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Hamlin, Charles S., Scrap Book — Volume 193, FRBoard Members

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

205.001 - Hamlin Charles SScrap Book - Volume 193

FRBoard Members


oBOARD OF GOVERNORS

OF THE

FEDERAL RESERVE SYSTEM

Office CorrespondenceTo The Files

From Mr. Coe

Date July 291 1941

Subject:

After correspondence with Mrs. Hamlin (see letters ofMay 25 and June 4, 1941) the items attached hereto and listedbelow, because of their possible confidential character, weretaken from volume 193 of Mr. Hamlin's scrap book and placed inthe Board's files:

VOLUME 193

Page 16 Memo in connection with the letter of the Secretary to the

Attorney General.Page 47

Letter to Governor Young from Chairman McGarrah re Boardpolicies.

Page 71Memorandum re Application of the Equitable Trust Company,

New York City.Page 73

Memorandum by Mr. Hamlin re Foreign Branch of the EquitableTrust Co.

Page 75 Memo to Board from Mr. Smead re Member Bank Reserves.

Page 83Memo re Reserve Bank Credit - Factors in Changes.

Page 89 Letters to Governors and Chairmen of all Federal Reserve Banks

re Operating Efficiency at the Federal Reserve Banks.Page 95

Letter to all F.R. Agents re Redemption Fund for Federal Re-serve notes.

Page 108 Earnings & Expenses of F.R. Banks, June 1929.

Page 109 Memorandum recommending minimum capital limitation by Mr. Platt.


RANDOM IN 401UCTION *ITEM litTUR OF ra SVCRiTART 07 1111TO TH1 ATTORNWI OKKZRAL

/4

The Law Committee of the Moral Reserve 'Board is inclined to Wee with

the opinion of Murray, Aldrich and Webb, for the following reasotS: It was

clearly the purose of Congress to place national and state bank members of

the Federal Reserve system sUbstantially on an equal basic so far as branches

are concerned. In the final controversy between he HOUle and Senate the Rouse

insisted that no branches should be established after the passage of the bill

outside of city limits. The Senate contended for a provision which would

allow branches in "contiguous territory" i. e., in tome which adjoined the

city of the parent bank. (Page 21 Conference Committee print, May 14, 1926)

/1Neither had in, mind foreign bramihos. National banks had long before obtained

authority for foreign branches by virtue of Sec. 25 of the Federal Reserve Act;

state banks obtained their auttlnrity from State laws. The McFadden Act did

not limit the application of State laws to branches, extent as to trenches out-

side city limits, which in the final discussion between House and Senate bad

reference solely to contiguous territory, the prohibition of state-wide branch

banking having been agreed to by both houses. It is obvious it ses to us,

that in finally adopting the words "beyond the limits of the city, town or

village in which the parent bank is situated" the conferees, and, in approving

the conference report, the House and Sanate,had no thought of limiting the

authority of State bank-members of the lidera' Reserve system in the matter of

the establishment of branches outside the United States. Poreign branches were

not at any time or in any sense a part of the controversy that led to the enact-

ment of the McFadden ;wt.

VOLUME 193PAGE 16


z.‘i • f;!ill Y T .

Jane 19:9.

Jear Govern )r Young:

eave received r)ur letter of June 14, enclosing your letter of

June 12, which you read to our•direct)rs last week for tne purpose of

giving them an opportunity to state their views.

Quite apart from its discussion of rn 1,11Aediate credit policy such

as that outlined in Jur letter of June 12, your letter raises cert!,in

questions of principle and jurisdiction c:ucernine wilich our directors

expressed their opinions when you presented your letter orally. For

reasons which they gave you at thA time their views on tnete questions

quite evidently differ from those of the Vederal Reserve 4ioard. They

feel, however, that as important as these luestions are for the future,

it would seem to be better to leave them for consideration as and when

they arise than to attempt to discus tham further now -t the risk of

prejudicing an immediate course of action whioh our directors end the

Federal Reserve Beard apparently agree should be followed at the

Fresent tine in the best interests of aoiculture, industry tJid

counerce.The 3onxd is alrealy familiar with the vies of the officers and

directors of this brnk with regard t the relative positions which the

discount rate fand so-called direct action should ploy in Federf:1 reserve

credit policies. The important feet now, it seem to us, is th,lt the

Board's letter of June 12 and our letter of the some date to the Board,

ree in substance es to the immtdiate course to be pursued, A course

which necessarily invllves some modificotion Jf the Board's policy of

direct action of the past few months in order taat member bank t might

rediscount with the Federal reserve bank to meet mil-year rel:uirements

and the demends for credit durinc tAe late maler and early fall.

Very truly yours,

(S) Gates d. LicUerrah,

Chairman.

1Conorable Roy A. Young,Governor, Federril Asserve Board,

4ngton, D. C.

VOLUME 193PAGE 47


f14‘• luv. 201929.

a it

APPlication of the Equitable Trust Company. New York City.

1. Section 9 of the Federal Reserve Act authorizes any state bank toretain a branch established by it at the date of the approvalof the amendment of Tebruary 25, 1927.

2. It further provides that no state bank may retain or acquire stockin a /federal Reserve bank, except upon relinquishment of all/branch or branches established after the date of the approvalof this Act beyond the limits of the city, town, or villagein which the parent bank is situated.

It seems clear that the word "established" as quoted above, refersto the establishment by a state bank of a branch.

3. By the express provision of the law, the Seaboard National Bank canapply for permission to establish a branch in Paris.

4. Should the Board authorize the establishment of a Paris branch bythe Seaboard National, I am of opinion that the EquitableTrust Company could take over the Seaboard National and yetcontinue to hold the Paris branch established by the SeaboardNational, for the reason that the Equitable Trust Company hasnot established this bank within the meaning of the Act.

5. I do not believe the Board would be prepared to lay down a rulingthat hereafter a state bank absorbing a national bank wouldhave to give up all the brandies established by the national banklawfully between Yebruary 25th and the date of taking overthe national bank, which would seem to be the ruling that anegative decision in this apolication would amount to.

6. I agree fully that the Board might decline the application of theSeaboard National to establish a branch in Paris, on theground that the Seaboard National is about to go out of existenceand that the state bank in Which it is to be merged would haveno right to establish such a branch under the Act.

7. I think the decision, however, if the Board takes this view, shouldbe a decision to the effect that it would not permit the SeaboardNational to establish the branch, and not a decision to the effectthat the state bank can not lawfully hold a branch lawfullyestablished by a national bank.

VOLUME 193PAGE 71


8. Inasmuch as Congress prohibited the establishment of branchesby either state or national banks outside of the limits ofthe parent city, by error, omitting to except foreign branches,although it specifically excepted them when referring tonational banks, -I see nothing in law or good morals Whichwould prevent the Board correcting this mistake legally bygranting permission to the Seaboard National to establish theParis branch.


•

Kamorandum.

June Ilp.929. .C€4,4

Foreign Brandh of the Equitable Trust Co.

Limitation of branches of national banks to the parent city, isfound in an amendment to Section 5155 of the Revised Statutes containedin the Act of liabruary 25, 1927. It states, (d) - brandh ihall beestablished after the date of the approval of this Aet within the limitsof any city, town, or village, etc." The Act of Pebruary 25th also amendsSection 9 of the Federal Reserve Act by providing that a state member batikaan become or remain a member of the Federal Reserve System "only uponrelinquishment of any brandh or branches established after the date of theapproval of this Act beyond the limits of the city, town, etc." Thelanguage of these two prohibitions is practically identical.

Congress, in amending the Revised Statutes, 5155, as to national bankshaving branches,ipparctgraph(g), provided that nothing in the Section shouldbe construed to amend or repeal Section 25 of the Tederal Reserve Act as toa national bank's right to establish foreign branches.

This practically is a statement by Congress that the language "beyondthe limits of the city, town, etc." refers only to domestic branches, andnot to foreign branches.

There was a reason for this construction growing out of the fact thatCongress had authorized national banks under Section 25 of the FederalReserve Act to establish foreign branches.

There was no reason for inserting a similar provision in Section 9 ofthe Act, because the state banks obtain authority to establish foreignbranches from their own states and not from Congress.

I know of no evidence disclosed by the debates in Congress showing, ortending to show, that Congress had in mind only damestic branches whenacting as to national banks, but had in mind domestic and foreign brancheswhen acting under Section 9 as to state member bamks.

Under Section 25, national banks are authorized to establish foreignbranches or to tAke stodk in state corporations engaged in foreign banking,whether directly or indirectly, and this clearly would include brandhes ofsuch foreign banks.

In Section 25 (a) Congress authorized corporations chartered by theFederal Reserve Board to engage in international or foreign banking, andspecifically to establish branches abroad.

Gen it be tilat Congress giving these liberal powers to national banks,

VOLUME 193PAGE 73


intended at the same time to cut down the powers of state banks alreadyhaving power to establish foreign branches? Nothing but the clearestevidence would show this,and I can find none such.

The branch bank question which Congress tried to straighten out, wasa difficulty relating to domestic branches of state banks, and not toforeign branches, and I submit that Section 9 had. nothing to do withforeign branches whatsoever.

It should further be remembered that under Section 9, state banksbecoming members of the Federal Reserve System are to retain their fullcharter and statutory rights as state banks or trust companies, and maycontinue to exercise all corporate powers granted them by the state inwhich they were created, and shall be entitled to all privileges of memberbanks, - subject to the provisions of this Act and the regulations of theBoard. To my mind it would require a very strained construction ofSection 9 to warrant the conclusion that Congress intended to cut downthe power of state banks to establish any other than state branches, andI am convinced that foreign branches were not in contemplation of Congresswhen it amended Section 9.

011.0

13


S June 3, 1929St. 6212

TO: Federal Reserve Board SUBJECT: Member Bank Reserves

FROM: Mr. Suead

In view of the discussion of reserve requirements at the lastGovernors) Conference, we have recently reviewed the material relating to pro-posed changes iee reserve requirements of member banks and have worked out threeformulas, in addition to the one contained in my memorandum to the Board underdate of June 27, 1'e27, which we suest :_fiven consideration by the Boardand by the Federal reserve banks before any chanzes in reserve requirementsare proposed to Con6ress or an7 further additions are made to the present listof reserve cities.

These formulas involve two important features which have been dis-cussed from time to time but have not been included as a part of any of theformal plans recently submitted. One involves the question as to whether weshould continue to require a. nigher reserve on demand donosits than on timedeposits, and the other ,ihether eroorience has demonstrated the desirabilityof allowieeg vault cash (all hinds of money in circulation) to be counted aspart of the legal reserves of member banks.

With two exceptions, both of which apply only to banks in CentralReserve Cities, all of the formulas submitted herewith provide for a higherreserve on bank deposits than on other deposits. This higher reserve on bankdeposits has been recommended by all Federal reserve banks and is a morescientific application of the principle incorporated in the National Bank Actand the Federal Reserve Act, that higher reserves be carried by banks infinancial centers, which usually hold substantial deposits of other banks.

During recent years there has been a much more rapid growth intime deposits of member 'Dames than in demand_ de7eosits, and this has raised thepresumption that efforts have boon made by many member banks to classify de-posits as time deposits wherever practicable in order to take advantage of thelower reserve requirements. In attempting to moot this situation the Boardhas adopted detailed rezulations defining time deposits but without entirelysatisfactory results. Time deposits of member banks now constitute 36 per centof total deposits, as compared with 19 per cent 10 years ar.fo. This relativelylarger growth of time than of demand Ceposits has, of course, gradually dimin-ished the proportion of required reserves to total dePoeits. Furthermore, theratio of time deposits to total deposits varies quite materially betweendifferent classes of banks and in different sections of the country. Forinstance, in the case of banks in New York City (Central Reserve City Banks)the ratio of time to total deposits is 14 per cent, in the Dallas district asa whole 22 per cent, and in the :Ainneapolis district 47 per cent.

It also appears from a review of the State laws on this point that17 states make no distinction in reserve requirements between demand and timedeposits, 20 specify a lower reserve on time denosits than on other de'oosits,and 11 require no reserves at all on tieie deposits.

VOLUME 193PAGE 75


15 1512 )

• 2 •

The second question mentioned above is rhether exporioleu has demon-strated that a more equitable system of reserve requirements can be evolved ifvault cash (all kinds of money in circulation) is porinitted to be counted aspart of legal rosorvec. At the present time member banks in central reservecities arc carrying cash in vault equal to 1,04 percent of their net deposits,exclusive of b-nk donosits, banks in other Federal reserve bank and branch cities1)43 per cent, banks in other reserve cities 2.75 per cent, and country banks2,50 per cent. Although the country banks as a whole carry an average of 2.50per cent, many country banks vihich are located close to a Federal reserve bankor branch carry much less than this percentage, while, other things being equal,banks located a considerLble distance from the Federal reserve bank or branch,and especially where transportation facilities are not of the best, carry amuch larger percentage of vault cash. For example, on narch 27, country banksin the New York district were carrying an average of 1.81 per cent while countrybanks in the Dallas district were carrying an average of 3.76 per cent.

There can be no question but that vault cash does constitute a Dart ofa bankH actual reserve, and since to .permit such cash to be counted as a partof requiefed reserves would tend to (a) equalize the total required reserve in-cluding .vault cash for member banks in different localities, (b) cut down thecost of handling currency at the Federal reserve banks, and (c) reduce the costof shipping currency to and from the Federal reserve banks Which is assumed bythe Federal reserve banks, itis thought that consideration should be given tothis question in any study of proposed changes in reserve requirements. Shouldvault cash be permitted to be counted as a part of the legal required reserves,there should no doubt be a provision requiring that not less than a given per-centage of the required reserves must be carried with the Federal reserve banks.

The formulas referred to in paragraph 1 arc as follows:

Excludin:e vault cash Including vault cashFormula Formula Formula I FormulaA**B C D

Central reserve city banks:*Bank deposits, gross 13% 13%Demand deposits, net 13 )

11Time deposits 3 )

Banks in F.R. bank and branch cities other than New York City and Chicago:Bank deposits, grossDemand deposits, netTime deposits

15e, 15%15 )3) 11

13 13 15 159 ) 6 12)3) 3) 7

Banks outside F.R. bank and branchCities:Bank deposits, gross 13 13Demand deposits, net 7 )Time deposits 3 ) 5

3 )*Except outlying' banks.

**Formula suggested in memorandum submitted under date of June 27, 1927.

7

St. 6212


-3-

There are attached hereto two tables showin for the different classesof banks in each district and for the System as a whole:

1. Present reauired reserves and reserves Which would be requiredunder formuaas A and B,

2. Present required reserves plus vault cash, and the proposedrequired reserves, including vault caSh, under formulas C and D.

A table is also attached showing the deposits and vault cash of memberbanks on March 27, 1929, which were used in calculating the reserves shown inthe two statements referred to above.

Under all of the formulas, the a,s,gregate reserves would be substantiallythe same as at present. The differentials in reserve requirements are to makeallowance for differences in vault cash requirements, except in the case ofcentral reserve city banks, where the percenta,ses for reserves on not demanddeposits more closely conform to the percentages provided for bank deposits.At the Present tiale, banks in central reserve cities are carrying higher re-serves than other banks, and t.le proposed percentages would continue thisrelationship on the ground that the banks in the central reserve cities carrybalances for large cor?orations and others throughout the United States andforeign countries, with the result that a portion of their demand depositsfall in substantially the same class as bank deposits.

It is recomilended that a copy of this memorandum with the attachedtables be forwarded to each Governor and Federal reserve agent, with the requestthat they advise the Board of their views with reference to the formulas pro-posed herein, particularly as to the discontinuance of a lower reserve on timedeposits than on net demand deposits and to the advisability of allowing vaultcash to be counted as part of legally required reserves, with correspondingadjustments in required reserve percentages. It is -.1so su,;gested that theGovernors and agents advise the Board What, in thoir opiiion, would be theI. sdtisfactory method of calculating reserves, provided none of the formulasoutlined above fully meet with their approval. After replies aro receivedfrom the Governors and azents a committee might be appointe0., if thoughtnecessary, to consider all of the recommendations and to prepe.re a draft of abill embodying the principles agreed upon.

St. 6212


SCOITARISON OF PRESENT PEQUILED RESERVES TIM RESERVES 1-TAT 707LD

BE REQUIRED UNDER THE FOLLOWING TWO FORMLAS:St. 6212 a

A. Lank deposits, gross - 13 per cent; time deposits - 3 per cent; all othe:de-,)osits,net-13 -?er cent for banks in central reserve cities,9 per centfor banks in other 7ederal reserve bank and branch cities, and 7 percent for other 2ember banks.

Bank deposits, cross - 13 per cent; all other deposits, net - 11 percent for banks in central reserve cities, 6 per cent for banks inother Federal reserve bank end branch cities, and 5 per cent for otherbanks

(Based on r. 27, 1929 coil report. In :1iliions of dollar)Fer.eral

ReservePresentrequired

Pronosed required resrves

Formula A Formula BDistrict reserves 1

All districts - total 2,308 2,?99 2,369Central reserve cities 927 937 966Other F.R. bank and branch cities 654 654 662"Other" reserve cities 108 96 93Country banks 619 613 648

Boston district - total 143 142 136 Federal reserve banks city (Boston) 76 74 66Other re5crve cities (none) -Country bonks 67 6s 70

New York CIstrict - total 926 926 954F. R. bank and branch cities:

New York (central reserve city banks) 762 766 781Buffalo, Brooklyn end Bronx 29 27 30

Other reserve cities (Albany) 10 8 7Country banks 125 124 136

Philadelphia district - total 132 132 132 F. R. bank city 71 72 64Other reserve cities (none)Country banks 61 60 68

Cleveland - totalF. R. bank and branch cities:(Cleveland,

Cincinnati and Pittsburgh)Other reserve cities (Coluzbus, Toledo)Country banks

Richmond district - total 67 68 71

183 179 188

105 105 10814 11 1165 62 69

F. R. bank and branch cities:(RichmondBaltimore, Charlotte) 22 23 23Other reserve cities (Washington) 9 8 7Country banks 36 37 41

Atlanta district - total 66 6s 68F.R.bank and branch cities (Atlanta, Bir-mingham, Jacksonville,Nashville,New Orleans)Other reserve cities (Savannah)Country banks

3314

3514

3)414

28 29 29


2

St. 6212nJJederalReserve

District

Chicago district - total F. R. bank and branch cities:

Chicngo (Central reserve city banks)(reserve city) end Detroit

Other reserve cities (Inc:..i..mapolis, Peoria,Grand Rapids, Cedar Rrnids, Les :oinos,Dubuque, Sioux City, :al-rukee) 34 32 31Country banks 79 77 84

St. Louis district - total 76 77 77F. R. bank and brnnch cities (St. Louis,Louisville, :CamDhis, Little Rock) 47 4g 47Other reserve cities (none)

Country banks 29 30 31

Presentrequiredre serves

333

1656o

rroosed required. reserves Form7...ln Formula

335 363

170 16656 62

Minneapolis district - total 51 52 55F. R. bank and br7.nch cities (Ifinne'Tolis,and Helena) 14 16 15Other reserve cities (St. Foul) 7 7 7Country banks 30 29 32

Kansas City district - totrl 88 87 81 F. R. bank andb r,',nch citios(K-msas City,01:aha, Oklcho:a City, Denver) JO7 f'` 4o 38Other reserve cities (St. Joseph, Lincoln,Kansas City, Kcns., Topeka, Wichita,Pueblo, ..:uskogoo, Tulsa) 18 16 15Qountry banks 32 31 28

Dallas district - total 66 66 59F. R. bank and brnch cities (Dallas,El Paso, Houston, San Antonio) 25 27 25Other reserve cities (Fort worth,Galveston, Taco) g 7 7Country banks 32 31 27

San Frr,ncisco district - total 171 167 185F. R. bank and branch c i tie s (San Frond sc oSalt Lake City, Seattle, Spokane,Portland, Los .Angeles) 133 131 150Other reserve cities (Oakland, Ogden) 3 3 2Country banks

35 3)4 33

DIVISION OF BANK OPERATIOrSJUNE 3, 1929


St. 6212b

Cleveland district - total 23S 232 237

ntral rus,)rvc cities 998 1,o74 1,000Other F. 7.. 1,3212:. and branch cities 772 799 77oOther ros,.rve cities 139 134 121Country banks 916 873 894

Boston district - total 131 192 qL13._F. R. bank city (Boston) 83 93 77Other reserve cities (none) - _ _Country banks 98 98 96

New York district - total 1 038 1 100 1,040F. R. bank and branch cities:New York (central reserve city banks) 822 879 SO8Buffalo, Brooklyn, Bronx 32 33 35Other reservc cities (Albany) 12 12 9Country banks ' 172 176 188

Philadelphia: district - total 115 173 169F. R. bank city 85 90 74Other reserve cities (none) - -Country banks 90 g4 95

F. R. bank and branch cities (Cleveland,Cincinnati, PittSburgh) 124 128 126

Other resLA-ve cities (Columbus, Toledo) 17 16 15Country ban::s 97 87 96

Cleveland district - total 23S 232 237

Richmond dist2ict - total 94 91 92

F. R. bank and branch cities (Cleveland,Cincinnati, PittSburgh) 124 128 126

Other resLA-ve cities (Columbus, Toledo) 17 16 15Country ban::s 97 87 96

F. R. bank anci branch cities (Richmond,Baltimore, 011.-:,riotte) 26 28 27

Other reserVe citis (Was'ninEton) 12 11 10Cauntry bani:s 5',5 52 55

Richmond dist2ict - total 94 91 92

Atlanta district - total 94 89 s5

F. R. bank anci branch cities (Richmond,Baltimore, 011.-:,riotte) 26 28 27

Other reserVe citis (Was'ninEton) 12 11 10Cauntry bani:s 5',5 52 55

F. R. bank and a

branch cities (Atlanta,Birmingham, Jacksonville, 'lshville,New Orleans)4o 43 40Other reserve cities (Savannah) 6 5 5country banks 43 4a. 4o

Atlanta district - total 94 89 s5

St. 6212b

F. R. bank and a


F. R. bank and a



•

FederalReserve

District

-

Present iProposed required reservesreqaired re- Jincludin.6 'Fault cash)

1 serves plusFormula C 1 Formula Dvault cash

Chicazo district - total /17 414 J!1F. R. bank and branch cities:

Chicail;o (central reserve city banks) 176 194 193Chicltso (rescryc city) and Detroit 76 67 72

Other reserve cities (Indianapolis, Peoria,Grand Rac?ids, Ced.lr Rapids, Des Moines,Dubv.que, Sioux City, Milw-rakee) 47 43 41

Country banks 119 109 116

St. Louis district - total _3g loo 96F. R. bank and branch cities (St. Louis,LwaisvillQ, Memphis, Litzde Rock) 54 5S 54

Other reserve cities (none) -Country banks 44 Jr 4-2

Minnea,)olis aistrict - total 7o 6g 71 F. R. bank ana branch cities (Yinneapolis

and Helena) 16 19 lgOther reserve cities (St. Paul) 9 lo 9Country banks 45 140 45

Kansas City district - total U. 117 102F. R. bank and branch cities (Kansas

City, Omaha, Oklahoma City, Denver) 45 49 44Other reserve cities (St. Joseph, Lincoln,Kan2as City, Kans. Topeka, 7ichita,Pu.eblo, Muskocee, Talsa) 22 22 19

Country banks 47 46 39Dallas district - total _90 93 74F. R. bank and branch cities (Dallas,El Paso, Houston, San Antonio) 31 34 29

Other reserve cities (Fort 7orth,Galveston, Waco) 11 10 9

Caantry banks 49 49 36

San Francisco district - total 214 210 223_F. R. bank and branch cities (San Fran-cisco, Salt Lake City, Seattle,S)okane, Portland, Los Antseles) 159 156 174

Other reserve cities (Oakland, Ooden) 3 4 3Country banks 52 5o 46

DIVISION OF BANK OPERATIONSJune 3, 1929.

St. 6212b


4

DL:OSIIS AND VAUAISH OF 12:.EV. DAYKS Pr MARCH 24k929,CLASSEJI2D 7OR PULIPOS: OF DFTE.PrIHIJCI 27SEDITES THAT WOULD BE RTQUIRED

UNDER C7RTAII.7 SUGGESTED FOR:11.AS

2dilion of dollrirs) FederalReserve

District All districts - total

Centre]. reserve citiesOther F. R. banl: and branchcities

Other reserve citiesCountry

Boston distict - total F. R. bank city (Boston)Other reserve cities (none)CountrT

New York district - F. R. bank and branch cities:

Now York (central reserve citybp.nks)

Buffalo, Brooklyn and BronxOther reserve cities (Albany)Country bpnks

Bank Otheacrposits, Demand,ross 1) gr2ss(2)13,673 19,8661,637 7,306

1852

Philadelphia district - total 131 F. R. b,:nk city 160Other reserve cities (none)Couhtry banks 20

Cleveland district - total 223F. R. bank and branch cities(Cleveland,Cincinnati, Pittsburgh) 178Other reserve Bs •1.

Toledo) 24Country banks 21

Richmond district - total 122F. R. bank and branch cities(Richmond, Baltimore, Charlotte) 64

Other reserve cities (Washington)Country banks 45

Atlanta district - total F. R. bank and branch cities(Atlanta, Birmingham, Jacksonville,Nashville, New Orleans)

Other reserve cities (Savannah)Country banks

Chicago district - total F. R. bank land branch cities:Chicago (central reserve citybanks)

Chicago (reserve city) andDetroit

Otherreserve cities (Indianapolis,Peoria, Grand Rapids, Cedar Rapids,Des Moines, Dubuque, Sioux City,Milwaukee)

Country banks

12

150

9615

39

549

5,221866

5,994

1,3526sg

60g

27232303

2,494

r de.00sits Demand,net(31_ Time

St. 6212cCashin

vault14,817 13,215 517 5,136 1,655 71

3,936 4,250 118653 493 31

5,042 6,317 297

1,14g 969 38554 271 7

595 69g 31

5,523 3 110 112

345

49

9957

262732

196 168 7IL 29 2230 251 20

2,019 2,092 79

369

358

4u.

179 12937 4o


• •2

(St. 6212c)7oderel Bank Other deposits Cash

Reserve de-posits, De:land, Demand inDistrict P.ross(1) gross(2) net(3) vault

St. Louis district - total 1_56 650 510 931 22 F. R. ban]: nnd branch cities(St. Louis, Louisville, Zemphis,Little Rock) 121 367 276 239 7Other reserve cities (nono)

Country boriks 35 2g3 233 292 15

Minnenpolis district - total 108 423 319 465 19 F. R. b:nh pri6_ branch city(:anneapolis and Helena) 57 loo 72 6o 2Other reserve cities (St. Paul) 23 56 43 33 iCountrr b:nks 28 267 204 372 15

Kansas City district - total 227 338 601 373 27 F. R. bank and branch cities(Kansos Citr, Omaha, OklahomaCity, Denver) 146 314 196 123

Other reserve cities (St. Jose9h,Lincoln, Kansas City, Kans.,Topeka, Wichita, Pueblo,

.) 146 105 6o 5:iusko ci:oe, Tulsa) r2

Country br-'nks 70) 377 3oo 190 15

Time

Dallas district - total 123 727 P61 235 24F. R. bcnk and branch cities(Dp.11ps, El Paso, Houston,San Antonio) 63 238 176 100 5Other reserve cities (Fort Worth,Galveston, Waco) 24 67 46 37 2

Country br,nks 36 422 34o 97 16

San Francisco district - total 231 1,364 1,044 1 652 43 F. R. bank and branch cities(San Francisco, Salt Lake City,Seattle, Spokane, Portland,Los,!..ns-oles) 202 960 712 l,347 26

Other reserve cities (Oakland,Ogdan) El 23 18 8 1

Countr7 brnks 22 381 313 297 16

(1) Represents total of all demand and time deposits credited to Federal re-serve

•

and other banks in Unite States and foreign countries (items 1-3of schedule J on form 105, ,)lus item 2 of schedule L)

(2) Represents the total of so-called individual demand de-posits, pluscertified and officers' checks, cash letters of credit and travelers'checks and United States de-posits (total of schedule K on for:: 105, plusitems 4 and 5 of schedule J, plus United States deposits)

(3) Gross demand deposits, as given in preceding column, less the total ofamounts due from banks in United States, exdhanges for clearing houseand other checks on local banks, and items with Federal reserve bank inprocess of collection, i.e., less itans 4-7 of schedule I on form 105.

DIVISION OF BOK OPERATIONSJUNE 3, 1929


F9DERAL RESERVE B011t.D3-e-A., 644

RESERVE BANK CREDIT - FACTORS IN CHANGES

R&S RBCF-1June 22, 1929

There are presented herewith tables of annual, monthly, and weekly averagesof daily figures of the volume of Federal reserve bank credit outstanding and ofall the factors that account for decreases and increases in this volume. Thesefactors represent all the channels connecting the general banking and monetarysystem of the country with the Federal reserve banks. A brief explanation ofeach item in the table is given in the following paragraphs.

Reserve bank credit. - The total volume of reserve bank credit outstanding atany time constitutes the contribution of the Federal reserve banks to the supplyof funds in the money markets of this country. This credit is released in vari-ous ways, namely, through direct loans to member banks on the basis of discountedor rediscounted paper, through the purchase of acceptances and United States andother securities, through loans on gold made to foreign central banks, throughthe deposit of funds in foreign banks, and through carrying Federal reserve bankfloat, which arises on account of transit items deposited with the reserve banksthat are credited prior to their actual collection. All of these methods placecredit at the disposal of member banks, to be used by them either to reduce theirindebtedness at the reserve banks, to meet a demand for currency or an export de-mand for gold, or to build up their reserve balances. It is only in the latter !case that an increase in reserve bank credit provides a basis for growth in mem-ber bank credit.

FACTORS OF DECREASE

Monetary gold stock. - Increase in the monetary gold stock of the United Statesis the most important factor of decrease in the demand for reserve bank credit.The monetary gold stock includes gold held by the Treasury and the Federal re-serve banks, except gold that has been earmarked for foreign account, and goldcoin in circulation in the United States. It is computed by taking the total ofall gold actually held by the Treasury and Federal reserve banks, except goldunder earmark, and adding to this total an estimated figure for gold coin in cir-culation which takes into consideration imports and exports, mintings, meltings,and the use of gold coin in the arts as well as payments of gold coin into circu-lation and withdrawals from circulation. Additions to the gold stock furnishfunds to the member banks, and enable them, other things being equal, to reducecorrespondingly the amount of reserve bank credit outstanding. Reductions ingold stock have the opposite effect.

Treasury currency outstanding, - Treasury currency outstanding (or Treasurycredit as it has been called) measures the net contribution of the Treasury tothe currency and is computed by subtracting Treasury holdings of cash from thetotal outstanding volume of those forms of money for which the Treasury is pri-marily responsible. This total includes silver coin and silver certificates,United States notes, Treasury notes of 1890, Federal reserve bank notes, Nationalbank notes (which are secured by Treasury bonds), and minor coin. Federal re-serve bank notes are included in Treasury currency at the present time becausethe Treasury has taken over the liability on these notes; prior to 1922, however,when these notes were a liability of the reserve banks, they were not included inthis item. Treasury currency does not include gold coin, Federal reserve notesor gold certificates--the latter being fully covered by gold held in trust by theTreasury. The total so derived is then reduced by all the cash assets which theTreasury has at its disposal without drawing on balances with depositary banks.That is, deductions are made for balances which the Treasury has in the reservebanks, for gold which it holds as reserve against United States notis, for goldin the general fund (excepting the gold redemption funds held agaihst Federal re-serve notes), and for all other currency and coin in its possession except goldwhich the Treasury holds in trust against gold certificates and for the reservebanks in the gold settlement funds. The item as presented in the table measuresthe net extent to which currency outstanding is secured primarily on the creditof the Treasury. Additions to this item decrease the demand for reserve bankcredit, and reductions in it increase this demand.

FACTORS OF INCREASE

Money in circulation. - Changes in money in circulation are usually the mostimportant seasonal factor in the demand for reserve bank credit, and at timesthe largest element in annual changes. The figures for money in circulation in-clude all kinds of United States money outside of the reserve banks and theTreasury, except gold coin which has been exported. They include, therefore,not only money held by the public, but vault cash held by banks and such UnitedStates money (other than gold coin) as may have been carried abroad. Increasesin the demand for currency increase the demand for reserve bank credit, whiledecreases in money in circulation diminish this demand.

VOLUME 193PAGE 83


2. R&S - RBCF-1

Member bank reserve balances- - The entire reserves which member banks are re-quired by law to hold agair,'7t their deposit liabilities have been carried sinceAugust, 1917, as reserve balances 71j.th the reserve banks. Aggregate reserve bal-

,ances of member banks usuaflj averacre close to the minimum requdrea by law, be-cause member banks do not zake it rl -L.Toejce to carry CYCOCS rese7nes. The re-serve balDnces fuctismte 1L:g3ly viu,.h cnarces in member bank d-Tosit liabilities,wlich chiefly reflect el-.nnge-; in men,V3r batik loans and investments. Changes inmember bank balances, therefore, ueually reflect changes jn the volume of memberbank credit outstanding. Then member bank reserve requirements increase, thereis a corresponding increase in the demand for reserve bank credit, and reductionin reserve requirements decreases this demand.

Nonmember clearing balances at Federal reserve banks. - This item includes alldeposits which the reserve banks hold .or depositors other thz,11 Trea-Jury andthe member banks, i.e., deposits for nonmember banks, and for others, such asforeign central banks and governments. These deposits are held, largely for clear-ing purposes and when they increase tend to cause an increase in reserve bankcredit, since they are usually built up out of funds transferred from the reservebalances of member banks.

Unexpended capital funds of Federal reserve banks. - This item measures the ex-tent to which the paying in of capital to the reserve banks and their subsequentearnings have taken funds out of the market. It is computed by subtracting fromthe "capital," "surplus," and "all other liabilities" of the reserve banks, theitems which represent amounts returned to the market, namely, "bank premises" and"all other resources" of the reserve banks. Since some components of these itemsin earlier years were carried in accounts other than those in which they now ap-pear, adjustments have been made to bring the entire series into conformity withthe current figures.

Balancing analysis. - It will be noted that for any period the sum of the threeitems, reserve bank credit, Treasury currency, and monetary gold stock, alwaysequals the sum of the other four items, namely, money in circulation, member bankreserve balances, nonmember clearing balances at the reserve banks, and unexpendedcapital funds of the reserve banks, The first three items may be considered assources of reserve funds, and the others as uses to which these funds have beenput. The items are all mutually related, and changes in any one of them can beaccounted for by balancing changes in the aggregate of all the others.

The tables present averages of daily figures, because comparisons betweensingle dates are seriously affected by transient fluctuations in money in circu-lation and in member bank reserve balances! Money in circulation usually risesabout $45,000,000 between Wednesday and Saturday of each week, and the effect ofchanges in the demand for currency would, therefore, be considerably exaggeratedin a single date comparison between a Wednesday in one month and a Saturday inanother. Member bank balances with the reserve banks, which are computed for re-serve purposes on an average basis for a reserve period, are also subject to wideday-to-day fluctuations.

TABLE I, - RESERVE BANK CREDIT AND FACTORS IN CHANGES, BY YEARS, 1918 - 1929

(Averages of daily figures. In millions of dollars)

YearReservebank

credit

1918 1,7201919 2,6231920 3,3901921 2,2021922 1,2261923 1,2051924 9961925 1,1951926 1,2571927 1,1741928 1,5041929

Factors of decrease Factors of increaseMonetary Treasury Money in

gold currency circula-stock out- tion

standing

3,157 1,478 4,6573,129 1,252 5,0152,869 1,402 5,4773,290 1,496 4,9513,801 1,603 4,5344,o6o 1,736 4,8214,438 1,757 4,8794,383 1,756 4,8704,452 1,743 4,9314,564 1,774 4,8924,207 1,782 4,783

Memberbank

reservebalances

Nonmemberclearingbalances

Unexpendedcapitalfunds

1,497 108 931,718 115 1561,835 67 2821,672 28 3371,781 30 2851,873 27 2802,023 27 2622,167 31 2662,209 28 2842,290 31 2992,355 29 326


3.

TABLT1 II. - RESERVE BANK CREDIT AND FACTORS IN CHANGES, BY MONTHS, 1918 - 1929


MonthReservebankcredit

1918January 1,170February 1,143March 1,263April 1,381May 1,412June 1,554July 1,631August 1,750September 2,073October 2,355November 2,416December 2,491

1919January 2,359February 2,3)41March 2,1480April 2,451May 2,498June 2,467July 2,599August 2,559September 2,636October 2,847November 3,038December 3,203

Factors OfMonetarygoldstock

docreaseTreasurycurrency

out-standing

Factors of increaseMoney incircula-

tion

Member Nonmemberbank

reservebalances

clearingbalances


3,152 1,563 4,3063,159 1,589 4,2803,162 1,583 4,3733,163 1,563 4,4233,163 1,521 4,4013,162 1,471 4,4483,161 1,92 4,5203,157 1,439 4,6663,156 1,411 4,9113,151 1,402 5,1343,155 1,378 5,1833,156 1,418 5,243

3,160 1,400 5,0503,162 1,286 4,9323,151 1,207 4,9423,166 1,277 4,9703,176 1,233 4,9413,169 1,231 4,8913,087 1,207 4,8963,114 1,248 4,9133,143 1,254 4,9893,120 1,209 5,1063,070 1,230 5,2083,021 1,239 -5,342

1920January 3,205 2,961 1,256 5,231February 3,314 2,909 1,241 5,285March 3,413 2,859 1,338 5,398April 3,364 2,821 1,409 5,372May 3,385 2,835 1,412 5,414June 3,382 2,854 1,426 5,448July 3,344 2,862 1,454 5,478August 3,353 2,855 1,456 5,509September 3,495 2,847 1,429 5,600October 3,522 2,855 1,468 5,673November 3,467 2,873 1,475 5,662December 3,442 2,894 1,458 5,658


2,931 1,463 5,4012,975 1,435 5,2633,040 1,411 5,2043,117 1,427 5,0783,197 1,485 5,0423,254 ,) r08 '- 4,9363,305 1,513 4,8573,392 1,508 4,7713,479 1,510 4,7523,547 1,534 4,7213,595 1,575 4,6733,643 1,577 4,718

1,467 361,468 631,466 851,504 951,482 1261,512 1381,448 1241,459 1261,507 1211,539 1301,520 1311,586 117

1,635 1181,612 1141,652 1231,656 1261,686 1351,696 1331,719 1211,740 1041,769 1081,793 991,837 971,820 100

1,883 981,858 941,878 981,870 1061,853 1031,853 881,840288541,807 461,817 381,815 271,782 271,758 25

1,773 241,728 261,694 311,665 341,657 321,664 311,639 271,621 261,629 271,652 261,663 281,673 27

76SO8485878992

95101105115119

116131131142145147157164167178196201

210227236246262273

302316330344

353

306311321331

VT342

. 344345348

351350350


•4.

TABLE II. - RESERVE BANK CREDIT AND FACTORS IN CHANGES, BY MONTHS, 1918 - 1929

(Average of daily figures. In millions of dollars)

MonthReservebankcredit

Factors of decrease Factors of increaseMonetarygoldstock

Tleasurycurrencyaut-

standing

Money incircula

tion

Memberbank

reservebalances




1923Jan-nary 1,249February 1,205March 1,228April 1,214May 1,222June 1,178July 1,179August 1,127September 1,134October 1,204November 1,204December 1,260

1924Janilary 1,041February 955March 990April 981May 879June 836July 379August 831September 983October 1,057November 1,135December 1,288


3,6723,704

3,7363,7563,768

3,7763,8033,8403,8603,8843,8963,917

1,5511,5211,5761,5721,5761,600

1,5951,6131,6301,6571,6501,690

4,5274,4514,4534,48214,14504,4294,4434,4484,5524,6434,6714,827

1,7071,6,891,711

1,7331,7831,8201,812

1,7991,8111,8361,8251,840

2934 28439 2864o 283

37 282314 28528 28525 28323 28421 28727 28828 289

286

3,945 1,724 4,679 1,918 46 2753,960 1,709 4,672 1,901 25 2763,966 1,690 4,713 1,873 22 2763,975 1,711 4,731 1,869 21 2793,993 1,740 4,764 1,874 36 2814,040 1,738 4,779 1,867 28 2824,061 1,743 4,812 1,867 24 2804,097 1,747 4,833 1,335 22 2814,123 1,745 4,901 1,848 22 2314,155 1,753 4,941 1,864 23 2844,132 1,757 4,953 1,875 31 2844,226 1,771 5,071 1,332 22 282

4,266 1,750 4,847 1,911 25 2744,302 1,759 4,332 1,892 22 2704,340 1,747 4,570 1,915 22 2704,383 1,720 4,336 1,905 23 2704,433 1,766 4,866 1,922 24 2664,471 1,759 4,3130 2,001 21 2644,503 1,763 4,310 2,046 23 2614,516 1,763 4,soo 2,072 33 2554,515 1,763 4,853 2,120 .31 2574,506 1,755 4,391 2,141 27 2594,517 1,771 4,970 2,164 30 2594,507 1,768 5,088 2,182 32 261

4,468 1,765 4,863 2,194 43 2584,393 1,773 4,so6 2,159 42 2584,347 1,732 4,321 2,137 30 2634,346 1,769 4,309 2,123 27 2664,359 1,752 1I:797 2,132 LC., 2644,364 1,744 4,794 2,141 25 2664,36 1,764 4,793 2,160 27 2624,374 1,742 4,319 2,151 25 2644,336 1,749 4,908 2,161 26 2674,391 1,737 4,945 2,203 30 2714,407 1,735 4,960 2,221 41 2724,397 1,740 5,119 2,219 32 274


• •5.

TABLE II. - RESERVE BANK CREDIT AND FACTORS IN CHANGES, BY MONTHS, 1918 - 1929

(Average of daily figures. In millions of dollars)

Month

_

Reservebankcredit


Treasurycurrencyout-

standing

Money incircular-

tion

Memberbank

reservebalances



192oJanuaryFebruaryMarchAprilMayJuneJulyAugustSeptemberOctoberNovemberDecember

1,279 4,407 1,744 4,891 2,236 301,218 4,425 1,719 4,854 2,208 261,216 4,444 1,707 4,864 2,198 271,204 4,448 1,722 4,8,2 2,183 261,200 4,434 1,744 4,871 2,199 261,185 4,43g 1,771 4,381 2,206 23 2841,221 4,460 1,753 4,916 2,212 25 2811,203 4,467 1,755 4,912 2,201 27 2851,275 4,471 1,750 4,969 2,211 30 2891,322 4,472 1,746 5,001 2,219 27 2931,318 4,477 1,755 5,005 2,214 36 2951,445 4,481 1,749 5,131 2,218 32 294

273274278283282

1927January 1,106 4,527 1,760 4,903 2,243 33 294February 1,043 4,576 1,757 4,843 2,212 26 295March 1,055 4,595 1,767 4,856 2,240 23 298April 1,087 4,601 1,761 4,879 2,248 23 299May 1,041 4,651 1,768 4,s6o 2,262 39 299June 1,081 4,606 1,777 4,831 2,301 34 298July 1,115 4,575 1,780 4,851 2,289 33 297August 1,093 4,585 1,780 4,849 2,283 30 296September 1,187 4,584 1,776 4,917 2,300 30 300October 1,254 )4,G6 1,776 4,934 2,326 34 302November 1,377 14,1490 1,790 4,936 2,373 44 304December 1,568 4,416 1,796 5,048 2,399 27 306

1928January 1,384 4,377 1,778 4,785 2,426 27 305February 1,264 4,373 1,776 4,709 2,368 26 310March 1,295 4,335 1,781 4,710 2,365 24 312April 1,405 4,287 1,778 4,730 2,396 27 317May 1,472 4,207 1,779 4,722 2,388 27 321June 1,531 4,119 1,791 14,736 2,355 28 322July 1,531 4,113 1,782 14,7146 2,324 30 326August 1,485 4,118 1,774 4,743 2,274 28 332September 1,581 4,125 1,787 4,804 2,314 38 VTOctober 1,621 4,133 1,786 4,836 2,332 30 342November 1,653 4,151 1,787 4,860 2,352 32 347December 1,824 4,142 1,790 5,008 2,367 29 352

1929January 1,613 4,115 1,789 4,748 2,387 31 351February 1,501 4,143 1,784 4,686 2,357 29 356March 1,481 4,166 1,791 4,709 2,337 31 361April 1,377 4,226 1,785 4,679 2,308 35 366May -1,303 4,292 1,787 4,684 2,296 32 370JuneJulyAugustSeptemberOctoberNovemberDecember


• •6.

TABLE III - RESERVE BANK CREDIT AND FACTORS IN CHANGES, BY WEEKS, 1922-1929


Week ending -Reservebank

credit

Factors of decrease- Factors of increaseMonetarygoldstock


standing ,

Money incircula-tion

Memberbankreserve,balances



922Jan. 7

2128

1,505 3,663 1,553 4,665 1,741 27 2881,335 3,669 1,601 4,558 1,732 27 2881,269 3,675 1,548 4,483 1,692 30 2871,238 3,676 1,516 4,438 1,675 30 287

Feb. 4 1,257 3,684 1,494 4,44o 1,678 32 28511 1,263 3,695 1,4so 4,4 8 1,685 30 28518 1,226 3,706 1,537 14,14J45 1,700 39 28525 1,188 3,715 1,558 4,46o 1,683 32 286

Mar, 4 1,230 3,721 1,560 4,490 1,702 34 28511 18

1,202 3,728 1,593 4,490 1,713 2851,222 3,737 1,601 4,480 1,751 1414 285

25 1,181 3,742 1,571 4,477 1,690 42 285

Apr, 1 1,206 3,746 1,546 4,479 1,693 40 2868 1,216 3,750 1,574 4,500 1,715 40 28515 1,232 3,753 1,565 4,497 1,727 4o 28622 1,212 3,758 1,578 4,476 1,747 41 28429 1,180 3,762 1,577 4,454 1,744 38 283

May 6 1,238 3,764 1,56o 4,472 1,765 43 28213 1,221 3,768 1,581 4,461 1,789 38 28220 1,201 3,769 1,584 4,442 1,794 36 28227 1,186 3,769 1,573 4,429 1,783 34 282

June 310

1,210 3,770 1,579 4,14 1,788 35 2821,205 3,771 1,589 14,14)42 1,809 33 281

17 1,214 3,774 1,601 4,416 1,852 37 28424 1,145 3,780 1,622 4,419 1,807 34 287

July 1 1,182 3,784 1,601 4,433 1,816 31 2878 1,235 3,788 1,602 4,496 1,814 30 28515 1,185 3,797 1,609 4,452 1,826 28 28522 1,151 3,806 1,592 4,419 1,819 28 2.83

. 29 1,120 3,816 1,582 4,407 1,801 27 283

Aug. 5 1,123 3,829 1,605 4,427 1,818 29 28312 1,094 3,836 1,616 4,L 1,798 25 28419 1,100 3,840 1,616 14,14147 1,801 24 28426 1,091 3,g45 1,611 4,459 1,782 23 283

. Sept. 2 1,126 3,851 1,601 4,480 1,791 23 2849 1,166 3,855 1,621 4,541 1,797 23 28116 1,132 3,859 1,641 4,545 1,829 24 28423 1,185 3,862 1,625 4,555 1,809 22 28630 1,189 3,867 1,643 4,579 1,812 22 286

Oct. 7 1,217 3,880 1,653 4,622 1,820 22 28614 1,264 3,884 1,658 4,660 1,837 23 28621 1,275 3,886 1,669 4,654 1,869 21 28628 1,226 3,885 1,654 4,634 1,824 19 288

Nov. 4 1,261 3,888 1,640 4,65o 1,826 26 28711 1,283 3,891 1,656 4,651 1,826 36 28718 1,280 3,896 1,652 4,674 1,636 30 28825 1,235 3,899 1,65o 4,659 1,818 20 287

Dec, 2 1,270 3,904 1,649 4,708 1,806 19 2909 1,327 3,907 1,652 4,761 1,817 19 28916 1,331 3,916 1,691 4,794 1,828 27 28923 1,432 3,921 1,710 4,594 1,842 37 29030 1,433 3,925 1,717 4,880 1,576 31 288


• •

Jan.

7.



Week ending -Reservebankcredit


Treasurycurrency

out-standing


Memberbank

reservebalances



19236132027

Feb. 3lo1724

1,3961,3051,1971,170

1,1761,1661,2171,218

3,932 1,727 4,798 1,9233,942 1,729 4,706 1,9403,949 1,732 4,643 1,9173,950 1,717 4,619 1,909 34

58 276275274275

3,953 1,705 4,631 1,901 29 2733,957 1,715 4,647 1,892 24 2753,959 1,711 4,668 1,911 31 2773,962 1,704 4,693 1,893 22 276

Mar. 3 1,238 3,963 1,709 4,716 1,898 22 27410 1,210 3,966 1,715 4,715 1,881 21 27417 1,208 3,964 1,730 4,707 1,899 21 27524 1,229 3,964 1,661 4,705 1,851 21 27731 1,262 3,968 1,648 4,720 1,856 23 279

Apr. 7 1,253 3,970 1,686 4,736 1,872 21 28014 1,202 3,974 1,715 4,729 1,863 20 27921 1,220 3,976 1,713 4,725 1,882 23 27928 1,182 3,978 1,725 4,727 1,857 21 280

May 5 1,239 3,983 1,721 4,759 1,871 33 28012 1,218 3,984 1,736 4,761 1,867 29 28119 1,220 3,990 1,729 4,759 1,870 30 28026 1,216 3,997 1,755 4,758 1,882 48 280

June 2 1,231 4,017 1,742 4,795 1,879 36 2809 1,220 4,029 1,728 4,793 1,872 33 27916 1,159 4,039 1,768 4,770 1,887 28 28123 1,132 4,046 1,745 4,763 1,851 26 28330 1,172 4,048 1,722 4,778 1,856 25 283

July 7 1,250 4,051 1,745 4,859 1,880 27 28014 1,211 4,053 1,746 4,829 1,877 25 27921 1,162 4,059 1,739 4,791 1,865 24 28028 1,115 4,072 1,742 4,777 1,851 22 279

Alg. 4 1,121 4,080 1,742 4,793 1,847 22 28111 1,139 4,088 1,752 4,834 1,838 25 28218 1,142 4,096 1,749 4,843 1,841 21 28225 1,108 4,104 1,748 4,833 1,824 22 281

Sept. 1 1,135 4,109 1,741 4,851 1,832 21 2818 1,176 4,112 1,748 4,899 1,835 21 28115 1,206 4,117 1,755 4,900 1,875 23 28022 1,164 4,128 1,752 4,891 1,846 24 28329 1,183 4,134 1,730 4,908 1,835 22 282

Oct. 6 1,212 4,139 1,752 4,942 1,856 22 28313 1,208 4,150 1,763 4,959 1,854 25 28320 1,228 4,158 1,743 4,945 1,879 23 28227 1,175 4,163 1,753 4,927 1,859 23 282

Nov. 3 1,199 4,166 1,749 4,939 1,866 25 284lo 1,225 4,172 1,757 4,960 1,880 30 28417 1,235 4,180 1,752 4,952 1,885 48 28224 1,165 4,188 1,764 4,936 1,874 24 283

Dec. 1 1,195 4,200 1,759 4,976 1,872 23 2838 1,216 4,210 1,764 5,010 1,876 22 28215 1,235 4,223 1,776 5,036 1,892 22 28422 1,266 4,232 1,786 5,117 1,862 23 28229 1,327 4,236 1,764 5,134 1,890 21 282


8.



Week ending -Reservebank

credit

Facto; of ,,icreaseMOnetary Tfeasurygold currencystock out-

standing

..-tor7; of increaseMoney incircula-tion

rember Nonmemberbank clearing

reserve balancesbalances


1924Jan. 5

121926

1,253 4,245 1,757 5,0181,085 4,258 1,767 4,896994 4,270 1,749 4,806959 4,276 1,734 4,750

Feb. 2 949 4,283 1,744 4,7819 936 4,292 1,756 4,80216 964 4,299 1,765 4,82623 951 4,308 1,759 4,846

Mar. 1 976 4,316 1,757 4,8698 984 4,325 1,740 4,87515 1,002 4,337 1,749 4,56922 987 4,343 1,793 4,86229 972 4,353 1,724 4,667

Apr. 5 1,040 4,362 1,681 4,59712 1,020 4,370 1,691 4,59819 998 4,385 1,722 4,89526 930 4,393 1,750 4,871

May 3 909 4,408 1,766 4,87110 892 4,419 1,777 4,87517 874 4,431 1,771 4,86024 851 4,441 1,765 4,54931 879 4,450 1,753 4,872

June 7 901 4,459 1,759 4,57014 893 4,466 1,760 4,53221 891 4,474 1,771 4,51028 871 4,481 1,748 4,506

July 5 922 4,490 1,769 4,55012 897 4,496 1,777 4,85819 564 4,505 1,764 4,79226 842 4,509 1,751 4,758

Aug. 2 864 4,510 1,743 4,7619 578 4,512 1,753. 4,78416 871 4,515 1,77b 4,79323 571 4,516 1,771 4,79930 593 4,520 1,761 4,820

Sept. 6 948 4,518 1,760 4,86613 970 4,516 1,765 4,85420 1,030 4,515 1,784 4,54327 569 4,512 1,753 4,844

Oct. 4 1,031 4,509 1,737 4,87511 1,053 4,505 1,746 4,88518 1,092 4,506 1,745 4,89825 1,036 4,506 1,773 4,857

Nov. 1 1,049 4,507 1,759 4,9078 1,121 4,510 1,774 4,95615 1,135 4,514 1,775 4,96422 1,143 4,520 1,766 4,95829 1,142 4,524 1,770 4,995rDec. 0 1,200 4,522 1,772 5,024

13 1,228 4,513 1,769 5,04320 1,281 4,502 1,782 5,09727 1,396 4,498 1,755 5,151

1,932 25 2791,917 25 2751,909 24 2741,892 24 273

1,902 22 2711,889 21 2721,906 26 2701,882 21 269

1,889 21 2701,885 21 2681,928 23 2681,967 24 2701,892 20 270

1,595 19 2721,893 21 2691,915 26 2691,910 25 267

1,919 25 2681,922 23 2681,925 214 2661,917 24 2671,921 23 266

1,963 22 2642,003 20 2642,037 23 2682,008 21 265

2,013 27 2612,026 25 2612,056 25 2602,054 30 260

2,067 31 2552,071 32 2562,081 33 2552,072 33 2542,066 34 254

2,075 32 2532,113 31 2532,195 32 2592,101 30 259

2,114 28 2602,133 27 2592,159 27 2592,141 27 260

2,132 27 2592,159 32 2582,175 30 2552,183 29 2592,154 28 259

2,182 30 2582,177 31 2592,174 32 2622,173 32 263


•9.


Week ending -

1925Jan, 3

101724

. 31

Feb. 71421

. 28

Mar, 7142128

Apr. 4111825

May 2

9162330

June 6132027

July 411

. 18

. 25

Aug. 1

1522.29

Sept, 5121926

Oct. 3lo172431

Nov. 7142128

Dec. 5121926


Reservebankcredit



standing


Memberbank

reservebalances



1,3281,2151,1141,0441,052

1,0751,1031,0851,115

1,1441,1491,1111,084

1,1241,1251,1091,096

1,1041,1161,0931,0751,100

1,1441,1261,1151,093

1,1721,1511,1101,081

1,0751,1331,1401,1431,153

1,1751,2211,2261,245

1,2841,3191,3471,3081,314

1,3621,3401,3371,353

1,4111,4521,5001,599

4,4984,49214,14704,4554,441

4,4174,3944,3854,375

4,3564,3494,3414,343

4,3444,3444,3464,347

4,3514,3594,3584,3604,360

4,3524,3634,3644,366

4,3654,3664,3664,364

4,3664,3704,3724,3764,379

4,3854,3904,3904,382

4,3824,3844,3854,3964,402

4,4084,4104,4114,401

4,3974,3984,4014,395

1,7591,7681,7761,7681,748

1,7681,7831,7821,779

1,7751,7791,8031,781

1,7651,7731,7721,763

1,7661,7661,7701,7581,755

1,7461,7361,7561,735

1,7611,7641,7691,765

1,7581,7391,7401,7441,743

1,7491,7501,7611,740

1,7431,7511,7401,7291,725

1,7341,7471,7331,728

1,7201,7241,7471,752

5,074,9 44,8 64,7954,778

4,(914,8094,5014,821

4,8444,8274,8124,803

4,8254,8334,8144,789

4,7924,8054,7894,7814,603

4,82)44,8014,7824,774

4,8324,8364,7904,765

4,7674,7974,8104,8244,838

4,8704,9154,9174,910

4,9364,9594,9564,9324,928

4,9564,9504,9394,975

5,0165,0555,1195,235

2,214 392,220 432,213

N2,1702,164 41

2,1662,1652,1522.152

2,1432,1612,1472,108

2,1152,1162,1252,126

2,1352,1422,1402,1222,123

2,1362,1352,1612,128

2,1742,1542,1662,155

2,1422,1582,1532,1492,149

2,1502,1572,1662,161

2,1772,1992,2132,2012,211

45484o36

28283231

28292528

259258258258258

258258259260

260261264266

265264263263

30 26430 264272626

265264263

27 26525 26426 26625 267

28272526

264264264264

26 26425 26225 2642j 26524 264

24 26524 26528 26627 269

28 26827 26932 27129 27131 271

2,234 432,224 512,2352,201

2,2052,2142,2242,205

363)4

33323031

271272271272

274273275275


•10.•



Week ending -Reserve Treasurybank currencycredit out-

standing

Factors of decreaseMonetary

goldstock

Factors of increaseMoney in Member Nonmember Unexpendedcircula- bank clearing capitaltion reserve

balancesbalances funds

1926Jan. 2 1,541 4,398 1,758 5,139 2,249 3 274

9 1,406 4,403 1,71 4,998 2,257 34 27116 1,271 4,403 1,749 4,872 2,248 30 27323 1,206 4,413 1,741 4,828 2,229 29 27

• 4

30 1,180 4,409 1,733 4,815 2,208 25 274

Feb. 6 1,207 4,416 1,721 4,833 2,215 22 27413 1,210 4,426 1,729 4,851 2,210 31 27320 1,219 4,429 1,722 4,652 2,217 24 277

. 27 1,228 4,427 1,710 4,871 2,192 25 277

Mar. 6 1,258 4,432 1,701 4,886 2,204 25 27613 1,204 4,444 1,709 4,867 2,188 25 27720 1,184 4,447 1,754 4,861 2,215 29 280

. 27 1,200 4,446 1,691 4,852 2,178 27 280

Apr. 3 1,269 4,449 1,668 4,878 2,197 30 28110 1,216 4,452 1,695 4,685 2,172 25 28117 1,226 4,452 1,717 4,887 2,202 25 28124 1,166 4,445 1,746 4,874 2,178 26 281

May 1 1,178 4,440 1,750 4,875 2,184 26 2838 1,221 4,439 1,734 4,881 2,203 28 28215 1,196 4,432 1,745 4,866 2,198 27 28222 1,187 4,432 1,746 4,852 2,205 26 28229 1,182 4,432 1,748 4,867 2,189 23 283

June 5 1,230 4,433 1,760 4,913 2,203 25 28212 1,186 4,434 1,779 4,884 2,209 23 28319 1,181 4,436 1,777 4,873 2,210 25 28626 1,163 4,444 1,764 4,867 2,197 22 285

July 3 1,239 4,446 1,766 4,918 2,225 25 28310 1,293 4,449 1,760 4,971 2,222 29 28017 1,218 4,462 1,758 4,913 2,220 23 28224 1,171 4,466 1,746 4,880 2,199 22 28231 1,163 4,469 1,747 4,881 2,193 23 282

Aug. 7 1,210 4,467 1,750 4,900 2,217 27 28314 1,184 4,463 1,771 4,913 2,197 27 28121 1,203 4,468 1,752 4,914 2,199 26 28428 1,201 4,470 1,749 4,915 2,191 28 286

Sept. 4 1,232 4,470 1,757 4,944 2,197 32 28611 1,258 4,473 1,779 4,988 2,207 29 28618 1,272 4,471 1,773 4,970 2,225 32 26925 1,298 4,470 1,715 4,958 2,203 30 292

Oct. 2 1,329 4,470 1,720 4,963 2,219 27 2909 1,328 4,471 1,749 5,005 2,226 25 29216 1,344 4,471 1,755 5,015 2,233 31 29123 • 1,297 4,472 1,749 4,989 2,213 25 29130 1,305 4,473 1,736 4,988 2,206 27 293

Nov. 6 1,349 4,475 1,747 5,016 2,222 40 29313 1,301 14,1478 1,771 5,002 2,212 43 29320 1,259 14,1479 1,753 4,985 2,219 33 29427 1,309 14,1477 1,750 5,008 2,203 32 293

Dec. 4 1,358 14,1475 1,747 5,038 2,217 31 29411 1,374 14,1480 1,758 5,082 2,208 29 293ig 1,431 14,1478 1,765 5,126 2,229 24 29525 1,539 4,484 1,729 5,221 2,205 29 297


•11.



Week ending -Reservebankcredit

Factors of decrease Factors of increaseMonetary

goldstock

,


standing


Memberbankreservebalances

Nonmemberclearingbalances,


1927Jan, 1

152229

1,482 4,4881,378 4,4991,198 4,5181,124 4,5371,049 4,551

Feb. 5 1,052 4,56112 1,028 4,57119 1,037 4,57826 1,044 4,585

Mar, 5 1,082 4,58812 1,052 4,59319 1,075 4,59426 1,028 4,599

Apr. 2 1,067 4,5989 1,096 4,59916 1,110 4,60023 1,089 4,60230 1,049 4,605

May 7 1,083 4,62914 1,004 4,68421 1,002 4,68128 1,057 4,627

June 4 1,127 4,60811 1,100 4,61418 1,060 4,61525 1,034 4,600

July 2 1,130 4,5899 1,194 4,57716 1,108 4,57023 1,077 4,57330 1,053 4,578

Aug. 6 1,101 4,57913 1,088 4,58320 1,102 4,58627 1,086 4.588

Sept. 3 1,124 4,58910 1,194 4,59317 1,204 4,58424 1,164 4,582

Oct. 1 1,203 4,5748 1,254 4,57115 1,267 4,57322 1,238 4,57229 1,250 4,555

Nov. 5 1,301 4,53012 1,370 4,50819 1,411 4,48726 1,380 4,465

Dec. 3 1,437 4,44910 1,488 4,43717 1,546 4,42024 1,634 4,40331 1,647 4,391

1,748 5,1411,7-T 5,0231,76 4,9081,748 4,8501,755 4,825

1,754 4,8311,763 4,8361,761 4,8321,751 4,859

1,741 4,8751,761 4,8611,776 4,8521,787 4,848

1,759 4,8661,767 4,8931,758 4,8941,754 4,8691,767 4,855

1,769 4,8701,774 4,8611,764 4,8501,766 4,846

1,770 4,8801,771 4,8431,789 4,8231,780 4,808

1,771 4,8481,780 4,9111,784 4,8451,780 4,8191,778 4,812

1,775 4,8381,785 4,8431,777 4,8511,777 4,854

1,779 4,8851,773 4,9351,783 4,9161,776 4,909

1,770 4,9171,770 4,9421,782 4,9511,784 4,9291,771 4,909

1,778 4,9301,774 4,9491,794 4,9261,803 4,934

1,803 4,9561,803 4,9971,804 5,0331,789 5,1201,783 5,075

2,231 50 2962,284 52 2932,251 28 2932,237 28 2942,213 24 295

2,219 23 2942,204 29 2932,219 31 2942,203 22 296

2,218 22 2962,222 25 2982,271 24 2982,246 22 298

2,240 20 2982,249 22 2982,251 25 2982,251 26 2992,246 21 299

2,261 51 2992,264 38 2992,262 35 3002,270 33 301

2,289 36 3002,311 33 2982,306 35 3002,275 30 301

2,305 38 2992,307 37 2962,287 33 2972,263 31 2972,270 30 297

2,291 30 2962,286 30 2972,287 31 2962,272 30 295

2,282 30 2952,300 30 2952,323 33 2992,284 29 300

2,299 29 3022,322 29 3022,332 36 302,324 37 3042,328 35 304

2,338 38 3032,342 56 3052,416 48 3022,372 39 303

2,395 33 3052,399 29 3032,405 27 3052,377 25 3042,415 214 307


•12.

•TABLE III - RESERVE BANK CREDIT AUD FACTORS IN CHANGES, BY WEEKS, 1922-1929


Week endingReservebank

credit


goldstock


standing,-


Memberbank

reservebalances



1928Jan. 7 1,593 4,377 1,776 4,951 2,466 30 299

14 1,422 4,376 1,784 4,811 2,441 27 30321 1,329 4,376 1,781 4,729 2,424 27 306

..PW1j1‘ 28 1,258 4,380 1,775 4,690 2,391 24 308

10,1 (4 Feb. 411

1,271 4,374 1,770 4,696 2,387 23 3091,267 4,376 1,775 4,708 2,378 24 308

18 1,272 4,376 1,777 4,710 2,372 33 31025 1,247 4,373 1,780 4,714 2,351 23 312

Mar. 3 1,285 4,362 1,772 4,719 2,366 23 31110 1,292 4,357 1,772 4,718 2,369

2 311

17 1,308 4,335 1,791 4,705 2,392 31324 1,262 4,324 1,792 4,699 2,342 25 31231 1,309 4,310 1,775 4,705 2,353 23 313

Apr, 7 1,407 4,304 1,779 4,751 2,397 28 31414 1,392 4,301 1,783 4,735 2,400 25 31621 1,409 4,280 1,775 4,718 2,401 28 31728 1,397 4,267 1,773 4,710 2,382 26 319

May 5 1,459 4,263 1,772 4,738 2,407 30 31912 1,456 4,236 1,781 4,726 2,401 27 319

l':11U(1

19 26 1,472 4,180 1,781 4,709 2,377 26

1,477 4,194 1,784 4,717 2,391 26 321321

June 2 1,531 4,165 1,774 4,7429 1,525 4,148 1,784 4,73716 1,556 4,106 1,793 4,728

,,,,1499 4103 1803 47272330 1,522 4,105 1,794 4,740

July 7 1,66g 4,110 1,769 4,816,,,„,›\ t• 14 1,558 4,115 1,790 4,769° ill 21 1,480 4,114 1,791 4,720

28 1,453 4,115 1,778 4,696

Aug. 4 1,486 4,113 1,770 4,71411 1,490 4,115 1,760 4,73318 1,472 4,119 1,784 4,74425 1,474 4,120 1,780 4,752

Sept. 1 1,506 4,123 1,779 4,7698 1,556 4,123 1,782 4,ns15 1,581 4,124 1,788 4,79722 1,600 4,126 1,792 4,78929 1,582 4,128 1,785 4,8o6

Oct. 6 1,634 4,125 1,783 4,83613 1,637 4,128 1,795 4,85220 1,634 4,136 1,789 4,84627 1,598 4,139 1,779 4,824

Nov. 3 1,625 4,143 1,782 4,834lo 1,662 4,148 1,783 4,86517 1,652 4,158 1,784 4,852

. 24 1,597 4,160 1,797 4,835

Dec. 1 1,728 4,138 1,785 4,9088 1,790 4,131 1,777 4,94715 1,794 4,140 1,784 4,96822 1,818 4,149 1,808 5,06029 1,882 4,148 1,795 5,074

2,379 272,372 272,377 272325, 292,326 28

2,369 332,337 312,308 292,294 27

2,298 282,274 282,271 282,259 29

2,278 292,284 252,324 362,335 552,312 38

2,334 532,331 342,340 302,324 26

2,342 302,347 352,357 392,346 25

2,368 262,375 282,369 312,332 302,366 30

322321323324327

323326328329

329330332334

332334336339339

339343343342

344346346348

349348350353355


•13.


(Averages of daily fi7,ures. In millions of dollars)

leek ending -Reservebankcredit


goldstock


standing


Memberbank

reservebalances



1929Jan, 5

121926

1,8321,6761.5931,509

4,1264,1114,1104,117

Feb. 2 1,501 4,1239 1,512 4,13016 1,522 4,143

. 23 1,476 4,152

Mar, 2 1,503 4,1549 1,522 4,15716 1,495 4,16023 1,423 4,16830 1,451 4,179

Apr. 6 1,446 4,19313 1,363 4,22020 1,382 4,23627 1,347 4,239

May 4 1,372 4,26211 1,332 4,28618 1,29 4,29825 1,262 4,300

June 1 1,295 4,3018 1,319 4,30315 1,313 4,3072229

July 6132027

Aug. 310172431

Sept. 71421

. 28

Oct. 51219

. 26

Nov. 29162330

Dec. 7142128

1,7851,7891,7891,790

1,7861,7811,7891,786

1,7761,7751,8021,8081,788

1,7901,8011,7751,776

1,7761,7841,7971,787

1,7851,7831,792

4,9324,7934,7224,677

4,6644,6754,6894,691

4,7064,7234,7034,6924,702

4,7074,6794,6764,664

4,6894,6874,6774,671

4,7034,7044,675

2,4292,4022,3872,35g

2,3642,3662,3772.339

2,3432,3412,3622,3182,317

32323230

350349351351

29 3528 35433 35527 357

26 35832 35831 36127 36236 363

2,320 37 3,..62,310 31 3.02,314 36 *0.43672,297 32 '''''369

2,311 42 3682,312 34 3692,310 30 3702,279 28 371

2,276 30 3722,298 30 3732,331 30 376


•FEDERAL RESERVE BOARD

WASHINGTON

ADDRESS OFFICIAL CORRESPONDENCE TO

THE FEDERAL RESERVE BOARD

•

• 1.44.

June 27, 1929St. 6249

SUBJECT: Operatinc Efficiency at theFederal Reserve Banks.

Dear Sir:

In continution of the state.nent, based on function-ex,onse roorts, sent you uner date of June 14, 1q2g

re are cnclosing herewith a state,:lent, St. 6231, relatingto the output :,?er employee and unit of cost in the de-)art-nents for which a 12easured.. service is available theilepd. offices of the Federal, reserve bariks.

Tais state3ent as you will note uses as a base figuxesfor 1925 insteaL of 1923 as was done in the state.nent sent701:. a year aLy). This change was :Lade es it was thought

).; fi,;ures for 1923, the first full year for which func-til ex-9ene rer)orts were submitted, are not as satisfac-tory c. base for future co.:!arisons as are figures for t-7oyea.rs 1E-Aar -1.hon all the banks had. become familiar withthe now s7ste:L of r(-.;ortin&- and. misinterpretations of in-strl:.ctions reLarcling Tpreparation of the re-:ports had. beenfairly well ironed out.

It be an-)reciated if you will bring to theBo,7,rdts attention any com.flents re,:arding the statementthat 7ou think desirafble.

Enclos-2.re

70 CHAIR:IEH OFILL ITE2Eall, 27:S7RVE BANKS*

VOLUME 193PAGE 89

Verv truly yours,

J. C. Noell,Assistant Secretary.

w


CGNFIDEJTIALOUTPUT PER EMPLOYEE AND PER urIT OF COST IN PRINCIPAL DEPARTMENTS, ALL FEDERAL RESERVE BANKS (HEAD OFFICES)

Number of items bandied in thousands: ex ense in thousands of dollars St 62 --TTotal for

1iope2ationsmeasured

I

Dis- i

counts laurrency1

CoinCity checks -Govern- Country

checksReturnitems

Citycol-

lectionls

Countrycol-

lections

Coupon collectionsClearings 1 Other ment

checksOther than Govern-

Gov't. 1 ment

Items handled:1925

S 192619271923

A7crago number ofemployees:

1925192619271928

Expense of unit:1925152615271928

NE•1

3,549.393,565.1s3,495.173,320.35

4kgat per employee(index):

192619271928

tput per unit•ost (index):

19261927

. 1928

5,3015,2765,1775,077

985 1,496,2861,153 1,606,6681,041 1,696,3131,206 1,735,206

188.19188.25187.46185.45

714.46686.60616.06562.11

376 1,036373 1,024374 026381 887

106.25 118.06 111.77112.74 107.75 131.55122.33 124.58 147.41

107.61 117.90 108.48113.64 103.51 126,43119.85 120.61 135.40

:ISION OF BANK OPERATIONS,TEDMAL REL,L1.--,VE BOARD

1,935,0982,173,1262,250,1122,475,897

105.79107.12109.57107.93

94,362101,861107,095111,756

225.48235.19254.88235.05

17,91818,65918,20320,476

127.45133.30127.72131.98

240 371 172241 379 179240 4C3 179246 392 184

112.98115.92127.41

113.21120.03127.21

104.38101.83115.52

107.34106.27114.04

99.10100.27113.75

99.6997.00109.01

20,002 414,493 8,81620,787 439,507 9,62421,783 460,524 10,02121,926 463,745 10,416

69.84 1,602.26 lo5.o464.29 1,638.43 103.2462.39 1,619.84 109.8761.16 1,535.63 104.29

95 2,159 20187 2,181 18887 2,164 17187 2,102 169

113.13 103.93 106.)01122.07 110.88 110.06125.57 118.14 121.14

113.50 105.59 118.11117.30 111.80 135.89118.87 116.18 142.Y1

736727726753

2,339 1,434 35,592,462 1,3go 31,6702,504 1,576 29,6882,576 1,923 22,930

85.65 202.7692.07 199.6395.06 195.8286.91 191.84

127134139131

93.9395.90105.42

97.1598.02104.01

321307302299

60.6254.9164.6172.69

10699110126

62.3557.1551.8945.31

97848273

104.46 105.55 97.78103.63 0c) .011.J, 100.66114.11 105.04 89.08

107.30 101.76 100.91111.00 101.77 96.75115.45 105.92 86-.03


C:11-ZIDRTTIAL

iTotal forI Dis-ionerationsl1 'measured

Items h-lildled:1925410 192619271328

Avera6e number ofenplo7ees:

1925192615271928

nazi. e se of unit:

OUTPUT PER FLTLOYEE AND PER UNIT OF COST IN PRINCIPAL DEPARTIMTS, FEDERAL RESERVE BANK_ OF BOSTON(Number of items handled in thousands; expense in thousands of dollars)

counts

192512519271928

Ittput per employee(index):

152619271928

OM.

9311199150

433.77 13.27452.33 15.13449.05 15.83443.43 15.84

Currency Coin

228,605 182,778237,828 191,128240,778 181,602242,602 213,019

110.32 10.21113.20 11.7697.07 11.3936.48 10.6o

City checks Govern- City CountrySt. 6?31-b

Coupon collectionsCountry ReturnI ment col- col- Other than Govern-1C1earings 1 Other 1checks checks items

mentI lections lections Gov't.

9,069 101 1,69610,053 121 1,71911,co6 139 1,83111,947 161 1,986

59,580 601 4964,934 655 5263,213 718 6172,052 758, 64

247 131239 127236 113236 109

3,9063,3653,0002,191

18.87 3.04 4.00 217.39 11.79 6.55 24.40 9.90 4.031754 3.04 4.01 230.43 11.61 6.43 25.23 9.90 4.0017.23 2.90 4.00 243.12 11.41 3.31 26.09 7.20 4.5o18.26 2.96 4.59 248.07 11.11 7.76 26.06 7.20 4.5o

6061 23 136 22 33 4 6 293 20 9 39 15 66.1 26 140 25 32 4 b 311 20 9 40 16 6rf,-)o)1 27 127 25 31 4 6 320 18 12 41 12 8624 28 117 22 32 4 7 324 18 10 42 12 8

102.42106.07113.86

Output per unit ofcost (index):

192b 102.241327 106.011928 113.81

104.0888.88135.10

105.5089.82132.15

101.40 90.52119.72 59.0135.40 112.26

100.52 91.79112,17 87.30122.17 114.61

119.27 120.39 101.00 102.82 110.77 108.71 93.50 96.57 86.75132.91 144.4s 110.75 102.37 123.58 97.47 89.42 124.03 68.89136.14 163.51 101.96 105.98 133.93 110.70 89.18 114.44 50.22

116.10 127.89 102.95 102.95 113.38 104.33 93.14 94.82 36.01130.13 146.81 ill.44 105.15 132.87 95.91 90.35 120.00 55.10138.06 162.86 104.17 109.72 140.94 120.92 88.68 111.65 41.49


OUTPUT PER EITLOYEE AND PEE UNIT OF COST EN PRETCIPAL DEPARTMENTS, FEDERAL RESERVE BANKj OF NEW YORK (HEAD OFFICE)(Number St. 6231-c

Total foroperationsmeasured

Dis-counts Curre cy

1

CityCoin

T- City checks Govern-ment

checks

Countylchecks

Returnitems col-

lections

Countrycol-

lections

Coupon collections

IClearings Other Other thanGov't.

(Govern-ment

Item handled:1925410 192615271928

Average number ofemplr_vees:

1925192619271928

4Patput per employee(index):

192615271928

Expense of Unit:1925192619271926

Output per unitcost (index):

19261.92711.926

1,136.571,113.271,095.25'1,110.77

225242290

320

52.5752.7752.4050.69

1,690 1181,655i 1161,649 1141,711 126

109.22 107.16120.69 129.54127.06 125.63

109.90 109.49119.41 133.31123.11 133.67

514,642562,212597,701621,134

253.02221.37191.95192.70

39435833o33s

124.86153.09150.48

119.21137.49139.b5

963,099 29,170 10,4371,108,499 33,86,6 10,6191,167,710 36,337 10,0611,313,913 36,327 12,442

45.3845.3745.34

108110109117

115.12120.03133.51

111.13117.90124.04

34.19

91.46L:T.33

111.22114.14120.06

93.5798.5292.2497.15

5,4065,6725,8C75,794

86,413 2,329 132 86992,876 2,554 205 894103,749 2,833 223 989109,099 3,262 211 1,092

27.43 391.7821.11 1403.2920.58 405.5720.46 417.65

118 34124 28

122 28124

96.63 136.3397.79 143.15

114.82 143.70

97,29 129.8293.5G 133.14110.10 129.40

46847q494524

io4.41115.98118.43

105.05113.76112.85

31.8632.5134.9132.35

58514

30.97 73.4333.72 76.7438.04 75.0930.70 75.19

424841

105103102104

107.47 97.72 98.41111.23 94.32 111.29137.96 110.85 122.73

117.49 104.51 104.49128.30 97.84 117.43155.65 106.29 127.10

820 11,889819 10,563909 9,741

1,173 7,473

31.03 21.3425.87 19.1228.78 17.9735.56 15.66

5)4475162

119.75119.53124.78

3 )-1-292825

99.1697.2785.63

103.5999.60


CONFI DEN T I AI, OUTPUT PER EMPLOYEE AIM PER UNIT OF COST IN PRINCIPAL DEPARTMENTS, FEDERAL RESERVE BANK OF PHILADELPHIA

(Number of items handled in thousands; expense in thousands of dollars) St. 6231-dTotal foroperationsmeasured

Items handled:19250 192619271528

OMNI

Dis-counts Currency

83 174,790102 180,98085 207,70198 214,881

lverage number ofemployees:

1925 385.00 14.99 87.131926 399.26 15.56 94.021327 392.49 15.22 90.161928 358.10 15.48 62.64

Exnense of unit:1925 5481926 5701927 5491)28 522

Output per employee(index):

1926 102.081927 108.301928 118.19


1926 102.261927 110.051928 115.30

Coin Clearings

265,610 12,191291,012 12,203303,015 11,320328,886 11,049

14.69 15.7716.85 15.9518.62 19.5317.97 20.84

City checks

Other

Govern-ment

checks

Countrychecks

5,922 1,798 46,1310,207 1,933 48,0046,219 2,003 50,5915,948 1,963 49,233

23.21 3.8323.75 4.7025.41 5.4124.91 4.66

29 118 33 27 39 630 129 35 30 41 730 111 35 35 43 831 86 35 38 42 7

Returnitems

Citycol-

lections

CountryC ol-

lections

Coupon collectionsOther than Govern-

ment

838 89 278 1181,021 86 289 1491,121 99 284 1651,146 97 269 186

175.86 9.16175.27 11.17166.73 11.58160.25 10.19

216 18219 10213 15209 15

4,2923,7093,468 .2,545

7.17 22.96 2.25 7.987.09 23.25 4.34 7.317.61 22.59 4.71 4.928.66 22.50 5. 5.

12 33 4 1312 32 6 1113 31 714 31 7 7

117.48 100.19 95.49 99.00 102.44 87.66 104.41 99.91 98.03 102.80 65.44 94.39101.05 114.84 89.82 74.96 95.91 78.93 115.67 105.79 104.60 103.81 66.88 131.10113.82 170.99 101.22 68.57 93.58 89.70 117.12 122.96 89.72 98.89 71.20 94.60

119.14 98.31 109.14100.o7 125.10 112.01109.21 168.10 121.83

88.15 98.84 90.50 102.84 124.54 97.65 107.20 80.85 95.2970.35 95.15 77.79 111.44 157.30 102.17 108.26 84.02 126.6264.18 92.39 85.50 110.54 166.60 90.23 102.98 90.90 106.69


CONFIDE7TIALOUTPUT PER ENPLOYEE AND PER UNIT OF COST IN PRINCIPAL DEPARTMENTS, FEDERAL RESERVE Boa OF CLEVELAND (HEAD OFFICE).

Number of items handled in thousands expense in thousands of dollars) St. 6231-eTotal foroperationsmeasured

Dis-counts Currency Coin

City checks Govern-ment

checks

Countrychecks

Returnitems

. Citycol-col

lections

Country-I

lections

Coupon collections

Clearings 1 Other Other thatovern-Gov't. ment

Items Iaanuled:1925

0 132619271928

59 58,357 93,95861 62,057 100,69351 55,763 85,4$965 67,767 89,837

6,5407,5167,4999,237

886 20,958 546 43 214 78963 23,264 484 44 203 83 2,298

1,136 25,307 492 46 1911,118 24,554 493 42 184 56 1,867

Average =doer ofemployees:

1925 190.20 11.00 32.11 5.25 23.82 - 2.00 80.94 5.33 5.00 16.00 4.79 3.961926 187.60 11.02 28.85 4.42 22.28 - 2.00 84.73 5.63 5.00 15.49 4.13 4.051927 190.52 11.00 28.33 4.59 23.02 - 2.00 84.77 5.69 5.84 15.95 5.50 3.61928 173.83 11.56 26.95 4.38 17.57 - 2.00 77.25 4.58 6.00 15.74 5.41 2.29

Expense of unit: 11925 293 26 46 11 38 _ 3 1031925 284 26 43 9 34 - 3 1061527 283 27 42 o.) 32 - 3 1061928 272 29 41 10 29 _ 3 102

etput per employee(index):

1926 105.75 102.45 118.37 127.60 95.33 _1927 107.65 85.82 127.71 108.93 90.88 -

1928 120.80 104.15 138.37 114.61 145.78 -

Output -.,?er unit ofcost (index):

1925 105.93 101.64 114.07 125.29 99.00 -1927 109.43 82.83 123,23 118.53 102.69 _1928 117.04 96.53 130.86 112.62 142.12 -

108.50 106.04128.00 115.29126.00 122.76

99.52 107.59117.08 117.92123.65 118.59

12 10 29 oJ11 11 28 810 12 28 97 12 27 9

83.84 103.40 97.87 122.5281.49 91.44 89.66 98.73105.02 82.67 87.10 108.32

6553

97.04104.13139.74

90.55 101.97 97.62 112.24 109.43106.35 94.74 93.24 109.77 106.86142.41 83.47 92.19 112.85 151.73


c orTrIDMTIALOUTPUT PER EMPLOYEE AND PER UNIT OF COST IN PRINCIPAL DEPARTMENTS, FEDERAL RESERVE BANK OF RICHMOND (HEkD OFFICE)

Number of items handled in thousands: ex-pense in thousands of dollars St -Total for Ioperationsmeasured

countsCurrency Coin

City c ecks Govern-ment

checks

Countrychecks

Returnitems

Citycol-

lections

Countrycol-

lections

Coupon collections

Clearings OtherOther than

Gov't.Govern-Govern-ment

Items handled:1925 119126 1361927 851928 154

Average number ofemployees:

1925192619271928


Output per employee(index):

19219271928


192619271928

181.68158.23142.57127.0

17.5616.9816.2014.81

253 31230 30208 29188 27

122.94 118.49133.56 77.5319.32 153.75

123.52 117.79131.13 76.38138.19 149.37

47,84153,65854,78847,290

24.3022.6019.7016.68

26,287 1,674 10735,027 1,636 10932,252 1,630 11125,846 1,627 119

711 28,066 675

790 29,672 751872 30,362 750792 26,397 661

4.24 3.50 .57 2.24 104.783.59 3.27 .54 1.99 86.723.87 2.84 .49 1.84 76.543.10 2.21 .40 1.94 68.43

23 101 1015 94 1411 99 1810 86 21

9.55 1.90 10.228.12 1.75 10.147.90 1.34 8.858.15 1.28 7.80

32 6 6 I 3 13 17 1632 6 5 1 3 118 14 2 1629 6 4 1 2 107 11 1 1525 4 3 1 3 96 11 2 12

120.58 157.10 104.59 107.41 125.13 127.73 130.91141.27 134.37 120.07 120.41 149.46 148.09 134.30144.00 134.52 153.85 157.50 128.87 144.02 114.85

113.44 148.81 115.52 89.67 123.06 131.09 137.33125.16 129.91 136.77 107.52 145.44 147.42 175.96124.71 146.70 162.60 124.65 118.11 142.72 148,81

625553535382

.72 2.10

.73 1.801.21 1.791.38 1.39

1 21 21 22 2

70.29 93.79 141.10 103.3370.90 112.77 114.05 100.5663.28 111.15 113.77 92.09

82.51 91.33 130.89 92.1676.74 107.31 140.48 88.3756.21 113.26 124.59 77.54

4


CONFIDENTIALOUTPUT PER EMPLOYEE AND PER UNIT OF COST ET PRINCIPAL DEPARTMENTS, FEDERA.L RESERVE BANK OF ATLAYTA (HE1D OYFIGE)

Number of items handled in thousands: ex Dense in thousands of dollars St. 62 1-'Total foroperations!operations

I measured

I Dis -ICurrencyl

ICoin

City checks !Govern-i mentchecks

fCo untrychecks

I Returnitems

City [Country Cou-pon collections

Clcarincs Othercol- i col- 10ther than

lectionsilections Gov't.Govern-ment

Items handled:1,25 74

•1926 1211527 1071928 111


1925 73.601?26 77.231927 68.401928 62.18

Expense of unit:1925 971926 991927 951928 92

4Itutput per employee(index):

1926 113.361927 128.77

1928 141.78


1926 117.311927 123.271928 127.711

37,607 15,953 1,624 18 549 6,73439,316 17,511 1,745 24 587 7,65039,557 16,589 1,886 24 625 8,44140,871 18,624 1,936 16 661 7,935

13.13 17.5414.61 17.6814.25 15.5511.67 15.84

20 2322 2322 2119 22

146.89 103.73132.91 118.65169.32 120.33

150.50 102.78137.15 113.94158.85 114.00

2.00 6.51 .10 1.78 24.811.00 5.81 .10 1.98 27.091.00 4.48 .10 1.74 22.111.00 3.97 .10 1.52 20.43

206 23 20 2247 24 19 3241 20 17247 22 16 10

3.703.723.74

1.822.012.02

3.46 1.41

1.582.232.181.62

37342316267

.631.00

.39 .84

.50 .66

3 8 2 29 6 2 3 12 6 2 32 6 2 3 12 5 2 30 7 2 3 a 12 4 2 29 7 2 3

220.00 120.48 130.00208.00 168.75 130.00233.00 19.47 90.00

193.61 156.94 66.67166.91 197.31 56.90185.91 227.60 38.94

Less than $500.

95.96 104.02 119.09116.67 140.66 115.51140.79 143.07 128.03

84.67 101.66 125.4899.32 121.19 107.05100.45 119.96 104.45

92.54 66.82 56.0077.72 63.76 60.71

118.44 77.78 65.15

98.23 86.25 _ 58.5285.04 84.48 - 62.8888.71 77.90 .. 5.65


CONFIDMTIAL OUTPUT PER EMPLOYEE AND PER UNIT OF COST IN PRINCIPAL DEPARTMEKTS, FEDERAL RESERVE BANK OF CHICAGO (HEAD OFFICE)

Na7ber if items handled in thousands e ense in thousands of dollars 2 -hTotal for ' Di s- 1operations counts laurrencylmeasured 1

CoinCity checks Govern-

mentchecks

Countrychecks

Returnitems

Citycol-

lections

Countrycol-

lections

Coupon collections

Clearings 1 Olt)ther Other thanGov't.

Govern-ment

Itezis handled:1925

0 1,261q271,2s

Average nuriber ofemploices:

1925 571.981(225 625.271927 E:37.80?9a4 562.44


Illutnut per employee(index):

903

938945892

1D26 97.121927 99.311928 116.05

137 244,535 195,877 13,887 4,133 68,267 1,064 56 239 227 6,517'47 262,162 220,582 15,285 4,161 72,885 1,168 55 273 138 5,92o115 289,125 229,116 16,195 4,3o3 76,176 1,120 61 267 177 5,54297 299,521 249,135 '7,436 4,3o5 78,095 1,135 65 305 221 4,337

23.51 104.85 10.43 41.03 15.18 311.65 11.7524.99 lo2.87 9.79 52.84 17.09 352.7o 13.0425.1s 57.76 8.85 64.08 14.87 360.65 13.0824.00 91.04 8.9() 50.24 14.29 3o6.23 14.71

5o51515o


1926 102.15 104.7g1)27 105.20 82.321928 114.68 7o.53

161167152149

262321

II22

109.27 119.92126.gi 137.85141.07 147.61

103.35 123.44125.16 144.09132.3g 146.84

13.01 21.26 9.2617.38 17.8o 7.2115.37 18.51 10.7013.62 20.69 11.14

9.959.568.757.49

57 20 464 27 23 40 18 1766 20 494 24 29 33 1584 19 503 19I 26 34. 20 1671 19 459 25 23 39 21 14

85.47 89.41 94.34 98.93 73.07 136.63 78.36 94.5674.69 106.25 96.41 94.57 91.48 128.53 67.57 96.69

102.55 110.64 116.42 85.18 110.21 131.08 80.97 g8.38

95.68 _ 99.48 100.30 124.13 78.84 139.14 69.31 103.5479.57 - 107.96 103.06 146.46 97.46 '30.69 68.26 91.8o100.85115.62 111.64 115.99 132.70 80.67 81.85


CO:TFIDEZTIALOU7PUT PER EITIOYEE .A:D PER UYIT OF COST IN PRINCIPAL DEPART:MTTS, FEDERAL RESERVE BANK OF ST. LOUIS (HEAD OFFICE)

Nu ber of items handled in thousands expense in thousands of dollars St. 6231-iTotal forioperationsI measured

counts Currency CoinCity checks -Tduvern-

Other.ICountry

ment I checkschecks

Return i City

items1 ccl-,lections

'Countrycolt-

lections

Coupon collectionsClearings j

_

Other thanGov't.

Governi=ment

Items 11-4.nd1ed:192.5

110 192315271928

33 55,630 93,o47 4,793 940 1,536 21,970 77647 56,871 91,386 5,052 1,012 1,55 23,294 83050 60,495 93,404 5,591 1,051 1,531 24,160 90439 61,182 93,356 5,604 1,022 1,452 24,260 963

21 74 23 1,82621 101 25 1,64620 1115 31 1,53022 112 36 1,247

Average nurber ofemploy.ees:

1925 140.51 4.93 24.31 4.64 7.88 3.75 3.83 72.50 4.G4 1.77 6.66 2.11 3.491^2S 127.73 5.06 23.22 4.38 7.94 3.78 2.36 64.26 4.94 1.27 5.51 1.4g 3.031927 124.57 4.94 21.02 4.63 3.30 3.73 2.43 63.45 5.06 1.27 5.58 1.40 2.711928 121.93J 5.01 19.05 4.90 9.19 3.88 2.45 61.80 5.02 1.24 5.51 1.40 2.48

Ex7)ense of unit:1925 204152G 1861927 1751928 172

41ktput per employee(index):

1526 118.081927 127.661928 129.35

9 37 10 9 5 5 99 9 510 37 lo 5 3 85 3 3 3 39 34 5 4 79 6 3 6 3 14.10 32 10 9 5 3 78 7 3 8 3 14

136.93 107.02 93.44152.02 125.78 99.57114.77 140.37 100.00


1926 118.20 132.37 103.43 91.181927 132.42 145.54 118.78 103.471928 133.13 104.35 127.38 100.99

104.66 106.63 164.41 119.62 100.40 136.22 164.7 1581.78110.72 112.33 157.26 125.66 106.72 132.28 189.43 207.86100.22 105.15 147.76 129.55 114.74 148.39 182.21 23.57

106.51 108.49 162.77 123.19 115.36 129.93 148.43 154.18122.93 108.87 149.72 138.30 131.84 129.81 168.58 199.32119.50 105.59 143.24 141.16 142.52 142.67 158.43 228.51

103.96107.75

95.97

94.2791.8487.41


CO.NFIDMiTIALOUTPUT PER EMPLOYEE AND PER UNIT OF COST IN PRINCIPAL DEPARTMENTS, FEDERAL RESERVE BANK OF MINNEAPOLIS (HEAD OFFICE)

umber of items handled in thousands: ex ense in thousands of dollars St. 6231-iTotal foroperationsmeasured

Dis-counts

Currency CoinCity checks

mentchecks

Country- Ichecks

Returnitems

Citycol-

lections

Countrycol-

lections

Coupon collections

Clearings

1Govern-

Other Other thaniGovern-Gov't. I

Govern-ment

Items handled:1925192619271928


1925 121.921926 113.461527 102.701928 92.77

Expense of unit:1925 1861926 1801927 1641928 148

Ilktput per employee(index):

1926 104.061927 106.461928 120.89


1926 101.051927 102.701928 117.44

24 32,046 8,925 3,8026 35,271 11,014 3,71723 38,572 10,954 3,78537 38,036 9,313 4,127

5.994.514.274.07

10

91010

143.46133.49227.52

122.8498.67159.90

15.74 1.4815.66 1.1612.64 1.1611.38 1.10

25 14.

27 420 14.

18 4

110.60 157.76149.92 156.90164.15 140.00

102.68 136.08146.83 124.12165.51 108.93

789 19,g45 494 187 135 1,007768 18,559 437 172 129 932718 17,346 325 126 87 32 923765 17,352 342 165 62 51 742

5.13 1.77 67.12 4.05 8.93 9.43 2.265.25 1.71 61.72 3.65 9.90 8.26 1.645.09 1.72 55.57 3.40 7.12 6.64 3.34 1.755.57 1.75 49.25 3.17 8.09 4.10 2.92 1.37

7 3 102 77 3 97 77 3 87 6

3 73 6

95.43 100.58 101.70 98.36100.39 93.60 105.58 95.29100.00 98.29 119.17 88.64

95.80 111.28 98.13 93.8397.9 104.94 101.64 101.1891.41 113.37 122.30 91.99

11 1412 12

9 1111 8

32

4 35 2

83.0 109.5684.83 92.1797.40 105.61

82.59 110.9479.45 83.0187.39 80.69

127.44118.29121.90

1 125.64108.24103.44


COITFIDRTTIALOUTPUT PER EEPLOYEE AITD PER UNIT OF COST IN PRINCIPAL DEPARTMELITS, 1LEDERAL RESERVE BANK OF KANSAS CITY (HEAD OFFICE)

Tumber of items handled in thousands- expense in thousands of dollars St. 6231-k!Total forioperations I measured

Dis-counts Currency Coin

City checks Govern-ment

checks

Countrychecks

Returnitems

Citycol-

lections

Countrycol-

lections

Coupon collections

Clearings Other Other thanGov't.

Govern-ment

haniled:19291926

411 19271928 •••11


1925 100.99152o 57.101927 93.491928 87.75

Expense of unit:1925 1781926 1721927 1651928 159

410putput per employee(index):

192619271928

111.56110.93115.84


1926 111.34t1927 110.0311928 112.811

38 34,74355 35,82841 37,6464o 36,940

48,28948,70645,64546,453

8.81 14.0o 2.48s.62 14.e7 2.588.54 13.71 2.808.74 11.97 2.78

16 2116 2316 2117 19

4,3134,5725,0784,921

7.095.946.000.00

Ode

1,1991,2121,2621,275

2.492.002.002.00

25,119 53225,792 59724,211 57323,666 545

50.724a.0545.5142.51

21 112 1,16922 124 1,06825 128 1,03823 136 886

4.00 2.00 6.774.63 2.00 5.964.64 2.00 5.993.93 2.00 5.82

0•1111

^

2.632.452.302.00

5 4 91 8 3 15 44 lo 3 87 8 3 14 45 10 3 82 8 3 14 35 11 3 78 7 3 13 3

148.38 97.11 96.90 126.60 126.00 108.39112.41 110.65 83.57 139.17 131.00 107.43107.55 124.39 85.97 134.83 132.50 112.42

148.34 95.08 100.62 120.82 _ 125.87 108.05110.72 106.00 88.99 129.07 - 122.10 106.92104.31 115.74 85.45 120.54 - 118.16 110.71

96.98 104.50 125.67 97.9692.67 119.50 128.71 101.74104.33 108.50 140.55 99.50

108.05 101.03 116.94 - 99.18113.81 114.21 123.34 - loo.66121.06 103.79 133.43 - 104.90


CONFIDKJTIATOUTPUT PER MPLOYEE AND PER UNIT OF COST La PRINCIPAL MARTMTTS, 1EDERAL REbLHVE BANK OF DALLAS (HEAD

OFFICE)

Number of items handled in thousands ex ense in

'Total foroperationsmeasured

Dis-counts tCurrenc

y CoinCity checks Govern-

mentchecks

CountrychecksClearings 1 Other

1

Itens handled:1525

1111 19261527192S


192515261927192S

Expense of unit:1925192S19271928

4110utput per employee(index))

192b19271928


192619271928

165173

66

24

20

28,947 20,15926,696 17,94727,674 17,57926,58S 20,531

14.53 1.4413.55 1.9611.5o 2.0011.79 1.17

191916lg

4443

153.69 107.08 64.65101.29 12o.78 63.00163.96 113.23 125.64

113.58 150.60112.77 100.76124.14 135.29

103.73 75.64112.70 73.81100.7) 135.34

41Jess than $500.

4.554.553.833.2g

.)-1 V1 al al

106.59132.90150.00

thousands of dollarsCity 'CountryI Returncol- col-items

lections lections

St. 0231 -LCoupon collectionsOther thaniGovern-

Gov't. I ment

16 4374 472

5o36 522

22,357 64423,225 7So22,513 73722,630 736

1.16 69.61.92 67.521.10 62.271.10 54.33

1 2

It 2

# 2

# 2

5.906.o45.304.67

15 4s13 5513 5114 48

2.602.032.052.01

103 13 399 12 393 9 7

.)

84 3

4.414.054.054.05

7

16.47 135.87 107.09 115.4o 114.29 123.7028.00 121.82 112.56 127.55 110.73 115.06

36.00 125.36 129.69 144.54 120.90 107.65

106.67 32.94 118.33 107.61 130.83 101.98 125.72

124.51 94.00 95.26 111.25 167.22 9o.6o 120.05122.14 105.14 96.68 123.25 172.58 101.56 113.81

22

33

OM.

ON,

463421386301

2

132.95216.00168.00

129.56201.23155.21.


-"MIR

CONFIDZ:ITIALOUTPUT PER EMPLOY= AND PER UNIT OF COST IN PRINCIPAL DEPARTMENTS, IhDERAL RESERVE BANK OF SAN FRANCISCO (HEAD OFFICE)

Number of items handled in thousands ex ense in thousands of dollars ' S4162 1-m

Total foroperations

I measuredcounts

,Currency

I City checks IGovern- ; Co untr.,4 Returnment i. checks! itemschecks I I

Citycol-

lections

CountryI col-lections

Coupon gliklections,--- -Coin 1C19,arinLfs

IOther Other thaniGovern-

Gov't. I ment

Items handled:• 1925

192619271928


1925 94.921926 96.121927 94.261928 88.00

Ezpense of unit:1925 1581326 1541927 1511928 145

tut per employee(index):

1926 109.681927 113.831928 117.52


192619271928

46 38,543 21,116 3,621 378 861 9,053 112 1355 43,577 39,421 4,330 562 955 9,352 12o 1944 37,013 62,657 4,8m 594 1,142 9,455 133 2234 38,344 61,982 5,730 763 1,293 8,472 127 20

9.57 16.61 3.558.78 18.71 3.74s.05 16.68 4.795.99 15.59 5.57

51413532

23 1,20321 1,05323 1,00115 692

7.14 2.70 4.12 35.10 3.31 3.93 5.64 .56 2.695.94 2.71 4.41 36.65 30.7 3.49 4.97 1.24 2.318.62 2.31 4.71 33.55 2.98 4.12 4.32 1.38 2.2510.49 2.53 4.40 29.43 2.95 4.14 2.76 2.18 1.97

20 24 8 11 4 7 55 6 7 11 1 418 26 oJ o 4 7 54 6 6 10 2 317 2314 22

130.98 100.37115.40 95.62118.03 105.97

115.45 136.76 104.53121.00 115.69 101.69120.67 .108.79 108.09

11 1312 16

177.27 143.77219.83 111.83187.07 107.72

172.86 145.53231.80 115.97196.99 109.55

4 7 50 5 7 ,-_' 3 34 7 46 5 7 -.i 4 3

143.34 103.63 98.94 112.30 122.35151.25 116.14 109.27 132.21 119.42215.42 140.66 111.62 127.12 107.73

163.36 104.95 106.02 116.64 12649159.13 119.47 114.53 153.23 116.95205.12 14o.89 112.17 160.47 106.34

89.54 39.52 401.7389.12 40.58 99.56125.72 17.89 78.68

$5.33 34.33 106.1590.67 35.96 101.59129.50 15.64 79.97


FEDERAL RESERVE BOARD

WASHINGTON

ADDRESS OFFICIAL CORRESPONDENCE TO

THE FEDERAL RESERVE DOARD

Dear Sir:

June 27, 1329St. 624S

• • 44,

G)9

At the last Governors' confrence, consideration was given toto-pic III-D "Redemption Fund for Federal reserve notes. Is thereany need for two se-.Parate funds?" and the conference voted that theChairman appoint a committee to confer with the Treasury officialsand ex-press the opinion of the conference that an effort . should bemade to do away with the Federal reserve agents' redemption fund ifagreeable to the Treasury. The secretary of the Governers' confer-ence as since advised Lae that the Chairman appointed r. L.R.Roundsof the Federal Reserve Bank of New York and myself as the committeeto confer with the Treasury officials.

For your information, I a-2 enclosing a copy of a memorandumdated 'larch 2, 1929 with reference to this subject which explainsthe history of the two separate redemAion funds and the use madeof them by the several Federl reserve banks which, it will benoted, is not uniform.

Information now available indicates that ten of the Federal re-serve banks make cross entries betveen the agent's redemption fundand the bank's redemption fund in connection with all shipments ofmutilated Federal reserire notes to the Treasury by them or by otherFederal reserve banks for their account while two of the banks makeno entries 7hatever in their redem2tion funds in connection with suchshipments. These banks merely reduce on their own books the amountof Federal reserve notes outstanding'. If the -.procedure followed bythese two banks is adopted by the other ten the only Federal reservenotes which 7111 be charged to the redemption fund by the Treasurywill be those received fraz sources other than the Federal reservebanks and such redem-Aions can be accomnlished through the bank'sredemytion fund as easily as throu-i,h the agent's redemption fund.It would seem from the above that there is no occasion for the .liain-tsmance of the two separate redemption funds and the elimination ofone would not only simplify some-that the accounting procedure inci-dent to the retirement of Federal reserve notes but would also make it

VOLUME 193PAGE 95


- 2-st. 624g

necessary to show only one redemption fund in published reports,thereby removing a source of confusion to many students of the System.

Since the sugj,estion for the discontinuance of one of theredemption funds was first made another very practical reason hasdeveloped which seems to make the change desirable. Under the pro-cedure followed by a majority of the banks, trensfers are made betweenthe two funds upon receipt of notice from the Treasury that Federal re-serve notes have been received for retireelent. This necessitates main-taininc, a close watch on the amounts of the respective redemption fundsin order that there may be at all times a sufficient balance to effectthe redemptions. In view of the impending change in the size of thecurrency, several of the Federal reserve banks have thought that somechange of procedure would be necessary in order that the more rapid re-tirement of Federal reserve notes which is anticipated following July10 can be made without building up too large a redemption fund and thuspossioly depleting the reserves against deposits. The procedure suggest-ed is as follows:

let - That with the approval of the Secretary of the Trea-sury, the agents' redemption funds be closed and allFederal reserve notes presented to the Treasury forredemption be redeemed out of the banks' gold redemp-tion fund. This, of course, would be done with theunderstanding that if at any future time circumstancesshould arise making desirable the maintenance of suchfunds, the Secretary would request the Federal ReserveBoard to require each agent to reestablish his fund.

2nd - That the procedure incident to the retirement of Fed-eral reserve notes be as follows:

a - That each Federal reserve bank charge to anaccount entitled "Mutilitated Federal reservenotes forwarded for redem2tion" all notes ofits issue forwarded to Washington either byitself or by another Federal eeserve bank forits account. (This is identical with the pre-sent procedure).

b - That upon receipt of advice from the Treasurythat notes shipped by the bank or by anotherFederal reserve bank for its account havebeen received in Washington entries be madedebiting "Federal reserve notes outstanding"and crediting "Mutilitated Federal reserve


•

3

St. 624g

notes forrfarded for redemptionll thus accomplish-ing the retirement of the notes with a minimumamount of bookkeeping. This proceclure would, ofcourse necessitate the Federal reserve agentsreducing on their books the amount of Federal re-serve notes outstanding. It would not requireentries in the redemption funds on the books ofthe Federal reserve agents, the Federal reservebanks or the Treasury of the United States.

The pronos,ld change in procedure has already been discussed in-formally 'rith the Treasury and our committee would like to have youradvice as promntly as possible as to whether or not the proposed planhas your approval. If the plan meets '7ith the approval of the agents,the matter will be taken up with the Treasury formally with a view tohaving the necessary instructions issued at the earliest practicabledate.

Very truly yours,

E. L. Smead, Chief,Division of Bank Operations.

LETTER TO ALL FEDERAL RESERVE AGENTS*

Enclosure.

4Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

Mr, McClelland

Mr. Smead

March 2g, 1929

SUBJECT: Redemption funds against Federal

reserve notes.

With regard to topic III.-D on the program for the next Governors'Conference "Redeelption fund for Federal reserve notes. Is there any needfor two separate funds?" I wish to comment as follows:

Section 16 of the Federal Reserve Act provides that the Board shallrequire each Federal reserve bank to maintain on deposit in the Treasuryof the United States a sum in gold sufficient in the judgment of theSecretary of the Treasury for the redemption of the Federal reserve notesissued to such bank, but in no event less than 5 per cent of the totalamount of notes issued less the amount of gold or gold certificates held bythe Federal reserve agent as collateral security. The same section alsoprovides that upon the request of the Secretary of the Treasury the FederalReserve Board shall require the Federal reserve agent to transmit to theTreasurer of the United States so much of the gold held by him as collateralsecurity for Federal reserve notes as may be required for the exclusive pur-pose of the redemption of such Federal reserve notes. It is apparent fromthe above that the Act requires the Federal reserve banks to maintain agold redemption fund with the United States Treasurer for the redemptionof Federal reserve notes but that the maintenance of an agents' gold re-do=tion fund is discretionary with the Secretary of the Treasury.

Under date of January 24, 1916, Mr. McAdoo, then Secretary of theTreasury, requested the Board to require each Federal reserve agent to .transmit gold equal to 5 per cent of the amount of notes against whichgold had been deposited with him, to the Treasury of the United States forthe exclusive TRIXDOSQ of the redemetion of such notes. The establishment ofredemption funds by the agents was necessary at that time as a number ofthe Federal reserve banks had deposited gold with the agents in an amountequal to the total amount of Federal reserve notes outstanding and there-fore were not required to maintain a gold redemption fund with the UnitedStates Treasury. From experience (luring the past several years there doesnot seem to be much prospect that any Federal reserve bank will in thefuture deposit gold with the agent equal to the amount of Federal reservenotes outstanding and consequently it is worthwhile to review the use madeof each of the redemption funds in order to ascertain whether the two fundsare necessary or desirable.

The present method of redeeming Federal reserve notes I understandto be as follows: When Federal reserve notes are returned to the Treasuryfor redemptioa by a Federal reserve bank, other than the bank of issue,settlement between Federal reserve banks is made in the geld settlementfund clearing. Upon receipt of notice from the Treasury that such Federalreserve notes have been received and package counted the Federal reserve

(St. 6248-a)


•

2

•G)13-1

banks and agents of New York and Chicago merely reduce on their books theaziount of Federal reserve notes outstanding. In the case of the other tenbanks the United States Treasurer charges the redemption fund of the agentand credits the redemption fund of the bank with the amount of notes re-ceived, and corres,2onding entries are made by the bank and agent in theirredem-ption funds, and in addition they red:.ce the amount of Federal reservenotes outstanding. Then notes are sent to the Treasury by the bank ofissue the Treasurer, in the case of nine of the banks, charges the redemp-tion fund of the agent and credits the redemption fund of the bank for theamount of shipment. In the case of the New York and Chicago banks theTreasury merely notifies the bank and the agent of the receipt of the Ship-ment and they make the necessary entries to reduce the amount of Federalreserve notes outstandin6. In the case of the San Francisco bank theTreasury notifies the Federal Reserve Board of the receipt of the shipmentand the Board charges the agent in the gold fund and credits the bank in thegold settlement fund.

In all of the above cases the work r!auld be simplified materiallyand a considerable amount of bookkeeping made unnecessary if all bankshandled the entries the same as do the Federal Reserve Banks of New York andChicago.

The only other redemptions of Federal reserve notes are therelatively small amounts which find their way into the Treasury mostlythrough banks in Washington. It is the present practice of the Treasury tocharge these notes to the ogents, gold redemption fund and this is the onlypurpose for which the redemption fund of the Federal reserve agent at NewYork is used. These redemptions could very well be made adt of the bank'sgold redemption fund.

:rem the above it would seem that there is now no real occasionfor the maintenance of two separate redemption funds. If one of the fundsis to be eliminated it would, under the Federal Reserve Act, have to bethe agents' fund and as the elimination of such fund would simplify materiallythe number of entries required at the Treasury and the Federal reserve banksits elimination would seem to be desirable.

(St. 6248-a)


CONFIDENTIAL'Not for publication \„_.)

EARNINGS AND MENSES OF FEDERAL RESERVE BANKS, JUNE 1929 St. 6258

Federal

Reserve

Bank

Month of June 1929 Jan. - June 1929Earnings from - Current expenses Current not

earnings Currentnet

earningsDividendsaccrued

Available forreserves

surplus andfranchise

tax*

Dis-countedbills

Pur-chasedbills

U, S.securi-ities

Othersources

TotalExclusiveof cost of

F.R.CurrencyTotal

Ratio toAmount paid-in

capitalPer cent

Ooston $402,507 $69,745 $30,783 $21,277 $524,312 $163,816 $182,413_ $341,399 40.0 i $1,819,665 $303,993 $1,482,040New York 1,007,977 76,732 155,458 168,969 1,409,136 528,093 730,990 678,146 14.3 4,810,134 1,637,289 3,129,106Philadelphia 353,115 43,696 60,324 21,669 473,304 168,323 185,348 293,456 23.1 1,916,228 449,775 1,414,242Cleveland 379,584 35,541 86,395 33,370 534,890 212,888 231,767 303,123 24.4 1,959,757 444,179 1,475,699

Richmond 232,471 13,252 4,877 14,258 269,358 119,468 129,748 140,110 27.6 758,764 135,322 518,175Atlanta 273,566 32,538 10,758 18,020 334,882 104,965 109,158 225,724 50.8 1,320,070 159,585 1,137,284Chicago 562,274 45,241 92,750 62,052 762,317 291,020 326,513 435,799 26.9 3,021,973 572,862 2,379,213St. Louis 204,961 2,639 45,896 9,142 262,633 113,415 119,352 143,286 33.5 886,397 162,006 1408,893

Minneapolis 62,184 12,054 30,775 21,243 126,256 77,347 84,712 41,544 16.5 315,272 91,879 203,737Kansas City 193,259 16,844 5,703 34,084 254,890 146,943 195,380 59,510 16.9 508,586 128,260 446,242Dallas 93,665 37,845 36,463 13,085 181,058 106,682 116,109 64,949 17.8 414,261 132,333 265,602San Francisco 235,214 57,179 33,055 19,954 350,402 201,705 225,987 124,415 13.4 1,263,009 328,910 896,361

TOTAL1 June 1923 4,005,777 443,306 598,237 437,123 5,489,W13 2,239,670 2,637,482 2,851,961 21.9

May 1929 4,022,791 676,458 509,902 186,494 5,395,645 2,197,195 2,680,581 2,715,064 20.5June 1928 3,723,159 774,888 701,480 271,310 5,475,837 2,185,134 2,265,927 3,209,910 27.9

Jan.-June 192923,179,159 6,197,351 3,637,205 1,277,1435314,291,150 13,226,635 15,297,034118,994,116 25.0 13,994,116 4,601,393 13,761,594____ ,_ ___ c__ _ -,r- ,,-.1. (' --ri ,,,,, ,,,, ,-,1 ,r 11,-,n ,,,,-. in nr-i ry,, 1, ,-,n nr,r. nn rInn ,n, lo, n ln cgnn 7,)C )1 lf-) el)In 7 t:n 7011/L/J.1 2 £o,7 JO7lJ,(C.) / t

FEDERAL RESERVE BOARDDIVISION Of BANK OPERATIONS

JULY 9, 1929

w.

VOLUME 193PAGE 108

*After adjustment for currentprofit and loss entries, pur-chases of furniture andequipment, etc.


1/MORANDTP1 11101La,,'":".DING MINI1.:UM CAPITAL LIMIVION

by Mr. Platt

ISlibsection k of Section 11 of the Federal Reserve Act — the subsectionrelating to the granting of trust powers to National banks — was as originally

a4t

enacted very short — only fcar lines. It authorized the Federal Reserve Board

"to grant by special permit to National banks Eonlying therefor when not in

contravention of State or local law, the right to act as trustee, executor,

administrator, or registrar of stocks and bonds under such riles and regula—

tions as the said -ooard may nrescribe."

I need not go into the difficulties of the administration of this broad

Power, or into the gation which followed. It is sufficient to say that

there was controversy over the meaning of the words "when not in contravention

of State or local law." The Board at first issued permits for the exercise of

trust powers to banks with a capital smaller than that required by State laws

in some States, and, as our records show, a few such national berIrs are still

exercisiS., or are authorized to exercise, the Powers then granted.

As a result of the onnoson of the State authores and as a result of

the litigation and the Board's own difficulties with regulations and adminis—

tration, the Act of September 26, 1918 greatly enlarged subsection k of Section

11 and both claed and limited the Boardle powers. The amendment nroviaed

among other things "that no permit shall be issued to any national banking associ—

ation hnving a capital and sarnlas less than the canital and surplus required by

State law of State banks, trust comnanies and cor-orations exercising such

powers," and in addon provided that "in passing unon annlications for permission

to exercise the powers enumerated in this subsection the Federal Reserve Board

may taae intocansideration the amount of ca,Atal and surplus of the a7nlying

bank, whether or not such canital and surnlas is sufficient under the circum—

stances of the case, the needs of the community to served, and any other

facts and cirmixstances that seem to itproner."

VOLUME 193PAGE 109


• - 2 •

The 3oard was prohibited from granting trust powers to banks with a

smaller ca--)ital than the State laws prescribed for State banks or trust

companies coillpetine., and the paragra,?h distinctly authorized the "Board to

require a larger capitalization than State laws recuired if thuaght advis—

able.

This at once raises the question whether the limitations of State laws

are in all cases adequate, and also raises the question whethere there is

good reason for the high canitalization required for trust powers in some

states, by comparison with others.

Twelve states require a minimum capitalization of at least $100,000,

three of them requiring $125,000. Fourteen other states require at least

$50,000, one of them $60,000. It thauld be added that in a few states where

the minimum reauirement is mach lower it is generally irmossible for banks

with the minimum requirement of capital to exercise trust powers because of

a high requirement of denosit of securities with the State Treasurer. For

instance, Illinois allows banks with a capital of $25,000 to exercise trast

powers in cities of less than 5,000 but its minimum reauirement for denosit

of securities is $50,000. We have given trust ?owers to ore $25,000 bank

in Illinois, but it is naturally not exercising them.

The following states require $100,000 or more as a minimum:

0alifornia. . .$125,000 New York $100,000Kansas 100,000 Nbrth Dakott... .. 100,000Maryland 100,000 Ohio 125,000Michigan (for all powers). 1E0,000 Pennsylvania.. 125,000Montana 100,000 West Virginia. .. 100,000New Jersey 100,000


S3

The following require $50,000,

IMP

or between $50,000 and $100,000:

Arkansas $60,000 Massachusetts ..$50,000Coloradao 50,000 Missouri 50,000Connecticut.. . 50,000 Minnesota. . 50,000Florida .. 50,000 Texas. 50,000Georgia (trust Cos.) 50,000 Washington 50,000Idaho 50,000 Wisconsin . 50,000Louisiana 50,000 Virginia 50,000

It will be noted that the staites with comparatively high requirementsand

are by no an all eastern states: California, Montana, North Dakota,/Kansas

ambaticack are among the states requiring $100,000 or more. Furthermore some

eastern states have low requirements, and one of them, Rhode Island, none at

all. In spite of the absence of any capital requirement for trust companies

Rhode Island has no National bank with a capital less than $200,000 exercising

trust powers and according to the Bankers 1 Directory hcs only four state trust

comoanies with a capital smaller than $200,000, the smallest of which has

capital of $75,000. We have granted one permit to a national bank with a canital

between $50,000 and $100,000 but it is not yet administering trusts. There is

obviously no reason, so far as the public convenience is concerned for small

trust companies in Rhode Island.

New Harenshire and Vermont each allow $25,000 institutions to administerin New Han shire

trusts bu4the National banks at present actively in trust business have a capital

larger than $50,000, with one exceiption. In Vermont two national banks of $50,000

capital and one of $25,000 are exercising trust powers. The 16 others are all

capitalized above $50,000. There is obviously little demand for small trust

comoanies in either of these states and the same is true of Lain, which has no

National banks of $25,000 with trust powers and only 3 with a capitalization of

$50,000.

In view of the high requirements of such western states as Montana,and

North Dalcota - $100,000 - states which are snarsely settled by comparison with the


New England states, it can hardly be maintained that the states generally be-

lieve that public convenience requires that every community should have an

institution authorized to administer trusts, and the fact that a majority of the

states require a capital of $50,000 or greater indicates that they believe

small banks are not as a rule so managed or officered as to be able to administer

trusts safely and successfully.

I have dealt with minim requirements only and have not included the sur-

plus requirements of State laws, because they seem as a rule unimportant - not

adding greatly to the minimum capital requirements. In a few states they never-

theless do much towards keening the small banks from trust business. Seventeen

states require banks exercising trust powers to eenosit security with State

authorities. The effect of these reauirements might be given further consider-

ation, but it seems unnecessary to devote more soace to them in the present

memorr-ndum.

State banking superintendents, as in California, have frequently exnressed

the opinion that small banks cannot "maintain -oraoer trust standards." There is

of course difference of opinion as to what constitute "proper trust standards" and

a dis-position in some states to insist that the bank should be large enough, or that

there should be sufficient trust business in the community to justify "the employ-

ment of a staff of experts in trust business." Without subscribing fully to this

view it is evident that the clerical force in the average small bank rarely contains

men who could qualify by any stretch of imagination as "exnerts" either in trust

business or in banking. It is the view of the directors of the Federal Reserve Bank

of rew York that a group of in may be well enough qualified 4,to conduct a local bank,

but may not be aualified to conduct trust business. The test they apply is the

question whether they would be willing to entrust the management of an estate or a

trust fund in which they were interested to the group. Certainly something more

in ability, in character and in financial stnnding should be required for conductingfiduciary business than for local banking.


• •5

That the small banks are much more licble to failure than large banks has

been amply demonstrated. Of the 5,004 bank failures from 1921 - 1928

inclusive, 4434, or 90.7 per cent were banks with a capital of less than

$100,000. A bank may fail without loss to the trusts administered by it, and

so far it does not appear that there have been any losses of trust funds due to

National bank failures, but this may be attributed in part to good lack and. Dart

to the fact that the banks having trast powers which have so far failed (61 in

all) have been comparatively few in number, and had not yet accumulated mach trust

business. More than 75 per cent of them were in fact not administerinz any trusts

at the time of failure. Lack of actual loss is furthermore a neEative argument

and Pdves little indtoation as to whether the trusts have been properly managed.

I have been informed that not much is yet known as to the securities in which the

tmst fune.s of failed banks were invested, "beyond the fc.ct that there have been

no complaints to the receivers. About all that is known is that univested funds

were not lost. Such uninvested funds might easily be lost if they were not

properly segTregated from the general funds of the bank, and small banks, where

trust -cusiness and commercial business must be handled by the same persons are less

likely to be careful about sezregation than bankm large enough to afford a staff

engaged solely in the trust isusiness. This is one of the chief conderns of our

Reserve Board trust department, and banks are constantly admonished and required

to maintain proper segreFation. An Iowa national bank that failed in February

was found to have an uninvested unsecured fund in its banking department only two

weeks before it closed.

To sunup; a majority of the states evidently regard a capitalization higher

than the minimum capitalization required for commercial banking necessary for

trust corporations "as a guarantee that trusts will be faithfully administered's'

End the states which maintain this position are as a rule the states with the

best banking standards. Shuald not the Federal Reserve Board s--k to raise the


6 WWI

standard for trust powers in states where it is now low, instead of grant—

ing trust powers solely with reference to the question whether similar

powers would be granted by the state banking authorities? By following the

latter course the 3oarduadouotedly runs the risk of furnishing an argument

towards the lowering of state standards. The advocates of n lowering o the

standard in a state where it is now high can point to the fact that in an

adjoining State the Federal Reserve Board endorses a lower standard by grant—

ing trust powers to banks with n small capitalization.

It would appear that bankers generally, as well as many of the State

superintendents of banking, are of the opinion that small banks ought not to

be permitted, or ought not to attempt, to administer trusts. By comnarison

with the large number of small banks in existence, only a few have ap3lied for

trust powers and although nearly all that have anplied have been given permission

to act, a large majority of them remain inactive. Of 76 $25,000 banks with trust

power 56 were inactive at last reports.Section 11—k, as amended in 1918 authorized the Board to considerilt.-le needs

of the community to be served." Without going so far as to say, as the Super—

intendent of Banking in California says, that public officials charged with the

duty of passing upon applications for trust powers "should satisfy themselves

that there is sufficient business in the community to justify the employment

of a staff of experts in trust business," the memorandum submitted by Governor

Young on November 8, 1928 goes much too far in the other direction by saying

that "outside of a few isolated and crossroad co=unities in the United States,

the need exists in every community." Evidently a majority of the states disagree

with this view, as I have indicated above, and it seems clear that the public

will be better served if trust business can continue to be administered by the

larger, well equipped institutions instead of being scattered among many small

institutions.There is probably some saving ofEmnense in the administration


7

•7

of an estate if the administrator or 0::eautor is a resident of the county

of the decedent, but there is no:hing to be gained by having the adminis-

trator or executor a small town bank when there is a larger, better equi-ned

bank.- only a few miles away. In the administration of trust funds generally,

apart from court trusts, and estates in process of settlement, the location

of the trustee bank is generally umi:Eportant to the beneficiaries. Certainly

the difficulties of supervision will be greatl: increased if the small banks

generally are permitted to administer trusts.

In the California case submitted, and in every case where the Board finds

a superintendent of banks administering the law so as to enforce a standard

higher than the minimum legal requirements, I believe the Board should adopt

the same higher standards. To do otherwise is obviously to force the state

banking authorities to lower thgir 'standards in order to me the competition

of the lower Notional bank.. or Federal Reserve standards.

Finally I believe we should ado-9t the policy of the majority of the

states and should provide by regulation that no national bank with a capital

less than $50,000 be granted permission to administer trusts, and further

that no national bank with a capital less than $100,000 be granted full trust

Dowers unless an excentional showing is made as to the bankls condition and

managerwnt, and as to the need of an institution exercising trust powers in

the community.


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