Annual Report of the Federal Reserve Board, 1940

Twenty'Seventh AMUAL REPORT of the BOARD OF GOVERNORS of the FEDERAL RESERVE SYSTEM COVERING OPERATIONS FOR THE YEAR 1940 Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

BOARD OF GOVERNORS OF THE FEDERAL RESERVE SYSTEM December 31, 1940 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 FRED A. NELSON, 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 Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

CONTENTS Text of Report PAGE Summary 1 Open-Market Operations 3 Banking Developments 4 Growth in Reserves 4 Growth in Deposits 6 Increase in Commercial Loans of Banks 6 Increase in Government Securities Held by Banks 7 Member Bank Earnings and Profits in 1940 8 Changes in Banking Structure 8 Federal Reserve Participation in National Defense Program 9 Business Conditions in 1940 11 The Spring Recession 11 Inauguration of Defense Program 12 Increase in Industrial Activity 13 Activity in Other Lines 13 Commodity Prices 14 Employment, Payrolls, and Wage Rates 15 Corporate Profits 15 Security Markets 15 Business Situation at End of Year 16 International Gold and Capital Movements 16 Early Months of the War 16 Consequences of the Spring Campaign 18 Prospect of Sharply Diminished Gold Inflow 20 Federal Reserve Bank Operations 21 Earnings and Expenses 21 Discount Rates 22 Interdistrict Collection System 23 Credits to Foreign Central Banks 23 Legislation Relating to the Federal Reserve System 23 Changes in Regulations of the Board of Governors 24 Bank Examinations : 25 Grants of Authority 26 Membership in the Reserve System 26 Trust Powers of National Banks 26 Holding Company Affiliates 26 Foreign Banking Corporations 26 Foreign Branches of Member Banks 27 Agreements with Nonmember Banks 28 Federal Reserve Meetings 28 Board of Governors-Staff and Expenditures 28 Reappointment of Board Members 28 Changes in Board Staff 29 Board Expenditures 29 Banking Studies and Reports to Congress 29 Federal Reserve Bulletin 29 Changes in Senior Executive Officers of Federal Reserve Banks 30 III Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

Tables PAGE No. 1. Statement of Condition of the Federal Reserve Banks (in Detail) December 31, 1940 32-33 No. 2. Statement of Condition of Each Federal Reserve Bank at End of 1939 and 1940 34-37 No. 3. Holdings of U. S. Government Securities by Federal Reserve Banks at End of December 1939 and 1940 38 No. 4. Volume of Operations in Principal Departments of Federal Reserve Banks, 1936-1940 39 No. 5. Earnings and Expenses of Federal Reserve Banks during 1940 40-41 No. 6. Current Earnings, Current Expenses, and Net Earnings of Federal Reserve Banks and Disposition of Net Earnings, 1914-1940 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 1940 44-45 No. 9. Federal Reserve Bank Discount, Interest, and Commitment Rates, and Buying Rates on Acceptances, December 31, 1940 46 No. 10. Maximum Rates on Time Deposits 47 No. 11. Member Bank Reserve Requirements 47 No. 12. Margin Requirements 47 No. 13. All Member Banks—Condition on December 31, 1940, by Classes of Banks 48-49 No. 14. All Member Banks—Classification of Loans, Investments, Real Estate, and Capital on December 31, 1940, by Classes of Banks... 50-51 No. 15. Member Bank Reserve Balances, Reserve Bank Credit, and Related Items—End of Year 1918-1939 and End of Month 1940 52 No. 16. Number of Banks and Branches in United States, 1933-1940 53 No. 17. Analysis of Changes in Number of Banks and Branches during 1940. 54 No. 18. Number of Banks on Par List and Not on Par List, by Federal Reserve Districts and States, on December 31, 1939 and 1940 55 No. 19. Money Rates, Bond Yields, and Stock Prices 56 No. 20. Business Indexes 57 Appendix Record of Policy Actions—Board of Governors 60-63 Record of Policy Actions—Federal Open Market Committee 63-66 Recommendations of the Federal Advisory Council to the Board of Governors of the Federal Reserve System 67 Special Report to the Congress 68-70 Board of Governors of the Federal Reserve System 71 Federal Open Market Committee 71 Federal Advisory Council 72 Senior Officers and Directors of Federal Reserve Banks 73-80 State Bank and Trust Company Members 81-90 Description of Federal Reserve Districts 91-96 Federal Reserve Branch Territories 97-98 Map of Federal Reserve Districts 99 Index 101-111 Digitized for FRASER IV http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

LETTER OF TRANSMITTAL BOARD OF GOVERNORS OF THE FEDERAL RESERVE SYSTEM, Washington, June 30, 1941. 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-seventh Annual Report, prepared by direction of the Board of Governors of the Federal Reserve System, covering operations during the calendar year 1940. Yours respectfully, M. S. ECCLES, Chairman. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

An+uud RepxvU o^ tUe Boasui oj QouebH&M oj the dd (lei&iue System SUMMARY war situation and the national defense program were the dominating influences on business and financial developments in this country during 1940. Throughout the year the Federal Reserve System endeavored in every way within its power to contribute to the effectiveness of the defense effort. It also gave consideration to the best means of preventing undesirable credit expansion that might impede the progress of defense and increase the difficulties of readjustment later. After the outbreak of war in the autumn of 1939, there was a rapid expansion of production and a substantial advance in prices. These developments were partly of a speculative character, in anticipation of large war demands. During the first four months of 1940, there was some recession in activity but as orders from belligerents increased and the national defense program got under way, industrial activity rose sharply. This rise continued to the end of the year, when industrial output as a whole was larger than at any previous time and many industries were operating close to existing capacity. The increase of activity, however, was not accompanied by a considerable or widespread advance in prices. National income advanced from $71 billion in 1939 to $76 billion in 1940, and in the late months of the year was at the annual rate of about $80 billion. This rise was due in large part to defense activities, together with orders from Great Britain for war materials. A considerable part of the increase reflected a further rise in the volume of industrial employment, particularly in the higher wage occupations. At the end of 1940, however, there were still a large number of persons unemployed. The cash income of farmers rose, and corporate profits, notwithstanding deductions for higher taxes, increased considerably. The volume of bank credit expanded substantially during the year. Banks added large amounts to their holdings of Government securities and also increased their commercial, industrial, and agricultural loans, their loans on real estate, and their consumer loans. A large part of the increase in bank credit was due to substantial purchases of United States Government obligations by New York City banks. The growth in bank credit, together with the unprecedented inflow of gold from abroad, resulted in a further increase in bank deposits to a new high record. This growth was more rapid than the increase in activity, with the consequence that the rate of turnover of deposits was lower than in 1939. An increasing proportion of total deposits appeared to be held as idle funds pending investment. 1 Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

2 ANNUAL REPORT OF BOARD OF GOVERNORS The flight of capital from foreign countries in the war zones continued to be a major factor in gold imports during the early part of the year. After the German successes in the spring, the rapid increase in British payments for war materials, including heavy advance payments, raised the gold inflow to new heights. But gold reserves of the United Kingdom were largely exhausted by the movement; and at the close of 1940 the gold inflow, which had been in progress on an extraordinary scale for nearly two years and a half, was receding toward the level of current gold production abroad. By the end of the year, bank reserves aggregated $14 billion, almost half of this amount being in excess of legal requirements. Banks had more money available for loans and investments than ever before, and far more than enough to meet probable credit needs. In view of this vast supply of available credit and the stimulus to business being engendered by the defense program, the Board of Governors, the Presidents of the Reserve Banks, and the Federal Advisory Council joined in a special report to Congress late in December. Since reserves had risen beyond the System's power to restrain an inflationary credit expansion should one develop, and since such a development might seriously hamper the defense program and later readjustment to peace-time economic conditions, the Federal Reserve authorities recommended that the System be given power to absorb excess reserves and limit further expansion, if the need for such measures should arise. (For text of the special report, turn to pages 68-70.) Federal Reserve credit policy during the year was expressed through open-market operations in the interest of maintaining orderly conditions in the capital market. The System's portfolio of Government obligations was intermittently reduced as market demand became strong and Government security prices advanced. By the end of the year the System had sold $300 million of Government obligations from its portfolio. By making these securities available to other purchasers, the System exerted a stabilizing influence on the capital market. In the latter part of the year, at the request of the Advisory Commission to the Council of National Defense, the Board organized a service within the Federal Reserve System through which smaller business enterprises interested in defense contracts could obtain advice on the proper course of action for obtaining and financing them. This work was greatly facilitated by the prior passage of the Assignment of Claims Act, which the Board, among others, had recommended. Through the Federal Reserve Banks it has been possible to assist the smaller businesses in securing defense contracts and to bring industries needing to finance such contracts in touch with lendable funds. Multiplication of problems in connection with the increasing defense effort and its implications for later reconstruction have led the Board Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

FEDERAL RESERVE SYSTEM during the year to expand considerably its studies in the field of domestic and international economic developments. OPEN-MARKET OPERATIONS The System's open-market policy in 1940, as in 1939, involved the use of a flexible portfolio for the purpose of maintaining orderly conditions in the Government security market. The purpose of this policy was to exert a steadying influence on the market for United States Government obligations and on the capital market in general. YIELD ON 1960-65 TREASURY BOND 2.75 2.50 2.25 2.25 2.00 J 2.00 1939 1940 Source: Treasury Department. About the time of the outbreak of European hostilities in 1939, the System purchased a total of $473 million of United States Government bonds and notes. In the last two months of 1939, at times of rapidly advancing Government security prices and strong demand in the market, $77 million of this total was sold. Also, the System's remaining holdings of Treasury bills ran off during the latter half of the year. In 1940 Government security prices rose to new high levels, reflecting principally a continued large amount of funds seeking investment, and the System disposed of an additional $300 million. In March, long-term Treasury bonds advanced in price, and by April 2 had recovered practically all of the loss sustained during the war crisis. From the beginning of the year to April 2, the System Account disposed of Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

4 ANNUAL REPORT OF BOARD OF GOVERNORS $18 million of Government securities. Following the invasion of Norway and Denmark and later the invasion of the Low Countries, long-term bonds declined by more than four points. This decline during April and May canceled about half of the recovery that had been made from the levels reached shortly after the outbreak of the war. Conditions in the market, however, were strikingly different from those that had existed in the autumn of 1939. Offerings were not large, and orders were in the market on a scale-down at practically all times. In view of this situation, the System's purchases during the decline amounted to only $10 million of notes and bonds, as compared with $473 million in the autumn of 1939. After reaching a low point early in June, the market for the next six months continued an almost uninterrupted advance to a new all-time high on December 10. At this time the longest outstanding Treasury bond issue, the 1960-65s, yielded about 2 per cent, as shown on page 3. This compares with a low yield of 234 per cent reached in June 1939 and again in April 1940, and a high yield of 2% per cent in September 1939. The average yield on all Treasury bonds callable in more than 12 years declined to \y% per cent, and the average yield on three to five year tax-exempt Treasury notes was between 34 and Y% of one per cent. As the market resumed its advance, the System account up to the first of September disposed of $44 million of notes and bonds. During the last three months of the year the System pursued a more active policy of selling and disposed of $250 million of securities. For the year as a whole, the amount of holdings in the System Account declined by $300 million, bringing total holdings of Government securities at the Reserve Banks to the lowest level since September 1933. BANKING DEVELOPMENTS Bank reserves and bank deposits continued to increase in 1940, again establishing new high records. The principal factor in the increase was the inflow of gold from abroad after the war entered a new, more active phase in the spring of the year. Another factor in the growth of deposits was a considerable increase in bank loans and investments, mainly commercial loans and holdings of United States Government securities. Although the volume of deposits increased sharply, their rate of use or turnover declined, reflecting the fact that the increase in deposits was faster than the increase in activity. By the end of the year the banks had more idle reserves than at any previous time and more than sufficient to meet all probable credit needs. Total reserves of member banks of the Federal Reserve System rose by $2.4 billion in 1940, following a rise of $2.9 billion in 1939. By the end of the year they totaled $14 billion, of which nearly reserves1" ^a^ was m excess °f legal requirements. In 1940, excess reserves increased by $1.4 billion, or by about two-thirds of the increase for 1939. The rapid expansion in bank reserves Digitized fowr aFsR dAuSeE Rch iefly to the continued acquisition of gold from foreign countries— http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

FEDERAL RESERVE SYSTEM 5 a movement that is explained more fully in a later section of this Report. During the year our monetary gold stock increased by over $4 billion to a level of $22 billion. The fact that the increase in bank reserves fell short of the growth in gold stock was due mainly to further expansion in the demand for currency, to sales of securities from the Federal Reserve System open-market portfolio, and to the building up of official foreign balances at the Federal Reserve Banks for exchange stabilization purposes and in anticipation of war orders. EXCESS RESERVES OF MEMBER BANKS BILLIONS OF OOLLARS WEEKLY AVERAGES OF DAILY FIGURES BILLIONS OF DOLLARS 7 7 1937 1938 1939 1940 Latest figures are for week ending Friday, December 27, 1940. The growth in member bank reserves occurred at all classes of banks in all sections of the country. New York City banks were usually the first depositories of the funds obtained from the gold inflow that supplied most of the additional reserves. Some of these funds later shifted to banks in other parts of the country as the result of payments for goods and services, security transactions in New York, and Treasury and business disbursements of funds borrowed in the New York market. Excess reserves of member banks, as well as total reserves, increased throughout the country. The amount of growth was less for New York City banks than it had been in 1938 and 1939, however, while for reserve Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

6 ANNUAL REPORT OF BOARD OF GOVERNORS city banks and country banks it was as large or larger. The largest increases during the year were at banks in the Boston, New York, Cleveland, and San Francisco Federal Reserve districts, while the smallest increases were in the Minneapolis, Kansas City, and Dallas Reserve districts. Banks in the latter districts, however, reported increases in their already substantial holdings of available cash funds in the form of balances with correspondent banks. Gold imports, together with the increase in bank loans and investments, have added to the already large volume of bank deposits. Deposits in all banks in the United States, exclusive of interbank deposits111 deposits, increased by over $6 billion during 1940. The total volume of bank deposits and currency held by the public, including inactive as well as active deposits and currency, reached a record high level of about $71 billion at the end of the year. This figure exceeds the predepression peak level of 1928-1929 by over $15 billion. That a considerable part of the volume of deposits of the general public is held idle, presumably awaiting investment or other profitable use, is indicated by the continued unusually low turnover or rate of use of existing deposits, as measured by the amount of checks drawn against them. Although there was a moderate increase in the aggregate amount of check payments handled by the country's commercial banks, the growth of deposits, other than interbank deposits, was greater. As a consequence the rate of turnover of deposits declined slightly to about 13 times a year. This compares with an average turnover rate of about 21 times a year during the early 1920's, prior to the rapid increase in turnover caused by the security market boom in the latter part of that decade. In addition to the growth in bank deposits and bank reserves, there has been a large increase in the demand for currency by the public. By the end of 1940 currency in circulation amounted to about $8.7 billion, representing a growth of $1.1 billion during the year. The increased demand for currency has reflected in part greater needs owing to the acceleration in business activity and in part the holding of inactive currency. There was a substantial increase in the volume of bank loans during the latter part of 1940. Following a moderate increase in commercial, industrial, and agricultural loans during the first half Increase in f the year, member banks generally experienced a o commercial loans ; ' ,° •; , of banks livelier demand lor such loans in the latter half of 1940. Most of the increase was at city banks. Commercial loans at member banks in 101 leading cities increased by $620 million during the year. Of this increase, $555 million was in the last four months, representing an average growth of about $31 million a week. Commercial, industrial, and agricultural loans at country banks increased by $210 million during the year, of which $125 million occurred in the last six months. Digitized foLr FoRanAsS EtoR brokers and dealers in securities, which are made mostly by New http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

FEDERAL RESERVE SYSTEM York City banks, declined sharply in the spring of 1940 following a fall in stock prices. Thereafter these loans showed little change until the end of the year, when they temporarily increased in volume. Real estate loans increased further in 1940, continuing a growth that has progressed steadily during the past five years. This increase has been principally at country banks in loans on urban residential property. ALL MEMBER BANKS BILLIONS OF DOLLARS CALL REPORT DATES BILLIONS OF DOLLARS 35 35 30 30 / DEMAND DEPOSITS ADJUSTED / 25 i / 25 1 / \ LOANS J y J s 20 \ \ 2 0 j -—ss.— \ -^ \ y I 5 \_ I 5 y— T INVESTMENTS I 0 -^— RESERVE BALANCES v^^" 1 1928 1930 1932 1934 1936 1938 1940 Member bank holdings of United States Government obligations, direct and guaranteed, increased by about $1.5 billion during 1940, following an increase of $1.1 billion in 1939. The increase amounted Increase in to $1.3 billion at New York City banks, compared with Government $900 million in the previous year. In the latter half securities held by banks of 1940, member banks in other leading cities and country banks increased their holdings to record levels, following declines in the first half of the year. Owing in part to the approach to maturity of outstanding issues, the proportion of member banks' Government security portfolios maturing within five years increased from 39 per cent at the end of 1939 to 44 per cent at the end of 1940. The amount of Treasury bonds, notes, and bills outstanding in the open market increased during 1940 by about $900 million, with an increase Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

8 ANNUAL REPORT OF BOARD OF GOVERNORS of $1.1 billion in bonds and small declines in notes and bills. Guaranteed obligations showed an increase of about $300 million. The total amount of Government obligations in the market, therefore, increased by about $1.2 billion. The Federal Reserve System disposed of $300 million of Government securities during this period. Commercial banks added $1.5 billion to their holdings, insurance companies purchased about $400 to $500 million, and mutual savings banks over $100 million. Other investors, principally individuals, reduced their holdings by about $500 to $600 million. On the other hand, these other investors added nearly $1 billion to their holdings of United States Savings bonds. In 1940 the net profits of member banks averaged 6.2 per cent of total capital accounts, about the same as the average for the past four years. Moderately higher income from loans offset most of Member bank ^ decline in income from investments and the small e earnings and . . _ , . profits in 1940 rise in expenses. Losses on loans were lower than those reported for any calendar year since 1920. Increased income from loans reflected growth in volume, especially in such types as real estate and personal installment loans that bear higher interest rates. Security holdings yielded less than in previous years, notwithstanding an increase in volume, since there was a decline in the average rate of return on securities. This decline resulted partly from extensive refunding of outstanding securities by new issues with lower coupons and partly from portfolio turnover. Following the trend of recent years, in 1940 the number of banking offices declined slightly to 18,561. The number of banks in operation decreased to 14,895, while the number of branches bankhfg8structure increased by 37 to 3,666. The net decline of 139 in the number of banks reflected mainly consolidations, absorptions, and voluntary liquidations. There were 22 bank suspensions, and two suspended banks reopened. Thirty-two new banks organized, about the same number as in 1939, but less than for any other year in the last several decades. The net increase of 37 in the number of branches was slightly smaller than in either of the two preceding years and considerably below the increases recorded in the four years following the banking holiday. As has been generally true in former years, the number of branches operated in the same city as the parent bank decreased, while the number of branches located outside the head-office city increased. Almost half of the gross increase in the number of branches was accounted for by the conversion of existing banks into branches. Membership in the Federal Reserve System increased from 6,362 to 6,486 during 1940. The net increase in the number of State member banks was the largest since 1920, but its effect upon membership in the System was partly offset by the decrease in the number of national banks that resulted primarily from consolidations and absorptions. During the year Digitized fo1r8 F8R AnSoEnRm ember banks were admitted to membership, exclusive of four http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

FEDERAL RESERVE SYSTEM 9 new State member banks that did not increase membership for the reason that they were organized to succeed previously existing member banks. Almost two-thirds of the State banks admitted were located in the North Central States, and about one-fifth in Texas and Virginia. FEDERAL RESERVE PARTICIPATION IN NATIONAL DEFENSE PROGRAM On May 30, 1940, the President of the United States appointed the Advisory Commission to the Council of National Defense, including in its membership Chester C. Davis of the Board of Governors. Space was immediately provided in the Federal Reserve Building for the use of the Commission and the Board offered the services and facilities of the Federal Reserve System in aid of the defense program. In September, at the request of the Defense Commission, the Board of Governors conducted a 48-hour survey to ascertain how much commercial bank credit could be made available for defense plant construction loans. Such loans were to be based on a proposed new form of contract—the Emergency Plant Facilities Contract—developed by the Commission after consultation with the War and Navy Departments and the Comptroller General. The Board acquainted the Federal Reserve Banks and their branches with the plan by telegraph and requested them to contact representative banks in their territories. It was revealed that the banks covered by the survey stood ready to lend large sums to manufacturers for emergency defense plant construction. It had become apparent that the statutory prohibition against the assignment of claims arising from a Government contract might impede the financing of the defense program. Accordingly the Board cooperated in securing the passage of the Assignment of Claims Act of October 9, 1940, which removed this prohibition. On October 25 the Defense Commission requested the Board of Governors to act as its operating agent in assisting the smaller business enterprises in obtaining defense contracts and such financial aid as might be required. The Defense Commission suggested that the Board designate one of its members to have charge of this work and request each Reserve Bank to detail an officer at each head office and branch to serve as field representative. The Board advised the Commission on October 26 that the System would be glad to assist in the manner indicated and that Ernest G. Draper, a member of the Board, had been requested to take charge of the activities. At the suggestion of the Defense Commission, a conference was called in Washington for November 12-13 in order to acquaint the field representatives fully with the details of the program, and prior thereto various memoranda were forwarded to the field representatives for their information and guidance. The conference was attended by 47 Reserve Bank officers; by representatives of the Board of Governors and of the Defense Commission; and by representatives of the War, Navy, Treasury, and Commerce Departments, the Reconstruction Finance Corporation, the Securi- Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

10 ANNUAL REPORT OF BOARD OF GOVERNORS ties and Exchange Commission, and the Tennessee Valley Authority. It was the understanding at the conference that the field representatives, working closely with Governor Draper, with Mr. Robert L. Mehornay of the Office of the Director of Small Business Activities of the Defense Commission, and with the various Army and Navy procurement officers, would be in a position to furnish business enterprises in their districts with information on the procedure to be followed relative to obtaining defense contracts; to place potential subcontractors in touch with concerns awarded primary contracts; to encourage prime contractors to subcontract part of their work; to familiarize local banks with the procedure to be followed in accepting assignments of Government claims as security for loans; to encourage local banks to make loan commitments on condition that borrowers obtain Government contracts; and to assist small business enterprises in obtaining necessary financing, through their local banks if possible, or through other lending agencies, including the Federal Reserve Banks and the Reconstruction Finance Corporation, if additional credit was found to be needed to supplement that obtainable from the borrowers' regular banking connections. Following the Washington conference, the Reserve Banks arranged for conferences with local procurement officers of the Army and Navy and forwarded letters to all banks in their respective districts advising of the services which they were in a position to render in connection with the defense program. Report forms entitled "Facilities for Defense Supplies" were furnished to be filled out by banks for concerns which were in a position to furnish needed defense supplies but were not on the invitation bidding lists of the War and Navy Departments, and arrangements were made to have surveys made of individual plants with a view to advising the types of defense products that could be supplied with their respective facilities. Advice was given that the field representative at each Federal Reserve Bank and branch would be ready at all times to consult with business men and bankers with respect to the procedure to be followed in obtaining Government contracts and subcontracts and to confer with them as to means of obtaining needed credit if it was not available from the usual sources. Later the Reserve Bank field representatives made surveys of various plant facilities at the request of Government officials and attended numerous meetings of bankers and business men to explain the activities of the System in the defense program and to suggest ways in which various features of the program could be explained to potential contract bidders and to the general public. Discussions of the Assignment of Claims Act and of the Emergency Plant Facilities Contract appeared to be of particular interest. A generally cooperative attitude prevailed at the meetings and the participants expressed a desire to assist to the fullest extent in financing the National Defense program. It is believed that the defense work of the 12 Federal Reserve Banks Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

FEDERAL RESERVE SYSTEM 11 and their 24 branches, a total of 36 field offices, has provided a valuable service to many business enterprises throughout the country and has reduced the need for special trips to Washington to obtain information with respect to defense contracts. Either directly or through the Reserve Banks, the Board of Governors has obtained information and assistance from various Government departments and agencies in Washington for contractors producing or about to produce defense supplies. The Board has also answered many inquiries of the Reserve Banks relating to financial and other problems connected with defense loans. Following the establishment of field offices at the Federal Reserve Banks it became evident that if they were to be of the greatest possible service in connection with the defense program, particularly with respect to the expansion of subcontracting, it would be desirable to have located at each office a staff of qualified engineers and other technical experts under the supervision of an outstanding industrialist of the community. These technicians would serve as local representatives of the Defense authorities. Before the year ended the necessary groundwork had been laid for the expanded facilities which have subsequently been established at most Federal Reserve Banks and branches. BUSINESS CONDITIONS IN 1940 Economic activity in the United States declined somewhat during the early months of 1940 but after April showed a rapid advance, owing primarily to the strong influence of defense measures undertaken after extension of German control on the European continent. By the end of the year activity generally had reached a new high level and in a few important industries was at or close to existing capacity. With a lull in active warfare in Europe during the early months of 1940, producers became increasingly uncertain as to prospects for a continuing large volume of business and geared their buying polic^es more closely to current needs than in the autumn of 1939, when they had accumulated considerable inventories. As a consequence industrial activity was reduced from earlier peak levels, as shown by the chart on page 12, and prices of commodities, especially basic materials, declined. Downward tendencies, however, did not spread throughout the economy. Export demand for war materials increased and a policy of maintaining existing large inventories as protection against possible future shortages of material was generally followed. With income payments sustained in many fields, consumer purchases of nondurable goods and of such durable goods as automobiles and new houses were maintained near levels reached toward the end of 1939. Security prices showed little change, high-grade bonds selling at somewhat higher prices than they had in the autumn of 1939 and stocks at somewhat lower prices. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

12 ANNUAL REPORT OF BOARD OF GOVERNORS SELECTED BUSINESS SERIES BILLIONS OF DOLLARS BILLIONS OF DOLLARS ANNUAL BASIS ANNUAL BASIS 100 100 80 80 INCOME PAYMENT (ADJUSTED) 60 60 1935-39= 100 1935-39= 100 140 140 y INDUSTRIAL PRODUCTION ^ 120 120 / \y /^* j 100 \ 100 y \ V*—^y 80 80 MILLIONS OF DOLLARS MILLIONS OF DOLLARS 400 400 300 300 200 — 200 100 80 60 1936 1937 1938 1939 1940 Source: Income payments, exports and imports, Department of Commerce; industrial production, Board of Governors of the Federal Reserve System; common stock prices, Standard Statistics Company; basic commodity prices, Bureau of Labor Statistics index converted to 1926 base. Beginning with the German invasion of Norway, Denmark, and the Low Countries in the spring, the domestic situation changed rapidly. There was an immediate decline of over one-fifth in common defence Vogram stock prices and there was a moderate decline in prices of high-grade bonds. Commodity prices, after ad- Digitized vfoarn FcRinAgS EinR the first few days, continued their general downward movement http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

FEDERAL RESERVE SYSTEM 13 for several months. Production, however, was greatly stimulated by the development of plans for a large defense program, repeatedly revised upward during the rest of the year. The awarding of contracts under this program began in June and the effects on business were evident in many instances before contracts were awarded. There was increased buying as attention became focused on the possibility of bottlenecks in particular industries. By the end of 1940 over $10 billion of defense contracts had been awarded and additional commitments of S3 billion had been made. Some of the contracts had been completed by the end of 1940 and work had been started on many of the longer-time projects. The bulk of the work on the defense program, however, remained to be done in later years. By the year end industrial production had risen to a level higher than at any time in the history of the country, about 10 per cent above the peak reached at the end of 1939. The rise was general, Increase in reflecting increased buying for civilian as well as for activity military requirements, but was most marked for metals and metal products, wool textiles, and building materials, all products which were in particular demand for military purposes. In some instances trade buying beyond current needs was stimulated by the prospect of priorities, and by the end of the year many manufacturers were increasing their inventories of materials. The amount of goods in process also increased considerably, reflecting in part increased activity on products that require a long time to produce. As new orders continued in excess of current output, unfilled orders reached new high levels and pressure for increased output was strong. The defense program required expansion of capacity for the manufacture of armaments, and, by expanding income and civilian demands, focused attention on the possible need for additional plant capacity in steel and certain other industries where most existing facilities were already in use. In the case of important materials obtained mostly from abroad, the Federal Government was accumulating stocks in a move to insure adequate future supplies in the event of shipping or other difficulties. The Government was also making special arrangements to import copper to be made available to consumers whenever sufficient quantities should not be available from domestic sources at existing prices. The rise in industrial production was accompanied by increased activity on the railroads, in the distributive trades, and in construction. Contracts awarded for new plant construction in the last quarter of 1940 were above the high 1929 leveL Awards for new privately financed factory construction exceeded the peak reached in the summer of 1937, and in addition there was a large volume of contracts for Government financed construction of factories to make airplanes, munitions, and the like. A large volume of contracts was awarded also for cantonment construction to be carried on during the Digitized fowr iFnRtAerS ERan d spring of 1940-41. Private residential building, greatly http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

14 ANNUAL REPORT OF BOARD OF GOVERNORS stimulated in some areas by defense activities, reached a level higher than at any time since 1929. Agricultural income increased in 1940, chiefly as a result of higher prices for all major products except hogs. Also, more livestock products were marketed and receipts from Federal loans on crops increased. For the year as a whole, cash farm income, including Government payments, was up 5 per cent, about the same increase as shown by total national income payments. There was a sharp curtailment in all principal exports of agricultural commodities, including cotton, tobacco, wheat, pork products, and fruits, but the effect of this on agricultural income was more than offset by increased domestic demand and by expansion in loans under the Federal program. During 1940 there were two general movements in wholesale commodity prices, a decline from the beginning of the year until August and an advance from August to November. The level at the end of the prices ° * * ^ear was a^out the same as that reached in the rapid advance late in 1939, following the outbreak of war in Europe. Retail prices showed only a small rise during 1940. The change in the military situation in Europe during the spring had certain direct effects on wholesale prices, mostly on the down side, and other less direct but fully as important effects that became evident months later in marked price advances. The principal declines in the spring were in commodities held partly for speculative purposes; wheat, for example, dropped from over $1 a bushel to about 70 cents and for a short period grain markets were closed to restore orderly conditions. Wood pulp and paper advanced, as Scandinavian supplies were cut off, but there were few other increases at this time. During the summer the general tendency of prices was downward despite a steady growth in domestic demand and maintenance of exports of manufactured goods at a high level. One important factor in this continued price decline was the pressure of foreign supplies of certain basic commodities on markets in this country as Continental markets were closed by extension of the British blockade. In the autumn, with a further increase in trade buying to cover requirements in connection with defense activities and growing civilian demand, prices of basic industrial materials rose sharply. Prices of semi-manufactured articles, particularly those most affected by military demands, also showed important increases and there were advances in some finished industrial products, notably automobiles and textiles. Prices of agricultural commodities rose during this period to a level about the same as a year earlier. In the last two months of 1940 wholesale prices showed relatively little change, owing to increased domestic production and greater imports and also to various steps taken by Federal agencies to restrain price advances, particularly in the metals. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

FEDERAL RESERVE SYSTEM 15 Early in 1940 employment and payrolls in nonagricultural pursuits declined moderately as industrial activity receded, but thereafter they showed large sustained advances. These increases were quite Employment, general but were most rapid in manufacturing inwage rates dustries, especially those making armaments and other products called for by the defense program. Payrolls in manufacturing rose more rapidly than employment, owing for the most part to an increasing amount of overtime work and pay in defense industries. There were also scattered wage rate increases. For the year as a whole factory payrolls were 14 per cent larger than in 1939. Profits of large industrial corporations as a group were nearly one-fourth larger in 1940 than in the preceding year. The largest increases occurred in durable goods industries. Net income of railroads was larSer than in any other year since 1930. Substantial increases in profits accompanied the rise in industrial activity as total costs rose less than gross income. Expansion in gross income reflected larger production and, in some instances, higher prices for finished products. Certain costs, such as interest and depreciation, changed relatively little and in most industries payrolls increased no more than output. Material costs, however, rose somewhat more than production, owing to increases in prices of materials affected by higher shipping charges, prospective shortages, and the like. Also, tax deductions were increased substantially to take account of higher corporate income taxes and a newly enacted excess profits tax. Prices of common stocks at the end of 1940 generally were at a lower level than at the beginning of the year. With the intensification of war in May, common stock prices showed a sharp drop to markets levels near the lowest of recent years. In the summer and fall, prices recovered about half of the May decline. Volume of trading on the New York Stock Exchange increased substantially in May but for the year as a whole was smaller than in any year since 1921. Prices of corporate bonds moved gradually upward during the year, except during May when high-grade bonds declined moderately and lowergrade bonds declined sharply. Yields on high-grade corporate bonds included in Moody's averages for Aaa issues reached successive new low records in the course of the year, and at the year end averaged less than 2% per cent. At that time yields on lower-grade obligations, as represented by issues included in Moody's averages for Baa bonds, were below 43^2 per cent, a new low for recent years. Corporate security issues, including refunding and new capital, totaled $2.7 billion for the year. This was the largest total for any year since 1936 and was $600 million larger than in 1939. New corporate financing during 1940 was largely for refunding, as was the case in other recent years. The amount of issues for new capital, although nearly double the 1939 Digitized fotro FtaRlA, SwEaRs considerably smaller than in 1936 and 1937. http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

16 ANNUAL REPORT OF BOARD OF GOVERNORS At the end of 1940 business activity was at a record level, particularly in industries affected by the defense program-and by British demands for war materials, and continued high activity was assured Business f considerable period by the large volume of orders or a situation at , . end of year on hand, schedules called for greatly increased output of war materials, which in some instances could be attained by fuller utilization of existing plants but in others could be brought about only through expansion of plant capacity or curtailment of production for civilian purposes. Sharp price advances had occurred in some commodities, particularly lumber, wool, and steel scrap. It had been recognized at the time of the establishment of the Advisory Commission to the Council of National Defense in May that expansion and redirection of economic activity would be likely to create serious price problems, and before the year end attempts were being made in various ways to prevent rising prices from adding to the many problems already faced by the country. The number of persons employed outside agriculture was about 2.5 million higher at the end of 1940 than before the war and about 400,000 men had been added to the armed forces. The number available to meet growing demands was still substantial, however. Workers potentially available included, in addition to employable workers without jobs, many people not ordinarily regarded as part of the labor force. Although the labor resources of the country were thus not being fully utilized, the number of skilled men in some trades had proved insufficient. This situation was being alleviated by training new workers and by reorganizing work so as to make use of workers with limited experience. It was evident that while the defense program would provide assurance of a high level of activity for a considerable period in the future, the standard of living could not be expected to be at a correspondingly higher level, since many of the goods produced would be war materials. Part of the increased money incomes would be paid out in increased taxes, and part might go to meet higher living costs. INTERNATIONAL GOLD AND CAPITAL MOVEMENTS The impact of war worked major changes in the international position of the United States during 1940. Progression of the war from one phase to another and the extension of territory affected by military occupation brought pronounced readjustments in gold and capital movements to this country as well as a reorientation of foreign trade. The changes came into evidence in the spring and became increasingly apparent as the year wore on. The first eight months of the war (September 1939-April 1940) were marked by movements of gold and capital similar to those in the year of crisis that preceded the war. The flight of capital of'the'war S from the neutral countries threatened by war develop- Digitized for FRASER ments but still able to maintain relatively free exchange http://frasmer.asrtlkoeuitssf edc.oonrgt/i nued on the same great scale after September 1, 1939, as Federal Reserve Bank of St. Louis

FEDERAL RESERVE SYSTEM 17 in the year that preceded. Many countries participated. On the basis of reported figures, Swiss nationals and residents of other countries who were using Swiss accounts accumulated nearly $240 million of dollar assets in the eight months ending with April 1940. An additional $90 million was accumulated in Belgian accounts; $70 million in Dutch; $60 million in Italian; and substantial sums in the names of residents of other countries that were neutral at the time. Some of the movement recorded in these figures represented the building up of official funds in this country for purposes of exchange stabilization; but the great bulk of the movement from these countries reflected the flight of private capital—a flight that put pressure on the resources of the monetary authorities. In fact the private movement was considerably larger than the reported figures would indicate. It is known, for example, that foreigners seeking to protect their dollar assets accumulated United States currency or made deposits here in accounts which appeared to belong to residents of this country. Again, refugees with large dollar deposits or security holdings, by the mere fact of their coming to the United States, converted what were previously foreign liabilities of this country into domestic, thus removing important sums from the regular weekly reports of capital inflow. It was mainly to meet this continuing exodus of uneasy private money that countries other than the British Empire, France, and Japan shipped over $550 million of gold directly to the United States, and additional large amounts by way of British countries, in the first eight months of the war. During the same period the British Empire and France shipped nearly $1,500 million of gold to this country, including substantial amounts for other European countries, and Japan sold more than $100 million. The role played by private capital in the gold movement from belligerent countries was mixed. With the outbreak of war the Allies imposed exchange controls and curbed the flight of British and French funds that had been in progress. The United Kingdom went further. It immediately requisitioned a large part of the dollar balances that its nationals had previously acquired, and subsequently, in a series of steps, it requisitioned specified holdings of dollar securities as well. In this and other ways the various controls not only stopped the flight of capital on the part of their own nationals, but drew upon existing private assets to finance their war needs. During the first eight months of the war the recorded figures indicate that $460 million of the capital credited in this country to the United Kingdom, Canada, and France was used up. Most of this had been private capital at the outset of the war. While private dollar funds of nationals of belligerent countries were being converted to war purposes, alien funds were being withdrawn from such countries, largely through the mechanism of the free sterling market. The British Treasury has estimated that there was a drain on British dollar resources of at least $735 million through capital withdrawals from Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

18 ANNUAL REPORT OF BOARD OF GOVERNORS England in the first 16 months of the war, and other evidence suggests that the bulk of these withdrawals occurred in the first half of the period. Funds were also transferred from Canada and, undoubtedly, France. In some degree the movement was an extension of the private flight of neutral capital already described, but in this case the flight of neutral funds was from Allied financial centers and at the expense of the dollar resources of the Allies. Not only did the flight of capital continue in this form even after exchange controls were introduced, but British gold and dollar resources were employed to lend assistance to friendly countries and to settle adverse trade balances with others than the United States. Although to some extent the trade balances were settled by sterling transactions, the creditor country holding the sterling or using it to repatriate securities from British holders, substantial balances often remained to be settled in gold or dollars. In the first eight months of the war these special factors of capital withdrawals, together with gold and dollar payments tq countries other than the United States, were more prominent than were increased Allied purchases of goods in this country. The British Empire was buying substantial amounts of cotton, steel, machinery, and other products, and France was getting delivery on planes; but in general this first part of the war period was characterized more by preparatory work than by widespread and urgent buying. The spring campaign of Germany made sweeping changes in this picture. Denmark, Norway, Luxembourg, Netherlands, Belgium, and France fell within a period of ten weeks. Directly and inconsequences directly most of Continental Europe was brought under of the spring J x i r™ , % uu _i campaign German control, lhe centers from which neutral European funds had been coming to the United States were largely blocked off. American assets of the countries named were frozen by a series of Executive Orders. Subsequently the American assets of several other invaded countries were added to the list. The amounts so frozen are shown in the accompanying table. FROZEN FOREIGN ASSETS IN UNITED STATES IN 19401 [Estimated market values in millions of dollars] Bullion, United States Country and date currency, and foreign Others Total and deposits securities Denmark (April 8) 55 27 10 92 Norway (April 8) 100 54 23 177 Belgium (May 10) 442 251 68 761 Luxembourg (May 10) 30 16 2 48 Netherlands (May 10) 700 796 126 1,622 France (June 17) 988 448 158 1,594 Latvia, Lithuania, and Estonia (July 10). 26 2 1 29 Rumania (October 9) 46 2 5 53 Total 2,387 1,596 393 4,376 1 Data compiled by United States Treasury from special reports required by the freezing orders and covering respective countries and then- empires. In some instances the net assets (total assets after deducion of debit balances) are slightly smaller than the totals in the table. 2 Includes credit instruments and claims not listed separately, merchandise, real property, etc. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

FEDERAL RESERVE SYSTEM 19 Capital and Gold Flow to the United States.—The extension of German military operations went far toward drying up the flow of European funds to the United States. From August 1938, on the eve of the Munich conference, through April 1940, the reported inflow of capital from European countries other than the United Kingdom and France had amounted to $1,300 million. From May to the end of 1940 private holders listed in these same countries withdrew $230 million; but official funds here rose as private funds were liquidated. There was little net change. After May 1940 the reported gold, capital, and trade transactions of these smaller European countries, which had played so significant a role in the movements of the year preceding the war and in the first eight months of the war itself, largely ceased to affect the American position. Similarly France ceased to be a factor. It had sent large amounts of gold to the United States for war purchases so long as it remained a combatant, and just before the freezing order in June it added considerably to its balances here. Since that time France has been active only to the very limited extent permitted by the freezing arrangements and the British naval blockade. Most of the unfilled war orders of France were taken over by the British. At the same time the British greatly intensified their own purchases in this country. Heavy advance payments were made on the new orders, and deliveries increased substantially. Gold sales to this country by the British Empire were over two and a half times as great in the last eight months of 1940 as in the first eight months of the war. About $3 billion was added to United States gold stock from foreign sources in this final period. United States Foreign Trade.—The rapid growth in English and Canadian purchases here and the blockade of the European Continent transformed the foreign trade of this country. By the middle of the summer nearly two-thirds of all United States exports were going to the British Empire. The remainder were going to Latin America and other countries that, for the most part, had little need for agricultural produce from the United States. Almost the entire export trade of this country was in industrial products. Half of these by value were what might be called war materials—aircraft, firearms, ammunition, explosives, and, at an earlier stage of war production, machine tools and metals and their manufactures. Exports of these socalled war materials rose from a volume of about $50 million a month at the outbreak of the war to $150 million a month in the last half of 1940. Not all of the commodities in this group went to Great Britain. Some went to Japan; and the Latin American countries, no longer adequately supplied from Europe, turned to the United States for steel and various other products. But British purchases accounted for the major part of the exports in this group and bulked large in most other commodities as well. In fact, from the collapse of France to the end of the year, the Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

20 ANNUAL REPORT OF BOARD OF GOVERNORS limiting factor on British purchases in this country was not the British willingness or ability to buy but the capacity of American industry to turn out the goods. By the end of 1940 the gold reserves of the United Kingdom had been largely exhausted—partly in making heavy advance payments on orders for American goods to be delivered later. The remain- Prospect of g dollar resources available to the British Treasury m ished gold inflow were mostly in American securities or direct investments in British controlled companies here. These involved special marketing problems and the dollars represented could not be accurately determined in advance of sale. While expanding British purchases of war materials in this country appeared to be assured by prospective American assistance under the lendlease plan, it was apparent as the year ended that the United States had entered a new phase in its international financial relations. The great gold movement in progress since 1933 reached its climax in the war crisis, and could no longer continue at the intensified rate made possible by the draining of British, French, and other gold reserves. From August 1938, when the Munich crisis was starting, to the end of 1940, the United States Treasury had purchased nearly $8.5 billion of foreign gold. During the same period foreign gold production amounted to about $3 billion. Although undeterminable movements in gold hoards were a factor in the difference between the two figures, the magnitude of the drain upon foreign gold reserves was clearly of extraordinary proportions. By the end of 1940 Europe, with its important gold holding countries, had largely fallen under German control and was blockaded by the British Navy; and the British Treasury itself was nearing the end of its accumulated gold resources and falling back on current gold production of the Empire, supplemented by the proceeds of intensified sales of American securities. Ahead lay the prospect of American assistance on a great scale under the lend-lease plan. South American countries in need of dollars were being assisted by the Export-Import Bank and the Stabilization Fund; and the way was being prepared for creation of an Inter- American Bank, through which further assistance could be given. Nowhere else in the world were there large accumulations of gold likely to be shipped to the United States for sale to the Treasury. As the year ended it seemed evident that, until the disposition of the great gold holdings of the European Continent was finally determined, further foreign gold acquisitions of the United States would be largely limited to gold production abroad. Such production, including rough estimates for Japan and the U. S. S. R., which publish no comprehensive figures, was running at the close of 1940 at the rate of about $1.3 billion a year; and some of this was in countries that might have little occasion to export their entire gold output. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

FEDERAL RESERVE SYSTEM 21 FEDERAL RESERVE BANK OPERATIONS Figures for the volume of operations in principal departments of Federal Reserve Banks during 1940 as compared with the preceding four years are given in Table 4 on page 39. The number and amount of bills discounted for member banks declined for the third successive year and fell below the volume handled for any previous year in the history of the System. Advances to industry under section 13b of the Federal Reserve Act also declined, but toward the end of the year there was an increase in the amount of applications for industrial loans owing to an expanding demand for credit in the financing of defense contracts. The number and amount of checks collected by the Reserve Banks and of paper money and coin handled increased in 1940. Securities issued, redeemed, and exchanged as fiscal agents for the United States Treasury and Government agencies were somewhat below the 1939 level. EARNINGS, EXPENSES, AND DISTRIBUTION OP NET EARNINGS OF FEDERAL RESERVE BANKS IN 1940 AND 1939 [In thousands of dollars] 1940 1939 Current earnings 43,537 38,501 Current expenses 29,165 28,647 Current net earnings 14,372 9,854 Profits on sales of U. S. Government securities and other additions to current net earnings in excess of special depreciation allowances and provision for losses 11,488 2,389 Net earnings 25,860 12,243 Paid U. S. Treasury (section 13b) 82 25 Dividends paid 8,215 8,110 Transferred to surplus (section 13b) -54 -426 Transferred to surplus (section 7) 17,617 4,534 Total 25,860 12,243 Transferred from surplus (section 7) to reserves for contingencies 12,273 1,965 An additional task performed by the Federal Reserve Banks for the United States Treasury arose out of Executive Orders pertaining to the control of property held in this country by certain foreign countries and their nationals. The Federal Reserve Banks, and particularly the Federal Reserve Bank of New York, were required to handle a large volume of applications for licenses covering transactions involving such frozen property and other matters relating thereto. Current earnings, current expenses, and distribution of net earnings of the Federal Reserve Banks for 1940 compared with 1939 are shown in the accompanying table. Net earnings were $25,860,000 and^xpenses in mo> an increase of $13,617,000 over the amount for 1939. This increase was due partly to larger current earnings from holdings of United States Government securities and partly Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

22 ANNUAL REPORT OF BOARD OF GOVERNORS to increased profits on Government securities. Current expenses of the Federal Reserve Banks increased $518,000 to $29,165,000. Of total net earnings for 1940, payments to the Secretary of the Treasury under section 13b of the Federal Reserve Act, relating to working capital advances to commercial and industrial businesses, amounted to $82,000. The 6 per cent dividend to member banks, paid in accordance with the provisions of the Federal Reserve Act, amounted to $8,215,000. Remaining net earnings of $17,563,000 were added to surplus accounts. Transfers from surplus to reserves for contingencies totaled $12,273,000. Detailed statements of earnings, expenses, and distribution of net earnings for the System and for each Federal Reserve Bank are given in Table 5 on pages 40-41. Average daily holdings of bills and securities at the Reserve Banks for the past four years and average rates of earnings thereon are shown in the accompanying table. It will be noted that while average holdings of United States securities were smaller in 1940 than in the preceding year earnings therefrom were substantially larger. This was due to a higher average earning rate, which is accounted for by the fact that holdings of United States securities in 1940 consisted exclusively of bonds and notes, whereas in 1939 they included a substantial volume of bills. EARNINGS ON BILLS AND SECURITIES [Amounts in thousands of dollars] Item and year Total dis B co il u ls nted i m b n B o a o u r i p l k g l e s e h n t t U G g d n s u o e i i r a v t c e e r u e c d a r r t n n i t S t m i a e e t n a e s e d t d , n e t s I a n d d v u a s n t c ri e a s l Daily average holdings: 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 1940 2,429,984 4,046 2,416,761 9,177 Earnings: 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 1940 42,677 51 42,174 452 Average rate of earnings (per cent): 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 1940 1.76 1.26 1.75 4.93 Discount rates of the Federal Reserve Banks were unchanged during the year except on industrial advances and commitments under section 13b of the Federal Reserve Act. Rates on such transactions rate?™* were &enerau<y reduced during the last quarter to permit the charging of lower interest on loans to finance defense contracts. The Reserve Banks were also authorized, in case of industrial advances participated in by a local bank, to charge the rate fixed by the financing institution if lower than the established Federal Reserve Bank rate. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

FEDERAL RESERVE SYSTEM 23 The number of banks on the Federal Reserve par list at the end of 1940 was 11,632, comprising all of the 6,486 member banks and 5,146 nonmember banks. The number of nonmember banks Interdistrict (other than mutual savings banks and banks on which Collection v _ & . .. x System no checks are drawn) not on the par list was 2,715. Banks on the par list pay without deduction of exchange charges such checks drawn upon them as are forwarded for payment by the Reserve Banks. The number of banks on the par list declined 125 during the year, as a result of mergers, voluntary liquidations, suspensions, and withdrawals from the par list. During the year there was a net reduction of four in the number of nonpar banks. Thirty-two such banks terminated their existence and 14 became par banks; on the other hand, 10 new banks opened as nonpar banks and 32 par banks assumed a nonpar status. In 1940 as in the previous year, more of the banks that were in existence throughout the year withdrew from the par list than were added to it. Of the gross increase of 42 in the number of nonpar banks, 10 were in the St. Louis and 14 in the Minneapolis Federal Reserve district. The net increase in the number of nonpar banks in the St. Louis district was one and in the Minneapolis district three. The distribution of the number of nonpar banks by States at the end of the year was as follows: Minnesota 415, Georgia 256, Mississippi 177, Tennessee 169, Nebraska 162, Wisconsin 160, Arkansas 133, Alabama 131, North Carolina 125, South Carolina 119, North Dakota 113, Iowa 113, Missouri 106, Louisiana 104, Texas 98, South Dakota 95, Florida 88, and 13 other States 151. The balance of the credit granted to the National Bank of Hungary by the Reserve Banks in 1931 was repaid on July 29, 1940, in the amount of $1,817,000 plus accrued interest from July 18, the date centraf bankseign on which ^he credit expired. Two semiannual interest payments due in 1940 were made according to the terms of the renewal agreement of 1937 (ANNUAL REPORT for 1937, p. 35). Two loans on gold to a foreign central bank were outstanding at the end of 1939 for a total amount of $5,020,000. This total included $1,520,000 maturing in February 1940 and $3,500,000 maturing in March 1940. In February the first loan was renewed for one month in the amount of $1,000,000, and later in the month, a further loan of $1,000,000 maturing in May was granted. These loans were repaid in full in advance of the respective due dates. A series of relatively small loans on gold for periods not exceeding three months was made to another central bank from August 31 to December 24. The amount of such loans outstanding on December 31,1940, was $947,000, all maturing by the end of January 1941. LEGISLATION RELATING TO THE FEDERAL RESERVE SYSTEM Although not the major subject of any legislation enacted during 1940, the Federal Reserve System and its operations were directly or indirectly Digitized for FRASER http://frasear.fsftelocutiesdfe db.oyr gC/ ongressional action with respect to the following: Federal Reserve Bank of St. Louis

24 ANNUAL REPORT OF BOARD OF GOVERNORS Impounding Funds of Certain Foreign Countries and Their Nationals.— An Act approved May 7, 1940, made certain technical and clarifying amendments to section 5(b) of the Act of October 6, 1917, known as the Trading with the Enemy Act. This provision was the basis for the Presidential Proclamation of a Federal "bank holiday" in 1933, and had been amended by section 2 of the Emergency Banking Act of March 9, 1933. The 1940 amendment was for the purpose of clarifying the authority of the President to regulate transactions in funds or other property in this country in which foreign countries or their nationals have an interest. By Executive Orders under this provision during 1940, transactions in funds or other property of various invaded countries and their nationals were subjected to licensing by the Secretary of the Treasury. In this connection reports as to such funds or property, as well as applications for licenses, were required to be filed with the Federal Reserve Banks. Possession of Property Stolen from Banks.—An Act approved June 29, 1940, provided criminal penalties for any person who receives, possesses, or disposes of any money or property which he knows to have been feloniously taken from any member bank of the Federal Reserve System, any insured bank, or any bank organized or operating under the laws of the United States. The Act was in the form of a further amendment to the amended Act of May 18, 1934, which provides criminal penalties for robberies of such banks. Assignment of Claims under Government Contracts.—The Assignment of Claims Act of 1940, approved October 9, 1940, provided that claims under public contracts may under certain conditions be assigned to a bank, trust company, or other financing institution. While this Act does not directly refer to the Federal Reserve System, it is closely related to the arrangements which the Federal Reserve System made, in cooperation with the Advisory Commission to the Council of National Defense, to assist in facilitating the defense program, particularly in connection with the obtaining of contracts by the smaller business enterprises and financing by local banks. CHANGES IN REGULATIONS OF THE BOARD OF GOVERNORS The regulations of the Board of Governors were changed during the year 1940 in the following respects: Regulation on Noncash Collections.—On February 1, 1940, there became effective a new Regulation G governing the collection by Federal Reserve Banks of notes and bills and other "noncash items" for member banks and nonmember banks. The regulation, which had been adopted by the Board on December 26, 1939, was issued in order that the principal terms and conditions relating to the collection of noncash items might be published 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 circulars of the Digitized fionr dFiRvAidSuEaRl Federal Reserve Banks. http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

FEDERAL RESERVE SYSTEM 25 Interlocking Bank Directorates.—Effective January 2, 1940, the Board of Governors amended section 3(c) of Regulation L, relating to interlocking bank directorates under the Clayton Act, so as to permit any director, officer, or employee of a bank which does not exercise trust powers to serve a trust company which does not receive deposits. The Banking Act of 1935 had amended the Clayton Act by tightening the prohibitions against interlocking bank directorates, but had allowed a period until February 1, 1939 for the adjustment of lawfully existing relationships. The statute authorized the Board of Governors to make exceptions by regulation, and the Board, by amendments to sections 3(a) and 3(e) of its Regulation L, had extended the period of adjustment until June 1, 1940, the last extension having been made on February 1, 1940. No further extension was made, and, therefore, on June 1, 1940 the provisions of the statute which had been postponed became effective. Common Trust Funds Invested Principally in Mortgages.—Effective June 1, 1940, the Board amended section 17 of Regulation F, relating to trust powers of national banks, so as to permit the operation of Common Trust Funds invested principally in mortgages, in States in which there is specific statutory authority for the operation of such funds. These amendments enable such funds operated under State statutes to obtain certain tax exemptions which are granted by the Federal revenue laws to Common Trust Funds operated in accordance with the Board's regulations. BANK EXAMINATIONS There was no change in the policy and procedure of the Board of Governors with respect to bank examinations during 1940. Briefly, the situation was as follows: Federal Reserve Banks.—Each of the 12 Federal Reserve Banks was examined during the year by the Board's Division of Examinations. Foreign Banking Corporations.—The head office of the one banking corporation now in active operation organized under the provisions of section 25 (a) of the Federal Reserve Act to engage in foreign or international banking was examined 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 Banks under the direction of the Board of Governors. State member banks are subject, under the provisions of the Federal Reserve Act, to examinations made by direction of the Board of Governors of the Federal Reserve System or of the Federal Reserve Banks by examiners selected or approved by the Board of Governors. The policy approved by the Board of Governors for such examinations was continued without change, i.e., that at least one regular examination of each State member bank, including its trust department, be made during each calendar year by the examiners for the Federal Reserve Bank of its district. As in previous years, in order to avoid duplication of examinations and to Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

26 ANNUAL REPORT OF BOARD OF GOVERNORS minimize inconvenience to the banks examined, it has been the policy wherever practicable to make joint examinations in cooperation with the State banking authorities or, by agreement with the State authorities, to make alternate examinations. GRANTS OF AUTHORITY Pursuant to provisions of the Federal Reserve Act and the Securities Exchange Act, the Board of Governors took the following action with regard to grants of authority during the year 1940. During the year the Board approved the applications for membership of 196 State banks and 192 were admitted to membership. Four of the 192 admissions did not increase the number of member Membership in banks in the Federal Reserve System, since they the Reserve _ _ , . . System represented banks organized to succeed existing member banks. The difference between the number of applications approved and the number of banks admitted to membership is accounted for by the fact that nine of the banks admitted in 1940 were approved for membership in 1939, twelve of those approved in 1940 did not accomplish membership until 1941, and one bank whose application was approved elected not to join the System. Under the provisions of section ll(k) of the Federal Reserve Act, the Board granted authority to exercise one or more trust powers to 18 national banks. Trust powers of 31 national banks were nadona?1banks terminated, 14 by voluntary liquidations, 4 by consolidations with other national banks, and 13 by voluntary surrender. At the end of 1940, there were 1,860 national banks holding permits to exercise trust powers. A list of such banks, showing the power or powers each is authorized to exercise, will be furnished upon request. During the year 1940 the Board acted upon the applications for voting permits submitted by holding company affiliates of member banks in accordance with the provisions of section 5144 of the Revised Statutes and section 9 of the Federal Reserve Act, and authorized the issuance of five permits for general purposes and eight permits for limited purposes. Under the authority of section 301 of the Banking Act of 1935, the Board determined that nine organizations were not engaged directly or indirectly as a business in holding the stock of, or managing or controlling, 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. There were no changes during the year in the list of foreign banking corporations operating under agreements entered into with the Board of Governors pursuant to section 25 of the Federal ReforpeorationskinS serve Act or in the list of foreiSn banking corporations Digitized for FRASER chartered by the Board under the provisions of section http://fraser.stlouisfed.org/ Federal Re2s5e(rave) Boafn tkh oef SFte. dLoeuriasl Reserve Act.

FEDERAL RESERVE SYSTEM 27 The four 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 Corporation, which is affiliated with the National City Bank of New York; First of Boston International Corporation, which is affiliated with the First National Bank of Boston; and French American Banking Corporation, which is owned by the Guaranty Trust Company of New York, the First National Bank of Boston, and the Comptoir National D'Escompte of Paris. The Chase Bank, which commenced business in 1930 and is affiliated with the Chase National Bank of New York, is the only banking corporation in active operation organized under the provisions of section 25(a) of the Federal Reserve Act to engage in international or foreign banking. Two of the five corporations referred to above have no foreign branches. The other three corporations operate, either directly or through subsidiary corporations, 12 foreign branches or offices located as follows: In England, 3; France, 4; Spain, 2; China, 2; Hong Kong, 1. During the year the Chase Bank discontinued one of the two offices operated in Paris and opened a temporary office in unoccupied French territory at Chateauneufsur-Cher. The National City Bank of New York (France) S. A. of Paris, affiliated with the International Banking Corporation, established an office at Le Puy en Velay in the south of France. At the end of the 3^ear, seven member banks were operating a total of 93 branches or offices in 62 cities in 23 foreign countries or dependencies or insular possessions of the United States. This repreof mwnbe^banks sents a net increase of one as the result of the establishment of four new branches and the discontinuance of three. During the year the Board granted permission, pursuant to the provisions of section 25 of the Federal Reserve Act, for the establishment of two foreign branches of member banks, a branch of the Guaranty Trust Company of New York at Vichy, France, and an additional branch of the First National Bank of Boston at Buenos Aires, Argentina. Two other branches were established by the National City Bank of New York under permission given in the previous year, one at Barranquilla, Colombia, and an additional branch at Shanghai, China. The three discontinued branches were those of the National City Bank of New York at Brussels, Belgium, and Hankow, China, and the branch of the Guaranty Trust Company of New York at Antwerp, Belgium. Of the 93 branches and offices, four national banks were operating 84, and three State bank members were operating nine. The foreign branches were distributed geographically as follows: Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

28 ANNUAL REPORT OF BOARD OF GOVERNORS Argentina 10 Dominican Republic. . 6 Philippine Islands.... 1 Belgium 1 England 11 Puerto Rico 7 Brazil 4 France 3 Straits Settlements... 1 Burma 1 Hong Kong 1 Uruguay 1 Canal Zone 4 India 3 Venezuela 1 Chile 2 Japan 4 China 7 Mexico 1 Colombia 3 Panama 4 Cuba 16 Peru 1 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 nonnonnfenfber banks member bank on registered securities (other than exempted securities) unless such nonmember bank has signed an agreement with and in the form prescribed by the Board of Governors of the Federal Reserve System. At the end of the year there were 150 nonmember banks with such agreements in force. FEDERAL RESERVE MEETINGS Four meetings of the Federal Open Market Committee were held in Washington during 1940, on March 20, May 27-28, September 27, and December 18, and the executive committee of the Federal Open Market Committee met 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. The procedure was followed during the year of having meetings of the Presidents' Conference in Washington at the time of the meetings of the Federal Open Market Committee and, accordingly, meetings of the Presidents of the Federal Reserve Banks were held on March 19, May 27, September 27-28, and December 17-18, 1940. The Chairmen of the Federal Reserve Banks held two conferences in 1940, the first of which was on April 12-14 and the second on December 9-10, 1940. Four meetings of the Federal Advisory Council were held in Washington during 1940, on February 19-20, May 20-21, October 7-8, and November 18-19. Recommendations of the Council to the Board of Governors are published in the appendix to this Report. BOARD OF GOVERNORS-STAFF AND EXPENDITURES Effective March 8, 1940, Marriner S. Eccles of Utah was reappointed a member of the Board of Governors for the remainder of the term held by Chester C. Davis of Maryland expiring on January 31, Boa?d°metmbers°f 1944> and Mr- Davis was reappointed a member of the Board for the full term expiring on January 31, 1954. On March 5 Mr. Eccles was redesignated by the President as Chairman of the Board for a term of four years from February 1, 1940, and on July 18, 1940, Ronald Ransom of Georgia was redesignated by the President as Vice Chairman. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

FEDERAL RESERVE SYSTEM 29 Effective as of June 10, 1940, Fred A. Nelson was appointed an Assistant Secretary of the Board of Governors. In order to provide a better service in handling the Boanf sta*ff growing number of requests from the public for Board publications and for information on the Federal Reserve System, this work and the personnel engaged therein, hitherto distributed through various divisions of the Board's staff, have been concentrated in a new unit set up for the purpose in the Office of the Secretary. In connection with the expansion of economic research in the Division of Research and Statistics, the Board engaged Professor Alvin H. Hansen of Harvard University on a part-time basis. The total cost of conducting the work of the Board during the year 1940 was $1,646,690.45. Details are shown in Table 8 on pages 44-45. For the general expenses of the Board two assessments expenditures were ^eyie(^ against the Federal Reserve Banks aggregating $1,704,011.35, 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 Atlanta, the accounts of the Board for the year 1940 were audited by the Auditor of the Federal Reserve Bank of Atlanta, who certified them to be correct. BANKING STUDIES AND REPORTS TO CONGRESS During 1940 the Federal Reserve System continued the analysis of the banking and monetary problems outlined in the ANNUAL REPORT for 1938. A series of banking studies was completed by the Board's staff and is now in process of publication. At the time the Board discontinued publication of detailed statistics in its Annual Reports, it stated that such data would be made available in another form. A comprehensive compilation of domestic and international banking and monetary statistics, with some earlier historical data but devoted principally to the period since the establishment of the Federal Reserve System, is being prepared for publication. At the request of Congressional committees, during the year the Board prepared a number of reports on bills pending before Congress. These included reports on bills relating to the Home Loan Bank System, loans to small business concerns, assignment of claims under public contracts, power of national banks to make real estate loans, the Federal Land Bank System, and foreign accounts in Federal Reserve Banks and insured banks. Copies of these reports may be obtained from the Board by request. FEDERAL RESERVE BULLETIN Beginning with the January 1940 issue, several changes in format and content were made in the Federal Reserve Bulletin. Each issue during 1940 contained one or more articles by members of the Board or its staff, or officers of the Federal Reserve Banks. These articles have been a Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

30 ANNUAL REPORT OF BOARD OF GOVERNORS medium for discussion of subjects within the field of the Bulletin, and have supplemented the monthly review of current banking and monetary developments and the statistical and legal data which constitute the main substance of the Bulletin. A section has also been added to the Bulletin in which questions of general interest relating to money and banking are answered. CHANGES IN SENIOR EXECUTIVE OFFICERS OF FEDERAL RESERVE BANKS Effective as of December 31, 1940, George L. Harrison resigned as President of the Federal Reserve Bank of New York and was succeeded on January 1, 1941, by Allan Sproul. Mr. Sproul was succeeded as First Vice President by Leslie R. Rounds, formerly Vice President of the Bank. The appointments of Messrs. Sproul and Rounds were for the unexpired portions of the five-year terms ending February 28, 1941. On January 2, 1941, Mr. Harrison was appointed a member of the Federal Advisory Council to represent the second Federal Reserve District, succeeding Leon Fraser in that capacity. 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 31, 19401 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 6,379,500 Gold certificates in interdistrict settlement fund with Board of Governors 11,860,837 Gold certificates held by banks 1,510,444 Gold certificates on hand and due from U. S. Treasury 19,750,781 Redemption fund—Federal Reserve notes 9,692 Total gold reserves 19,760,473 Other cash: United States notes 54,583 Silver certificates 203,489 Standard silver dollars 2,432 National and Federal Reserve Bank notes 1,345 Subsidiary silver nickels and cents 13,260 Total other cash 275,109 Total reserves 20,035,582 Bills discounted: Secured by U. S. Government obligations, direct and guaranteed: Discounted for member banks 851 For others Total secured by U. S. Government obligations, direct and guaranteed 851 Other bills discounted: For member banks 1,117 For others 947 Total other bills discounted 2,064 Total bills discounted 2,915 Industrial advances 7,538 U. S. Government securities, direct and guaranteed: Bonds 1,284,600 Notes 899,500 Total U. S. Government securities, direct and guaranteed 2,184,100 Total bills and securities 2,194,553 Due from foreign banks 47 Federal Reserve notes of other Reserve Banks 31,628 Uncollected items: Transit items 849,330 Exchanges for clearing house 41,472 Other cash items 21,596 Total uncollected items 912,398 Bank premises 41,851 Other assets: Miscellaneous assets acquired account industrial advances 1,227 Industrial advances past due 1,614 Claims account closed banks 1,271 Total 4,112 2,577 Net 1,535 Interest accrued 8,493 Premium on securities 33,497 Deferred charges 589 Suspense account and miscellaneous assets 3,395 Total other assets 47,509 Total assets '. 23,263,568 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. 1,—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) 6,256,650 Held by issuing Federal Reserve Banks and branches 314,459 Forwarded for redemption 11,194 Federal Reserve notes in actual circulation (including notes held by Treasury and by Federal Reserve Banks other than issuing bank) 5,930,997 Deposits: Member bank—reserve account 14,024,784 U. S. Treasurer—general account 368,470 Foreign 1,132,909 Other deposits: Nonmember clearing account 365,262 Officers' checks 65,189 Federal Reserve exchange drafts 170 All other 168,923 Total other deposits 599,544 Total deposits 16,125,707 Deferred availability items 832,779 Other liabilities: Accrued dividends unpaid 847 Unearned discount 4 Discount on securities Reserves for estimated losses on bills and securities 350 Suspense account and miscellaneous liabilities 1,366 Total other liabilities 2,567 Total liabilities 22,892,050 CAPITAL ACCOUNTS Capital paid in 138,578 Surplus (sec. 7) 151,720 Surplus (sec. 13b) 26,839 Other capital accounts: Reserve for contingencies 34,627 Earnings: Gross earnings 43,538 Current expenses 29,166 Current net earnings 14,372 Add—profit and loss 13,597 Deduct: Dividends accrued since closing of books 8,215 Net earnings available for depreciation allowances, reserves and surplus 19,754 Total other capital accounts 54,381 Total liabilities and capital accounts 23,263,568 Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

00 NO. 2.-STATEMENT OF CONDITION OF EACH FEDERAL RESERVE BANK AT END OF 1939 AND 1940 [In thousands of dollars] Total Boston New York Philadelphia Clevelaind Richmond 1940 1939 1940 1939 1940 1939 1940 1939 1940 1939 1940 1939 ASSETS Gold certificates on hand and due from U. S. Treasury. 19,750,78115,199,120 1,136,171 865,816 9,757,527 7,225,434 1,046,557 846,062 1,331,413 1,027,910 553,294 405603 Redemption fund—Federal Reserve notes 9,692 9,903 1,213 924 972 1,619 1,073 1,071 660 816 1,108 935 Other cash 275,109 315,194 26,617 28,528 51,324 71,716 18,754 26,470 19,963 21,340 18,806 20223 w Total reserves 20,035,58215,524,217 1,164,001 895,268 9,809,823 7,298,769 1,066,384 873,603 1,352,036 1,050,066 573,208 426 761 o > Bills discounted: Secured by U. S. Government obligations, direct d Ot a h n e d r b g i u ll a s r a d n i t s e c e o d unted 2,0 8 6 5 4 1 6,1 5 9 7 1 4 100 30 4 2 9 4 1 5 2,25 9 8 0 2 1 7 8 8 7 5 1 1 5 3 0 1 1 5 5 0 0 5 1 4 1 2 3 4 1 1 0 2 4 3 2 0 o Total bills discounted 2,915 6,765 100 30 736 2,348 465 663 300 655 51 272 Q Industrial advances 7,538 11,044 974 1,301 1,756 2,035 2,052 3,084 250 315 781 948 O U. S. Government securities, direct and guaranteed: Bonds .... 1,284,600 1,351,045 92,213 98,098 379,572 419,593 107,638 115,673 128,649 140,975 68,168 70,076 Notes 899,500 1,133,225 64,568 82,283 265,783 351,944 75,369 97,022 90,082 118,247 47,732 58,778 3 § Total U. S. Government securities, direct and guaranteed 2,184,100 2,484,270 156,781 180,381 645,355 771,537 183,007 212,695 218,731 259,222 115,900 128 854 GO Total bills and securities 2,194,553 2,502,079 157,855 181,712 647,847 775,920 185,524 216,442 219,281 260,192 116,732 130 074 Due from foreign banks 47 47 3 3 18 18 5 5 4 4 2 Federal Reserve notes of other Federal Reserve Banks. 31,628 33,454 635 584 4,773 4,336 1,865 1,945 1,947 2,137 3,328 4 189 Uncollected items 912,398 867,206 82,594 82,640 234,525 245,509 63,085 73,955 102,207 97,538 76,132 64944 Bank premises . .. ... 40,062 41,749 2,833 2,889 9,701 9,895 4,501 4,573 4,587 5,547 ,590 545 Other assets 47,596 58,583 3,168 3,887 13,228 17,226 4,909 5,829 5,074 6,523 2,756 3486 Total assets 23,261,86619,027,335 1,411,089 1,166,98310,719,915 8,351,673 1,326,273 1,176,352 1,685,136 1,422,007 774,748 632 001 Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

LIABILITIES Federal Reserve notes in actual circulation1 5,930,997 4,958,546 479,728 408,195 1,576,404 1,269,922 410,704 348,938 540,941 463,123 283,520 229,550 Deposits: Member bank—reserve account 14,025,63311,653,232 756,465 544.545 7,556,979 6,319,837 703,580 598,597 920,969 680,194 354,132 282,998 U. S. Treasurer—general account 368,481 634,270 6,044 77,716 131,605 139,593 13,664 65,043 16,328 113,236 12,636 25,590 Foreign bank 1,132,909 397,443 54,872 29,243 633,979 136,108 75,944 39,417 72,069 37,791 33,322 17,473 Other deposits 599,544 255,836 8,236 6,758 492,197 165,324 26,675 16,820 4,774 8,181 4,245 2,513 Total deposits 16,126,56712,940,781 825,617 658,262 8,814,760 6,760,862 819,863 719,877 1,014,140 839,402 404,335 328,574 Deferred availability items 832,779 776,665 79,913 76,082 201,083 199,137 60,412 73,866 95,814 86,696 70,836 58,805 Other liabilities including accrued dividends 2,196 2,558 269 183 175 873 875 965 149 126 246 10 Total liabilities 22,892,53918,678,550 1,385,527 1,142,72210,592,422 8,230,794 1,291,854 1,143,646 1,651,044 1,389,347 758,937 616,939 CAPITAL ACCOUNTS Capital paid in 138,579 135,599 9,335 9,384 51,096 50,972 11,882 12,115 14,198 13,830 5,366 5,171 Surplus (sec. 7) 157,064 151,720 10,905 10,405 56,447 53,326 15,144 14,198 14,323 14,323 5,247 5,247 Surplus (sec. 13b) 26,785 26,839 2,874 2,874 7,070 7,109 4,393 4,393 1,007 1,007 3,244 3,246 Other capital accounts 46,899 34,627 2,448 1,598 12,880 9,472 3,000 2,000 4,564 3,500 1,954 1,398 Total liabilities and capital accounts. 23,261,86619,027,335 1,411,089 1,166,98310,719,915 8,351,673 1,326,273 1,176,352 1,685,136 1,422,007 774,748 632,001 Commitments to make industrial advances 5,226 9,070 244 479 700 1,803 162 930 727 1,140 540 761 FEDERAL RESERVE NOTE STATEMENT Federal Reserve notes: Issued to Federal Reserve Bank by Federal Reserve agent 6,256,650 5,274,522 502,343 429,660 1,660,126 1,362,927 429,044 368,874 569,587 488,021 299,792 245,605 Held by Federal Reserve Bank 325,653 315,976 22,615 21,465 83,722 93,005 18,340 19,936 28,646 24,898 16,272 16,055 In actual circulation1 5,930,997 4,958,546 479,728 408,195 1,576,404 1,269.922 410,704 348,938 540,941 463,123 283,520 229,550 Collateral held by agent for notes issued to banks: Gold certificates on hand and due from U. S. Treasurv 6 379 500 5 371 000 510 000 440 000 1 685 000 1 385 000 440 000 375 000 575 000 491 000 315 000 250 000 Eligible paper 1,688 1,365 100 30 331 184 372 177 10 57 Total collateral held 6,381,188 5,372,365 510,100 440,030 1,685,331 1,385,184 440,372 375,177 575,000 491,000 315,010 250,057 1 Includes Federal Reserve notes held by the U. S. Treasury or by a Federal Reserve Bank other than the issuing bank. 00 Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

No. 2.—Statement of Condition—Continued 00*- OS [In thousands of dollars] Atlanta Chicago St. Louis Minneapolis Kansas City Dallas San Francisco 1940 1939 1940 1939 1940 1939 1940 1939 1940 1939 1940 1939 1940 1939 ASSETS Gold certificates on hand and due from U. S. Treasury... 384,635 300,8312,899,447 2,455,662 494,577 413,898 311,096 258,566 420,712 348,852 280,159 242,196 1,135,193 808,290 Redemption fund—Federa IReserve notes 19,0 6 5 2 5 9 16,6 7 6 4 1 5 36 1 , , 3 22 5 9 2 39,9 6 0 2 6 4 16,4 1 8 6 2 9 17, 7 78 7 3 2 6,5 3 7 3 6 2 9,2 2 6 1 8 9 15,2 4 8 1 5 0 17,4 4 1 7 8 8 14,0 5 1 0 0 9 15,2 3 5 6 9 4 31 1 , , 885 30 1 , , 6 33 2 6 2 2 Other cash Total reserves 404,319 318,2372,937,028 2,496,192 511,228 432,453 318,004 268,053 436,407 366,748 294,678 257,819 1,168,466 840,248 S Bills discounted: Secured by U. S. Government obligations, direct and guaranteed 20 15 109 50 48 25 4 35 Other bills discounted 190 157 28 186 107 216 667 906 40 146 361 Total bills discounted 210 157 643 28 201 216 715 931 40 150 Industrial advances 334 269 324 11 219 743 181 278 500 545 U. S. Government securities, direct and guaranteed: Bonds 49,278 54,597 146,651 148,547 55,508 45,803 36,611 36,677 62,958 61,021 49,948 48,970 107,406 111,015 o Notes 34,506 45,795 102,688 124,599 38,868 38,419 25,636 30,764 44,085 51,183 34,974 41,075 75,209 93,116 > Total U. S. Government securities, direct and Pi guaranteed 83,784 100,392 249,339 273,146 94,376 84,222 62,247 67,441 107,043 112,204 84,922 90,045 182,615 204,131 Total bills and securities 84,156 101,296 249,765 274,113 94,404 84,434 62,682 68,450 107,838 113,316 85,240 90,695 183,229 205,435 Due from foreign banks 2 2 6 6 1 1 * 1 1 1 1 4 4 o Federal Reserve notes of other Federal Reserve Banks... 3,385 3,617 4,136 5,475 2,; 2,510 1,514 1,316 2,261 1,975 1,024 865 3,864 4,505 o i Uncollected items 43,435 33,471 126,885 119,172 52,651 36,269 19,555 20,795 36,161 33,000 29,530 26,817 45,638 33,096 Bank premises 1,991 2,034 3,040 3,390 2,318 2,243 1,367 1,396 3,059 3,106 1,226 1,175 2,849 2,956 Other assets 1,766 2,359 5,069 5,974 1,917 1,903 1,: 1,622 2,198 2,514 1,865 2,140 4,250 5,120 Total assets 539,054 461,016 3,325,929 2,904,322 665,415 559,813 404,518 361,632 587,925 520,660 413,564 379,512 1,408,300 1,091,364 § * Less than $500. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

LIABILITIES Federal Reserve notes in actual circulation1. 195,853 162,9411,262,3961,085,378 221,148 193,549 158,709 141,427 211,215 183,908 97,865 83,575 492,514 388,040 Deposits: Member bank—reserve account... 246,999 211,821 1,711,100 1,528,702 326,872 270,676 174,476 154,788 279,690 260,687 240,275 216i,,794 754,096 583,593 U. S. Treasurer—general account.. 12,547 22,462 84,537 71,030 23,893 32,195 22,857 24,452 16,861 23,077 10,926 21,233 16,583 18,643 Foreign bank 27,123 14,222 92,992 49,169 23,248 11,784 17,049 9,346 22,473 11,784 23,248 11,784 56,590 29,322 Other deposits 5,481 6,813 5,324 5,312 7,167 7,294 5,376 6,105 13,164 991 2,446 9,584 24,459 20,141 Total deposits 292,150 255,318 1,893,9531,654,213 381,180 321,949 219,758 194,691 332,188 296,539 276,895 259,395 851,728 651,699 Deferred availability items 37,533 30,078 122,197 120,150 51,417 33,564 16,344 16,362 33,301 29,887 27,369 25,388 36,530 26,650 Other liabilities including accrued dividends. 17 153 160 56 15 81 87 48 72 61 48 3 2 Total liabilities. 525,616 448,354 3,278,699 2,859,901 653,801 549,077 394,892 352,567 576,752 510,406 402,220 368,406 1,380,7751,066,391 CAPITAL ACCOUNTS Capital paid in 4,693 4,621 14,533 13,494 4,212 4,073 2,975 2,931 4,462 4,314 4,208 4,066 11,619 10,628 Surplus (sec. 7) 5,725 5,725 22,824 22,824 4,925 4,709 3,152 3,152 3,613 3,613 3,974 3,974 10,785 10,224 Surplus (sec. 13b) 713 713 1,429 1,429 533 538 1,000 1,001 1,138 1,142 1,263 2,121 2,121 Other capital accounts 2,307 1,603 8,444 6,674 1,944 1,416 2,499 1,981 1,960 1,185 1 1^800 3,000 2,000 Total liabilities and capital accounts 539,054 461,016 3,325,9292,904,322 665,415 559,813 404,518 361,632 587,925 520,660 413,564 379,512 1,408,300 1,091,364 78 24 22 303 50 62 35 532 2,441 2,960 Commitments to make industrial advances FEDERAL RESERVE NOTE STATEMENT Federal Reserve notes: Issued to Federal Reserve Bank byfFederal Reserve agent 220,270 177,629 ,294,126 1,121,094 234,319 204,926 163,870 146,847 219,247 193,713106,582 92,100 557,344 443,126 Held by Federal Reserve Bank 24,417 14,688 31,730 35,716 13,171 11,377 5,161 5,420 8,032 9,805 8,717 8,525 64,830 55,086 In actual circulation1 195,853 162,9411,262,396 1,085,378 221,148 193,549 158,709 141,427 211,215 183,908 97,865 83,575 492,514 388,040 Collateral held by agent for notes issued to banks: Gold certificates on hand and due from U. S. Treasury 225,000 180,0001,310,000 1,140,000 244,000 209,000 165,500 147,500 225,000 195,000 111,000 94,500 574,000 464,000 Eligible paper 55 190 118 685 744 Total collateral held 225,000 180,0001,310,000 1,140,000 244,000 209,055 165,690 147,618 225,685 195,744 111,000 94,500 574,000 464,000 1 Includes Federal Reserve notes held by the U. S. Treasury or by a Federal Reserve Bank other than the issuing bank. CO Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

38 ANNUAL REPORT OF BOARD OF GOVERNORS NO. 3.-HOLDINGS OF UNITED STATES GOVERNMENT SECURITIES BY FEDERAL RESERVE BANKS AT END OF DECEMBER 1939 AND 1940 [In thousands of dollars] i R nt a e te re o s f t Dec. 30, Dec. 31, Change (per cent) 1939 1940 Treasury bonds of: 1941 . . VA 57,027 57,000 -27 1941-43 Ws 14,669 14,600 —69 1940-43 W% 10,675 -10,675 1943-45.. V/x 46,523 46,500 -23 1945 2H 29,258 28,700 -558 1944-46 . 3^ 53,132 53,000 -132 1943-47 3^ 30,443 30,400 -43 1945-47 2U 63,681 63,300 -381 1947 .... . 2 44,156 31,800 -12,356 1946-48 3 71,870 71,800 -70 1948 .. 2H 25,197 21,400 -3,797 1946-49 ... . 3K 27,746 23,600 -4,146 1948-51 88,536 92,800 +4,264 1 1 9 9 4 5 7 0 - - 5 5 2 2... 4 2 M V2 1 8 0 0 , , 6 7 9 1 8 5 1 8 0 0 , , 6 0 0 0 0 0 -7 -9 1 8 5 1949-52 30,378 27,500 -2,878 1 19 9 5 4 1 9 - - 5 5 3 3.... 2 2H V2 9 9 1 6 , , 6 0 4 0 4 0 9 7 0 7 , , 3 9 0 0 0 0 -1 -1 8 , , 3 1 4 0 4 0 1951-54 2% 93,394 89,700 -3,694 1944-54 35,078 35,000 -78 1953-55 2 47,800 +47,800 1951-55 3 45,952 44,000 -1,952 1946-56 VA 24,025 24,500 +475 1956-59 2% 58,200 50,400 -7,800 1955-60 2% 79,894 68,300 -11,594 1958-63 2U 57,006 52,800 -4,206 1960-65 2*A 74,399 46,300 -28,099 Total Treasury bonds 1,340,295 1,280,000 -60,295 Guaranteed bonds: HOLC of 1942-44 2H 4,000 2,000 -2,000 HOLC of 1944-52 3 2,000 1,000 -1,000 FFMC of 1942-47 3 1,000 1,000 FFMC of 1944-49 3 3,550 600 -2,950 FFMC of 1944-64 3M 200 -200 Total guaranteed bonds 10,750 4,600 -6,150 Treasury notes: Series maturing: June 15, 1940 1)2 136,783 -136,783 Dec. 15, 1940 IK 105,974 -105,974 Mar. 15, 1941 118,822 66,266* * -58,622 June 15, 1941 m 60,397 58,300 -2,097 Dec. 15, 1941 44,069 43,000 -1,069 Mar. 15, 1942 IK 85,872 84,800 -1,072 Sept. 15, 1942 68,294 66,200 -2,094 Dec. 15, 1942 2 33,801 30,800 -3,001 June 15, 1943. .. 1% 144,420 102,400 -42,020 Sept. 15, 1943 35,700 +35,700 Dec. 15, 1943 79,096 69,800 -9,296 Mar. 15, 1944 1 113,498 109,900 -3,598 June 15, 1944. . % 79,441 79,400 -41 Sept. 15, 1944 61,705 60,600 -1,105 Mar. 15, 1945 % 98,400 +98,400 Total Treasury notes 1,132,172 899,500 -232,672 Guaranteed note: RFC of Jan. 15, 1942 % 1,053 -1,053 Total holdings 2,484,270 2,184,100 -300,170 Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

FEDERAL RESERVE SYSTEM 39 NO. 4.-VOLUME OF OPERATIONS IN PRINCIPAL DEPARTMENTS OF FEDERAL RESERVE BANKS 1936-1940 [Number in thousaiids; amounts in thousands of dollars] 1936 1937 1938 NUMBER OF PIECES HANDLED* Bills discounted: Applications 3 7 Notes discounted 4 7 Advances made 3 7 Industrial advances: Advances made .7 .2 Commitments to make industrial advances .3 .1 Bills purchased in open market for own account 1 2 Currency received and counted 2,232,980 2 257,892 Coin received and counted 2,665,190 2,730,387 Checks handled 1,009,264 1044,553 Collection items handled: U. S. Government coupons paid2 18,806 18,566 All other 6,968 6,705 Issues, redemptions, and exchanges by fiscal agency department: U. S. Government direct obligations 27,919 3,892 All other 1,538 661 Transfer of funds 951 980 AMOUNTS HANDLED Bills discounted: Notes discounted 6,886 16,187 Advances made 160,714 516,852 Industrial advances: Advances made 8,519 4,932 Commitments to make industrial advances 12,583 6,978 Bills purchased in open market for own account 25,207 25,252 Currency received and counted 10,059,637 10,199,559 Coin received and counted 276,323 287,708 Checks handled 234,417,787 255,453,609r Collection items handled: U. S. Government coupons paid2 798,925 865,465 Allother 7,089,008 6,159,828J Issues, redemptions, and exchanges by fiscal agency department: U. S. Government direct obligations.... 25,196,825 19,304,020 Allother 2,223,136 1,691,863 Transfer of funds 87,001,630 94,596,861 CO CO 1939 194C 2 2 4 3 6 2 1 .4 .2 .2 .2 .1 .2 .2 .1 2,089,987 2,134,908 2,248 290' 2,676,248 2,644,418 2,705 344 1,098,115 1,157,140 1,184 356 17,802 17,145 15,444 6,389 6,177 6094 3,456 3,528 3752 575 1,162 485 853 814 780 10,472 11,285 8,384 226,687 75,690 61,500 6,500 3,805 2,860 11,217 4,621 4.374 2,781 2,133 8,883,728 9,285,921 "9,438,629 271,128 276,589 288,140 231,820,217 255,937,980 280,436,092 854,273 890,620 902,288 5,321,443 5,442,645 5,068,674 24,450,791 24,462,659 20,189,983 2,581,611 4,537.228 1,687.194 82,219,749 88,080,756 92,105^910 r Revised. 1 Two or more checks, coupons, etc., handled as a single item are counted as one "piece." 2 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 1JHO New Phila- Cleve- Rich- St. Minne- Kansas San Total Boston York delphia land mond Atlanta Chicago Louis apolis City Dallas Francisco CURRENT EARNINGS Discounted bills $51,188 $14,969 $4,710 $3,480 $2,349 $2,234 $3,051 $2,332 $2,756 $7,510 $4,656 $2,273 U. S. Government securities 42,174,224 3,046,481 12,740,845 3,426,176 4,291,014 2,152,496 1,662,283 4,616,872 1,894,530 1,237,3391,986,708 1,624,281 3,495,199 Industrial advances 451,501 54,322 88,844 120,867 16,097 54,207 21,714 14,689 818 15.265 8,848 22,477 33,353 Commitments to make industrial advances , 97,672 2,422 9,074 1,646 10,924 7,453 1,614 374 3,105 573 5,054 16 55,417 All other 763,220 7,973 131,354 53,738 28,117 17,255 196,231 19,994 9,570 151,556 11,860 51,633 Total current earnings 43,537,805 3,112,066 12,985,086 3,607,137 4,405,454 2,244,622 1,705,100 4,831,217 1,920,779 1,265,503 2,159,676 1,663,290 3,637,875 CURRENT EXPENSES Operating expenses: Salaries: Officers 2,233,802 120,167 511,769 121,132 177,079 143,483 141,593 240,875 157,297 111,167 171,311 125,954 211,975 Employees — 17,995,426 1,083,714 4,632,517 1,293,633 1,570,119 956,1451,004,642 2,457,306 1,018,012 581,362 1,004,308 981,928 1,411,740 Retirement System contributions for current service 984,185 55,639 250,156 83,538 55,168 56,086 127,202 59,187 33,457 61,272 51,474 81,652 Legal fees 62,284 12,078 10,883 6,506 15,762 434 673 566 151 9,243 59 -17 5,946 Directors' fees and expenses 133,895 7,' 11,573 8,600 7,605 7,524 14,290 7,249 12,491 11,681 19,991 9,702 15,953 Federal Advisory Council, fees and expenses 16,537 1,150 1,035 750 902 763 1,590 1,600 1,381 1,6 1,368 3,350 Traveling expenses (other than of directors and members of Federal Advisory Council) 319,027 15,479 47,735 25,816 28,459 23,722 25,150 36,053 23,379 21,898 19,649 21,864 Postage and expressage 3,540,191 388,209 599,246 284,651 340,529 287,074 213,902 438,345 166,881 138,968 217,207 170,637 294,542 Telephone and telegraph 446,459 16,239 87,847 26,164 42,103 25,676 43,372 30,995 35,487 18,682 41,029 33,938 44,927 Printing, stationery and supplies.... 849,492 79,437 198,808 66,092 71,150 47,306 53,123 90,644 47,635 33,694 49,241 46,654 65,708 Insurance on currency and security shipments 227,452 35,289 41,020 20,430 21,563 18,708 12,495 25,525 5,863 7,413 9,080 7,508 22,558 Other insurance 192,856 13,174 21,306 16,554 15,010 11,679 15,074 16,529 15,761 14,801 19,410 15,097 18,461 Taxes on bank premises 1,493,058 153,468 482,692 77,617 142,155 69,549 63,458 161,233 52,391 67,755 91,289 33,431 98,020 Depreciation on bank building 1,253,981 55,832 244,857 126,531 155,124 83,403 42,509 98,177 42,290 28,846 191,019 77,501 107,892 Light, heat, power, and water 401,267 28,857 75,236 30,040 43,275 24,232 35,203 40,394 25,717 19,574 28,785 24,844 25,110 Repairs and alterations to bank building 162,878 5,067 24,859 28,151 15,333 4,818 11,841 8,553 12,298 13,579 13,000 12,574 12,805 Rent 143,626 96 720 68,549 17,304 1,386 3,120 1,682 1,115 49,654 Furniture and equipment 334,550 18,985 84,620 31,253 24,377 22,351 28,188 "iM89 12,139 "ii;523 13,923 34,934 35,868 Allother 576,297 34,945 -9,945 74,363 55,217 36,270 56,632 85,473 52,526 39,561 42,165 43,887 65,203 Total operating expenses 31,367,263 2,125,061 7,316,214 2,308,357 1,877,8491,835,609 1 3,883,098 1,744,225 1,164,585 1,996,116 1,694,393 1,601,187 Less reimbursements for certain fiscal agency and other expenses... 5,416,317 210,575 933,518 202,536 264,348 236,001 655,976 961,115 468,856 251,882 345,554 518,614 367,342 Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

Net operating expenses 25,950,946 1,914,486 2,105,821 2,613,5011 1,164,593 2,921,983 1,275,369 912,703 1,650,562 1,175,779 2,233,845 Assessment for expenses of Board of Governors 1,704,011 122,453 602,890 165,500 158,308 74,243 59,879 204,768 50,617 38,397 49,291 50,509 127,156 Federal Reserve currency: Original cost 1,352,281 121,328 323,951 85,476 124,225 75,223j 47,752 319,084 40,436 28,215 39,683 30,114 116,794 Cost of redemption 158,239 11,254 31,884 10,755 14,084 12,419 11,024 25,329 6,786 5,619 8,458 5,862 14,765 Total current expenses. 29,165,477 2,169,521 7,341,421 2,367,552 2,910,118 1,761,493 1,283,248 3,471,164 1,373,208 984,934 1,747,994 1,262,264 2,492,560 PROFIT AND LOSS Current earnings (above)... 43,537,805 3,112,066 12,985,086 3,607,137 4,405,454 2,244,622 1,705,100 4,831,2171,920,7791,265,50312,159,676 1,663,290 3,637,875 Current expenses (above)... 29,165,477 2,169,521 7,341,421 2,367,552 2,910,118 1,761,4931,283,248 3,471,1641,373,208 984,934 1,747,994 1,262,264 2,492,560 Current net earnings. 14,372,328 942,545 5,643,665 1,239,585 1,495,336 483,129 421,852 1,360,053 547,571 280,569 411,682 401,026 1,145,315 Additions to current net earnings: Profits on sales of U. S. Government securities 11,696,656 851,604 3,408,167 979,180 1,163,699 608,518 496,545 1,292,363 528,208 363,421 570,275 449,203 985,473 All other 2,240,674 149,405 637,888 517,747 175,872 72,575 92,519 237,658 60,998 53,782 52,381 52,951 136,898 Total additions 13,937,330 1,001,009 4,046,055 1,496,927 1,339,571 681,093 589,064 1,530,021 589,206 417,203 622,656 502,154 1,122,371 Deductions from current net earnings: Losses and reserves for losses on industrial advances (net) 250,494 31,378 102,972 17,906 i110,150 30,500 26,509 499 16,000 34,880 Charge-offs and special depreciation on bann!k premises. 1,788,664 812,926 282,000 150,000 543,738 All other.. 410,475 570 31,767 1,678 110,824 '26U74 266 100 205 3,021 45 271 554 Total deductions. 2,449,633 31,948 134,739 19,584 913,600 291,674 26,775 282,100 150,205 3,520 45 560,009 35,434 Net additions 11,487,697 969,061 3,911,316 1,477,343 425,971 389,419 562,289 1,247,921 439,001 413,683 622,611 -57,855 1,086,937 Net earnings 25,860,025 1,911,606 9,554,981 2,716,928 1,921,307 872,548 984,141 2,607,974 986,572 694,252 1,034,293 343,171 2,232,252 Paid U. S. Treasury (sec. 13b) 82,152 23 56,097 15,108 10,924 Dividends paid 8,214,971 560,433 3,065,085 714,329 842,330 317,760 279,310 826,919 248,242 177,401 263,803 247,577 671,782 Transferred to surplus (sec. 13b) -54,456 -38,r ~~ -1,721 -5,675 -385 -4,265 -3,434 Transferred to surplus (sec. 7) 17,617,358 6,528,872 i,' 946; 502" i,' 063 ^ 869556,509 1,770,131 744,005 517,236 774,755 99,028 i,'566!470 A Su d r d p i l t u io s n ( , s e a c s . a 7 b ) o , v J e anuary 1 15 1 1 7 , , 7 6 2 1 0 7 , , 4 3 1 5 3 8 1 1 0 , , 3 4 5 0 1 4 , , 1 5 5 9 0 6 53 6, , 5 3 2 2 8 6 , , 8 2 7 8 2 5 14 1 , ,9 1 4 9 6 7 , , 5 7 0 9 2 6 5, 7 7 0 2 4 4 , , 8 6 3 2 1 8 22 1 , , 8 7 2 7 4 0 , ,1 2 3 6 1 8 4;, 7 7 4 0 4 9 , , 0 1 0 7 5 9 3, 5 1 1 5 7 2 , , 2 4 3 2 6 0 3, 7 6 7 1 4 2 , , 7 6 5 8 5 13,97 9 4 9 , , 4 0 6 2 2 8 1 1 0 , , 5 2 6 2 0 4, , 0 4 8 7 9 0 Transferred to reserves for contingencies -12,272,706 -850,000 -3,408,167 -1,000,000 -704,831 -1,770,131 -528,208 -517,236 -774,755 -99,000 -1,000,000 Surplus (sec. 7), Dec. 31 , 157,065,06510,905,746 56,446,990 15,144,2 14,322,790 5,247,2195,724,628 22,824,268 4,924,976 3,152,420 3,612,6813,974,490 10,784,559 1 Net recoveries. 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, 1914-1940 Earnings and expenses Disposition of net earnings Direct 2 charges d e C a u rn rr i e n n g t s e C x u p r e r n e s n e t s ear N ni e n t gs1 Div p i a d i e d nds F p r a T a i n d re c t a h o s i s u U e r . y t 2 a S x . Pa ( T S id r e e c t a . o s 1 u U 3 r b . y ) S. T t ( r o S a e n s c u s . f r e p 1 r 3 l r u b e s ) d T t r o ( a S n s e u s c f r . e p r 7 l r ) u e s d to (S s e u c r . p 7 l ) u 8 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 1918 67,584,417 10,959,533 52,716,310 5,540,684 48,334,341 1919 102,380,583 19,339,633 78,367,504 5,011,832 2,703,894 70,651,778 1 19 9 2 2 1 0 1 12 8 2 1 , , 8 2 6 9 5 6 , , 8 7 6 1 6 1 3 2 4 8 , , 4 2 6 5 3 8, , 0 8 3 4 0 5 1 8 4 2 9 , , 0 2 8 9 7 4 , ,7 2 7 2 4 5 5 6 , , 6 1 5 1 4 9 , , 0 6 1 7 8 3 5 6 9 0 , , 9 7 7 2 4 4, , 7 4 4 6 2 6 8 1 2 5 , , 9 9 1 9 6 3 , , 0 0 1 8 4 6 obd 1922 50,498,699 29,559,049 16,497,736 6,307,035 10,850,605 -659,904 1923 50,708,566 29,764,173 12,711,286 6,552,717 3,613,056 2,545,513 1924 38,340,449 28,431,126 3,718,180 6,682,496 113,646 -3,077,962 1925 41,800,706 27,528,163 9,449,066 6,915,958 59,300 2,473,808 1926 47,599,595 27,350,182 16,611,745 7,329,169 818,150 8,464,426 . 1927 43,024,484 27,518,443 13,048,249 7,754,539 249,591 5,044,119 $500', ooo' o 1928 64,052,860 26,904,810 32,122,021 8,458,463 2,584,659 21,078,899 o 1929 70,955,496 29,691,113 36,402,741 9,583,913 4,283,231 22,535,597 1930 36,424,044 28,342,726 7,988,182 10,268,598 17,308 -2,297,724 1931 29,701,279 27,040,664 2,972,066 10,029,760 —7,057,694 1932 50,018,817 26,291,381 22,314,244 9,282,244 2,011,418 11,020,582 1933 49,487,318 29,222,837 7,957,407 8,874,262 -916,855 1934 48,902,813 29,241,396 15,231,409 8,781,661 $-60,323 6,510,071 139,299,557 1935 42,751,959 31,577,443 9,437,125 8,504,974 $297,667 27,062 607,422 1936 37,900,639 29,874,023 8,512,433 7,829,581 227,448 102,880 352,524 1937 . 41,233,135 28,800,614 10,801,247 7,940,966 176,625 67,304 2,616,352 731,313 1938 36,261,428 28,911,608 9,581,954 8,019,137 119,524 -419,140 1,862,433 448,835 1939 38,500,665 28,646,855 12,243,365 8,110,462 24,579 -425,653 4,533,977 1,964,919 1940 43,537,805 29,165,477 25,860,025 8,214,971 82,152 -54,456 17,617,358 12,272,706 Total-1914-1940 1,359,347,923 646,637,436 648,117,900 186,531,536 149,138,300 927,995 4-762,326 312,282,395 155,217,330 Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

Aggregate for each Federal Reserve Bank 1914-1940: Boston $91,634,893 $46,729,854 $42,966,628 i $13,630,640 $7,111,395 $91,766 $-3,155 $22,135,982 $11,230,237 New York 400,345,682 157,500,677 233,739,699 62,686,555 68,006,262 82,987 -682,388 103,646,283 47,199.295 Philadelphia 106,548,869 49,638,701 54,746,873 j 17,877,815 5,558,901 349,985 194,990 30,765,182 15,620,883 Cleveland 121,731,751 59,864,090 53,864,535 ; 18,826,577 4,842,447 51,976 -8,446 30,151,981 15,829,192 Richmond 64,971,332 35,302,641 25,656,025 7,953,546 6,200,189 66,714 -176,443 11,612,019 6,364,800 Atlanta 63,283,065 29,824,170 27,278,972 6,647,348 8,950,561 23,876 -44,304 11,701,491 5,976,863 Chicago 187,369,386 84,162,367 91,575,740 21,796,514 25,313,526 111,103 11,681 44,342,916 21,518,648 St. Louis 58,533,605 33,004,303 20,330,923 6,718,901 2,755,629 5,948 -13,844 10,864,289 5,939,311 Minneapolis 43,961,760 23,678,890 17,881,147 4,692,070 5,202,900 34,319 -7,447 7,959,305 4,806,884 Kansas City 65,236,632 39,649,940 22,146,493 6,330,140 6,939,100 35,204 -7,887 8,849,936 5,237,254 Dallas 48,432,341 29,146,844 15,120,474 6,014,853 560,049 74,117 10,821 8,460,634 4,486,145 San Francisco 107,298,607 58,134,959 42,810,391 13,356,577 7,697,341 -35,904 21,792,377 11,007,818 1 Current earnings less current expenses, plus other additions and less other deductions. 2 The Banking Act of 1933 eliminated the provision in the Federal Reserve Act requiring payment of a franchise tax. 3 Direct 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 In 1935 the Federal Reserve Bank of Boston credited $1,810 and the Federal Reserve Bank of St. Louis charged $1,176 direct to surplus (sec. 13b). Total payments received from the Secretary of the Treasury under section 13b of the Federal Reserve Act to the end of 1940 and credited to surplus (sec. 13b) amounted to $27,546,311. NO. 7-NUMBER AND SALARIES OF OFFICERS AND EMPLOYEES OF FEDERAL RESERVE BANKS F (December 31, 1940) ftJ President Other officers E w m ho p s l e o y s e a e la s r , i e es x c a e re p t r e th im os - e E a m re p l r o e y im ee b s u w rs h e o d s e to sa b l a a n ri k es Total Federal Reserve Bank ; bursed to bank (including branches) Annual salary Number S dumber Annual Number Annual Number Annual salaries salaries salaries Boston $30,000 9 $91,000 633 $934,805 77 $116,855 720 $1,172,660 New York 50,000 39 465,600 • 2,070 3,923,886 410 755,081 2,520 5,194,567 Philadelphia... 25,000 11 103,700 • 700 1,152,328 81 136,000 793 1,417,028 Cleveland 25,000 18 153,500 ! 850 1,404,351 87 165,893 956 1,748,744 Richmond 21,000 17 123,400 ; 541 783,383 115 161,969 674 1,089,752 Atlanta 20,000 22 124,120 404 542,373 323 409,417 750 1,095,910 Chicago 35,000 21 201,850 1,206 1,785,652 621 876,164 1,849 2,898,666 St. Louis 20,000 19 137,500 509 719,388 166 227,745 695 1,104,633 Minneapolis 25,000 13 88,000 273 420.091 154 201,649 441 734,740 Kansas City... 25,000 19 145,100 ' 482 743,448 190 266,139 692 1,179,687 Dallas 18,000 15 108,900 379 596,431 252 351,059 647 1,074,390 San Francisco. 25,000 26 194,600 ; 699 1,150,031 177 277,109 903 1,646,740 Total.. 319,000 229 1,937,270 ! 8,746 14,156,167 2,653 3,945,080 11,640 20,357,517 00 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 1940 General fund account: Balance January 1, 1940: Available for general expenses of the Board $150,476.48 Available for expenses chargeable to Federal Reserve Banks 53,708.15 Total $204,184.63 RECEIPTS Available for general expenses of the Board: Assessments on Federal Reserve Banks for estimated general expenses of the Board $1,704,011.35 Subscriptions to the Federal Reserve Bulletin 6,308.54 Other publications, sales 1,558.14 Reimbursements for leased wire service 36,528.80 Miscellaneous receipts, refunds, and reimbursements 25,122.31 Total receipts available for general expenses of the Board 1,773,529.14 Available for expenses chargeable to Federal Reserve Banks: Assessments on Federal Reserve Banks for: Cost of printing Federal Reserve notes 844,208.83 Expenses of leased wire system (telegraph) 51,006.90 Expenses of leased telephone lines 16,095.69 Expenses of Federal Reserve Issue and Redemption Division (office of Comptroller of the Currency) 51,811.16 Miscellaneous expenses 8,101.08 Total receipts available for expenses chargeable to Federal Reserve Banks 971,223.66 Total receipts 2,744,752.80 Total available for disbursement 2,948,937.43 DISBURSEMENTS For expenses of the Board: General expenses of 1940 (per detailed statement) $1,646,690.45 Less accounts unpaid December 31, 1940 24,393.61 1,622,296.84 Expenses of 1939 paid in 1940 27,959.99 Expenses of leased wire service, reimbursable 40,239.20 Plans for alteration and addition to building 51,243.58 Miscellaneous refunds and reimbursable expenses 15,740.39 Total disbursements for expenses of the Board 1,757,480.00 For expenses chargeable to Federal Reserve Banks: Cost of printing Federal Reserve notes 882,062.73 Expenses of leased wire system (telegraph) 51,006.90 Expenses of leased telephone lines 15,679.19 Expenses of Federal Reserve Issue and Redemption Division (office of Comptroller of the Currency) 52,994.20 Miscellaneous expenses 2,877.69 Total disbursements for expenses chargeable to Federal Reser ve Banks. 1,004,620.71 Total disbursements 2,762,100.71 Balance in general fund account December 31, 1940: Available for general expenses of the Board 166,525.62 Available for expenses chargeable to Federal Reserve Banks 20,311.10 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 $1,283,803.46 Retirement contributions 58,785.52 Total Personal Services 1,342,588.98 NON-PERSONAL SERVICES Traveling Expenses 67,416.41 Postage and Expressage 1,430.71 Telephone and Telegraph 60,524.65 Printing and Binding 67,851.66 Stationery and Supplies 16,041.36 Furniture and Equipment 25,145.49 Books and Subscriptions 6,434.77 Light, Heat, Power and Water 24,487.42 Repairs and Alterations (Building and Grounds) 17,056.13 Rental and Repairs (Furniture and Equipment) 2,578.15 Medical Service and Supplies 342.21 Insurance 2,402.66 Miscellaneous 12,389.85 Total Non-Personal Services 304,101.47 GRAND TOTAL $1,646,690.45 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 iPer cent per annum] In effect December 31, 1940 B to o n s- Y N o e r w k P a p d h h e i i l a l - - C l l a e n v d e- m Ri o c n h d - la A n t- ta c C a h g i o - Lo S u t. is n M o e l a i i n s p - - I K C s a a it s n y - D , las , F c S i r a s a c n n o - - Rediscounts for and advances to member banks under sees. 13 and 13a of the Federal Reserve Act except last paragraph of sec. 13: Secured by direct and eligible guaranteed obligations of the United States 1 1 134 134 1 1 1 134 1 1 134 All other 1 (i)l 1M i1^ 134 134 134 134 134 (*)134 (1)l34 134 Advances to member banks under sec. 10 (b) of the Federal Reserve Act 2 2 2 2 2 2 2 2 2 2 2 2 Advances to individuals, partnerships or corporations, secured by direct obligations of the United States (last paragraph of sec. 13 of the Federal Reserve Act): To banks (including nonmember banks)... 1 1 \y> (2H34 134 1 1 1 13^ 1 1 134 To others 234 334 234 334 4 234 4 4 3 234 2A Advances direct to industrial or commercial organizations under sec. 13b of the FederalReserve Act.334~6 4-6 334-6 334-5 4-6 4-6 3-6 334- 3-6; 4-6 4-6 4-6 534 Advances to or in participation with financing institutions under sec. 13b of the Federal Reserve Act: On portion for which institution is obligated3 3 2 3 2//2 3 (4)3 4 3-6 134-2 3-6 4 4 3-4 On remaining portion3.. 334 2 5 (5) 3/2 (6)4 4-6 3-6 3-6 4 4-6 4-5 Commitments to make advances under sec. 13b of the Federal Reserve Act .. 34-1 1-2 34-2 1 12 1-2 34 -2 (7)1 1-2 ! (8)2 1 A-2 Minimum buying rates on prime bankers' acceptances payable in dollars... (10) (10) (10) (10) (10) (10) (10) (10) (10) (10) (10) 1- 15 days9 34 16- 30 days 31- 45 days y 46- 60 days l/o 2 61- 90 days 34 91-120 days K 121-180 days l 1 The same rate applies to United States Government securities bought under repurchase agreement. 2 234 per cent to other lenders than banks. 3 The Federal Reserve Banks of New York, Philadelphia, Richmond, Atlanta, Chicago, Minneapolis, Kansas City, and Dallas may charge same rate as charged borrower by financing institution, if lower than rate shown. 4 One per cent less than rate charged borrower by financing institution with minimum of three per cent (see note 3). 5 Same as to borrower. 8 One-half of one per cent less than rate charged borrower by financing institution with minimum of four per cent (see note 3). 7 Minimum charge one-fourth of one per cent. 8 Minimum charge one-half of one per cent. 9 This rate also applies to acceptances bought under repurchase agreement, which agreements are always for a period of 15 days or less. 10 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 beginning Jan. 31, 1935 Dec. 31, 1935 Jan. 1, 1936 Savings deposits 2H Postal Savings deposits 2H Other time deposits payable in: 6 months or more 2K 90 days to 6 months IV* Less than 90 days 2K 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 u u n g 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 7 6- A M p a r r . . 3 1 0 , , 1 1 9 9 3 3 7 7 - A M p a r y . 1 1 5 , , 1 1 9 9 3 3 7 8 - Ap a r n . d 16 a , f t 1 e 9 r 38 On net demand deposits:1 Central reserve city... 13 26 22 Reserve city 10 20 17 Country 7 14 12 On time deposits: All member banks.... 1 Gross demand deposits minus demand balances with domestic banks (except private banks and Amercan branches of foreign banks) and cash items in process of collection. NO. 12.-MARGIN REQUIREMENTS* Prescribed by Board of Governors of the Federal Reserve System in accordance with Securities Exchange Act of 1934 [Per cent of market value] Apr. 1,1936- Nov. 1, 1937 Oct. 31 1937 and after For extensions of credit by brokers and dealers on ]isted securities, under Regulation T 55 40 E^or short sales, under Regulation T (2) 50 For'loans by banks on stocks, under Regulation tjr 355 40 1 Regulations T and U limit the amount of credit that may be extended on a security by prescribing a maximum loan value, which is a specified percentage of its market value at the time of the extension; the "margin requirements" shown in this table are the difference between the market value (100%) and the maximum loan value. 2 Requirement under Regulation T was the margin "customarily required" by the broker. 3 Regulation U became effective May 1, 1936. NOTE.—Regulations T and U also provide special margin requirements on "omnibus" accounts and loans to brokers and dealers. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

oo NO. 13.—ALL MEMBER BANKS-CONDITION ON DECEMBER 31, 1940, BY CLASSES OF BANKS [Amounts in thousands of dollars] me A m l b l er nat A io ll nal A m ll e m St b a e t r e Ce m n e tr m al b r e e r s e b r a v n e k c s1 ity Re c s i e ty rve C m o e u m n b t e ry r banks m b e a m nk b s er banks New York Chicago m b e a m nk b s e 1 r banks1 ASSETS Loans (including overdrafts) 15,320,598 10,004,346 5,316,252 3,383,623 696,100 5,931,494 5,309,381 United States Government direct obligations 12,337,408 7,642,011 4,695,397 4,429,224 1,194,097 4,154,998 2,559,089 Obligations guaranteed by United States Government 3,485,638 2,093,305 1,392,333 1,614,718 112,410 1,048,840 709,670 Obligations of States and political subdivisions 3,012,693 2,004,686 1,008,007 694,700 188,262 984,083 1,145,648 Obligations of Government corporations and agencies not guaranteed by United States 499,355 322,085 177,270 166,233 40,991 184,509 107,622 Other bonds, notes, and debentures 2,053,842 1,368,600 685,242 476,153 117,710 555,901 904,078 Corporate stocks (including Federal Reserve Bank stock) 416,533 212,881 203,652 145,682 27,744 152,689 90,418 Total loans and investments 37,126,067 23,647,914 13,478,153 10,910,333 2,377,314 13,012,514 10,825,906 Reserve with Federal Reserve Banks 13,991,733 7,986,914 6,004,819 7,056,651 1,050,980 4,026,746 1,857,356 Cash in vault 991,146 712,561 278,585 101,576 41,829 396,124 451,617 Demand balances with banks in United States (except private banks and American branches of foreign banks) 6,084,424 4,651,188 1,433,236 120,485 315,615 2,707,770 2,940,554 Other balances with banks in United States 100,881 76,236 24,645 1,641 3,667 33,635 61,938 Balances with banks in foreign countries 11,311 8,031 3,280 6,264 355 3,171 1,521 Due from own foreign branches 2,182 2,086 96 96 2,086 Cash items in process of collection 2,783,960 1,663,795 1,120,165 1,136,669 165,349 1,110,078 371,864 Bank premises owned and furniture and fixtures 914,425 592,759 321,666 200,215 19,740 322,055 372,415 Other real estate owned 228,243 108,191 120,052 23,922 3,057 84,692 116,572 Investments and other assets indirectly representing bank premises or other real estate 111,146 62,415 48,731 10,071 803 79,896 20,376 Customers' liability on acceptances 83,052 47,148 35,904 57,432 2,988 19,919 2,713 Income accrued but not yet collected 105,026 60,238 44,788 37,757 7,848 41,048 18,373 Other assets 124,082 41,088 25,024 5,651 33,428 59,979 Total assets 62,657,678 39,660,564 22,997,114 19,688,136 3,995,196 21,873,162 17,101,184 LIABILITIES Demand deposits—Total. 44,110,412 27,360,631 16,749,781 16,919,623 3,201,042 14,987,013 9,002,734 Individuals, partnerships, and corporations 29,576,064 17,913,896 11,662,168 11,357,143 1,905,172 9,468,202 6,845,547 United States Government2 616,118 459,225 156,893 47,856 89,826 327,333 151,103 States and political subdivisions 2,723,660 1,993,674 729,986 370,195 174,203 995,339 1,183,923 Banks in United States 9,581,199 6,119,964 3,461,235 4,031,856 996,958 3,919,160 633,225 Banks in foreign countries 700,073 355,691 344,382 641,205 7,523 49,373 1,972 Certified and officers' checks, cash letters of credit and travelers' checks, etc 913,298 518,181 395,117 471,368 27,360 227,606 186,964 Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

Time deposits—Total 12,319,198 8,426,642 3,892,556 824,032 508,877 4,857,400 6,128,889 Individuals, partnerships, and corporations: Savings deposits 10,266,149 7,107,266 3,158,883 403,053 435,766 4,072,802 5,354,528 Certificates of deposit 654,941 505,293 149,648 10,948 29,305 150,131 464,557 Christmas savings and similar accounts 27,853 18,885 8,968 1,086 201 9,848 16,718 Open accounts 737,865 295,315 442,550 353,155 30,805 272,890 81,015 Postal savings2 55,987 42,600 13,387 4,500 18,940 32,547 States and political subdivisions 435,075 359,321 75,754 si," ios 8,300 225,513 150,154 Banks in United States 135,226 93,040 42,186 330 105,526 29,370 Banks in foreign countries 6,102 4,922 1,180 4,352 1,750 Total deposits 56,429,610 35,787,273 20,642,337 17,743,655 3,709,919 19,844,413 15,131,623 Due to own foreign branches 182,067 145,970 36,097 182,067 Bills payable, rediscounts, and other liabilities for borrowed money. 3,282 3,127 155 1 3,281 Acceptances outstanding , 97,461 54,483 42,978 67,203" 3,446 23,950 2,862 Dividends declared but not yet payable 38,953 24,561 14,392 17,997 980 11,920 8,056 Income collected but not yet earned 67,666 46,380 21,286 9,591 1,955 35,367 20,753 Expenses accrued and unpaid. 77,946 48,030 29,916 16,743 8,300 35,336 17,567 Other liabilities 63,177 22,494 40,683 35,803 850 18,163 8,361 Total liabilities. 56,960,162 36,132,318 20,827,844 18,073,059 3,725,450 19,969,150 15,192,503 CAPITAL ACCOUNTS Capital (see page 5) I 2,356,258 1,523,437 832,821 548,062 101,700 787,150 919,346 Sulrrpplluus • j 2,279,621 1,307,038 972,583 827,225 103,690 720,657 628,049 Undivided profits. 721,444 467,711 253,733 191,070 29,160 251,088 250,126 Reserves for contingencies. 295,839 194,729 101,110 45,501 35,019 128,478 86,841 Other capital accounts 44,354 35,331 9,023 3,219 177 16,639 24,319 Total capital accounts 5,697,516 3,528,246 2,169,270 1,615,077 269,746 1,904,012 1,908,681 Total liabilities and capital accounts 62,657,678 39,660,564 22,997,114 19,688,136 3,995,196 21,873,162 17,101,184 Net demand deposits subject to reserve.. 35,261,636 21,060,469 14,201,167 15,662,469 2,721,247 11,173,420 5,704,500 Demand deposits—adjusted3 30,429,062 18,761,956 11,667,106 11,062,037 1,941,386 9,581,069 7,844,570 Number of banks 6,486 5,144 1,342 36 13 348 6,089 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 accounts, 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

NO. 14.-ALL MEMBER BANKS-CLASSIFICATION OF LOANS, INVESTMENTS, REAL ESTATE, AND CAPITAL ON DECEMBER 31,1940, BY CLASSES OF BANKS [In thousands of dollars] All Central reserve city Reserve m b e A a m n ll k b s er n m b a e t a i m n o k b n s e a r l A m l b l e a m n S k b ta s e t r e New m Y em or b k er b C an h k ic s a 1 go m b e a c m n it k y b s e 1 r C m b o e a u m n n k b t s r e 1 y r Loans—Total 15,320,598 10,004,346 5,316,252 3,383,623 696,100 5,931,494 5,309,381 Commercial and industrial loans 6,203,515 4,016,691 2,186,824 2,025,344 475,797 2,435,554 1,266,820 Agricultural loans 865,031 728,640 136,451 6,445 4,974 263,270 590,402 Commercial paper bought in open market 321,473 221,056 100,417 4,596 14,384 120,444 182,049 Bills, acceptances, etc. payable in foreign countries 4,291 3,038 1,253 195 547 2,769 780 Acceptances of other banks, payable in United States 55,875 30,134 25,741 49,171 23 4,038 2,643 Reporting banks' own acceptances 74,418 41,369 33,049 45,686 1,708 25,855 1,169 Loans to brokers and dealers in securities 642,448 274,021 368,427 465,031 41,943 114,952 20,522 Other loans for purchasing or carrying securities 652,121 369,377 282,744 189,680 54,043 207,121 201,277 Real estate loans: On farm land 299,188 233,753 65,435 61 339 90,617 208,171 On residential property 2,118,475 1,363,227 755,248 63,402 9,967 964,596 1,080,510 On other properties I 810,344 490,276 320,068 66,081 8,305 380,644 355,314 Loans to banks 43,106 22,683 20,423 25,219 11 14,690 3,186 All other loans I 3,222,650 2,205,139 1,017,511 440,395 83,841 1,304,093 1,394,321 Overdrafts | 7,603 4,942 2,661 2,317 218 2,851 2,217 United States Government direct obligations—Total 12,337,408 7,642,011 4,695,397 4,429,224 1,194,097 4,154,998 2,559,089 Treasury bills ! 651,986 445,062 206,924 207,218 296,869 103,044 44,855 Treasury notes i 2,594,269 1,720,130 874,139 1,245,135 145,278 770,805 433,051 Bonds maturing in 5 years or less | 1,367,488 727,530 639,958 596,130 51,886 469,818 249,654 Bonds maturing in 5 to 10 years I 2,885,694 1,524,940 1,360,754 1,232,622 117,497 922,063 613,512 Bonds maturing in 10 to 20 years I 4,344,955 2,908,212 1,436,743 1,058,141 482,847 1,711,562 1,092,405 Bonds maturing after 20 years I 493,016 316,137 176,879 89,978 99,720 177,706 125,612 Obligations guaranteed by Uffted States Government—Total 3,485,638 2,093,305 1,392,333 1,614,718 112,410 1,048,840 709,670 Total amount maturing in 5 years or less 2,329,749 1,32^,833 1,004,916 1,244,657 104,931 590,030 390,131 Reconstruction Finance Corporation 840,575 338,143 502,432 513,278 57,316 162,241 107,740 Home Owners' Loan Corporation 1,490,350 1,069,118 421,232 644,407 19,332 503,849 322,762 Federal Farm Mortgage Corporation 463,128 255,761 207,367 155,876 3,804 163,699 139,749 Other Government corporations and agencies 691,585 430,283 261,302 301,157 31,958 219,051 139,419 Obligations of Government corporations and agencies* not guaranteed by United States- Total % 499,355 322,085 177,270 166,233 40,991 184,509 107,622 Total armunt maturing in 5 years or less 377,790 239, W 138,648 139,152 25,125 153,224 60,289 Federal Land banks 129,171 82,943 46,228 35,350 15,865 30,339 47,617 Federal Intermediate Credit Banks 164,414 98,937 65,477 77,816 12,419 62,263 11,916 Other Government corporations and agencies 205,770 140,205 65,565 53,067 12,707 91,907 48,089 Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

Obligations of States and political subdivisions—Total 3,012,693 2,004,686 1,008,007 694,700 188,262 984,083 1,145,648 In default 6,735 6,032 703 477 3,917 2,341 Without specific maturity 220,432 187,625 32,807 11,136 " " 63,952 " 76,812 68,532 Maturing in 5 years or less 1,788,648 1,067,938 720,710 559,454 97,498 530,662 601,034 Maturing after 5 years 996,878 743,091 253,787 123,633 26,812 372,692 473,741 Other bonds, notes, and debentures—Total 2,053,842 1,368,600 685,242 476,153 117,710 555,901 904,078 Total amount in default 55,690 88,464 88,836 16,686 1,153 16,970 20,881 Total amount maturing in 5 years or less 579,907 318,597 261,310 218,332 59,767 160,207 141,601 Railroads 701,663 472,120 229,543 131,582 32,617 194,136 343,328 Public utilities 499,920 335,280 164,640 71,170 32,931 134,013 261,806 Industrials 539,702 375,181 164,521 156,651 32,369 148,898 201,784 Other domestic corporations 147,774 73,694 74,080 68,096 8,238 35,040 36,400 Foreign—public and private 164,783 112,325 52,458 48,654 11,555 43,814 60,760 Corporate stocks—Total 416,533 212,881 203,652 145,682 27,744 152,689 90,418 Federal Reserve Banks 138,539 84,551 53,988 40,905 6,153 45,074 46,407 Affiliates of reporting banks 99,659 47,204 52,455 41,363 277 52,500 5,519 Other domestic banks 18,864 6,715 12,149 2,487 40 7,732 8,605 Other domestic corporations 157,977 73,525 84,452 60,581 21,260 46,534 29,602 Foreign corporations 1,494 886 608 346 14 849 285 Bank premises, furniture and fixtures, and other real estate—Total 1,142,668 700,950 441,718 224,137 22,797 406,747 488,987 Bank premises 842,618 537,373 305,245 199,542 19,549 292,405 331,122 Furniture and fixtures 71,807 55,386 16,421 673 191 29,650 41,293 Farm land (including improvements) 18,446 13,644 4,802 17 217 6,951 11,261 Residential properties 86,228 36,738 49,490 8,253 889 25,543 51,543 Other real properties 123,569 57,809 65,760 15,652 1,951 52,198 53,768 Assets indirectly representing bank premises or other real estate—Total 111,146 62,415 48,731 10,071 803 79,896 20,376 Investments 77,831 51,099 26,732 8,835 702 53,670 14,624 Other assets 33,315. 11,316 21,999 1,236 101 26,226 5,752 Capital: Par or face value—Total -. 2,359,291 1,525,673 833,618 548,062 101,700 787,150 922,379 Capital notes and debentures 40,758 40,758 375 25,450 14,933 First preferred stock 247,726 181,899 65,827 8,868 1,700 99,543 137,615 Second preferred stock 18,243 13 638 4,605 2 150 16,093 Common stock 2,052,564 1,330,136 722,428 538,819 100,000 660,007 753,738 Retirable value of: First preferred stock 343,093 233,160 109,933 21,992 1,700 135,936 183,465 Second preferred stock 23,894 15,523 8,371 2,150 21,744 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. 15.-MEMBER BANK RESERVE BALANCES, RESERVE BANK CREDIT, AND RELATED ITEMS- END OF YEAR 1918-1939 AND END OF MONTH 1940 [In millions of dollars] Reserve Bank credit out- standing End of year or month 1918. 1919 1920. 1921 1922 1923. 1924. 1925. 1926. 1927 1928. 1929. 1930. 1931. 1932 1933. 1934 1935. 1936. 1937. 1938. 1939. 1940—Jan.. Feb... Mar.. Apr... May.. June.. July.. Aug... Sept.. Oct... Nov.. Dec... tnuocsild slliB i i 1,766 2,215 2,687 1,144 618 723 320 643 637 582 1,056 632 251 638 235 98 7 5 3 10 4 7 7 7 4 3 3 2 4 4 5 4 4 3 slliB i .^ 287 574 260 145 272 355 387 374 381 392 489 392 364 339 33 133 6 5 3 1 1 irevoG .S.U ruces taiem seit r 239 206 300 203 287 120 234 40 436 79 134 27 540 54 375 67 315 49 617 64 228 35 511 48 729 29 817 59 1,855 22 2,437 20 2,430 20 2,431 45 2,430 64 2,564 38 2,564 33 2,484 102 2,477 18 2,477 62 2,475 50 2,467 48 2,477 39 2,466 63 2,448 32 2,436 76 2,434 46 2,333 76 2,199 101 2,184 87 latoT 2,498 3,292 3,355 1,563 1,405 1,238 L.302 ,459 L.381 ,655 ,809 ,583 ,373 1,853 2,145 2,688 2,463 2,486 2,500 2,612 2,601 2,593 2,503 2,547 2,529 2,518 2,519 2,531 2,484 2,515 2,485 2,412 2,304 2,274 dloG 2,873 2,707 2,639 3,373 3,642 3,957 4,212 4,112 4,205 4,092 3,854 3,997 4,306 4,173 4,226 4,036 8,238 10,125 11,258 12,760 14,512 17,644 17,931 18,177 18,433 18,770 19,209 19,963 20,463 20,913 21,244 21,506 21,801 21,995 -tuo ycn 1 1,795 1,707 1,709 1,842 1,958 2,009 2,025 1,977 1,991 2,006 2,012 2,022 2,027 2,035 2,204 2,303 2,511 2,476 2,532 2,637 2,798 2,963 2,970 2,981 2,990 2,999 3,008 3,013 3,024 3,036 3,044 3,059 3,072 3,087 noita •§ enoM 1 1 4,951 5,091 5,325 4,403 4,530 4,757 4,760 4,817 4,808 4,716 4,686 4,578 4,603 5,360 5,388 5,519 5,536 3 5,882 2 6,543 2 6,550 3 6,856 2 7,598 2 7,376 2 7,455 2 7,511 2 7,559 2 7,710 2 7,848 2 7,883 2 8,059 2 8,151 2 8,300 2 8,522 2 8,732 2 sac yru 288 385 218 214 225 213 211 203 201 208 202 216 211 222 272 284 ,029 ,566 ,376 ,619 ,706 ,409 ,359 ,372 ,371 ,320 ,198 ,186 ,250 ,277 ,290 ,188 ,187 ,213 htiw stis ed yru sknaB ev• eR larel 1 •a I o H z; 51 121 31 101 57 23 96 27 11 29 38 23 51 39 16 29 17 65 18 26 23 27 29 30 19 28 54 110 8 43 3 132 121 189 544 255 244 259 142 407 923 441 634 653 549 723 562 740 702 691 446 787 365 973 234 1,198 694 1,382 810 1,516 756 1,581 349 1,661 250 1,726 368 1,732 evreseR Member bank reserve balances o 118 208 298 285 276 275 258 272 293 301 348 393 375 354 355 360 241 253 261 263 260 251 248 247 255 256 253 261 262 261 269 271 277 284 latoT 1,636 51 1,890 68 1,781 1,753 99 1,934 1,898 14 2,220 59 2,212 -44 2,194 -56 2487 63 2,389 -41 2,355 -73 2,471 96 1,961 -33 2 509 576 2,729 859 4096 1,814 5,587 2,844 6,606 1,984 7,027 1,212 8,724 3,205 11, 653 5,209 12, 150 5,559 12,328 5,692 12, 423 5,828 12, 919 6,149 13, 237 6,385 13,781 6,857 13,498 6,514 13541 6,525 13727 6,655 14208 6,960 14215 6,849 14026 6,615 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, to $350,000 in 1939, and to $450,000 in 1940. 3 Comprises outstanding United States notes, national bank notes, silver bullion, Treasury notes of 1890, standard silver dollars, subsidiary silver and minor coin, and the Federal Reserve Bank notes for the retirement of which lawful money has been deposited with the Treasurer of the United States, including the currency of these kinds that is held in the Treasury and the Federal Reserve Banks as well as that in circulation. 4 Cash (including gold bullion) held in the Treasury excepting (a) gold and silver held against gold and silver certificates and (6) amounts held for the Federal Reserve Banks. 5 Item includes all deposits in Federal Reserve Banks except Government deposits and member bank reserve balances. 6 This item is derived from the condition statement of the Federal Reserve Banks by adding capital, surplus, other capital accounts, and "other liabilities, including accrued dividends," and subtracting the sum of bank premises and "other assets." 7 Represents excess of total reserve balances over reserves required to be held by member banks against their deposits. Figures not available prior to 1929 except on call dates, and since April 1933 are for licensed member banks only. For required reserves and changes in the percentages of requirements see table 11. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

FEDERAL RESERVE SYSTEM 53 NO. 16.-NUMBER OF BANKS AND BRANCHES IN UNITED STATES, 1933-1940 Member banks Nonmember banks Branches Other than muof year figures tual savings and Total In Outside National State private banks s M av u i t n u g a s l Private2 h e e r a f d f - ice o h f e fi a c d e - Insured1 in N su o r n e - d1 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 1,088 143 19,153 1936 6,723 2,032 8,436 1,043 139 19,066 1£37 6,745 2,075 8,340 997 79 18,927 1938 6,723 2,106 8,224 958 73 18,774 1939 6,705 2,177 8,0" 931 683 69 18,663 1940 6,683 2,344 7,8 562 18,561 Number of banks (Head offices) 1933 5,154 857 8,341 579 15,029 1934 5,462 980 1,108 579 241 16,063 1935 5,386 1,001 7,728 1,046 570 138 15,869 5,325 1,051 7,588 1,004 565 134 15,667 1937. 5,260 1,081 7,449 960 563 74 15,387 5,224 1,114 7,316 917 555 68 15,194 1939 5,187 1,175 7,171 887 551 63 15,034 1940 5,144 1,342 6,951 851 551 14,895 Number of branches 1933 1,121 960 700 125 2,911 1,784 1,127 1934 1,243 981 778 126 3,133 1,776 1,357 1935 1,329 952 42 128 3,284 1,754 1,530 1936 1,398 981 39 128 3,399 1,749 1,650 1927 1,485 994 891 37 128 3,540 1,757 1,783 1938 1,499 992 S08 41 135 3,580 1,743 1,837 1939 1,518 1,002 927 44 132 3,629 1,738 1,891 1940 1,539 1,002 940 44 135 3,666 1,716 1,950 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. * Comprises 53 insured banks with 31 branches and 498 noninsured banks with 104 branches. The figures beginning with 1939 exclude one bank with 4 branches which theretofore 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 55 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. 17.-ANALYSIS OF CHANGES IN NUMBER OF BANKS AND BRANCHES DURING 1940 Member banks Nonmember banks Other than mutual savings Total and private ti N on a- al State banks s M av u i t n u g a s l Private Non- Insured insured Analysis of Bank Changes Number of banks on December 31, 1939 15,034 5,187 1,175 7,171 887 551 63 Increases in number of banks: Primary organizations (new banks)1 +32 +3 +24 +5 Reopenings of suspended banks +2 5+2 Decreases in number of banks: Suspensions -22 -1 ... _ . -18 -3 Voluntary liquidations2 -53 -4 -28 -16 • * _4- • • Consolidations, absorptions, etc -96 -41 -11 -39 -5 Unclassified -2 —2 Inter-class bank changes: Conversions— National into State -16 ±1 +14 P S r ta iv te a t i e n t i o n t N o a S t t i a o t n e al +16 -8 +3 -3 Federal Reserve membership—8 Admissions of State banks +188 -182 -6 Withdrawals of State banks -3 +3 Federal deposit insurance—4 Admissions of State banks +12 -12 Withdrawals of State banks Net increase or decrease in number of banks .... . . .... -139 -43 +167 -220 -36 -7 Number of banks on December 31, 1940 14,895 5,144 1,342 6,951 851 551 56 Analysis of Branch Changes Number of branches on December 31, 1939 3,629 1,518 1,002 927 44 132 6 Increases in number of branches: De novo branches +46 +13 +2 +28 +3 Banks converted into branches +43 +21 +9 +12 ••••«•• Decreases in number of branches: Branches discontinued -51 -23 -11 -17 Unclassified 1 Inter-class branch changes: From State to National +10 -7 -3 From nonmember to State member +8 -8 From uninsured to insured nonmember... +1 -1 , Net increase or decrease in number of branches... +37 +21 +13 +3 Number of branches on December 31, 1940 3,666 1,539 1,002 940 44 135 6 1 Exclusive of new banks organized to succeed operating banks. 2 Exclusive of liquidations incident to the succession, conversion and absorption of banks. 8 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 conversions do not affect Federal Deposit Insurance Corporation membership. 5 Includes one bank which was not insured at time of suspension. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

FEDERAL RESERVE SYSTEM 55 NO. 18.-NUMBER OF BANKS ON PAR LIST AND NOT ON PAR LIST,' BY FEDERAL RESERVE DISTRICTS AND STATES, ON DECEMBER 31, 1939 AND 1940 Nonmember banks, other than Federal Reserve mutual savings banks district or State Member banks On par list Not on par list DISTRICT Dec. 31, Dec. 31, Dec. 31, Dec. 31, Dec. 31, Dec. 31, 1940 193S 1940 1939 1940 1939 Boston 350 353 165 167 New York 765 768 243 257 Philadelphia 651 652 236 r248 Cleveland 658 639 558 590 2 " " 2 " " Richmond 431 410 289 306 289 295 Atlanta JilL. ^M- 86 J595 698 Chicago 856 804 1,392 1,458 ^21 217 St. Louis 415 392 661 695 443 442 Minneapolis 460 467 120 133 706 703 Kansas City 739 736 919 946 176 176 Dallas 568 544 246 270 154 158 San Francisco 277 282 235 239 29 28 Total 6,486 6,362 5,146 5,395 2,715 2,719 STATE New England: Maine 42 43 27 27 New Hampshire 53 53 12 12 Vermont 41 42 32 33 Massachusetts 154 154 42 42 Rhode Island 14 14 9 9 Connecticut 58 58 59 61 Middle Atlantic: New York 557 563 170 178 New Jersey 280 277 74 84 Pennsylvania 773 775 298 r308 East North Central: Ohio 363 344 330 357 Indiana 184 148 315 355 3 " '' 3 " Illinois 419 4G4 394 417 28 27 Michigan 220 213 237 249 1 1 Wisconsin 137 134 272 280 160 158 West North Central: Minnesota 209 209 50 58 415 411 Iowa 148 143 397 405 113 110 Missouri 150 142 363 378 106 106 North Dakota 45 50 5 4 113 117 South Dakota 63 64 6 8 95 93 Nebraska 147 148 108 114 162 161 Kansas 206 203 457 471 1 1 South Atlantic: Delaware 19 19 23 24 Maryland 73 73 101 103 District of Columbia 15 14 7 8 Virginia 176 162 99 109 39 "" '43 West Virginia 98 96 76 79 6 6 North Carolina 54 51 18 18 125 126 South Carolina 26 25 4 5 119 120 Georgia 69 70 17 17 256 260 Florida 57' 56 15 16 88 87 East South Central: Kentucky 112 112 280 282 10 12 Tennessee 77 77 51 52 169 171 Alabama 82 4 5 131 130 Mississippi 26 4 4 177 175 West South Central: Arkansas 57 56 46 49 133 132 Louisiana . 37 36 4 5 104 104 Oklahoma 219 220 159 161 12 12 Texas 525 501 232 256 98 102 Mountain: Montana 67 68 24 23 20 20 Idaho 27 28 23 23 Wyoming. 35 35 22 21 1 2 Colorado 93 91 52 53 1 1 New Mexico 27 27 14 14 Arizona... 7 7 5 5 Utah 33 33 27 26 Nevada 8 7 3 4 Pacific- Washington 57 60 51 53 26 25 Oregon 32 34 36 36 3 3 California 115 115 92 94 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 par list" comprise nonmember banks which have not agreed to pay without deduction such checks drawn upon them as may be Digitized fofor rFwRarAdeSd EfoRr payment through the Federal Reserve Banks. Checks on such banks are not collectible through http://frasetrh.es tFloeudeisrafel dR.eosregr/v e Banks. The difference of 3 between the number of nonmember banks on December Federal Re Q s 1• e 1 •r nU , v 4 /AI eII "oU Bn ravTnimk • ino A T- f T* nSiJc_ it " . LT 1O L rAo I u<"\ 1 i ns •v \r1J .i»-1»1 -•i* •A n • r~\ I1 / •* I/IJ ICTx i nnJA? TJJ"_VJ _1T Ki»j /*l*V T ri» rtllT " T r~\ r1» T 1T hiio-i< TJOK1 r\ I Ai /%*V/ i"» 1•1 1 iS• ao n1 /lK n rA\dir% Ira I "Y\VI -r\ rti i^O I I XT r\/t

56 ANNUAL REPORT OF BOARD OF GOVERNORS NO. 19.-MONEY RATES, BOND YIELDS, AND STOCK PRICES* Open-markot rates in Bond Yields^ Common stock prices4 New York City* (per cent per annum) (1926 = 100) (per cent per annum) Prime Year and Month m p c e a o r p c m e i r a - , l T U u r . e r S y a . s- T U u r . e r S a y . s- T U u r . e r S y a . s- Corporate Total In tr d i u al s- R ro a a i d l- P ut u i b li l t i y c 4-6 bills notes months Aaa Baa Number of issues.. 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 71.9 73.8 1924 3.88 4.06 5.00 6.83 72.8 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 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 1632 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 .81 0.053 0.83 2.56 3.19 5.80 83.3 99.4 26.1 73.2 1939 .59 r0.023 0.59 2.36 3.01 4.96 89.2 104.9 28.2 84.5 1940 .56 0.014 0.50 2.21 2.84 4.75 83.6 97.4 26.9 82.1 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 r0.058 0.48 2.21 2.93 4.85 86.3 100.5 25.4 87.0 September .69 r0.101 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 r0.010 0.51 2.35 2.94 4.92 91.8 107.9 29.6 86.7 1940 January .56 0.47 2.30 2.88 4.86 92.7 108.8 29.6 88.4 February .56 0.004 0.46 2.32 2.86 4.83 91.5 107.3 28.7 87.6 A M A J O M J S N u u e p u c o a a l n p t r g y v r y o e i t c u e l e b h s m m e t r b b e e r r . . . . . . . . . 5 5 5 5 5 5 5 5 5 6 6 6 6 6 6 6 6 6 0 0 0 0 0 0 0 . . . . . . . ( ( 0 0 0 0 0 0 0 5 5 1 7 2 0 0 0 4 ) ) 9 1 1 9 3 3 2 0 0 0 0 0 0 0 0 0 . . . . . . . . . 4 5 5 4 4 3 4 6 7 2 7 8 5 3 4 8 5 6 2 2 2 2 2 2 2 2 1 . . . . . . . . . 9 3 2 2 1 1 2 2 3 7 9 8 5 0 8 5 5 8 2 2 2 2 2 2 2 2 2 . . . . . . . . . 8 8 9 8 7 9 8 8 7 4 8 6 2 9 3 5 2 5 4 4 4 4 4 4 4 4 5 . . . . . . . . . 7 8 8 6 9 7 5 4 1 4 0 0 6 4 6 6 8 1 9 7 7 9 8 7 8 8 8 1 2 7 1 6 3 3 0 2 . . . . . . . . . 9 4 9 5 0 5 3 1 1 1 1 9 8 9 9 8 8 9 0 0 3 7 9 7 4 4 5 9 7 . . . . . . . . . 2 7 3 1 8 8 6 2 5 2 2 2 2 2 2 2 2 2 2 4 8 5 4 9 7 7 7 . . . . . . . . . 7 4 4 9 9 4 0 1 8 8 8 8 8 8 8 7 8 7 7 0 1 7 0 0 0 9 5 . . . . . . . . . 8 3 0 1 2 1 6 0 1 December .56 0.35 1.89 2.71 4.45 80.4 94.0 26.4 77.6 r Revised. 1 Annual data are averages of monthly figures. 2 For commercial paper, monthly data are prevailing rates; for Treasury bills, the average rates on new issues within period; and for Treasury notes the averages of daily figures for 3- to 5-year issues. Treasury bill series comprises 90-day bills to February 16, 1934; 182-day bills from February 23, 1934 to February 23, 1935; 273-day bills from March 1, 1935 to October 15, 1937; bills maturing about March 16, 1938, from October 22 to December 10, 1937; and 91-day bills thereafter. 3 Monthly data are averages of daily figures. U. S. Treasury bond yields are averages of all outstanding bonds due or callable 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. 5 Negative rate. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

FEDERAL RESERVE SYSTEM 57 NO. 20.—BUSINESS INDEXES* Industrial i (physical (1935-39 Year and month •a 1919 72 1920 75 1921 58 1922 73 1923 88 1924 82 1925 91 1926 96 1927 95 1928 99 1929 110 1930 91 1931 75 1932 58 1933 . . 69 1934 75 1935 87 1936 103 1937 113 1938 88 1939 108 1940 122 1939 January 102 February 101 March 101 April 97 May 97 June 102 July 104 August 104 September 113 October 121 November 124 December 126 1940 January 122 February 116 March 113 April 111 May 115 June 121 July 121 August 121 September 125 October 129 November 133 December 139 elbaru erutcafunam [Adjusted for sease Droduction volume) = 100) SR Q 84 93 53 81 104 95 108 114 107 117 133 99 68 41 54 66 84 108 122 78 108 135 98 98 96 93 90 97 101 106 115 129 133 140 135 124 118 113 119 131 132 135 146 150 154 165 elbarudno erutcafunam 62 60 57 67 72 69 76 79 83 85 93 84 79 70 79 81 90 100 106 95 108 113 104 104 104 103 104 106 106 108 111 115 117 117 113 110 107 107 110 114 112 112 112 116 120 124 slareni mal variation Construction con- tracts awarded (value) 2 1923-25 = 100 1 § H 71 63 83 63 66 56 71 79 98 84 89 94 92 122 99 129 100 129 99 135 107 117 93 92 80 63 66 28 76 25 80 32 86 37 99 55 112 59 97 64 106 72 117 81 103 86 102 73 103 69 92 67 96 63 105 63 107 67 92 73 114 73 119 76 120 83 115 86 118 75 114 63 117 62 119 64 117 64 118 74 120 85 113 90 116 93 113 95 118 111 119 115 laitnedise tf 44 30 44 68 81 95 124 121 117 126 87 50 37 13 11 12 21 37 41 45 60 72 55 58 55 58 55 58 62 67 68 68 61 60 53 56 57 62 64 69 77 82 82 85 87 90 rehto li Employ- ment (number) •as < 79 90 65 88 86 94 120 135 139 142 142 125 84 40 37 48 50 70 74 80 81 89 111 85 80 74 68 67 71 78 76 82 101 107 93 68 66 66 65 77 91 98 101 103 130 136 rutlucirgano 1 = 93-5391( 2 107^6 100.9 92.3 82.8 83.3 90.5 94.2 100.0 105.0 98.5 102.3 105.6 100.5 100 7 100.8 99.8 100.6 101.7 102.0 102.4 103.0 104.2 104.9 105.4 104.9 104.2 104.0 103.3 103.8 104.2 104.7 105.6 106.1 107.3 108.8 110.6 yrotca (1 = 52-3291( 106.7 107.1 82.0 90.7 103.8 96.4 99.8 101.7 99.5 99.7 106.0 92.4 78.1 66.3 73 4 85.7 91.3 99.0 108.6 90.9 99.9 107.5 96.8 96.8 96.7 96.6 96.3 97.3 98.4 99.0 100.8 104.8 107.0 108.2 107.6 105.8 104.0 102.8 102.8 103.9 105 1 107.4 108.9 111.4 114.2 116.6 )001 = i go* oryap yrotca c291( )eulav( f II 'Oco 98.0 117.2 75.6 81.2 102.9 96.0 101.1 104.2 102.4 103.5 110.4 89.4 67.8 46.7 50.1 64.5 74.1 85.8 102.5 78.5 92.2 105.4 84.7 87.1 88.8 86.8 86.3 87.9 85.8 91.2 95.4 103.2 103.2 105.4 99.8 99.3 99.8 97.9 97.8 99.5 98.2 105.5 111.6 116.2 116.4 122.4 iol rac-thgier !1( )rebmun( 120 129 110 121 142 139 146 152 147 148 152 131 105 78 82 89 92 107 111 89 101 109 98 95 94 87 90 97 99 101 111 114 114 110 111 105 100 103 106 111 110 112 112 110 116 119 selas s 1s tnemtrape )001 = i c291( )eulav( Q 78 94 87 88 98 99 103 106 107 108 111 102 92 69 67 75 79 88 92 85 90 94 88 88 88 88 87 86 87 88 90 92 93 95 92 90 89 89 89 91 92 98 97 94 100 101 *secirp ytid o a moc elaseloh )001 = 6291( 138.6 154.4 97.6 96.7 100.6 98.1 103.5 100.0 95.4 96.7 95.3 86.4 73.0 64.8 65.9 74.9 80.0 80.8 86.3 78.6 77.1 78.6 76.9 76.9 76.7 76.2 76.2 75.6 75.4 75.0 79.1 79.4 79.2 79.2 79.4 78.7 78.4 78.6 78.4 77.5 77.7 77.4 78.0 78.7 79.6 80.0 stnemyap )001 ID n a I ocni lanoita 1291( )eulav( ioo'6" 90.8 77.3 60.1 57.1 65.8 71.7 82.7 87.5 80.7 85.4 90.5 83.4 83 7 84.6 83.1 83.8 84.1 83.6 85.2 86.1 88.0 88.5 90.0 90.3 89.7 88.4 88.2 88.6 88.7 89.3 90.5 91.7 92.5 93.6 95.8 * 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. 2 Three-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 JANUARY 2, 1940 Members present: Mr. Eccles, Chairman; Mr. Ransom, Vice Chairman; Mr. McKee, Mr. Davis, Mr. Draper. Amendment to Regulation L, Interlocking Bank Directorates under the Clayton Act. By unanimous vote, section 3 of Regulation L, Interlocking Bank Directorates under the Clayton Act, was amended, effective immediately, so as to permit any director, officer or employee of a member bank of the Federal Reserve System which does not exercise trust powers to serve a trust company which does not receive deposits, or any director, officer or employee of a trust company which is a member of the Federal Reserve System and which does not receive deposits to serve a bank, banking association or savings bank, which does not exercise trust powers. In section 8 of the Clayton Act Congress made a number of exceptions to the prohibition against interlocking bank directorates and authorized the Board to make additional exceptions, by regulation. The Board has exercised this authority only to fill out the pattern established by Congress in the statute. Mutual savings banks are specifically exempted from the prohibition of the statute and in the opinion of the Board there are less potentialities of competition between banks which do not exercise trust powers and trust companies which do not receive deposits than between member banks with savings deposits and mutual savings banks. Moreover, the statute does not prohibit interlocking relationships between member banks and life insurance companies, finance companies, building and loan associations, and several other types of institutions which compete with member banks for numerous kinds of loans to a much greater extent than do trust companies which receive no deposits. The Board felt that the two classes of institutions described in the amendment are clearly of distinct types, operating in different fields. MEETING ON FEBRUARY 1, 1940 Members present: Mr. Eccles, Chairman; Mr. Ransom, Vice Chairman; Mr. Szymczak, Mr. Davis, Mr. Draper. Amendment to Regulation L, Interlocking Bank Directorates Under the Clayton Act. On August 1, 1939, the Board of Governors extended the authority contained in subsections 3 (a) and 3(e) of Regulation L, Interlocking Bank Directorates Under the Clayton Act, to permit (1) any private banker or any director, officer, or employee of a member bank of the Federal Reserve System 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 February 1, 1940, and (2) any director, officer, or employee of any member bank of the Federal Reserve System who, on August 23, 1935 (date of approval of the Banking Act of 1935), was lawfully serving at the same time as a private banker or as a director, officer, or employee of any other bank, and whose services in such capacities had been continuous since such date, to continue until February 1, 1940, to serve such member bank and not more than one other bank. 60 Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

FEDERAL RESERVE SYSTEM 61 At this meeting, by unanimous vote, subsections 3 (a) and 3(e) of Regulation L were further amended, effective immediately, to authorize the continuation of such relationships until June 1, 1940. The reasons for the Board's action were set forth in the following press statement: "The Board of Governors of the Federal Reserve System has amended subsections 3 (a) and 3(e) of its Regulation L relating to interlocking bank directorates under the Clayton Act, effective immediately, so as to extend until June 1, 1940, the time during which certain persons who have been serving member banks may continue to serve a member bank and not more than one other bank. "This final extension was made at the request of Senator Wagner, Chairman of the Banking and Currency Committee of the Senate, and of Senator Glass, senior member of that Committee, and upon receipt of the following letter from the President addressed to the Chairman of the Board: " 'In view of my veto last year of the Bill extending the time for ending interlocking bank directorships and in view of the apparent hope on the part of some of these directors that some method could be devised for a slight extension of the final date, I am writing to you and the Board to tell you that I have no objection to a short extension—say three months but no longer than four months. This will give ample time to make the necessary arrangements. As I said in my veto message, I honestly believe that the intent of the law should be definitely put into effect especially because so much time has already elapsed.' " MEETING ON MAY 3, 1940 Members present: Mr. Ransom, Vice Chairman; Mr. Szymczak, Mr. McKee, Mr. Draper. Amendment to Regulation F, Trust Powers of National Banks. By unanimous vote, Regulation F, Trust Powers of National Banks, was amended to permit the operation of common trust funds composed principally of mortgages. In connection with this action, the Board issued a statement to the press under date of May 6, in which the reasons for the action were set forth as follows: "The Board, effective June 1, 1940, has approved amendments to its Regulation F, relating to the administration of trusts by national banks, to permit the operation of Common Trust Funds which are invested principally in mortgages. The Board for some time has had under consideration a proposal by representatives of member banks for such amendments to its regulation and the proposal was approved by representatives of banking associations. It was represented to the Board that smaller trust institutions may not have facilities for operating Common Trust Funds composed principally of securities, the operation of which is now permitted by the Board's Regulation F, but would have facilities for operating Common Trust Funds composed principally of mortgages. Under the amendments to Regulation F Common Trust Funds composed principally of mortgages may be operated only in States in which there is statutory authority for Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

62 ANNUAL REPORT OF BOARD OF GOVERNORS such operation, and these amendments will permit funds operated under such statutes to obtain certain tax exemptions which are granted by the Federal revenue laws to Common Trust Funds operated in accordance with the Board's regulations." MEETING ON OCTOBER 17, 1940 Members present: Mr. Eccles, Chairman; Mr. McKee, Mr. Davis, Mr. Draper. Changes in Rates on Industrial Loans under section 13b of the Federal Reserve Act. Unanimous approval was given to a telegram to all Federal Reserve Banks stating that the Board was prepared to approve for the Banks schedules of rates on advances under section 13b of the Federal Reserve Act which would enable a Federal Reserve Bank to charge the same rate on its participation in an industrial loan as the rate charged by the financing institution on the portion of the loan for which it was obligated. At the request of the Board of Governors the Presidents of the Federal Reserve Banks, at a conference in Washington on September 28, 1940, gave consideration to whether the existing schedules of rates charged by the Federal Reserve Banks on industrial advances were justified in the light of existing conditions and whether the rates at all Federal Reserve Banks should be uniform. It was the consensus of the Presidents that in view of the different conditions existing in the various Federal Reserve districts there was no necessity for uniformity of rates, that the variety of problems arising in connection with financing the defense program made it desirable to have a spread in rates, and that in general the rate charged by a Federal Reserve Bank on its participation in a loan made with a financing institution should be the rate agreed upon by the financing institution and the borrower. The Board of Governors was in agreement with the policy suggested by the Presidents and the telegram to the Federal Reserve Banks was for the purpose of advising the Banks accordingly. Changes in industrial loan rates approved by the Board during the latter part of 1940 for the Federal Reserve Banks of New York, Philadelphia, Richmond, Atlanta, Chicago, St. Louis, Minneapolis, Kansas City, Dallas, and San Francisco were in accordance with this policy. MEETING ON DECEMBER 23, 1940 Members present: Mr. Eccles, Chairman; Mr. Ransom, Vice Chairman; Mr. Szymczak, Mr. McKee, Mr. Davis, Mr. Draper. Condition of Membership Prohibiting a Bank from Acting as Agent in the Rental or Sale of Real Estate. It was unanimously voted that in the future a condition of membership requiring a bank to discontinue acting as agent in the rental or sale of real estate would not be generally prescribed in connection with admission of State banks to membership in the Federal Reserve System, but that in any case where the information available reflected abuses or unsound practices the matter would be handled by condition of membership or otherwise in the same manner as if the unsound Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

FEDERAL RESERVE SYSTEM 63 practices were disclosed in the operations of any other department of the bank. For a number of years it had been the policy of the Board to prescribe such a condition in connection with the admission to membership of banks which were engaged as a business in the handling of real estate as rental or sales agent. The question was presented to the Board for reconsideration at this time in connection with the membership application of a State bank which did a substantial amount of business as agent in the sale and rental of real estate. The bank was in good condition and under capable management which was well qualified by experience to handle real estate transactions and it appeared that the real estate activities of the bank had not had, and were not likely in the future to have, any adverse effects on the bank. The Board felt that in a situation of this kind there was no longer any necessity, from the standpoint of effective supervision of State member banks, to take the position that it would admit a bank to membership only on condition that it discontinue its real estate agency operations, it being understood that the condition could be prescribed in any case where circumstances might require. RECORD OF POLICY ACTIONS-FEDERAL OPEN MARKET COMMITTEE MEETING ON MARCH 20, 1940 Members present: Mr. Eccles, Chairman; Mr. Harrison, Vice Chairman; Mr. Szymczak, Mr. McKee, Mr. Ransom, Mr. Davis, Mr. Draper, Mr. Sinclair, Mr. Parker, Mr. Schaller, Mr. Day. 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 transactions 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 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 resolution was in the same form as the resolution adopted at the two preceding meetings of the Federal Open Market Committee. As on the two previous occasions, the action was taken in the light of continued unsettled conditions in our markets resulting from the war in Europe and the unanimous opinion of the members of the Committee that because of these conditions the executive committee should continue to have flexible authority to execute transactions in the System open market account for the purpose of exercising an influence toward maintaining orderly market conditions. MEETING ON MAY 28, 1940 Members present: Mr. Eccles, Chairman; Mr. Harrison, Vice Chairman; Mr. Szymczak, Mr. McKee, Mr. Ransom, Mr. Davis, Mr. Draper, Mr. Sinclair, Mr. Schaller, Mr. Day, Mr. Leach (alternate for Mr. Parker). Upon motion duly made and seconded, the following resolution, which was in the same form as the resolution adopted at the meeting of the Federal Open Market Committee on March 20, 1940, 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- Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

64 ANNUAL REPORT OF BOARD OF GOVERNORS 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 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." The action of the Committee renewed the authority granted to the executive committee at the meeting of the Federal Open Market Committee on March 20, 1940, and was taken for substantially the same reasons, with the understanding that the executive committee would have authority under the resolution to direct the sale of securities, within the limits fixed by the full Committee, not only for the purpose of exercising an influence toward orderly conditions in the market but also for the purpose of disposing of securities, which had been acquired in a period of market weakness, whenever there was a strong buying market and there were not sufficient offerings from other sources to meet demands. The reason for this was that experience had indicated that the System ordinarily would be called upon to buy more securities during a period of market weakness than it would have occasion to sell during a period of rising prices for the purpose of exercising an influence of a stabilizing character, and, therefore, the Committee believed that securities which had been acquired during a period of market weakness should be sold whenever that could be done without adverse effects on the market. V MEETING ON SEPTEMBER 27, 1940 Members present: Mr. Harrison, Vice Chairman; Mr. Szymczak, Mr. McKee, Mr. Ransom, Mr. Davis, Mr. Draper, Mr. Sinclair, Mr. Parker, Mr. Schaller, Mr. Day. Upon motion duly made and seconded, the following resolution was adopted, Messrs. Harrison, Szymczak, McKee, Ransom, Davis, Sinclair, Parker, Schaller and Day voting "aye," and Mr. Draper voting "no": "That the executive committee be directed until otherwise directed by the Federal Open Market Committee to arrange for such transactions 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 advisable in the light of existing 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." By this action the Committee changed the form of the existing resolution by substituting the phrase "advisable in the light of existing conditions" for the phrase "necessary for the purpose of exercising an influence toward maintaining orderly market conditions." This was done for the purpose of bringing the resolution more closely into conformity with the existing understanding of the authority conferred upon the executive committee as stated in the record in connection with the action taken on May 28, 1940. It was the opinion of the full Committee that the resolution should be in such form as to enable the executive committee to continue to direct the execution of transactions in the account not only for the purpose of exercising an influence toward maintaining orderly market conditions but also, within the stated limit, for the purpose of selling Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

FEDERAL RESERVE SYSTEM 65 securities which had been acquired during a period of market weakness, whenever such sales could be made without adversely affecting the market. Mr. Draper voted against the adoption of the resolution for the reason that the changed instructions to the executive committee might be construed by the public as a change in policy having deflationary implications. He also felt that caution was particularly necessary at this time not only because of the domestic situation but also because of the dangerous war conditions abroad. MEETING ON DECEMBER 18, 1940 Member present: Mr. Eccles, Chairman; Mr. Harrison, Vice Chairman; Mr. Szymczak, Mr. McKee, Mr. Ransom, Mr. Davis, Mr. Draper, Mr. Sinclair, Mr. Parker, Mr. Schaller, Mr. Day. Upon motion duly made and seconded, the following resolution was adopted, Messrs. Eccles, Harrison, Szymczak, McKee, Ransom, Davis, Sinclair, Parker, Schaller, and Day voting "aye," and Mr. Draper voting "no": "That the executive committee be directed until otherwise directed by the Federal Open Market Committee to arrange for such transactions 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 advisable in the light of existing conditions; provided that the aggregate amount of securities held in the account at the close of this date shall not be increased or decreased by more than $200,000,000." The above resolution was in the same form as that adopted at the meeting on September 27, 1940, except that it reduced from $500,000,000 to $200,000,000 the amount by which the aggregate amount of securities held in the System account could be increased or decreased. The reason for the action was that, because of the many uncertainties in the then existing situation which could not be appraised satisfactorily, it was believed that the executive committee should continue to be in a position to act in accordance with its best judgment within the limits of the resolution and in the light of developments from time to time, especially when it might be deemed desirable to exercise an influence toward preventing disorderly conditions in the market during the interval before another meeting of the full Committee, but that, in view of the large reduction in the portfolio that had been accomplished during the past several months, there was no need at this time for making further sales for the sole purpose of reducing the account. Mr. Draper stated that he voted "no" on the above resolution for the following reasons which were broader in scope than those outlined by him when voting in the negative on a similar resolution adopted at the meeting of the Federal Open Market Committee on September 27, 1940: "I do not believe that in the present circumstances sales from the portfolio are necessary in order to maintain orderly market conditions. I have seen no recent evidence of the market being disorderly. In my judgment, also, sales from the portfolio for the purpose of maintaining an orderly market should be resorted to much less frequently and less vigorously than purchases at a time when the market is declining rapidly. Rapid declines are apt to result in a selling wave amounting to panic, which I believe should be prevented when possible. On the other hand, there is little danger of a panic when Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

66 ANNUAL REPORT OF BOARD OF GOVERNORS the market advances, and it makes little difference whether a rise is rapid or slow, so long as the level it reaches is appropriate to existing conditions and is not the result of purely speculative purchases. "A still more important reason for my belief that there is no occasion to sell is that our portfolio has been reduced very substantially and that we shall need all the ammunition we can muster when reserve requirements will have been increased and the time comes to adopt a policy of credit restriction in order to prevent inflation." 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 20, 1940 Topic No. 1: Purchases of Foreign Silver. RECOMMENDATION: The Federal Advisory Council has noted that the Senate Committee on Banking and Currency is considering at this time S.785 which would discontinue the purchase of foreign silver by the Secretary of the Treasury. The Council is unanimously of the opinion that these purchases of foreign silver should be discontinued forthwith, particularly in view of the fact that silver purchases increase the already excessively large bank reserves. MAY 21, 1940 Topic No. 1: Assignment of claims on the United States. RECOMMENDATION: The Federal Advisory Council repeats at this time the recommendation made at its meeting of November 29, 1938, and reading as follows: "The Federal Advisory Council requests the Board of Governors of the Federal Reserve System to recommend to the proper authorities an amendment to that part of section 3477 of the Revised Statutes of the United States which is Title 31 U.S.C.A., Sec. 203, which makes null and void all transfers and assignments of any claims on the United States. The amendment should permit the assignment of claims where legitimate credit has been extended excepting in those cases where claims arise in consequence of torts, tax refunds, or the like." The Council believes this suggested amendment to the law especially important at this time, since the Government's preparedness program whenever put into effect will result in the necessity of placing large orders for materials of all kinds. Many small and medium sized business enterprises would be in a better position to accept and execute Government orders if they were able to use assignments of their claims against the Government as collateral for loans. OCTOBER 8, 1940 Topic No. 1: Financing of war defense program. RECOMMENDATION: The Federal Advisory Council believes the danger of inflation would be increased by a material addition to the already large holdings of Government securities in the commercial banking system. The Council, therefore, urges the Board of Governors of the Federal Reserve System to use its influence to the end that future issues of Government securities be placed, as far as possible, with individual and corporate investors, including insurance companies, trusts, and savings institutions, rather than with banks of deposit; terms and maturities of future issues should be fixed with a view of encouraging ownership by such investors and discouraging ownership by banks of deposit. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

SPECIAL REPORT TO THE CONGRESS by the Board of Governors of the Federal Reserve System, the Presidents of the Federal Reserve Banks, and the Federal Advisory Council (Submitted to the President of the Senate and the Speaker of the House of Representatives, December 31, 1940) FOR the first time since the creation of the Federal Reserve System, the Board of Governors, the Presidents of the twelve Federal Reserve Banks and the members of the Federal Advisory Council representing the twelve Federal Reserve Districts present a joint report to the Congress. This step is taken in order to draw attention to the need of proper preparedness in our monetary organization at a time when the country is engaged in a great defense program that requires the coordinated effort of the entire Nation. Defense is not exclusively a military undertaking, but involves economic and financial effectiveness as well. The volume of physical production is now greater than ever before and under the stimulus of the defense program is certain to rise to still higher levels. Vast expenditures of the military program and their financing create additional problems in the monetary field which make it necessary to review our existing monetary machinery and to place ourselves in a position to take measures, when necessary, to forestall the development of inflationary tendencies attributable to defects in the machinery of credit control. These tendencies, if unchecked, would produce a rise of prices, would retard the national effort for defense and greatly increase its cost, and would aggravate the situation which may result when the needs of defense, now a stimulus, later absorb less of our economic productivity. While inflation cannot be controlled by monetary measures alone, the present extraordinary situation demands that adequate means be provided to combat the dangers of overexpansion of bank credit due to monetary causes. The volume of demand deposits and currency is fifty per cent greater than in any other period in our history. Excess reserves are huge and are increasing. They provide a base for more than doubling the existing supply of bank credit. Since the early part of 1934 fourteen billion dollars of gold, the principal cause of excess reserves, has flowed into the country, and the stream of incoming gold is continuing. The necessarily large defense program of the Government will have still further expansive effects. Government securities have become the chief asset of the banking system, and purchases by banks have created additional deposits. Because of the excess reserves, interest rates have fallen to unprecedentedly low levels. Some of them are well below the reasonable requirements of an easy money policy, and are raising serious, long-term problems for the future wellbeing of our charitable and educational institutions, for the holders of insurance policies and savings bank accounts, and for the national economy as a whole. The Federal Reserve System finds itself in the position of being unable effectively to discharge all of its responsibilities. While the Congress has not deprived the System of responsibilities or of powers, but in fact has granted it new powers, nevertheless, due to extraordinary world conditions, its authority is now inadequate to cope with the present and potential excess reserve problem. The Federal Reserve System, therefore, submits for the consideration of the Congress the following five-point program: 1. Congress should provide means for absorbing a large part of existing 68 Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

FEDERAL RESERVE SYSTEM 69 excess reserves, which amount to seven billion dollars, as well as such additions to these reserves as may occur. Specifically, it is recommended that Congress— (a) Increase the statutory reserve requirements for demand deposits in banks in central reserve cities to 26%; for demand deposits in banks in reserve cities to 20%; for demand deposits in country banks to 14%; and for time deposits in all banks to 6%. (b) Empower the Federal Open Market Committee to make further increases of reserve requirements sufficient to absorb excess reserves, subject to the limitation that reserve requirements shall not be increased to more than double the respective percentages specified in paragraph (a). (The power to change reserve requirements, now vested in the Board of Governors, and the control of open market operations, now vested in the Federal Open Market Committee, should be placed in the same body.) (c) Authorize the Federal Open Market Committee to change reserve requirements for central reserve city banks, or for reserve city banks, or for country banks, or for any combination of these three classes. (d) Make reserve requirements applicable to all banks receiving demand deposits regardless of whether or not they are members of the Federal Reserve System. (e) Exempt reserves required under paragraphs (a), (b) and (d) from the assessments of the Federal Deposit Insurance Corporation. 2. Various sources of potential increases in excess reserves should be removed. These include: the power to issue three billions of greenbacks; further monetization of foreign silver; the power to issue silver certificates against the seigniorage, now amounting to one and a half billion dollars on previous purchases of silver. In view of the completely changed international situation during the past year, the power further to devalue the dollar in terms of gold is no longer necessary or desirable and should be permitted to lapse. If it should be necessary to use the stabilization fund in any manner which would affect excess reserves of banks of this country, it would be advisable if it were done only after consultation with the Federal Open Market Committee, whose responsibility it would be to fix reserve requirements. 3. Without interfering with any assistance that this Government may wish to extend to friendly nations, means should be found to prevent further growth in excess reserves and in deposits arising from future gold acquisitions. Such acquisitions should be insulated from the credit system and, once insulated, it would be advisable if they were not restored to the credit system except after consultation with the Federal Open Market Committee. 4. The financing of both the ordinary requirements of Government and the extraordinary needs of the defense program should be accomplished by drawing upon the existing large volume of deposits rather than by creating additional deposits through bank purchases of Government securities. We are in accord with the view that the general debt limit should be raised; that the special limitations on defense financing should be removed; and that the Treasury should be authorized to issue any type of securities (including fully taxable securities) which would be especially suitable for investors other than commercial banks. This is clearly desirable for monetary as well as fiscal reasons. 5. As the national income increases a larger and larger portion of the defense expenses should be met by tax revenues rather than by borrowing. Whatever the point may be at which the budget should be balanced, there cannot be any question that whenever the country approaches a condition of full utilization of its economic capacity, with appropriate consideration of both employment and production, the budget should be balanced. This will be essential if monetary responsibility is to be discharged effectively. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

70 ANNUAL REPORT OF BOARD OF GOVERNORS In making these five recommendations, the Federal Reserve System has addressed itself primarily to the monetary aspects of the situation. These monetary measures are necessary, but there are protective steps, equally or more important, that should be taken in other fields, such as prevention of industrial and labor bottlenecks, and pursuance of a tax policy appropriate to the defense program and to our monetary and fiscal needs. It is vital to the success of these measures that there be unity of policy and full coordination of action by the various Governmental bodies. A monetary system divided against itself cannot stand securely. In the period that lies ahead a secure monetary system is essential to the success of the defense program and constitutes an indispensable bulwark of the Nation. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

FEDERAL RESERVE SYSTEM 71 BOARD OF GOVERNORS OF THE FEDERAL RESERVE SYSTEM (December 31, 1940) Term expires MAKRINER S. ECCLES, of Utah, Chairman January 31, 1944 RONALD RANSOM, of Georgia, Vice Chairman January 31, 1942 M. S. SZYMCZAK, of Illinois January 31, 1948 JOHN K. MCKEE, of Ohio January 31, 1946 CHESTER C. DAVIS, of Maryland January 31, 1954 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 FRED A. NELSON, 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 FEDERAL OPEN MARKET COMMITTEE (December 31, 1940) Members MARRINER S. ECCLES, Chairman (Board of Governors) GEORGE L. HARRISON, Vice Chairman (Elected by Federal Reserve Banks of Boston and New York) M. S. SZYMCZAK (Board of Governors) JOHN K. MCKEE (Board of Governors) RONALD RANSOM (Board of Governors) CHESTER C. DAVIS (Board of Governors) ERNEST G. DRAPER (Board of Governors) JOHN S. SINCLAIR (Elected by Federal Reserve Banks of Philadelphia and Cleveland) ROBERT S. PARKER (Elected by Federal Reserve Banks of Richmond, Atlanta, and Dallas) GEORGE J. SCHALLER (Elected by Federal Reserve Banks of Chicago and St. Louis) WILLIAM A. DAY (Elected by Federal Reserve Banks of Minneapolis, Kansas City, and San Francisco) 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

72 ANNUAL REPORT OF BOARD OF GOVERNORS FEDERAL ADVISORY COUNCIL (December 31, 1940) OFFICERS President, EDWARD E. BROWN Vice President, HOWARD A. LOEB Secretary, WALTER LICHTENSTEIN EXECUTIVE COMMITTEE EDWARD E. BROWN LEON FRASER HOWARD A. LOEB B. G. HTJNTINGTON THOMAS M. STEELE ROBERT M. HANES MEMBERS District No. 1—THOMAS M. STEELE, President, The First National Bank and Trust Company of 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—B. G. HUNTINGTON, President, The Huntington National Bank, Columbus, Ohio. District No. 5—ROBERT M. HANES, President, Wachovia Bank and Trust Company, Winston-Salem, North Carolina. District No. 6—RYBTJRN G. CLAY, Director, Fulton National Bank, Atlanta, Georgia. District No. 7—EDWARD E. BROWN, President, The First National Bank of Chicago, Chicago, Illinois. District No. 8—S. E. RAGLAND, President, The First National Bank of Memphis, Memphis, Tennessee. District No. 9—JOHN CROSBY, Vice President, Farmers and Mechanics Savings Bank of Minneapolis, 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

73 FEDERAL RESERVE SYSTEM SENIOR OFFICERS AND DIRECTORS OF FEDERAL RESERVE BANKS (December 31, 1940) 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 Alfred H. Williams Cleveland Geo. C. Brainard R. E. Klages Richmond. Robt. Lassiter W. G. Wysor Atlanta Frank H. Neely J. F. Porter Chicago R. E. Wood F. J. Lewis St. Louis Wm. T. Nardin Oscar Johnston Minneapolis W. C. Coffey Roger B. Shepard Kansas City R. B. Caldwell J. J. Thomas Dallas J. H. Merritt Jay Taylor San Fancisco R. C. Force St. George Holden Each Federal Reserve Bank has nine directors divided equally into Classes A, B, and C. The term of office of a director is three years. The 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. The Class B directors, elected by member banks, must be actively engaged in some commercial, agricultural, or industrial pursuit and may not be officers, directors, or employees of any bank. The 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 Governors, 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

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

FEDERAL RESERVE SYSTEM 75 DIRECTORS OF FEDERAL RESERVE BANKS District No. 1—Boston Term Expires Dec. SI Class A.- Lewis S. Reed President, Citizens and Mfg. Nat. Bank, Waterbury, Conn.. 1940 Allan Forbes President, State Street Tr. Co., Boston, Mass 1941 Leon A. Dodge President, First National Bank, Damariscotta, Me 1942 Class S.- Edward S. French President, Boston & Maine R. RM Springfield, Vt 1940 Philip R. Allen Chairman, Bird & Son, Inc., E. Walpole, Mass 1941 Edward J. Frost Vice President, Treasurer, and Director, William Filene's Sons Co., Boston, Mass 1942 Class C.- Henry I. Harriman Director, New England Power Co., Boston, Mass 1940 Frederic H. Curtiss Vice President, Board of Trustees, Wellesley College, Wellesley, Mass 1941 Henry S. Dennison President, Dennison Mfg. Co., Framingham, Mass 1942 District No. 2—New York Class A: William C. Potter Chairman, Guaranty Trust Co., New York, N. Y 1940 Otis A. Thompson President, Nat. Bank & Tr. Co., Norwich, N. Y 1941 Neil H. Dorrance President, First Nat. Bank & Tr. Co., Camden, N. Y 1942 Class B: 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 Robert T. Stevens President, J. P. Stevens & Co., Inc., New York, N. Y 1942 Class C.- Owen D. Young Honorary Chairman, General Electric Co., New York, N. Y 1940 Beardsley Ruml Treasurer, R. H. Macy & Co., Inc., New York, N. Y 1941 Edmund E. Day President, Cornell University, Ithaca, N. Y 1942 Buffalo Branch Appointed by Federal Reserve Bank: Robert M. O'Hara Managing Director, Buffalo, N. Y 1940 William A. Dusenbury President, First National Bank, Olean, N. Y 1940 Frank F. Henry Chairman, Washburn Crosby Co., Inc., Buffalo, N. Y 1941 George F. Rand President, The Marine Trust Co., Buffalo, N. Y 1942 Appointed by Board of Governors: Howard Kellogg President, Spencer Kellogg & Sons, Inc., Buffalo, N. Y... 1940 Marion B. Folsom Treasurer, Eastman Kodak Co., Rochester, N. Y 1941 Gilbert A. Prole Genesee Farm Supply Co., Batavia, N. Y 1942 District No. 3—Philadelphia Class A.- John B. Henning President, Wyoming Nat. Bank, Tunkhannock, Pa 1940 Joseph Wayne, Jr President, Philadelphia Nat. Bank, Philadelphia, Pa 1941 George W. Reily President, Harrisburg Nat. Bank, Harrisburg, Pa 1942 Class B: C. Frederick C. Stout John R. Evans & Company, Camden, N. J 1940 Harry L. Cannon President, H. P. Cannon & Son, Inc., Bridgeville, Del 1941 Ward D. Kerlin Secretary and Treasurer, Camden Forge Co., Camden, N. J. 1942 Class C: Warren F. Whittier Farmer, Dairyman and Cattle Breeder, Douglassville, Pa... 1940 Alfred H. Williams Dean of Wharton School of Finance, University of Pennsylvania, Philadelphia, Pa 1941 Thomas B. McCabe President, Scott Paper Co., Chester, Pa , 1942 District No. 4—Cleveland Class A: Harry B. McDowell President, McDowell Nat. Bank, Sharon, Pa 1940 Frank F. Brooks President, First National Bank, Pittsburgh, Pa 1941 Ben R. Conner President, First National Bank, Ada, Ohio 1942 Class B: Ross P. Wright Secretary-Treasurer, Reed Mfg. Co., Erie, Pa 1940 George D. Crabbs President, Philip Carey Mfg. Co., Cincinnati, Ohio 1941 Thomas E. Millsop President, Weirton Steel Company, Weirton, W. Va 1942 Class C.- George C. Brainard President, General Fireproofing Co., Youngstown, Ohio 1940 Vacancy 1941 Reynold E. Klages President, Columbus Auto Parts Co., Columbus, Ohio.... 1942 Cincinnati Branch Appointed by Federal Reserve Bank: Benedict J. Lazar Managing Director, Cincinnati, Ohio 1940 John J. Rowe President, Fifth Third Union Tr. Co., Cincinnati, Ohio.... 1940 Buckner Woodford Vice President and Cashier, Bourbon-Agricultural Bank & Trust Co., Paris, Ky 1941 Appointed by Board of Governors: Frank A. Brown Farmer, Chillicothe, Ohio 1940 Stuart B. Sutphin President, I. V. Sutphin Co., Cincinnati, Ohio. 1941 Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

76 ANNUAL REPORT OF BOARD OF GOVERNORS Pittsburgh Branch Term Expires Appointed by Federal Reserve Bank: Dec. SI Percy A. Brown Managing Director, Pittsburgh, Pa 1940 Samuel W. Harper President, Wheeling Dollar Sav. & Trust Co., Wheeling, W. Va 1940 Clarence Stanley President, Union Trust Company, Pittsburgh, Pa 1941 Appointed by Board of Governors: George T. Ladd. President, United Engineering & Foundry Co., Pittsburgh, Pa 1940 Harry S. Wherrett President, Pittsburgh Plate Glass Co., Pittsburgh, Pa 1941 District No. 5—Richmond Class A.- James C. Braswell President, Planters Nat. Bank & Tr. Co., Rocky Mount, N. C 1940 Lewis E. Johnson Chairman, First National Bank, Alderson, W. Va 1941 Charles E. Rieman President, Western National Bank, Baltimore, Md 1942 Class B.- John H. Hanna Chairman, Capital Transit Co., Washington, D. C 1940 Edwin Malloy President and Treasurer, Cheraw Cotton Mills, Inc., Cheraw, S. C 1941 Charles C. Reed Vice President and General Manager, Williams & Reed, Inc., Richmond, Va 1942 Class C: Robert Lassiter Chairman, Mooresville Cotton Mills, Mooresville, N. C 1940 Charles P. McCormick President, McCormick & Co., Inc., Baltimore, Md 1941 William G. Wysor General Manager, Southern States Cooperative, Inc., Richmond, Va 1942 Baltimore Branch Appointed by Federal Reserve Bank: W. Robert Milford Managing Director, Baltimore, Md 1940 James Dixon President, Easton National Bank, Easton, Md 1940 George W. Reed President, National Marine Bank, Baltimore, Md 1941 James C. Fenhagen Chairman, Executive Committee, Baltimore National Bank, Baltimore, Md 1942 Appointed by Board of Governors: W. Frank Roberts President, Standard Gas Equipment Corp., Baltimore, Md.. 1940 W. Frank Thomas Construction Engineer and Real Estate Management, Westminster, Md 1941 Joseph D. Baker, Jr Secretary and Treasurer, The Standard Lime and Stone Company, Baltimore, Md 1942 Charlotte Branch Appointed by Federal Reserve Bank: William T. Clements Managing Director, Charlotte, N. C 1940 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 Byron M. Edwards Executive Vice President, South Carolina National Bank, Columbia, S. C 1942 Appointed by Board of Governors: George M. Wright President, Republic Cotton Mills, Great Falls, S. C 1940 Vacancy 1941 David W. Watkins Director of Extension, Clemson College, Clemson, S. C 1942 District No. 6—Atlanta Class A.- William D. Cook Executive Vice President, First National Bank, Meridian, Miss 1940 George J. White President, First National Bank, Mount Dora, Fla 1941 Thomas K. Glenn Chairman, Trust Co. of Georgia, Atlanta, Ga 1942 Class E.- 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 John A. McCrary Vice President and Treasurer, J. B. McCrary Co., Inc., Atlanta, Ga 1942 Class C: Rufus C. Harris President, Tulane University, New Orleans, La 1940 Frank H. Neely Executive Vice President and Secretary, Rich's, Inc., Atlanta, Ga 1941 Joe Frank Porter President, Tenn. Farm Bureau Fed., Columbia, Tenn 1942 Birmingham Branch Appointed by Federal Reserve Bank: Paul L. T. Beavers :. Managing Director, Birmingham, Ala 1940 John S. Coleman President, Birmingham Trust & Sav. Co., Birmingham, Ala 1940 Gordon D. Palmer Executive Vice President, First National Bank, Tuscaloosa, Ala 1941 John C. Persons President, First National Bank, Birmingham, Ala 1942 Appointed by Board of Governors: Edward L. Norton Vice President, The Munger Estate, Birmingham, Ala 1940 Donald Comer Chairman, Avondale Mills, Birmingham, Ala 1941 Howard Gray Farmer, New Market, Ala 1942 Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

FEDERAL RESERVE SYSTEM 77 Jacksonville Branch Term Expires Appointed by Federal Reserve Bank: Dec. 81 George S. Vardeman, Jr Managing Director, Jacksonville, Fla 1940 Junius C. McCrocklin Executive Vice President, First National Bank, Tarpon Springs, Fla 1940 William R. McQuaid President, Barnett National Bank, Jacksonville, Fla 1941 Bert C. Teed First Vice President, First National Bank, Palm Beach, Fla 1942 Appointed by Board of Governors: Bayless W. Haynes President, Wilson & Toomer Fertilizer Co., Jacksonville, Fla 1940 Robert H. Gamble President, Florida Brick & Tile Corp., Jacksonville, Fla.... 1941 Howard Phillips Executive Vice President, Dr. P. Phillips Co., Inc., Orlando, Fla 1942 Nashville Branch Appointed by Federal Reserve Bank: Joel B. Fort, Jr Managing Director, Nashville, Tenn 1940 George N. Bass Cashier, First National Bank of Franklin Co., Decherd, Tenn 1940 Edward B. Maupin Cashier, Peoples National Bank, Shelbyville, Tenn 1941 Frank M. Farris President, Third National Bank, Nashville, Tenn 1942 Appointed by Board of Governors: Elbridge W. Palmer President, Kingsport Press, Inc., Kingsport, Tenn 1940 Clyde B. Austin President, The Austin Co., Inc., Greeneville, Tenn 1941 William E. McEwen Farmer and Stock Raiser, Williamsport, Tenn 1942 New Orleans Branch Appointed by Federal Reserve Bank: Lewis M. Clark Managing Director, New Orleans, La 1940 Oliver G. Lucas President, National Bank of Commerce, New Orleans, La... 1940 Herbert Holmes President, Delta Nat. Bank, Yazoo City, Miss 1941 Emile E. Soulier Executive Vice President, First Nat. Bank, Lafayette, La... 1942 Appointed by Board of Governors: Eugene F. Billington Vice President & Secretary, Soule Steam Feed Works, Meridian, Miss 1940 Alexander Fitz-Hugh Vice President, P. P. Williams Co., Vieksburg, Miss 1941 Henry G. Chalkley, Jr General Manager, Sweet Lake Land & Oil Co., Inc., Lake Charles, La 1942 District No. 7—Chicago Class A.- Edward R. Estberg Chairman, Waukesha Nat. Bank, Waukesha, Wis 1940 Frank D. Williams Executive Vice President and Cashier, First Capital National Bank, Iowa City, Iowa 1941 Walter J. Cummings Chairman, Cont'l. 111. Nat. Bank and Trust Co., Chicago, 111 1942 Class B: Charles B. Van Dusen Director, S. S. Kresge Co., Detroit, Mich 1940 Nicholas H. Noyes Vice President and Secretary, Eli Lilly and Company, Indianapolis, Ind 1941 Max W. Babb President, Allis-Chalmers Mfg. Co., Milwaukee, Wis 1942 Class C.- Frank J. Lewis Chairman, F. J. Lewis Mfg. Co., Chicago, 111 1940 Robert E. Wood Chairman, Sears, Roebuck & Co., Chicago, 111 1941 Clifford V. Gregory Associate Publisher, Wallaces' Farmer and Iowa Homestead, Des Moines, Iowa 1942 Detroit Branch Appointed by Federal Reserve Bank: Vacancy Managing Director, Detroit, Mich 1940 Walter S. McLucas Chairman, The National Bank of Detroit, Detroit, Mich.... 1940 Joseph M. Dodge President, The Detroit Bank, Detroit, Mich 1941 James E Davidson President, Peoples Com. & Sav. Bank, Bay City, Mich 1942 Appointed by Board of Governors: Alfred C. Marshall President, Detroit Edison Co., Detroit, Mich 1940 L. Whitney Watkins Farmer, Manchester, Mich 1941 Harry L. Pierson President, Detroit Harvester Co., Detroit, Mich 1942 District No. 8—St. Louis Class A: George R. Corlis Cashier, Anna National Bank, Anna, 111 1940 Sidney Maestre President, Mississippi Valley Trust Co., St. Louis, Mo 1941 Max B. Nahm Vice President, Citizens National Bank, Bowling Green, Ky. 1942 Class .B.- Harvey C. Couch President, Ark. Power & Light Co., Pine Bluff, Ark 1940 John R. Stanley Secretary, Treasurer, Stanley Clothing Co., Evansville, Ind 1941 James W. Harris Chairman, Harris-Langenberg Hat Co., St. Louis, Mo 1942 Class C.- Oscar G. Johnston President, Delta and Pine Land Co., Scott, Miss 1940 Douglas W. Brooks President, Union Compress & Warehouse Co., Memphis, Tenn 1941 William T. Nardin Vice President and General Manager, Pet Milk Company, St. Louis, Mo 1942 Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

78 ANNUAL REPORT OF BOARD OF GOVERNORS Little Rock Branch Term Expires Appointed by Federal Reserve Bank: Dec. SI Arthur F. Bailey Managing Director, Little Rock, Ark 1940 Arthur E. McLean President, Commercial Nat. Bank, Little Rock, Ark 1940 Paul R. McCoy Chairman, Peoples Nat. Bank, Stuttgart, Ark 1941 James H. Penick Vice President, W. B. Worthen Co., Little Rock, Ark 1942 Appointed by Board of Governors: Ira N. Barnett, Jr Manager, Barnett Bros. Mercantile Co., Batesville, Ark 1940 Henry H. Tucker President, Fones Bros. Hardware Co., Little Rock, Ark 1941 Romeo E. Short Farmer, Brinkley, Ark 1942 Louisville Branch Appointed by Federal Reserve Bank: Charles A. Schacht Managing Director, Louisville, Ky 1940 Phil E. Chappell Cashier, Planters Bk. & Tr. Co., Hopkinsville, Ky 1940 Ralph C. Gifford President, First National Bank, Louisville, Ky 1941 James O. Sanders President, First National Bank, Huntingburg, Ind 1942 Appointed by Board of Governors: Perry B. Gaines Farmer and Stock Raiser, Carrollton, Ky 1940 James B. Hill President, Louisville & Nashville R. R., Louisville, Ky... 1941 George O. Boomer Vice President, The Girdler Corporation, Louisville, Ky... 1942 Memphis Branch Appointed by Federal Reserve Bank: William H. Glasgow Managing Director, Memphis, Tenn 1940 Bert A. Lynch President, Farmers Bank & Trust Co., Blytheville, Ark.... 1940 Oliver Benton President, National Bank of Commerce, Jackson, Tenn... 1941 Vance J. Alexander President, Union Planters Nat. Bank & Tr. Co., Memphis, Tenn 1942 Appointed by Board of Governors: Rufus C. Branch Cotton Farmer and Ginner, Pecan Point, Ark 1940 J. Holmes Sherard J. Holmes Sherard & Co., Sherard, Miss 1941 Jesse P. Norfleet President, Sledge & Norfleet, Memphis, Tenn 1942 District No. 9—Minneapolis Class A: Melvin O. Grangaard Vice President, First Nat. Bk. & Tr. Co., Minneapolis, Minn 1940 James R. McKnight President, Pierre National Bank, Pierre, S. D 1941 Fred D. McCartney Executive Vice President, First National Bank, Oakes, N. D : 1942 Class B.- William O. Washburn President, W. O. Washburn & Sons, St. Paul, Minn 1940 James E. O'Connell President, Eddy's Bakeries, Inc., Helena, Mont 1941 Albert P. Funk President and Treasurer, LaCrosse Rubber Mills Co., La- Crosse, Wis 1942 Class C: William D. Cochran President, W. D. Cochran Freight Lines, Iron Mountain, Mich 1940 Roger B. Shepard President, Finch, Van Slyck & McConville, St. Paul, Minn.. 1941 Walter C. Coffey Dean, College of Agriculture, University of Minnesota, St. Paul, Minn 1942 Helena Branch Appointed by Federal Reserve Bank: Robert E. Towle Managing Director, Helena, Mont 1940 Arthur R. McDermott Vice President, Montana National Bank, Billings, Mont... 1940 Peter Pauly President, Deer Lodge Bank & Tr. Co., Deer Lodge, Mont.. 1941 Appointed by Board of Governors: Alex Cunningham Vice President and Treasurer, Western Life Ins. Co., Helena, Mont 1940 Hobart D. Myrick Farmer, Square Butte, Mont 1941 District No. 10—Kansas City Class A.- Myron A. Limbocker President, Citizens National Bank, Emporia, Kans 1940 Edward E. Mullaney President, Farmers & Merchants Bank, Hill City, Kans 1941 Thomas A. Dines President, U. S. National Bank, Denver, Colo 1942 Class B.- Joseph M. Bernardin Vice President, Burk Lumber Company, Dawson, N. M... 1940 Lee E. Phillips Phillips Petroleum Co., Bartlesville, Okla 1941 Willard D. Hosford Vice President, John Deere Plow Co., Omaha, Neb 1942 Class C.- Robert B. Caldwell McCune, Caldwell & Downing, Kansas City, Mo 1940 John J. Thomas Attorney-at-Law, Seward, Neb 1941 Clarence Roberts Editor, The Farmer-Stockman, Oklahoma City, Okla 1942 Denver Branch Appointed by Federal Reserve Bank: Joseph E. Olson Managing Director, Denver, Colo 1940 William C. Kurtz President and General Manager, Independent Lumber Co., Grand Junction, Colo 1940 Harold Kountze President, Colorado National Bank, Denver, Colo 1941 Roblin H. Davis President, Denver National Bank, Denver, Colo 1942 Appointed by Board of Governors: Albert K. Mitchell President and General Manager, T. E. Mitchell & Son, Albert, N. M 1940 James B. Grant Lewis and Grant, Denver, Colo 1941 Wilson McCarthy President, Denver & Salt Lake R. R. Co., Denver, Colo... 1942 Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

FEDERAL RESERVE SYSTEM 79 Oklahoma City Branch Term Expires Appointed by Federal Reserve Bank: Dec. SI George H. Pipkin Managing Director, Oklahoma City, Okla 1940 Samuel W. Hayes Hayes, Richardson, Shartel, Gilliland & Jordan, Oklahoma City, Okla 1940 Leroy D. Edgington President, First National Bank, Ponca City, Okla 1941 Arthur E. Stephenson President, Central National Bank, Enid, Okla 1942 Appointed by Board of Governors: Lee Clinton Realtor, Tulsa, Okla 1940 Neil R. Johnson Rancher and Farmer, Norman, Okla 1941 Thomas S. Hanna President, Baker, Hanna & Blake Co., Oklahoma City, Okla 1942 Omaha Branch Appointed by Federal Reserve Bank: Lloyd H. Earhart Managing Director, Omaha, Neb 1940 George A. Bible President, First National Bank, Rawlins, Wyo 1940 George W. Holmes President, First National Bank, Lincoln, Neb 1941 Thomas L. Davis President, First National Bank, Omaha, Neb 1942 Appointed by Board of Governors: William H. Schellberg President, Union Stock Yards Co., Omaha, Neb 1940 Robert E. Campbell Chairman, Miller & Paine, Lincoln, Neb 1941 Harry L. Dempster President, Dempster Mill Mfg. Co., Beatrice, Neb 1942 District No. 11—Dallas Class A: Pat E. Hooks President, First National Bank, Itasca, Tex 1940 Ford Seale President, Citizens National Bank, Denison, Tex 1941 Ed H. Winton Executive Vice President, Continental National Bank, Fort Worth, Tex 1942 Class B: James M. West Chairman, West Production Co., Houston, Tex 1940 Ernest L. Kurth Vice President and General Manager, Angelina County Lumber Co., Keltys, Tex 1941 Jesse R. Milan President, Cooper Company, Inc., Waco, Tex 1942 Class C.- Joseph B. Cozzo Womack & Cozzo, Dallas, Tex 1940 James H. Merritt Retired, McKinney, Tex 1941 Jay Taylor Rafter O Cattle Company, Amarillo, Tex 1942 El Paso Branch Appointed by Federal Reserve Bank: Joseph L. Hermann Managing Director, El Paso, Tex 1940 Charles N. Bassett President, State National Bank, El Paso, Tex 1940 Frank R. Coon President, Mimbres Valley Bank, Deming, N. M 1941 Homer A. Jacobs Vice President, El Paso National Bank, El Paso, Tex 1942 Appointed by Board of Governors: Jack B. Martin President, Arizona Ice & Cold Storage Co., Tucson, Ariz... 1940 Franklin M. Hayner President, Las Cruces Lumber Co., Las Cruces, N. M 1941 Ray E. Sherman President, Leavell and Sherman, Ind., El Paso, Tex 1942 Houston Branch Appointed by Federal Reserve Bank: William D. Gentry Managing Director, Houston, Tex 1940 Vacancy 1940 Sam R. Lawder Vice President, First National Bank, Houston, Tex 1941 Preston B. Doty President, First National Bank, Beaumont, Tex 1942 Appointed by Board of Governors: George G. Chance Farmer, Bryan, Tex 1940 Henry Renfert Renfert-Helmbrecht Co., Galveston, Tex 1941 Sam Taub J. N. Taub & Sons, Houston, Tex 1942 San Antonio Branch Appointed by Federal Reserve Bank: Miers Crump Managing Director, San Antonio, Tex 1940 Vacancy 1940 John K. Beretta President, National Bank of Commerce, San Antonio, Tex.. 1941 Ernest J. Miller President, South Texas Nat. Bank, San Antonio, Tex 1942 Appointed by Board of Governors: Dolph Briscoe Stock Raiser, Uvalde, Tex 1940 Jamie M. Odom General Contractor, Austin, Tex 1941 Edwin F. Flato President, Corpus Christi Hardware Co., Corpus Christi, Tex 1942 District No. 12—San Francisco Class A: Charles K. Mclntosh Chairman, Bank of California, N. A., San Francisco, Calif.. 1940 Reno Odlin President, Puget Sound National Bank, Tacoma, Wash... 1941 Carroll F. Byrd Executive Vice President and Chairman, First Nat. Bank, Willows, Calif 1942 Class B: 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 Reese H. Taylor President, Union Oil Company, Los Angeles, Calif 1942 Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

80 ANNUAL REPORT OF BOARD OF GOVERNORS Class C: Term Expires Dec. 31 St. George Holden President, St. George Holden Realty Co., San Francisco, Calif 1940 Raymond C. Force Chairman, Executive Committee, Caterpillar Tractor Co., San Leandro, Calif 1941 Carlyle Thorpe General Manager, California Walnut Growers Association, Los Angeles, Calif 1942 Los Angeles Branch Appointed by Federal Reserve Bank: W. Norman Ambrose Managing Director, Los Angeles, Calif 1940 Victor H. Rossetti President, Farmers & Merchants Nat. Bank, Los Angeles, Calif 1940 Charles E. Brouse President, Citizens Nat. Trust & Sav. Bank, Riverside, Calif 1941 Appointed by Board of Governors: William S. Rosecrans Land Management & Investments, Los Angeles, Calif 1940 Carl V. Newman President, Calavo Growers of California, Los Angeles, Calif. 1941 Portland Branch Appointed by Federal Reserve Bank: David L. Davis Managing Director, Portland, Ore 1940 Nona A. Davis Vice President, Baker-Boyer National Bank, Walla Walla, Wash 1940 Ernest B. MacNaughton President, First National Bank, Portland, Ore 1941 Appointed by Board of Governors: Albert E. Engbretsen President, Engbretsen Seed Co., Astoria, Ore 1940 George T. Gerlinger President, Willamette Valley Lumber Co., Portland, Ore... 1941 Salt Lake City Branch Appointed by Federal Reserve Bank: Winnie L. Partner Managing Director, Salt Lake City, Utah 1940 Orval W. Adams Executive Vice President, Utah State Nat. Bank, Salt Lake City, Utah 1940 Frederick P. Champ President, Utah Mortgage Loan Corp., Logan, Utah 1941 Appointed by Board of Governors: Roscoe C. Rich President, R. C. Rich Sheep'Co., Burley, Idaho 1940 Herbert S. Auerbach President, Auerbach Company, Salt Lake City, Utah 1941 Seattle Branch Appointed by Federal Reserve Bank: Clarence R. Shaw Managing Director, Seattle, Wash 1940 Ned A. Telyea President, Old Nat. Bank & Union Trust Co., Spokane, Wash 1940 Andrew Price President, National Bank of Commerce, Seattle, Wash 1941 Appointed by Board of Governors: Fred Nelsen Dairy Farmer, Seattle, Wash 1940 Charles F. Larrabee Vice President, Pacific American Fisheries, Inc., Bellingham, Wash 1941 Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

FEDERAL RESERVE SYSTEM 81 STATE BANK AND TRUST COMPANY MEMBERS Following is a list of the 1,342 State bank and trust company members of the Federal Reserve System on December 31, 1940. DISTRICT NO. 1 (42 banks) DISTRICT NO. 2—Continued CONNECTICUT^ (5 banks) NEW JERSEY—continued Hartford Phoenix State Bank & Trust East Orange Savings Investment & Trust Co. Co. New Haven Union & New Haven Trust Co. Elizabeth Central Home Trust Co. Torrington Brooks Bank & Trust Co. Elizabethport Banking Co. Waterbury Colonial Trust Co. Fort Lee Fort Lee Trust Co. Waterbury Trust Co. Franklin Sussex County Trust Co. Glen Ridge Glen Ridge Trust Co. MAINE (5 banks) Glen Rock Glen Rock Bank Hackensack Hackensack Trust Co. Augusta Depositors Trust Co. Peoples Trust Co. of Bergen Bangor Merrill Trust Co. County Bar Harbor Bar Harbor Banking & Trust Jersey City Commercial Trust Co. of New Co. Jersey Ellsworth Union Trust Co. Linden Linden Trust Co. Sanford Sanford Trust Co. Montclair '.'.'. .Bank of Montclair Montclair Trust Co. MASSACHUSETTS (29 banks) Morristown Morristown Trust Co. Newark Clinton Trust Co. Arlington Menotomy Trust Co. Columbus Trust Co. Boston New England Trust Co. Federal Trust Co. Old Colony Trust Co. Fidelity Union Trust Co. Pilgrim Trust Co. Franklin-Washington Trust Co. State Street Trust Co. Merchants & Newark Trust Co United States Trust Co. United States Trust Co. Bridgewater Bridgewater Trust Co. West Side Trust Co. Brookline Norfolk County Trust Co. Nutley Bank of Nutley Cambridge County Bank & Trust Co. Passaic Bank of Passaic & Trust Co. Harvard Trust Co. Peoples Bank & Trust Co. Fall River B.M.C. Durfee Trust Co. Perth Amboy First Bank & Trust Co. Fall River Trust Co. Plainfield Mid-City Trust Co. Gloucester Gloucester Safe Deposit & Plainfield Trust Co. Trust Co. State Trust Co. Greenfield Franklin County Trust Co. Ridgefield Park .... Ridgefield Park Trust Co. Holyoke Hadley Falls Trust Co. Ridgewood North Jersey Trust Co. Hyannis Hyannis Trust Co. Rochelle Park Rochelle Park Bank Lynn Security Trust Co. Rutherford Rutherford Trust Co. Milton Blue Hill Bank & Trust Co. South Orange South Orange Trust Co. Newton Newton Trust Co. Summit Summit Trust Co. Norwood Norwood Trust Co. Tenafly Tenafly Trust Co. Quincy Quincy Trust Co. Westfield Peoples Bank & Trust Co. Salem Naumkeag Trust Co. Westfield Trust Co. Somerville Somerville Trust Co. Springfield Springfield Safe Deposit & NEW YORK (129 banks) Trust Co. Union Trust Co. Adams .Citizens & Farmers Trust Co. T W a e u ll n e t s o le n y Hills B W r e is ll t e o s l l e C y o T un ru ty st T C r o u . st Co. Albany . S F t i a r t s e t B T a ru n s k t o C f o A . lbany Winchester Winchester Trust Co. Amity ville .Bank of Amity ville Worcester Worcester County Trust Co. Amsterdam .Montgomery County Trust Co. Arcade .Citizens Bank Avoca .Bank of Avoca NEW HAMPSHIRE (1 bank) Babylon .Bank of Babylon Con way Carroll County Trust Co. Baldwin . Peoples State Bank Batavia . Genesee Trust Co. Bayshore .South Side Bank RHODE ISLAND (2 banks) Belmont . State Bank of Belmont Providence Industrial Trust Co. Binghamton .Marine Midland Trust Co. Blasdell .Bank of Blasdell Union Trust Co. Brooklyn (see NewYork) Buffalo . Liberty Bank DISTRICT NO. 2 (178 banks) Manufacturers & Traders CONNECTICUT! (1 bank) Trust Co. Marine Trust Co. Springdale Springdale Bank & Trust Co. Canandaigua... .Ontario County Trust Co. .Canaseraga State Bank NEW JERSEYi (48 banks) Canisteo .First State Bank Cattaraugus . Bank of Cattaraugus Bayonne Bayonne Trust Co. Center Moriches.. .Center Moriches Bank Bloomfield Bloomfield Bank & Trust Co. Chatham . State Bank of Chatham Community Trust Co. Chestertown .Chester-Schroon-Horicon Bank Bogota Bank of Bogota Clymer . Clymer State Bank Boonton Boonton Trust Co. Cohocton .Cohocton State Bank Bound Brook Bound Brook Trust Co. DeRuyter . De Ruyter State Bank Carteret Carteret Bank & Trust Co. Dunkirk . Dunkirk Trust Co. Cranford Cranford Trust Co. Ellenburg Depot. . State Bank of Ellenburg Dover Dover Trust Co. Elmira .Chemung Canal Trust Co. Dunellen Peoples Trust Co. Elmira 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

82 ANNUAL REPORT OF BOARD OF GOVERNORS DISTRICT NO. 2—Continued DISTRICT NO. 2—Continued NEW YORK-continued NEW YORK—continued Endicott Endicott Trust Co. Salamanca Salamanca Trust Co. Union Trust Co. Saratoga Springs .. .Adirondack Trust Co. Evans Mills Peoples Bank Say ville Oystermen's Bank & Trust Co. Farmingdale Bank of Farmingdale Schenectady Schenectady Trust Co. Floral Park Floral Park Bank & Trust Co. Sea Cliff State Bank of Sea Cliff Forrest Hills (See New York) Smithtown Branch.Bank of Smithtown Fredonia Citizens Trust Co. Spring Valley Ramapo Trust Co. Garden City Garden City Bank & Trust Co. Stony Brook Bank of Suffolk County Geneva Geneva Trust Co. Syracuse First Trust & Deposit Co. Gloversville Trust Co. of Fulton County Syracuse Trust Co. Great Neck Bank of Great Neck Tarry town Washington Irving Trust Co. Hamburg Peoples Bank Utica First Bank & Trust Co. Hammondsport.... Bank of Hammondsport Warsaw Wyoming County Bank & Trust Hicksville Bank of Hicks ville Co. Ithaca Tompkins County Trust Co. Watertown Northern New York Trust Co. Jamestown Bank of Jamestown Westbury Bank of Westbury Trust Co. Johnson City Workers Trust Co. Westhampton Katonah Northern Westchester Bank Beach Seaside Bank Kingston Kingston Trust Co. West New Brighton. West New Brighton Bank Lackawanna American Bank White Plains Citizens Bank Lindenhurst Lindenhurst Bank County Trust Co. Little Falls Herkimer County Trust Co. Locke Citizens Bank Locust Valley Matinecock Bank DISTRICT NO. 3 (69 banks) Lowville Lewis County Trust Co. Malone Peoples Trust Co. DELAWARE (4 banks) Massena Massena Banking & Trust Co. Wilmington.. .. .Equitable Trust Co. May ville State Bank of May ville Industrial Trust Co. Middletown Orange County Trust Co. Security Trust Co. Millbrook Bank of Millbrook Wilmington Trust Co. Mineola Nassau County Trust Co. Mount Vernon Fleetwood Bank Mount Vernon Trust Co. NEW JERSEYi (7 banks) New York Amalgamated Bank Bankers Trust Co. Burlington Burlington City Loan & Trust Bank of the Manhattan Co. Co. Bank of New York Camden Camden Trust Co. Bank of Yorktown Egg Harbor City... Egg Harbor City Trust Co. Bronx County Trust Co. Hightstown Hightstown Trust Co. Brooklyn Trust Co. Princeton Princeton Bank & Trust Co. Central Hanover Bank & Trust Riverside Riverside Trust Co. Co. Swedesboro Swedesboro Trust Co. Chemical Bank & Trust Co. City Bank-Farmers Trust Co. PENNSYLVANIAi (58 banks) Clinton Trust Co. Colonial Trust Co. Allentown Liberty Bank & Trust Co. Continental Bank & Trust Co. Bloomsburg Bloomsburg Bank-Columbia Corn Exchange Bank Trust Co. Trust Co. Federation Bank & Trust Co. Carlisle Carlisle Trust Co. Fifth Avenue Bank Chester Chester-Cambridge Bank & Fulton Trust Co. Trust Co. Guaranty Trust Co. Clearfield Clearfield Trust Co. Irving Trust Co. Danville Montour County Trust Co. Lawyers Trust Co. Du Bois Union Banking & Trust Co. Manufacturers Trust Co. Easton Easton Trust Co. Marine Midland Trust Co. East Petersburg ... .East Petersburg State Bank Merchants Bank Egypt Farmers Bank New York Trust Co. Harrisburg Central Trust Co. Pan American Trust Co. Dauphin Deposit Trust Co. Pennsylvania Exchange Bank Hazleton Markle Banking & Trust Co. Schroder Trust Co. Peoples Savings & Trust Co. Trade Bank & Trust Co. Traders Bank & Trust Co. United States Trust Co. Honesdale Wayne County Savings Bank Niagara Falls Power City Trust Co. Houtzdale Houtzdale Trust Co. North Collins Bank of North Collins Huntingdon Grange Trust Co. Nyack Nyack Bank & Trust Co. Jenkintown Jenkintown Bank & Trust Co. Ogdensburg Ogdensburg Trust Co. Lancaster Farmers Bank & Trust Co. Olean Olean Trust Co. Northern Bank & Trust Co. Oneida Madison County Trust & De- Lemoyne Lemoyne Trust Co. posit Co. Lewistown Lewistown Trust Co. Ontario State Bank of Ontario Littlestown Littlestown State Bank Orchard Park Bank of Orchard Park Lock Haven Lock Haven Trust Co. Oriskany Falls First Trust & Deposit Co. Lykens Miners Bank & Trust Co. Ossining Ossining Trust Co Mahanoy City Merchants Banking Trust Co. Patchogue Patchogue Citizens Bank & Middletown Citizens Bank & Trust Co. Trust Co. Mount Carmel Liberty State Bank & Trust Co. Pearl River State Bank of Pearl River Myerstown Myerstown Trust Co. Perry Citizens Bank Nanticoke Peoples Bank Port Chester Mutual Trust Co. of West- New Oxford Farmers & Merchants Bank chester County Newtown Newtown Title & Trust Co. Rochester Central Trust Co. Norristown Montgomery Trust Co. Lincoln-Alliance Bank & Trust Norristown-Penn Trust Co. Co. Orrstown Orrstown Bank Rome Rome Trust Co. Paoli PaoliBank Sag Harbor Peconic Bank Paradise State Bank of Paradise Digitized for F1 RExAcSluEsiRve of part of State located in another district. http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

FEDERAL RESERVE SYSTEM 83 DISTRICT NO. 3-Continued DISTRICT NO. 4-Continued PENNSYLVANIA—continued OHIO—continued Philadelphia . Fidelity-Philadelphia Trust Co. Delta Peoples Savings Bank Co. First Trust Co. East Liverpool Potters Bank & Trust Co. Gimbel Bros. Bank & Trust Co. Elyria Elyria Savings & Trust Co. Girard Trust Co. Savings Deposit Bank & Trust Ninth Bank & Trust Co. Co. Pennsylvania Co. for Insurances Findlay Ohio Bank & Savings Co. on Lives and Granting Fort Recovery Fort Recovery Banking Co. Annuities Freeport Freeport State Bank Provident Trust Co. Geneva Geneva Savings & Trust Co. Prospect Park .Interboro Bank & Trust Co. Gibsonburg Home Banking Co. Quakertown .Quakertown Trust Co. Gnadenhutten Gnadenhutten Bank Reading . Reading Trust Co. Hillsboro Hillsboro Bank & Savings Co. Schnecksville Schnecksville State Bank Hubbard Hubbard Banking Co. Schuylkill Haven Schuylkill Haven Trust Co. Kipton Kipton Bank Co. Steelton." .Steelton Bank & Trust Co. Leesburg Citizens Bank & Savings Co. Tamaqua . Peoples Trust Co. Lodi Lodi State Bank Temple .Temple State Bank Lorain Central Bank Co. Wilkes-Barre . Wilkes-Barre Deposit & Savings City Bank Co. Bank Lorain Banking Co. Williamsport . West Branch Bank & Trust Co. Lyons Farmers State Bank Wyomissing . Peoples Trust Co. Madison Citizens Bank York . Guardian Trust Co. Mansfield Farmers Savings & Trust Co. York Trust Co. Richland Trust Co. Marblehead Marblehead Bank Co. DISTRICT NO. 4 (158 banks) Marengo Marengo Banking Co. Martins Ferry Peoples Savings Bank Co. KENTUCKY1 (7 banks) Mason First-Mason Bank Massillon Ohio-Merchants Trust Co. Catlettsburg.. Kentucky-Farmers Bank Maumee State Savings Bank Co. Covington ... Peoples-Liberty Bank & Trust Middlepoint Middlepoint Banking Co. Co. Middletown First American Bank & Trust Lexington Bank of Commerce Co. Security Trust Co. Minerva Minerva Banking Co. Paris Bourbon-Agricultural Bank & Minerva Savings & Bank Co. Trust Co. Minster Minster State Bank Peoples Deposit Bank & Trust Monroeville Farmers & Citizens Banking Co. Co. Mount Blanchard. .Citizens Bank Richmond. State Bank & Trust Co. Mount Gilead Peoples Savings Bank Co. Mount Sterling Sterling State Bank OHIO (121 banks) Mount Vernon Knox County Savings Bank Napoleon. Community Bank Akron. . Firestone Park Trust & Savings Newark Licking County Bank Bank Newark Trust Co. First-Central Trust Co. New Knqxville Peoples Savings Bank Alliance Mount Union Bank New Lexington Perry County Bank Antwerp Antwerp Exchange Bank New Philadelphia. .Ohio Sayings & Trust Co. Apple Creek Apple Creek Banking Co. Northfield Macedonia-North field Banking Archbold Peoples State Bank Co. Co. Arlington Farmers & Merchants Bank Co. Norwalk Huron County Banking Co. Ashland Ashland Bank & Savings Co. Norwood Norwood-Hyde Park Bank <fc Bellevue Union Bank & Savings Co. Trust Co. Bellville Farmers Bank Oak Harbor Oak Harbor State Bank Co. Bowling Green .. . Bank of Wood County Co. Oberlin Oberlin Savings Bank Co. Brecksville . . .Brecksville Bank Co. Orrville Orrville Savings Bank Canal Wincheste] Peoples Bank Co. Pomeroy Farmers Bank & Savings Co. Canton . . First Trust & Savings Ban k Ravenna First Savings Bank Geo. D. Harter Bank Reading Reading Bank Peoples Bank Rich wood Rich wood Banking Co. Castalia . . Castalia Banking Co. Rittman Rittman Savings Bank Celina .. Commercial Bank Co. Russellville Bank of Russellville Christiansburg. ... Farmers & Merchants Bank Co. St. Bernard Citizens Bank Cincinnati ... Central Trust Co. St. Marys Home Banking Co. Fifth-Third Union Trust Co. Sandusky Citizens Banking Co. Peoples Bank & Savings Co. Western Security Bank Provident Savings Bank & Shelby Citizens Bank Trust Co. Shiloh Shiloh Savings Bank Co. Southern Ohio Savings Bank Shreve Farmers Bank & Trust Co. Silverton Silverton Bank Western Bank & Trust Co. Strasburg Citizens-State Bank Cleveland... .. Cleveland Trust Co. Sylvania Sylvania Savings Bank Co. Lorain Street Bank Toledo Commerce Guardian Bank Union Bank of Commerce Co. Morris Plan Bank Columbiana. .. .Union Banking Co. Ohio Citizens Trust Co. Columbus... .. Fifth Avenue Savings Bank Co. Toledo Trust Co. Conneaut.... . .Citizens Banking & Savings Co. Utica Utica Savings Bank Co. Conneaut Banking & Trust Co. Vandalia Vandalia State Bank Cortland . .. Cortland Savings & Banking Van Wert Peoples Savings Bank Coshocton. . .. . Pe C o o p . les Bank & Trust Co. W Wa a t k e e rv m il a le n ....r W W a a k te e r m vi a l n le B S a t n at k e C S o a . vings Bank Crestline . . Farmers & Citizens State Bank Wellington First Wellington Bank Croton . .Croton Bank Co. West Carroll ton West Carrollton Bank Danville .. .Commercial & Savings Bank Wood ville State Savings Bank Co. Wooster Commercial Banking & Trust Delphos .. Commercial Bank Co. Peoples Bank Yellow Springs Miami Deposit Bank Co. Digitized for F1 RExAcSluEsiRve of part of State located in another district. http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

84 ANNUAL REPORT OF BOARD OF GOVERNORS DISTRICT NO. 4—Continued DISTRICT NO. 5—Continued OHIO—continued SOUTH CAROLINA—continued Youngstown City Trust & Savings Bank Charleston ... Carolina Savings Bank Chester ... Commercial Bank Dollar Savings & Trust Co. Harts ville ...Bank of Hartsville PENNSYLVANIA* (27 banks) VIRGINIA (46 banks) Aliquippa Woodlawn Trust Co. Ambridge Economy Bank Abingdon Farmers Exchange Bank Beaver Beaver Trust Co. Alberta Bank of Alberta Dormont Dormont Savings & Trust Co. Amelia Union Bank & Trust Co. Elizabeth Bank of Elizabeth Amherst Farmers & Bank of Amherst Erie Security-Peoples Trust Co. Blacksburg Farmers & Merchants Bank Homestead Monongahela Trust Co. Blackstone Citizens Bank & Trust Co. Linesville Farmers & Merchants Bank Bridgewater Planters Bank McKeesport Peoples City Bank Chase City Peoples Bank & Trust Co. Meadville Crawford County Trust Co. Christiansburg Bank of Christiansburg New Brighton Beaver County Trust Co. Edinburg Farmers Bank New Castle Lawrence Savings & Trust Co. Farm ville Planters Bank & Trust Co. Pittsburgh Allegheny Trust Co. Front Royal Bank of Warren Allegheny Valley Bank Glade Spring Bank of Glade Spring Bank of Ohio Valley Halifax Bank of Halifax Colonial Trust Co. Kenbridge Bank of Lunenburg Commonwealth Trust Co. Lacrosse Bank of Lacrosse Homewood Bank Lawrenceville. Farmers & Merchants Bank Iron & Glass Dollar Savings Lynchburg Lynchburg Trust & Savings Bank of Birmingham Bank Peoples-Pittsburgh Trust Co. Mathews Farmers Bank Potter Title & Trust Co. Montross Peoples Bank St. Clair Deposit Bank Mount Jackson Peoples Bank Union Trust Co. Odd Citizens Bank of Poquoson Somerset Somerset Trust Co. Petersburg Petersburg Savings & American Turtle Creek Turtle Creek Bank & Trust Co. Trust Co. Warren Warren Bank & Trust Co. Phoebus Bank of Phoebus Windber Windber Trust Co. Portsmouth Merchants & Farmers Bank Powhatan Bank of Powhatan Remington State Bank of Remington WEST VIRGINIA* (3 banks) Rich Creek Farmers & Merchants Bank Sistersville First-Tyler Bank & Trust Co. Richmond Bank of Commerce & Trusts Wheeling Security Trust Co. Mechanics & Merchants Bank Wheeling Dollar Savings & Southern Bank & Trust Co. Trust Co. State-Planters Bank & Trust Co. Rural Retreat Peoples Bank DISTRICT NO. 5 (95 banks) Shawsville Bank of Shawsville DISTRICT OF COLUMBIA (6 banks) Smithfield Bank of Smithfield Merchants & Farmers Bank Washington American Security & Trust Co. South Boston.: South Boston Bank & Trust Co. City Bank South Hill. Citizens Bank National Savings & Trust Co. Stanardsville Bank of Greene Security Savings & Commercial Suffolk American Bank & Trust Co. Bank Farmers Bank of Nansemond Union Trust Co. Tazewell Farmers Bank of Clinch Valley Washington Loan & Trust Co. Waynesboro Citizens-Waynesboro Bank & Trust Co. MARYLAND (10 banks) Williamsburg Peninsula Bank & Trust Co. Winchester Union Bank Baltimore Baltimore Commercial Bank Woodstock Shenandoah County Bank & Calvert Bank Trust Co. Fidelity Trust Co. Maryland Trust Co. WEST VIRGINIAi (18 banks) Union Trust Co. of Maryland Cambridge County Trust Co. of Maryland Belington Belington Bank Ellicott City Commercial & Farmers Bank Berwind Berwind Bank Forest Hill Forest Hill State Bank Buffalo Buffalo Bank Hagerstown Hagerstown Trust Co. Charleston Kanawha Banking & Trust Co. Salisbury Farmers & Merchants Bank Kanawha Valley Bank Hurricane Putnam County Bank Lewisburg Greenbrier Valley Bank NORTH CAROLINA (10 banks) Martinsburg Peoples Trust Co. Charlotte American Trust Co. Parsons Tucker County Bank Concord Citizens Bank & Trust Co. Petersburg Potomac Valley Bank Edenton Bank of Edenton Quinwood Bank of Quinwood Marshall Citizens Bartk Rainelle Bank of Rainelle Tryon Tryon Bank & Trust Co. Romney Bank of Romney Wadesboro Bank of Wadesboro St. Albans Bank of St. Albans Washington Bank of Washington St. Marys Pleasants County Bank Wilmington Peoples .Savings Bank & Trust Spencer Traders Trust & Banking Co. Co. Summersville Farmers & Merchants Bank Wilmington Savings & Trust Union .Bank of Monroe Co. Winston-Salem Wachovia Bank & Trust Co. DISTRICT NO. 6 (54 banks) ALABAMA (17 banks) SOUTH CAROLINA (5 banks) Aliceyille Aliceyille Bank & Trust Co. Bishopville Peoples Bank Birmingham Birmingham Trust & Savings Camden Commercial Bank Co. Digitized for 1F ERxAclSuEsivRe of part of State located in another district. 4 http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

FEDERAL RESERVE SYSTEM 85 DISTRICT NO. 6—Continued DISTRICT NO. 7—Continued ALABAMA—continued ILLINOIS—continued Clan ton Peoples Savings Bank Chicago Amalgamated Trust & Savings Clayton Bank of Commerce Bank Columbiana Columbiana Savings Bank Drexel State Bank Cullman Parker Bank & Trust Co. East Side Trust & Savings Bank Dothan Dothan Bank & Trust Co. Harris Trust & Savings Bank Eutaw Merchants & Farmers Bank of Kaspar-American State Bank Greene County Lake Shore Trust & Savings Guin Marion County Banking Co. Bank Marion Junction Marion Junction State Bank Lake View Trust & Savings Montgomery Union Bank & Trust Co. Bank Oneonta Citizens Bank Main State Bank Pine Apple Bank of Pine Apple Metropolitan State Bank Selma Peoples Bank & Trust Co. Metropolitan Trust Co. Thomaston Planters Bank & Trust Co. Northern Trust Co. Winfield Winfield State Bank Sears-Community State Bank York Bank of York State Bank of Clearing Cowden State Bank of Cowden FLORIDA (5 banks) Elburn Kane County Bank & Trust Co. Eureka State Bank of Eureka Bradenton Manatee River Bank & Trust Evanston Evanston Trust & Savings Co. Bank Fort Lauderdale... Brqward Bank & Trust Co. State Bank & Trust Co. Marianna Citizens State Bank Freeport State Bank of Freeport Ocala Commercial Bank & Trust Co. Fulton Fulton State Bank St. Petersburg Union Trust Co. Galesburg Farmers & Mechanics Bank Geneva State Bank of Geneva GEORGIA (18 banks) Hillsdale Old Farmers & Merchants State Bank Adairsville Bank of Adairsville Joy Joy State Bank Atlanta Trust Co. of Georgia Lanark Exchange State Bank Augusta Georgia Railroad Bank & Trust LaSalle LaSalle State Bank Co. Lostant Farmers State Bank Bainbridge Citizens Bank & Trust Co. McHenry West McHenry State Bank Blackshear Blackshear Bank Metamora Metamora State Bank Brunswick Brunswick Bank & Trust Co. Milford Citizens State Bank Canton Bank of Canton Momence Parish Bank & Trust Co. Columbus Columbus Bank & Trust Co. Morrison Smith Trust & Savings Bank Merchants & Mechanics Bank Mt. Pulaski Farmers Bank Commerce Northeastern Banking Co. Niantic State Bank of Niantic Lawrenceville Brand Banking Co. Oak Park Oak Park Trust & Savings Bank Millen Bank of Millen Petersburg Schirding State Bank Monroe Farmers Bank Piper City State Bank of Piper City Pelham Farmers Bank Plymouth Plymouth State Bank Savannah Citizens Bank & Trust Co. Riverdale First Trust & Savings Bank Savannah Bank & Trust Co. Rochester Rochester State Bank Soperton Bank of Soperton Rock Island State Bank of Rock Island Swainsboro Central Bank Rushville Rush ville State Bank Shannon First State Bank LOUISIANA^ (6 banks) Shelby ville Shelby County State Bank Shelby Loan & Trust Co. Alexandria .. Rapides Bank & Trust Co. Skokie Niles Center State Bank Arabi .. St. Bernard Bank & Trust Co. Springfield Springfield Marine Bank Lake Charles .. Lake Charles Bank & Trust Co. Thomson Thomson State Bank New Orleans . .American Bank & Trust Co. Tolono Citizens Bank Louisiana Savings Bank & Walnut Citizens State Bank Trust Co. Washington Danforth Banking Co. Slidell. . ..Bank of Slidell Wenona First State Bank Wheaton Gary-Wheaton Bank MISSISSIPPI (2 banks) Wheaton Trust & Savings Bank Wilmette Wilmette State Bank Forest Bank of Forest Jackson Deposit Guaranty Bank & Trust Co. INDIANAi (53 banks) Angola Steuben County State Bank TENNESSEE (6 banks) Auburn Auburn State Bank Carthage Citizens Bank & Trust Co. A villa Community State Bank Chattanooga American Trust & Banking Co. Battle Ground Battle Ground State Bank Greeneyille Greene County Bank Berne First Bank of Berne Hartsville Bank of Hartsville Boswell Farmers & Merchants Bank Knoxville Commercial Bank & Trust Co. Brazil Brazil Trust Co. Nashville Commerce Union Bank Brookville .Peoples Trust Co. Cambridge City..'. .Wayne Trust Co. Carthage. State Bank of Carthage DISTRICT NO. 7 (320 banks) Columbia City Citizens State Bank ILLINOIS^ (63 banks) Farmers Loan & Trust Co. Connersville Fayette Bank & Trust Co. Argenta Gerber State Bank Crawfordsville Elston Bank & Trust Co. Bloomington Corn Belt Bank Darlington Farmers & Merchants State Peoples Bank Bank Blue Island State Bank of Blue Island Decatur First State Bank Bushnell Farmers & Merchants State Delphi Union Bank & Trust Co. Bank Elkhart First Old State Bank Byron Rock River Community Bank St. Joseph Valley Bank Camp Grove Camp Grove State Bank Etna Green Etna Bank Chad wick Farmers State Bank Fairmount Fairmount State Bank Digitized for F1R EAxcSluEsiRv e of part of State located in another district. http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

86 ANNUAL REPORT OF BOARD OF GOVERNORS DISTRICT NO. 7—Continued DISTRICT NO. 7-Continued INDIANA-continued MICHIGAN* (130 banks) Franklin Farmers Trust Co. Adrian... .... Adrian State Savings Bank Gary Gary State Bank Commercial Savings Bank Gary Trust & Savings Bank Lenawee County Savings Bank Greencastle First-Citizens Bank & Trust Co. Albion ... .Commercial & Savings Bank Greenfield Greenfield Banking Co. Algonac .. .Algonac Sayings Bank Greensburg Union Trust Co. Alpena ... .Alpena Savings Bank Hartford City Citizens State Bank Alto Farmers State Bank Hebron Citizens Bank Ann Arbor. Ann Arbor Savings & Commer- Indianapolis Fletcher Trust Co. cial Bank Jamestown Citizens State Bank State Savings Bank Kokomo Union Bank & Trust Co. Armada .. . Armada State Bank Linden Linden State Bank ...Bay City Bank Logansport Farmers & Merchants State Bay City Peoples Commercial & Savings Bank Bank Marshall Citizens State Bank Belleville .... Peoples State Bank Mohawk Mohawk State Bank Berrien Spring Berrien Springs State Bank Monticello State & Savings Bank Big Rapids ... Big Rapids Savings Bank Montpelier Bank of Montpelier Blanchard .... Blanchard State Bank Muncie Merchants Trust Co. Blissfield .... Blissfield State Bank Nappanee State Bank of Nappanee Bronson .... Peoples State Bank Oldenburg Farmers & Merchants State Brown City... Brown City Savings Bank Bank Byron Center. Byron Center State Bank Pendleton Pendleton Banking Co. Caledonia State Bank of Caledonia Poland Poland-State Bank Capac .... Capac State Savings Bank Porter First State Bank Cass City .... Cass City State Bank Roachdale Roachdale Bank & Trust Co. Pinney State Bank South Bend First Bank & Trust Co. Cassopolis .... Cass County State Bank Sweetser Farmers State Bank Charlevoix .... Charlevoix County State Bank Tipton Farmers Loan & Trust Co. Charlotte .. . .Eaton County Savings Bank Valparaiso First State Bank Chelsea .... Chelsea State Bank Van Buren Farmers Trust Co. Chesaning Chesaning State Bank Warren Exchange Bank Clare .... Citizens State Bank Warsaw Lake City Bank Clarkston .... Clarkston State Bank West College Corner Coloma State Bank of Coloma (College Corner, Coopersville.. ... .Coopersville State Bank Ohio, P. O.) Farmers State Bank Corunna .... Old Corunna State Bank Croswell State Bank of Croswell IOWA (5 banks) Davison .... Davison State Bank Algona Iowa State Bank Detroit Detroit Bank Security State Bank Industrial Morris Plan Bank Aurelia First Trust & Savings Bank United Savings Bank Avoca Avoca State Bank Dexter Dexter Savings Bank Blencoe Blencoe State Bank Dundee .... Monroe County Bank Cherokee Cherokee State Bank Durand .... Shiawassee County Bank Churdan First State Bank Ecorse Ecorse Savings Bank Clear Lake Clear Lake Bank & Trust Co. Farmington... Farmington State Bank Cory don Cory don State Bank Fennville Old State Bank Davenport Davenport Bank & Trust Co. Fenton State Savings Bank Des Moines Bankers Trust Co. Flint Citizens Commercial & Savings Dubuque American Trust & Savings Bank Bank Early .Early Savings Bank Genesee County Savings Bank Fairfield Iowa State Bank & Trust Co. Merchants & Mechanics Bank Fontanelle State Savings Bank Fountain Fountain State Bank Forest City Forest City Bank & Trust Co. Frankenmuth. Frankenmuth State Bank Fort Dodge The State Bank Frankfort State Savings Bank Fort Madison Fort Madison Savings Bank Fremont Fremont State Bank Gladbrook State Bank Old State Bank Glen wood Glenwood State Bank Gagetown State Savings Bank Holstein Holstein State Bank Gay lord Gaylord State Savings Bank Ida Grove Ida County State Bank Grand Haven. Grand Haven State Bank Jesup Farmers State Bank Peoples Savings Bank Lineville Lineville State Bank Grand Rapids. Old Kent Bank Maquoketa Jackson State Savings Bank Grandville Community State Bank Mason City United Home Bank & Trust Co. Grant Grant State Bank Monticello Monticello State Bank Greenville Commercial State Savings Bank Moorhead Moorhead State Bank First State Bank Muscatine Central State Bank Grosse Pointe. Grosse Pointe Bank Muscatine Bank & Trust Co. Harbor Beach. State Bank New Hampton Security State Bank Harbor Spring! Emmet County State Bank Newton Jasper County Savings Bank Hillsdale Hillsdale State Savings Bank Osage Home Trust & Savings Bank Holland Holland State Bank Ottumwa Fidelity Savings Bank Peoples State Bank Union Bank & Trust Co. Holly First State & Savings Bank Riceville Riceville State Bank Howell First State & Savings Bank Royal Home State Bank Imlay City Imlay City State Bank Sheldon Security State Bank Jackson Jackson City Bank & Trust Co. Shenandoah Security Trust & Savings Bank Jonesville Grosvenor Savings Bank Storm Lake Commercial Trust & Savings Kingston Kingston State Bank Bank Lakeyiew Bank of Lakeview Security Trust & Savings Bank Lansing American State Savings Bank Strawberry Point.. .Union Bank & Trust Co. Bank of Lansing Templeton Templeton Savings Bank Lapeer Savings Bank Washington Washington State Bank Lawrence.... Home State Bank Williams Williams Savings Bank Lowell State Savings Bank 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 87 DISTRICT NO. 7—Continued DISTRICT-NO. 8 (97 banks) MICHIGAN—continued ARKANSAS (7 banks) Ludington Ludington State Bank Batesville Citizens Bank & Trust Co. Manchester Peoples Bank Blytheville Farmers Bank & Trust Co. Union Savings Bank Fordyce Fordyce Bank & Trust Co. Manistee Manistee County Savings Bank Little Rock W. B. Worthen Co., Bankers Marcellus G. W. Jones Exchange Bank Russelville Bank of Russelville Mason Farmers Bank Peoples Exchange Bank Merrill Farmers & Merchants State Waldron Bank of Waldron Bank Midland Chemical State Savings Bank ILLINOIS1 (19 banks) Milan Peoples State Bank Milford Oakland County State Bank Breese State Bank of Breese Montague Farmers State Bank Cairo First Bank & Trust Co. Morrice Morrice State Bank Dupo Dupo State Savings Bank Mount Clemens .... Mount Clemens Savings Bank East St. Louis Union Trust Co. Mount Pleasant Exchange Savings Bank Edwardsville Bank of Edwardsville Isabella County State Bank Effingham Efhngham State Bank New Baltimore Citizens State Savings Bank Eldorado C. P. Burnett & Sons, Bankers New Boston Peoples State Bank Hillsboro Montgomery County Bank New Haven New Haven Savings Bank Hoyleton Hoyleton State & Savings Bank North Branch Pioneer Bank Jacksonville Elliott State Bank Onsted Onsted State Bank Johnston City Johnston City State Bank Oxford Oxford Savings Bank Keyesport State Bank of Keyesport Petoskey First State Bank Litchfield Litchfield Bank & Trust Co. Pigeon Pigeon State Bank Mounds First State Bank Pinconning Pinconning State Bank Olmsted First State Bank Plymouth PlymouthUnited Savings Bank Red Bud First State Bank Richmond Macomb County Savings Bank Rich view Rich view State Bank River Rouge River Rouge Savings Bank Ridgway Gallatin County Bank Romeo Romeo Savings Bank St. Peter First State Bank St. Charles St. Charles State Bank St. Clair Commercial & Savings Bank INDIANA1 (7 banks) St. Johns State Bank of St. Johns Saugatuck Fruit Growers State Bank Bloomfield Bloomfield State Bank Sebewaing Farmers & Merchants State Charlestown First Bank of Charlestown Bank Oaktown Oaktown Bank South Haven Citizens State Bank Orleans Bank of Orleans First State Bank Richland Lake State Bank Sparta Spirta State Bank Sandborn Sandborn Banking Co. Spring Lake Spring Lake State Bank Scottsburg Scott County State Bank Springport Springport State Savings Bank Traverse City First-Peoples State Bank KENTUCKY* (10 banks) Traverse City State Bank Trenton Trenton State Bank Bardstown Farmers Bank & Trust Co. Vassar State Bank of Vassar Campbellsville Citizens Bank & Trust Co. Wayne Wayne State Bank Clay Farmers Bank West Branch State Savings Bank Danville Boyle Bank & Trust Co. Whitehall State Bank of Whitehall Hartford Citizens Bank Williamston Peoples State Bank Hopkinsville Planters Bank & Trust Co. Wyandotte Wyandotte Savings Bank Louisville Kentucky Title Trust Co. Yale Yale State Bank Lincoln Bank & Trust Co. Zeeland Zeeland State Bank Louisville Trust Co. Owensboro First-Owensboro Bank & Trust WISCONSIN1 (29 banks) Co. Antigo .Fidelity Savings Bank MISSOURI1 (54 banks) Beloit . Beloit State Bank Burlington . Bank of Burlington Arnold Bank of Maxville Chilton ,. Commercial Bank California Farmers & Traders Bank Edgerton . Tobacco Exchange Bank Camdenton Camden County Bank Evansville .Union Bank & Trust Co. Carrollton Carroll County Trust Co. Green Bay Peoples Trust & Savings Bank Clayton St. Louis County Bank Green Lake .Green Lake State Bank Clinton Union State Bank Kaukauna .Bank of Kaukauna Crane Bank of Crane Kewaunee . State Bank of Kewaunee Cuba Peoples Bank Manitowoc .Manitowoc Savings Bank Farmington United Bank Markesan .Markesan State Bank Fenton Farmers & Merchants Bank Mayville . State Bank of Mayville Fulton Callaway Bank Milwaukee .American State Bank Glasgow Glasgow Savings Bank Marshall & Ilsley Bank Hannibal Farmers & Merchants Bank & Trust Co. Northern Bank Keytesville Bank of Keytesville Platteville West Side Bank Lancaster Schuyler County State Bank Sauk City . State Bank of Platteville Lebanon State Bank of Lebanon Sheboygan . Farmers & Citizens Bank State Savings Bank . Bank of Sheboygan Luxemburg Lemay Bank & Trust Co. South Milwaukee. Citizens State Bank Maplewood Maplewood Bank & Trust Co. W V St i u a ro u rg p q e a u o c a n a Bay . . . . F S H B a t a o r a n m m te k e e r B o s S f a t n S a S k t t t a e u t o r e B g f e a B V o n a n i k n r o k B q a u y a M M Mo a e r m b s e h p r a h ly l i l s W P B C e a i o o t n y o p k d l B e o & s a f n S H M k t a u e & t s e m t o T p B n h r a u i n B s s k t a n C k o. Waupun . State Bank of Waupun Mechanics Bank & Trust Co. Wausau . Citizens State Bank Monroe City Monroe City Bank West Allis . .Milwaukee County Bank Normandy Normandy State Bank Whitewater . .First Citizens State Bank Pine Lawn Pine Lawn 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

88 ANNUAL REPORT OF BOARD OF GOVERNORS DISTRICT NO. 8—Continued DISTRICT NO. 9—Continued MISSOURI-continued MONTANA—continued Sedalia Sedalia Bank & Trust Co. Choteau Citizens State Bank St. Louis Baden Bank Columbus Yellowstone Bank Bremen Bank & Trust Co. Deer Lodge Deer Lodge Bank & Trust Co. Cass Bank & Trust Co. Denton Farmers State Bank Chippewa Trust Co. Fromberg Clarks Fork Valley Bank Easton-Taylor Trust Co. Glasgow Farmers-Stockgrowers Bank Jefferson Bank & Trust Co. Great Falls Montana Bank & Trust Co. Jefferson-Gravois Bank Helena Union Bank & Trust Co. Lindell Trust Co. Laurel Yellowstone Bank Manchester Bank Libby First State Bank Manufacturers Bank & Trust Richey First State Bank Co. Ronan Ronan State Bank Mercantile-Commerce Bank & Terry State Bank of Terry Trust Co. Townsend State Bank of Townsend Mississippi Valley Trust Co. Victor Farmers State Bank Mound City Trust Co. Worden Farmers State Bank North St. Louis Trust Co. Plaza Bank SOUTH DAKOTA (23 banks) Southern Commercial & Savings Bank Alcester State Bank of Alcester Southwest Bank Alpena Bank of Alpena Tower Grove Bank & Trust Co. Arlington Citizens State Bank United Bank & Trust Co. Belle Fourche Bank of Belle Fourche St. Louis County.. .Gravois Bank Belvidere Belvidere State Bank Springfield Southern Missouri Trust Co. Buffalo First State Bank Sweet Springs Chemical Bank Custer Custer County Bank Vandalia Vandalia State Bank Faith Farmers State Bank Versailles Bank of Versailles Flandreau Farmers State Bank Washington Franklin County Bank Freeman Merchants State Bank Webster Groves Webster Groves Trust Co. Fulton Fulton State Bank Huron Farmers & Merchants Bank DISTRICT NO. 9 (88 banks) Madison Security Bank & Trust Co. Miller Hand County State Bank MICHIGAN* (14 banks) Mitchell Commercial Trust & Savings Bank Bark River Bark River State Bank Mobridge Citizens Bank Escanaba State Savings Bank Presho Farmers & Merchants State Ewen State Bank of Ewen Bank Gladstone Gladstone State Savings Bank Sioux Falls Union Savings Bank Iron Mountain Commercial Bank Sturgis Bear Butte Valley Bank Iron River Miners' State Bank Toronto Bank of Toronto L'Anse Commercial Bank Vermillion Citizens Bank Manistique State Savings Bank Webster Security Bank Menominee Commercial Bank Woonsocket Sanborn County Bank Newberry Newberry State Bank O Sa n u to lt n a S g t o e. n M arie... . C C i e ti n z t e r n al s S S a t v at in e g B s a B n a k nk WISCONSIN1 (5 banks) Sault Savings Bank Boyceville Bank of Boyceville South Range South Range State Bank Glenwood City First State Bank Menomonie Kraft State Bank MINNESOTA (21 banks) Rhinelander Merchants State Bank Caledonia Sprague State Bank Tomahawk Bradley Bank Cannon Falls Security State Bank Chatfield Root River State Bank DISTRICT NO. 10 (86 banks) Clinton Clinton State Bank COLORADO (15 banks) Hawley State Bank of Hawley Houston Security State Bank Brighton Brighton State Bank Lakefield Farmers State Bank Craig Moffatt County State Bank Madelia Farmers State Bank Del Norte Rio Grande County Bank Minneapolis Fidelity State Bank Delta Colorado Bank & Trust Co. Owatonna Security Bank & Trust Co. Denver Central Savings Bank & Trust Plainview Peoples State Bank Co. Rockville State Bank of Rockville International Trust Co. Rushmore First State Bank Eaton Eaton Bank St. Cloud Zapp State Bank Fort Morgan Farmers State Bank Sleepy Eye State Bank of Sleepy Eye Grand Junction .... United States Bank Springfield Farmers & Merchants State Gunnison Gunnison Bank & Trust Co. Bank Haxtun Haxtun State Bank State Bank of Springfield La Junta Colorado Savings & Trust Co. Wadena Wadena County State Bank Sterling Commercial Savings Bank Welcome Welcome State Bank Security State Bank West Concord Farmers State Bank Yuma Farmers State Bank Winona Merchants Bank KANSAS (25 banks) MONTANA (25 banks) Abilene Citizens Bank Anaconda Daly Bank & Trust Co. Augusta Prairie State Bank Belt Belt Valley Bank Caldwell Stock Exchange Bank Big Timber Citizens Bank & Trust Co. Eldorado Citizens State Bank Billings Security Trust & Savings Bank Goodland Goodland State Bank Bozeman Gallatin Trust & Savings Bank Great Bend American State Bank Security Bank & Trust Co. Hiawatha Morrill & Janes Bank Broadus Powder River County Bank Hoxie Hoxie State Bank Butte Metals Bank & Trust Co. Hutchinson Hutchinson State Bank Cascade Stockmens Bank Kansas City Riverview State Bank Digitized for F1 ERxAcSluEsiRve of part of State located in another district. http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

FEDERAL RESERVE SYSTEM 89 DISTRICT NO. 10—Continued DISTRICT NO. 11—Continued KANSAS—continued LOUISIANA^ (2 banks) Kinsley Kinsley Bank Minden Minden Bank & Trust Co. Liberal Citizens State Bank Shreveport Continental-American Bank & Luray Peoples State Bank Ness City First State Bank Trust Co. Oakley Farmers State Bank NEW MEXICO1 (3 banks) Osage City Citizens State Bank Pratt Peoples Bank Carlsbad American Bank Rossville Peoples State Bank Deming Mimbres Valley Bank Sedan Sedan State Bank Logan McFarland Bros. Bank St. Marys St. Marys State Bank Sylvan Grove Sylvan State Bank OKLAHOMA1 (1 bank) Tonganoxie First State Bank Topeka Fidelity Savings State Bank Atoka Atoka State Bank Wakefield Farmers & Merchants State Bank TEXAS (79 banks) Winfield The State Bank Bandera First State Bank MISSOURI* (11 banks) Bangs First State Bank Bay City Bay City Bank & Trust Co. Albany Gentry County Bank Beaumont Security State Bank & Trust Carthage Bank of Carthage Co. Craig Bank of Craig Beeville State Bank & Trust Co. Kansas City Commerce Trust Co. Bremond First State Bank Mercantile Home Bank & Trust Brenham Washington County State Bank Co. Brownfield Brownfield State Bank Merchants Bank Bryan First State Bank & Trust Co. King City First State Bank Celina First State Bank Lamar Barton County State Bank Clarendon Farmers State Bank Rich Hill Security Bank Cleveland Farmers State Bank St. Joseph Empire Trust Co. Clifton Farmers State Bank South St. Joseph...First St. Joseph Stock Yards Crosby Crosby State Bank Bank Crowell Crowell State Bank Cuero Farmers State Bank & Trust NEBRASKA (14 banks) Co. Dalhart Citizens State Bank Alma Harlan County Bank Dallas Liberty State Bank Bancroft Citizens Bank De Kalb State Bank of De Kalb Blair Washington County Bank Del Rio Del Rio Bank & Trust Co. Bluehill Commercial Bank Dodson First State Bank Chappell Deuel County State Bank Dumas First State Bank Hartington Bank of Hartington East Bernard Union State Bank Lexington Farmers State Bank Eden Eden State Bank North Platte McDonald State Bank Ferris Farmers & Merchants State Pawnee City Citizens State Bank Bank Scribner Farmers State Bank Forney Forney State Bank Stromsburg Stromsburg Bank Franklin First State Bank Valley Bank of Valley Gatesville Guaranty Bank & Trust Co. Wahoo Wahoo State Bank Gladewater First State Bank Wallace Farmers State Bank Gonzales Gonzales State Bank Granger First State Bank NEW MEXICO1 (2 banks) Hamilton Hamilton Bank & Trust Co. Houston Citizens State Bank Aztec Citizens Bank Guardian Trust Co. Taos First State Bank Iola Iola State Bank Kerrville First State Bank OKLAHOMA1 (10 banks) Knox City Citizens State Bank Kosse First State Bank Ada Oklahoma State Bank Ladonia Farmers & Merchants State Canton Bank of Canton Bank Eldorado First State Bank Llano Moore State Bank Fairview Fairview State Bank Loraine First State Bank Garber Bank of Garber Lorenzo Lorenzo State Bank Medford Grant County Bank Madisonville Farmers State Bank Okarche First Bank of Okarche Marlin First State Bank Purcell First State Bank Matador First State Bank Stroud First State Bank Mathis First State Bank Woodward Bank of Woodward Maypearl First State Bank McAllen City State Bank & Trust Co. WYOMING (9 banks) Monahans First State Bank Evanston Stockgrowers Bank Mount Pleasant Guaranty Bond State Bank Lusk Lusk State Bank Muleshoe Muleshoe State Bank Mountain View Uinta County State Bank Pearsall Security State Bank Newcastle First State Bank Rails Security State Bank & Trust Saratoga Saratoga State Bank Co. Sundance Sundance State Bank Rankin First State Bank Wheatland State Bank of Wheatland Richardson Citizens State Bank Stock Growers Bank Robert Lee Robert Lee State Bank Worland Farmers State Bank Roby Citizens State Bank Roscoe Roscoe State Bank Rusk Farmers & Merchants State DISTRICT NO. 11 (86 banks) Bank & Trust Co. ARIZONAi (1 bank) San Marcos State Bank & Trust Co. Schertz Schertz State Bank Tucson Southern Arizona Bank & Trust Shamrock Farmers & Merchants State Co. Bank Digitized for FERxcAluSsEivRe of part of State located in another district. http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

90 ANNUAL REPORT OF BOARD OF GOVERNORS DISTRICT NO. 11—Continued DISTRICT NO. 12—Continued TEXAS—continued IDAHO—continued Shiro .. Farmers State Bank Soda Springs Largilliere Co., Bankers Silsbee .. Silsbee State Bank Sinton . .Commercial State Bank Twin Falls Twin Falls Bank & Trust Co. Spearman .. First State Bank NEVADA (2 banks) Spur .. Spur Security Bank Sulphur Springs. .. Sulphur Springs State Bank Elko.... ...... Nevada Bank of Commerce T T a a f lp t a . . . . F F i i r r s s t t S S t t a a t t e e B B a a n n k k Pioche. Bank of Pioche Thorndale .. Thorndale State Bank OREGON (6 banks) Tomball .. Guaranty Bond State Bank Trent .. Home State Bank Albany Bank of Albany Wellington .. Wellington State Bank Beaverton First Security Bank West Columbia.. . .First Capitol State Bank Dallas Dallas City Bank Wharton .. Security Bank & Trust Co. Halsey Halsey State Bank Wharton Bank & Trust Co. Myrtle Point.. Security Bank Winters ..Winters State Bank Oakland E. G. Young & Co. Bank .. First State Bank Yorktown UTAH (20 banks) DISTRICT NO. 12 (69 banks) Brigham State Security Bank ARIZONA^ (1 bank) Cedar City Bank of Southern Utah Ephraim Bank of Ephraim Buckeye Buckeye Valley Bank Gunnison Gunnison Valley Bank Helper Helper State Bank CALIFORNIA (17 banks) Kaysville Barnes Banking Co. Logan Cache Valley Banking Co. Auburn Placer County Bank Nephi Commercial Bank Carmel Bank of Carmel Ogden Commercial Security Bank Fairfield Solano County Bank Price Carbon Emery Bank Lodi Farmers & Merchants Bank Provo Farmers & Merchants Bank Long Beach Farmers & Merchants Bank Salina First State Bank Los Angeles California Bank Salt Lake City. Tracy Loan & Trust Co. California Trust Co. Utah Savings & Trust Co. Union Bank & Trust Co. Walker Bank & Trust Co. Newman Bank of Newman Spanish Fork Bank of Spanish Fork Oakland Bank of Commerce Commercial Bank Pasadena Citizens Commercial Trust & Springville .... Springville Banking Co. Savings Bank Vernal Bank of Vernal First Trust & Savings Bank Uintah State Bank Salinas Monterey County Trust & Savings Bank WASHINGTON (14 banks) San Francisco American Trust Co. Wells. Fargo Bank & Union Almira .... Almira State Bank Trust Co. Cashmere .... Cashmere Valley Bank San Rafael Bank of San Rafael Coulee City Security State Bank Santa Paula Citizens State Bank Kelso ...Cowlitz Valley Bank Lacrosse ...First State .Bank IDAHO (9 banks) Puyallup .... Citizens State Bank Ridgefield .... Ridgefield State Bank Aberdeen Bank of Aberdeen Ritzville .... Ritzville State Bank Arco Butte County Bank Rockford ... .Farmers & Merchants Bank Boise First Security Bank of Idaho Seattle ,.... Seattle Trust & Savings Bank Hazelton Hazelton State Bank Selah .... Selah State Bank Malad City J. N. Ireland & Co., Bankers Spokane ... .Washington Trust Co. Orofino Bank of Orofino Uniontown .... Farmers State Bank Richfield First State Bank Wilbur .... State Bank of Wilbur 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 91 DESCRIPTION OF FEDERAL RESERVE DISTRICTS Land area1 Popula- Federal Reserve district (square tion April miles) 1, 1940 No. 1—Boston 62,573 8,018,906 No. 2—New York 52,153 17,129,265 No. 3—Philadelphia 37,023 7,777,910 No. 4—Cleveland 74,027 11,809,528 No. 5—Richmond 152,471 12,330,219 No. 6—Atlanta 247,778 12,597,347 N No o . . 8 7— — - S C t. h i L ca o g u o is 1 19 9 5 0 , , 9 4 0 4 2 6 1 1 0 9 , f 1 4 8 0 7 6 , , 4 38 0 9 5 No. 9—Minneapolis 412,304 5,542,966 No. 10—Kansas City 480,537 7,855,397 No. 11—Dallas 386,447 7,733,748 No. 12—San Francisco 685,438 11,280,195 Total : 2,977,099 131,669,275 FEDERAL RESERVE DISTRICTS DISTRICT NO. 1—BOSTON Connecticut (excluding Fairfield County)... 1,290,858 Maine 847,226 Massachusetts 4,316,721 New Hampshire 491,524 Rhode Island 713,346 Vermont 359,231 DISTRICT NO. 2-NEW YORK Connecticut (Fairfield County) New Jersey Counties of— Bergen Hunterdon Morris Sussex Essex Middlesex Passaic Union Hudson Monmouth Somerset Warren New York DISTRICT NO. 3 -PHILADELPHIA. Delaware New Jersey Counties of— Atlantic Cape May Gloucester Burlington Cumberland Mercer Camden Pennsylvania (eastern part) Counties of— Adams Clinton Lebanon Bedford Columbia Lehigh Berks Cumberland Luzerne Blair Dauphin Lycoming Bradford Delaware McKean Bucks Elk Mifflin Cambria Franklin Monroe Cameron Fulton Montgomery Carbon Huntingdon Montour Center Juniata Northampton Chester Lackawanna Northumberlan d Clearfield Lancaster Perry DISTRICT NO. 4—CLEVELAND.. Kentucky (eastern part) Counties of— Bath Elliott Jessamine Lincoln Bell Estill Johnson McCreary Boone Fayette Kenton Madison Bourbon Fleming Knott Magoffin Boyd Floyd . Knox Martin Bracken Garrard Laurel Mason Breathitt Grant Lawrence Menifee Campbell Greenup Lee Montgomery Carter Harlan Leslie Morgan Clark Harrison Letcher Nicholas Clay Jackson Lewis Owsley 1 Data for land areas of States were recomputed in preparation for the 1940 Census and, therefore, differ somewhat from those shown in previous issues. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

ANNUAL REPORT OF BOARD OF GOVERNORS DESCRIPTION OF FEDERAL RESERVE DISTRICTS-Continued Land area Population Federal Reserve district (square April 1, miles) 1940 DISTRICT NO. 4.-CLEVELAND-Continued Kentucky (eastern part) Counties of—Continued Pendleton Powell Rockcastle Whitley Perry Pulaski Rowan Wolfe Pike Robertson Scott Woodford Ohio 41,122 6,907,612 Pennsylvania (westen part) 13,931 3,317,201 Counties of— Allegheny Crawford Indiana Venango Armstrong Erie Jefferson Warren Beaver Fayette Lawrence Washington Butler Forest Mercer Westmoreland Clarion Greene Somerset West Virginia (northern part) 1,202 205,290 Counties of— Brooke Marshall Tyler Hancock Ohio Wetzel DISTRICT NO. 5-RICHMOND 152,471 12,330,219 District of Columbia 61 663,091 Maryland 9,887 1,821,244 North Carolina .. 49,142 3,571,623 South Carolina 30,594 1,899,804 Virginia. 39,899 2,677,773 West Virginia (souther^ nart.l 22,888 1,696,684 Counties of— Barbour Hardy Mingo Roane Berkeley Harrison Monongalia Summers Boone Jackson Monroe Taylor Braxton Jefferson Morgan Tucker Cabell Kanawha Nicholas Upshur Calhoun Lewis Pendleton Wayne Clay Lincoln Pleasants Webster Doddridge Logan Pocahontas Wirt Fayette McDowell Preston Wood Gilmer Marion Putnam Wyoming Grant Mason Raleigh Greenbrier Mercer Randolph Hampshire Mineral Ritchie DISTRICT NO. 6—ATLANTA 247,778 12,597,347 Alabama 51,078 2,832,961 Florida 54,262 1,897,414 Georgia . . 58,518 3,123,723 Louisiana (southern part) 26,630 1,611,595 Parishes of— Acadia 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 West Baton * Calcasieu La Fourche Baptist Rouge Cameron Livingston St. Landry West Feliciana East Baton Orleans St. Martin Rouge Plaquemines St. Mary East Feliciana Pointe Coupee St. Tammany Mississippi (southern part) 26,092 1,073,748 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 Daft) 31,198 2,057,906 Counties of— Anderson Clay Grainger Jackson Bedford Cocke Greene Jefferson Bledsoe Coffee Grundy Johnson Blount Cumberland Hamblen Knox Bradley Davidson Hamilton Lawrence Campbell DeKalb Hancock Lewis Cannon Dickson Hawkins Lincoln Digitized for FRASCEarRte r Fentress Hickman Loudon http://fraser.stlouisCfheeda.tohragm/ Franklin Houston McMinn Claiborne Giles Humphreys Macon Federal Reserve Bank of St. Louis

FEDERAL RESERVE SYSTEM 93 DESCRIPTION OF FEDERAL RESERVEDISTRICTS-Continued Land area Population Federal Reserve district (square April 1, miles) 1940 DISTRICT NO. 6.-ATLANTA-Continued Tennessee (eastern part) Counties of—Continued Marion Perry Sequatchie Van Buren Marshall Pickett Sevier Warren Maury Polk Smith Washington Meigs Putnam Stewart Wayne Monroe Rhea Sullivan White Montgomery Roane Sumner Williamson Moore Robertson Trousdale Wilson Morgan Rutherford Unicoi Overton Scott Union DISTRICT NO. 7.-CHICAGO 190,446 19,406,389 Illinois (northern part 35,333 6,591,832 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 De Kalb Kendall Moultrie Will De Witt Knox Ogle Winnebago Douglas Lake Peoria Woodford Du Page La Salle Piatt Edgar Lee Putnam Indiana (northern part) 26,779 2,788,910 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 De Kalb Johnson Porter Wayne Delaware Kosciusko Pulaski Wells Elkhart Lagrange Putnam White Fayette Lake Randolph Whitley Iowa 55,986 2,538,268 Michigan (southern part) 40,484 4,932,562 Counties of— Alcona Eaton Lapeer Ogemaw Allegan Emmet Leelanau Osceola Alpena Genesee Lenawee Oscoda Antrim Glad win 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 Wisconsin (southern part} 31,864 2,554,817 Counties of— Adams Door Juneau Marquette Brown Fond du Lac Kenosha Milwaukee Calumet Grant Kewaunee Monroe Clark Green Lafayette Oconto Columbia Green Lake Langlade Outagamie Crawford Iowa Manitowoc Ozaukee Dane Jackson Marathon Portage Dodge Jefferson Marinette Racine Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

94 ANNUAL REPORT OF BOARD OF GOVERNORS DESCRIPTION OF FEDERAL RESERVE DISTRICTS—Continued Land area Population Federal Reserve district (square April 1, miles) 1940 DISTRICT NO. 7.—CHICAGO—Continued Wisconsin (southern part) Counties of—Continued Richland Sheboygan Waukesha Wood Rock Vernon Waupaca Sauk Walworth Waushara Shawano Washington Winnebago DISTRICT NO. 8.—ST. LOUIS 195,902 10,187,405 Arkansas . 52,725 1,949,387 Illinois (southern part) t 20,613 1,305,409 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 Effmgham Johnson Pope White Fayette Lawrence Pulaski Williamson Indiana (southern part^ 9,399 638,886 Counties of— Clark Greene Martin Spencer- Crawford Harrison Orange Sullivan Daviess Jackson Perry Switzerland Dubois Jefferson Pike Vanderburg Floyd • Knox Posey Warrick Gibson Lawrence Scott Washington Kentucky (western part) 22,337 1,466,202 Counties of— Adair Crittenden Hopkins Ohio Allen Cumberland Jefferson Oldham Anderson Daviess Larue Owen Ballard Edmonson Livingston Russell Barren Franklin Logan Shelby Boyle Fulton Lyon Simpson Breckinridge Gallatin McCracken Spencer Bullitt Graves McLean Taylor Butler Grayson Marion Todd Caldwell Green Marshall Trigg Calloway Hancock Meade Trimble Carlisle Hardin Mercer Union Carroll Hart Metcalfe Warren Casey Henderson Monroe Washington Christian Henry Muhlenberg Wayne Clinton Hickman Nelson Webster Mississippi (northern part) 21,328 1,110,048 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 Tellahatchie Missouri (eastern part] 58,737 2 859 538 Counties of— id | \J%JU y *JKJ\J Adair Clark Hickory Maries Audrain Cole Howard Marion Barry Cooper Howell Mercer Benton Crawford Iron Miller Bollinger Dade Jefferson Mississippi Boone Dallas Johnson Moniteau Butler Daviess Knox Monroe Caldwell Dent Laclede Montgomery Callaway Douglas Lafayette Morgan Camden Dunklin Lawrence New Madrid Cape Girardeau Franklin Lewis Oregon Carroll Gasconade Lincoln Osage Carter Greene Linn Ozark Cedar Grundy Livingston Pemiscot Chariton Harrison Macon Perry Christian Henry Madison Pettis Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

FEDERAL RESERVE SYSTEM 95 DESCRIPTION OF FEDERAL RESERVEDISTRICTS-Continued Land area Population Federal Reserve district (square April 1, miles) 1940 DISTRICT NO. 8.-ST. LOUIS—Continued Missouri (eastern part) Counties of—Continued Phelps Reynolds Saline Sullivan Pike Ripley Schuyler Taney Polk St. Charles Scotland Texas Pulaski St. Clair Scott Warren Putnam St. Francois Shannon Washington Rails St. Louis Shelby Wayne Randolph St. Louis City Stoddard Webster Ray Ste. Genevieve Stone Wright Tennessee (western part) 10,763 857,935 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.-MINNEAP0LIS 412,304 5,542,966 Michigan (northern part). . 16,538 323,544 Counties of— Alger Dickinson Keweenaw Menominee Baraga Gogebic Luce Ontonagon Chippewa Houghton Mackinac Schoolcraft Delta Iron Marquette Minnesota 80,009 2,792,300 Montana 146,316 559,456 North Dakota 70,054 641,935 South Dakota 76,536 642,961 Wisconsin (northern part) 22,851 582,770 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.—KANSAS CITY 480,537 7,855,397 Colorado 103,967 1,123,296 Kansas 82,113 1,801,028 Missouri (western par 10,533 925,126 Counties of— Andrew Cass Holt Nodaway Atchison Clay Jackson Platte Barton Clinton Jasper Vernon Bates De Kalb McDonald Worth Buchanan Gentry Newton Nebraska 76,653 1 315 834 New Mexico (northern part) 48,045 290,074 Counties of— Bernalillo Mora San Miguel Valencia Colfax Rio Arriba Santa Fe Harding Sandoval Taos McKinley San Juan Union Oklahoma (northwestern narf) 61,720 2,149,297 Counties of— Adair Ellis Logan Pontotoc Alfalfa Garfield Love Pottawatomie Beaver Garvin McClain Roger Mills Beckham Grady Mclntosh Rogers Blaine Grant Major Seminole Caddo Greer Mayes Sequoyah Canadian Harmon Murray Stephens Carter Harper Muskogee Texas Cherokee Haskell Noble Tillman Cimarron Hughes Nowata Tulsa Cleveland Jackson Okfuskee Wagoner Comanche Jefferson Oklahoma Washington Cotton Kay Okmulgee Washita Craig Kingfisher Osage Woods Creek Kiowa Ottawa Woodward Custer Latimer Pawnee Delaware Le Flore Payne Dewey Lincoln Pittsburg Wyoming 97,506 250,742 Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

96 ANNUAL REPORT OF BOARD OF GOVERNORS DESCRIPTION OF FEDERAL RESERVE DISTRICTS—Continued Land area Popula- Federal Reserve district (square tion April 1, miles) 1940 DISTRICT NO. ll.-DALLAS. 386,447 7,733,748 Arizona (southeastern part) 23,227 137,758 Counties of— Cochise Greenlee Pima Santa Cruz Graham Louisiana (northern part) 18,547 752,285 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) 73,466 241,744 Counties of— Catron Eddy Lincoln Sierra Chaves Grant Luna Socorro Curry Guadalupe OOtteeroo Torrance De Baca Hidalgo QQuuaayy Dona Ana Lea Roosevelt Oklahoma (southeastern part) 7,563 187,137 Counties of— Atoka Choctaw Johnston Marshall Bryan Coal McCurtain Pushmataha Texas 263,644 6,414,824 DISTRICT NO. 12.—SAN FRANCISCO. 685,438 11,280,195 Arizona (northwestern part) 90,353 361,503 Counties of— Apache Maricopa Navajo Yavapai Coconino Mohave Pinal Yuma Gila California 156,803 6,907,387 Idaho 82,808 524,873 Nevada 109,802 110,247 Oregon 96,349 1,089,684 Utah 82,346 550,310 Washington 66,977 1,736,191 Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

FEDERAL RESERVE SYSTEM 97 FEDERAL RESERVE BRANCH TERRITORIES (December 31, 1940) BUFFALO BRANCH (district No. 2).—The 10 most westerly counties of New York State, as follows: Monroe Orleans Allegany Wyoming Chautauqua Genesee Erie Cattaraugus Livingston Niagara CINCINNATI BRANCH (district No. 4).—That part of Kentucky in Federal Reserve district No. 4, and the following 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 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 and South Carolina: NORTH CAROLINA Alamance Catawba Guilford Mecklenburg Stanly Alexander Chatham Haywood Mitchell Stokes Alleghany Cherokee Henderson Montgomery Surry Anson Clay Iredell Moore Swain Ashe Cleveland Jackson Polk Transylvania Avery Davidson Lee Randolph Union Buncombe Davie Lincoln Richmond Watauga Burke Forsythe Macon Rockingham Wilkes Cabarrus Gaston Madison Rowan Yadkin Caldwell Graham McDowell Rutherford Yancey 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: Baldwin Covington Geneva Houston Pike Barbour Dale Henry Mobile Russell Coffee 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 Baldwin and Mobile in Alabama. SAVANNAH AGENCY (district No. 6).—Savannah, Ga. DETROIT BRANCH (district No. 7).—The following 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).—The State of Arkansas except the following counties: Baxter Craighead Greene Mississippi Sebastian2 Benton1 Crawford Lawrence Phillips Sharp Boone Crittenden Lee Poinsett Washington Carroll Cross Madison Randolph Woodruff Clay Fulton Marion St. Francis and except also the towns of DeValls Bluff (Prairie County), Mena (Polk County), and Newport (Jackson County). 1 Town of Gentry assigned to Little Rock Branch. 2 Town of Mansfield assigned to Little Rock Branch. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

98 ANNUAL REPORT OF BOARD OF GOVERNORS LOUISVILLE BRANCH (district No. 8).—That part of the State of Kentucky included in Federal Reserve district No. 8, with the exception of the town of Morganfield (Union County), and the following counties in the State of Indiana: Clark Floyd Jefferson Orange Switzerland Crawford Harrison Lawrence Perry Washington Dubois1 Jackson Martin2 Scott MEMPHIS BRANCH (district No. 8) .—Those parts of the States of Mississippi and Tennessee included in Federal Reserve district No. 8, with the exception of Union City (Obion County), Tennessee, and Paris (Henry County), Tennessee, and the following counties in the State of Arkansas: Craighead Cross Lee Phillips St. Francis Crittenden Lawrence Mississippi Poinsett Woodruff also the town of DeValls Bluff (Prairie County), Arkansas. HELENA BRANCH (district No. 9).—The entire State of Montana. DENVER BRANCH (district No. 10).—The entire State of Colorado and that part of the State of New Mexico included in Federal Reserve district No. 10. OKLAHOMA CITY BRANCH (district No. 10).—That part of the State of Oklahoma located in Federal Reserve district No. 10. OMAHA BRANCH (district No. 10).—The entire States of Nebraska and Wyoming. EL PASO BRANCH (district No. 11).—That part of the States of Arizona and New Mexico located in Federal Reserve district No. 11, and the following counties in the State of Texas: Andrews Ector Jeff Davis Midland Reeves Crane El Paso Loving Pecos Ward Culberson Hudspeth Martin Presidio Winkler HOUSTON BRANCH (district No. 11).—The following 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. 1] following counties in the State of Texass: Aransas De Witt Hidalgo La Salle Starr Atascosa Dimmit Jim Hogg Llano Terrell Bandera Duval Jim Wells Live Oak Travis Bee Edwards Karnes Mason Uvalde Bexar Frio Kendall Maverick Val Verde Blanco Gillespie Kenedy McMullen Webb Brewster Goliad Kerr Medina Willacy Brooks Gonzales Kimble Nueces Wilson Caldwell Guadalupe Kinney Real Zapata Cameron Hays Kleberg San Patricio Zavalla Comal 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 counties in the State of Washington: Asotin Columbia Garfield Skamania Walla Walla Clark Cowlitz Klickitat Wahkiakum Also, the following counties in the State of Idaho: Benewah Boundary Idaho Latah Nez Perce Bonner Clearwater Kootenai Lewis Shoshone SALT LAKE CITY BRANCH (district No. 12).—The entire State of Utah and the following counties in Idaho and Nevada: IDAHO Ada Bonneville Custer Jerome Payette Adams Butte Elmore Lemhi Power Bannock Camas Franklin Lincoln Teton Bear Lake Canyon Fremont Madison Twin Falls Bingham Caribou Gem Minidoka Valley Blaine Cassia Gooding Oneida Washington Boise Clark Jefferson Owyhee NEVADA Clark Elko Lincoln White Pine SEATTLE BRANCH (district No. 12).—The entire State of Washington except the town of Ilwaco and the following counties which are affiliated with the Portland Branch: Asotin Columbia Garfield Skamania Walla Walla Clark Cowlitz Klickitat Wahikiakum 1 Except the towns of Ferdinand and Holland. 2 Except the town of Loogootee. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

FEDERAL RESERVE DISTRICTS HMH BOUNDARIES OF FEDERAL RESERVE DISTRICTS ..••M, BOUNDARIES OF FEDERAL RESERVE BRANCH TERRITORIES (APPROXIMATE IN THE ST. LOUIS DISTRICT) (g) FEDERAL. RESERVE 6ANK CITIES • FEDERAL RESERVE BRANCH CITIES O FEDERAL RESERVE BANK AGENCY Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

INDEX Page Acceptances: Buying rates 46 Member bank holdings, December 31, 1940 50 Assets and liabilities. (See Condition statements.) Bank credit. (See Credit, Bank.) Bank directorates, Interlocking: Regulation L: Amendments 25 Policy actions of Board of Governors on 60 Press statement of Board of Governors on 60 Bank examinations 25 Bank failures 54 Bank mergers 54 Bank premises: Member banks, December 31, 1940 48, 51 Bank robberies: Law prohibiting possession of stolen bank property 24 Bankers' acceptances. (See Acceptances.) Banking and tinancial legislation: Assignment of Claims Act of 1940: Federal Advisory Council recommendations on 67 Law enacted 2, 9, 24 Board of Governors reports to Congress on pending legislation 29 Stolen bank property 24 Trading With the Enemy Act, amended 24 Banking developments in 1940, Discussion of 4-9 Banking offices: American foreign banking offices 27 Number of, 1933-1940 53 Banking statistics: Preparation for publication of 30 Banking structure: Discussion of changes in 8 Banking studies 29 Banks: Branches: Number of: 1933-1940 53 1940, analysis of changes in 54 Discussion of changes in 1940 8 Consolidations, absorptions, etc 54 Loans to, by member banks: December 31, 1940 50 Number of: 1933-1940 53 1940, analysis of changes in 54 Discussion of changes in 1940 8 Suspensions: Discussion of 8 Number of 54 (See also Federal Reserve Banks; National member banks; Nonmember banks; State member banks.) Bills: Bought by Federal Reserve Banks: All banks combined: 1918-1939, end of year figures 52 1940, end of month figures 52 Each bank, end of year figures 34 Earnings on, each bank 40 Volume of operations 39 101 Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

102 INDEX Page Bills—Continued- Discounted by Federal Reserve Banks: All banks combined: 1918-1939, end of year figures 52 1940, end of month figures 52 December 31, 1940 32 Each bank, end of year figures 34 Earnings on, each bank 40 Volume of operations 39 Board of Governors of Federal Reserve System: Davis, Chester C, reappointed 28 Eccles, Marriner S.: Designated Chairman 28 Reappointed 28 Expenses 29, 44 Hansen, Alvin H., engaged for economic research 30 Members and officers 71 Policy actions: Membership condition prohibiting real estate agency activities discontinued 62 Rates on industrial loans 62 Regulation F. Trust powers of national banks 61 Regulation L. Interlocking bank directorates 60 Press statement: Interlocking bank directorates 60 Publications: Banking and monetary statistics, Preparation for publication of 29 Banking studies completed 29 Federal Reserve Bulletin: Changes in format and content. 29 Ransom, Ronald, designated Vice Chairman 28 Receipts and disbursements 44 Reports to Congress on pending legislation 30 Special Report to Congress 2, 68-70 Staff changes: Nelson, Fred A., appointed Assistant Secretary 29 Publications and information unit set up 29 Bonds: Prices, Discussion of 15 United States Government. (See United States Government securities.) Yields: Discussion of 15 Monthly and yearly figures 56 Branch banks: Foreign branches of member banks 27 Number of: 1933-1940 53 1940, analysis of changes in 54 Discussion of changes in 1940 8 Brokers and dealers in securities: Loans to, by member banks, December 31, 1940 50 Business conditions in 1940, Discussion of 11-16 Capital: Federal Reserve Banks: All banks combined, December 31, 1940 33 Each bank, end of year figures 34 Flight to United States, Discussion of 2, 16-18 Member banks: December 31, 1940 49, 51 Capital issues, Discussion of 15 Capital movement to United States, Discussion of 2, 16-20 Central reserve city member banks: Assets and liabilities, December 31, 1940 48 Classification of loans, investments, real estate and capital: December 31, 1940 50 Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

INDEX 103 Page Charts: All member banks, demand deposits, loans, investments, and reserve balances 7 Excess reserves of member banks 5 Selected business series 12 Yield on 1960-65 Treasury bond 3 Check clearing and collection: Par list, Number of banks on: Discussion of 23 Table 54 Regulation G. Noncash collection 24 Volume of operations at Federal Reserve Banks 39 Claims against Government, Assignment of: Federal Advisory Council recommendation on 67 Law enacted 2, 9, 24 Clayton Act: Interlocking bank directorates: Regulation L, amended 25, 60 Closed banks 54 Coins received and counted by Federal Reserve Banks 39 Commercial loans, Discussion of. increase in : 6 Commercial paper: Discount rates, open market 56 Member bank holdings, December 31, 1940 50 Commitment rates of Federal Reserve Banks 46 Commodity prices. (See Prices.) Condition statements: Federal Reserve Banks: All banks combined, December 31, 1940 32 Each bank, end of year figures 34 Member banks, December 31. 1940 48, 50 Congress: Board of Governors reports to: Pending legislation 30 Special Report to Congress 2, 68-70 Consolidations, absorptions, etc. of banks 54 Construction activity, Discussion of 13 Construction contracts awarded: Defense contracts awarded, Discussion of 13 Indexes of value of 57 Contracts, Public: Assignment of claims against Government: Federal Advisory Council recommendation on 67 Law enacted 2, 9, 24 Corporate profits, Discussion of 1, 15 Corporate stocks owned by member banks: December 31, 1940 51 Corporations, Foreign banking. (See Foreign banking corporations.) Country member banks: Assets and liabilities, December 31, 1940 48 Classification of loans, investments, real estate and capital: December 31, 1940 50 Credit, Bank: Discussion of growth in 1-2 Federal Reserve: 1918-1939, end of year figures 52 1940, end of month figures 52 Special Report to Congress 2, 68-70 Credit control: Special Report to Congress recommendations on 68-70 Credit policy, Discussion of 2-8 Currency: Circulation, 1918-1940 52 Demand for currency, Discussion of 6 Received and counted by Federal Reserve Banks 39 Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

104 INDEX Page Davis, Chester C.: Appointed member of Advisory Commission to the Council of National Defense 9 Reappointed as member of Board of Governors 28 Defense program: Assignment of Claims Act of 1940: Federal Advisory Council recommendation on 67 Law enacted 2, 9, 24 Business conditions under 11-14, 16 Conference in Washington, November 12-13, 1940 9 Contracts awarded 13 Davis, Chester C, appointed member of Advisory Commission 9 Discussion of 1-3 Draper, Ernest G., small business activities 9 Federal Advisory Council recommendation on financing of 67 Federal Reserve participation in 2, 9-11 National Defense Advisory Commission appointed 9 Small business activities 2, 9-11 Special Report to Congress recommendations on financing of 69 Department store sales (value) index 57 Deposits: Demand deposits of member banks: Chart of 7 Discussion of growth in 6 Federal Reserve Banks: All banks combined, December 31, 1940 33 Each bank, end of year figures 34 Member banks, December 31, 1940 48 Nonmember deposits in Federal Reserve Banks: 1918-1939, end of year figures 52 1940, end of month figures 52 Reserves required for member banks 47 Time deposits, Interest rate on 47 Turnover of deposits, Discussion of 6 Devaluation of the dollar: Special Report to Congress recommendation on 69 Directorates, Interlocking. (See Bank directorates, Interlocking.) Discount rates: Federal Reserve Banks: Discussion of 22 Table 46 Dividends: Federal Reserve Banks 21, 41, 42 Member banks 49 Draper, Ernest G., defense activities 9 Durable goods production index 57 Earnings and expenses: Federal Reserve Banks: All banks combined 42 Discussion of 21-22 Each bank 40 Member banks: Discussion of 8 Eccles, Marriner S.: Designated Chairman of Board of Governors 28 Reappointed member^of Board of Governors 28 Edge Act corporations: Examination of 25 List of 26 Employment: Discussion of 14, 16 Factory employment index 57 Nonagricultural employment index 57 Examinations. (See Bank examinations.) Expenses: Board of Governors of Federal Reserve System 29, 44 Digitized for FRFAedSeErRal Reserve Banks 40, 42 http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

INDEX 105 Page Exports and imports of United States: Chart 12 Factory employment index 57 Failures, Bank 54 Federal Advisory Council: Harrison, George L, appointed member of 30 Meetings 28 Members and officers 72 Recommendations to Board of Governors: February 20, 1940. Purchases of foreign silver 67 May 21, 1940. Assignment of claims on the United States 67 October 8, 1940. Financing of war defense program 67 Special Report to Congress 2, 68-70 Federal Deposit Insurance Corporation: Membership changes 54 Federal Open Market Committee: Discussion of policies 3 Meetings 28 Members and officers 71 Policy actions 63-66 Special Report to Congress recommendations on 69 Federal Reserve Banks: Assessment for expenses of Board of Governors 41 Branches: Directors, List of 75-80 Chairmen and Deputy Chairmen: Conferences 28 List of 73 Defense program, Federal Reserve Bank participation in 9-11 Directors, List of 75-80 Dividends paid: All banks combined 42 Each bank 41 Earnings and expenses: All banks combined 42 Discussion of 21-22 Each bank 40 Employees, number and salaries 43 Examination of 25 Officers and employees: Senior officers, List of 73 Presidents: Conferences 28 Harrison, George L., resignation, New York 30 List of 74 Special Report to Congress 2, 68-70 Sproul, Allan, appointed, New York 30 Profit and loss account 41 Retirement system contributions 40 Salaries of officers and employees 40, 43 Vice Presidents: List of. 74 Rounds, Leslie, appointed, New York 30 Volume of operations 39 Federal Reserve branch banks. (See Federal Reserve Banks: Branches.) Federal Reserve Bulletin: Changes in format and content 29 Federal Reserve districts: Area, square miles 91-96 Branch territories, Counties comprising 97 Map showing outline 99 Population 91-96 Federal Reserve notes: Circulation 34 Collateral security, end of year figures 34 Issued 34 Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

106 INDEX Page Federal Reserve notes—Continued. Redemption fund: All banks combined, December 31, 1940 32 Each bank, end of year figures 34 Federal Reserve policy, Discussion of 2-8 Federal Reserve System: Membership: Banks admitted in 1940 26 Changes in 54 Condition prohibiting real estate agency activities discontinued 62 Discussion of increase in 8 State bank and trust company members , 81-90 Special Report to Congress 2, 68-70 Fiduciary powers of national banks. (See Trust powers of national banks.) Financial legislation. (See Banking and financial legislation.) Foreign assets in United States: Table of amounts frozen, by countries 18 Foreign banking corporations: Examination of 25 List of 26 Foreign banks: Central banks: Credits to, by Federal Reserve Banks 23 Deposits of, held by Federal Reserve Banks: All banks combined, December 31, 1940 33 Each bank, end of year figures 34 Foreign funds, Impounding of: Trading With the Enemy Act, amended 24 Foreign trade of United States, Discussion of 19 Franchise tax paid by Federal Reserve Banks to Government, 1917-1932 42 Freight-car loadings indexes 57 Gold: Foreign gold purchased by Treasury, Discussion of 20 Movement to United States, Discussion of 1-2, 16-20 Special Report to Congress recommendation on gold purchases 69 Stock, Monetary in United States: 1918-1939, end of year figures 52 1940, end of month figures 52 Discussion of 5 Gold certificates: Federal Reserve Bank holdings: All banks combined, December 31, 1940 32 Each bank, end of year figures 34 Government bonds. (See United States Government securities.) Greenbacks, Special Report to Congress recommendation on 69 Hansen, Alvin H., engaged for economic research 29 Harrison, George L.: Appointed member of Federal Advisory Council 30 Resignation as President of Federal Reserve Bank of New York 30 Holding company affiliates: Permits granted 26 Hungary, National Bank of: Loan from Federal Reserve Banks repaid 23 Income: Agricultural, Discussion of 1, 14 National income payments: Chart 12 Discussion of 1 Indexes 57 Industrial advances of Federal Reserve Banks: All banks combined, December 31, 1940 32 Commitments : 34 Each bank, end of year figures 34 Earnings on 40 Rates on: Policy action of Board of Governors 62 Table 46 Digitized for FRASER Volume of operations 39 http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

INDEX 107 Page Industrial production. (See Production, Industrial.) Inflation: Special Report to Congress 2, 68-70 Interdistrict collection system: Membership in: Discussion of 23 Table 54 Volume of operations at Federal Reserve Banks 39 Interest rates: Federal Reserve Banks 46 Industrial advances of Federal Reserve Banks: Policy action of Board of Governors on 62 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 13 Investments: Member banks: December 31, 1940 48, 50 Chart of 7 Laws and legislation. (See Banking and financial legislation.) Liabilities. (See Condition statements.) Loans: Brokers' loans by member banks 50 Commercial, Discussion of increase in 6 Industrial. (See Industrial advances of Federal Reserve Banks.) Real estate loans of member banks 50 Security loans by member banks 50 Total for member banks: December 31, 1940 48, 50 Chart of 7 Loans and investments: Member banks, December 31, 1940 48, 50 Margin requirements: Brokers and dealers in securities. Regulation T: Agreements of nonmember banks under Sec. 8(a) of Securities Exchange Act of 1934 28 Table of 47 Member banks: Bills discounted for. (See Bills: Discounted by Federal Reserve Banks.) Branches, Foreign 27 Condition statements, December 31, 1940 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.) Minerals production index 57 Monetary gold stock. (See Gold: Stock, Monetary in United States.) Monetary legislation. (See Banking and financial legislation.) Monetary statistics: Preparation for publication of 29 Money in circulation: 1918-1939, end of year figures 52 1940, end of month figures 52 Discussion of 6 Money rates: Open market in New York City ' 56 Mortgages: Regulation F. Amendments •'.". 25 Mutual savings banks: Banking offices, 1933-1940 53 Branches: 1933-1940 _ 53 1940, analysis of changes in 54 Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

108 INDEX Page Mutual savings banks—Continued. Number of: 1933-1940 53 1940, analysis of changes in 54 National Defense Advisory Commission: Appointment of 9 Davis, Chester C, appointed a member •. 9 Federal Reserve field representatives of 10-11 National income. (See Income.) National member banks: Assets and liabilities, December 31, 1940 48 Banking offices, 1933-1940 53 Branches: Number of: 1933-1940 53 1940, analysis of changes in 54 Classification of loans, investments, real estate and capital: December 31, 1940 50 Number of: 1933-1940 53 1940, analysis of changes in 54 Trust powers. (See Trust powers of national banks.) Nelson, Fred A., appointed Assistant Secretary 29 Noncash collections: Regulation G. New regulation issued by Board of Governors 24 Nondurable goods production index 57 Nonmember banks: Deposits of, held by Federal Reserve Banks: 1918-1939, end of year figures 52 1940, end of month figures 52 Insured: Banking offices, 1933-1940 53 Branches: 1933-1940 53 1940, analysis of changes in 54 Number of: 1933-1940 53 1940, analysis of changes in 54 Uninsured: Banking offices, 1933-1940 53 Branches: 1933-1940 53 1940, analysis of changes in 54 Number of: 1933-1940 53 1940, analysis of changes in 54 Non-par banks: Discussion of 23 Number of 54 Number of banks. (See Banks: Number of.) Open Market Committee. (See Federal Open Market Committee.) Open-market operations: Discussion of 3 Federal Open Market Committee policy actions 63-66 Par list: Number of banks on: Discussion of 23 Table 54 Payrolls, Factory: Discussion of 14 Index 57 Policy actions. (See Board of Governors of Federal Reserve System: Policy actions; Federal Open Market Committee: Policy actions.) Postal savings deposits: Interest rate on, paid by member banks 47 Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

INDEX 109 Page Prices: Wholesale commodity: Chart 12 Discussion of 14 Index 57 Private banks: Banking offices, 1933-1940 53 Branches: 1933-1940. 53 1940, analysis of changes in 54 Number of: 1933-1940 53 1940, analysis of changes in 54 Production, Industrial: Chart 12 Discussion of 13 Indexes 57 Profits: Corporate profits, Discussion of 1, 15 Member banks, Discussion of 8 Ransom,, Ronald: Designated Vice Chairman, Board of Governors 28 Real estate: Loans on, by member banks: December 31, 1940 50 Member bank holdings', December 31, 1940 48 Membership condition prohibiting bank as real estate agent discontinued by Board of Governors 62 Regulations of Board of Governors: Regulation F. Trust powers of national banks: Amendments 25 Policy action of Board 61 Regulation G. Noncash collections: New regulation 24 Regulation L. Interlocking bank directorates: Amendments 25 Regulation T. Margin requirements for brokers: Agreements of nonmember banks under Sec. 8(a) of Securities Exchange Act of 1934 28 Reserve bank credit. (See Credit, Bank.) Reserve city member banks: Assets and liabilities, December 31, 1940 48 Classification of loans, investments, real estate and capital: December 31, 1940 50 Reserve requirements: Member banks 47 Special Report to Congress recommendations on 68-70 Reserves: Federal Reserve Banks: All banks combined, December 31, 1940 33 Each bank, end of year figures 34 Member banks: Account in Federal Reserve Banks: All banks combined, December 31, 1940 33 Each bank, end of year figures 34 Chart of 7 Discussion of growth in 2, 4-6 Excess: 1918-1939, end of year figures 52 1940, end of month figures 52 Chart of 5 Discussion of 4-6 Special Report to Congress recommendations on 2, 68-70 Total: 1918-1939, end of year figures 52 1940, end of month figures 52 Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

110 INDEX Page Rounds, Leslie R., appointed First Vice President, Federal Reserve Bank of New York 30 Salaries: Federal Reserve Banks 40, 43 Savings deposits: Interest rate on 47 Securities: Loans on, by member banks, December 31, 1940 50 United States Government. (See United States Government securities.) Securities Exchange Act of 1934: Agreements of nonmember banks under 28 Security markets, Discussion of 15 Silver: Federal Advisory Council recommendation on purchases of foreign silver. 67 Special Report to Congress recommendation on 69 Silver certificates: Special Report to Congress recommendation on 69 Small business activities of defense program: Draper, Ernest G., in charge of Reserve participation in 9 Federal Reserve participation in 2, 9-11 Sproul, Allan, appointed President of Federal Reserve Bank of New York.... 30 Stabilization fund: Special Report to Congress recommendation on 69 State banks: Federal Reserve membership, Admitted to 8 State member banks: Assets and liabilities, December 31, 1940 48 Banking offices, 1933-1940 53 Branches: Number of: 1933-1940 53 1940, analysis of changes in 54 Classification of loans, investments, real estate and capital: December 31, 1940 50 Examinations of 25 List of, December 31, 1940 81-90 Number of: 1933-1940 53 1940, analysis of changes in 54 States and political subdivisions: Obligations of, owned by member banks: December 31, 1940 48 Statistics, Banking and monetary: Publication of compilation announced 30 Stock prices: Chart 12 Discussion of 15 Table 56 Stolen bank property: Law prohibiting possession of 24 Surplus: Federal Reserve Banks 40, 42 Member banks 49 Suspensions, Bank 54 Taxation: Special Report to Congress recommendation on 69 Trading With the Enemy Act, amended 24 Treasury cash and deposits with Federal Reserve Banks. (See United States Government deposits: Federal Reserve Banks.) Treasury currency outstanding, 1918-1940 52 Treasury financing: Special Report to Congress recommendations on 69 Trust company members of Federal Reserve System 81-90 Trust powers of national banks: Common trust funds: Regulation F.: Digitized for FRASER Amendments 25 Policy action of Board of Governors 61 http://fraser.stlouisfed.org/ Permits granted 26 Federal Reserve Bank of St. Louis

INDEX 111 Page United Kingdom: Dollar resources requisitioned 17 Gold reserves, Discussion of 20 United States Government deposits: Federal Reserve Banks: All banks combined: 1918-1939, end of year figures 52 1940, end of month figures 52 December 31, 1940 33 Each bank, end of year figures 34 United States Government securities: Bond yields: Chart of yield on 1960 65 bond 3 Discussion of 3 Table 56 Federal Open Market Committee policy actions on 63-66 Federal Reserve Bank holdings: All banks combined: 1918-1939, end of year figures 52 December 31, 1939 and 1940 in detail 38 1940, end of month figures 52 December 31, 1940 32 Discussion of 2,3 Each bank, end of year figures 34 Earnings on 22, 40 Interest rate on 38 Member bank holdings: December 31, 1940 48, 50 Discussion of 7 Open-market operations 3 Special Report to Congress recommendations on 69 Treasury bills: Discount rates on 56 Treasury notes: Yields 56 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.) Wage rates, Discussion of 15 War: Business conditions in United States affected by 11-16 Gold and capital movements affected by 16-20 Materials purchased in United States 18 Wholesale commodity prices. (See Prices: Wholesale commodity.) Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis