of—Continued. 1938, Analysis of changes in 67 Trust powers. (See Trust powers of national banks.) Nondurable goods production index 69 Nonmember banks: Deposits of, held by Federal Reserve banks: 1918-1938, End of year figures 61 1938, End of month figures 61 Insured: Banking offices, 1933-1938 66 Branches: 1933-1938 66 1938, Analysis of changes in 67 Number of: 1933-1938 " 66 1938, Analysis of changes in 67 Uninsured: Banking offices, 1933-1938 66 Branches: 1933-1938 66 1938, Analysis of changes in 67 Number of: 1933-1938 66 1938, Analysis of changes in 67 Number of banks. (See Banks: Number of.) Open Market Committee. (See Federal Open Market Committee.) Open-market operations: Federal Open Market Committee policy actions 76-84 Regulation of Federal Open Market Committee amended 36 Par collection system: Membership in 33 Payrolls, Factory: Discussion of 24, 25 Index 69 Policy actions. (See Board of Governors of Federal Reserve System: Policy actions; Federal Open Market Committee: Policy actions.) Postal savings deposits: Interest rate on, paid by member banks 59 Prices, Wholesale commodity: Discussion of 25 Index 69 Private banks: Banking offices, 1933-1938 66 Branches: 1933-1938 66 1938, Analysis of changes in 67 Number of: 1933-1938 66 1938, Analysis of changes in 67 Production, Industrial: Chart 23 # Discussion of 24 Indexes 69 Profits: Securities profits in bank examinations 90 Real estate loans: Member banks, Sept. 28, 1938 64 Reconstruction Finance Corporation: Bank supervision 3, 11 Redemption fund, Federal Reserve notes. • (See Federal Reserve notes: Redemption fund.) Regulations of Board of Governors: Regulation D, Reserve requirements: Policy action of Board on 73 Supplement, decreasing 35 Regulation L, Interlocking directorates: Digitized for FRASEAR mendments • 35 http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

INDEX 135 Regulation of Board of Governors—Continued. Pase Regulation L, Interlocking directorates—Continued. Policy actions of Board on 74 Regulation T, Margin requirements for brokers: Agreement of nonmember banks under sec. 8(a) of Securities Exchange Act of 1934 and Board's Regulation T 34 Amendment 36 Policy action of Board on 73 Reserve bank credit. (See Credit, Bank.) Reserve city member banks: Assets and liabilities, Dec 31, 1938 62 Classification of loans, investments, and capital stock, Sept. 28, 1938 64 Reserve requirements for member banks: Discussion of 18- Reduction in: Regulation D: Policy action of Board of Governors on 73 Supplement 35 Table 60 Reserves: All banks in United States: Discussion of 27 Excess: Discussion of 29 Federal Reserve banks: All banks combined, Dec. 31, 1938 45 Each bank, end of year figures 48 Ratio to liabilities 48 Member banks: Account in Federal Reserve banks: All banks combined, Dec. 31, 1938 45 Each bank, end of year figures 48 Discussion of: Factors of change in reserves 20 Growth in reserves in recent years 5 Nature and function of bank reserves 4 Reserves and credit regulation 18 Sources of reserves 19 Treasury powers affecting reserves 5, 21 Excess: 1931-1938, End of year figures 61 1938, End of month figures 61 Discussion of 5, 18, 21, 27 Total: 1918-1938, End of year figures 61 1938, End of month figures 61 Salaries: Board of Governors, officers and employees 95-99 Federal Reserve banks 54, 108 Savings deposits: Interest rate on 59 Securities: Classification in bank examinations: Description of 89 Discussion of 37-39 Comptroller of the Currency regulation of investment securities: Enforcement of 12 Revision of 91-93 Loans on, by member banks: Sept. 28, 1938 64 Profits, Bank examination treatment of 90 United States Government. (See United States Government securities.) Securities exchange act of 1934: Agreement of nonmember banks under 34 Spokane branch of Federal Reserve Bank of San Francisco discontinued , 32 State member banks: Digitized for FRASER Assets and liabilities, Dec. 31, 1938 62 http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

136 INDEX State member banks—Continued. Page Banking offices, 1933-1938 66 Branches: Number of: 1933-1938 . m 1938, Analysis of changes in 67 Classification of loans, investments and capital stock, Sept. 28, 1938 64 Examinations of 37 List of, Dec. 31, 1938 109-117 Number of: 1933-1938 66 1938, Analysis of changes in 67 Stock prices 68 Supervision of banks. (See Bank supervision.) Surplus: Federal Reserve banks 55, 56 Member banks 63 Suspensions, Bank. (See Banks: Suspensions.) Treasury cash and deposits with Federal Reserve banks. (See United States Government deposits: Federal Reserve banks.) Treasury currency outstanding 61 Treasury Department: Bank supervision 3, 11 Powers affecting bank reserves 5, 21 Trust company members of Federal Reserve System 109-117 Trust powers of National banks: Conflict in authority of regulating 13 Permits granted 39 United States Government deposits: Federal Reserve banks: All banks combined: 1918-1938, End of year figures 61 1938, End of month figures 61 Dec. 31, 1938 46 Each bank, end of year figures 48 United States Government securities: Bonds: Yields 68 Federal Open Market Committee policy actions on 76-84 Federal Reserve bank holdings: All banks combined: 1918-1938, End of year figures 61 1938, End of month figures 61 Dec. 31, 1938 45 Each bank, end of year figures 48 Earnings on 54 Maturity distribution 47 Member bank holdings: Sept. 28, 1938 64 Dec. 31, 1938 62 Discussion of 19, 28 Treasury bills: Discount rates on 68 Treasury notes: Yields 68 Volume handled by Federal Reserve banks: All banks combined 53 United States Treasurer: General account on deposit in Federal Reserve banks. (See United States Government deposits: Federal Reserve banks.) Wholesale commodity prices. (See Prices, Wholesale commodity.) Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis