Annual Report of the Federal Reserve Board, 1939

Twenty-Sixth MIUAL REPORT of the BOARD OF GOVERNORS of the FEDERAL RESERVE SYSTEM COVERING O P E R A T I O NS FOR T HE Y E AR 1939 Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

BOARD OF GOVERNORS OF THE FEDERAL RESERVE SYSTEM December 31, 1939 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 E. A. GOLDENWEISER, Director, Division of Research and Statistics WOODLIEF THOMAS, Assistant Director, Division of Research and Statistics LEO H. PAULGER, Chief, Division of Examinations R. F. LEONARD, Assistant Chief, Division of Examinations C. E. CAGLE, Assistant Chief, Division of Examinations 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 II Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

CONTENTS Text of Report PAGE Summary 1 Federal Reserve Policy 2 Flexible Open-Market Portfolio 2 Liquidation of Treasury Bills 3 Open-market Purchases on Outbreak of War 4 Recovery of Bond Prices 7 Significance of Flexible Portfolio 9 Change in Maturity Distribution 9 United States Acquisitions of Foreign Gold 10 Prewar Capital Inflow 11 Prewar Merchandise Balance 11 Prewar Gold Acquisitions , 12 First Months of War 12 Banking Developments 13 Growth in Reserves and Deposits 13 Increase in Government Securities 14 Increase in Commercial Loans 14 Changes in Banking Structure 15 Business Conditions 15 Developments Prior to the Outbreak of War 17 Developments Subsequent to the Outbreak of War 18 Federal Reserve Bank Operations 19 Earnings and Expenses of Federal Reserve Banks 19 Interdistrict Collection System 21 Credits to Foreign Central Banks 22 Legislation Relating to the Federal Reserve System 22 Changes in Regulations of the Board of Governors 23 Bank Examinations 25 Grants of Authority 25 Trust Powers of National Banks 25 Holding Company Affiliates 26 Foreign Banking Corporations 27 Foreign Branches of Member Banks 27 Regulation T—Agreements with Nonmember Banks 28 Meetings of the Federal Open Market Committee 28 Meetings of the Federal Advisory Council . 28 Board of Governors—Staff and Expenditures 28 Change in Board Staff 28 Board Expenditures , 29 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) De cember 30, 1939 32-33 No. 2. Statement of Condition of Each Federal Reserve Bank at End of 1938 and 1939 34-37 No. 3. Holdings of U. S. Government Securities by Federal Reserve Banks at end of December 1937, 1938 and 1939 38 No. 4. Volume of Operations in Principal Departments of Federal Reserve Banks, 1935-1939 39 No. 5. Earnings and Expenses of Federal Reserve Banks During 1939 40-41 No. 6. Current Earnings, Current Expenses, and Net Earnings of Federal Re serve Banks and Disposition of Net Earnings, 1914-1939 42-43 No. 7. Number and Salaries of Officers and Employees of Federal Reserve Banks 43 No. 8. Receipts and Disbursements of the Board of Governors of the Federal Reserve System for the Year 1939 44-45 No. 9. Federal Reserve Bank Discount, Interest, and Commitment Rates and Buying Rates on Acceptances, December 30, 1939 46 No. 10. Maximum Rates on Time Deposits 47 No. 11. Member Bank Reserve Requirements 47 No. 12. All Member Banks—Condition on December 30, 1939, by Classes of Banks 48-49 No. 13. All Member Banks—Classification of Loans, Investments, Real Estate, and Capital on December 30, 1939, by Classes of Banks 50-51 No. 14. Member Bank Reserve Balances, Reserve Bank Credit, and Related Items—End of Year 1918-1939 and End of Month 1939 52 No. 15. Number of Banks and Branches in United States, 1933-1939 53 No. 16. Analysis of Changes in Number of Banks and Branches during 1939... 54 No. 17. Number of Banks on Par List and Not on Par List, by Federal Reserve Districts and States, on December 31, 1938 and 1939 55 No. 18. Money Rates, Bond Yields, and Stock Prices 56 No. 19. Business Indexes 57 Appendix Record of Policy Actions—Board of Governors 60-66 Record of Policy Actions—Federal Open Market Committee 67-74 Recommendations of the Federal Advisory Council to the Board of Governors of the Federal Reserve System 75-80 Board of Governors of the Federal Reserve System 81 Federal Open Market Committee 81 Federal Advisory Council 82 Senior Officers and Directors of Federal Reserve Banks 83-90 State Bank and Trust Company Members 91-99 Description of Federal Reserve Districts 100-105 Federal Reserve Branch Territories 106-107 Map of Federal Reserve Districts 108 Index 109-119 IV 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, April 12, 1940. 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-sixth Annual Report, prepared by direction of the Board of Governors of the Federal Reserve System, covering operations during the calendar year 1939. Yours respectfully, M. S. ECCLES, Chairman. v Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

-finnual Mepott ofo the jSaatd ok Qovatnotl ob the redetal /Qe&etve Sultem SUMMARY AT THE beginning of 1939 business activity had recovered about half •E*- of the severe decline that had occurred between the middle of 1937 and the summer of 1938. In the early months of 1939 there was a slight recession in industrial output but other types of business activity were for the most part maintained. In the middle of the year an upward movement got under way, which was sharply accelerated in September when war broke out in Europe. In the closing months of the year the current rate of output in terms of quantity of goods and services was higher than at any time in the country's history. With continued growth of population, however, output per capita was no larger than in 1929. Unemployment, while reduced materially from the highest level of the depression, was still in large volume. In the latter part of the year there was an increase in commitments for new industrial plant and par ticularly for new equipment, which will further increase and improve productive capacity. Building activity increased in 1939 but was still far below the levels of the 1920's. National income and distribution of commodities to consumers also increased in the last few months, and exports were considerably larger. In many lines, however, it appears that production rose more rapidly than consumption, with a consequent increase in inventories in the hands of producers and distributors. Un filled orders, which had been in unusually large volume after the buying wave in the early autumn, had declined somewhat by the end of the year. During the year recurring war crises in Europe resulted in an increased flow of gold to this country, and at the end of the year our gold stock reached the unprecedented total of $17,650,000,000, representing twothirds of the world's monetary gold. This inflow of gold resulted in a corresponding growth of member bank reserves and deposits, and this, together with some expansion of bank loans and investments, carried bank deposits to new high levels. Required reserves increased correspondingly but this increase fell far short of ab sorbing the additions to bank reserves, so that excess reserves rose further to a volume in excess of five billion dollars. The principal medium of Federal Reserve policy during the year was open-market operations. In the middle of the year, when rates on Treas ury bills were practically on a no-yield basis, the Federal Open Market Committee decided that, whenever market conditions warranted, hold ings of Treasury bills wrould be allowed to mature without replacement. 1 Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

2 ANNUAL REPORT OF BOARD OF GOVERNORS In the autumn when hostilities broke out in Europe and United States securities, as well as other high-grade fixed-interest obligations, fell rap idly in price, the System bought Government securities freely with a view to cushioning the decline and exerting an influence against dis organization in the capital market. It was not the System's objective to hold Government security prices at any given level but to prevent them from falling so rapidly as to result in panicky conditions in the market. When the shock of the outbreak of the war had subsided and prices of Government securities, after a substantial recovery, had ad vanced further, the System sold some securities from its portfolio. As a net result of the year's operations, the System's open-market port folio at the end of 1939 was $80,000,000 lower than at the beginning of the year. In its annual report for 1938 the Board presented a brief review of the problems of banking and bank supervision with which the country is confronted. No material changes in the situation described in the report occurred during 1939, except a further large expansion of bank reserves. In the summer the United States Senate adopted a resolution introduced by Senator Wagner of New York, reading in part as follows: "Resolved, That the Committee on Banking and Currency is authorized to conduct a study and to hold hearings to consider and recommend a national monetary and banking policy by which the monetary and banking authorities of the Federal Government shall be guided and governed, and to consider and recommend the character of governmental machinery best calculated to carry out such policy. The Committee shall report to the Senate as soon as practicable the results of its study, together with its recommendation for the enactment of any legislation it may deem necessary." FEDERAL RESERVE POLICY An important change in the System's open-market policy during 1939 was the departure from the practice of recent years of maintaining a constant amount of securities in the System account. This change re flected a shift in emphasis in the use of open-market operations from their influence on member bank reserves to their direct influence on con ditions in the capital market. As a corollary of this change it was no longer necessary to attach as much importance as previously to having at all times a large amount of securities of short maturity. Since the autumn of 1933 the System's open-market portfolio had been approximately $2,500,000,000. No net changes in the portfolio had occurred, except for relatively minor purchases in Flexible the spring of 1937 for the purpose of attempting to portfolio1* preserve orderly market conditions and in the autumn of that year for the purpose of providing funds to meet seasonal requirements. Maintenance of a constant portfolio had reflected Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

FEDERAL RESERVE SYSTEM 3 the judgment of the Federal Open Market Committee that, so long as business recovery was incomplete and there was no evidence of overexpansion of credit, there wTas no occasion for a reduction in the System's open-market holdings. On the other hand, there was no occasion to in crease the portfolio materially so long as excess reserves were abundant and growing, bank deposits were in unusually large volume, and interest rates were lowr. In 1939, however, developments in the market caused the System to depart from the practice of maintaining a constant portfolio. These de velopments were, first, the difficulty of replacing maturing Treasury bills without paying a premium over a no-yield basis, and, later, the sharp decline in United States Government security prices at the outbreak of the war in Europe. As early as the last quarter of 1938, the diminution in the supply of Treasury bills in the face of a growing demand had resulted in a decline in the rate on weekly bill issues almost to zero, and on Liquidation of some occasions bills were not obtainable except at a lreasury bills x # premium above a no-yield basis. This matter was discussed by the Federal Open Market Committee as early as December 1938, and the following statement was released to the press on Decem ber 30: "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 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. Shortterm 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 port folio 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 con templated at this time, maturing bills will be replaced to the extent that market conditions warrant." For nearly six months after this announcement it was found possible to replace maturing bills each week with other bills or with short-term Treasury notes without paying a premium above a no-yield basis or with Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

4 ANNUAL REPORT OF BOARD OF GOVERNORS longer-term Treasury notes without causing undue disturbance in the market for such notes. The difficulty of replacing bills, however, became continuously more pronounced. On June 21, the Open Market Com mittee considered the matter again and decided that no useful purpose would be served by continuing to replace maturing bills for which there was a strong demand in the market and that, therefore, the System's holdings of bills should be allowed to run off without replacement unless market conditions made this undesirable for any given week. On June 30 the following statement was issued: "As a result of a reduction in holdings of Treasury bills, this week's statement of condition of Federal Reserve banks shows a decline of $13,378,000 in the System Open Market Account. This is in accordance with action taken by the Federal Open Market Committee on June 21, 1939. For some time past, Treasury bills have been purchased for the System's account at or near a no-yield basis and the account at times has had difficulty in replacing its maturing bills. It was decided that it would serve no useful purpose to continue full replacement of maturing bills, the supply of which is not always equal to the market demand. This action is in response to technical conditions in the bill market and does not represent a change in general credit policy." In the course of 24 weeks the total of Treasury bills held on June 21 amounting to $477,000,000 was liquidated, and since December 6 no Treasury bills have been held in the System's open-market account. While the gradual liquidation of the System's Treasury bills was in process, world events precipitated conditions in the bond market which caused the System to make purchases of other United Open-market States obligations on a substantial scale. As early as outbre*akSoTwar ^s meeting on April 19 the Federal Open Market Committee had taken cognizance of the possibility of serious disturbances in the Government security market in the event of an armed conflict in Europe. At that meeting the committee gave authority to its executive committee to arrange for large-scale purchases of United States Government securities in case war should break out and result in serious disturbances in the capital market in the United States. This authority was renewed on June 21 at the last meeting of the committee before the outbreak of the war. On September 1, when war in Europe actually began, prices of United States Government and high-grade corporate bonds declined abruptly. Prices of Government bonds had advanced almost continuously from September 1937 to June 1939 and were at that time at the highest level on record, with the average yield on long-term Treasury bonds at 21/ 4: per cent. Even prior to the actual outbreak of hostilities high-grade Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

FEDERAL RESERVE SYSTEM D bond prices had declined somewhat as the result of uncertainties in the world outlook, but early in September the break in the bond market be came more pronounced. In the circumstances, the Federal Reserve System deemed it to be in the public interest to exert its influence in a positive way toward main taining orderly conditions in the market for United States Government securities. While the System has neither the obligation nor the power to assure any given level of prices or yields for Government securities, it has been its policy in so far as its powers permit to protect the market for these securities from violent fluctuations of a speculative, or panicky nature. Prices of fixed-interest rate securities, including those of the Government, inevitably adjust to changes in long-time interest rates. Consequently, an orderly rise or fall in United States bond prices in re sponse to changes in underlying credit conditions, as expressed in inter est rates, does not call for action by the System. Violent temporary movements, however, caused by such circumstances as the shock of the outbreak of European hostilities, make it in the public interest for the System to use its influence toward preventing a disorganized condition in the market. In undertaking large-scale open-market operations in September 1939, the System was guided principally by the following considerations: (1) By helping to maintain orderly conditions in the market for United States Government securities the System can exert a steadying influence on the entire capital market, which is an essential part of the country's economic machinery, and disorganization in which would be a serious obstacle to the progress of economic recovery. The market for United States Government securities is the only part of the capital market in which the System is authorized by law to operate, and Gov ernment securities occupy a vital place in that market. (2) The System also has a measure of responsibility for safeguarding the large United States Government portfolio of the member banks from unnecessarily wide and violent fluctuations in price. The System cannot and does not guarantee any current prices of Government obligations, nor does it undertake to preserve for member banks such profits as they may have on their Government securities, or to protect them against losses in this account. The Government security market, however, has become in recent years the principal part of the money market, and member banks are in the habit of adjusting their cash positions through sales and purchases of United States Government securities. This prac tice has arisen partly because of a shrinkage in the availability of other liquid assets, such as Street loans and bankers' acceptances, which in earlier years were in much larger volume and were the medium through which banks were likely to adjust their positions. In the enhanced im portance of the Government portfolio to member banks, the System sees Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

6 ANNUAL REPORT OF BOARD OF GOVERNORS an additional reason for exerting its influence against undue disturbances in Government security prices. On September 1 the System announced that all the Federal Reserve banks stood ready to make advances on Government securities to mem ber and nonmember banks at par and at the discount rate. The dis count rate at the time was 1 per cent in New York and 1% per cent at the other Reserve banks. During September the rate for such advances was reduced to 1 per cent at six Federal Reserve banks. The purpose of the announcement and of the reduction in the discount rates was to assure all banks, as large holders of Government obligations, that a tem porary decline in prices of Government securities should not be regarded as an occasion for selling these securities, as, in case of need, these hold ings could be the basis for obtaining their par value in cash at the Fed eral Reserve banks. A more tangible expression of System policy, however, was the active intervention of the Federal Reserve banks, at the direction of the Fed eral Open Market Committee, in the market for Government securities. In the early part of September the System made substantial purchases with a view to preventing the development of disorderly conditions or unreasonably abrupt declines in prices. Offerings were increasing and there was a scarcity of buyers. Consequently, prices were falling rapidly. A few purchases of United States Government securities were made in the closing days of August. On September 1 when war actually 7 broke out and long-term Government bonds declined by a full point, the System purchased more than $100,000,000 of Government secu rities. This amount included $61,000,000 purchased from dealers in order to prevent these holdings from hanging over the market, or from demoralizing the market further if the dealers attempted to liquidate them at once. The understanding with dealers during this period was that they were expected to act in effect as brokers only and were not to take positions on either the long or the short side of the market. For a brief period from September 1 to September 6 dealers were also requested, when offering securities to the Federal Reserve banks, to give the names of the sellers of the securities. This plan was adopted as a means of detecting possible speculative short sales and in general as a method of having better knowledge of developments in the market. The policy of requiring the names of sellers was discontinued as soon as market condi tions justified its abandonment. As a further precaution it was agreed that dealers would stop trading in United States Government obligations at 4 o'clock in the afternoon. During the period in September when the Federal Reserve banks were making purchases in the open market, many banks cooperated with the System's program by refraining from making sales from their portfolios of United States Government securities. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

FEDERAL RESERVE SYSTEM 7 The aggregate amount of securities purchased by the System from August 28, when the purchases began, to September 25, when they ter minated, was $473,000,000. Toward the end of September prices of Government and high-grade corporate obligations steadied and shortly thereafter began to advance. By the end of the year their level had advanced to Recovery of ^ ^ prevailing prior to the outbreak of the war in na bond prices J ^ • Europe. Advances m Government security prices dur ing the last three months of the year were at times so rapid that it was thought advisable to sell some of the System's holdings, particularly of issues for which there was a strong market demand. In the course of these months a total of $77,000,000 was sold. As a net result of the year's open-market operations, the System's portfolio at the end of December was about $80,000,000 smaller than a year earlier. Two charts are presented in this connection. The first chart shows for the last five months of 1939 daily changes in the price of a repre sentative long-term Treasury bond (2% per cent bonds of 1960-65) and daily purchases or sales of securities by the Federal Reserve System. The chart shows that over a period of a few weeks a sharp drop in the OPEN-MARKET OPERATIONS AND TREASURY BOND PRICES AUGUST-DECEMBER, 1939 *RS DOLLARS 112 112 108 108 ^TREASURY BOND PRICES 104 100 100 96 96 92 92 MILLIONS OF DOLLARS MILLIONS OF DOLLARS FEDERAL RESERVE 100 PURCHASES SO K 50 J I FEDERAL RESERVE SALES 50 50 AUGUST SEPTEMBER OCTOBER NOVEMBER DECEMBER Prices of Treasury bonds of 1960-1965. Purchases and sales are shown as of date of purchase or sale rather than date of delivery and include all Government securities, except Treasury bills. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

© ANNUAL REPORT OF BOARD OF GOVERNORS prices of Treasury bonds was followed first by a period of relative stability and subsequently by an advance toward the level that had prevailed before the outbreak of the war. It is apparent from the chart that open-market operations by the Reserve System were so timed as to moderate the more extreme daily movements of bond prices but not so as to prevent the market from following over the period the gen eral pattern of decline and recovery. The second chart shows for a period of years average yields on long-term Government bonds, excess reserves BOND YIELDS, EXCESS RESERVES, AND BANK DEPOSITS rfrNT MONTHLY AVERAGES OF DAILY FIGURES PFR rl b 4 \ TRLMOURI D\Jl\U 1ICL.U s 3 2 i £ 1 t 0 BILLIONS OF DOLLARS BILLIONS OF DOLLARS 6 4 2 0 x.~ E 2 )i EX CESS F? ESERV -s y „—*% V" RESERV ES 0 SCALE) MILLIONS OF DOLLARS CALL REPORT DATES BILLIONS OF DOLLARS 70 70 60 TO-fAL DEI3 0SITS AND CI URREN CY J 60 50 50 40 40 30 30 1928 1930 1932 1934 1936 1938 Average yields on Treasury bonds due or callable after 12 years. Borrowed reserves are bills discounted by member banks at Federal Reserve banks. Excess reserves in the period 1928-1930 and borrowed reserves in the period 1934-1939 were small and are not shown. Bank deposits and currency figures are partly estimated. Currency figures represent amounts outside bank vaults. Deposit figures are for all commercial and sav ings banks in the United States and Postal Savings System; they exclude interbank deposits and are adjusted for cash items in process of collection. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

FEDERAL RESERVE SYSTEM 9 of member banks, and bank deposits and currency outside of banks. The extraordinary inflow of gold has been the principal factor in the growth of excess reserves and of bank deposits in recent years with a consequent large volume of funds seeking investment. As a result, inter est rates have declined to record low levels, as is indicated by the course of Government bond yields on the chart. The sudden sharp rise in these yields in the autumn of 1939, without a change in the deposit and reserve position of banks or a substantial increase in credit demands by com merce and industry, was a temporary development rather than a reflec tion of a change in underlying credit conditions. Adoption by the System in 1939 of a flexible portfolio in place of the fixed portfolio held for the preceding six years was in response to mone tary conditions that had developed over the past few Significance of years. In earlier years changes in the System portflexible portfolio folio had been made with reference to their effect on member bank indebtedness or the volume of excess reserves. With bank reserves at an unprecedented and constantly mounting level, and with a vast amount of funds in the hands of in dividual and institutional investors seeking outlets, such changes in member bank reserves as are caused by System open-market operations are no longer a major factor in easing or tightening credit conditions. On the other hand, such operations exert an influence on conditions in the capital market. The entry or withdrawal of the System as an active buyer or seller has an influence not only on prices of the particular issues that the System buys or sells, but also on the market for Govern ment obligations as a whole and to some extent on the capital market in general. In view of the fact that member banks hold a large volume of Government and corporate bonds, the endeavors of the System to con tribute to the maintenance of an orderly bond market tend to stabilize banking conditions and, through their effect on the capital markets, they contribute to general economic recovery. The change in the immediate objective of open-market operations has had the incidental effect of making it less important for the Federal Reserve System to have its portfolio of United States Change in Government securities consist in large part of shortmaturity distribution term obligations. The chart following shows the ex tent of the decrease in the last six months of 1939 in the System's holdings of obligations maturing in a year or less and the increase in obligations maturing in more than five years. At the end of the year about one-tenth of the System's portfolio had a maturity of one year or less, compared with one-third at the end of 1938. When open-market sales and purchases by the System were primarily Digitized fofro Fr RtAhSe EpRu rpose of affecting the volume of member bank reserves, it was http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

10 ANNUAL REPORT OF BOARD OF GOVERNORS considered important to hold a large amount of securities that would mature in a short time or could be sold without sustaining losses or causing a disturbance in the market. With the shift in emphasis in openmarket operations from their effect on member bank reserves to their effect in contributing to orderly conditions in the market for United States Government obligations, it has become less important for the UNITED STATES GOVERNMENT OBLIGATIONS HELD BY FEDERAL RESERVE BANKS BILLIONS OF DOLLARS BILLIONS OF DOLLARS 3 3 1936 1937 1938 1939 System to have a large proportion of its portfolio in short-term obliga tions. The change in the distribution of maturities in the portfolio during the year was consistent with this viewpoint. UNITED STATES ACQUISITIONS OF FOREIGN GOLD Gold movements to this country in recent years have been influenced to an increasing extent by apprehensions of war and by actual hostilities. In the last year and a half the movement of capital to the United States has been almost entirely determined by the war situation, which has also been a powerful influence on American exports. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

FEDERAL RESERVE SYSTEM 11 The war flight of capital to the United States assumed large dimen sions in September 1938 with the events leading up to the dismember ment of Czechoslovakia. During the year ending Tapital inflow August 1939, according to the reported figures, $1,800,- 000,000 of capital came to the United States from abroad, a larger sum than in any other period of equal length. Roughly half the total inflow occurred during the twelve weeks of severest crisis— four in September 1938 on the occasion of the first Czech crisis, five in March and April 1939 following the German absorption of Bohemia and Moravia, and three in August, immediately preceding the outbreak of war. The bulk of the capital inflow represented private money seeking refuge in the United States, most of which was placed on deposit, but foreign central banks and governments also participated in the move ment. In the year ending August 1939 official balances held with the Reserve banks and certain other institutions rose by $260,000,000. The increase would no doubt have been much larger were it not for the fact that foreign central banks are permitted to hold gold in this country, a facility denied to private persons. Gold earmarked for foreign account increased $700,000,000 in the year ending August 1939, bringing the total accumulation of foreign official resources in the United States during the period to approximately $1,000,000,000. A second important factor in the gold flow to the United States in the prewar period was the excess of merchandise exports. The sudden emergence of a large export surplus in the latter part Puewa.?m£ri of 1937 was due less to war influences than to the chandise balance coincidence of diminishing business activity in the United States with increased agricultural output after a year of short crops occasioned by drought. Imports of industrial goods declined and certain agricultural commodities shifted from an import to an export basis. But in addition to these domestic developments there was also a strong foreign demand for American manufactures. Military expendi tures abroad contributed to this demand, partly through enlarging the flow of goods and materials needed directly for armament and partly through intensifying the whole range of foreign business activity. The growth in exports of American manufactures was the chief factor in maintaining the export surplus of this country at an unusually high level even after the domestic conditions which had played a large part in creating the surplus in 1937 had disappeared. In the middle of 1938 business began to recover and in the ensuingyear there was a renewed expansion of raw material imports, while ex ports of agricultural products, reflecting chiefly a decline in cotton exports, receded to an unusually low level; but owing to larger ship ments of manufactured goods the excess of exports was maintained Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

12 ANNUAL REPORT OF BOARD OF GOVERNORS during the year ending August 1939 at $800,000,000, compared with $1,100,000,000 in the previous twelve months. Acquisitions of foreign gold by the United States during the year ending August 1939 reached the unprecedented total of $3,400,000,000. Most of this gold, as already indicated, was received acquStfons m connec^on with the reported inflow of capital and the excess of exports, but a substantial portion repre sents transactions which have not been identified. It seems probable, however, that many of these transactions constituted capital transfers hidden for the purpose of evading exchange restrictions abroad and particularly the compulsory relinquishment of foreign assets to the governments. With the outbreak of war and the imposition of war controls the recorded inflow of capital came to a halt, but the merchandise export surplus and credits due to unidentified transactions of^a^10111118 rose to £reater volume. This country continued to acquire gold from abroad on nearly the same scale as before. Gold acquisitions in the first four months of the war averaged $55,000,000 a week, compared with $65,000,000 a week in the record year that preceded the declaration of war. The cessation of the recorded capital inflow that occurred following the commencement of hostilities in Europe reflected two offsetting move ments. Capital continued to arrive from the neutral countries of Europe at fully as great a rate as before the war, but the inflow from England, France, and Canada came to an end and was succeeded by a release of funds for account of these countries which offset the continuing receipts from other areas. The belligerent countries, with the exception of Ger many, which had taken such steps some years before, imposed foreign exchange restrictions immediately after the outbreak of war. For the most part these restrictions were designed to prevent the further transfer of capital abroad. In England, moreover, the public was required to offer short-term assets denominated in dollars and other leading currencies to the Treasury, which was also authorized to requisition stocks and bonds. Compulsory sale of foreign assets was not decreed in France, but meas ures designed to encourage capital repatriation were taken. In the four war months of 1939 nationals of England, France, and Canada reduced their holdings of short-term balances in the United States by about $300,000,000 and sold more than $100,000,000 of American securities. Some of the proceeds of this liquidation went into official deposits in this country, and there was some further return of United States capital so that the net capital outflow to these countries was about $300,000,000. The net inflow from the rest of the world was of approximately equal magnitude. The effect of the war on American foreign trade was equally prompt though less spectacular. Exports from the United States increased sharply Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

FEDERAL RESERVE SYSTEM 13 in September and October and, after a setback in November, rose fur ther in December. The rise was partly seasonal, but it carried the figures well above those of a year previous. By far the largest increase as compared with 1938 occurred in exports of raw cotton, which had been unusually small the year before. Iron and steel manufactures, aircraft, petroleum products, industrial machinery, coal, industrial chemicals, and copper also showed large advances. Except for cotton, agricultural ex ports showed few increases, and shipments of tobacco fell off sharply. Imports also increased under the stimulus of rapidly expanding busi ness activity, but not to the same extent as exports. The export surplus increased substantially during the last four months of 1939. At $400,000,000 it was the principal known factor bringing gold to the United States. Transactions whose nature could not be determined pre cisely from available figures, but which probably in large part represented some form of capital movement, also continued to be important. From the outbreak of war to the end of the year the United States acquired nearly $1,000,000,000 of foreign gold. In the year and a half in which the war influence was predominant the United States acquired $4,500,000,000 of gold, an amount larger than the dollar value of the entire gold stock of this country at the end of 1933. The gold stock at the end of 1939 was $17,650,000,000; and it was increasing at the rate of about $2,500,000,000 a year. BANKING DEVELOPMENTS Bank reserves and bank deposits increased further during 1939 to the highest level on record. The principal factor in the increase was the inflow of gold from abroad but deposits were expanded also by an increase in bank holdings of United States Government obligations. The growth of deposits during the year was larger than the rise in economic activity with the consequence that the turnover of deposits declined further. Total reserves of member banks rose by $3,000,000,000 in 1939, fol lowing a rise of $2,000,000,000 in 1938; over the two-year period the amount of reserves held by banks in excess of legal ^nd"dtehositseSerVeS re<luirements increased from about $1,000,000,000 to eposi s ^ $55oo000,000, the highest on record. At the a b ? ? end of 1939, therefore, nearly half of the $12,000,000,000 of reserves held by member banks were excess reserves. Rapid expansion of bank re serves in recent years has been due chiefly to the acquisition of foreign gold, discussed in the preceding section of this report. Gold imports, together with the increase in bank loans and invest ments, have also added to our already swollen volume of bank deposits. Although recent increases in bank deposits have been widespread, with substantial percentage increases in some of the Southern and far Western States, the largest growth has been at banks in New York City. These banks are the chief holders of balances of large institutional and indi- Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

14 ANNUAL REPORT OF BOARD OF GOVERNORS vidual investors and receive most of the deposits of funds representing the capital inflow from abroad, which was mainly responsible for our gold imports and deposit growth in 1939. Banks were purchasers of United States Government securities on a large scale in 1939 and their combined holdings of direct and guaranteed obligations rose above the previous peak reached in Increase in 1936. Changes in bank holdings of Government oblisecu^m^esf11 gations in recent years have been chiefly at city banks. In 1939 the increase was mainly at member banks in New York City, and in 1938 it was mainly at member banks in other leading cities. As shown by the chart, United States Government securi ties held by banks in New York and 100 other leading cities increased by $1,900,000,000 from June 1938 to the end of 1939; this compares with an estimated increase of $2,100,000,000 at all commercial banks. MEMBER BANKS IN 101 LEADING CITIES BILLIONS OF DOLLARS WEDNESDAY FIGURES BILLIONS OF DOLLARS 1 2 12 1935 1936 1937 1938 1939 Government securities include direct and fully guaranteed obligations. Commercial loans based on new classification, beginning May 12, 1937. The chart also shows that city banks experienced a livelier demand for loans from commercial and industrial borrowers in the latter half of 1939, when a sharp increase m business activity commercial loans brought a growing need for funds to finance the cur rent expansion of business operations, including the acquisition of enlarged inventories. In this period commercial loans at Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

FEDERAL RESERVE SYSTEM 15 banks in 101 leading cities rose by nearly $600,000,000, or 13 per cent. About half of this increase was at New York City banks. Taking the year as a whole, commercial loans increased at city banks in each Fed eral Reserve district, except the San Francisco district. Outside the leading cities there were moderate but widespread increases in com mercial and industrial loans and in real estate loans. During 1939, as during the previous year, there was a decline in the number of operating banks which was offset only in part by an increase ™ . in the number of branches. As a result the number Changes in banking structure of offices at which banking business is conducted de clined during the year, continuing the trend of the four previous years. The proportion of branches to total banking offices again increased but at a slower rate than in most earlier years. Details of these changes may be found in tables 15 and 16 on pages 53-54 of this report. There was a net decrease of 160 operating banks during the year, re flecting principally 122 consolidations, absorptions, and mergers. There were 41 voluntary liquidations and 42 bank suspensions. Thirty new banks were organized and 15 were added to the records as a result of revisions. The number of Federal Reserve member banks increased during the year, while the number of insured nonmember banks and of noninsured banks continued to decline. The increase in Federal Reserve membership was due mainly to the admission of 85 nonmember State banks. During 1939 the number of branch offices of banks showed a net in crease of 49, slightly more than in 1938, but increases in each of these years are much less than those of the previous four years. The net in crease in 1939 was wholly accounted for by branches located outside the head-office city; the number of head-office city branches has remained almost unchanged for several years. BUSINESS CONDITIONS By the end of 1939 business activity was at a much higher level than at the beginning of the year. A considerable part of the rise was due to the influence of war conditions abroad, which in early autumn stimu lated a general wave of buying and greatly accelerated the rise in pro duction already under way. The increase in production extended quite generally throughout industry and led to large increases in payrolls and many other types of income payments. Cash farm income from market ings rose more than seasonally in the autumn and for the year was about the same as in 1938, while Government payments to farmers were larger. Distribution of commodities to individual consumers in turn increased and this rise, together with larger orders for capital goods, particularly equipment, took a large part of the expanded output off the market; also, Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

16 ANNUAL REPORT OF BOARD OF GOVERNORS exports of industrial products expanded. Part of the increased output, however, went into inventories and in some lines, as production toward the end of the year reached levels clearly in excess of current consump tion, new orders fell to a level below current output and unfilled orders wTere being reduced from earlier peak levels. Such developments indi cated that in these industries a decline in activity was to be expected during the early part of 1940. In some other lines, however, it appeared that new orders were continuing at relatively high levels and that the volume of unfilled orders on hand at the end of the year was sufficient to maintain activity at high levels for a considerable period. The extent of any decrease in output as a whole appeared to depend on whether the decline would prove cumulative or whether it would be stopped by new demands forthcoming from domestic sources or from abroad. SELECTED BUSINESS SERIES BILLIONS OF DOLLARS BILLIONS OF DOLLARS MONTHLY BASIS ANNUAL BASIS 84 1N COME PAYMENTS 72 60 1923-25 = 100 1923-25 = 100 140 140 120 120 ^^1ND USTRIAL PRODUCT 10N / 100 100 80 80 140 120 100 1935 1936 1937 1938 1939 Sources: Income payments, Department of Commerce; industrial production, Board of Governors of the Federal Reserve System; common stock prices, Standard Statistics Company; wholesale commodity prices, Bureau of Labor Statistics. Income payments and industrial production are adjusted for seasonal variation. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

FEDERAL RESERVE SYSTEM 17 The course of industrial production, as measured by the Board's sea sonally adjusted index, is shown for 1939 and other recent years on the accompanying chart. During the first half of 1939 Developments there was some decline, reflecting in large part reducoutbreak of war tions in activity in the steel and automobile industries and a protracted shutdown at bituminous coal mines pending settlement of contract negotiations between mine operators and the miners' union. In most important steel-consuming lines, with the exception of the automobile industry, activity was maintained during this period or increased further; the decline in steel production was due largely to the fact that in the latter part of 1938 steel production had been in excess of consumption and there had been some accumulation of inventories at steel-consuming establishments. Production of textiles, shoes, and certain other nondurable goods showed some reduction from the levels reached at the end of 1938. In the construction industry activity during the first half of 1939 was maintained near the highest level in recent years owing to a large volume of public work and to a substantial amount of private residential build ing. Total income payments, which include many items not affected directly or immediately by changes in industrial activity, did not decline and distribution of commodities to consumers showed about the usual sea sonal fluctuations until May when there was a moderate decline. In June industrial output began an advance, which continued through the summer. Steel production increased and coal production rose con siderably, following reopening of mines in the latter half of May. There was an increase in automobile production schedules during the remainder of the model year, made possible by an improvement in retail sales of new and used cars. Activity in the machinery and other steel-consum ing industries rose further. There were increases also in output of tex tiles and other nondurable goods. On the railroads, where shipments had decreased considerably during the shutdown of coal mines, loadings were in larger volume during the summer. In August retail trade ad vanced to the level prevailing in the first part of the year. Throughout the first eight months of 1939 manufacturers and dis tributors had followed a policy of inventory reduction so that by the beginning of September their stocks of industrial materials and products were generally in smaller volume than earlier in the year and in some instances were at low levels. Stocks of agricultural products, however, particularly cotton and wheat, were large. Commodity prices as a whole declined somewhat in the period, re flecting reductions in prices of farm products, particularly livestock; prices of industrial products showed little change. Common stock prices at the end of August were generally somewhat lower than at the begin- Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

18 ANNUAL REPORT OF BOARD OF GOVERNORS ning of the year, although during the summer they had advanced from the lower levels reached in the spring during the period of unusual inter national tension. When war broke out in Europe at the beginning of September indus trial activity had already increased to about the level reached at the close of 1938 and a further increase was anticipated Developments in many quarters. The outbreak of war greatly acsubsequent to the , i •, v xi ex. n xl T outbreak of war celerated the advance. Immediately a wave ol buy ing developed, extending beyond the commodities and securities markets to industrial materials and products not traded in on organized exchanges, such as steel and textiles, and, for a short time, even to some retail markets. For the most part the buying was from domestic sources, although foreign demand also increased. Prices of basic commodities and of many equity securities rose sharply in this period, while bond prices declined. The buying wave that occurred at the outset soon subsided but pur chasing of some materials continued in considerable volume and was supplemented by a large volume of orders for finished products, such as machine tools and other machinery and railway equipment. By the end of October producers in some lines had sufficient orders on their books for capacity or near-capacity production throughout the remainder of the year and in certain instances well into the first quarter of 1940. Com modity prices generally showed little change after the sharp advances of the first few weeks in September. Prices of semi-finished and finished steel for delivery in the first quarter of 1940 were reaffirmed in Novem ber, and in December prices of grains, cotton, and silk rose substantially, while there were declines in prices of steel scrap and some nonferrous metals. Commodity prices at the end of 1939 were generally somewhat higher than a year earlier but considerably below the levels reached in 1937 at the culmination of the previous recovery in business. Prices of common stocks, particularly those that earlier had risen sharply, declined after the middle of October. At the year end stock prices were generally about the same as a year earlier. In a few lines, however, notably the public utility and aircraft industries and some companies producing nondurable goods, especially textiles and foods, prices were above the level prevailing at the end of 1938. Industrial output rose sharply in September and October and in the remaining months of the year continued at a high rate, near capacity levels in a number of industries. There were also considerable increases in employment, in total income payments, and in distribution of com modities to consumers. Expenditures on publicly-financed construction, other than works projects, continued at the high level reached in the summer, but the volume of public construction undertaken declined toward the end of the year and was considerably below that of a year Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

FEDERAL RESERVE SYSTEM 19 earlier when a new Public Works Administration program was initiated. Private residential building continued at the highest level in recent years. Other private work was at a level somewhat greater than during the summer but still considerably below the levels reached in 1937. FEDERAL RESERVE BANK OPERATIONS Current earnings, current expenses, net earnings and distribution of net earnings of the twelve Federal Reserve banks for 1939 as compared with 1938 are shown in the following table. Earnings and As in other recent years, most of the earnings of the expenses of Federal 771 i i T> UI j ir • x x J Reserve banks * ederal Reserve banks were derived irom interest and discount on their holdings of United States Govern ment obligations. EARNINGS, EXPENSES, AND DISTRIBUTION OF NET EARNINGS OF FEDERAL RESEEVE BANKS DURING 1939 AND 1938 [In thousands of dollars] 1939 1938 Current earnings 38,501 36,261 C urrent expenses: Net operating expenses 25,669 25,557 Assessments for Board's expenses . 1,621 1,725 Cost of Federal Reserve currency . 1,357 1,629 Total. 28,647 28,911 Current net earnings. 9,854 7,350 Additions to current net earnings1 4,814 9,827 Deductions from current net earnings2 2,425 7,595 Net additions. | 2,389 2,232 Net earnings.. 12,243 9,582 Payment to United States Treasury (sec. 13b). 25 120 Dividends paid 8,110 8,019 Transferred to surplus (sec. 13b) -426 -419 Transferred to surplus (sec. 7) 4,534 1,862 1 Principally profits on sales of U. S. Government securities. 2 Principally charge-offs on bank premises and reserves for losses, and in 1938 contributions to re tirement system for prior service. Since nearly all member banks have reserves substantially in excess of requirements, they have had little occasion to borrow from their Fed eral Reserve banks. As a result, earnings on discounts for and advances to member banks amounted to only $61,000 in 1939. Earnings on in dustrial advances and commitments made under section 13b of the Fed eral Reserve Act, which authorizes the Federal Reserve banks, under certain conditions and limitations, to make industrial advances to estab lished commercial and industrial enterprises either direct or in participa tion with financing institutions and to enter into commitments to make such advances, aggregated $744,000. Expenses connected with industrial Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

20 ANNUAL REPORT OF BOARD OF GOVERNORS advances and commitments amounted to $424,000 and in addition provi sion was made in 1939 for estimated losses on such advances in the amount of $739,000. Net operating expenses of the Federal Reserve banks, which consisted of total operating expenses after deducting reimbursements of $4,939,000 received from the United States Treasury and other Government agen cies for fiscal agency, depositary and custodianship work, were slightly larger in 1939 than in 1938, but decreases in the assessments for expenses of the Board of Governors and in the cost of Federal Reserve currency resulted in a slightly smaller total of current expenses as compared with 1938. Principal items of expenses were salaries and contributions to the Retirement System, $20,663,000, postage and expressage, $3,356,000, taxes and normal depreciation allowances on bank premises, $2,717,000, and printing, stationery and supplies, $783,000. As shown in the foregoing table current net earnings of the Federal Reserve banks amounted to $9,854,000 in 1939. After adding to this amount $4,391,000 net profits on sales of United States Government secu rities and other credits to profit and loss aggregating $423,000 and de ducting $1,417,000 for special depreciation allowances and charge-offs on bank premises, $739,000 for losses and reserves for estimated losses on industrial advances, and other charges to profit and loss aggregat ing $269,000, there remained net earnings of $12,243,000, as compared with $9,582,000 in 1938. Federal Reserve banks paid dividends to member banks aggregating $8,110,000 at the rate of 6 per cent per annum on paid-in capital, as pro vided in the Federal Reserve Act. Payments to the United States Treas ury under provisions of section 13b of the Federal Reserve Act, relating to industrial advances, amounted to $25,000. These payments are made in accordance with the provisions of the Federal Reserve Act wliich re quire the Federal Reserve banks to pay to the Secretary of the Treasury 2 per cent, if earned, on the amounts paid to the Federal Reserve banks by the Secretary of the Treasury for the purpose of making industrial advances. The remaining net earnings of the Federal Reserve banks, transferred to surplus, amounted to $4,108,000, as compared with $1,- 443,000 in 1938. Itemized earnings and expenses in 1939 and distribu tion of net earnings for each Federal Reserve bank are shown in Table 5 on pages 40-41. Total earnings on bills and securities were $2,177,000 more in 1939 than in 1938. The increase in earnings was the result of an increase of $20,000,000 in daily average holdings of United States Government secu rities and an increase from 1.34 per cent to 1.43 per cent in the average rate of earnings thereon. The increase in the rate of earnings was due to the replacement of maturing bills with bonds and notes. Average daily holdings of bills and securities, together with average rates and Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

FEDERAL RESERVE SYSTEM 21 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] United States Total di m s c B o i u ll n s t ed op b e o n u B g i m l h ls t a r i k n e t G d s o e i v r c e e u c r r n t i t m i a e n e s n d , t I a n d d v u a s n t c ri e a s l guaranteed Daily average holdings: 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 1939 2,602,590 5,103 440 2,584,268 12,779 Earnings: 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 1939 37,581 61 2 36,903 615 Average rate of earnings (per cent): 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 1939 1.44 1.20 .45 1.43 4.81 The number of banks on the Federal Reserve par list at the end of 1939 was 11,758, comprising all of the 6,362 member banks and 5,396 nonmember banks. The number of nonmember banks Interdistnct (other than mutual savings banks and banks on which collection system ° no checks are drawn) not on the par list was 2,719. Banks on the par list pay without deduction of exchange charges such checks drawn upon them as are forwarded for payment by the Federal Reserve banks. Changes in the number of par and nonpar banks during 1939 reflect principally changes in the banking structure.1 During the year there was a net reduction of 3 in the number of nonpar banks, due to 44 such banks terminating their existence and 16 becoming par banks, offset by 21 new banks opening as nonpar banks and 36 par banks assum ing a nonpar status. As these figures show, more of the banks which were in existence throughout the year withdrew from the par list than were added to it. The number of banks on the par list declined 185 during the year, as a result of mergers, voluntary liquidations, suspen sions, and withdrawals from the par list. Of the gross addition of 57 to the number of nonpar banks, 20 were in the Atlanta and 15 in the St. Louis Federal Reserve districts. The net increase in the number of nonpar banks in the Atlanta district was 9 and in the St. Louis district 5. The distribution of the number of nonpar banks by States at the end of the year was as follows: Minne sota 411, Georgia 260, Mississippi 175, Tennessee 171, Nebraska 161, Wisconsin 158, Arkansas 132, Alabama 130, North Carolina 126, South Carolina 120, North Dakota 117, Iowa 110, Missouri 106, Louisiana 104, 1 See page 15 and table 17, page 55. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

22 ANNUAL REPORT OF BOARD OF GOVERNORS Texas 102, South Dakota 93, Florida 87, Virginia 43, and twelve other States 113. The credit to the National Bank of Hungary, granted by the Federal Reserve banks in 1931, was reduced during 1939 in accordance with the terms of the renewal agreement of 1937 (Annual Re- Crntrllbankseign P°rt f°r 193?> P' 3 5^ 0n DeCember 31> 1939> t he share of the Federal Reserve banks in the outstanding amount of the credit was $1,830,000, as compared with $2,055,000 at the end of 1938. With authorization of the Board of Governors, four loans secured by gold earmarked at the Federal Reserve Bank of New York were granted by that and other Federal Reserve banks to a foreign central bank in June, September, November, and December. The first loan, which had been renewed once, and the second loan matured in December, when they were replaced by a fourth loan in the form of a credit for a larger amount, to be made available as required. Repayment in full of this credit is due not later than June 15, 1940. The third loan, which was not covered by the fourth, was repayable in February 1940. Amounts outstanding on December 31, 1939, under the third and fourth loans totaled $5,020,000. LEGISLATION RELATING TO THE FEDERAL RESERVE SYSTEM Renewal of Loans to Executive Officers of Member Banks.—By an Act of Congress approved June 20, 1939, 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 ex tended, subject to the other provisions of the law, for periods expiring not later than June 16, 1944. (The law had previously limited such renewals or extensions to June 16, 1939.) Repeal of Compulsory Federal Reserve Membership of Insured State Banks.—The Act of June 20, 1939, which amended section 22(g) of the Federal Reserve Act as indicated above, also repealed section 12B(y) (1) of the Federal Reserve Act which had required that after July 1, 1942, each State bank with average deposits of $1,000,000 or more must be a member of the Federal Reserve System in order to have its deposits insured by the Federal Deposit Insurance Corporation under section 12B of the Federal Reserve Act. Government Obligations as Collateral for Federal Reserve Notes.—By an Act of Congress approved June 30, 1939, the second paragraph of section 16 of the Federal Reserve Act was amended so that the authority of the Board of Governors of the Federal Reserve System to permit direct obligations of the United States to be used as collateral for Federal Reserve notes was extended from June 30, 1939, until June 30, 1941. Existing Interlocking Bank Directorates.—A bill, S. 2150, to amend the second paragraph of section 8 of the Clayton Act so as to extend Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

FEDERAL RESERVE SYSTEM 23 from February 1, 1939, to February 1, 1944, the period during which certain interlocking relationships lawfully existing on the date of the Banking Act of 1935 might continue was vetoed by the President of the United States on August 5, 1939. CHANGES IN REGULATIONS OF THE BOARD OF GOVERNORS The regulations of the Board of Governors were changed during the year 1939 in the following respects: Rediscount of Notes Secured by Adjusted Service Certificates.—On April 6, 1939, the Board of Governors repealed its Regulation G, series of 1932, relating to the rediscount by Federal Reserve banks of notes secured by adjusted service certificates. No notes covered by the regu lation had been discounted with the Federal Reserve banks in several years, and the Board announced that if any applications for the re discount of any such notes should be received in the future they would be handled under the pertinent provisions of the law in the same manner as if the provisions of the regulation were still in effect. (As indicated below, the designation "Regulation G" was applied later in the year to the regulation issued by the Board on noncash collections.) Extension of Credit by Brokers, Dealers, and Members of National Securities Exchanges.—Effective May 22, 1939, the Board of Gover nors amended its Regulation T, relating to the extension and mainte nance of credit by brokers, dealers, and members of national securities exchanges. The amendment clarified and liberalized, with appropriate safeguards, provisions that relate to bona fide cash transactions in securities and to certain other classes of transactions that are not effected in margin accounts. Loans to Executive Officers.—Effective July 1, 1939, the Board of Governors amended the definition of the term "executive officer" con tained in section 1(b) of its Regulation 0, which relates to loans to executive officers of member banks. The regulation had previously included as "executive officers," among others, all persons who have certain titles, such as chairman of the board, president, vice-president, etc., regardless of their actual duties. The amendment provided that the term should include only those officers who actually participate or have authority to participate in the operating management of the bank or a branch, but provided that persons having certain titles, such as chairman of the board, president, vice-president, etc., would be assumed to be executive officers "unless it is provided by resolution of the board of directors or the bank's by-laws that any such officer is not authorized to participate in the operating management of the bank and he does not actually participate therein." The amendment also changed the date in section 4(a) of the regula tion to "June 16, 1944." This change was made to conform to the change Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

24 ANNUAL REPORT OF BOARD OF GOVERNORS in the law, as referred to above, which extended until June 16, 1944, the date to which loans made by member banks to their executive offi cers prior to June 16, 1933, may be extended or renewed. Interlocking Bank Directorates under the Clayton Act.—Effective August 1, 1939, the Board of Governors amended sections 3(a) and 3(e) of its Regulation L, relating to interlocking bank directorates under the Clayton Act, so as to extend until February 1, 1940, the time during which certain persons who had been serving member banks might continue to serve a member bank and not more than one other bank. Check Clearing and Collection.—Effective September 1, 1939, the Board revised its Regulation J, relating to check clearing and collec tion. The revision, which made a number of technical changes in the regulation, was adopted in connection with the new procedure estab lished at the Federal Reserve banks to give their member banks more prompt credit for checks deposited with the Reserve banks for collec tion and to reduce the amount of work required in preparing checks for deposit with the Reserve banks. Trust Powers of National Banks.—Effective November 20, 1939, the Board of Governors amended its Regulation F, relating to trust powers of national banks. The only substantial change made was in the re quirements of section 11 regarding self-dealing in the investment of trust funds and the sale or transfer of trust assets. The change exempted from the requirements of the section all transactions which are specifi cally authorized by court order. Certain other clarifying and tech nical changes also were made in the regulation. Membership of State Banking Institutions in the Federal Reserve System.—Effective November 20, 1939, the Board of Governors amended its Regulation H, relating to membership of State banking institutions in the Federal Reserve System. A number of technical changes were made in the regulation, but the principal changes were those made neces sary by the repeal, as referred to above, of the statutory requirement in subsection (y) of section 12B of the Federal Reserve Act that after July 1, 1942, each State bank with average deposits of $1,000,000 or more must be a member of the Federal Reserve System in order to have its deposits insured by the Federal Deposit Insurance Corporation under" section 12B of the Federal Reserve Act. Regulation on Noncash Collections.—On December 26, 1939, the Board of Governors adopted a regulation governing the collection by Federal Reserve banks of notes and bills and other "noncash items" for member banks and nonmember clearing banks. The new regulation was made effective February 1, 1940, and was designated Regulation G. (The designation "Regulation G" had previously applied to the Board's regulation relating to the rediscount by Federal Reserve banks of notes secured by adjusted service certificates, but that regulation, as indi- Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

FEDERAL RESERVE SYSTEM 25 cated above, was repealed on April 6, 1939.) The regulation on noncash collections was issued by the Board in order that the principal terms and conditions relating to the collection of such items might be pub lished in the Federal Register and it required no change in the existing practices of the Federal Reserve banks. Other provisions regarding the collection of noncash items are contained, as heretofore, in the circulars of the individual Federal Reserve banks. 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 inter national banking was examined during the year by the Board's Division of Examinations. Member Banks.—All member banks are examined by a Federal agency; national banks by the Comptroller of the Currency, and State member banks by the Federal Reserve System. State member banks are subject, under the provisions of the Federal Reserve Act, to examinations made by direction of the Board of Gov ernors 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. In order to avoid duplication of examinations and to minimize inconvenience to the banks examined, the policy of making joint examinations in cooperation with the State banking authorities wherever practicable was followed during the past year as in previous years. GRANTS OF AUTHORITY During the year 1939, 20 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 numnatimud banks ^eY mcmdes grants of one or more additional powers to three banks which previously had been granted cer tain trust powers; it also includes one grant of trust powers contingent upon the consolidation of a national bank with a State institution hav ing a trust department, and one grant of trust powers contingent upon the conversion of a State bank into a national banking association, neither of which transactions had been consummated by the end of the year. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

26 ANNUAL REPORT OF BOARD OF GOVERNORS In ten cases the grant of trust powers did not represent the establish ment of new trust facilities. In nine of such cases the grants were made in connection with the conversion of a State bank into a national bank or the consolidation of a State bank with a national bank, thereby enabling the national banks concerned to continue operation of trust de partments acquired by reason of such conversions or consolidations. In the other case the grant was made to a newly organized national bank to enable it to acquire the trust business of its predecessor national bank. One grant of trust powers was made to a newly chartered national bank which was organized solely for the purpose of doing a trust busi ness. It appears that this is the first instance of a national bank being chartered under such circumstances. During the year, 12 operating national banks surrendered their trust powers, and the trust powers of 15 other national banks were terminated, 14 because of the banks being placed in voluntary liquidation and one because of a consolidation with another national bank having trust powers. The reasons generally given for the surrender of trust powers were either the entire lack of trust business, or that the small amount of such business, past or prospective, did not justify maintenance of a trust department. The net result of the various actions with respect to trust powers during the year 1939 was a decrease of ten in the number of national banks holding one or more general powers, and a decrease of one in the number of national banks holding restricted trust powers. On December 31, 1939, 1,873 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. This list does not include 12 national banks which 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 one or more specific trust accounts, when, in the light of all the facts and circumstances in the particular case, such action was deemed warranted. During the year 1939 the Board acted upon the applications for vot ing permits submitted by holding company affiliates of member banks in accordance with the provisions of section 5144 of ?ffililtlCOmpany the Revised Statutes and section 9 of the Federal Re s serve Act, and authorized the issuance of six permits for general purposes and six permits for limited purposes. Under the authority of section 301 of the Banking Act of 1935, the Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

FEDERAL RESERVE SYSTEM 27 Board determined that seven organizations were not engaged directly or indirectly as a business in holding the stock of, or managing or con 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. During the year there were no changes in the list of foreign banking corporations operating under agreements entered into with the Board of Governors pursuant to section 25 of the Federal Re- Foreign banking rve Act and of foreign banking corporations charcorporations se i -r» ii . . tered by the Board under the provisions of section 25(a) of the Federal Reserve Act, The 4 corporations organized under State law and operating under agreements with the Board pursuant to the provisions of section 25 of the Federal Reserve Act relating to the investment by member banks in stocks of corporations engaged principally in international or foreign banking are: Bankers Company of New York, which is affiliated with the Bankers Trust Company of New York; International Banking Cor poration, which is affiliated with the National City Bank of New York; First of Boston International Corporation, wrhich is affiliated with the First National Bank of Boston; and French American Banking Corpora tion, wrhich 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 cor poration 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. There has been no change in the list of such branches during the past year, and they are located as follows: in England, 3; France, 3; Spain, 2; China, 2; Hong Kong, 1. During the year the Board granted a member bank permission to establish two foreign branches, which, however, had not been formally opened for business by the end of the year. Due to Foreign branches }itions certain member banks with branches war cono of member banks in London obtained the Board's permission to transfer the banking activities of the branches to points outside that city when ever such action is deemed necessary during the present emergency. Two London offices of member banks have been temporarily closed by reason of exigencies of the war. At the end of the year, 7 member banks were operating a total of 92 Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

28 ANNUAL REPORT OF BOARD OF GOVERNORS branches or offices located in 62 cities in 22 foreign countries or depen dencies or insular possessions of the United States. Of the 92 branches and offices, 4 national banks were operating 83, and 3 State bank mem bers were operating 9. The foreign branches were distributed geogra phically as follows: Argentina 9 Dominican Republic.. 6 Peru Belgium 3 England 11 Philippine Islands . .. Brazil 4 France 2 Puerto Rico Canal Zone 4 Hong Kong 1 Straits Settlements... Chile 2 India 4 Uruguay China 7 Japan 4 Venezuela Colombia 2 Mexico 1 Cuba 16 Panama 4 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 non- Regulation T— member bank on registered securities (other than agreements with . . ° nonmember banks 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. MEETINGS OF THE FEDERAL OPEN MARKET COMMITTEE Meetings of the Federal Open Market Committee were held in Wash ington on the following dates in 1939: March 6-7, March 20, April 19, June 20-21, September 18, and December 13. The executive committee of the Federal Open Market Committee met from time to time through out the year as occasion required. A record of actions taken by the Committee on questions of policy relating to open-market operations is published as an appendix to this report, MEETINGS OF THE FEDERAL ADVISORY COUNCIL Four meetings of the Federal Advisory Council were held in Wash ington during 1939 on the following dates: February 13-14, June 5-6, October 9-10, and November 20-21. Recommendations of the Federal Advisory Council to the Board of Governors are published in the appen dix to this report. BOARD OF GOVERNORS-STAFF AND EXPENDITURES Mr. Lauchlin B. Currie, who had been serving as an Assistant Di rector of the Board's Division of Research and Statistics since Decem ber 1934, was appointed as Administrative Assistant Change in p idnt of the United States, effective July to the res e Board staff ' J 17, 1939. The total cost of conducting the work of the Board during the year Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

FEDERAL RESERVE SYSTEM 29 1939 was $1,577,825.41. Details are shown in table 8 on pages 44-45. For the general expenses of the board two assessments Board were levied against the Federal Reserve banks aggreexpenditures . ° gating $1,621,463.77 or about one-half of one per cent of their average paid-in capital and surplus for the year. Under an arrangement with the Federal Reserve Bank of Chicago the accounts of the Board were audited twice during the course of the year 1939 by the Auditor of the Federal Reserve Bank of Chicago, who certified them to be correct. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

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

32 ANNUAL REPORT OF BOARD OF GOVERNORS NO. 1.-STATEMENT OF CONDITION OF THE FEDERAL RESERVE BANKS (IN DETAIL) DECEMBER 30, 1939 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 5,371,000 Gold certificates in interdistrict settlement fund with Board of Governors 8,317,676 Gold certificates held by banks 1,510,444 Gold certificates on hand and due from U. S. Treasury 15,199,120 Redemption fund—Federal Reserve notes 9,903 15,209,023 Total gold reserves Other cash: United States notes 71,830 Silver certificates 223,079 Standard silver dollars 2,932 National and Federal Reserve bank notes 1,128 Subsidiary silver, nickels and cents 16,225 Total other cash 315,194 Total reserves 15,524,217 Bills discounted: Secured by U. S. Government obligations, direct and guaranteed: Discounted for member banks 549 For others 25 Total secured by U. S. Government obligations, direct and guaranteed 574 Other bills discounted: For member banks 1,171 For others 5,020 Total other bills discounted 6,191 Total bills discounted 6,765 Industrial advances 11,044 U. S. Government securities, direct and guaranteed: Bonds 1,351,045 Notes 1,133,225 Total U. S. Government securities, direct and guaranteed 2,484,270 Total bills and securities 2,502,079 Due from foreign banks 47 Federal Reserve notes of other Reserve banks 33,454 Uncollected items: Transit items 813,755 Exchanges for clearing house 28,776 Other cash items 24,675 Total uncollected items 867,206 Bank premises 43,166 Other assets: Miscellaneous assets acquired account industrial advances. 1,215 Industrial advances past due 2,565 Other bills and securities past due 1,834 Claims account closed banks 1,586 Total 7,200 Lessreserves 4,446 Net 2,754 Interest accrued 8,551 Premium on securities 43,831 Deferred charges 608 Suspense account and miscellaneous assets 3,387 Total other assets 59,131 Totalassets 19,029,300 1 Before closing books at end of year. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

FEDERAL RESERVE SYSTEM 33 No. L—Federal Reserve Banks (In Detail)—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) 5,274,522 Held by issuing Federal Reserve banks and branches 300,531 Forwarded for redemption 15,445 Federal Reserve notes in actual circulation (including notes held by Treasury and by Federal Reserve banks other than issuing bank) 4,958,546 Deposits: Member bank—reserve account 11,652,396 U. S. Treasurer—general account 634,245 Foreign bank 397,443 Other deposits: Nonmember clearing account 166,156 Officers' checks 34,564 Federal Reserve exchange drafts 137 All other 54,980 Total other deposits 255,837 Total deposits 12,939,921 Deferred availability items 776,665 Other liabilities: Accrued dividends unpaid 836 Unearned discount 6 Discount on securities Reserves for estimated losses on bills and securities 285 Suspense account and miscellaneous liabilities 2,287 Total other liabilities 3,414 Total liabilities 18,678,546 CAPITAL ACCOUNTS Capital paid in 135,599 Surplus (sec. 7) 149,152 Surplus (sec. 13b) 27,264 Other capital accounts: Reserve for contingencies 32,665 Earnings: Gross earnings 38,501 Current expenses 28,647 Current net earnings 9,854 Add—profit and loss. 4,330 Deduct: Dividends accrued since closing of books 8,110 Net earnings available for depreciation allowances, reserves and surplus 6,074 • Total other capital accounts 38,739 Total liabilities and capital accounts 19,029,300 Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

CO NO. 2.-STATEMENT OF CONDITION OF EACH FEDERAL RESERVE BANK AT END OF 1938 AND 1939 [In thousands of dollars] Total Boston New York Philadelphia Cleveland Richmond 1939 1938 1939 1938 1939 1S38 1939 1938 1939 1938 1939 1938 > ASSETS > Gold certificates on hand and due fromU. S. Treasury. 15,199,120 11,787,720 865,816 660,319 7,225,434 5,115,945 846,062 546,461 1,027,910 783,882 405,603 356,645 Redemption fund—Federal Reserve notes JL903 9,873 924 328 1,619 1,226 1,071 1,236 816 810 935 1,222 Other cash 315,194 368,213 28,528 36,112 71,716 103,924 26,470 29,221 21,340 23,751 20,223 21,917 w M 15,524,217 12,165,806 895,268 696,759 7,298,769 5,221,095 873,603 576,918 1,050,066 808,443 426,761 379,784 O w Bills discounted: Secured by U.S.Government obligations, direct O and guaranteed 574 2,099 30 32 90 804 150 704 113 191 42 54 Other bills discounted 6,191 1,872 9 2,258 241 513 473 542 54 230 153 offl Total bills discounted .^6,765 3,971 30 41 2,348 1,045 663 1,177 655 245 272 207 > Bills bought in open market 549 41 215 56 51 24 Industrial advances •*11,044 15,644 1,301 1,945 2,035 3,879 3,084 3,120 315 618 948 1,466 H U. S. Government securities, direct and guaranteed: o Notes 1 1 , , 1 3 3 5 3 1 , , 2 0 2 4 5 5 1,1 8 5 4 6 0 , , 9 8 4 93 7 9 8 8 2 , , 0 2 9 8 8 3 8 6 7 3 , , 0 2 7 8 3 7 4 35 1 1 9 , , 9 5 4 9 4 3 2 36 6 7 7 , , 9 4 3 2 8 6 1 9 1 7 5 , , 0 6 2 7 2 3 1 7 0 3 0 , , 0 5 5 1 7 5 1 11 4 8 0 , , 2 9 4 7 7 5 1 8 1 4 6 , , 5 3 5 3 4 5 5 7 8 0 , , 7 0 7 7 8 6 3 54 9 , , 2 4 9 6 1 1 o*1 Bills 566,175 42,611 180,058 49,189 56,931 26,569 o <J Total U. S. Government securities, direct and guaranteed /. 2,484,270 2,564,015 180,381 192,971 771,537 815,422 212,695 222,761 259,222 257,820 128,854 120,321 O Total bills and securities 2,502,079 2,584,179 181,712 194,998 775,920 820,561 216,442 227,114 260,192 258,734 130,074 122,018 Due from foreign banks 47 172 3 13 18 65 5 17 4 16 2 7 (Jl Federal Reserve notes of other Federal Reserve banks 33,454 32,570 584 757 4,336 5,337 1,945 2,081 2,137 1,966 4,189 2,946 Uncollected items 867,206 710,849 82,640 69,882 245,509 207,064 73,955 54,506 97,538 74,509 64,944 47,040 Bank premises 41,749 42,768 2,889 2,945 9,895 9,038 4,573 4,699 5,547 6,017 2,545 2,621 Other assets 58,583 44,348 3,887 2,893 17,226 13,388 5,829 4,637 6,523 5,018 3,486 2,508 Total assets 19,027,335 15,580,692 1,166,983 9 68,247 8,351,673 6,276,548 1,176,352 869,972 1,422,007 1,154,703 632,001 556,924 Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

LIABILITIES Federal Reserve notes in actual circulation1 4,958,546 4,451,824 408,195 384,130 1,269,922 1,029,296 348,938 320,562 463,123 427,467 229,550 208,287 Deposits: Member bank—reserve account 111,653,232 8,724,050 544,545 392,294 6,319,837 4,460,340 598,597 374,231 680,194 477,880 282,998 231,576 U. S. Treasurer—general account ! 634,270 923,225 77,716 81,324 139,593 212,295 65,043 58,155 113,236 116,296 25,590 48,507 Foreign bank i 397,443 199,211 29,243 14,360 136,108 71,369 39,417 19,545 37,791 18,349 17,473 8,576 Other deposits ! 255,836 241,512 6,758 4,251 165,324 188,479 16,820 8,181 7,228 2,513 2,033 Total deposits J12,940,781 10,087,998 658,262 492,229 5,760,862 4,932.483 719,877 458,830 839,402 619,753 328,574 290,692 Deferred availability items | 776,665 694,217 76,082 67,897 199,137 194,382 73,866 57,591 86,696 75,047 58,805 43,155 Other liabilities including accrued dividends J 2,558 2,998 183 175 873 1,214 965 664 126 134 10 108 Total liabilities 18,i 1,550 15,237,037 1,142,722 944,431 8,230,794 6,157,375 1,143,646 837,647 1,389,347 1,122,401 616,939 542.242 CAPITAL ACCOUNTS Capital paid in ; 135,599 134,575 9,384 9,411 50,972 51,043 12,115 12,213 13,830 13,546 5,171 5,005 Surplus (sec. 7) • 151,720 149,152 10,405 10,083 53,326 52,463 14,198 13,696 14,323 14,323 5,247 4,983 Surplus (sec. 13b) | 26,839 27,264 2,874 2,874 7,109 7,457 4,393 4,416 1,007 1,007 3,246 3,293 Other capital accounts I 34,627 32,664 1,598 1,448 9,472 8,210 2,000 2,000 3,500 3,426 1,398 1,401 Total liabilities and capital accounts 19,027,335 15,580,692 1,166,983 8,247 8,351,673 6,276,548 1,176,352 869,972 1,422,007 1,154,703 556,924 Contingent liability on bills purchased for foreign correspondents 76 27 7 7 3 Commitments to make industrial advances 9,070 14,272 479 1,297 2,677 930 1,525 1,140 2,234 761 1,282 FEDERAL RESERVE NOTE STATEMENT Federal Reserve notes: Issued to Federal Reserve bank by Federal Reserve agent 5,274,522 4,790,047 429,660 408,865 1,362,927 1,134,257 368,874 340,668 488,021 451,834 245,605 222,006 Held by Federal Reserve bank 315,976 338,223 21,465 24,735 93,005 104,961 19,936 20,106 24,898 24,367 16,055 13,719 In actual circulation *. 4,958,546 4,451,824 1,269,922 1,029,296 348,938 320,562 427,467 229,550 208,287 Collateral held by agent for notes issued to banks: Gold certificates on hand and due from U. S. Treasury 5,371,000 4,888,000 440,000 420,000 1,385,000 1,155,000 375,000 345,000 491,000 457,000 250,000 230,000 Eligible paper 1,365 3,397 30 36 184 997 177 827 232 57 207 Total collateral held ! 5,372,365 4,891,397 440,030 420,036 1,385,184 1,155,997 375,177 345,827 457,232 250,057 230,207 I 1 Includes Federal Reserve notes held by the U. S. Treasury or by a Federal Reserve bank other than the issuing bank. CO Or Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

A7o. 2.—Statement of Condition—Continued CO [In thousands of dollars] Atlanta Chicago St. Louis Minneapolis Kansas City Dallas San Francisco 1939 1938 1939 1938 1939 1938 1939 1938 1939 1938 1939 1938 1939 1938 ASSETS Gold certificates on hand and due from U.S. Treasury.. 300,831 275,267 2,455,662 2,200,214 413,898 316,830 258,566 241,452 348,852 304,342 242,196 210,498 808,290 775,865 745 583 624 629 772 843 • 219 606 478 509 364 191 1,336 1 690 Other cash 16,661 15,526 39,906 51,557 17,783 19,634 9,268 7,786 17,418 14,773 15,259 14,400 30,622 29,612 > Total reserves 318,237 291,376 2,496,192 2,252,400 432,453 337,307 268,053 249,844 366,748 319,624 257,819 225,089 840,248 807,167 Bills discounted: H Secured by U. S. Government obligations, direct 20 75 55 15 50 43 25 74 4 4 35 63 O hd Other bills discounted 190 111 643 74 186 45 216 91 906 567 146 20 361 34 W ^ 210 186 643 129 201 45 266 134 931 641 _ 150 24 396 97 o 19 68 2 2 16 16 39 *) 694 825 324 415 11 21 743 964 181 268 500 775 908 1 348 w o U. S. Government securities, direct and guaranteed: 54,597 34,279 148,547 90,644 45,803 35,023 36,677 18,633 61,021 37,140 48,970 30,913 111,015 66,476 > 45,795 47,163 124,599 124,714 38,419 48,187 30,764 25,636 51,183 51,101 41,075 42,531 93,116 91 463 © Bills 23,080 61,031 23,581 12,546 25,007 20,814 44,758 o Total U. S. Government securities, direct 100,392 104,522 273,146 276,389 84,222 106,791 57,441 56,815 112,204 113,248 90,045 94,258 204.131 202,697 o a*j < Total bills and securities 101,296 105,552 274,113 277,001 84,434 106,859 68,450 57,915 113,316 114,173 90,695 95,073 205,435 204,181 Due from foreign banks 2 6 6 21 1 3 * 2 1 5 1 5 4 12 W Federal Reserve notes of other Federal Reserve banks 3 3 3 , , 6 4 1 7 7 1 2 3 4 , ,8 4 8 4 7 3 11 5 9 , , 4 1 7 72 5 9 5 5 , , 8 9 8 15 6 3 2 6 , , 5 2 1 6 0 9 2 2 9 , , 9 8 3 3 1 8 1,316 1 1 6 , , 4 8 2 8 8 9 33 1, , 9 0 7 0 5 0 32 1, , 4 6 5 2 3 4 26,8 8 1 6 7 5 2 1 5 , , 3 6 0 2 8 2 3 4 3 , , 5 0 0 96 5 3 3 2 , , 0 0 3 7 4 3 o w Bank premises 2,034 2,076 3,390 3,964 2,243 2,291 20,795 1,524 3,106 3,089 1,175 1,261 2,956 3,243 w Other assets 2,359 1,809 5,974 4,349 1,903 1,679 1,396 1,096 2,514 1,779 2,140 1,565 5,120 3,627 1,622 Total assets 461,016 429,149 2,904,322 2,639,536 559,813 480,908 361,632 328,698 520,660 472,747 379,512 349,923 1,091,364 1,053,337 * Less than $500. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

LIABILITIES Federal Reserve notes in actual circulationl 162,941 151,398 1,085,378 996,721 193,549 183,131 141,427 136,857 183,908 171,390 83,575 81,375 388,040 361,210 Deposits: 211,821 188,709 1,528,702 1,299,880 270,676 209,543 154,788 113,568 260,687 227,796 216,794 183,468 583,593 564,765 U. S. Treasurer—general account 22,462 41,110 71,030 176,765 32,195 35,355 24,452 43,294 23,077 24,886 21,233 38,428 18,643 46,810 14,222 6,980 49,169 23,734 11,784 5,983 9,346 4,587 11,784 5,784 11,784 5,784 29,322 14,160 Other deposits 6,813 4,168 5,312 1,658 7,294 5,093 6,105 3,779 991 1,476 9,584 2,686 20,141 13,762 255,318 240,967 1,654,213 1,502,037 321,949 255,974 194,691 165,228 296,539 259,942 259,395 230,366 651,699 639,497 30,078 24,190 120,150 96,322 33,564 31,361 16,362 17,480 29,887 31,468 25,388 27,254 26,650 28,070 17 153 160 199 15 51 87 95 72 46 48 37 2 122 Total liabilities 448,354 416,708 2,859,901 2,595,279 549,077 470,517 352,567 319,660 510,406 462,846 368,406 339,032 1,066,391 1,028,899 CAPITAL ACCOUNTS 4,621 4,495 13,494 13,488 4,073 3,946 2,931 2,903 4,314 4,212 4,066 3,961 10,628 10,352 5,725 5,630 22,824 22,666 4,709 4,685 3,152 3,153 3,613 3,613 3,974 3,892 10,224 9,965 713 713 1,429 1,429 538 545 1,001 1,001 1,142 1,142 1,268 1,266 2,121 2,121 Other capital accounts 1,603 1,603 6,674 6,674 1,416 1,215 1,981 1,981 1,185 934 1,800 1,772 2,000 2,000 Total liabilities and capital accounts 461,016 429,149 2,904,322 2,639,536 559,813 480,908 361,632 328,698 520,660 472,747 379,512 349,923 1,091,364 1,053,337 Contingent liability on bills purchased for foreign 3 9 2 2 2 2 6 78 157 22 58 303 548 62 212 532 658 46 2,960 8,578 FEDERAL RESERVE NOTE STATEMENT Federal Reserve no tes: Issued to Federal Reserve bank by Federal Reserve 177,629 166,266 1,121,094 1,031,415 204,926 200,495 146,847 142,702 193,713 180,418 92,100 89,921 443,126 421,200 Held by Federal Reserve bank 14,688 14,868 35,716 34,694 11,377 17,364 5,420 5,845 9,805 9,028 8,525 8,546 55,086 59,990 In actual circulation 1 162,941 151,398 1,085,378 996,721 193,549 183,131 141,427 136,857 183,908 171,390 83,575 81,375 388,040 361,210 Collateral held by agent for notes issued to banks: Gold certificates on hand and due from U. S. 180,000 169,000 1,140,000 1,050,000 209,000 207,000 147,500 143,500 195,000 185,000 94,500 92,500 464,000 434,000 157 129 55 118 82 744 627 24 79 Total collateral held 180,000 169,157 1,140,000 1,050,129 209,055 207,000 147,618 143,582 195,744 185,627 94,500 92,524 464,000 434,079 1 Includes Federal Reserve notes held by the U. S. Treasury or by a Federal Reserve bank other than the issuing bank. CO ^3 Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

38 ANNUAL REPORT OF BOARD OF GOVERNORS NO. 3.-H0LDINGS OF UNITED STATES GOVERNMENT SECURITIES BY FEDERAL RESERVE BANKS AT END OF DECEMBER 1937, 1938, AND 1939 [In thousands of dollars] Rate of Dec. 31, Dec. 31, Dec. 30, (p in er t er c e e s n t t) 1937 1938 19S9 Treasury bonds of: 1941 50,832 56,325 57,027 1941-43 m. 7,894 14,123 14,669 1940-43 99 10,297 10,675 1943-45 24,743 41,202 46,523 1945 41,466 19,820 29,258 1944-46 30,881 45,195 53,132 1943-47 r 14,965 27,678 30,443 1945-47 2% 31,816 41,443 63,681 1947 2 35,000 44,156 1946-48 3 45,901 53,972 71,870 1948 VA 3,183 25,197 1 1 9 9 4 4 6 8 - - 4 5 9 1 z 2 y % 8 1 1 0 3 0 , , 3 0 8 4 4 4 5 1 4 1 , , 5 6 0 7 2 1 2 88 7 , , 5 7 3 4 6 6 1 1 9 9 4 5 7 0 - - 5 5 2 2 2 4 V M 2 2,314 36 1, , 9 5 2 5 7 8 8 1 0 0 , , 7 6 1 9 5 8 1949-52 3^ 28,327 31,404 30,378 1 1 9 9 4 5 9 1 - - 5 5 3 3 2 2 V H 2 108,573 49,142 9 9 1 6 , , 6 0 4 0 4 0 1951-54 2H 84,694 57,173 93,394 1944-54 <". 4 20,041 28,455 35,078 1951-55 3 28,922 31,295 45,952 1946-56 &A 13,901 15,331 24,025 1956-59 2% 62.932 53,436 58,200 1955-60 2% 39,811 48,606 79,894 1958-63 : 2% 54,591 57,006 1960-65 2% 18,566 74,399 Total Treasury bonds 751,539 840,893 1,340,295 Guaranteed bonds: HOLC of 1942-44 2K 4,000 HOLC of 1944-52 3 2,000 FFMC of 1942-47 3 1,000 FFMC of 1944-49 3 3,550 FFMC of 1944-64 .... 200 10,750 Treasury notes: Series maturing: Mar. 15, 1938 .... 3 107,212 J S D u e e n c p . e t . 1 1 1 5 5 5 , , , 1 1 1 9 9 9 3 3 3 8 8 8 2 2 U V V i 2 8 4 8 9 2 0 7 , , , 7 7 9 8 8 2 4 5 1 Mar. 15, 1939 VA 75,066 J S u e n p e t. 1 1 5 5 , , 1 1 9 9 3 3 9 9 2 m V8 8 3 4 4 , , 9 7 4 0 7 0 8 70 5 , , 4 1 6 9 6 7 Dec. 15, 1939 88,676 102,676 Mar. 15, 1940 89,875 156,440 June 15, 1940 1H 97,862 139,628 136,783 Dec. 15, 1940 80,974 94,586 105,974 Mar. 15, 1941 VA 62,060 91,410 118,822 J D u e n c. e 1 1 5 5 , , 1 1 9 9 4 4 1 1 1mV2 3 4 7 8 , , 1 4 5 5 0 0 5 4 3 2 , , 9 9 0 5 0 0 4 6 4 0 , , 0 3 6 9 9 7 Mar. 15, 1942 IN 61,000 73,500 85,872 Sept. 15, 1942 46,035 62,535 68,294 Dec. 15, 1942 m 19,500 32,900 33,801 June 15, 1943 113,259 144,420 Dec 15 1943 . . 2 37,500 79,096 Mar. 15, 1944 IH 113,498 June 15, 1944 IVs 79,441 Sept. 15, 1944 1 61,705 % Total Treasury notes 1 1,154,997 1,156,947 1,132,172 Guaranteed notes: RFC of Jan. 15, 1942 H 1,053 Treasury bills: Series maturing within: ^ 0) 24,385 105,340 16 to 30 days 0) 33,296 88,872 31 to 60 days (l) 68,350 252,208 61 to 90 days C1) 170,581 119,755 (*) 280,541 80,326 0) 657,479 566,175 Digitized for FRASER ! 2,564,015 2,564,015 I M847270 http://fraser.s*t Rloauteiss fedidd. onrogt / exceed 1 per cent on Treasury bills of any maturity. Federal Reserve Bank of St. Louis

FEDERAL RESERVE SYSTEM 39 NO. 4.-V0LUME OF OPERATIONS IN PRINCIPAL DEPARTMENTS OF FEDERAL RESERVE BANKS, 1935-1939 [Number in thousands; amounts in thousands of dollars] 1935 1936 1937 1938 NUMBER OF PIECES HANDLED i Bills discounted: Applications Notes discounted Advances made Industrial advances: Advances made . .4 Commitments to make industrial ad vances .2 Bills purchased in open market for own ac count .2 Currency received and counted 2,148,485 2,232,980 2,257,892 2,089,987 Coin received and counted 2,590,859 2,665,190 2,730,387 2,676,248 Checks handled 885,190 1,009,264 1,044,553 1,098,115 Collection items handled: U. S. Government coupons paid 2 22,633 18,806 18,566 17,802 All other 7,119 6,705 Issues, redemptions, and exchanges by fiscal agency department: U. S. Government direct obligations 6,838 27,919 3,892 3,456 All other 3,742 1,538 661 575 Transfer of funds 951 980 853 AMOUNTS HANDLED Bills discounted: Notes discounted 9,622 6,886 16,187 10,472 Advances made 219,924 160,714 516,852 Industrial advances: 226,687 Advances made 28,479 8,519 4,932 Commitments to make industrial ad 6,500 vances 29,223 12,583 6,978 Bills purchased in open market for own ac 11,217 count 31,446 25,207 25,252 Currency received and counted 9,837,681 10,059,637 10,199,559 2,781 Coin received and counted 275,608 276,323 287,708 8,883,728 Checks handled 202,989,742 234,417,787 255,453,609 271,128 Collection items handled: •231,820,217 U. S. Government coupons paid2 751,916 798,925 865,465 854,273 All other 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 30,755,611 25,196,825 19,304,020 24,450,791 All other 3,346,189 2,223,136 1,691,863 2,581,611 Transfer of funds 80,483,190 87,001,630 94,596,861 82,219,749 r Revised. 1 Two or more checks, coupons, etc., handled as a single item are counted as one "piece.' * Includes coupons from obligations guaranteed by the United States. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

NO. 5.-EARNINGS AND EXPENSES OF FEDERAL RESERVE BANKS DURING 1939 New Phila Cleve Rich St. Minne Kansas Total Boston York delphia land mond Atlanta Chicago Louis apolis City Dallas CURRENT EARNINGS Discounted bills $60,898 $2,744 $15,448 $7,383 $4,068 $4,983 $2,145 $2,742 $1,992 $1,644 $8,456 $3,673 $5,620 Purchased bills 2,323 174 897 235 216 100 81 293 14 11 68 67 167 U. S. Government securities 36,903,367 2,707,507 10,887,682 3,069,558 3,732,788 1,941,562 1,593,067 4,044,306 1,585,350 1,069,782 1,798,964 1,422,670 3,050,131 Industrial advances 615,169 77,168 117,648 132,954 18,367 61,823 38,564 22,677 333 50,206 10,459 32,598 52,372 Commitments to make industrial ad vances. 128,577 5,641 21,312 2,035 14,199 9,335 635 1,068 5,511 1,295 12,592 127 54,827 All other 790,331 15,807 168,077 52,211 76,203 27,684 12,376 183,516 16,729 11,662 164,920 7,076 54,070 Total current earnings 38,500,665 2,809,041 11,211,064 3,264,376 3,845,841 2,045,487 1,646,868 4,254,602 1,609,929 1,134,600 1,995,459 1,466,211 3,217,187 CURRENT EXPENSES Operating expenses: Salaries: Officers 2,210,856 117,374 502,074 123,181 173,774| 141,900 137,120! 247,690 160,327 108,238) 172,360 121,768 Employees 17,486,823 1,062,445) 4,422,828 1,273,482 1,555,965 953,598 1,027,473] 2,219,840 988,646] 591,5171 1,014,145 964,234 Retirement System ^ contribu tions for current service 964,8491 55,8201 241,968 69,110| 83,0251 54,820 56,857 120,094| 58W 31,851' 60,884 51,344! Legal fees 64,765 10,367 14,803 4,946 6,116 498 2,000 757 9,112 98 4,368i Directors' fees and expenses 134,268 6,571 12,822 8,267 8,575| 6,566 14,819 6,524| 10,731 9,173 23,011 9,796! Federal Advisory Council, fees and expenses 16,102 1,157 930] 7501 1,105 575 l,382i 1,196 1,275 1.323J 1,610 1,371 Traveling expenses (other than of directors and members of Fed eral Advisory Council) 282,815 15,247 43,907 23,369] 25,872] 23,143 22,206, 28,296 20,161 21,726 16,734 13,301 Postage and expressage 3,356,450 363,225 552,5841 289,284 316,413 269,660 204,927 411,864 160,717 132,970 216,124! 162,681! Telephone and telegraph 459,7161 18,633 82,748 28,910] 46,778] 28,778 44,987; 32,274 34,878 19,029 43,182] 34,099 Printing, stationery and supplies. 782,704 73,843 147,103 66,659 77,987 44,835 60,581 81,525 45,840| 30,179 44,639 42,010] Insurance on currency and se curity shipments 236,389 35,527 41,290] 28,049 21,937] 17,024 13,245 25,655 5,389 7,488 9,156 7,584 Other insurance 232,087 15,655 32,167 18,922 17,128 13,971 15,420) 20,075 20,853 17,707 21,522 17,882 Taxes on bank premises 1,501,035 150,822 477,675 73,567 140,338 69,103 60,804 186,412, 52,0371 69,567 88,853, 33,613, Depreciation on bank building 1,215,582 55,832 236,205 126,532 152,055 76,189 42,589 110,739' 51,687 34,336 155,959! 69,660| Light, heat, power, and water 388,167) 27,523 64,4721 32,100 46,581 22,664 34,100 40,584 21,722 19,622 28,537] 24,202 Repairs and alterations to bank building , 160,181 3,473! 25,663 13,362 11,6471 1,6131 26,956! 9,213 6,915l 15,110 11,784 13,637 Rent. 142,783) 96 695| 71,077 16,994) 1,277) 3,120 4,112 1,751 Furniture and equipment 337,710 17,9181 70,779 26,682 34,986] 11,752] 63,172! 44,466 13,913 16,146 19,326 5,775 Allother 634,707 36,432) 46,0291 76,544 56,701 34,602 58,174 80,624| 52,797 35,181 42,127! 44.756 Total operating expenses 30,607,989 2,067,960) 7,016,047 2,284,411 2,848,060 1,788,285 3,667,828 1,709,077 1,170,275 1,974,163 1,623,832 Less reimbursements for certain fiscal agency and other expenses., 4,939,082 185,886 654,206 204,131 255,428 248,782J 687,576 775,218! 447,582 269,201 355,713' 509,981 Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

Net operating expenses 25,668,9071 1,882,074 6,361,8411 2,080,280 2,592,632 1,539,503 1,200,513 2,892,6101 1,261,4951 901,0741 1,618,450 1,113,851 2,224,584 Assessment for expenses of Board of Governors 1,621,464 116,514! 577,662 157,586 150,738 69,373! 56,5461 196,358 47,914 36,797 46,8451 47,6791 117,452 Federal Reserve currency: Original cost 1,196,535 103,259 336,877 93,129 102,936 69,000 38,228 201,953) 41,367 30,752 38,004 31,931 109,099 Cost of redemption 159,949 10,053 35,156 10,315 14,182 12,157 10,675 25,431 7,202 6,116 6,715 6,015 15,932 Total current expenses 28,646,8551 2,111,900 7,311,536 2,341,310 2,860,488 1,690,033 1,305,962 3,316,352 1,357,978 974,739 1,710,014 1,199,476 2,467,067 PROFIT AND LOSS Current earnings (above) 38,500,665 2,809,041 11,211,064 3,264,376 3,845,841 2,045,487 1,646,868 4,254,602 1,609,929 1,134,600 1,995,459 1,466,211 3,217,187 Current expenses (above) 28,646,855 2,111,900 7,311,536 2,341,310 2,860,4881 1,690,033 1,305,963 3,316,352 1,357,978 974,739 1,710,014 1,199,476) 2,467,066 Current net earnings 3,899,528 923,066 985,353 355,454 340,905 938,250 266,735 Additions to current net earnings: Profits on sales of U. S. Govern ment securities 4,390,869 319,978 1,261,918 369,951 432,876 229,376 189,295 487,914 201,044 139,648 216,< 169,192 372,768 All other 423,9331 50,65l| 94,295' 37,5301 24,636 21,0961 97,805' 33,399 8,5191 7,579 8,3481 8,514 31,561 Total 4,814,802 370,629 1,356,213 407,481 457,512 250,472 287,100 147,227 225,257 177,706 Deductions from current net earnings: Losses and reserves for losses on industrial advances (net) 739,040 32,475 405,3 120,2 70,554 14,819 39 33,000 14,000 Special reserves and charge-offs on bank premises 1,417,404 321,838 231,2001 462,500 100,000 78,000 223,866 All other 268,803 18, 19,048 5,198, 224,363 12,245 146 4,045 655 240 2,664 Total 2,425,247 32,493 424,356 125,484 546,201 82,799 476,6 4,084 133,655 172 92,240 261,089 Net additions to current net earnings. 2,389,555 338,136 931,857 281,997 41,072 44,667 205,479 13,572 225,085 85,466 143,240 Net earnings 12,243,365 1,035,277 4,831,385 1,205,063 381,977 982,917 457,430 173,433 510,530 352,201 893,361 Paid U. S. Treasury (sec. 13b) 24,579 51 14,810 5,120| 3,981 617 Dividends paid 8,110,462 563,982 3,054,991 725,1 823,216 305,414 272,229 819,532 239,369 174,905 256,136) 241,185 634,123 Transferred to surplus (sec. 13b) -425,653 -348,859 -22,527! -290 -46,834 -6,664 -479) Transferred to surplus (sec. 7) 4,533,977 2,125,253 502,210 73,738 264,547 94,938 158,265 224,725 -993 250,413 259,238 Surplus (sec. 7), Jan. 1,1939 149,151,35* 10,083,351 52,462,949 13,695,587 14,322,790 4,982,672 5,629,690 22,666,003 4,685,498 3,153,414) 3,612,681 3,891,870 i,964,851 Addition, as above 4,533,977 471,244! 2,125,2531 502,210 73,738 264,547 94,938 158,265 224,725 -993 250,413 no,; 259,238 Transferred to reserves for contin gencies -1,964,919 -150,000 -1,261,917 -73,738 -201,044 -250,413 -27,807 Surplus (sec. 7), Dec. 31, 1939 151,720,414 10,404,595 53,326,285 14,197,797 14,322,790 5,247,219 5,724,628 22,824,268 4,709,179 3,152,421 3,612,681 3,974,462 10,224,089 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, 1914-1939 to Earnings and expenses Disposition of net earnings Direct charges Current earnings e C x u p r e r n e s n e t s Net earnings 1 Div p i a d i e d n ds p F a r T i a d r n e c t a o h s i u U s 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 to r ( 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 by years: 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 '9,582,067 '6,804,186 1,134,234 1,134,234 1 19 9 1 1 9 8 1 6 0 7 2 , , 5 3 8 8 4 0 , , 4 5 1 8 7 3 1 1 0 9 , , 9 3 5 3 9 9 , , 5 6 3 3 3 3 5 7 2 8 , , 7 3 1 6 6 7 , , 3 5 1 0 0 4 5 5 , , 5 0 4 1 0 1 , , 6 8 8 3 4 2 2,703,894 4 7 8 0 , , 3 6 3 51 4 , , 7 3 7 4 8 1 d 1920 181,296,711 28,258,030 149,294,774 5,654,018 60,724,742 82,916,014 1921 122,865,866 34,463,845 82,087.225 6,119,673 59,974.466 15,993,086 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 O 1924 38,340,449 28,431,126 3,718,180 6,682,496 113,646 -3,077,962 W 1925 41,800,706 27,528,163 9,449,066 6,915,958 59,300 2,473,808 H 1926 47,599,595 27,350,182 16,611,745 7,329,169 818.150 8,464,426 O 1927 43,024,484 27,518,443 13,048,249 7,754,539 249,591 5,044,119 500,000 *J 1 19 9 2 2 9 8 6 7 4 0 , , 0 9 5 5 2 5 , , 8 4 6 9 0 6 2 2 9 6 , , 6 9 9 04 1 , , 8 1 1 1 0 3 3 3 2 6 , , 1 4 2 0 2 2 , , 0 7 2 4 1 1 8 9, ,4 5 5 83 8 , ,4 91 6 3 3 4 2 , , 2 5 8 8 3 4 , . 2 6 3 5 1 9 2 2 1 2 , , 0 5 7 3 8 5 , , 8 5 9 9 9 7 o > W 1930 36,424,044 28,342,726 7,988,182 10,268,598 17,308 -2,297,724 W 1931 29,701,279 27,040,664 2,972,066 10.029,760 -7,057,694 O 1932 50,018,817 26,291,381 22,314,244 9,282,244 2,011,418 11,020,582 O 1933 49,487,318 29,222,837 7.957,407 8,874,262 -916,855 *J 1934 48,902,813 29,241,396 15,231,409 8,781,661 -60,323 6,510,071 139,299,557 Q 1935 42,751,959 31,577,443 9,437,125 8.504,974 297,667 27,062 607,422 O< 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 W 1938 36,261,428 28,911,608 9,581,954 8,019,137 119,524 -419,140 1,862,433 448,835 1939 38,500,665 28,646,855 12,243,365 8,110,462 24,579 -425,653 4,533,977 1,964,919 O W W Total—1914-1939 1,315,810,118 617,471,959 622,257,875 178,316,565 149,138,300 845,843 4-707,870 294,665,037 142,944,624 Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

Aggregate for each Federal Reserve bank 1914-1939: 88,522,827 44,560,333 41,055,022 13,070,207 7,111,395 91,743 -3,155 20,784,832 10,380,237 387,360,596 150,159,256 224,184,718 59,621,470 68,006,262 82,987 -643,412 97,117,411 43,791,128 102,941,732 47,271,149 52,029,945 17,163,486 5,558,901 293,888 194,990 28,818,680 14,620,883 117,326,297 56,953,972 51,943,228 17,984,247 4,842,447 36,868 -8,446 29,088,112 14,765,323 62,726,710 33,541,148 24,783,477 7,635,786 6,200,189 66,714 -174,722 11,055,510 5,808,291 61,577,965 28,540,922 26,294,831 6,368,038 8,950,561 23,876 -44,304 10,996,660 5,272,032 182,538,169 80,691,203 88,967,766 20,969,595 25,313,526 100,179 11,681 42,572,785 19,748,517 56,612,826 31,631,095 19,344,351 6,470,659 2,755.629 5,948 -8,169 10,120,284 5,411,103 42,696,257 22,693,956 17,186,895 4,514,669 5,202,900 34,319 -7,062 7,442,069 4,289,648 63,076,956 37,901,946 21,112,200 6,066,337 6,939,100 35,204 -3,622 8,075,181 4,462,499 46,769,051 27,884,580 14,777,303 5,767,276 560,049 74,117 14,255 8,361,606 4,387,145 SanFrancisco 103,660,732 55,642,399 40,578,139 12,684,795 7,697,341 -35,904 20,231,907 10,007,818 r Revised. 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. *4 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 re ceived from the Secretary of the Treasury under section 13b of the Federal Reserve Act to the end of 1939 and credited to surplus (sec. 13b) amounted to $27,546,311. O > NO. 7—NUMBER AND SALARIES OF OFFICERS AND EMPLOYEES OF FEDERAL RESERVE BANKS W (December 31, 1939) W < Employees, except those Employees whose Other officers whose salaries are salaries are Total Federal Reserve Bank Annual salary reimbursed to bank reimbursed to bank (including branches) of President Number Annual salaries Number Annual salaries Number Annual salaries Number Annual salaries $30,000 9 $88,500 610 $926,836 72 $103,374 692 $1,148,710 New York 50,000 40 463,000 1,994 3,878,406 284 530,034 2,319 4,921,440 Philadelphia 25,000 11 103,700 691 1,146,948 77 124,200 780 1,399,848 25,000 18 149,200 847 1,394,130 100 180,340 966 1,748,670 Richmond 21,000 17 121,200 519 766,703 138 183,615 675 1,092,518 20,000 21 119,020 381 513,423 401 484,189 804 1,136,632 35,000 21 205,450 1,070 1,622,771 456 659,368 1,548 2,522,589 20,000 19 140,200 491 698,801 268 316,073 779 1,175,074 25,000 13 83,600 253 400,098 149 197,262 416 705,960 25,000 19 147,500 467 724,481 298 392,116 785 1,289,097 Dallas 18,000 15 106,600 364 572,174 313 425,676 693 1,122,450 25,000 26 182,300 689 1,139,721 182 283,959 898 1,630,980 Total 319,000 229 1,910,270 8,376 13,784,492 2,738 3,880,206 11,355 19,893,968 GO Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

44 ANNUAL REPORT OF BOARD OF GOVERNORS NO. 8—RECEIPTS AND DISBURSEMENTS OF THE BOARD OF GOVERNORS OF THE FEDERAL RESERVE SYSTEM FOR THE YEAR 1939 General fund account: Balance January 1, 1939: Available for general expenses of the Board $89,324.14 Available for expenses chargeable to Federal Reserve banks 80,086.63 Total $169,410.77 RECEIPTS Available for general expenses of the Board: Assessments on Federal Reserve banks for estimated general expenses of the Board $1,621,463.77 Subscriptions to the Federal Reserve Bulletin 5,708.59 Reimbursements for leased wire service 31,775.75 Miscellaneous receipts, refunds, and reimbursements 8,038.40 Total receipts available for general expenses of the Board $1,666,986.51 Available for expenses chargeable to Federal Reserve banks: Assessments on Federal Reserve banks for: Cost of printing Federal Reserve notes 852,596.20 Expenses of leased wire system (telegraph) 66,469.16 Expenses of leased telephone lines 20,762.87 Expenses of the Federal Reserve Issue and Redemption Division (office of Comptroller of the Currency) 56,306.53 Miscellaneous expenses 5,988.04 Total receipts available for expenses chargeable to Federal Reserve banks $1,002,122.80 Total receipts 2,669,109.31 Total available for disbursement 2,838,520.08 DISBURSEMENTS For general expenses of the Board: Expenses of 1939 (per detailed statement) $1,577,825.41 Less accounts unpaid December 31, 1939 28,864.23 1,548,961.18 Expenses of 1938 paid in 1939 18,477.88 Expenses of leased wire service, reimbursable 32,443.37 Miscellaneous refunds and reimbursable expenses 5,951.74 Total disbursements for general expenses of the Board 1,605,834.17 For expenses chargeable to Federal Reserve banks: Cost of printing Federal Reserve notes 878,264.20 Expenses of leased wire system (telegraph) 66,469.16 Expenses of leased telephone lines 22,062.37 Expenses of Federal Reserve Issue and Redemption Division (office of Comptroller of theCurrency) 55,123.49 Miscellaneous expenses 6,582.06 Total disbursements for expenses chargeable to Federal Reserve banks.. 1,028,501.28 Total disbursements 2,634,335.45 Balance in general fund account December 31, 1939: Available for general expenses of the Board 150,476.48 Available for expenses chargeable to Federal Reserve banks 53,708.15 204,184.63 Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

FEDERAL RESERVE SYSTEM 45 No. 8.—Receipts and Disbursements—Continued PERSONAL SERVICES Salaries $1,231,868.35 Retirement System contributions for current service 56,369.73 TotalPersonal Services $1,288,238.08 NON-PERSONAL SERVICES Traveling Expenses $ 70,789.44 Postage andExpressage 1,498.99 Telephone and Telegraph 56,143.39 Printing and Binding 74,059.44 Stationery and Supplies 21,704.74 Furniture andEquipment 20,001.66 Books and Subscriptions 5,722.49 Light, Heat, Power and Water 23,850.92 Repairs and Alterations to Building 4,314.16 Rental and Repairs (Furniture andEquipment) 2,451.29 Medical Service and Supplies 491.75 Insurance 2,221.93 Miscellaneous 6,337.13 Total Non-Personal Services 289,587.33 GRAND TOTAL $1,577,825.41 Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

46 ANNUAL REPORT OF BOARD OF GOVERNORS NO. 9.-FEDERAL RESERVE BANK DISCOUNT, INTEREST, AND COMMITMENT RATES, AND BUYING RATES ON ACCEPTANCES [Per cent per annum] In effect December 30, 1939 B to o n s Y N o e r w k P d h e i l l a C la le n v d e R m i o c n h d la A n t t a C ca h g i o L S ou t. i s n M ea in p K s a a n s Dallas F S r a a n n phia olis City cisco Rediscounts for and ad vances to member banks under sees. 13 and 13a of the Federal Reserve Act. Secured by direct and eligible guaranteed obligations of the 1 1 IK IX IX 1 1 1 IX IX Adva A nc ll e s o t t h o e m r ember banks 1 0)1 IX (inx IX IX IX IX IX vnx OHM IX under sec. 10(b) of the 2 2 2 2 2 2 2 2 2 2 2 2 Advances to individuals, partnerships or corpora tions, secured by direct obligations of the United States (last paragraph of sec. 13 of the Federal Re- To nonmember banks. 1 1 ix (*nx IX 1 1 IX 1 1 VX 2H ZX 2X 4 4 2X 2X 4 Advances direct to indus trial or commercial or ganizations under sec. 13b 2X 3X 4 3 of the Federal Reserve Act 3^-6 4-6 5-6 5-6 4-5H 4-6 5-6 5-6 Advances to financing insti t o u f ti t o h n eF s ed u e n r d a e lR r es s e e r c v . e 1 A 3 c b t . 4-6 4^-6 6 6 On portion for which institution is obli- On remaining portion.. 3H 3 4-5 3 m (4 x ) 4 4 4 - - 6 6 5 5 mx VX 4 4 4 ^ ^ - - 5 5 4 4 5-6 4 3 4 - - 4 5 Commitments to make ad vances under sec. 13b of 5-6 theFederalReserveAct... X-l 1-2 X-2 1 1-2 X (5H 1 (5)2 1 X-2 Minimum buying rates on prime bankers' accept 1-2 ance 1 s - 1 p 5 a y d a a b y l s e 6 in dollars.. 0) X (7) (7) (7) (7) I7) 0) (7) (7) (7) 0) 16- 30 days X 31- 45 days X 46- 60 days X 61- 90 days X 91-120 days H 121-180 days 1 1 The same rate applies to United States Government securities bought under repurchase agreement. 2 2X per cent to other lenders than banks. 3 Authorized rate 1 per cent above prevailing discount rate. 4 Same as to borrower but not less than 4 per cent. 5 Minimum charge one-half of one per cent. 6 This rate also applies to acceptances bought under repurchase agreement, which agreements are always for a period of 15 days or less. 7 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 47 NO. 10.-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 [Per cent per annum] Nov. 1, 1933, Feb. 1, 1935, In effect to to beginning Jan. 31, 1935 Dec. 31, 1935 Jan. 1, 1936 Savings deposits 2H Postal Savings deposits 2M Other time deposits payable in: 6 months or more 2K 90 days to 6 months 2 Less than 90 days 1 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. NO. 11.-MEMBER BANK RESERVE REQUIREMENTS [Per cent of deposits] Classes of deposits and banks J A un ug e . 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 9 3 3 6 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 , ft 1 e 9 r 3 8- On net demand deposits: Central reserve city.. 22% Reserve city 15 Country 10H 12H 12 On time deposits: All member banks... 4H VA 1 Gross demand deposits minus demand balances with domestic banks (except private banks and Amer ican branches of foreign banks) and cash items in process of collection. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

GO NO. 12.-ALL MEMBER BANKS-CONDITION ON DECEMBER 30, 1939, BY CLASSES OF BANKS [Amounts in thousands of dollars] m b e a A m n ll k b s e r n m b a e t a A m i n o ll k b n s e a r l A m l b l e a m n S b k ta s e r te N C ew e m n Y t e r o m al r k b r e e r s e b r C a v h e n i k c c s a 1 i g ty o R m b e e a c s m n i e t k y b r s v e 1 e r C m b o e a u m n n k b t s r e 1 y r ASSETS Loans (including overdrafts) 13,961,820 9,021,748 4,940,072 3,296,299 569,289 5,328,533 4,767,699 United States Government direct obligations 11,184,195 7,101,805 4,082,390 3,496,994 1,030,661 4,222,057 2,434,483 Obligations guaranteed by United States Government 3,143,960 1,955,835 1,188,125 1,274,508 172,303 972,226 724,923 Obligations of States and political subdivisions 2,691,687 1,782,161 909,526 578,749 162,288 889,746 1,060,904 Obligations of Government corporations and agencies, not guaranteed by United States. 376,697 257,645 119,052 128,541 24,980 129,486 93,690 Other bonds, notes, and debentures 2,142,672 1,470,268 672,404 404,298 117,005 575,309 1,046,060 Corporate stocks (including Federal Reserve bank stock) 439,477 220,873 218,604 159,921 28,356 154,795 96,405 Total loans and investments 33,940,508 21,810,335 12,130,173 9,339,310 2,104,882 12,272,152 10,224,164 Reserve with Federal Reserve banks 11,603,504 6,493,792 5,109,712 5,914,718 993,082 3,118,161 1,577,543 Cash in vault 841,215 611,339 229,876 89,034 41,885 347,527 362,769 Demand balances with banks in United States (except private banks and American branches of foreign banks) 5,370,257 4,113,177 1,257,080 122,852 267,368 2,425,592 2,554,445 Other balances wifh banks in United States 136,112 101,927 34,185 2,017 15,166 59,245 59,684 Balances with banks in foreign countries 23,796 15,971 7,825 14,108 857 6,898 1,933 Due from own foreign branches 7,827 7,027 800 800 7,027 Cash items in process of collection 1,807,370 1,153,289 654,081 560,243 127,640 827,661 291,826 Bank premises owned and furniture and fixtures 924,273 598,665 325,608 206,679 20,404 321,404 375,786 Other real estate owned 287,709 131,669 156,040 28,818 4,523 107,221 147,147 Investments and other assets indirectly representing bank premises or other real estate.. 130,774 65,551 65,223 11,140 858 90,619 28,157 Customers' liability on acceptances 107,543 55,843 51,700 74,741 3,153 27,607 2,042 Income accrued but not yet collected 100,159 57,872 42,287 33,962 8,006 39,438 18,753 Other assets 79,902 40,917 38,985 14,625 6,923 36,177 22,177 Total assets 55,360,949 35,257,374 20,103,575 16,413,047 3,594,747 19,686,729 15,666,426 LIABILITIES Demand deposits—Total 37,487,815 23,368,070 14,119,745 13,763,924 2,834,938 13,004,583 7,884,370 Individuals, partnerships, and corporations 24,603,982 14,921,445 9,682,537 9,030,363 1,675,767 8,001,603 5,896,249 United States Government2 742,566 540,296 202,270 73,906 79,610 434,969 154,081 States and political subdivisions 2,321,334 1,733,425 587,909 250,918 167,425 812,640 1,090,351 Banks in United States 8,507,394 5,431,9£8 3,075,396 3,541,727 879,144 3,515,944 570,579 Banks in foreign countries 749,251 356,836 392,415 689,032 9,115 49,542 1,562 Certified and officers' checks, cash letters of credit and travelers' checks, etc 563,288 384,070 179,218 177,978 23,877 189,885 171,548 Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

| 11,852,337 8,190,880 3,661,457 742,950 495,407 4,736,102 5,877,878 Individuals, partnerships, and corporations: Savings deposits 9,883,113 6,890,392 2,992,721 385,648 427,846 3,944,330 5,125,289 676,529 527,521 149,008 23,341 24,133 162,012 467,043 Christmas savings and similar accounts 24,434 16,418 8,016 921 178 8,614 14,721 Open accounts 631,033 259,281 371,752 283,201 30,400 247,057 70,375 51,330 44,531 6,799 3,000 13,681 34,649 States and political subdivisions 432,173 343,343 88,830 42,517 9,850 240,149 139,657 144,188 103,937 40,251 1,185 116,859 26,144 9,537 5,457 4,080 6,137 3,400 49,340,152 31,558,950 17,781,202 14,506,874 3,330,345 17,740,685 13,762,248 150,938 111,032 39,906 150,938 3,241 2,882 359 121 3,120 123,755 64,173 59,582 85,896 3,531 32,090 2,238 Dividends declared but not yet payable 37,968 23,668 14,300 18,036 800 11,528 7,604 Income collected but not yet earned 56,310 37,694 18,616 9,730 1,569 28,386 16,625 68,690 40,948 27,742 14,977 8,256 29,274 16,183 Other liabilities 58,136 20,644 37,492 34,180 132 16,180 7,644 *1 O Total liabilities 49,839,190 31,859,991 17,979,199 14,820,631 3,344,633 17,858,264 13,815,662 > CAPITAL ACCOUNTS Capital (for par value see next table) 2,363,229 1,529,103 834,126 548,245 101,700 794,362 918,922 W Surplus 2,166,392 1,213,857 952,535 814,572 87,260 671,187 593,373 Undivided profits 674,734 445,206 229,528 173,100 29,530 238,165 233,939 276,613 176,960 99,653 53,260 31,498 111,733 80,122 Other capital accounts 40,791 32,257 8,534 3,239 126 13,018 24,408 < 5,521,759 3,397,383 2,124,376 1,592,416 250,114 1,828,465 1,850,764 w Total liabilities and capital accounts „ 55,360,949 35,257,374 20,103,575 16,413,047 3,594,747 19,686,729 15,666,426 Hwi H 30,325,868 18,110,036 12,215,832 13,080,829 2,441,365 9,756,072 5,047,602 25,681,234 15,885,651 9,795,583 8,899,016 1,739,429 8,176,467 6,866,322 Number of banks 6,362 5,187 1,175 36 14 346 5,966 1 Banks are classed according to the reserves which they are required to carry (see table 11). Some banks classed as "country banks" are in outlying sections of reserve cities or central reserve cities, and some banks classed as "reserve city banks" are in outlying sections of central reserve cities. Figures for each class of banks include assets and liabilities of their domestic branches, whether located within or outside the cities in which the parent banks are located. 2 United States Treasurer's time deposits, open account, are combined with postal savings (time) deposits. 3 Demand 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

Ox O NO. 13.—ALL MEMBER BANKS-CLASSIFICATION OF LOANS, INVESTMENTS, REAL ESTATE, AND CAPITAL ON DECEMBER 30, 1939, BY CLASSES OF BANKS [In thousands of dollars] m b e a A m n l k l b s e r n m b a e t a A i m n o ll k b n s e a r l A m b ll e a m n S b k ta s e r te N C ew e n m t Y e r m a o l r b k r e e r s e b r C a v n e h i k c c s a 1 i t g y o m R b e e a c s m n i e t k y b r s v e 1 e r C m b o e a u m n n k b t s r e 1 y r Loans—Total 13,961,820 9,021,748 4,940,072 3,296,299 569,289 5,328,533 4,767,699 Commercial and industrial loans 5,385,773 3,484,417 1,901,356 1,768,266 365,331 2,100,962 1,151,214 Agricultural loans 729,539 620,283 109,256 7,465 6,306 221,094 494,674 Commercial paper bought in open market 290,817 192,795 98,022 8,053 12,879 111,479 158,406 Bills, acceptances, etc., payable in foreign countries 9,229 6,883 2,346 239 1,945 5,790 1,255 Acceptances of other banks, payable in United States 63,246 30,827 32,419 53,625 82 7,685 1,854 Reporting banks' own acceptances 91,681 54,233 37,448 57,756 2,375 29,856 1,694 Loans to brokers and dealers in securities 790,316 313,864 476,452 611,019 40,651 118,621 20,025 Other loans for purchasing or carrying securities 700,351 415,309 285,042 188,394 66,158 222,205 223,594 Real estate loans: On farm land 288,696 231,806 56,890 656 386 93,834 193,820 On residential property 1,883,553 1,208,313 675,240 58,695 7,870 861,870 955,118 On other properties 784,476 461,559 322,917 73,221 4,711 378,948 327,596 Loans to banks 56,350 26,524 29,826 43,528 179 8,638 4,005 All other loans 2,876,628 1,970,156 906,472 419,029 60,263 1,164,778 1,232,558 Overdrafts 11,165 4,779 6,353 153 2,773 1,886 United States Government direct obligations—Total 11,184,195 7,101,805 4,082,390 3,496,994 1,030,661 4,222,057 2,434,483 Treasury bills 562,737 447,521 115,216 315,234 152,953 63,396 31,154 Treasury notes 2,223,277 1,429,756 793,521 796,724 176,268 819,404 430,88! Bonds maturing in 5 years or less 773,492 471,686 301,806 317,554 32,919 267,491 155,528 Bonds maturing in 5 to 10 years 3,017,960 1,785,405 1,232,555 921,088 122,597 1,311,395 662,880 Bonds maturing in 10 to 20 years 3,657,326 2,390,642 1,266,684 917,053 444,524 1,403,013 892,736 Bonds maturing after 20 years 949,403 576,795 372,608 229,341 101,400 357,358 261,304 Obligations guaranteed by United States Government—Total 3,143,960 1,955,835 1,188,125 1,274,508 172,303 972,226 724,923 Total amount maturing in 5 years or less 2,082,254 1,195,322 886,932 1,002,449 163,635 555,507 360,663 Reconstruction Finance Corporation 833,690 439,622 394,068 439,544 112,365 167,317 114,464 Home Owners' Loan Corporation 1,500,513 987,670 512,843 546,765 24,029 547,409 382,310 Federal Farm Mortgage Corporation 444,449 287,983 156,466 168,856 4,592 131,507 139,494 Other Government corporations and agencies 365,308 240,560 124,748 119,343 31,317 125,993 88,655 Obligations of Government corporations and agencies, not guaranteed by United States—Total 376,697 257,645 119,052 128,541 24,980 129,486 93,690 Total amount maturing in 5 years or less 280,968 180,168 100,795 116,861 12,845 102,482 48,775 Federal Land banks 94,977 77,477 17,500 11,673 12,185 26,668 44,451 Federal Intermediate Credit banks 154,365 86,526 67,839 83,442 8,021 54,176 8,726 Other Government corporations and agencies 127,355 93,642 33,713 33,426 4,774 48,642 40,513 Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

3,691,687 1,783,161 909,536 578,749 163,288 889,746 1,060,904 In default 7,022 5,782 1,240 743 180 3,007 3,092 Without specific maturity 172,253 146,537 25,716 2,806 45,113 57,390 66,944 Maturing in 5 years or less 1,645,051 973,552 671,499 488,951 96,416 493,447 566,237 Maturing after 5 years 867,361 656,290 211,071 86,249 20,579 335,902 424,631 3,143,673 1,470,368 673,404 404,398 117,005 575,309 1,046,060 77,557 47,488 29,774 21,310 1,571 25,213 29,163 451,364 253,480 197,884 109,747 49,955 142,697 148,965 731,149 513,912 217,237 121,914 24,836 185,326 399,073 604,513 409,520 194,993 97,532 43,118 152,707 311,156 Industrials 527,541 373,231 154,310 106,595 32,608 152,169 236,169 93,015 47,177 45,838 20,607 1,735 35,410 35,263 186,454 126,428 60,026 57,650 14,708 49,697 64,399 439,477 330,873 318,604 159,931 38,356 154,795 96,405 135,546 82,087 53,459 40,719 5,667 43,799 45,361 100,069 46,190 53,879 42,759 276 50,697 6,337 Other domestic banks 20,369 7,893 12,476 2,526 36 8,796 9,011 181,778 83,856 97,922 73,449 22,362 50,700 35,267 Foreign corporations 1,715 847 468 15 803 429 1,311,983 730,334 481,648 335,497 34,937 438,635 533,933 848,862 540,123 308,739 205,945 20,320 289,153 333,444 75,411 58,542 16,869 734 84 32,251 42,342 Farm land (including improvements) 21,835 15,894 5,941 28 390 7,433 13,984 116,135 46,489 69,646 10,743 1,354 37,348 66,690 149,739 80,453 18,047 2,779 62,440 66,473 130,774 65,551 65,333 11,140 858 90,619 38,157 85,997 50,725 35,272 8,874 795 57,581 18,747 44,777 14,826 29,951 2,266 63 33,038 9,410 Capital: 3,366,514 1,531,637 834,887 548,345 101,700 794,363 933,307 43,677 43,677 464 26,720 16,493 265,166 195,407 69,759 9,237 700' 101,961 153,268 24,029 16,205 7,824 8,100 15,929 2,033,642 1,320,015 713,627 538,544 101,000 657,581 736,517 335,277 228,068 107,209 122,890 188,773 29,499 18,228 11,271 8,500 20,999 For footnote see preceding table. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

52 ANNUAL REPORT OF BOARD OF GOVERNORS NO. 14.-MEMBER BANK RESERVE BALANCES, RESERVE BANK CREDIT, AND RELATED ITEMS- END OF YEAR 1918-1939 AND END OF MONTH 1939 [In millions of dollars] Member Reserve bank credit outstanding bank reserve Treas balances End of ury Treas Treas Non- Other year cur Money ury ury mem Federal or month c B d o i i u l s n l s t bo B u il g ls h t U G m er o . e n S v n . t O s R e t r h e v e e r Total st G o o c l k d * s r i o e t n a n u n g c t 3 d y l c a ir t in i c o u n i h c n o a g l s d s h * d b e F w a p . n i o t R k s h i s . t s po b d s e e i r t s 5 co s R e u a r n c e v t e s 6 Total c E es x s 7 ed secur creditl 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 "i4 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 1,459 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 2,486 10,125 2,476 5,882 2,566 544 255 253 5,587 2,844 1936 3 3 2,430 64 2,500 11,258 2,532 6,543 2,376 244 259 261 6,606 1,984 1937 10 1 2,564 38 2,612 12,760 2,637 6,550 3,619 142 407 263 7,027 1,212 1938 4 1 2,564 33 2,601 14,512 2,798; 6,856 2,706 923 441 260 8,724 3,205 1939-Jan... 5 1 2,574 28 2,607 14,682 2,816 6,653 2,776 747 458 255 9,215 3,644 Feb. . 4 1 2,564 30 2,598 14,874 2,824 6,731 2,740 1,148 488 254 8,936 3,387 Mar. 4 1 2,564 18 2,587 15,258 2,839 6,817 2,691 1,229 533 257 9,157 3,559 Apr. . 3 1 2,571 20 2,595 15,791 2,849 6,905 2,699 931 545 255 9,900 4,098 May . 4 1 2,564 4 2,573 15,957 2,862 6,967 2,636 920 586 253 10,029 4,218 June . 5 1 2,551 23 2,579 16,110 2,881 7,047 2,563 944 739 258 10,018 4,140 July. 5 1 2,488 -8 2,486 16,238 2,895 7,049 2,360 752 693 257 10,507 4,553 Aug.. 5 1 2,426 14 2,446 16,646 2,907 7,171 2,325 708 622 255 10,918 4,758 Sept.. 6 1 2,804 68 2,879 16,932 2,919 7,293 2,244 545 753 240 11,655 5,352 Oct.. 6 2,736 59 2,801 17,091 2,932 7,342 2,254 286 728 241 11,973 5,553 Nov.. 8 2,552 89 2,650 17,358 2,947 7,483 2,367 419 819 241 11,628 5,160 Dec.. 7 2,481 102 2,593 17,644 2,963 7,598 2,409 634 653 251 11,653 5,209 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, to $500,000 in 1938, and to $350,000 in 1939. 3 Comprises outstanding United States notes, national bank notes, silver bullion, Treasury notes of 1890, standara silver dollars, subsidiary silver and minor coin, and the Federal Reserve bank notes for the retire ment of which lawful money has been deposited with the Treasurer of the United States, including the cur rency of these kinds that is held in the Treasury and the Federal Reserve banks as well as that in circulation. <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. 6 Item includes all deposits in Federal Reserve banks except Government deposits and member bank reserve balances. •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 11. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

FEDERAL RESERVE SYSTEM 53 NO. 15.-NUMBER OF BANKS AND BRANCHES IN UNITED STATES, 1933-1939 Member banks Nonmember banks Branches Other than mu End of year figures National State tu p a r l i v s a a t v e i n b g a s n a k n s d M sa u vi t n u g a s l Private 2 Total h o e f I f n a ic d e - O h o u f e t f a s ic d i e d - e Insured ] in N su o r n ed - x cities cities Number of banking offices 1933 6,275 1,817 9,041 704 103 17,940 1934 6,705 1,961 39,579 705 246 19,196 1935 6,715 1,953 8,556 1,088 698 143 19,153 1936 6,723 2,032 8,436 1,043 693 139 19,066 1937 6,745 2,075 8,340 997 691 79 18,927 1938 6,723 2,106 8,224 958 690 73 18,774 1939 6,705 2,177 8,098 931 «683 «69 18,663 Number of banks (Head offices) 1933 5,154 857 8,<3 41 579 98 15,029 1934 5,462 980 7,693 1,108 579 241 16,063 1935 5,386 1,001 7,728 1,046 570 138 15,869 1936 5,325 1,051 7,588 1,004 565 134 15,667 1937 5,260 1,081 7,449 960 563 74 15,387 1938 5,224 1,114 7,316 917 555 68 15,194 1939 5,187 1,175 7,171 887 551 63 15,034 Number of branches 1933 1,121 960 7t) 0 125 5 2,911 1,784 1,127 1934 1,243 981 778 126 5 3,133 1,776 1,357 1935 1,329 952 828 42 128 5 3,284 1,754 1.530 1936 1,398 981 848 39 128 5 3,399 1,749 1.650 1937 1,485 994 891 37 128 5 3,540 1,757 1,783 1938 1,499 992 908 41 135 5 3,580 1,743 1,837 1939 1,518 1,002 927 44 132 6 3,629 1,738 1,891 1 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 noninsured banks. 4 Comprises 51 insured banks with 24 branches and 500 noninsured banks with 108 branches. The figures for 1939 exclude one bank with 4 branches which heretofore was classified as an insured mutual savings bank but is now included with "Nonmember banks other than mutual savings and private banks." 5 Comprises 1 insured bank with no branches and 62 noninsured banks with 6 branches. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

54 ANNUAL REPORT OF BOARD OF GOVERNORS NO. 16—ANALYSIS OF CHANGES IN NUMBER OF BANKS AND BRANCHES DURING 1939 Member banks Nonmember banks Other than mutual savings and Total private banks National State Mutual Private savings Non- Insured Insured Analysis of Bank Changes Number of banks on December 31, 1938 15,194 5,224 1,114 7,316 917 555 68 Increases in number of banks: +30 +3 +1 +24 +2 Decreases in number of banks: Suspensions -42 1 -4 -3 -25 -9 -1 Voluntary liquidations2 -41 -7 -3 -15 -12 -4 -122 -30 -8 -74 -7 -3 Inter-class bank changes: Conversions— State into national +13 -9 -4 -12 +2 +10 Federal Reserve membership3 +85 -84 -1 Withdrawals of State banks -4 +4 Federal deposit insurance4 +17 -17 + 15 +2 +14 -1 Net increase or decrease in number -160 -37 +61 -145 -30 -4 -5 15,034 5,187 1,175 7,171 887 551 63 Analysis of Branch Changes Number of branches onDecember 31, 1938. 3,580 1,499 992 908 41 135 5 Increases in number of branches: +48 +6 +6 +33 +2 +1 Banks converted into branches +48 +5 +27 +1 +1 Decreases in number of branches: -9 +14 -7 -2 -40 -14 -17 Inter-class branch changes: Branches of a national bank which be -9 came a State member bank Branch of a national bank which be- -4 +1 Branches of a nonmember bank which -1 +4 -13 Branches of nonmember banks which +13 became branches of State member -16 +2 +6 -4 Net increase or decrease in number +16 of branches +49 +19 +10 +19 +3 -3 +1 Number of branches onDecember 31, 1939. ,. 3,629 1,518 1,002 927 44 132 6 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. 4 Exclusive of conversions of member banks into insured nonmember banks, or vice versa, as such con versions do not affect Federal Deposit Insurance Corporation membership. 6 Includes 2 branches of an insured nonmember bank which was absorbed by a State member bank, and 14 branches of insured nonmember banks which became State member banks. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

FEDERAL RESERVE SYSTEM 55 NO. 17.-NUMBER OF BANKS ON PAR LIST AND NOT ON PAR LIST/ BY FEDERAL RESERVE DISTRICTS AND STATES, ON DECEMBER 31, 1938 AND 1939 Federal Reserve Nonmember banks, other than district Member banks mutual savings banks or State On par list Not on par list Dec. 31, Dec. 31, 1 Dec. 31, Dec. 31, Dec. 31, Dec. 31, DISTRICT 1939 1938 1939 1938* 1939 1938' 353 356 167 1 168 New York 768 772 257 1 274 652 i 655 249 ! 258 639 624 590 617 2 2 Richmond 410 406 306 315 295 298 315 320 86 89 698 689 804 787 1,458 1,504 217 218 392 391 695 727 442 437 467 461 133 153 703 710 ! 736 734 946 964 176 178 Dallas 544 544 270 283 158 161 San Francisco 282 288 239 253 28 29 Total 6,362 6,338 5,396 5,605 2,719 2,722 STATE New England: Maine 43 44 27 27 53 53 12 11 Vermont 42 42 33 33 154 155 42 43 Rhode Island 14 14 9 9 Connecticut 58 59 61 62 Middle Atlantic: 563 563 178 188 New Jersey 277 283 84 96 Pennsylvania 775 776 309 314 East North Central: Ohio 344 327 357 378 148 145 355 363 3 4 404 395 417 435 27 28 Michigan 213 207 249 262 1 1 134 133 280 288 158 161 West North Central: 209 206 58 67 411 410 143 142 405 412 110 108 142 141 378 389 106 105 50 50 4 5 117 125 64 64 8 12 93 92 148 150 114 116 161 163 Kansas 203 200 471 482 1 1 South Atlantic: 19 20 24 25 73 74 103 106 District of Columbia 14 13 8 9 162 157 109 115 43 43 96 98 79 79 6 6 51 52 18 17 126 129 25 24 5 5 120 120 Georgia 70 73 17 17 260 254 56 57 16 18 87 83 East South Central: 112 111 282 295 12 12 77 77 52 55 171 169 82 82 5 6 130 130 26 27 4 4 175 175 West South Central: 56 57 49 53 132 129 36 37 5 5 104 104 220 221 161 165 12 12 Texas 501 501 256 269 102 105 Mountain: 68 67 23 26 20 21 28 30 23 22 35 35 21 21 2 2 91 89 53 54 1 1 27 27 14 14 7 7 5 5 Utah 33 33 26 26 7 5 4 4 Pacific: 60 63 53 59 25 25 34 35 36 37 3 4 115 1 117 94 102 r Revised. 1 Includes all member banks, and all nonmember banks on which checks are drawn (except mutual savings banks, on a few of which some checks are drawn). Banks not on the par list comprise nonmember banks that have not agreed to pay without deduction such checks drawn upon them as are forwarded for payment by the Federal Reserve banks. The difference of 6 between the number of nonmember banks on December 31, 1939 shown in this table and in table 15 is due to the fact that Digitized fothr iFs RtabAlSe EexRcl udes 159 banks (principally 65 industrial banks and 74 non-deposit trust companies) on which http://frasenr.os ctlhoeucikssf earde. odrragw/ n, and includes 153 banks (principally 122 private banks and 22 cooperative banks) on which checks are drawn but which (1) are not reporting to State banking departments, (2) are in Federal Reserve Bank of St. Louis

56 ANNUAL REPORT OF BOARD OF GOVERNORS NO. 18.-M0NEY RATES, BOND YIELDS, AND STOCK PRICES' ( O p p e N r e n e c - w e m n Y a t r o p k r e e k r t a r C a n i t n t e y u s ' m in ) (per B ce o n n t d p y e i r e l a d n s n 3 um) Common stock prices4 (1926 =» 100) Year and month Prime Corporate m p c a e 4 o p r - m c e 6 i r a , l T U b u r . i e r l S a y l . s s T U n r u o . e r t S a y e . s s T U r u . e r S a y . 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 1.402 3.34 4.58 7.62 94.7 87.4 72.5 148.7 1932 2.73 0.879 3.68 5.01 9.30 48.6 46.5 26.4 79.1 1933 1.72 0.515 2.66 3.31 4.49 7.76 63.0 65.7 37.7 78.1 1934 1.02 0.256 2.12 3.12 4.00 6.32 72.4 81.1 41.5 68.9 1935 .76 0.137 1.29 2.79 3.60 5.75 78.3 90.8 34.0 71.4 1936 .75 0.143 1.11 2.65 3.24 4.77 111.0 127.3 51.2 .104.3 1937 .95 0.447 1.40 2.68 3.26 5.03 111.8 131.3 49.3 94.8 1938 .81 0.053 0.83 2.56 3.19 5.80 83.3 99.4 26.1 73.2 1939 .59 0.022 0.59 2.36 3.01 4.96 89.2 104.9 28.2 84.5 1938 January 1 00 0.099 1.13 2.65 3.17 5.89 81.6 95.7 29.0 75.7 1 00 0.084 1.09 2.64 3.20 5.97 80.7 95.7 28.3 71.2 March 88 0.074 1.01 2.64 3.22 6.30 77.9 92.7 25.5 68.5 April 88 0.083 0.94 2.62 3.30 6.47 70.7 84.2 20.9 64.0 May 88 0.027 0.77 2.51 3.22 6.06 73.9 87.4 21.8 69.5 June 88 0.023 0.67 2.52 3.26 6.25 73.1 86.4 20.5 69.2 July 75 0.053 0.70 2.52 3.22 5.63 88.0 105.3 27.3 76.5 August 75 0.047 0.71 2.51 3.18 5.49 89.5 108.0 27.8 75.0 September 69 0.096 0.82 2.58 3.21 5.65 86.0 103.9 25.5 72.2 October 69 0.023 0.68 2.48 3.15 5.36 91.1 109.6 28.1 77.4 November 69 0.024 0.71 2.50 3.10 5.23 94.7 113.6 30.0 80.9 December 63 0.007 0.67 2.49 3.08 5.27 92.0 110.6 28.8 77.9 1939 January .56 0.002 0.65 2.47 3.01 5.12 91.8 109.3 29.8 81.2 February .56 0.004 0.63 2.44 3.00 5.05 90.1 106.3 28.0 83.8 March .56 0.005 0.51 2.34 2.99 4.89 91.7 108.0 29.7 85.8 April .56 0.019 0.50 2.30 3.02 5.15 81.9 95.9 24.8 80.0 May .56 0.006 0.42 2.17 2.97 5.07 83.1 97.0 25.0 82.4 June .56 0.006 0.39 2.13 2.92 4.91 86.0 100.5 25.9 84.7 July .56 0.017 0.45 2.16 2.89 4.84 86.1 100.6 25.7 84.9 August .56 0.046 0.48 2.21 2.93 4.85 86.3 100.5 25.4 87.0 September .69 0.102 1.07 2.65 3.25 5.00 92.4 109.4 29.7 84.3 October .69 0.028 0.77 2.60 3.15 4.88 95.3 112.7 32.9 86.0 November .63 0.018 0.64 2.46 3.00 4.85 94.2 110.9 31.6 87.3 December .56 0.012 0.51 2.35 2.94 4.92 91.8 107.9 29.6 86.7 1 Annual data are averages of monthly figures. * 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 aboutMarch 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 in more than eight years from 1919 to 1925 and in more than twelve years beginning in 1926. 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 57 NO. 19—BUSINESS INDEXES1 [Adjusted for seasonal variation, 1923-1925 average=100] Construction con Industrial production tracts awarded Year and month Total u m D a f a u b a l n r c e m N d a a o u b r l n n e M era in ls ( d v R e a e n l s t u i i e a ) l 2 o A th l e l r m p t F e o l m a o e r c n y y t r p F t o o a a l r l y c s y * Fre c i a g r h t-] ( m s p v D a a a e l e r l n e t u t s e ) ( p m W 1 c r 1 o s h 9 i o 0 a d o 2 c m l 0 i l e 6 e ) s t e = * y ( i m t 1 n p 1 N i e 9 c a 0 o a n 2 o y n 0 t 9 a m ) s = l e tures ufac tures 83 83 86 63 44 107 84 78 139 87 92 83 i 63 30 107 117 91 94 154 67 53 79 70 56 44 82 76 78 87 98 85 80 93 1 74 79 68 91 81 85 88 97 101 102 100 105 84 81 104 103 100 98 101 95 92 96 94 95 94 96 96 98 99 98 104 106 104 122 124 120 100 101 103 103 104 108 110 106 108 129 121 135 102 104 107 106 100 106 101 110 107 129 117 139 100 102 104 107 95 111 112 112 106 135 126 142 100 104 104 108 97 119 122 117 115 117 87 142 106 110 107 111 95 100 96 89 101 ! 99 92 50 125 92 89 92 102 86 92 81 59 99 84 63 37 84 78 68 74 92 73 78 64 33 88 71 28 13 40 47 55 69 65 61 76 50 98 82 25 11 37 50 58 67 66 57 79 57 97 86 32 12 48 65 62 75 75 66 90 76 102 91 37 21 50 74 64 79 80 72 105 99 110 105 55 37 70 86 75 88 81 83 110 107 110 116 59 41 74 109 '103 78 92 86 89 86 64 100 98 64 45 80 90 78 62 85 79 82 105 95 112 108 72 60 81 97 91 70 90 77 85 81 56 93 108 52 26 73 90 81 83 79 54 94 103 51 32 66 88 80 82 79 54 93 104 46 33 56 86 80 82 77 53 91 100 52 37 65 83 79 81 76 51 93 92 51 37 62 78 78 80 77 50 95 93 54 42 64 82 78 80 83 58 102 93 59 49 68 83 79 80 88 64 107 95 66 53 77 83 78 81 90 69 107 97 78 56 96 86 78 82 96 83 106 98 82 57 102 84 78 83 103 94 110 102 96 56 128 89 78 83 104 92 114 110 96 57 128 89 77 83 101 88 110 110 86 55 111 88 77 83 99 84 109 110 73 58 85 94 87 77 83 98 80 110 110 69 55 94 88 77 84 92 76 105 95 67 58 94 86 88 76 83 92 71 108 98 63 55 93 85 85 76 83 98 82 110 104 63 58 67 94 87 86 76 84 101 88 110 106 67 62 71 95 84 86 75 84 103 92 115 91 73 67 78 96 90 89 75 85 111 103 117 114 73 68 76 98 94 91 79 87 121 123 119 121 76 68 82 101 102 90 79 88 124 130 118 124 83 61 101 103 102 95 79 89 128 141 120 120 86 60 107 105 104 96 79 90 * Without seasonal adjustment. 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 Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

RECORD OF POLICY ACTIONS-BOARD OF GOVERNORS MEETING ON APRIL 6, 1939 Members present: Mr. Eccles, Chairman; Mr, Ransom, Vice Chair man; Mr. Davis, Mr. Draper. Repeal of Regulation G, Rediscount of Notes Secured by Adjusted Service Certificates. By unanimous vote, Regulation G, Rediscount of Notes Secured by Adjusted Service Certificates, was repealed effective as of April 6, 1939. At the time this action was taken the Federal Reserve banks did not hold any notes secured by adjusted service certificates and no such notes had been rediscounted with the Federal Reserve banks for a number of years. Furthermore, the law provided for the payment of an adjusted service certificate by the Veterans' Administration at the option of the veteran holding the certificate and authorized the Administration to make a loan on such certificate, and, while commercial banks might still make loans on the security of the certificates, it seemed improbable in the circumstances that a Federal Reserve bank would be called upon to re discount a note evidencing such a loan. In advising the Federal Reserve banks of its action, the Board requested that if such a note were pre sented by a member bank for rediscount it be handled under the pertinent provisions in the law in the same manner as it would have been handled if Regulation G were still in effect. MEETING ON MAY 9, 1939 Members present: Mr. Eccles, Chairman; Mr. Ransom, Vice Chair man; Mr. McKee, Mr. Davis. Amendment to Regulation T, Extension and Maintenance of Credit by Brokers, Dealers and Members of National Securities Exchanges. By unanimous vote a number of provisions of Regula tion T were amended, effective May 22, 1939. The principal changes made by the amendment were as follows: Cash sales jor customers.—When a broker sells a security for a customer in a special cash account, without first having obtained the security from the customer, the broker will no longer be required by the regulation to get the security within a period of 7 days, or within any other specified period. Such a sale cannot be a short sale, since the making of a short sale by a customer in a special cash account is forbidden. Cash purchases for customers on C.O.D. basis.—When a broker buys a security for a customer in a special cash account and the transaction is of the type in which the customer arranges to have the security delivered to him promptly against payment, the broker will no longer be required by the regulation to obtain payment (and 60 Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

FEDERAL RESERVE SYSTEM 61 consequently to make delivery) within a period of 7 days. The time limit is not altogether removed, but is fixed at 35 days. The broker is not permitted, however, without the permission of an appropriate committee of a national securities exchange, to give the customer more than 7 days if the customer, for any reason what ever, has failed to settle with him promptly in full on any cash transaction during the preceding three months. Cash transactions between brokers or dealers.—Cash transactions between one broker or dealer and another, as distinguished from transactions and relations with the general public, are relieved from the 7-day limitation, or any similar limitation, provided the trans actions are in good faith for prompt settlement in accordance with the ordinary usage of the trade. Loans by one member of an exchange to another.—A new pro vision has been added to the regulation to facilitate the making of a loan by one member of a national securities exchange to another member for the purpose of enabling the borrower, in his capacity as a partner in a member firm, to make a contribution of capital to his firm. Unless the loan is by one partner in a firm to another partner in the same firm, however, it must be approved, in accord ance with conditions specified in the amendment, by an appropriate committee of the exchange, and one of these conditions is that if the firm is one that does any dealing in securities for its own account, the loan must not be for the purpose of enabling the firm to in crease the amount of such dealing. The changes were made for the purpose of clarifying and liberalizing the provisions of the regulation that relate to bona fide cash transactions in securities and to certain other classes of transactions that are not effected in margin accounts. The Board was of the opinion that in making the changes necessary safeguards were provided and that the regulation would not be weakened. MEETING ON JUNE 23, 1939 Members present: Mr. Ransom, Vice Chairman; Mr. Szymczak, Mr. McKee, Mr. Davis, Mr. Draper. Amendment to Regulation O, Loans to Executive Officers of Member Banks. By unanimous vote Regulation 0 was amended, effective July 1, 1939, in the following respects: (1) Subsection 1(b) was changed to read as follows: "(b) The term 'executive officer' means every officer of a member bank who participates or has authority to par ticipate in the operating management of the bank or any branch thereof otherwise than in the capacity of a director of the bank, regardless of whether he has an official title or whether his title contains a designation of assistant and regardless of whether he is serving without salary or other compensation. It will be assumed that the chairman of the board, the president, every vice president, the cashier, sec retary, treasurer and trust officer of a member bank are executive officers, unless it is provided by resolution of the board of directors or the bank's by-laws that any such Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

62 ANNUAL REPORT OF BOARD OF GOVERNORS officer is not authorized to participate in the operating man agement of the bank and he does not actually participate therein." (2) Subsection 4(a) was amended by striking out "June 16, 1938," in the first and last sentences of such subsection and inserting in lieu there of "June 16, 1944." The reasons for the Board's action were set forth as follows in a statement which was released to the press: "Section 22(g) of the Federal Reserve Act, which restricts loans to 'executive officers' and which is implemented by the Board's Regulation 0, makes a distinction between 'executive officers' and other officers. On reviewing this subject, the Board concluded that the regulation should be amended to give clearer recognition to this distinction and to the view that the question whether or not a person is an 'executive officer' does not depend upon the title which he has but upon the nature of his duties. As amended, the regulation would not apply to a person, regardless of his title, who has no authority to perform and actually does not perform the duties of an executive especially in view of the fact that the law does not restrict loans to directors who are not also executive officers. "The Board also amended its Regulation 0 by changing the date in section 4(a) to 'June 16, 1944.' This amendment was made to conform to the change recently made in the law extending until June 16, 1944, the date to which loans made by member banks to their executive officers prior to June 16, 1933, may be renewed or extended." MEETING ON JULY 31, 1939 Members present: Mr. Eccles, Chairman; Mr. Ransom, Vice Chair man; Mr. McKee, Mr. Davis. Amendment to Regulation J, Check Clearing and Collection. By unanimous vote Regulation J, Check Clearing and Collection, was amended, effective September 1, 1939, in the following respects: (1) Section 3 was amended so as to permit, but not to require, a Federal Reserve bank to receive from member banks and nonmember clearing banks in its own district items drawn on banks in other districts. (2) The first paragraph of Section 5 was amended to provide indemnification to a Federal Reserve bank for loss resulting from forged endorsements, and also to provide that each member and nonmember bank sending checks to a Federal Reserve bank shall be deemed to guarantee all prior endorsements on such checks whether or not a specific guaranty is incorporated in an endorsement of the sending bank. (3) Section 5 was further amended by the addition of a new paragraph to provide that with respect to any check sent direct by a bank in one district to a Federal Reserve bank in another the relationships and the rights and liabilities existing between such Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

FEDERAL RESERVE SYSTEM 63 sending bank, the Federal Reserve bank of its district and the Federal Reserve bank to which the check is sent will be the same as though the item had been sent to the Federal Reserve bank in the sending bank's district and by it to the other Federal Reserve bank. (4) The first sentence of Section 6 was amended to provide that each Federal Reserve bank may promulgate rules not inconsistent with the terms of the law or the regulation, governing the sorting, listing, packaging, and transmission of items. (5) Certain other amendments of a minor and unimportant character. The changes in the regulation were adopted by the Board in connec tion with a revision in the check collection procedure of the Federal Reserve banks, having as its purpose a reduction in the work required in preparing checks for deposit with the Federal Reserve banks and a reduction in the maximum time for which credit is deferred. The Board released to the press on August 21, 1939, a statement with respect to this action as follows: "The Board of Governors of the Federal Reserve System an nounced today that the Federal Reserve banks will put into effect on September 1, 1939, certain changes in their check collection pro cedure designed to give member banks more prompt credit for checks deposited with the Federal Reserve banks for collection and to reduce the amount of work required in preparing the checks for deposit with the Federal Reserve banks. "Heretofore member banks have been given credit for checks deposited with the Federal Reserve banks in accordance with time schedules which were based on the actual time required to collect the checks. After September 1 the Federal Reserve banks will credit member banks within three days or less for all checks de posited with them for collection. Immediate credit or credit within one or two days will continue to be given for most checks. "The Board's Regulation J relating to the clearance and collec tion of checks and the check collection circulars and time schedules of the Federal Reserve banks have been revised. Copies are being sent by the Federal Reserve banks to all member banks and to all other banks which maintain deposit accounts with the Federal Reserve banks." MEETING ON AUGUST 1, 1939 Members present: Mr. Eccles, Chairman; Mr. Ransom, Vice Chair man; Mr. McKee, Mr. Davis. Amendment to Regulation L, Interlocking Bank Directorates Under the Clayton Act. On November 7, 1938, the Board amended Regulation L to permit (1) any director, officer, or employee of a member bank or any private banker who was lawfully serving as a director, officer, or employee of a Morris Plan bank or similar institution on January 31, 1939, to continue to serve until August 1, 1939, and (2) any director, officer, or employee of any member bank who, on August 23, 1935 (date of approval of the Banking Act of 1935), was lawfully serving at the same time as a private Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

64 ANNUAL REPORT OF BOARD OF GOVERNORS banker or as a director, officer, or employee of any other bank and whose services in such capacities had been continuous since such date, to con tinue until August 1, 1939, to serve such member bank and not more than one other bank. At this meeting, by unanimous vote subsections 3(a) and 3(e) of Regulation L were further amended effective imme diately to authorize the continuation of such relationships until February 1, 1940. On the date this action was taken Congress had passed and sent to the President for signature Senate bill 2150 which would amend the second paragraph of Section 8 of the Clayton Act to authorize a director, officer, or employee of a member bank who was lawfully serving other banks on the date of the enactment of the Banking Act of 1935 to continue such service until February 1,1943. On August 1, 1939, the President had not signed the bill * and in these circumstances it was decided that the per mission previously granted by the Board should be extended to February 1, 1940. As annual elections of directors and appointments of officers usually take place in the early part of January, this action had the effect of permitting the necessary adjustments to be made in most cases at the usual time of the ensuing regular elections instead of terminating imme diately the services of the directors, officers, or employees affected. MEETING ON AUGUST 25, 1939 Members present: Mr. Ransom, Vice Chairman; Mr. Szymczak, Mr. Davis, Mr. Draper. Reduction by the Federal Reserve Bank of New York in Rate on Advances to Nonmember Banks on Government Obligations. By unanimous vote, approval was given to a rate of 1% fixed by the board of directors of the Federal Reserve Bank of New York, effective immediately, on advances by the bank to nonmember banks secured by direct obligations of the United States. This action, which established the same rate for advances to member and nonmember banks secured by Government obligations, was taken by the bank, and the new rate was approved by the Board, in anticipation of the adoption of a policy (which became effective on September 1) in accordance with which the Federal Reserve banks would be prepared to make advances to member and nonmember banks on Government obliga tions at par at the rate prevailing for member banks. MEETING ON SEPTEMBER 1, 1939 Members present: Mr. Eccles, Chairman; Mr. Szymczak, Mr. Davis, Mr. Draper. Advances by Federal Reserve Banks to Member and Nonmember Banks on Government Obligations. By unanimous vote, the following statement for the press was approved for release in the afternoon papers of Septem ber 1, 1939: * This bill was vetoed on August 5, 1939. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

FEDERAL RESERVE SYSTEM 65 "The Board of Governors of the Federal Reserve System an nounces that in view of current developments in the international situation, the Federal Reserve banks are prepared at this time to make advances to member and nonmember banks on Government obligations at par at the rates prevailing for member banks." In April 1939 members of the Board of Governors discussed informally with presidents of the Federal Reserve banks the question of action that might be taken by the System in the event of armed conflict abroad resulting in serious disturbances to the markets in this country and it was agreed that during such an emergency the Federal Reserve banks should follow a policy of making advances to member and nonmember banks on the security of direct obligations of the United States at par at the discount rate. The presidents had been advised of the decision reached by the Federal Open Market Committee to authorize, in case of such an emergency, an increase in the System open market account by not to exceed $1,000,000,000 if deemed necessary for the purpose of exer cising an influence toward the maintenance of orderly market conditions, and the policy with respect to advances to member and nonmember banks on Government obligations was considered desirable as a further means of lending stability to the markets. War having broken out in Europe with sharp repercussions on the markets in this country, it was decided on September 1 that the policy should be put into effect and thereupon the Board issued the press state ment set forth above. On September 1 reductions in the rates in effect at all Federal Reserve banks except New York (for which a reduced rate was approved on August 25) were approved by the Board in accordance with the an nounced policy. MEETING ON NOVEMBER 7, 1939 Members present: Mr. Eccles, Chairman; Mr. Ransom, Vice Chair man; Mr. Szymczak, Mr. McKee, Mr. Davis, Mr. Draper. Amendment to Regulation F, Trust Powers of National Banks. By unanimous vote, Regulation F, Trust Powers of Na tional Banks, was amended in certain respects to become effective November 20, 1939. The principal amendment affected the provision relating to "self deal ing" in the investment of trust funds and sale or transfer of trust assets, contained in section 11, and was prompted by inquiries received from time to time which indicated that in some instances the best interests of trusts would be better served if the requirements were more flexible. For that reason, transactions were excepted from such requirements when specifically authorized by court order. The other amendments were of a minor nature and were made for the purpose of clarification or to con form to amendments to the Internal Revenue laws. Amendment to Regulation H, Membership of State Banking Institutions in the Federal Reserve System. By unanimous vote, Regulation H, Membership of State Banking Institutions in the Federal Reserve System, was amended in certain respects to become effective November 20, 1939. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

66 ANNUAL REPORT OF BOARD OF GOVERNORS Congress on June 20, 1939, repealed the requirement in subsection (y) of Section 12B of the Federal Reserve Act that certain State banks hav ing deposits of $1,000,000 or more become members of the Federal Reserve System not later than July 1,1942, in order to continue as insured banks. This change in the law made necessary the elimination from Section 2 of the regulation of all reference to such statutory provisions and the related provisions of Section 9 of the Federal Reserve Act con cerning the waiver of membership requirements. In section 6, standard condition of membership numbered 4 was amended and a previously approved revision of standard condition of membership numbered 5 was incorporated. Both conditions deal with the exercise of trust powers by State member banks and were modified in order to conform to comparable requirements contained in the Board's Regulation F, Trust Powers of National Banks. Other changes were of a perfecting nature and did not involve any change in policies or practices already in effect. MEETING ON DECEMBER 26, 1939 Members present: Mr. Eccles, Chairman; Mr. Ransom, Vice Chair man; Mr. McKee, Mr. Davis, Mr. Draper. Adoption of Regulation G, Collection of Noncash Items. By unanimous vote, a new Regulation G, relating to the collection by the Federal Reserve banks of noncash items, was adopted to become effective February 1, 1940. The reason for the adoption of the regulation is set forth in the following statement which was released to the press on December 29, 1939: "The Board of Governors of the Federal Reserve System an nounced today the adoption of a regulation, effective February 1, 1940, governing the collection by Federal Reserve banks of notes and bills and other 'noncash items' for member banks and nonmember clearing banks. This regulation has been issued by the Board in order that the principal terms and conditions relating to the collection of noncash items may be published in the Federal Register and requires no change in the existing practices of the Federal Reserve banks. Other provisions regarding the collection of noncash items will be contained, as heretofore, in the circulars of the individual Federal Reserve banks." Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

RECORD OF POLICY ACTIONS—FEDERAL OPEN MARKET COMMITTEE MEETING ON MARCH 7, 1939 Members present: Mr. Eccles, Chairman; Mr. Harrison, Vice Chair man; Mr. Szymczak, Mr. McKee, Mr. Ransom, Mr. Davis, Mr. Draper, Mr. Fleming, Mr. Leach, Mr. Martin, Mr. Hamilton. Authority (1) to Replace Maturing Securities and to Make Shifts of Securi ties 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, which were in the same form as the resolu tions adopted at the meeting on December 30, 1938, were adopted, Messrs. Harrison, Szymczak, McKee, Davis, Fleming, Leach, Martin and Hamilton voting "aye," and Messrs. Eccles, Ransom, and Draper voting "no": "That the executive committee be directed until otherwise di rected 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 replace ment or pending subsequent replacement (a) when market condi tions 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 67 Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

68 ANNUAL REPORT OF BOARD OF GOVERNORS 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." These resolutions were adopted for the purpose of continuing the existing policy of the Federal Open Market Committee and for sub stantially the same reasons as prompted similar action at the meeting of the Committee on December 30, 1938. These reasons are set forth in the policy record on pages 80 to 84, inclusive, of the annual report of the Board of Governors for the year 1938. MEETING ON MARCH 20, 1939 Members present: Mr. Eccles, Chairman; Mr. Harrison, Vice Chair man; Mr. Szymczak, Mr. McKee, Mr. Ransom, Mr. Davis, Mr. Draper, Mr. Fleming, Mr. Leach, Mr. Martin, Mr. Hamilton. 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, which were in the same form as the resolutions adopted at the meeting on March 7, 1939, were adopted, Messrs. Harrison, Szymczak, McKee, Davis, Fleming, Leach, Martin and Hamilton 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 pend ing 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 securi ties; and (3) to arrange for such shifts in maturities in the System open market account as may be necessary in the proper admini stration 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 Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

FP]DERAL RESERVE SYSTEM 69 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 main tained at not less than $500,000,000 nor more than $900,000,000. This action continued the existing policy of the Committee and was taken for substantially the same reasons as prompted similar action by the Committee at its meetings on March 7, 1939, and December 30, 1938. MEETING ON APRIL 19, 1939 Members present: Mr. Eccles, Chairman; Mr. Harrison, Vice Chair man; Mr. McKee, Mr. Ransom, Mr. Davis, Mr. Draper, Mr. Fleming, Mr. Leach, Mr. Martin, Mr. Hamilton. 1. Authority to Increase System Open Market Account in the Event of Serious Disturbance in the Government Securities Market Resulting from Armed Conflict Abroad. At this meeting Chairman Eccles reported that on April 13, 1939, the executive committee of the Federal Open Market Committee agreed unanimously that the executive committee should ask the Federal Open Market Committee' for authority, in the event of serious disturbance in the Government securities market resulting from armed conflict abroad, to direct the purchase of securities for the System portfolio in an amount not to exceed $500,000,000 with the understanding that in making such purchases it might become necessary to exceed the $900,000,000 limita tion on bonds having maturities over five years contained in the second resolution adopted at the meeting of the Federal Open Market Commit tee on March 20, 1939, and that on April 14, 1939, all of the members of the Federal Open Market Committee who were not members of the exec utive committee approved the granting of authority to the executive committee as set forth above. Upon motion duly made and seconded, and by unanimous vote, the action of the members of the Federal Open Market Committee in granting this additional authority to the exec utive committee wras approved, ratified and confirmed. This action was taken because of the expectation that an outbreak of armed conflict in Europe would result in serious disturbance to the securi ties markets in this country and there was complete agreement that, should such disturbance occur, the System should be prepared to exercise its influence toward preventing disorderly conditions in the market for Government securities. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

70 ANNUAL REPORT OF BOARD OF GOVERNORS 2. 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, Messrs. Eccles, Harrison, McKee, Ransom, Davis, Fleming, Leach, Martin and Hamilton voting "aye" and Mr. 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 pend ing 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 $1,000,000,000; and (c) that, if Treas ury 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 other wise 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 $1,000,000,000." These resolutions were adopted for the purpose of continuing similar authority granted at the three previous meetings of the Committee and for substantially the same reasons. The change from $900,000,000 to $1,000,000,000 in the maximum amount of bonds having maturities in excess of five years which might be held in the System account was in recognition of the possibility that a substantial increase in the holdings of bonds might result from disturbed market conditions. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

FEDERAL RESERVE SYSTEM 71 3. Authority to Increase the Amount of Securities in the System Account in the Event of Armed Conflict or Political Developments Threatening Armed Conflict Abroad. Upon motion duly made and seconded, and by unanimous vote, the following resolution was adopted: "That, in the event that armed conflict or political developments threatening armed conflict abroad result in serious disturbance to the Government securities market in this country, the executive com mittee be authorized, in addition to the authority granted by the resolutions set forth above and notwithstanding any limitations or restrictions in those resolutions, to increase the securities in the account by not to exceed $500,000,000, and upon written, telephonic or telegraphic approval of a majority of the members of the Federal Open Market Committee by not to exceed an additional $500,000,000, if deemed necessary for the purpose of exercising an influence toward the maintenance of orderly market conditions, and, if and when market conditions warrant, to sell securities in the amount of any securities so purchased. Any purchases made under the authority of this resolution shall not be construed as limiting the powers granted under resolutions previously adopted at this meeting." The reasons for this action are stated above in connection with the ratification of the previous action of the members of the Federal Open Market Committee in authorizing the executive committee to increase the System account in the event of the outbreak of hostilities abroad. MEETING ON JUNE 21, 1939 Members present: Mr. Eccles, Chairman; Mr. Harrison, Vice Chair man; Mr. Szymczak, Mr. McKee, Mr. Ransom, Mr. Davis, Mr. Draper, Mr. Fleming, Mr. Leach, Mr. Martin, Mr. Hamilton. Authority (1) to Replace Maturing Securities and to Make Shifts of Securi ties in the System Open Market Account, (2) to Purchase or Sell Securities from the System Open Market Account, and (3) to Increase or Decrease the Account in the Event of Armed Conflict or Political Developments Threat ening Armed Conflict Abroad. Upon motion duly made and seconded, the following reso lutions were adopted, Messrs. Eccles, Harrison, Szymczak, McKee, Ransom, Davis, Fleming, Leach, Martin, and Hamilton voting "aye" and Mr. Draper voting "no," he being opposed to authorizing the executive committee to allow bills to run off without replacement but otherwise favoring the resolutions: "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, whenever market conditions warrant, to allow part or all of such bills to mature without replacement; (2) to arrange for the replacement of maturing Treasury notes and bonds in the Sys tem 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 practical administration of the account; provided (a) that the amount of securities in the Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

72 ANNUAL REPORT OF BOARD OF GOVERNORS account maturing within two years be maintained at not less than $700,000,000; and (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 $1,000,000,000. "That, in addition to such authority as may be contained in other resolutions of the Federal Open Market Committee and until other wise directed by the Committee, the executive committee be autho rized, upon written, telephonic or telegraphic approval of a ma jority 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 Govern ment 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 excluding such decreases as may result from allowing Treasury bills in the account to mature without replacement under the preceding resolution, 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 $1,000,000,000. "That, in the event that armed conflict or political developments threatening armed conflict abroad result in serious disturbance to the Government securities market in this country, the executive committee be authorized, in addition to the authority granted by the resolutions set forth above and notwithstanding any limita tions or restrictions in those resolutions, to increase the securities in the account by not to exceed $500,000,000, and upon written, telephonic or telegraphic approval of a majority of the members of the Federal Open Market Committee by not to exceed an addi tional $500,000,000, if deemed necessary for the purpose of exer cising an influence toward the maintenance of orderly market con ditions, and, if and when market conditions warrant, to sell securi ties in the amount of any securities so purchased. Any purchases made under the authority of this resolution shall not be construed as limiting the powers granted under resolutions previously adopted at this meeting." With the exception of a change with respect to allowing bills to run off without replacement these resolutions were in the same form as the resolutions adopted at the previous meeting of the Committee and were adopted for substantially the same reasons. The change in the first two resolutions with respect to allowing Treasury bills to run off with out replacement was made for the reasons set forth in the following statement for the press which was approved at this meeting for publi cation when the first reduction was made in the amount of Treasury bills held in the account pursuant to the first resolution: "As a result of a reduction in holdings of Treasury bills, this week's statement of condition of Federal Reserve banks shows a decline of $ 1 in the System Open Market Account. This 1 Subsequently, on June 29, 1939, the above statement was released to the press, showing a decline of $13,378,000. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

FEDERAL RESERVE SYSTEM 73 is in accordance with action taken by the Federal Open Market Committee on June 21, 1939. For some time past, Treasury bills have been purchased for the System's account at or near a no-yield basis and the account at times has had difficulty in replacing its maturing bills. It was decided that it would serve no useful purpose to continue full replacement of maturing bills, the supply of which is not always equal to the market demand. This action is in response to technical conditions in the bill market and does not represent a change in general credit policy." On the question of the approval of the statement Messrs. Eccles, Harrison, Szymezak, McKee, Ransom, Davis, Flem ing, Leach, Martin and Hamilton voted "aye" and Mr. Draper voted "no." MEETING ON SEPTEMBER 18, 1939 Members present: Mr. Eccles, Chairman; Mr. Harrison, Vice Chair man; Mr. Szymezak, Mr. McKee, Mr. Ransom, Mr. Davis, Mr. Draper, Mr. Fleming, Mr. Leach, Mr. Martin, Mr. Hamilton. 1. Authority to Increase the Amount of Securities in the System Open Market Account for the Purpose of Exercising an Influence Toward the Mainte nance of Orderly Market Conditions. On September 9, 1939, in accordance with the provisions of the third resolution adopted at the meeting on June 21, 1939, and at the request of the members of the executive committee, the members of the Federal Open Market Committee approved an increase of $500,000,000 in the authority of the executive committee to purchase securities for the Sys tem open market account. Upon motion duly made and seconded, and by unanimous vote, the action of the members of the Federal Open Market Committee in granting the additional authority referred to above was approved, ratified and confirmed. The outbreak of armed conflict in Europe had resulted in serious dis turbances in our markets and at the close of business on September 8 the System had purchased $317,000,000 of the $500,000,000 of purchases authorized at the meeting on June 21, 1939, for the purpose of exercising an influence toward the maintenance of orderly conditions in the Gov ernment securities market. The above action was taken to place the executive committee in a position to continue to make purchases of securities for the same purpose within the limit set. 2. Authority to Effect Transactions in the System Open Market Account. Upon motion duly made and seconded, the following reso lution was adopted by unanimous vote: "That the executive committee be directed until otherwise directed by the Federal Open Market Committee to arrange for such trans actions for the System open market account (including purchases, sales, exchanges, replacement of maturing securities, and letting maturities run off without replacement) as in its judgment from time to time may be necessary for the purpose of exercising an in fluence toward maintaining orderly market conditions; provided that the aggregate amount of securities held in the account at the close of this date shall not be increased nor decreased by more than $500,000,000." Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

74 ANNUAL REPORT OF BOARD OF GOVERNORS This action was taken in the light of the unsettled conditions existing in our markets at the time which had resulted from the war in Europe and it was agreed that the executive committee should be given more flexible authority to execute transactions in the System account for the purpose of exercising an influence toward maintaining orderly market conditions. MEETING ON DECEMBER 13, 1939 Members present: Mr. Eccles, Chairman; Mr. Harrison, Vice Chair man; Mr. Szymczak, Mr. McKee, Mr. Ransom, Mr. Davis, Mr. Draper, Mr. Fleming, Mr. Leach, Mr. Martin, Mr. Hamilton. Authority to Effect Transactions in the System Open Market Account. Upon motion duly made and seconded, the following resolution was adopted by unanimous vote: "That the executive committee be directed until otherwise directed by the Federal Open Market Committee to arrange for such trans actions for the System open market account (including purchases, sales, exchanges, replacement of maturing securities, and letting maturities run oft without replacement) as in its judgment from time to time may be necessary for the purpose of exercising an influence toward maintaining orderly market conditions; provided that the aggregate amount of securities held in the account at the close of this date shall not be increased nor decreased by more than $500,- 000,000." This action resulted in the renewal of the authority granted to the executive committee at the meeting of the Federal Open Market Com mittee on September 18, 1939, and was taken for substantially the same reasons as prompted the granting of the earlier authority. 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 FEBRUARY 14, 1939 Topic: Easy Money Policy. RECOMMENDATION: The Federal Advisory Council, considering that many of the fundamental effects of the continuing cheap money policy have not been fully appreciated, recommends that the Board of Governors of the Federal Reserve System conduct a study of the long-range con sequences of the continuing policy of cheap money upon the accumulation and investment of the savings of the people, and upon the financial struc ture of the country, with especial reference to its effects upon the main tenance of a sound banking system. Topic: Interlocking Directorates. RECOMMENDATION: Section 8 of the Clayton Anti-Trust Act, as amended by Section 329 of the Banking Act of 1935, permits a director, officer or employee of a member bank of the Federal Reserve System, or a branch thereof, who was lawfully serving as a private banker or as a director, officer, or employee of any other bank, banking association, savings bank, or trust company, or any branch thereof, on August 23, 1935, to continue such service to February 1, 1939. The Board of Governors of the Federal Reserve System by regulation has permitted such service as director, officer, or employee of a member bank and in not more than one other banking institution, to continue to August 1, 1939. The service of the directors, officers and employees who are now serving under the authority of the aforesaid law and regulations is in many cases extremely valuable to the banking institutions of which they are such directors, officers, or employees, and the discontinuance of such service would not result in a commensurate benefit to the public. Therefore, the Federal Advisory Council believes that any director, officer or employee of any member bank of the Federal Reserve System or any branch thereof, who is now 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 or any branch thereof should be permitted to continue such service so long as the stock holders of any such banking institution shall desire to retain such persons in such capacities, and so long as such persons shall accept the election or appointment to such positions. This, of course, means that no permits for new interlocking directorates will be issued. Topic: S. 477 (Corporate Trusteeships). RECOMMENDATION: The Federal Advisory Council desires to call the attention of the Board of Governors of the Federal Reserve System to Senate Bill 477 relating to the regulation of trust indentures under which securities are issued. 75 Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

76 ANNUAL REPORT OF BOARD OF GOVERNORS The Council feels strongly that the imposition of some of the liabilities as provided in the bill would create contingent liabilities for banks of deposit accepting corporate trusteeships which might be dangerous to themselves and the banking system as a whole. Broadly speaking, no corporations other than banks of deposit have either the financial respon sibility or the experience which qualify them to act as corporate trustees. Furthermore, the Council believes that the bill would materially in crease the cost of, and make more difficult long-term public financing; particularly to smaller corporations, and would thus tend to hinder expansion of plants and businesses at a time when such expansion is particularly desirable in the interest of business recovery. The Council also believes that the restrictions contained in the bill on the right of security holders to waive defaults, and the requirements that the trustee must act in the event of default if it is to avoid liability, would force into receiverships, or the bankruptcy courts, many businesses that otherwise might survive, particularly in times of depression, with resultant loss to their creditors, including banks, and to their stockholders and to their employees and the communities in which they are located. The Council requests the Board to submit this expression of its opinion to the Senate Committee on Banking and Currency with the request that it be put in the record of the hearings before its Subcommittee consider ing the bill. The Council understands that the record of the Subcommittee of the Senate Committee on Banking and Currency, in the absence of further hearings, will be closed on February 16th, and therefore requests that it be forwarded by that date. Topic: In Re: Chandler Act. . RECOMMENDATION: The Federal Advisory Council suggests that the Federal Reserve Board give consideration to amendments to the Federal Bankruptcy Act as amended by the Chandler Act, approved June 22, 1938, and particularly to Section 60 (a) — (b), to alter the provisions of that Section. To an increasing extent member banks of the Federal Reserve System are making loans secured by assignments of receivables and other types of collateral. For the most part, such loans are made to relatively small and inadequately capitalized enterprises and without notification to borrowers' debtors, in a spirit of cooperation with the borrowers to preserve their credit standing. The Federal Advisory Council is of the opinion that under the pro visions of Section 60 (a) — (b) the reliance that banks place upon such collateral, unless title thereto is perfected to comply with the require ments of this Section, is illusory and may result in heavy losses. Atten tion is also called to the timing of perfection of title with relation to the date of the loan, leading to a possible classification of the loan as an antecedent debt. In addition to loans secured by accounts receivable, other types of collateral loans may be affected, among which are: A—Loans secured by assignment of money payable under a contract or rents under a lease. B—Loans secured by assignments of life insurance policies. C—Loans secured by assignments of rights and interests in estates and trusts. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

FEDERAL RESERVE SYSTEM 77 D—Loans on the security of instruments which appear to be but are not in fact negotiable instruments. E—Loans upon borrower's promise to deliver collateral, whether or not the collateral is segregated or escrowed. F—Loans secured in whole or in part by equities of the borrower in collateral owned by the borrower but pledged to secure other indebtedness. The language of Section 60 (a) — (b) is presumably intended to pre vent secret liens, but its provisions bear so heavily upon business and banking practice that restrictions in making loans will ensue, thus ad versely affecting general business, or if such loans are made without complete compliance with the requirements of this Section, heavy losses may be encountered by banks. JUNE 6, 1939 Topic: Easy Money Policy. RECOMMENDATION: At the meeting of the Federal Advisory Council with the Board of Governors of the Federal Reserve System held on February 14, 1939, the Council submitted a resolution expressing the opinion that many of the fundamental effects of the continuing "cheap money" policy have not been fully appreciated and recommending that the Board conduct a study of the long range consequences of this policy upon the accumulation and investment of the savings of the people, and upon the financial structure of the country, with especial reference to its effects upon the maintenance of a sound banking system. At that meeting some members of the Board informally expressed regret that the Council had not made its recommendation more concrete. Other members expressed doubts whether any such special study as recommended would add to the knowledge already possessed and con stantly being acquired through the medium of current studies now being made not only by the Board but by other official bodies. In a letter from the Assistant Secretary of the Board to the Secretary of the Council dated March 31, 1939, the latter view was formally expressed and the Council interprets this letter as meaning that the special study recom mended is not to be undertaken. In this situation, and in view of what the Council believes to be the dangerous condition toward which the country appears to be moving, the Council conceives it to be its duty to place formally upon the record its general opinion concerning the results of the "easy money" policy to date and some of the probable results of its further continuance. The so-called "easy money" policy has been followed since 1929 upon the theory, as the Council understands it, that "easy money" would act as a stimulant to business and that it would cause business to borrow and impel banks to lend. It has done neither; but it has done and is doing undeniable economic injury to the whole savings .class of the American people. The Council believes that the "easy money" policy, through its failure to bring to the banks normal rates on their loans and investments, is tending to weaken the capital position of banks and is encouraging an essentially unhealthy position of the bond portfolios of the banking system through its inducement toward lengthened maturities at pro gressively lower rates. In addition the Council believes that the operation of the "easy money" Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

78 ANNUAL REPORT OF BOARD OF GOVERNORS policy, by lessening the current cost of Government financing, has made the people, and even Congress itself, indifferent to the steadily mounting Government debt and is tending to create illusions as to the eventual burden of carrying a constantly increasing debt. It has become evident during the past two or three years that the cu mulative effect of the policy in question is profoundly and adversely affecting that large group of industrious and thrifty persons who are, by virtue of their character and habits, the backbone of the country's social and economic structure. Steadily they have seen the returns on their accumulated savings decrease as savings institutions, faced with con stantly diminishing earnings, have been forced, step by step, to decrease the rate of interest paid on savings deposits. Steadily, year by year, they are meeting increased discouragement in their attempts, through the purchase of life insurance, to provide for their own old age and for the protection of their families, as the cost of insurance slowly mounts and as the dividends payable on policies steadily diminish. Schools, colleges, churches, hospitals and educational and charitable institutions of all sorts see the returns on their accumulated endowments constantly lessening, the salaries of their staff members reduced and their promo tions delayed, services to students, patients and dependents curtailed, and more and more of the functions which are normally and most efficiently performed by private or semi-private agencies necessarily taken over by public boards at the expense of the taxpayers unless essential social needs are to be neglected. So far as the banking system is concerned, the Council recognizes that it is only a part, but an essential part, of the economic structure taken as a whole. It believes, nevertheless, that the time has come to face squarely the fact that the entire banking system is confronted with a distinct menace to the soundness of its capital structure through the continuation of an abnormally "easy money" policy. A prolongation of this situation threatens the existence of private banking and with it the whole system of private enterprise. The Council is not unmindful that the long continued "easy money" policy has created a condition, the correction of which can only be gradually attained. But it is now a serious problem portending critical consequences. The Council, therefore, urges upon the Board as one of the greatest single services which it can render to the country as a whole, the modification of the policy of extreme "easy money." Topic: Mead Bill (S. 2343). RECOMMENDATION: The Federal Advisory Council desires to call to the attention of the Board of Governors of the Federal Reserve System Senate bill No. 2343 on which hearings are now being held by a subcom mittee of the Banking and Currency Committee of the Senate. The Council believes that the great majority of businesses needing loans for a period of years, where a reasonable assurance of repayment exists, can and do obtain such loans from banks and other non-govern mental sources such as insurance companies. In those cases where such loans are not obtainable from banks or private sources the Reconstruc tion Finance Corporation is already empowered by existing legislation to make, and through participation arrangements, in effect, to guarantee or insure percentages of such loans, and does so make and in effect insure loans. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

FEDERAL RESERVE SYSTEM 79 Under present legislation the Reconstruction Finance Corporation is restricted in that the loans must be in the opinion of its board "of such sound value or so secured as reasonably to assure retirement or repay ment" and to concerns "only when in the opinion of the board of directors, the business enterprise is solvent." Under Senate bill No. 2343 no such restrictions are imposed. If it is the intent of the bill that the Reconstruction Finance Corporation will under it only insure loans the repayment of which in its opinion are reasonably assured, the bill should be so amended. If it is the intent of the bill that the Reconstruction Finance Corpora tion shall insure loans the repayment of which in its opinion are not reasonably assured, and the Reconstruction Finance Corporation should insure such loans, the Council feels that the result would be injurious to industry as a whole and would tend to restrict longer-term credit now being made available by banks and others to businesses which in the opinion of the lenders do have reasonable assurances of being able to repay such credit. The extension of credit, through insurance or direct loans, by governmental agencies or by private capital, to businesses not able to repay not only is costly to the lender and does not benefit the borrower, but enables inefficient, poorly managed and uneconomic busi nesses to compete for a time with other people's money against successful, well managed and economic businesses in the same line. By so doing it retards the expansion of sound business enterprises and because these are faced with unsound competition, makes it more difficult for them to obtain credit either short- or long-term, and makes it even more difficult for them to obtain additional proprietary capital. In fairness to the sound and solvent businesses of the country, and apart from any con siderations of probable loss to the Treasury, the Council believes that no governmental agency should be empowered to make or insure loans to industry or commerce unless after examination the agency feels that such loans are reasonably certain to be repaid. The provisions for the rediscount of the insured portions of loans con tained in the bill should be eliminated. In the case of member banks the Federal Reserve banks could under existing law accept them as collateral for short-term loans which can be renewed if necessary. Member banks should not be indebted through rediscounts to Federal Reserve banks over long periods of time as would be the case if notes running up to ten years were rediscounted. Nor should nonmember banks be able to use the credit facilities of the Federal Reserve banks but should depend on their correspondents. The Council urges that before legislation is enacted which puts the Government in the business of insuring industrial and commercial loans on a permanent basis, as contemplated by the bill, and which might have far-reaching ultimate effects on industry, commerce and banking, that an investigation be made by Congress of the extent to which existing agencies meet the need for term loans on the part of business and of the extent of the unsatisfied justifiable demand for such loans. The Council is informed that various studies are in progress which might well be used in connection with such an investigation. The Council requests that a copy of this expression of its views be sent by the Board to the subcommittee considering Senate bill No. 2343. If the subcommittee will give opportunity the Council would be glad to have one or more of its members appear and testify regarding the bill. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

80 ANNUAL REPORT OF BOARD OF GOVERNORS OCTOBER 9, 1939 Topic: Easy Money Policy. RECOMMENDATION: In connection with further consideration of the "easy money" policy, as suggested in the letter of the Secretary of the Board of Governors of the Federal Reserve System to the Secretary of the Federal Advisory Council, dated August 18, 1939, the Federal Ad visory Council was led to examine the recent changes in the yields of corporate and Government bonds. As to the general topic of extreme easy money, the Council reaffirms the views expressed in its recommen dation to the Board of Governors dated June 6, 1939. While the Council fully recognizes the need in a grave emergency, such as that recently experienced, of taking steps designed to preserve an orderly market in Government securities, it also believes that the market price of Government bonds should be allowed to find its natural level, free of official intervention, as rapidly as possible consistent with an orderly market. The operations of the Open Market Committee, acting for the Federal Reserve banks, in maintaining an orderly natural market (as distin guished from a pegged market) should not be influenced by its judgment as to what the proper price level should be, but that level should be the result of general operations of walling normal buyers and sellers. Neither should it be influenced by any considerations of maintaining or extend ing the former policy of extremely easy money. The Council believes that any policy of maintaining an orderly natural market in Government securities makes advisable the sale of the bonds and notes bought in the process of maintaining an orderly market as and when the free market will absorb them, and that these bonds and notes should not be withheld with a view to forcing the price of bonds back toward pre-September prices. NOVEMBER 20, 1939 Topic: Easy Money Policy. RECOMMENDATION: Referring to its resolution of October 9, 1939, the Council is pleased to observe that the Open Market Committee has recently initiated some sales from the System's portfolio of long-term Governments. This action has not been attended by any disturbance in the market or by any apprehension on the part of banks lest the action represent a profound alteration in credit policy. On the contrary, the price of long-term Governments advanced after the sales, as well as before. When the Council passed its resolution on October 9, last, the quotation of the two longest issues was 101-7/32. On November 16 it was 104-7/32. The Council recommends that the volume of sales be promptly ex panded in an orderly manner. It is not believed to be consistent with sound central banking principles that the System retain an unduly large quantity of long-term Governments especially at a time when nearly all insurance companies and many banks are desirous of acquiring these securities. Furthermore, from the current earnings record of the System, it does not appear that the retention of all the bonds purchased last September is really requisite. The System should seize the opportunity in an orderly market to clear the decks so that wThen and if another grave emergency develops, it will be in a position to act without then having on hand an unnecessarily heavy inventory of long term Government bonds. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

FEDERAL RESERVE SYSTEM 81 BOARD OF GOVERNORS OF THE FEDERAL RESERVE SYSTEM (December 31, 1939) Term expires MARRINER S. ECCLES, of Utah, Chairman January 31, 1940 RONALD RANSOM, of Georgia, Vice Chairman January 31, 1942 M. S. SZYMCZAK, of Illinois January 31, 1948 JOHN K. MCKEIB, of Ohio January 31, 1946 CHESTER C. DAVIS, of Ma^land January 31, 1944 ERNEST G. DRAPER, of Connecticut January 31, 1950 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. E. A. GOLDENWEISER, Director, Division of Research and Statistics. WOODLIEF THOMAS, Assistant Director, Division of Research and Statistics. LEO H. PAULGER, Chief, Division of Examinations. R. F. LEONARD, Assistant Chief, Division of Examinations. C. E. CAGLE, Assistant Chief, Division of Examinations. 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. 0. E. FOULK, Fiscal Agent. JOSEPHINE E. LALLY, Deputy Fiscal Agent. FEDERAL OPEN MARKET COMMITTEE (December 31, 1939) Members MARRINER S. ECCLES, Chairman GEORGE L. HARRISON, Vice Chairman M. S. SZYMCZAK JOHN K. MCKEE RONALD RANSOM CHESTER C. DAVIS ERNEST G. DRAPER M. J. FLEMING HUGH LEACH WILLIAM MCC. MARTIN GEORGE H. HAMILTON Officers CHESTER MORRILL, Secretary S. R. CARPENTER, Assistant Secretary E. A. GOLDENWEISER, Economist JOHN H. WILLIAMS, Associate Economist WALTER WYATT, General Counsel J. P. DREIBELBIS, Assistant General Counsel Agent FEDERAL RESERVE BANK OF NEW YORK R. G. ROUSE, Manager of System Open Market Account Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

82 ANNUAL REPORT OF BOARD OF GOVERNORS FEDERAL ADVISORY COUNCIL (December 31, 1939) OFFICERS President, WALTER W. SMITH Vice President, HOWARD A. LOEB Secretary, WALTER LICHTENSTEIN EXECUTIVE COMMITTEE WALTER W. SMITH LEON FRASER HOWARD A. LOEB ROBERT M. HANES THOMAS M. STEELE EDWARD E. BROWN MEMBERS District No. 1.—THOMAS M. STEELE, President, First National Bank & Trust Company of New Haven, New Haven, Connecticut. District No. 2.—LEON FRASER, President, The First 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.—T. J. DAVIS, President, First National Bank, Cincinnati, Ohio. District No. 5.—ROBERT M. HANES, President, Wachovia Bank and Trust Company, Winston-Salem, North Carolina. District No. 6.—EDWARD BALL, 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.—JOHN EVANS, President, First National Bank, Denver, Colorado. 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. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

FEDERAL RESERVE SYSTEM 83 SENIOR OFFICERS AND DIRECTORS OF FEDERAL RESERVE BANKS (December 31, 1939) CHAIRMEN AND DEPUTY CHAIRMEN Federal Reserve Bank of- Chairman Deputy Chairman Boston Frederic H. Curtiss. Henry S. Dennison New York.... Owen D. Young.. . . Beardsley Ruml Philadelphia. . Thomas B. McCabe. Cleveland. . . . George C. Brainard. Reynold E. Klages Richmond.... Robert Lassiter.... William G. Wysor Atlanta Frank H. Neely.... Joe Frank Porter Chicago Robert E. Wood St. Louis William T. Nardin. Oscar G. Johnston Minneapolis. . Walter C. Coffey Kansas City. . Robert B. Caldwell. John J. Thomas Dallas James H. Merritt... Jay Taylor San Francisco. St. George Holden Each Federal Reserve bank has nine directors; the term of office of a director is three years. One-third of the directors, known as Class C directors, are appointed by the Board of Governors of the Federal Reserve System, and cannot be officers, directors, employees, or stockholders of any bank. Another third, elected by mem ber banks and known as Class B directors, must be actively engaged in some com mercial, agricultural, or industrial pursuit and may not be officers, directors, or , employees of any bank. The remaining one-third of the directors, known as Class A directors, are elected by the member banks as the banks' own representatives. For the purpose of electing Class A and Class B directors, the member banks in each Federal Reserve district are divided into three groups—large, small, and medium-sized banks. Each of the three groups elects one Class A and one Class B director. The Board of Governors of the Federal Reserve System designates one of the Class C directors as chairman and Federal Reserve agent, and another as deputy chairman. The board of directors of each Federal Reserve bank appoints a president and a first vice president, subject to the approval of the Board of Gover nors, to serve for terms of five years, The president is the chief executive officer of the bank and all other officers and employees are responsible to him. Federal Reserve bank branches have either five or seven directors, of whom a majority, including the managing director, are appointed by the board of directors of the parent Federal Reserve bank and the others are appointed by the Board of Governors of the Federal Reserve System. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

84 ANNUAL REPORT OF BOARD OF GOVERNORS PRESIDENTS AND VICE PRESIDENTS Federal Reserve President First Vice President Vice Presidents Bank of— Boston Roy A. Young William W. Paddock... William Willett1 New York George L. Harrison. . . Allan Sproul Ray M. Gidney L. Werner Knoke Walter S. Logan Leslie R. Rounds Robert G. Rouse John H. Williams Philadelphia. . John S. Sinclair Frank J. Drinnen W. John Davis Ernest C. Hill Clarence A. Mcllhenny2 Cleveland. . . . Matthew J. Fleming. . Frank J. Zurlinden.... William H. Fletcher William F. Taylor2 George H. Wagner Richmond. . . . Hugh Leach JohnS. Walden, Jr.... John G. Fry George H. Keesee1 Atlanta Robert S. Parker William S. McLarin, Jr. Malcolm H. Bryan Harry F. Conniff Chicago George J. Schaller.... Howard P. Preston.... James H. Dillard William H. Snyder2 Clifford S. Young St. Louis William McC. Martin. F. Guy Hitt Olin M. Attebery Clarence M. Stewart1 Minneapolis. . John N. Peyton Oliver S. Powell Ernest W. Swanson Harry I. Ziemer2 Kansas City. . George H. Hamilton. . Carroll A. Worthington James W. Helm2 Harold G. Leedy Dallas Robert R. Gilbert Ethan B. Stroud Robert B. Coleman William J. Evans Walter 0. Ford1 San Francisco. William A. Day Ira Clerk Cecil E. Earhart1 William M. Hale Richard B. West 1 Cashier. 2 Also cashier. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

FEDERAL RESERVE SYSTEM 85 DIRECTORS OF FEDERAL RESERVE BANKS District No. 1—Boston Expires Dec. SI Class A. Leon A. Dodge President, First National Bank, Damariscotta, Me 1939 Lewis S. Reed President, Citizens and Mfg. Nat. Bank, Waterbury, Conn. . 1940 Allan Forbes President, State Street Tr. Co., Boston, Mass 1941 Class B. Edward J. Frost Vice President and Director, William Filene's Sons Co., Bos ton, Mass 1939 Edward S. French President, Boston & Maine R. R., Springfield, Vt 1940 Philip R. Allen Chairman, Bird & Son, Inc., E. Walpole, Mass 1941 Class C. Henry S. Dennison President, Dennison Mfg. Co., Framingham, Mass 1939 Henry I. Harriman Director, New England Power Co., Boston, Mass 1940 Frederic H. Curtiss Vice President, Board of Trustees, Wellesley College, Wellesley, Mass 1941 District No. 2—New York Class A: William F. Ploch President, National City Bank, Long Beach, N. Y 1939 William C. Potter Chairman, Guaranty Trust Co., New York, N. Y 1940 Otis A. Thompson President, Nat. Bank & Tr. Co., Norwich, N. Y 1941 Class B: Robert T. Stevens President, J. P. Stevens & Co., Inc., New York, N. Y 1939 Thomas J. Watson President, International Business Machines Corp., New York, N. Y 1940 Walter C. Teagle Chairman, Standard Oil Co. of New Jersey, New York, N. Y. . 1941 Class C. Edmund E. Day President, Cornell University, Ithaca, NY 1939 Owen D. Young Chairman, General Electric Co., New York, N. Y 1940 Beardsley Ruml Treasurer, R. H. Macy & Co., Inc., New York, N. Y 1941 Buffalo Branch Appointed by Federal Reserve Bank: Robert M. O'Hara Managing Director, Buffalo, N. Y 1939 Fred J. Coe President, Power City Trust Co., Niagara Falls, N. Y 1939 William A. Dusenbury President, First National Bank, Olean, N. Y 1940 Frank F. Henry Chairman, Washburn Crosby Co., Inc., Buffalo, N. Y 1941 Appointed by Board of Governors: Gilbert A. Prole Genesee Farm Supply Co., Batavia, N. Y 1939 Howard Kellogg President, Spencer Kellogg & Sons. Inc., Buffalo, N. Y 1940 Marion B. Folsom Treasurer, Eastman Kodak Co., Rochester, N. Y 1941 District No. 3—Philadelphia Class A. George W. Reily President, Harrisburg Nat. Bank, Harrisburg, Pa 1939 John B. Henning President, Wyoming Nat. Bank, Tunkhannock, Pa 1940 Joseph Wayne, Jr President, Philadelphia Nat. Bank, Philadelphia, Pa 1941 Class B: J. Carl DeLaCour Vice President, Win. S. Scull Coffee Co., Camden, N. J 1939 C. Frederick C. Stout John R. Evans & Company, Camden, N. J 1940 Harry L. Cannon President, H. P. Cannon & Son, Inc., Bridgeville, Del 1941 Class C. Thomas B. McCabe President, Scott Paper Co., Chester, Pa 1939 Warren F. Whittier Farmer, Dairyman and Cattle Breeder, Douglassville, Pa... . 1940 Alfred H. Williams Dean of Wharton School of Finance, University of Pennsyl vania, Philadelphia, Pa 1941 District No. 4—Cleveland Class A: Ben R. Conner President, First National Bank, Ada, Ohio 1939 Harry B. McDowell President, McDowell Nat. Bank, Sharon, Pa 1940 Frank F. Brooks President, First National Bank, Pittsburgh, Pa 1941 Class B: John E. Galvin President, Ohio Steel Foundry Co., Lima, Ohio 1939 Ross P. Wright Secretary-Treasurer, Reed Mfg. Co., Erie, Pa 1940 George D. Crabbs President, Philip Carey Mfg. Co., Cincinnati, Ohio 1941 Class C. Reynold E. Klages President, Columbus Auto Parts Co., Columbus, Ohio 1939 George C. Brainard President, General Fireproofing Co., Youngstown, Ohio 1940 James C. Stone Tobacco Dealer, Lexington, Ky 1941 Cincinnati Branch Appointed by Federal Reserve Bank: Benedict J. Lazar Managing Director, Cincinnati, Ohio 1939 William H. Courtney President, First Nat. Bank & Tr. Co., Lexington, Ky 1939 John J. Rowe President, Fifth Third Union Tr. Co., Cincinnati, Ohio 1940 Appointed by Board of Governors: Stuart B. Sutphin President, I. V. Sutphin Co., Cincinnati, Ohio 1939 Frank A. Brown Farmer, Chillicothe, Ohio 1940 Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

86 ANNUAL REPORT OF BOARD OF GOVERNORS Pittsburgh Branch Term Expires Dec. SI Appointed by Federal Reserve Bank: Percy A. Brown Managing Director, Pittsburgh, Pa 1039 Clarence Stanley President, Union Trust Company, Pittsburgh, Pa. . . , 1939 Samuel W. Harper President, Wheeling Dollar Sav. & Trust Co., Wheeling, W. Va 1940 Appointed by Board of Governors: Harry S. Wherrett President, Pittsburgh Plate Glass Co., Pittsburgh, Pa.. . 1939 George T. Ladd President, United Engineering & Foundry Co., Pittsburgh, Pa. 1940 District No. 5—Richmond Class A: Charles E. Rieman President, Western National Bank, Baltimore, Md 1939 James C. Braswell President, Planters Nat. Bank & Tr. Co., RQcky Mount, N. C. 1940 Lewis E. Johnson Chairman, First National Bank, Alderson, W. Va 1941 Class B: CharleB C. Reed Vice President and General Manager, Williams & Reed, Inc., Richmond, Va 1939 John H. Hanna Chairman, Capital Transit Co., Washington, D. C 1940 Edwin Malloy President and Treasurer, Cheraw Cotton Mills, Inc., Cheraw, S. C 1941 Class C: William G. Wysor General Manager, Southern States Cooperative, Inc., Rich mond, Va 1939 Robert Lassiter Chairman, Mooresville Cotton Mills, Mooresville, N. C. . . . . 1940 Charles P. McCormick President, McCormick & Co., Inc., Baltimore, Md 1941 Baltimore Branch Appointed by Federal Reserve Bank: W, Robert Milford Managing Director, Baltimore, Md 1939 Morton M. Prentis President, First National Bank, Baltimore, Md 1939 James Dixon President, Easton National Bank, Easton, Md 1940 George W. Reed President, National Marine Bank, Baltimore, Md 1941 Appointed by Board of Governors: Vacancy 1939 W. Frank Roberts President, Standard Gas Equipment Corp., Baltimore, Md.... 1940 W. Frank Thomas Construction Engineer and Real Estate Management, West minster, Md 1941 Charlotte Branch Appointed by Federal Reserve Bank: William T. Clements Managing Director, Charlotte, N. C 1939 Byron M. Edwards Executive Vice President, South Carolina National Bank, Co lumbia, S. C 1939 Torrence E. Hemby Executive Vice President, American Trust Co., Charlotte, N. C , 1940 J. Gerald Cowan Vice President, Wachovia Bank & Trust Co., Asheville, N. C 1941 Appointed by Board of Governors: Christie Benet Benet, Shand & McGowan, Columbia, S. C 1939 George M. Wright President, Republic Cotton Mills, Great Falls, S. C 1940 George S. Harris Executive Vice President, Springs Cotton Mills, Lancaster, S. C 1941 District No. 6—Atlanta Class A: Ryburn G. Clay President, Fulton National Bank, Atlanta, Ga 1939 William D. Cook Executive Vice President, First National Bank, Meridian, Miss 1940 George J. White President, First National Bank, Mount Dora, Fla 1941 Class B: John A. McCrary Vice President and Treasurer, J. B. McCrary Co., Inc., Atlanta Ga 1939 Fitzgerald Hall President,' Nash.',"Chat! & St! Louis Ry., Nashville, Tenn!! 1940 Ernest T. George President and Chairman, Seaboard Refining Co., Ltd., New Orleans, La 1941 Class C. Joe Frank Porter President, Tenn. Farm Bureau Fed., Columbia, Tenn..... 1939 Rufus C. Harris President, Tulane University, New Orleans, La 1940 Frank H. Neely Executive Vice President and Secretary, Rich's, Inc., Atlanta, Ga 1941 Birmingham Branch Appointed by Federal Reserve Bank: Paul L. T. Beavers Managing Director, Birmingham, Ala 1939 John C. Persons President, First National Bank, Birmingham, Ala 1039 John S. Coleman President, Birmingham Trust & Sav. Co., Birmingham, Ala. 1940 Frank M. Moody President, First National Bank, Tuscaloosa, Ala 1941 Appointed by Board of Governors: Howard Gray Farmer, New Market, Ala 1939 Edward L. Norton Executive Vice President, Munger Companies, Birming ham, Ala 1940 Donald Comer Chairman, Avondale Mills, Birmingham, Ala 1941 Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

FEDERAL RESERVE SYSTEM 87 Jacksonville Branch Term Expires D*c. SI Appointed by Federal Reserve Bank: George S. Vardeman, Jr Managing Director, Jacksonville, Fla 1939 George J. Avent President, Florida National Bank, Jacksonville, Fla 1939 Junius C. McCrocklin Executive Vice President, First National Bank, Tarpon Springs, Fla 1940 William R. McQuaid President, Barnett National Bank, Jacksonville, Fla 1941 Appointed by Board of Governors: Howard Phillips Executive Vice President, Dr. P. Phillips Co., Inc., Orlando, Fla 1939 Bayless W. Haynes President, Wilson & Toomer Fertilizer Co., Jacksonville, Fla 1940 Robert H. Gamble President, Florida Brick & Tile Corp., Jacksonville, Fla .. . 1941 Nashville Branch Appointed by Federal Reserve Bank: Joel B. Fort, Jr Managing Director, Nashville, Tenn 1939 Frank M. Farris President, Third National Bank, Nashville, Tenn 1939 George N. Bass Cashier, First National Bank of Franklin Co., Decherd, Tenn 1940 Edward B. Maupin Cashier, Peoples National Bank, Shelbyville, Tenn 1941 Appointed by Board of Governors: William E. McEwen Farmer and Stock Raiser, Williamsport, Tenn 1939 Elbridge W. Palmer President, Kingsport Press, Inc., Kingsport, Tenn 1940 Clyde B. Austin President, The Austin Co., Inc., Greeneville, Tenn 1941 New Orleans Branch Appointed by Federal Reserve Bank: Lewis M. Clark Managing Director, New Orleans, La 1939 Emile E. Soulier Vice President and Cashier, First National Bank, Lafayette, La 1939 Oliver G. Lucas President, National Bank of Commerce, New Orleans, La. 1940 Herbert Holmes President, Delta Nat. Bank, Yazoo City, Miss 1941 Appointed by Board of Governors: Henry G. Chalkley, Jr General Manager, Sweet Lake Land & Oil Co., Inc., Lake Charles, La 1939 Eugene F. Billington Vice President & Secretary, Soule Steam Feed Works, Me ridian, Miss 1940 Alexander Fitz-Hugh Vice President, P. P. Williams Co., Vicksburg, Miss 1941 District No. 7—Chicago Class A. Walter J. Cummings Chairman, Cont'l. 111. Nat. Bank and Trust Co., Chicago, 111 1939 Edward R. Estberg President, Waukesha Nat. Bank, Waukesha, Wis 1940 Frank D. Williams Executive Vice President and Cashier, First Capital Na tional Bank, Iowa City, Iowa 1941 Class B: Max W. Babb President, Allis-Chalmers Mfg. Co., Milwaukee, Wis 1939 Charles B. Van Dusen Director, S. S. Kresge Co., Detroit, Mich 1940 Nicholas H. Noyes Secretary and Treasurer, Eli Lilly and Co., Indianapolis, Ind 1941 Class C: Vacancy 1939 Frank J. Lewis Chairman, F. J. Lewis Mfg. Co., Chicago, 111 1940 Robert E. Wood Chairman, Sears, Roebuck & Co., Chicago, 111 1941 Detroit Branch Appointed by Federal Reserve Bank: Ralph H. Buss Managing Director, Detroit, Mich 1939 James E. Davidson President, Peoples Com. & Sav. Bank, Bay City, Mich... . 1939 Walter S. McLucas Chairman, The National Bank of Detroit, Detroit, Mich. . 1940 Joseph M. Dodge President, The Detroit Bank, Detroit, Mich 1941 Appointed by Board of Governors: Harry L. Pierson President, Detroit Harvester Co., Detroit, Mich 1939 Alfred C. Marshall Vice President and General Manager, Detroit Edison Co., Detroit, Mich 1940 L. Whitney Watkins Farmer, Manchester, Mich 1941 District No. 8—St. Louis Class A. Max B. Nahm Vice President, Citizens National Bank, Bowling Green, Ky. 1939 George R. Corlis Cashier, Anna National Bank, Anna, 111 1940 Sidney Maestre President, Mississippi Valley Trust Co., St. Louis, Mo. . . . 1941 Class B. James W. Harris Chairman, Harris-Langenberg Hat Co., St. Louis, Mo 1939 Harvey C. Couch President, Ark. Power & Light Co., Pine Bluff, Ark 1940 John R. Stanley Secretary, Treasurer, Stanley Clothing Co., Evansville, Ind. 1941 Class C. William T. Nardin Vice President and General Manager, Pet Milk Company, St. Louis, Mo * 1939 Oscar G. Johnston President, Delta and Pine Land Co., Scott, Miss 1940 Vacant 1941 Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

88 ANNUAL REPORT OF BOARD OF GOVERNORS Little Rock Branch Term Expires Dec. 13 Appointed by Federal Reserve Bank: Arthur F. Bailey Managing Director, Little Rock, Ark 1939 James H. Penick Vice President, W. B. Worthen Co., Little Rock, Ark 1939 Arthur E. McLean President, Commercial Nat. Bank, Little Rock, Ark 1940 Paul R. McCoy Chairman, Peoples Nat. Bank, Stuttgart, Ark 1941 Appointed by Board of Governors: Frederick K. Darragh President, Darragh Co., Little Rock, Ark 1939 Ira N. Barnett, Jr Manager, Barnett Bros. Mercantile Co., Batesville, Ark.. . 1940 Henry H. Tucker President, Fones Bros. Hardward Co., Little Rock, Ark. . . 1941 Louisville Branch Appointed by Federal Reserve Bank: Frank D. Rash Managing Director, Louisville, Ky 1939 James O. Sanders President, First National Bank, Huntingburg, Ind 1939 Phil E. Chappell Cashier, Planters Bk. & Tr. Co., Hopkinsville, Ky 1940 Ralph C. Gifford President, First National Bank, Louisville, Ky 1941 Appointed by Board of Governors: William P. Paxton President, Southern Textile Machinery Co., Paducah, Ky. 1939 Perry B. Gaines Farmer and Stock Raiser, Carrollton, Ky 1940 James B. Hill President, Louisville & Nashville R. R., Louisville, Ky. .. . 1941 Memphis Branch Appointed by Federal Reserve Bank: William H. Glasgow Managing Director, Memphis, Tenn 1939 William R. King President, National Bank of Commerce, Memphis, Tenn. . 1939 Bert A. Lynch President, Farmers Bank & Trust Co., Blytheville, Ark. . . 1940 Oliver Benton President, National Bank of Commerce, Jackson, Tenn.. . . 1941 Appointed by Board of Governors: Douglas W. Brooks President, Union Compress & Warehouse Co., Memphis, Tenn 1939 Rufus C. Branch Cotton Farmer and Ginner, Pecan Point, Ark 1940 J. Holmes Sherard J. Holmes Sherard & Co., Sherard, Miss 1941 District No. 9—Minneapolis Class A: H. C. Hansen Churchs Ferry, N. D 1939 Melvin O. Grangaard Vice President, First Nat. Bk. & Tr. Co., Minneapolis, Minn. 1940 James R. McKnight President, Pierre National Bank, Pierre, S. D 1941 Class B: Albert P. Funk President and Treasurer, LaCrosse Rubber Mills Co., LaCrosse, Wis 1939 William O. Washburn President, W. O. Washburn & Sons, St. Paul, Minn 1940 James E. O'Connell President, Eddy's Bakeries, Inc., Helena, Mont 1941 Class C: Walter C. Coffey Dean, College of Agriculture, University of Minnesota, St. Paul, Minn 1939 William D. Cochran President, W. D. Cochran Freight Lines, Iron Mountain, Mich 1940 Roger B. Shepard President, Finch, Van Slyke & McConville, St. Paul, Minn. 1941 Helena Branch Appointed by Federal Reserve Bank: Robert E. Towle Managing Director, Helena, Mont 1939 Peter Pauly Vice President, Deer Lodge Bank and Tr. Co., Deer Lodge, Mont 1939 Arthur R. McDermott Vice President, Montana National Bank, Billings, Mont. . . 1940 Appointed by Board of Governors: Hobart D. Myrick Farmer, Square Butte, Mont 1939 Alex Cunningham Vice President and Treasurer, Western Life Ins. Co., Helena, Mont 1940 District No. 10—Kansas City Class A. Thomas A. Dines President, U. S. National Bank, Denver, Colo 1939 Frank W. Sponable President, Miami County Nat. Bank, Paola, Kans 1940 Edward E. Mullaiiey President, Farmers & Merchants Bank, Hill City, Kans. . . 1941 Class B: Willard D. Hosford Vice President and General Manager, John Deere Plow Co., Omaha, Neb 1939 Joseph M. Bernardin Vice President, Burk Lumber Company, Dawson, N. M.. . 1940 Lee E. Phillips Phillips Petroleum Co., Bartlesville, Okla 1941 Clats C. Edward P. Brown Farmer, Davey, Neb 193P Robert B. Caldwell McCune, Caldwell & Downing, Kansas City, Mo 1940 John J. Thomas Attorney-at-Law, Seward, Neb 1941 Denver Branch Appointed by Federal Reserve Barik: Joseph E. Olson Managing Director, Denver, Colo 1939 Roblin H. Davis President, Denver National Bank, Denver, Colo 1939 William C. Kurtz President and General Manager, Independent Lumber Co., Grand Junction, Colo 1940 Harold Kountze President, Colorado National Bank, Denver, Colo 1941 Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

FEDERAL RESERVE SYSTEM 89 Term Exyirts Dec. $1 Appointed by Board of Governors: Wilson McCarthy President, Denver & Salt Lake RR Co., Denver, Colo 1939 Albert K. Mitchell President and General Manager, T. E. Mitchell & Son, Al bert, N. M 1940 James B. Grant Lewis and Grant, Denver, Colo 1941 Oklahoma City Branch Appointed by Federal Reserve Bank: Cyrus E. Daniel Managing Director, Oklahoma City, Okla 1939 Frank T. Chandler Vice President, Oklahoma National Bank, Chickasha, Okla 1939 Samuel W. Hayes Hayes, Richardson, Shartel, Gilliland & Jordan, Oklahoma City, Okla 1940 Leroy D. Edgington President, First National Bank, Ponca City, Okla 1941 Appointed by Board of Governors: Thomas S. Hanna President, Baker, Hanna & Blake Co., Oklahoma City, Okla 1939 Lee Clinton Realtor, Tulsa, Okla 1940 Neil R. Johnson Farmer and Cattleman, Norman, Okla 1941 Omaha Branch Appointed by Federal Reserve Bank: Lloyd H. Earhart Managing Director, Omaha, Neb 1939 W. Dale Clark President, Omaha National Bank, Omaha, Neb 1939 " George A. Bible President, First National Bank, Rawlins, Wyo 1940 George W. Holmes President, First National Bank, Lincoln, Neb 1941 Appointed by Board of Governors: Harry L. Dempster President, Dempster Mill Mfg. Co., Beatrice, Neb 1939 William H. Schellberg President, Union Stock Yards Co., Omaha, Neb 1940 Robert E. Campbell Chairman, Miller & Paine, Lincoln, Neb 1941 District No. 11—Dallas Class A: Ed H. Winton Executive Vice President, Continental National Bank, Fort Worth, Tex 1939 Pat E. Hooks President, First National Bank, Itasca, Tex 1940 Ford Seale President, Citizens National Bank, Denison, Tex 1941 Class B. Jesse R. Milam President, Cooper Company, Inc., Waco, Tex 1939 James M. West Chairman, West Production Co., Houston, Tex 1940 John D. Middleton President, Texas Refining Co., Greenville, Tex 1941 Class C. Jay Taylor Rafter O. Cattle Company, Amarillo, Tex 1939 Joseph B. Cozzo Womack & Cozzo, Dallas, Tex 1940 James H. Merritt Retired, McKinney, Tex 1941 El Paso Branch Appointed by Federal Reserve Bank: Joseph L. Hermann Managing Director, El Paso, Tex 1939 Samuel D. Young Vice President, El Paso National Bank, El Paso, Tex 1939 Charles N. Bassett President, State National Bank, El Paso, Tex 1940 Frank R. Coon President, Mimbres Valley Bank, Deming, N. M 1941 Appointed by Board of Governors: Ray E. Sherman President, Leavell and Sherman, Inc., El Paso, Tex 1939 Jack B. Martm President, Arizona Ice & Cold Storage Co., Tucson, Ariz. . 1940 Franklin M. Hayner President, Las Cruces Lumber Co., Las Cruces, N. M . . . . 1941 Houston Branch Appointed by Federal Reserve Bank: William D. Gentry Managing Director, Houston, Tex 1939 Preston B. Doty President, First National Bank, Beaumont, Tex 1939 John W. Neal Chairman, Second National Bank, Houston, Tex 1940 Sam R. Lawder Vice President, First National Bank, Houston, Tex 1941 Appointed by Board of Governors: Sam Taub J. N. Taub & Sons, Houston, Tex 1939 George G. Chance Farmer, Bryan, Tex 1940 Henry Renfert Renfert-Helmbrecht Co., Galveston, Tex 1941 San Antonio Branch Appointed by Federal Reserve Bank: Miers Crump Managing Director, San Antonio, Tex 1939 George C. Hollis President, First National Bank, Eagle Pass, Tex 1939 Claude M. Bartholomew Vice President^ Austin National Bank, Austin, Tex 1940 John K. Beretta President, National Bank of Commerce, San Antonio, Tex. 1941 Appointed by Board of Governors: Edwin F. Flato President, Corpus Christi Hardware Co., CorpusChristi, Tex. 1939 Dolph Briscoe Stock Raiser, Uvalde, Tex 1940 Jamie M. Odom Contractor, Austin, Tex 1941 District No. 12—San Francisco Class A: Keith Powell President, Salem Fed. Sav. & Loan Assn., Salem, Ore 1939 Charles K. Mcintosh Chairman, Bank of Calif., N. A., San Francisco, Calif. . . . 1940 Reno Odlin President, Puget Sound National Bank, Tacoma, Wash. . . 1941 Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

90 ANNUAL REPORT OF BOARD OF GOVERNORS Term Expires Dec. 31 Class B. Reese H. Taylor President, Union Oil Company, Los Angeles, Calif 19$9 Elmer H. Cox President, .Madera Sugar Pine Co., San Francisco, Calif.. . 1940 William G. Volkmann Vice President, A. Schilling and Co., San Francisco, Calif.. 1941 Class C: Carlyle Thorpe General Manager, California Walnut Growers Association, Los Angeles, Calif 1989 St. George Holden President, St. George Holden Realty Co., San Francisco, Calif 1940 Vacancy 1941 Los Angeles Branch Appointed by Federal Reserve Bank: W. Norman Ambrose Managing Director, Los Angeles, Calif 1939 Charles E. Brouse President, Citizens Nat. Trust & Sav. Bank, Riverside, Calif 1939 Victor H. Rossetti President, Farmers & Merchants Nat. Bank, Los Angeles, Calif 1940 Appointed by Board of Governors: Carl V. Newman President, Calavo Growers of California, Los Angeles, Calif, 1939 William S. Roseorans Land Management & Investments, Los Angeles, Calif. . . . 1940 Portland Branch Appointed by Federal Reserve Bank: David L. Davis Managing Director, Portland, Ore . 1939 Ernest B. MacNaughton President, First National Bank, Portland, Ore . 1939 Nona A. Davis Vice President, Baker-Boyer National Bank, Walla Walla, Wash 1940 Appointed by Board of Governors: George T. Gerlinger President, Willamette Valley Lumber Co., Portland, Ore. 1939 Albert E. Engbretsen President, Engbretsen Seed Co., Astoria, Ore 1940 Salt Lake City Branch Appointed by Federal Reserve Bank: Winnie L. Partner Managing Director, Salt Lake City, Utah 1939 Frederick P. Champ President, Utah Mortgage Loan Corp., Logan, Utah 1939 Orval W. Adams Executive Vice President, Utah State Nat. Bank, Salt Lake City, Utah 1940 Appointed by Board of Governors: Herbert S. Auerbach President, Auerbach Company, Salt Lake City, Utah 1939 John Thomas Livestock Raiser and Farmer, Gooding, Idaho 1940 Seattle Branch Appointed by Federal Reserve Bank: Clarence R. Shaw Managing Director, Seattle, Wash 1939 George H. Greenwood President, Pacific National Bank, Seattle, Wash 1989 Ned A. Telyea President, Old Nat. Bank & Union Trust Co., Spokane, Wash 1940 Appointed by Board of Governors: Charles F. Larrabee Vice President, Pacific American Fisheries, Inc., Bellingham, Wash 1939 Fred Nelsen Dairy Farmer, Seattle, Wash 1940 Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

FEDERAL RESERVE SYSTEM 91 STATE BANK AND TRUST COMPANY MEMBERS Following is a list of the 1,175 State bank and trust company mem bers of the Federal Reserve System on December 30, 1939. 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. Linden Linden Trust Co. Torrington Brooks Bank & Trust Co. Montclair Bank of Montclair Waterbury Colonial Trust Co. Montclair Trust Co. Waterbury Trust Co. Morristown Morristown Trust Co. Newark Clinton Trust Co. MAINE (5 banks) Columbus Trust Co. Augusta Depositors Trust Co. Federal Trust Co. Bangor Merrill Trust Co. Fidelity Union Trust Co. Bar Harbor Bar Harbor Banking & Trust Franklin-Washington Trust Co. Co. Merchants & Newark Trust Co. Ellsworth Union Trust Co. United States Trust Co. Sanford Sanford Trust Co. West Side Trust Co. Nutley Bank of Nutley MASSACHUSETTS (29 banks) Passaic Bank of Passaic & Trust Co. Arlington Menotomy Trust Co. Peoples Bank & Trust Co. Boston New England Trust Co. Perth Amboy .... First Bank & Trust Co. Old Colony Trust Co. Plainfield Mid-City Trust Co. Pilgrim Trust Co. Plainfield Trust Co. State Street Trust Co. State Trust Co. United States Trust Co. Ridgefield Park... .Ridgefield Park Trust Co. Bridgewater Bridge water Trust Co. Rochelle Park Rochelle Park Bank Brookline Norfolk County Trust Co. Rutherford Rutherford Trust Co. Cambridge County Bank & Trust Co. South Orange South Orange Trust Co. Harvard Trust Co. Summit Summit Trust Co. Fall River B. M. C. Durfee Trust Co. Tenafly Tenafly Trust Co. Fall River Trust Co. Westfield Peoples Bank & Trust Co. Gloucester Gloucester Safe Deposit & Westfield Trust Co. Trust Co. Greenfield Franklin County Trust Co. NEW YORK (126 banks) Holyoke Hadley Falls Trust Co. Hyannis Hyannis Trust Co. Adams Citizens & Farmers Trust Co. Lynn Security Trust Co. Albany First Trust Co. Milton Blue Hill Bank & Trust Co. State Bank of Albany Newton Newton Trust Co. Amityville Bank of Amityville Norwood Norwood Trust Co. Amsterdam Montgomery County Trust Co. Quincy Quincy Trust Co. Arcade Citizens Bank Salem Naumkeag Trust Co. Avoca Bank of Avoca Somerville Somerville Trust Co. Batavia Genesee Trust Co. Springfield Springfield Safe Deposit & Belmont State Bank of Belmont Trust Co. Binghamton Marine Midland Trust Co. Union Trust Co. Blasdell Bank of Blasdell Taunton Bristol County Trust Co. Brooklyn (see New York) Wellesley Hills .... Wellesley Trust Co. Buffalo Liberty Bank Winchester Winchester Trust Co. Manufacturers & Traders Trust Worcester Worcester County Trust Co. Co. Marine Trust Co. NEW HAMPSHIRE (1 bank) Canandaigua Ontario County Trust Co. Conway Carroll County Trust Co. Canaseraga State Bank Canisteo First State Bank RHODE ISLAND (2 banks) Cattaraugus Bank of Cattaraugus Providence Industrial Trust Co. Center Moriches.. Center Moriches Bank Chatham State Bank of Chatham Union Trust Co. Chestertown Chester-Schroon-Horicon Bank DISTRICT NO. 2 (172 banks) Clymer Clymer State Bank Cohocton Cohocton State Bank NEW JERSEY i (46 banks) De Ruyter De Ruyter State Bank Bayonne Bayonne Trust Co. Dunkirk Dunkirk Trust Co. Bloomfield Bloomfield Bank & Trust Co. Ellenburg Depot. State Bank of Ellenburg Community Trust Co. Elmira Chemung Canal Trust Co. Bogota Bank of Bogota Elmira Bank & Trust Co. Boonton Boonton Trust Co. Endicott Endicott Trust Co. Carteret Carteret Bank & Trust Co. Union Trust Co. Cranford Cranford Trust Co. Evans Mills .. Peoples Bank Dover Dover Trust Co. Farmingdale ... Bank of Farmingdale Dunellen Peoples Trust Co. Floral Park Floral Park Bank & Trust Co. East Orange Savings Investment & Trust Fredonia Citizens Trust Co. Co. Garden City Garden City Bank & Trust Co. Elizabeth Central Home Trust Co. Geneva Geneva Trust Co. Elizabethport Banking Co. Gloversville .... Trust Co. of Fulton County Fort Lee Fort Lee Trust Co. Great Neck ... Bank of Great Neck Franklin Sussex County Trust Co. Hamburg Peoples Bank Glen Ridge Glen Ridge Trust Co. Hammondsport Bank of Hammondsport G H l a e c n k e R ns o a c c k k H P G e a l C e o c n o p k u l e e R n n s t s o y a c T c k k r u B T s a t r n u k C s t o . C o o . f Bergen I J J H t a o h i m h c a n k e c s s s a o v t o n il w le n C ity... T W B B o a a o n n m r k k k p e k o o r i f s f n s J H T a r C i m c u o k s e u t s s v n to C i t l y w l o e n . T rust Co. L Exclusive of part of State located in another district. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

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

FEDERAL RESERVE SYSTEM 93 DISTRICT NO. 3—Continued 1 DISTRICT NO. 4—Continued PENNSYLVANIA—continued OHIO—continued Williamsport West Branch Bank & Trust Middlepoint Middlepoint Banking Co. Co. Middletown First American Bank & Trust Wyomissing Peoples Trust Co. Co. York Guardian Trust Co. Minster Minster State Bank York Trust Co. Monroeville Farmers & Citizens Banking Co. Mount Blanchard. Citizens Bank Mount Gilead Peoples Savings Bank Co. DISTRICT NO. 4 (135 banks) Mount Vernon Knox County Savings Bank KENTUCKY1 (7 banks) N N a e p w o a l r e k o n L C i o c m ki m ng u n C it o y u n B ty a nk B ank Catlettsburg Kentucky-Farmers Bank Newark Trust Co. Covington Peoples-Liberty Bank & Trust New Lexington.... Perry County Bank Co. New Philadelphia. Ohio Savings & Trust Co. Lexington Bank of Commerce Northfield Macedonia-Northfield Banking Security Trust Co. Co. Paris Bourbon-Agricultural Bank & Norwalk Huron County Banking Co. Trust Co. Norwood Norwood-Hyde Park Bank & Peoples Deposit Bank & Trust Trust Co. Co. Oak Harbor Oak Harbor State Bank Co. Richmond State Bank & Trust Co. Oberlin Oberlin Savings Bank Co. Orrville Orrville Savings Bank OHIO (100 banks) Pomeroy Farmers Bank & Savings Co. Reading Reading Bank Akron Firestone Park Trust & Sav Rittman Rittman Savings Bank ings Bank Russellville Bank of Russellville First-Central Trust Co. St Bernard Citizens Bank Antwerp Antwerp Exchange Bank St. Marys Home Banking Co. Apple Creek Apple Creek Banking Co. Sandusky Citizens Banking Co. Archbold Peoples State Bank Co. Western Security Bank Ashland Ashland Bank & Savings Co. Shelby Citizens Bank Bellevue Union Bank & Savings Co. Shiloh Shiloh Savings Bank Co. Bellville Farmers Bank Sylvania Farmers & Merchants Bank Co. Brecksville Brecksville Bank Co. Sylvania Savings Bank Co. Canal Winchester.. Peoples Bank Co. Toledo Commerce Guardian Bank Canton Geo. D. Harter Bank Morris Plan Bank Castalia Castalia Banking Co. Ohio Citizens Trust Co. Celina Commercial Bank Co. Toledo Trust Co. Christiansburg Farmers & Merchants Bank Utica Utica Savings Bank Co. Co. Vandalia Vandalia State Bank Cincinnati Central Trust Co. Van Wert Peoples Savings Bank Fifth-Third Union Trust Co. Wakeman Wakeman Bank Co. Peoples Bank & Savings Co. Waterville Waterville State Savings Bank Provident Savings Bank & Wellington First Wellington Bank Trust Co. Woodville State Savings Bank Southern Ohio Savings Bank Wooster Commercial Banking & Trust & Trust Co. Co. Western Bank & Trust Co. Yellow Springs.... Miami Deposit Bank Co. Cleveland Cleveland Trust Co. Youngstown Citv Trust & Savings Bank Lorain Street Bank Dollar Savings & Trust Co. Columbiana U U n n i i o o n n B B a a n n k k in o g f C C o o m . merce Co. PENNSYLVANIA1 (25 banks) Columbus Fifth Avenue Savings Bank Co. Aliquippa Woodlawn Trust Co. Conneaut Citizens Banking & Savings Co. Ambridge Economy Bank Conneaut Banking & Trust Co. Beaver Beaver Trust Co. Cortland Cortland Savings & Banking Dormont Dormont Savings & Trust Co. Co. Elizabeth Bank of Elizabeth Coshocton Peoples Bank & Trust Co. Erie Security-Peoples Trust Co. Croton Croton Bank Co. Homestead Monongahela Trust Co. Danville Commercial & Savings Bank McKeesport Peoples City Bank Co. Meadville Crawford County Trust Co. Delphos Commercial Bank New Brighton .... Beaver County Trust Co. Peoples Bank New Castle Lawrence Savings & Trust Co. Delta Peoples Savings Bank Co. Paint Borough East Liverpool.... Potters Bank & Trust Co. (Scalp Level Elyria Elyria Savings & Trust Co. P. O.) Merchants & Miners Bank Savings Deposit Bank & Trust Pittsburgh Allegheny Trust Co. Co. Allegheny Valley Bank Findlay Ohio Bank & Savings Co. Colonial Trust Co. Fort Recovery .... Fort Recovery Banking Co. Commonwealth Trust Co. Geneva Geneva Savings & Trust Co. Homewood Bank Gibsonburg Home Banking Co. Iron & Glass Dollar Savings Gnadenhutten ... Gnadenhutten Bank Bank of Birmingham Hillsboro Hillsboro Bank & Savings Co. Peoples-Pittsburgh Trust Co. Hubbard Hubbard Banking Co. Potter Title & Trust Co. Kipton Kiijton Rank Co. Union Trust Co. Leesburg Citizens Bank & Savings Co. Somerset Somerset Trust Co. Lorain Central Bank Co. Turtle Creek Turtle Creek Bank & Trust Co. Lyons Farmers State Bank Warren Warren Bank & Trust Co. Madison Citizens Bank Windber Windber Trust Co. M M a a n re sf n i g e o ld F M a a r r m en e g rs o S B av an in k g in s g & C T o r . u st Co. WEST VIRGINIA 1 (3 banks) Martins Ferry Peoples Savings Bank Co. Sistersville First-Tyler Bank & Trust Co. Mason First-Mason Bank Wheeling Security Trust Co. Massillon Ohio-Merchants Trust Co. Wheeling Dollar Savings & Maumee State Savings Bank Co. I Trust Co. Digitized for 1 F ERxAclSusEivRe of part of State located in another district. http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

94 ANNUAL REPORT OF BOARD OF GOVERNORS DISTRICT NO. 5 (77 banks) DISTRICT NO. 5—Continued DISTRICT OF COLUMBIA (5 banks) WEST VIRGINIA-continued Washington American Security & Trust Co. Martinsburg Peoples Trust Co. National Savings & Trust Co. Security Savings & Commer Parsons Tucker County Bank cial Bank Petersburg Potomac Valley Bank Union Trust Co. Rainelle Bank of Rainelle Washington Loan & Trust Co. Romney Bank of Romney St. Albans Bank of St. Albans MARYLAND (10 banks) St. Marys Pleasants County Bank Baltimore Baltimore Commercial Bank Spencer Traders Trust & Banking Co. Summersville Farmers & Merchants Bank Calvert Bank Fidelity Trust Co. Maryland Trust Co. Union, Trust Co. of Maryland DISTRICT NO. 6 (51 banks) Cambridge County Trust Co. of Maryland Ellicott City Commercial & Farmers Bank ALABAMA (16 banks) Forest Hill Forest Hill State Bank Aliceville Aliceville Bank & Trust Co. Hagerstown Hagerstown Trust Co. Birmingham Birmingham Trust & Savings Salisbury Farmers & Merchants Bank Co. NORTH CAROLINA (9 banks) Clanton Peoples Savings Bank Clayton Bank of Commerce Charlotte American Trust Co. Columbiana Columbiana Savings Bank Concord Citizens Bank & Trust Co. Cullman Parker Bank & Trust Co. Edenton Bank of Edenton Dothan Dothan Bank & Trust Co. Marshall Citizens Bank Eutaw Merchants & Farmers Bank of Tryon Tryon Bank & Trust Co. Greene County Washington Bank of Washington Guin Marion County Banking Co. Wilmington Peoples Savings Bank & Trust Marion Junction... Marion Junction State Bank Co. Oneonta Citizens Bank Wilmington Savings & Trust Pine Apple Bank of Pine Apple Co. Selma Peoples Bank & Trust Co. Winston-Salem ...Wachovia Bank & Trust Co. Thomaston Planters Bank & Trust Co. SOUTH CAROLINA (5 banks) Winfield Winfield State Bank York Bank of York Bishopville Peoples Bank Camden Commercial Bank FLORIDA (4 banks) Charleston Carolina Savings Bank Chester Commercial Bank Fort Lauderdale... Broward Bank & Trust Co. Hartsville Bank of Hartsville Marianna Citizens State Bank Ocala Commercial Bank & Trust Co. VIRGINIA (32 banks) St. Petersburg Union Trust Co. Abingdon Farmers Exchange Bank, Inc. Amelia '. Union Bank & Trust Co. GEORGIA (18 banks) Blackstone Citizens Bank & Trust Co. Chase City Peoples Bank & Trust Co. Adairsville Bank of Adairsville Farmville Planters Bank & Trust Co. Atlanta Trust Co. of Georgia Front Royal Bank of Warren Augusta Georgia Railroad Bank & Glade Spring Bank of Glade Spring Trust Co. Halifax Bank of Halifax Bainbridge Citizens Bank & Trust Co. Kenbridge Bank of Lunenburg (Inc.) Blackshear Blackshear Bank Lacrosse Bank of Lacrosse Brunswick Brunswick Bank & Trust Co. Lawrenceville Farmers & Merchants Bank Canton Bank of Canton Lynchburg Lynchburg Trust & Savings Columbus Columbus Bank & Trust Co. Bank Merchants & Mechanics Bank Mathews Farmers Bank Commerce Northeastern Banking Co. Montross Peoples Bank Lawrenceville Brand Banking Co. Odd Citizens Bank of Poquoson Millen Bank of Millen Petersburg Petersburg Savings & Ameri Monroe Farmers Bank can Trust Co. Pelham Farmers Bank Phoebus Bank of Phoebus Savannah Citizens Bank & Trust Co. Portsmouth Merchants and Farmers Bank Savannah Bank & Trust Co. Powhatan Bank of Powhatan Soperton Bank of Soperton Richmond Bank of Commerce & Trusts Swainsboro Central Bank Mechanics & Merchants Bank Southern Bank & Trust Co. LOUISIANA^ (5 banks) State-Planters Bank & Trust Alexandria Rapides Bank & Trust Co. Co. Lake Charles Lake Charles Bank & Trust Co. Rural Retreat Peoples Bank New Orleans American Bank & Trust Co. Smithfield Bank of Smithfield Louisiana Savings Bank & Merchants & Farmers Bank, Trust Co. Inc. Slidell Bank of Slidell South Hill Citizens Bank, Inc. Suffolk American Bank & Trust Co. MISSISSIPPI (2 banks) Farmers Bank of Nansemond Tazewell Farmers Bank of Clinch Valley Forest Bank of Forest Williamsburg Peninsula Bank & Trust Co. Jackson Deposit Guaranty Bank & Winchester Union Bank Trust Co. WEST VIRGINIA * (16 banks) TENNESSEE (6 banks) Belington Belington Bank Berwind Berwind Bank Carthage Citizens Bank & Trust Co. Buffalo Buffalo Bank Chattanooga American Trust & Banking Co. Charleston Kanawha Banking & Trust Co. Greeneville Greene County Bank Kanawha Valley Bank Hartsville Bank of Hartsville Hurricane Putnam County Bank Knoxville Commercial Bank & Trust Co. Lewisburg Greenbrier Valley Bank Nashville Commerce Union 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 95 DISTRICT NO. 7 (265 banks) I DISTRICT NO. 7—Continued ILLINOIS i (62 banks) INDIANA—continued Argenta Gerber State Bank Hartford City .... Citizens State Bank Bloomington Corn Belt Bank Hebron Citizens Bank Peoples Bank Indianapolis Fletcher Trust Co. Blue Island State Bank of Blue Island Jamestown Citizens State Bank Bushnell Farmers & Merchants State Kokomo Union Bank & Trust Co. Bank Mohawk Mohawk State Bank Byron Rock River Community Bank Monticello State & Savings Bank Chadwick Farmers State Bank • Muncie Merchants Trust Co. Chicago Amalgamated Trust & Sav Poland Poland-State Bank ings Bank South Bend First Bank & Trust Co. Drexel State Bank Tipton Farmers Loan & Trust Co. East Side Trust & Savings Bank Valparaiso First State Bank Harris Trust & Savings Bank Kaspar-American State Bank IOWA (35 banks) Lake Shore Trust & Savings Bank Algona Iowa State Bank Lake View Trust & Savings Security State Bank Bank Avoca Avoca State Bank Main State Bank Blencoe Blencoe State Bank Metropolitan State Bank Cherokee Cherokee State Bank Metropolitan Trust Co. Churdan First State Bank Northern Trust Co. Davenport Davenport Bank & Trust Co. Personal Loan & Savings Bank Des Moines Bankers Trust Co. Sears-Community State Bank Fairfield Iowa State Bank & Trust Co. State Bank of Clearing Fontanelle State Savings Bank Uptown State Bank Fort Dodge The State Bank Cicero Western State Rank Fort Madison Fort Madison Savings Bank Cowden State Bank of Cowden Glenwood Glenwood State Bank Elburn Kane County Bank & Trust Holstein Holstein State Bank Co. Ida Grove Ida County State Bank Eureka State Bank of Eureka Lineville Lineville State Bank Evanston Evanston Trust & Savings Maquoketa Jackson State Savings Bank Bank Mason City United Home Bank & Trust ! State Bank & Trust Co. Co. Freeport State Bank of Freeport Monticello Monticello State Bank Fulton Fulton State Bank Moorhead Moorhead State Bank Galesburg Farmers & Mechanics Bank Muscatine Central State Bank Geneva State Bank of Geneva Muscatine Bank & Trust Co. Joy Joy State Bank Newton Jasper County Savings Bank Kankakee City Trust & Savings Bank Osage Home Trust & Savings Bank Lanark Exchange State Bank Ottumwa Fidelity Savings Bank Lostant Farmers State Bank Union Bank & Trust Co. McHenry West McHenry State Bank Riceville Riceville State Bank Metamora Metamora State Bank Royal Home State Bank Milford Citizens State Bank Shenandoah Security Trust & Savings Bank Momence Parish Bank & Trust Co. Storm Lake Commercial Trust & Savings Morrison Smith Trust & Savings Bank Bank Niantic State Bank of Niantic Security Trust & Savings Bank Niles Center Niles Center State Bank Strawberry Point. Union Bank & Trust Co. Oak Park Oak Park Trust & Savings Templeton .... Templeton Savings Bank Bank Washington Washington State Bank Petersburg Schirding State Bank Williams Williams Savings Bank Piper City State Bank of Piper City Riverdale First Trust & Savings Bank MICHIGAN1 (120 banks) Rochester Rochester State Bank Rushville Rushville State Bank Adrian Adrian State Savings Bank Shannon First State Bank Commercial Savings Bank Shelbyville Shelby County State Bank Lenawee County Savings Bank Springfield Springfield Marine Bank Albion Commercial & Savings Bank Thomson Thomson State Bank Algonac Algonac Savings Bank Tolono Bank of Tolono Alpena Alpena Savings Bank Citizens Bank Alto Farmers State Bank Tuscola Tuscola State Bank Ann Arbor Ann Arbor Savings & Com Walnut Citizens State Bank mercial Bank Washington Danforth Banking Co. State Savings Bank Wenona First State Bank Armada Armada State Bank Wheaton Gary-Wheaton Bank Bay City Bay City Bank Wheaton Trust & Savings Peoples Commercial & Savings Bank Bank Wilmette Wilmette State Bank Belleville Peoples State Bank Berrien Springs ..Berrien Springs State Bank INDIANA (23 banks) Big Rapids Big Rapids Savings Bank Angola Steuben County State Bank Blanchard Blanchard State Bank Auburn Auburn State Bank Blissfield Blissfield State Bank Avilla Community State Bank Bronson Peoples State Bank Cambridge City... Wayne Trust Co. Brown City Brown City Savings Bank Columbia City ...Citizens State Bank Byron Center Byron Center State Bank Connersville Fayette Bank & Trust Co. Capac Capac State Savings Bank Darlington Farmers & Merchants State Cass City Cass City State Bank Bank Pinney State Bank Elkhart St. Joseph Valley Bank Cassopolis Cass County State Bank Gary Gary State Bank Charlevoix Charlevoix County State Bank Gary Trust & Savings Bank Charlotte Eaton County Savings Bank Greencastle First-Citizens Bank & Trust Chelsea Chelsea State Bank Co. • Chesaning Chesaning State Bank Digitized for F1 RExAcSluEsiRve of part of State located in another district. http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

96 ANNUAL REPORT OF BOARD OF GOVERNORS DISTRICT NO. 7—Continued DISTRICT NO. 7—Continued MICHIGAN—continued MICHIGAN—continued Clare Citizens State Bank Spring Lake Spring Lake State Bank CJarkston Clarkston State Bank Springport Springport State Savings Bank Coloma State Bank of Coloma Traverse City ....First-Peoples State Bank Coopersville Coopersville State Bank Traverse City State Bank Corunna Old Corunna State Bank Trenton Trenton State Bank Croswell State Bank of Croswell Vassar State Bank of Vassar Davison Davison State Bank Wayne Wayne State Bank Detroit Detroit Bank Whitehall State Bank of Whitehall Industrial Morris Plan Bank Williamston Peoples State Bank United Savings Bank Wyandotte Wyandotte Savings Bank Dundee Monroe County Bank Yale Yale State Bank Durand Shiawassee County Bank Zeeland Zeeland State Bank Ecorse Ecorse Savings Bank Farmington Farmington State Bank WISCONSIN1 (25 banks) Fennville Old State Bank Fenton State Savings Bank Antigo Fidelity Savings Bank Flint Citizens Commercial & Sav Burlington Bank of Burlington ings Bank Chilton Commercial Bank Genesee County Savings Bank Edgerton Tobacco Exchange Bank Merchants & Mechanics Bank Evansville Farmers & State Bank Fountain Fountain State Bank Green Bay Peoples Trust & Savings Bank Frankenmuth Frankenmuth State Bank Green Lake Green Lake State Bank Fremont Fremont State Bank Kaukauna Bank of Kaukauna Old State Bank Manitowoc Manitowoc Savings Bank Gagetown State Savings Bank Markesan Markesan State Bank Grand Haven Grand Haven State Bank Mayville State Bank of Mayville Peoples Savings Bank Milwaukee American State Bank Grand Rapids Old Kent Bank Marshall & Ilsley Bank Grandville Community State Bank West Side Bank Greenville Commercial State Savings Platteville State Bank of Platteville Bank Sauk City Farmers & Citizens Bank First State Bank of Greenville Sheboygan Bank of Sheboygan Grosse Pointe Grosse Pointe Bank Citizens State Bank Harbor Springs .. Emmet County State Bank South Milwaukee.. Home State Bank Hillsdale Hillsdale State Savings Bank Sturgeon Bay Bank of Sturgeon Bay Holland Holland State Bank Viioqua State Bank of Viroqua Peoples State Bank Waupaca Farmers State Bank Holly First State & Savings Bank Waupun State Bank of Waupun Howell First State & Savings Bank Wausau Citizens State Bank Imlay City Imlay City State Bank Whitewater First Citizens State Bank Jackson Jackson City Bank & Trust Co. Jonesville Grosvenor Savings Bank DISTRICT NO. 8 (78 banks) Kingston Kingston State Bank ARKANSAS (7 banks) Lakeview Bank of Lakeview Lansing American State Savings Bank Batesville Citizens Bank & Trust Co. Bank of Lansing Blytheville Farmers Bank & Trust Co. Lapeer Lapeer Savings Bank Fordyce Fordyce Bank & Trust Co. Lawrence Home State Bank Little Rock W. B. Worthen Co., Bankers Lowell State Savings Bank Russellville Bank of Russellville Manchester Peoples Bank Peoples Exchange Bank Union Savings Bank Waldron Bank of Waldron Manistee M B an a i n s k te e County Savings ILLINOIS1 (15 banks) Marcellus G. W. Jones Exchange Bank Breese State Bank of Breese Mason Farmers Bank Chester First State Bank Midland Chemical State Savings Bank East St. Louis Union Trust Co. Milan Peoples State Bank Edwardsville Bank of Edwardsville Milford Oakland County State Bank Effingham Effingham State Bank Monroe Dansard State Bank Eldorado C. P. Burnett & Sons, Bankers Montague Farmers State Bank Hillsboro Montgomery County Loan & Mount Clemens .. Mount Clemens Savings Bank Trust Co. Mount Pleasant ..Exchange Savings Bank Hoyleton Hoyleton State & Savings Isabella County State Bank Bank New Baltimore ... Citizens State Savings Bank Jacksonville Elliott State Bank New Boston Peoples State Bank Johnston City ... Johnston City State Bank New Haven New Haven Savings Bank Litchfield Litchfield Bank & Trust Co. North Branch Pioneer Bank Red Bud First State Bank Onsted Onsted State Bank Richview Rich view State Bank Oxford Oxford Savings Bank St. Peter First State Bank Petoskey First State Bank Steeleville State Bank of Steeleville Pigeon Pigeon State Bank Pinconning Pinconning State Bank KENTUCKY i (10 banks) Richmond Macomb County Savings Bank Romeo Romeo Savings Bank Bardstown Farmers Bank & Trust Co. Saginaw Saginaw State Bank Campbellsville ...Citizens Bank & Trust Co. St. Charles St. Charles State Bank Clay .- Farmers Bank St. Clair Commercial & Savings Bank Danville Boyle Bank & Trust Co. St. Johns State Bank of St. Johns Hartford Citizens Bank Saugatuck Fruit Growers State Bank Hopkinsville Planters Bank & Trust Co. Sebewaing Farmers & Merchants State Louisville Kentucky Title Trust Co. Bank Lincoln Bank & Trust Co. South Haven Citizens State Bank Louisville Trust Co. First State Bank Owensboro First - Owensboro Bank & Sparta Sparta State Bank Trust Co. 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 97 DISTRICT NO. 8—Continued DISTRICT NO. 9—Continued MISSOURI i (46 banks) MINNESOTA—continued Camdenton Camden County Bank Springfield Farmers & Merchants State Carrollton Carroll County Trust Co. Bank Clayton St. Louis County Bank State Bank of Springfield Clinton Union State Bank Wadena Wadena County State Bank Farmington United Bank Welcome Welcome State Bank Fulton Callaway Bank West Concord Farmers State Bank Glasgow Glasgow Savings Bank Hannibal Farmers & Merchants Bank MONTANA (25 banks) & Trust Co. Anaconda Daly Bank & Trust Co. Lancaster Schuyler County State Bank Belt Belt Valley Bank Lebanon State Savings Bank Big Timber Citizens Bank & Trust Co. Luxemburg (St. Billings Security Trust & Savings Louis P. 0.)....Lemay Bank & Trust Co. Bank Maplewood ...... Maplewood Bank & Trust Co. Bozeman Gallatin Trust & Savings Bank Peoples Slate Bank Security Bank & Trust Co. Marshall Wood & Huston Bank Broadus Powder River Coun.v Bank Memphis Bank of Memphis Butte Metals Bank & Trust Co. Moberly City Bank & Trust Co. Cascade Stockmens Bank Mechanics Bank & Trust Co. Choteau Citizens State Bank Monroe City Monroe City Bank Columbus Yellowstone Bank Normandy Normandy State Bank Deer Lodge Deer Lodge Bank & Trust Co. Pine Lawn Pine Lawn Bank & Trust Co. Denton Farmers State Bank Sedalia Sodalia Bank & Trust Co. Fromberg CI arks Fork Valley Bank St. Louis Baden Bank Glasgow Farmers-Stockgrowers Bank Bremen Bank & Trust Co. Great Falls Montana Bank & Trust Co. Cass Bank & Trust Co. Helena Union Bank & Trust Co. Chippewa Trust Co. Laurel Yellowstone Bank Easton-Taylor Tnist Co. Libby First State Bank Jefferson Bank & Trust Co. Richey First State Bank Jefferson-Gravois Rank Ronan Ronan State Bank Lindell Trust Co. Terry State Bank of Terry Manchester Bank Townsend State Bank of Townsend Manufacturers Bank & Trust Victor Farmers State Bank Co. Worden Farmers State Bank Mercantile-Commerce Bank & Trust Co. SOUTH DAKOTA (23 banks) Mississippi Valley Trust Co. Alcester State Bank of Alcester Mound City Trust Co. Alpena Bank of Alpena North St. Louis Trust Co. Arlington Citizens State Bank Plaza Bank Belle Fourche Bank of Belle Fourche Southern Commercial & Sav Belvidere Belvidere State Bank ings Bank Buffalo First State Bank Southwest Bank Burke Burke State Bank Tower Grove Bank & Trust Faith Farmers State Bank Co. Flandreau Farmers State Bank United Bank & Trust Co. Freeman Merchants State Bank St. Louis County. Gravois Bank Fulton Fulton State Bank Sweet Springs . . Chemical Bank Huron Farmers & Merchants Bank Vandalia Vandalia State Bank Madison Security Bank & Trust Co. Versailles Bank of Versailles Mcintosh Security State Bank Washington Franklin County Bank Miller Hand County State Bank Webster Groves... Webster Groves Trust Co. Mitchell Commercial Trust & Savings Bank Mobridge Citizens Bank Presho Farmers & Merchants State DISTRICT NO. 9 (81 banks) Bank MICHIGAN^ (11 banks) Sturgis Bear Butte Valley Bank Toronto Bank of Toronto Escanaba State Savings Bank Vermillion Citizens Bank Ewen State Bank of Ewen Webster Security Bank Gladstone Gladstone State Savings Bank Woonsocket Sanborn County Bank Iron Mountain .. Commercial Bank Iron River Miners' State Bank WISCONSIN i (4 banks) L'Anse Commercial Bank Boyceville Bank of Boyceville Menominee Commercial Bank Glenwood City First State Bank Newberry Newberry State Bank Rhinelander Merchants State Bank Sault Ste. Marie.. Central Savings Bank Tomahawk Bradley Bank Sault Savings Bank South Range South Range State Bank DISTRICT NO. 10 (76 banks) COLORADO (13 banks) MINNESOTA (18 banks) Brighton Brighton State Bank Caledonia Sprague State Bank Craig Moffatt County State Bank Cannon Falls Security State Bank Del Norte Rio Grande County Bank Chatfield Root River State Bank Delta Colorado Bank & Trust Co. Clinton Clinton State Bank Denver Central Savings Bank & Trust Houston Security State Bank Co. Lakefield Farmers State Bank International Trust Co. Madelia Farmers State Bank Eaton Eaton Bank Minneapolis Fidelity State Bank Fort Morgan Farmers State Bank Owatonna Security Bank & Trust Co. Haxtun Haxtun State Bank Plainview Peoples State Bank La Junta Colorado Savings & Trust Co. Rockville State Bank of Rockville Sterling Commercial Savings Bank Rushmore First State Bank Security State Bank St. Cloud Zapp State Bank Yuma Farmers State Bank 1 Exclusive of part of State located in another dif Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

98 ANNUAL REPORT OF BOARD OF GOVERNORS DISTRICT NO. 10—Continued DISTRICT NO. 11—Continued KANSAS (21 banks) NEW MEXICO1 (3 banks) Abilene Citizens Bank Carlsbad American Bank Augusta Prairie State Bank Deming Mimbres Valley Bank Eldorado Citizens State Bank Logan McFarland Bros. Bank Goodland Goodland State Bank Great Bend American State Bank OKLAHOMA i (1 bank) Hiawatha Morrill & Janes Bank Atoka Atoka State Bank Hutchinson Hutchinson State Bank Kansas City Riverview State Bank TEXAS (56 banks) Liberal Citizens'. State Bank Bay City Bay City Bank & Trust Co. Luray Peoples Stat© Bank Beaumont Security State Bank & Trust Ness City First State Bank Co. Oakley Farmers State Bank Beeville State Bank & Trust Co. Osage City Citizens State Bank Bremond First State Bank Pratt Peoples Bank Brownfield Brownfield State Bank Sedan Sedan State Bank Bryan First State Bank & Trust Co. St. Marys St. Marys State Bank Celina First State Bank Sylvan Grove Sylvan State Bank Clarendon Farmers State Bank Tonganoxie First State Bank Clifton Farmers State Bank Topeka Fidelity Savings State Bank Dalhart Citizens State Bank Wakefield Farmers & Merchants State Dallas Liberty State Bank Bank De Kalb State Bank of De Kalb Winfield The State Bank Del Rio Del Rio Bank & Trust Co. Dodsonville First State Bank MISSOURI1 (10 banks) East Bernard Union State Bank Albany Gentry County Bank Eden Eden State Bank Carthage Bank of Carthage Ferrisl Farmers & Merchants State Craig Bank of Craig Bank Kansas City Commerce Trust Co. Forney Forney State Bank Merchants Bank Franklin First State Bank King City , First State Bank Gatesville Guaranty Bank & Trust Co. Lamar Barton County State Bank Gonzales Gonzales State Bank Rich Hill Security Bank Goose Creek Citizens State Bank & Trust St. Joseph Empire Trust Co. Co. South St. Joseph.. First St. Joseph Stock Yards Granger First State Bank Bank Hamilton Hamilton Bank & Trust Co. Houston Citizens State Bank NEBRASKA (13 banks) Iola Iola State Bank Alma Harlan County Bank Kosse First State Bank Bancroft Citizens Bank Ladonia Farmers & Merchants State Blair Washington County Bank Bank Chappeil Deuel County State Bank Llano Moore State Bank Hartington Bank of Hartington Loraine First State Bank Lexington Farmers State Bank Madisonville Farmers State Bank North Platte McDonald State Bank Matador First State Bank Pawnee City Citizens State Bank Mathis First State Bank Scribner Farmers State Bank Maypearl First State Bank Stromsburg Stromsburg Bank McAllen City State Bank & Trust Co. Valley Bank of Valley Mount Pleasant... Guaranty Bond State Bank Wahoo Wahoo State Bank Pearsall Security State Bank Wallace Farmers State Bank Ralls Security State Bank & Trust NEW MEXICO i (2 banks) Co. Richardson Citizens State Bank Aztec Citizens Bank Robert Lee Robert Lee State Bank Taos First State Bank Roscoe Roscoe State Bank OKLAHOMA i (8 banks) Rusk Farmers & Merchants State Ada Oklahoma State Bank Bank & Trust Co. Eldorado First State Bank San Marcos State Bank & Trust Co. Fairview Fairview State Bank Schertz Schertz State Bank Garber Bank of Garber Shamrock Farmers & Merchants State Okarche First Bank of Okarche Bank Purcell First State Bank Shiro Farmers State Bank Stroud First State Bank Silsbeo Silsbee State Bank Woodward Bank of Woodward Sinton Commercial State Bank Spearman First State Bank WYOMING (9 banks) Thorndale Thorndale State Bank Evanston Stockgrowers Bank Tomball Guaranty Bond State Bank Lusk Lusk State Bank Trent Home State 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 DISTRICT NO. 12 (69 banks) Worland Farmers State Bank ARIZONA1 (1 bank) DISTRICT NO. 11 (63 banks) Buckeye Buckeye Valley Bank ARIZONA^ (1 bank) Tucson Southern Arizona Bank & CALIFORNIA (15 banks) Trust Co. Carmel Bank of Carmel Fairfield Solano County Bank LOUISIANA i (2 banks) Long Beach Farmers & Merchants Bank Minden Minden Bank & Trust Co. Los Angeles California Bank Shreveport Continental-American Bank & California Trust Co. Trust Co. Union Bank & Trust Co. 1 Exclusive of part of State located in another district. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

FEDERAL RESERVE SYSTEM 99 DISTRICT NO. 12—Continued DISTRICT NO. 12—Continued CALIFORNIA—continued UTAH (20 banks) Newman Bank of Newman Brigham State Security Bank Oakland Bank of Commerce Cedar City Bank of Southern Utah Pasadena Citizens Commercial Trust & Ephraim Bank of Ephraim Savings Bank Gunnison Gunnison Valley Bank First Trust & Savings Bank Helper Helper State Bank Salinas Monterey County Trust & Kaysville Barnes Banking Co. Savings Bank Logan Cache Valley Banking Co. San Francisco American Trust Co. Nephi Commercial Bank Wells Fargo Bank & Union Ogden Commercial Security Bank Trust Co. Price Carbon Emery Bank San Rafael Bank of San Rafael Provo Farmers & Merchants Bank Santa Paula Citizens State Bank Salina First State Bank Salt Lake City.... Tracy Loan & Trust Co. IDAHO (10 banks) Utah Savings & Trust Co. Aberdeen Bank of Aberdeen Walker Bank & Trust Co. Arco Butte County Bank Spanish Fork Bank of Spanish Fork Boise First Security Bank of Idaho Commercial Bank Hazelton Hazelton State Bank Springville Springville Banking Co. Kellogg First State Bank Vernal Bank of Vernal Malad City J. N. Ireland & Co., Bankers Uintah State Bank Orofino Bank of Orofino Richfield First State Bank WASHINGTON (15 banks) Soda Springs Largilliere Co., Bankers Almira Almira State Bank Twin Falls Twin Falls Bank & Trust Co. Cashmere Cashmere Valley Bank Coulee City Security State Bank NEVADA (1 bank) Kelso Cowlitz Valley Bank Lacrosse First State Bank Elko Nevada Bank of Commerce Pomeroy Pomeroy State Bank Pullman Pullman State Bank OREGON (7 banks) Puyallup Citizens State Bank Albany Bank of Albany Ritzville Ritzville State Bank Beaverton First Security Bank Rockford Farmers & Merchants Bank Dallas Dallas City Bank Seattle Seattle Trust & Savings Bank Gold Beach Curry County Bank Selah Selah State Bank Halsey Halsey State Bank Spokane Washington Trust Co. Myrtle Point Security Bank Uniontown Farmers State Bank Oakland E. G. Young & Co. Bank Wilbur State Bank of Wilbur Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

100 ANNUAL REPORT OF BOARD OF GOVERNORS 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 4.426,000 New Hampshire , 9,031 510,000 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 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 Mifilin Sullivan Cambria Franklin Monroe Susquehanna Cameron Fulton Montgomery Tioga Carbon Huntingdon Montour Union Center Juniata Northampton Wayne Chester Lackawanna Northumberland Wyoming Clearfield Lancaster Perry York 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 Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

FEDERAL RESERVE SYSTEM 101 FEDERAL RESERVE DISTRICTS-Continued Land area Population Federa Reserve district (square July 1, 1937 miles) (estimated) DISTRICT NO. 4—CLEVELAND—Continued Kentucky (eastern part) Counties of—- Continued Elliott Knott Menifee Whitley Estill Knox Montgomery Wolfe Fayette Laurel Morgan Woodford Ohio 40,740 6,733,000 Pennsylvania (western nart,') 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 r>a,rt) 1,206 216,000 Counties of— Brooke Marshall Tyler Hancock Ohio Wetzel DISTRICT NO. 5—RICH] V10ND 152,316 ~ 12,028,000 District of Columbia 62 627,000 Maryland 9,941 1,679,000 North Carolina 48,740 3,492,000 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—ATLA NTA 248^226" 12,085,000 51,279 2,895,000 Florida 54,861 1,670,000 Georgia 58,725 3,085,000 Louisiana (southern narfi . 26,891 1,444,000 Parishes of— Aeadia Evangeline Rapides Tangipahoa Allen Iberia St. Bernard Terrebonne Ascension Iberville St. Charles Vermilion Assumption Jefferson St. Helena Vernon Avoyelles Jefferson Davis St. James Washington Beauregard Lafayette St. John the Bap West Baton 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 nart). 25,519 969,000 Counties of- Adams Harrison Lawrence Scott Amite 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 Hancock Lauderdale Rankin Tennessee (eastern part) 30,951 2,022,000 Counties of- 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 Digitized for FRASCElaRib orne Houston Morgan Union http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

102 ANNUAL REPORT OF BOARD OF GOVERNORS FEDERAL RESERVE DISTRICTS—Continued Land area Population Federal Reserve district (square July 1,1937 miles) (estimated) DISTRICT NO. 6—ATLANTA—Continued Tennessee (eastern part) Counties of--Continued 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.—CHICA GO 190,513 18,863,000 Illinois (northern pa rt) 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 DuPage La Salle Piatt Edgar Lee Putnam Indiana (northern pa irt) 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 Lake Randolph Whitley Iowa 55,586 2,552,000 Michigan (southern nart) 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 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 Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

FEDERAL RESERVE SYSTEM 103 FEDERAL RESERVE DISTRICTS—Continued Land area Population Federal Reserve district (square July 1,1937 miles) (estimated) DISTRICT NO. 7—CHICAGO—Continued Wisconsin (southern part) Counties of--Continued 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 oart) 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 Effingham Johnson Pope White Fayette Lawrence Pulaski Williamson 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 parM 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 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 Leflore Quitman Winston Clay Lowndes Sunflower Yalobusha Coahoma Marshall Tallahatchie Missouri (eastern parf) 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 Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

104 ANNUAL REPORT OF BOARD OF GOVERNORS FEDERAL RESERVE DISTRICTS—Continued Land area Population Federal Reserve district (square July 1, 1937 miles) (estimated) DISTRICT NO. 8.—ST. LOUIS-Continued. Missouri (eastern part) Counties of—- Continued Clark Lafayette Phelps Sullivan Cole Lawrence Pike Taney Cooper Lewis Polk Texas Crawford Lincoln Pulaski Warren Dade Linn Putnam Washington Dallas Livingston Ralls Wayne Daviess Macon Randolph Webster Dent Madison Ray Wright Tennessee (western part) 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.—MINI ^EAPOLIS 414,004 5,452,000 Michigan (northern part) 16,691 318,000 Counties of- Alger Dickinson Keweenaw Menominee Baraga Gogebic Luce Ontonagon Chippewa Houghton Mackinac Schoolcraft Delta Iron Marquette Minnesota 80,858 2,652,000 Montana 146,131 539,000 70,183 706,000 South Dakota 76,868 692,000 Wisconsin (northern nart} _ 23,273 545,000 Counties of- Ashland Dunn Oneida Sawyer Barron Eau Claire Pepin Taylor Bayfield Florence Pierce Trempealeau Buffalo Forest Polk Vilas Burnett Iron Price Washburn Chippewa La Crosse Rusk Douglas Lincoln St. Croix DISTRICT NO. 10.—KA£ JSAS 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 76,808 1,364,000 New Mexico (northern part} .. 48,359 231,000 Counties of- Bernalillo Mora San Miguel Valencia Colfax Rio Arriba Santa Fe Harding Sandoval Taos McKinley San Juan Union Oklahoma (northwestern r>art) 61,770 2,382,000 Counties of- Adair Ellis Logan Pontotoc Alfalfa Garfield Love Pottawatomie Beaver Garvin McClain Roger Mills Beckham Grady Mcintosh 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 Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

FEDERAL RESERVE SYSTEM 105 FEDERAL RESERVE DISTRICTS—Continued Land area Population Federal Reserve district (square July 1, 1937 miles) (estimated) DISTRICT NO. 11.—DALLAS 7,337,000 Arizona (southeastern part) '. 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 part) 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 part) 7,644 166,000 Counties of— Atoka Choctaw Johnston Marshall Bryan Coal McCurtain Pushmataha Texas 262,398 ,172,000 DISTRICT NO. 12.—SAN FRANCISCO 683,852 10,244,000 Arizona (northwestern part) 90,398 292,000 Counties of— Apache Maricopa Navajo Yavapai Coconino Mohave Pinal Yuma 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

106 ANNUAL REPORT OF BOARD OF GOVERNORS FEDERAL RESERVE BRANCH TERRITORIES (December 30, 1939) BUFFALO BRANCH (district No. 2).--The 10 most westerly counties of New York State, as follows: Moiiroe 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 CHARLOTTE BRANCH (district No. 5).-—The following counties in the States of North Carolina ai South Carolina: NORTH CAROLINA Alexander Caldwell Haywood 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 Fairfield 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 Genesee Jackson Macomb Sanilac Washtenaw Hillsdale Lapeer Monroe St. Clair Wayne Huron Lenawee Oakland Shiawassee LITTLE ROCK BRANCH (district No. 8).—Ete State of Arkansas except the following counties: Baxter Craighead Greene Mississippi Sebastiana Benton* 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 GentFy assigned to Little Rock Branch. 8 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 fol lowing 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. 8 Except the town of Loogootee. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

FEDERAL RESERVE SYSTEM 107 MEMPHIS BRANCH (district No. 8).—Those parts of the States of Mississippi and Tennessee in cluded in Federal Reserve district No. 8, with the exception of Union City (Obion County), Ten nessee 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. DBNVER 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 c es 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 McMullen 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 Zavalla 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 NBVADA 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 ^mmm BOUNDARIES OF FEDERAL RESERVE DISTRICTS -HM 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 ' 46 Member bank holdings, December 30, 1939 50 Adjusted service certificates: Policy action of Board of Governors on rediscounting of 60 Regulation G of Board of Governors repealed 23 Assets and liabilities. (See Condition statements.) Bank credit. (See Credit, Bank.) Bank directorates, Interlocking: Federal Advisory Council recommendations 75 President's veto of S. 2150 22 Regulation L: Amendments 24 Policy action of Board of Governors 63 Bank examinations: Report on banks examined 25 Bank failures 54 Bank mergers 54 Bank premises: Member banks, December 30, 1939 51 Bankers' acceptances. (See Acceptances.) Banking and financial legislation: Federal Reserve membership requirement for State-insured banks repealed. . 22 Federal Reserve notes, Direct obligations of United States as collateral for, until June 30, 1941 22 Interlocking bank directorates bill vetoed by President 22 Loans to executive officers of member banks extended 22 Banking developments in 1939, Discussion of 13-15 Banking inquiry, Wagner resolution for 2 Banking offices: Number of, 1933-1939 53 Banking structure: Discussion of changes in 15 Bankruptcy: Federal Advisory Council recommendations on amendments to Chandler Act 76 Banks: Branches: Number of: 1933-1939 .. 53 1939, Analysis of changes in 54 Discussion of changes in 1939 15 Consolidations, absorptions, etc 54 Loans to, by member banks: December 30, 1939 50 Number of: 1933-1939 53 1939, Analysis of changes in 54 Discussion of changes in 1939 15 Suspensions 54 (See also Federal Reserve banks; National member banks; Nonmember banks; State banks; State member banks.) Bills: Bought in open market by Federal Reserve banks: All banks combined: 1918-1939, End of year figures 52 1939, End of month figures 52 Each bank, end of year figures 34 Earnings on: Each bank 40 Volume of operations.. , , 39 Digitized for FRASER 109 http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

110 INDEX Bills—Continued. Page Discounted by Federal Reserve banks: All banks combined: 1918-1939, End of year figures 52 1939, End of month figures 52 December 30, 1939 32 Each bank, end of year figures 34 Earnings on: Each bank 40 Volume of operations 39 Board of Governors of Federal Reserve System: Currie, Lauchlin B., appointed Administrative Assistant to President 28 Expenses 28,44,56 Members and officers 81 Policy actions: Advances by Federal Reserve banks on Government obligations 64 Regulation F. Trust powers of national banks 65 Regulation G. Noncash collections 66 Regulation G. Rediscount of notes secured by adjusted service cer tificates 60 Regulation H.. Membership of State banks 65 Regulation J. Check clearing and collection 62 Regulation L. Interlocking bank directorates 63 Regulation O. Loans to executive officers of member banks 61 Regulation T. Margin requirements for brokers 60 Press statements: Advances by Federal Reserve banks on Government obligations 64 Check clearing and collection 63 Loans to executive officers of member banks 62 Noncash collections , . 66 Receipts and disbursements 44 Bonds: Prices: Discussion of 4-9 United States Government. (See United States Government securities.) Yields: Chart 7 Monthly and yearly figures 56 Branch banks: Foreign branches of member banks 27 Number of: 1933-1939 53 1939, Analysis of changes in 54 Discussion of changes in 1939 15 Brokers and dealers in securities: Loans to, by member banks: December 30, 1939 50 Business conditions, Discussion of 15-19 Canada: Foreign exchange restrictions 12 Capital: Federal Reserve banks: All banks combined: December 30, 1939 33 Each bank, end of year figures 34 Member banks: December 30, 1939 49, 51 Capital movements to United States: Prewar 11 First months of war 12 Central reserve city member banks: Assets and liabilities, December 30, 1939 48 Classification of loans, investments, real estate and capital: December 30, 1939 50 Chandler Act: Federal Advisoiy Council recommendations on amendments to 76 Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

INDEX 111 Charts: P»*e Bond yields, excess reserves, and bank deposits 7 Member banks in 101 leading cities 14 Open-market operations and Treasury bond prices, August-December, 1939 8 Selected business series 16 United States Government obligations held by Federal Reserve banks.... 10 Check clearing and collection: Par list, Number of banks on: Discussion of 21 Table 55 Regulation J: Policy action of Board of Governors ,62 Press statement of Board of Governors 63 Revision 22 Volume of operations at Federal Reserve banks ' 39 Closed banks 54 Coins received and counted by Federal Reserve banks 39 Commercial loans: Chart . 14 # Discussion of increase in 14 Commercial paper: Discount rates, open market 56 Member bank holdings: December 30, 1939 50 Commitment rates: Federal Reserve banks 46 Commodity prices. (See Prices.) Condition statements: Federal Reserve Banks: All banks combined, December 30, 1939 32 Each bank, end of year figures 34 Member banks: December 30, 1939 48, 50 Consolidations, absorptions, etc., of banks 54 Construction activity, Discussion of 17,18 Construction contracts awarded: Indexes of value of 57 Corporate trusteeships: Federal Advisory Council recommendations 75 Corporations, Foreign banking. (See Foreign banking corporations.) Country member banks: Assets and liabilities, December 30, 1939 48 Classification of loans, investments, real estate, and capital: December 30, 1939 50 Credit, Bank: Federal Reserve: 1918-1939, End of year figures 52 1939, End of month figures 52 Currency: Circulation 52 Received and counted by Federal Reserve banks 39 Currie, Lauchlin B., appointed Administrative Assistant to President 28 Department store sales (value) index 57 Deposits: All banks in United States: Chart 7 Discussion of growth in 13 Federal Reserve banks: All banks combined: December 30, 1939 33 Each bank, end of year figures 34 Insurance of: Federal Reserve membership requirement for State banks repealed. . . 22 Member banks: December 30, 1939 48 Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

112 INDEX Deposits—Continued. Pa£e Nonmember deposits in Federal Reserve banks: 1918-1939, End of year figures 52 1939, End of month figures 52 Reserves required for member banks 47 Directorates, Interlocking. (See Bank directorates, Interlocking.) Discount rates: Federal Reserve banks 46 Discounts and advances: Federal Reserve bank advances on Government obligations: Policy actions by Board of Governors 64 Federal Reserve banks for member banks: Policy action of Board of Governors on. repeal of Regulation G 60 Regulation G repealed 23 Dividends: Federal Reserve Banks 20,40, 42 Member banks 49 Durable goods production index 57 Earmarked gold. (See Gold: Earmarked.) Earnings and expenses: Federal Reserve banks: All banks combined 42 Discussion of 19-21 Each bank 40 Easy money policy: Federal Advisory Council recommendations: February 14, 1939. 75 June 6, 1939 77 October 9, 1939 80 November 20, 1939 80 Edge Act corporations: Examination of 25 List of 27 Employment, Factory: Indexes 57 England: War controls of foreign exchange, foreign assets 12 Examinations. (See Bank examinations.) Executive officers of member banks: Loans to: Public act, amended, extending period to June 16, 1944 ... 22 Regulation O, amended: Definition of "Executive Officer" changed 23 Policy action of Board of Governors 61 Press statement of Board of Governors 62 Expenses: Board of Governors of Federal Reserve System 28, 44 Federal Reserve banks 40, 42 Exports and imports of United States: Prewar 11 War effects on 12 Factory employment indexes 57 Failures, Bank v 54 Federal Advisory Council: Meetings 28 Members and officers 82 Recommendations to Board of Governors: February 14, 1939, Easy money policy 75 February 14, 1939, Interlocking directorates 75 February 14, 1939, Corporate trusteeships (S. 477) 75 February 14, 1939, Chandler Act amendments 76 June 6, 1939, Easy money policy 77 June 6, 1939, Mead Bill (S. 2343) 78 October 9, 1939, Easy money policy 80 November 20, 1939, Easy money policy 80 Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

INDEX 113 Federal Deposit Insurance Corporation: Page Federal Reserve membership requirement for State-insured banks repealed. . 22 Membership changes 54 Federal Open Market Committee: Discussion of policies 2-10 Meetings 28 Members and officers 81 Policy actions 67-74 Press statements: December 30, 1938, Liquidation of Treasury bills 3 June 30, 1939, Liquidation of Treasury bills 4 Federal Reserve Act: Amendments, 76th Congress: Direct obligations of United States as collateral for Federal Reserve notes until June 30, 1941 22 Federal Reserve membership requirement for State-insured banks re pealed 22 Loans to executive officers of member banks extended 22 Federal Reserve banks: Assessment for expenses of Board of Governors 40 Branches: Directors, List of 85-90 Chairmen and Deputy Chairmen 83 Directors, List of 85-90 Dividends paid: All banks combined 42 Each bank 40 Earnings and expenses: All banks combined 42 Discussion of 19-21 Each bank 40 Employees, number and salaries 43 Examination of 25 Officers and employees: Number and salaries of 43 Senior officers, List of 84 Presidents and Vice Presidents, List of 84 Profit and loss account 41 Retirement system contributions 40 Salaries of officers and employees 40,43 Volume of operations 39 Federal Reserve Branch banks. (See Federal Reserve banks: Branches.) Federal Reserve districts: Area, square miles 100-105 Branch territories: Counties comprising 106-107 Map showing outline 10S Population 100-105 Federal Reserve notes: Circulation 34 Collateral security: Direct obligations of United States may be used as, until June 30, 1941. . 22 End of year figures 34 Issued 34 Redemption fund: All banks combined: December 30, 1939 32 Each bank, end of year figures 34 Federal Reserve policy: Discussion of ,. 2-10 Federal Reserve System: Membership: Changes in 15, 52 State bank and trust company members 91-99 Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

114 INDEX Federal Reserve System—Continued. Page State bank membership: Membership requirement for State insured banks repealed........ 22 Regulation H: Policy action of Board of Governors 65 Revision 24 Fiduciary powers of national banks. (See Trust powers of national banks.) Financial legislation. (See Banking and financial legislation.) Foreign banking corporations: Examination of 25 List of 27 Foreign banks: Central banks: Credits to, by Federal Reserve banks 22 Deposits of, held by Federal Reserve banks: All banks combined: December 30, 1939 33 . Each bank, end of year figures 34 Foreign exchange: Restrictions in England, France and Canada 12 Foreign trade of United States: Prewar 11 War effects on "! 12 France: War controls of foreign exchange 12 Franchise tax paid by Federal Reserve banks to Government, 1917-1932 42 Freight-car loadings: Indexes , . 57 Gold: Earmarked for foreign account 11 Foreign gold acquired by United States 10-13 Movement to United States, Discussion of 1,10-13 Stock, Monetary in United States: 1918-1939, End of year figures 52 1939, End of month figures 52 Discussion of 1,13 Gold certificates: Federal Reserve bank holdings: All banks combined, December 30, 1939 32 Each bank, end of year figures 34 Government bonds. (See United States Government securities.) Holding company affiliates: Permits granted 26 Hungary, National Bank of: Loan from Federal Reserve banks reduced 22 Income payments: Chart 16 Discussion of 17,18 Indexes 57 Industrial advances of Federal Reserve banks: All banks combined, December 30, 1939 32 Commitments 34 Each bank, end of year figures 34 Earnings on 40 Rates 46 Volume of operations 39 Industrial credit: Federal Advisory Council recommendations on S. 2343 78 Industrial production. (See Production, Industrial.) Insurance of deposits: Federal Reserve membership requirement for State banks repealed.... 22 Interdistrict collection system: Membership in: Discussion of 21 Table 55 Volume of operations at Federal Reserve banks 39 Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

INDEX 115 Interest rates: Page Federal Reserve banks 46 Open market, in New York City 56 Time deposits 47 United States Government securities 38 Interlocking bank directorates. (See Bank directorates, Interlocking.) Inventories, Discussion of 16 Investments: Member banks: December 30, 1939 50 Laws and legislation. (See Banking and financial legislation.) Liabilities. {See Condition statements.) Loans: Brokers 50 Commercial: Discussion of increase in 14 Executive officers of member banks: Public act extending period 22 Industrial: Federal Advisory Council recommendations on S. 2343 78 (See also Industrial advances of Federal Reserve banks.) Real estate 50 Security 50 Total for member banks: December 30, 1939 50 Loans and investments: Member banks: December 30, 1939 48,50 Margin requirements: Brokers and dealers in securities. Regulation T: Agreements of nonmember banks under Section 8(a) of Securities Exchange Act of 1934 28 Cash transactions. (Amendment.) 23 Policy action of Board of Governors 60 Mead Bill (S. 2343): Federal Advisory Council recommendations 78 Member banks: Bills discounted for. (See Bills, Discounted by Federal Reserve banks.) Branches, Foreign 27 Condition statements 48, 50 Deposits. (See Deposits.) Loans and investments. (See Loans and investments.) National banks. (See National member banks.) Reserves. (See Reserves.) State banks. (See State member banks.) Suspensions. (See Banks: Suspensions.) Merchandise exports of United States: Prewar 11 War effects on 12 Minerals production index 57 Monetary gold stock. (See Gold: Stock, Monetary.) Monetary legislation. (See Banking and financial legislation.) Monetary policy, Wagner resolution for hearings on 2 Money in circulation: 1918-1939, End of year figures 52 1939, End of month figures 52 Money rates: Open market in New York City.... 56 Mutual savings banks: Banking offices, 1933-1939... 53 Branches: 1933-1939 53 1939, Analysis of changes in 54 Number of: 1933-1939 53 1939, Analysis of changes in 54 Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

116 INDEX National income. (See Income payments.) Pase National member banks: Assets and liabilities: December 30, 1939 48 Banking offices, 1933-1939 53 Branches: Number of: 1933-1939 53 1939, Analysis of changes in 54 Classification of loans, investments, real estate, and capital: December 30, 1939 50 Number of: 1933-1939 53 1939, Analysis of changes in 54 Trust powers. (See Trust powers of national banks.) Noncash collections: Regulation G: New regulation issued by Board of Governors 24 Policy action of Board of Governors 66 Press statement of Board of Governors 66 Nondurable goods production index 57 Nonmember banks: Deposits of, held by Federal Reserve banks: 1918-1939, End of year figures 52 1939, End of month figures 52 Insured: Banking offices, 1933-1939 53 Branches: 1933-1939 53 1939, Analysis of changes in 54 Number of: 1933-1939 53 1939, Analysis of changes in 54 Uninsured: Banking offices, 1933-1939 53 Branches: 1933-1939 53 1939, Analysis of changes in 54 Number of: 1933-1939 53 1939, Analysis of changes in 54 Non-par banks: Discussion of 21 Number of 55 Number of banks. (See Banks: Number of.) Open Market Committee. (See Federal Open Market Committee.) Open-market operations: Chart 8 Discussion of 2-10 Federal Open Market Committee policy actions 67-74 Flexible open-market portfolio 2,9 Long-term obligations, Increase in holdings of 9 Treasury bills, Liquidation of 3 Par list: Number of banks on: Discussion of 21 Table 55 Payrolls, Factory: Index 57 Policy actions. (See Board of Governors of Federal Reserve System: Policy actions; Federal Open Market Committee: Policy actions.) Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

INDEX 117 Prices: Page Wholesale commodity: Chart 16 Discussion of 17,18 Index 57 Private banks: Banking offices, 1933-1939 . 53 Branches: 1933-1939 53 1939, Analysis of changes in 54 Number of: 1933-1939 53 1939, Analysis of changes in 54 Production, Industrial: Chart 16 Discussion of 17,18 Indexes 57 Real estate: Loans on, by member banks: December 30, 1939 , 50 Member bank holdings: December 30, 1939 51 Redemption fund, Federal Reserve notes. (See Federal Reserve notes: Re demption fund.) Reserve bank credit. (See Credit, Bank.) Regulations of Board of Governors: Regulation F. Trust powers of national banks: Amendment 24 Policy action of Board 65 Regulation G. Noncash collections: New regulation 24 Policy action of Board 66 Press statement of Board 66 Regulation G. Rediscount of notes secured by adjusted service certificates: Policy action of Board of Governors on repeal of 60 Regulation repealed 23 Regulation H. Membership of State banks: Policy action of Board 65 Revised 24 Regulation J. Check clearing and collection: Policy action of Board 62 Press statement of Board 63 Revised 24 Regulation L. Interlocking bank directorates: Amendments 24 Policy action of Board 63 Regulation O. Executive officers of member banks: Amendment. Change in definition of "Executive Officer". ... 23 Regulation O. Loans to executive officers of member banks: Policy action of Board 61 Press statement of Board 62 Regulation T. Margin requirements for brokers: Agreements of nonmember banks under Section 8(a) of Securities Exchange Act of 1934 28 Amendment 23 Policy action of Board 60 Reserve city member banks: Assets and liabilities: December 30, 1939 48 Classification of loans, investments, real estate and capital: December 30, 1939. 50 Reserve requirements for member banks 47 Reserves: Federal Reserve banks: All banks combined, December 30, 1939 33 Each bank, end of year figures 34 Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

118 INDEX Reserves—Continued. Page Member banks: Account in Federal Reserve banks: All banks combined, December 30, 1939 33 Each bank, end of year figures 34 Chart 14 Discussion of growth in 13 Excess: 1918-1939, End of year figures 52 1939, End of month figures 52 Chart 7 Discussion of 13 Total: 1918-1939, End of year figures 52 1939, End of month figures 52 Salaries: Federal Reserve banks 40,43 Savings deposits: Interest rate on 47 Securities: Loans on, by member banks: December 30, 1939 50 United States Government. (See United States Government securities.) Securities Exchange Act of 1934: Agreements of nonmember banks under 28 Short-term balances in United States: Foreign holdings reduced 12 State banks: Federal Reserve membership requirement for State-insured banks repealed. . 22 State member banks: Assets and liabilities: December 30, 1939 48 Banking offices, 1933-1939 53 Branches: Number of: 1933-1939 .. 53 1939, Analysis of changes in 54 Classification of loans, investments, real estate, and capital: December 30, 1939 50 Examinations of 25 List of, December 30, 1939 91-99 Number of: 1933-1939 53 1939, Analysis of changes in 54 Regulation H: Policy action of Board of Governors 65 Revision 24 States and political subdivisions: Obligations of, owned by member banks: December 30, 1939 51 Stock prices: Chart 16 Discussion of 17,18 Table 56 Surplus: Federal Reserve banks 40, 42 Member banks 49 Suspensions, Bank 54 Treasury cash and deposits with Federal Reserve banks. (See United States Government deposits: Federal Reserve banks.) Treasury currency outstanding 52 Trust company member of Federal Reserve System 91-99 Trust indentures: Federal Advisory Council recommendations on S. 477 75 Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

INDEX 119 Trust powers of national banks: Page Permits granted 25 Regulation F: Amended 24 Policy action of Board of Governors 65 United States Government deposits: Federal Reserve banks: All banks combined: 1918-1939, End of year figures , 52 1939, End of month figures 52 December 30, 1939 33 Each bank, end of year figures 34 United States Government securities: Bank holdings of Government securities, Discussion of 14 Bonds: Chart of open-market operations and Treasury bond prices, August- December, 1939 8 Yields: Chart 7 Table 56 Collateral security for Federal Reserve notes until June 30, 1941 22 Federal Open Market Committee policy actions on 67-74 Federal Reserve bank holdings: All banks combined: 1918-1939, End of year figures 52 December 31, 1937, 1938 and 1939, in detail 38 1939, End of month figures 52 December 30, 1939 32 Chart 10 Each bank, end of year figures 34 Earnings on 19,40 Maturity distribution: Discussion of 9 Interest rate on 38 Member bank holdings: December 30, 1939 48, 50 Chart 14 Open-market operations 2-10 Policy actions of Board of Governors on advances on 64 Treasury bills: Discount rates on 56 Federal Open Market Committee statements on liquidation of 3-4 Treasury notes: Yields 53 Volume handled by Federal Reserve banks 39 United States Treasurer: General account on deposit in Federal Reserve banks. (See United States Government deposits: Federal Reserve banks.) Wagner resolution on monetary and banking policy 2 War: Bond prices at outbreak of war 4-7 Capital movements to United States 10-12 Foreign exchange restrictions 12 Foreign trade of United States affected by war 12 Gold acquired abroad by United States 12-13 Industrial production of U. S. prior and subsequent to outbreak of war. .. . 17,18 Open-market operations at outbreak of war 4-7 Short-term balances in U. S. held by England, France, and Canada reduced 12 Wholesale commodity prices. (See Prices: Wholesale commodity.) Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis