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205.001 - Hamlin Charles SScrap Book - Volume 204

FRBoard Members


B O A R D O F G O V E R N O R S

F E D E R A L R E S E R V E S Y S T E M

Office CorrespondenceTo_____The Files_____________________ Subject:

From_W C . .

Mr. Coe

Date August 1, 1941

After correspondence with Mrs. Hamlin (see letters of May 25 and June U , 1941) the items attached hereto and listed below, be-

• cause of their possible confidential character, were taken from Volume 2 0 4 of Mr. Hamlin’s scrap book and placed in the Board’s files:

VOLUME 204

P.ftge. 7 ,Letter to Gov. Young from J. H. Case re Open Market procedure. Page 8 .Confidential memo re domestic business and credit conditions.Page 9Preliminary memo for the Open Market Investment Committee. Pages 20 & 22Telegram to Gov. Young from Gov. Harrison re Bank of Interna

tional Settlements - and reply thereto.Page 21

Motion by C. S. Hamlin that Board interpose no objection to the proposed answer of said Bank to the inquisy made by the B. I. S.

7Letter to Mr. Hamlin from Gov.

Page 38Letter to Mr. Hamlin from Gov.

etc.

Seay re financial conditions, etc.

Harrison re financial conditions,Page f t

Memo to Mr. Hamlin from Mr. Smead re ”gold”.


F E D E R A L R E S E R V E B A N K O F N E W Y O R K

♦

M a y 1 5 , 1 9 3 0 .

D e a r G o v e r n o r Y o u n g :

0! h e d i r e c t o r s o f t h i s b a n k h a v e c o n s i d e r e d t h e F e d e r a l R e s e r v e B o a r d s l e t t e r o f M a r c h 3 1 , 1 9 3 0 , t o g e t h e r w i t h t h e e n c l o s e d d r a f t o f o p e n m a r k e t p r o c e d u r e a s r e v i s e d o n M a r c h 2 5 , 1 9 3 0 , a n d h a v e v o t e d t h a t t h i s b a n k a c c e p t p a r t i c i p a t i o n i n t h e o p e n m a r k e t p o l i c y c o n f e r e n c e u n d e r t h e t e r m s o f t h e p r o p o s e d p l a n a s t h e y i n t e r p r e t t h a t p l a n .

I n c o n s i d e r i n g t h e p l a n o f p r o c e d u r e i t h a s s e e m e d t o o u r d i r e c t o r s t h a t t h e r e m a y b e s o m e p o s s i b l e a m b i g u i t y w i t h r e g a r d t o t h e e x t e n t t o w h i c h t h e p r o p o s e d p r o c e d u r e i s a p p l i c a b l e t o F e d e r a l r e s e r v e b a n k t r a n s a c t i o n s i n b a n k e r s a c c e p t a n c e s a n d o u r d i r e c t o r s i n t e r p r e t t h e r e v i s e d p l a n a s n o t e s t a b l i s h i n g a n y d i f f e r e n t p r o c e d u r e w i t h r e s p e o t t o b i l l o p e r a t i o n t h a n h a s e x i s t

e d h e r e t o f o r e .

O p e r a t i o n s i n b a n k e r s a c c e p t a n c e s a r e , o f c o u r s e , g o v e r n e d b y a t e c h n i q u e q u i t e d i f f e r e n t f r o m o p e r a t i o n s i n g o v e m - n » n t s e c u r i t i e s . W h e r e a s t h e v o l u m e o f p u r c h a s e s o r s a l e s o f G o v e r n m e n t s e c u r i t i e s m a y b e d e t e r m i n e d d i r e c t l y , t h e v o l u m e o f h o l d i n g s o f b a n k e r s a c c e p t a n c e s o n t h e o t h e r h a n d i s s u b j e c t l a r g e l y t o a r a t e c o n t r o l w h i c h m u s t b e a d j u s t e d p r o m p t l y f r o m t i m e t o t i m e t o c h a n g i n g m a r k e t c o n d i t i o n s , a n d t h e r e f o r e d o e s n o t ^ J e c t i t s e l f t o d e t e r m i n a t i o n i n a d v a n c e b y a n o p e n m a r k e t p o l i c y c o n f e r e n c e .

W e a r e m e n t i o n i n g t h i s m a t t e r n o w o n l y b e c a u s e o f r i f t a i - r a t o a v o i d a n y p o s s i b l e m i s u n d e r s t a n d i n g i n t h e f u t u r e , a n d

n e w p r o c e d u r e w i t h r e g a r d t o b i l l o p e r a t i o n s .

F a i t h f u l l y y o u r s ,

(Signed) J. H. Case, Chairman

H o n . R o y A . Y o u n g ,Governor, Federal Reserve Board,W a s h i n g t o n , D . C .

\ \


/ VX-6S05

F E D E R A L R E S E R V E B O A R Dl • STATEMENT FOR THE PRESS

For release in Morning Paper Saturday, May 24, IS30.

The following summary of general business and financial conditions in the United States, based upon statistics for the months of April and May willappear in the forthcoming issue of the Federal Reserve Bulletin and in the monthly reviews of the Federal reserve banks.

Industrial activity increased slightly in April from the rate prevail

ing in March. Factory employment declined by the usual seasonal amount,

while factory payrolls showed a smaller reduction than usual. Wholesale

prices continued to decline in April and the first half of May. There was

a further easing of open-market money rateg.

Production— Production in basic industries in April was slightly larg

er than in March and the Board's index, which makes allowance for the usual

seasonal changes, shows an increase of abdut 2 per cent, offsetting a large

part of the decrease in March.• " « l

Output of automobiles showed the usual seasonal expansion. Steel out

put declined seasonally in April and the early part of May. The output oft

silk textiles was considerably reduced, and woolen mills curtailed opera

tions, though less than seasonally. Cotton mills were more active in April

and there was some increase in stocks. In the first half of May, however, a

program of curtailment was instituted in the industry.

In comparison with the first four months of 1929, a year of exception

ally active business, production was smaller in almost all major branches

of industry, with the exception of tobacco. In comparison with 1928, however,


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■ '■■” •;• ’ ' ,* t .vour.gia>fV>t: § the-Hsfcomcbile, petroleum. antJ'- sil'-t indu*itkje3 , slight-■ ^ • *y ty 0 £ $ $ ty ' ’■' ■ ■'"$'\ . v #?? ’•'̂ rnK*^ "**'

ly smaller in sueel and cdal, and considerably smaller in cotton and wool• * * ’ ’ - ,

textiles, ilour, meatpacking, automobile tires, and lumber.

Building contracts awarded during April, according to the F. W. Dodge

Corporation, were S per cent larger than in March, reflecting further expan

sion in awards for public works and utilities, and some increase in residential

construction, largely seasonal in character. In the first two weeks in May

there was a further increase in building activity. In comparison with 1929,

awards in the first four months of. the year were 17 per cent smaller, re

flecting chiefly the continued small volume of residential building, which

more than oft set increases in public works and in utility construction.

Employment and payrolls— Factory employment, which had been decreasing

since last September, declined by about 1 per cent in April, which represents

the usual development for that month, while the reduction in factory payrolls from March to April was smaller than usual.

Distribution Department store sales increased during the month by an

amount estimated to be slightly larger than is accounted for by the late Easter holiday.

The value of foreign trade decreased further in April, and for the firstI

four montns of the year exports were about 2 0 per cent smaller than a year ago,

when trade was exceptionally active. In part this decline reflected the lower level of wholesale prices.

Wholesale prices— An increase in wholesale prices in the first week in

April was iollowed by a substantial decline which continued into May-and

Drought the level of prices to the lowest point in a number of years. Prices

of important raw materials, such as wheat, cotton, and silk declined during

most of the period, but steadied somewhat around the middle of May, while


“ A

X-66G

prices of silver, hides, and coffee were comparatively stable. There were

fairly continuous price declines in steel, sugar, raw wool, and the textiles.

Conner prices were reduced further early in May, hut recovered somewhat fol

lowing large purchases for domestic and foreign consumption.Bank credit— Loans and investments of member banks increased by about

$160,000,000 in the latter half of April, but declined by almost that amount

in the first two weeks in May, both movements reflecting chiefly fluctuations

in loans on securities. Investments increased further, while "all other"

loans continued to decline, and on May 14 at $8,530,000,000 were the smallest

since 1827. '*■The volume of reserve bank credit declined further by $125,000,000 be

tween the weeks ending April 19 and May 17, largely as a result of the

addition of about $65,000,000 to the stock of monetary gold and of a further

substantial reduction in the volume of money in circulation, which reflected

chiefly smaller volume of payrolls and declines in retail prices. The Sys

tem’s holdings of bills declined, while United States securities and dis

counts for member banks showed little change.Money rates on all classes of paper declined further in May. The dis

count rate of the Federal Reserve Bank of New York was reduced from 3 1/2

to 3 per cent on May 2, and that at the Federal Reserve Bank of Boston from

4 to 3 l/2 per cent on May 8.


The Conference has o one id ©red a preliminary memorandum reviewing

present trends in world trade, ooaieroe and commodity prices. .articular

and Its probable relation to the decline in cor/rjodity prioss in this country.It appears to the Conference that conditions in business, hgri- \

culture and trade are still seriously depressed, not only in this gauntry

but evidently throughout the rest of the world as well* It is th% sense

of the Conference that those conditions merit continuous careful observation by the Federal Reserve system in order that the System will be pre

pared to act promptly in the event that conditions further develop in suc*i

a way as to mates action seem advisable*

Conference that any affirmative recommendation as to Open Market operations

is advisable just now* But it is the sense of the Conference that if the

situation so develops as to require an Open Market operation by the System

the members of the Conforonee will be prepared to reconvene or else, if a meeting of the whole Conforonee is not practicable, to act promptly on

consideration was given to the rapidly declining volume of our export tradeV _ .......... ^

In the present circumstances, however, it does not appear to the

recommendations of its executive Committee*

Mfcy 22, 1050

VOLUME 20A PAGE 8


May 20, 1930

PRELIMINARY MEMORANDUM FOR THE OPEN J1ARKET INYESH'IENT COMITIES

Reports on business activity during the two months since the last meetingof the Open Market Investment Committee have, in general, shown no material evidence of recovery. After allowance for the usual seasonal increase, final figures for March showed some reduction from February in general production and trade, and April figures apparently will show a slight increase, but, in general, there seems to have been little advance from the lowest levels reached during the recession

which began last autumn.

rather than better. Factory employment, for example, failed to show the customary spring increases, and the Federal Reserve Board’s seasonally adjusted index has declined each month to a new low point for recent years. The bond market, which at the time of the March meeting had been showing a strong advance, has since had a setback and, although there has been some improvement accompanying the easy money conditions of the past three or four weeks, the recent condition of the bond market cannot be called better than fair. Commodity prices, after some indication of a slightly finner tendency in the latter part of March, have subsequently turned downward again and the weekly index of 285 commodities computed by the Federal Reserve Board has declined gradually, but steadily, to new low levels since

1916.COLMODITY PRICES

comparison with the index for March 28, and also with the index for July 26, 1929, which marked the high point just preceding the decline which began last August. This indicates that there has been a decline of about 2 per cent since March 28,

and approximately 10 per cent since last July.

In some directions conditions appear to have become somewhat worse,

The tabulation below shows the Board’s latest weekly commodity index in

VOLUME 20A PAGE 9


2

(

July 26 1929

General Index - Federal Reserve Board 98.9Wheat 1.47 5/8Corn 1.06Hogs 11*73Steers 14.92Hides 0.18Sugar, refined 0.0550Cotton 0.1870Wool, domestic, weekly average 0*8817Silk, weekly average 4.763Rubber 0.21 1/4Pig iron* 18.42Finished steel* 0.02412Scrap steel 18.75Copper -*18Lead .0675Tin .47 1/16Zinc .0680Petroleum 1.727

* Iron age composites for preceding Tuesdays.

Mar, 28 May 161930 1930

91.2 89.2 (May 9)

1.06 3/4 0*81 3/8 9.9513.25 0.14 1/4 0.0500 0.1600 0.6874 4.258 0.15 1/217.750.0231216.25 0.18 0.0575 0.37 5/8 0.0485 1.489

1.06 1/2 .80

9.97 1/2 12.33 0.14.0490 .1650

0.6518 3.812 .14 1/8

17.58 0.02228 15.50 0.13 0.056 0.32 0.04641.522 (May 9)

This decline has not been confined to any one group of commodities.As the tabulation indicates, while some of the most severe declines since last July have been in agricultural products, there have been substantial declines also

in metals and other industrial raw materials.

SECURITY MARKETSJust preceding the last meeting of the Committee on March-24 and 25, the

bond market showed a rapid increase in the volume of trading, and a rapid rise in prices. Apparently this represented, in part, a response to the unusually easy money conditions which developed for a short time during the March tax period because of the temporary excess of Treasury disbursements over collections. With the firmer money conditions that developed in the latter part of Lferch and the early part of April, there was a reaction in the bond market; the volume of bond trading on the New York Stock Exchange declined from around $20,000,000 a day to

around $10,000,000; a large part of the March rise in bond prices was canceled; and there were reports of a considerable accumulation of undigested bonds in the


3 l1

hands of security dealers.Accompanying the easier money conditions of the past few weeks, however,

bond market conditions have shown some slight improvement. There has been no sustained increase in the volume of bond trading on the exchange, but it is reported that the accumulation of bonds has been to some extent distributed, and that there has been a little better distribution of new offerings, which have beenin large volume. Bond prices, however, have not reached the levels of the third

week in March, and the market is not strong.The following is a summary of long-term bond issues during the first

four months of 1930 compared with the corresponding period in the two precedingyears. This shows that there has been a larger volume of domestic corporate bond

issues than in either of the two previous years, an increase also in foreign corporate issues, and a considerable revival in issues of domestic municipalities and states, and also in foreign governmental borrowing through the bond market.The increased issues reflect in part the carrying out of financing postponed by reason of adverse market conditions last year, and also represept the partialfulfilment of pledges made to the President by corporation and public officials. An analysis of the issues indicates a large part of the proceeds are being used directly in undertakings involving construction or other undertakings involving

the employment of labor and the purchase of materials.(First four months each year; figures in millions of dollars;

refunding issues excluded)1928 1929 1930

Domestic Corporate Municipal and State Foreign Corporate Foreign Government

859 785 1,279477 338 458163 157 238287 38 208

Total 1,786 1,318 2,183

Although recent money rates have made bond yields more attractive than for twoyears past there still appears to be reluctance on the part of commercial banks to

increase their bond holdings materially.


4Notwithstanding the somewhat finner money conditions during the latter

part of March and the early part of April, stock prices continued to rise during that period, and at the highest point reached early in April, a general index of stock prices showed a recovery equal to nearly 60 per cent of the decline from the highest level reached in 1929 to the lowest point of last November, Subsequently, although money conditions have eased, there has been a substantial decline in stock prices, and recently the volume of trading has diminished considerably.MONEY RATES

The accompanying table shows the principal changes in money rates compared with those shown in the memorandum presented at the March meeting of the

Committee:March 21 April 16 May 20

Call loan renewals 3 4 3Time money, 90-day 3 3/4-4 4 1/4 3 1/4-3 IfeCommercial paper 4 3 3/4-4 3 3/4Bills, 90-day 2 1/2 3 2 3/8Treasury certificates

Sept. 15 2.65 3.11 2.22Dec. 15 2.81 3.19 2.63

This shows a distinct filming between March 21 and April 16 in a majority of rates, including call money, time money, and bankers acceptance rates, and yields on short-dated Treasury certificates. During that period there was no evidence of any considerable surplus of funds seeking short-term investment in the New York money market. In fact, the advance in rates reflected some slight difficulty in meeting the demand for funds, a difficulty which was further evidenced by a considerable increase in sales of bills to the New York Reserve Bank under repurchase agreement. During the latter part of April money conditions eased slightly, reflecting chiefly a substantial inflow of gold, and this movement toward easier conditions was accelerated early in May by reductions in the rediscount rate of the Federal Reserve Banks of New York and Boston, and by a further decline in the amount of currency in circulation. Even during this later period, however, there were only a few days on which the New York banks were completely out of debt,


5

and surplus funds in the market were rather promptly absorbed by reductions in the

system bill portfolio.FEDERAL RESERVE CREDIT

Funds made available through gold imports or currency reduction were used to reduce the amount of Federal Reserve credit in use, rather than for any expansion in credit, as indicated in the following figures:

(In millions of dollars)March 24 April 16 May 17

Discounts Bills bought U. S. securities Other securities

219 214 227 241 302 174 533 535 529 9 10 7

Total 1,002 1,061 938

Discounts for member banks show little change. Between March 24 and April 16 the bill holdings of the System increased $61,000,000, largely in sales contracts, accompanying firmer money conditions. Subsequently, gold imports and the continued reduction in the amount of currency in circulation made available

funds which were used to reduce bill holdings over §100,000,000.

MEMBER BANE CREDITSince the statement date just preceding the last meeting there has been

a comparatively small increase in the total loans and investments of weekly re

porting member banks, as follows:(In millions of dollars)

Amount onMarch 19 May 14 Change

Loans on securities All other loans Investments

8,054 8,246 + 192 8,793 8,560 - 233 5,667 5,811 + 144

Total 22,514 22,616 + 102

One factor in the recent trend of bank loans, no doubt, is the fact that

municipalities and, to seme extent, corporations, which last year were unable to obtain long-term loans under favorable conditions through the bond market, and


6

consequently relied upon short-term bank loans, this year have sold long-term bonds and have used part at least of the proceeds to repay bank loans. To the extent that the increase in security loans has been duo to borrowing by security dealers to carry such securities pending distribution, the loans which would now be included in ”loans on securities” may be serving the samo purpose as last year, when they would have been included among the ”all other loans.”

Further light on recent changes in bank security loans is contained in the tabulation on the following page. Comparisons in this tabulation are between October 2 of last year, when the highest point in the weekly brokers loan figures was reached, October 30, immediately following the first severe break in the market and consequent shifting of loans; December 24, when the lowest recent point in total brokers loans was reached; February 26, when the 1930 low for reporting bank security loans was reached; and May 7, which is the last date for which complete

figures are now available.This tabulation indicates that, although the security loans of weekly

reporting banks are now higher than on October 2 of last year, there has been a net liquidation of nearly 4 billion dollars of loans on securities during the intervening period. The analysis indicates further that, although the loans of

weekly reporting banks to brokers for their own account have increased nearly $1,100,000,000 since December 24, practically $400,000,000 of this amount has served simply to replace loans to brokers withdrawn by lenders other than domestic banks, and the remainder has replaced loans made by reporting banks directly to their customers, so that there has been no net increase in total security loans since December 24, notwithstanding the fact that the weekly reports of brokers loans have indicated a net increase of about $750,000,000. Even since February 26 a substantial part of the increase in the loans of reporting banks to brokers has simply offset continued withdrawals of funds from brokers loans by ”other” lenders, and continued reductions in security loans made by the reporting banks directly to

their customers.


7

The total reduction in loans for "others” indicated by this analysis is nearly $3,400,000,000 since last October, not including the reduction of unknown amount in loans to New York brokers by customers of out-of-town banks. The reduction did not all take place last autumn, but has continued during the past few months, and it seems quite possible that it may have some bearing on the continued decline in the "commercial” loans of reporting banks. That is to say, the steady withdrawal of funds from the call loan market by corporations and other lenders may well have provided current funds for business transactions, which otherwise might

have been borrowed at banks.


8

(In millions of dollars)

Bank Loans to brokers Oct, 2 Oct, 30 Dec, 24 Feb* 26 May 7

L©ans to New York City brokersNew York City reporting banks, own account Other reporting banks, own account Loans to brokers outside New York City,

all reporting banks, own account

1,025430862

2,021285913

794297700

906503583

1,560662652

To tal 2,288 3,219 1,791 1,992 2,874

Loans to Brokers from Other Banks and their Customers* 1,396 720 419 477 461

Loans to Brokers from Other LendersReported by New York City banks Reported to Stock Exchange^

3,9071,472

2,464796

1,767620

1,556639

1,341654

Total 5,379 3,260 2,387 2,195 1,995

Total Reported loans to Brokers 9,093 7,199 4,597 4,664 5,330

Security Loans of Reporting Banks to Customers Other than Brokers 5,508 5,959 6,140 5,649 5,285

Total Reported Security Loans 14,601 13,158 10,737 10,313 10,715

*Loans placed by New York banks for out-of-town banks less brokers loans of reporting member banks in cities otherthan New York.

xEnd of month figures nearest dates specified*


CONFIDENTIAL

REPORT OF THE SECRETARY OF THE OPEN MARKET INVESTMENT COMMITTEE TO THE MEETING OF THE COMMITTEE AT WASHINGTON ON MAY 21, 1920

There has been no change in the total amount of holdings of government securities in the System Special Investment Account since March 24, 1^30, the date of the last meeting of the committee, the total remaining a t --------------------------------------------------- $327,300,000

iiowever, some transactions have been effected in the account which consisted almost entirely of a sale of a block of Treasury notes to the Treasury, and some exchanges of issues

effected in the market, as follows:i

1. $10,000,000 - 3 1/2% Treasury notes due March15, 1930-32 were sold to the Treasury Account Sinking Fund which sale was replaced by purchase of a like amount of 3 1/2%Treasury notes due September 15,1930-32,

2. $16,000,000 - Fourth 4 1/4% Liberty Loan bondswere sold in the market in exchange for a like amount of 3 1/2% Treasury notes due 1932 at a two point spread in price in our favor.

3. $20,000,000 - 4 7/8% certificates of indebtednessdue June 16, 1930 were exchanged in the market for a like amount of Treasury bills due July 14, 1930.

4. $26,000,000 - Treasuiy bills due May 19, 1930redeemed on that day and replaced by purchase in the market of a like amount of Treasury bills dated May 19, 1930 due August 18, 1930.

At the request of several of the Federal reserve banks their participations of government securities in the System Account were increased, such sales being made from the Federal Reserve Bank of New York’s participation in the account. The dates, banks and the amount that each bank’s


participation was increased are as followsAmountDate

March 28, 1930 April 10, 1930 May 9, 1930 May 14, 1930

Reserve BankBoston Cleveland Kansas City Minneapolis

5)10,000,00015.000. 00010.000. 000 5,000,000

The Federal Reserve Bank o£ New York is still holding in itsinvestment account approximately $113,000,000 of short-term governments which were purchased in the market last fall, as previously reported*At the present time these securities consist of the following issues:

U. s. Treasury Bills 5= CD << H V 1930 $ 17,500,000t» « »» V tt AUg. 18, 1930 28,500,0004 7/8% Cert, of Ind. tt June 16, 1930 23,751,0003 1/8% " " ti tt Sept. 15, 1930 2,066r0003 1/4% " " « t» Dec. 15, 1930 1,115,0003 1/2% Treasury Notes " March 15, 1932 400,0003 1/2% " tr tr Sept. 15, 1932 20,821,8503 1/2 % " tr tr Dec. 15, 1932 19,121,150

Total 5113,275,000

TRANSACTIONS RELATING TO SYSTEM PURCHASES OF BANKERS ACCEPTANCES

The following Federal reserve banks are participating at present

in the System purchases of bills:* Boston New York

* Philadelphia ClevelandR i chmond Atlanta

Chicago St. Louis Minneapolis Kansas City DallasSan Francisco

* Participations at present confined to purchases in own market.

In order to accommodate the Federal Reserve Bank of Atlanta with a special allotment of bills which they requested, special sales were made

to them as follows:March 21, 1930 April 10, 1930 April 17, 1930

52, 500,000 5,000,000 5,000,000


3Of those amounts, $10,000,000 was sold from the portfolio of the Federal Reserve Bank of New York and the balance of $2,500,000 was purchased in the

market.

Attached are statements showing: *Exhibit "A" - Outright holdings of government securities

by individual Fee oral reserve banks, also their participation in system Special Investment Account, both as of close of business May 14, 1930, and the classification of issues held in the System Account by maturities, as of close of business May 19, 1930.

Exhibit WB" - Bills purchased outright by the Systemby weeks from January 3, 1929 to May 14, 1930.

Exhibit "C" - Earning asset holdings of all Federalreserve banks May 14, 1930, as compared with previous week and May 15, 1929; also weekly average of earning assets from January 2, 1930 to May 14, 1930, as compared with corresponding period 1929 and entire year 1929*

Exhibit - Actual net earnings of all Federal reserve banks for the first four months of 1930.

Exhibit "E" - Approximate amount of net profit that wasrealized on various sales of United states Government securities in the System Account during period October 31, 1929 to May 19, 1930; also the approximate amount of net profit represented by the difference between the book values and the market bid prices, as of May 19, 1930, of the United States Government securities held in the system Special Investment Account.


Exhibit "A"

STATEMENT SHOWING HOLDINGS OF GOVERNMENT SECURITIES BY FEDERAL RESERVE BANKS(Excluding Sales Contracts)

Outright Holdings of Government Securities by Federal reserve banks as at the close of business May 14, 1930

Participation by Federal reserve banks in System Special Investment Acct. Government Securities as at the close of Business May 14, 1930 Total

Boston $ 706,600 $ 39,616,000 $ 40,322,600

New York 112,797,650 63,535,500 176,333,150

Philadelphia 15,010,100 31,114,500 46,124,600

Cleveland 10,165,800 39,830,500 49,996,300

Richmond 1,152,100 11,487,500 12,639,600

Atlanta 2,605,800 6,227,500 8,833,300

Chicago 19,927,400 50,456,500 70,383,900

St, Louis 8,625,000 10,642,500 19,267,500

Minneapolis 7,679,400 15,766,000 23,445,400

Kansas City 503,000 15,921,500 16,424,500

Dallas 9,987,550 15,649,500 25,637,050

San Francisco 9,642,650 27,052,500 36,695,150

Totals $198,803,050 $327,300,000 $526,103,050

CLASSIFICATION OF ISSUES OF GOVERNMENT SECURITIES HELD IN THE SYSTEM SPECIAL INVESTMENT ACCOUNT

__________CLOSE OF BUSINESS MAY 19, 1930________

4 7/8# C/I due June 16, 1930 $ 23,360,000U. S. Treasury Bills due July 14, 1930 20,000,000T» »» ♦» »» * Aug. 18, 1930 36,000,0003 1/8# C/I due Sept. 15, 1930 69,075,0003 1/4# " " Dec. 15, 1930 65,800,0003 1/2 # T/N " Mar. 15, 1932 14,055,0003 1/2# " " Sept. 15, 1932 54,735,0003 1/2# " " Dec. 15, 1932 39,825,0004 1/4# 4th L/L bonds Oct. 15, 1938 4,450,000

Total $327,300,000


EXHIBIT "B'BILLS PURCHASE) OUTRIGHT BYjsYSTffi BY WS3CS m JA-'̂ UARY 3 JQ DECaagR 31. 1929 AND PRO!/ 2 TO VAY 1*.

( OOO Or i i1930, inclusive

Week e New York;o t -iiIrdir.r 3£eton Benks Deelere E M lu Cleveland Richmond Atlanta Chicago Minn. P ell as Sen Fran,

-1929-Jan, 9 ♦15,801 ♦ 8,624 • 7,634 • 16,308 ♦ 2 ,9 25 -0 - ♦ 150 - 0 - ♦ 2,782 -0 - • 504 ♦10,059

16 8,792 18,089 7,047 25,136 3,058 1,251 547 127 1,727 - 0 - 747 3,29723 4,605 14,543 10,624 25,167 2,144 539 357 -0 - 1 ,55* -0 - 509 1^68430 1,148 14,893 1,107 16,000 2,524 - 0- 1,134 1,430 290 -0 - 672 '972

Feb. 6 1,726 16,670 1,694 18,564 3,155 717 75 112 883 - c - 505 1,29813 550 9,382 5,346 14,728 1,129 1 ,3C3 568 125 577 -0 - 1,069 5,$8220 816 25,293 5,099 30,392 553 476 250 201 1,0 8 8 1 j 517 2 ,7042? 1,564 8,457 705 9,162 969 253 •0- 1,201 1,349 - 0 - ____'983 '263

Mw. 6 1,579 13,256 2,244 15,500 3,311 418 515 *05 592 -0 - 729 1,93513 6,389 2,018 5,567 7,585 2,124 1,510 150 200 623 - 0 - 1,093 2,53920 1,506 9,752 7,508 17,260 1,227 863 469 1,302 25 - 0 - '808 3,29427 4,701 5,648 12,097 17,745 516 1,424 1,305 657 621 - 0 - 602 /,4C0

A p ril 3 929 9,073 6,584 15,657 1,410 498 275 340 95 -0 - l t 012 35310 1,665 6,732 2,531 9,263 1,639 -C - 228 403 14 - c - i ' 490 95217 4,281 3,525 2,504 6,029 1,594 2,042 134 778 20 - 0 - '642 24124 2,496 8,321 416 8,737 2,554 - 0 - 25 1,214 218 - 0 - 722 338

Vex 1 3,050 13,843 8,654 22, 457 2,387 - 0 - -0 - 524 539 - 0 - 714 1,0368 1,442 7,408 191 7,599 1,689 250 278 1,287 192 - 0- 1,132 1^69615 3,230 4,385 9,634 14,019 1,399 8 101 761 728 - 0 - 1,682 32322 1,742 6,382 i i ,89e i e ,280 1,623 -C - 400 650 830 -0 - 1,308 1,62629 1,442 3,834 6,390 10,224 1,9*6 502 100 806 1,480 1,101 1,742

June 5 1,594 4,856 2,902 7,758 2,113 - 0 - 200 1,1*5 204 - e - 518 84712 1,040 4,008 1,355 5,363 2,177 -0 - 225 991 271 - 0- 969 74819 114 2,610 2,e63 5,693 991 792 - 0 - 303 *50 - 0 - 654 1,76926 339 4,374 945 5,319 877 1,050 313 178 648 -0 - 874 769

Ju lx 3 1,686 15 6,606 6,621 1,305 - 0 - -0 - 531 629 - 0 - 6l8 35410 - 0 - - 0 - 1,270 1,270 *5 - 0 - - 0 - 851 50 - 0 - 720 - 0 -17 604 847 -0 - 847 124 - 0 - - 0 - 729 30 - 0- 1,210 70024 598 1,575 8,654 10,229 771 - c - *58 575 526 - 0 - 1,125 36931 864 4,831 -0 - 4,831 588 - c - 147 298 61 - 0 - 5C0 898

Aug. 7 720 3,031 -0 - 3,031 1,090 - c - - 0 - 143 470 - 0- 390 6814 4,857 2,038 6,7C7 8,745 1,356 - c - 380 365 1,326 -0 - 738 1,73721 2,261 3,929 2,819 6,748 1,558 104 - 0 - 354 1,830 - 0 - 825 2,71028 2,686 6,585 5,926 12,511 3,644 598 85 1,060 217 514 2,492

5«pt. 4 1,411 2,919 8,265 11,184 1,856 1,190 100 1,563 324 - 0— 993 2,06911 1,334 16,779 21,431 38,210 2,023 - 0- 350 2,089 425 mQm 814 868IS 1,131 13,090 13,974 27,064 2,202 2C0 160 1,140 631 - 0 - 501 1,83925 357 16,558 5,151 21,707 2,304 75 358 208 614 -0 - 1,041 2,314

Oct. 2 1,014 14,113 52,986 67,099 2,938 479 65 682 476 - 0 - 866 2,3179 1,125 9,828 41,463 51,291 1,961 -0 - 166 2,792 1,970 686 2,789

16 962 13,966 ie ,96 3 32,929 1,9*3 460 -O- 1,847 551 -0 - 371 2,33423 1,744 2,323 30,092 32,415 952 351 316 1,618 348 -0— 757 93330 5 6,053 -0 - 6,053 284 -0 - 995 560 746 e-C- 204 1,013

Nov, 6 3 12,862 -0 - 12,862 161 - c - - 0 - 1 ,044 3*9 -Aw. 752 25013 18 77 5 200 975 707 - c - - 0 - 1,460 387 217 76020 12 311 1,785 2,096 336 -0 - 50 1,210 579 •0- 421 1, *9227 383 - 0 - - 0 - - 0 - 573 100 364 328 383 2,151

Deo. 4 1,351 2,820 4,171 141 - c - 715 645 550 -0 - 400 68611 1,418 11,650 9,9*4 21,59* 1,285 97 737 3,657 -0 - 362 3,21018 84 17,630 19,750 37,380 1,220 - 0 - - 0 - 770 1,*15 -0 - 654 1,41724 1,187 8,974 297 9,271 565 - c - 177 1,133 2,128 -0 - 387 1,47831 1.649 7.99 5 33.298 41.293 2.629 135 3.148 3.392 - c - 423 2.093

TOTALS ♦100,414 ♦408,402 ♦416,010 ♦822,412 ♦80,617 ♦17,353 ♦12,653 • 43,056 ♦*1,909 ♦39,430 ♦88,850

-1930-Jen. 8 2,359 25,766 7,338 33,104 1,385 - 0 - 599 1,790 615 -0 - 661 2,248

15 3,359 20,539 30,900 51,439 1 , 8 4 6 - 0 - 650 303 975 -0 - 483 4,96122 1,627 9,398 i 4 , i e 7 23,585 1,608 - c - 473 965 1,107 -0 - 592 3,76129 563 10,740 4,834 15,574 1,160 -0 - - 0 - 942 137 -0 - 356 1,913

Feb, 5 172 37,970 14,294 52,264 1,813 - 0 - - 0 - 769 *69 -0 - 595 2,12911 •o* 6 ,0 7 3 8 ,9 7 3 1 5 ,0 4 6 544 - 0 - 426 361 - c - 402 43019 613 37,852 12,431 50,203 078 - 0 - 403 96 730 70S 550 2,90 226 2,175 30,381 15,677 46,058 2,585 • c - 50 323 389 547 410 1,930

Kerch 5 900 2 8 ,4 6 4 3,858 32,322 1,150 -0 - 283 496 721 854 316 5, *2712 301 8,714 2,387 11,101 279 -0 - 514 223 2,960 443 98419 85 13,650 4,567 18,217 698 -0 - 100 -0 - 590 - 0 - _ 281 15226 1,009 7,404 - 0 - 7,404 137 - 0 - 162 -0 - 168 -0 - 115 135

A pril 2 3,542 18,474 8,206 26,680 1,999 - 0 - 269 125 ♦,7*9 335 633 3,4289 6,455 6 ,4 1 2 2 6 ,1 8 6 34 ,59! 3,515 - 0 - - 0 - - c - 853 -0 - 190 2,865

16 3,428 19,450 24,203 43,653 1,442 •G* 454 468 507 -0 - 418 2,19423 2,122 7,498 19,295 26,793 1,964 - 0 - - 0 - 21 480 1,780 57 1,43330 1,586 16,613 371 16,984 245 - c - 109 220 717 366 132 1,714

Vex 7 824 2,341 3,562 6,403 - 0 - -0 - 102 -0 - 669 - C - 108 43414 332 23.380 9,917 33,297 _ 143 -0 - - 0 - - 0 - 1.365 - 0 - 138 1.225

TOTALS •31,452 • 3 3 3 ,1 1 9 • 2 1 1 ,5 6 6 ♦544,705 ♦23,283 - 0 - ♦4,168 ♦ 7,167 ♦18,562 ♦*.590 ♦6,880 ♦*0,265

INCREASE or DECRZASZ Dealerain Holdings Operations

Including Sal os Contracts With OtherMew York System D is tr ic t a

Total a Operations Operations Received Sent

♦ *8,329 ♦ 26,633— ♦ 7 ,258- ♦ 1,557 ♦ 9,30844,684 10,283- *,139* 5,574 7,42236,559 26,014- __27,C21- 2,573 5,60424,170 15,620- 18 ,609- 2,352 J.060

27,035 17 ,956- 24 ,867- 2,010 2,03125,631 18 ,448- 19 ,684 - 327 5,58237,997 25,738- 35 ,422- 903 6,257

— 15,744 15 ,273 - -21 ,561- 3,641 3,575

24,984 14 ,396 - 29 ,431- 2 ,5 a 4,92022,213 12 ,823 - 21 ,543- 3,575 5,24326,574 35 ,520- 46,263— 2,556 5,45930,971 17 ,464 - 23 ,411- 1,866 17,510

20,569 18 ,573 - 33 ,724- 3,490 6,27415,294 13,862- 17 ,386- 3,436 2,35315,761 13,772- 16.29C- 4,730 3,74416,304 2,116* 148* 2,421 3,557

30,747 20,847* 29,246* 1,9C4 3,65315,567 13 ,132 - 13 ,240- 2,311 1,77522,251 8 ,7 59 - 11 ,074- 2,080 2.9C426 , 459 5 ,0 63 - 8 ,1 21 - 1,884 2,21119,343 15,983- 20 ,067- 4,747 2,403

14,379 4,566* 5 ,1 7 2 - 5,083 3,20311,884 6,402* 1,370* 6,212 2,08210,766 22,822- 27 ,085 - 3,000 4.9C010,367 762- 4 ,1 9 3 - 2,547 4,945

11,744 3 ,2 8 2 - 8 ,9 1 7 - 2,080 10,4632,936 2,137- 7 ,9 46 - 3,836 2974,244 1,793* 1,662* 7,227 2,973

15,151 1 ,4 26- 1,204* 2,6*6 6,5188,187 6,197* 5,725* 4,785 1,715

5,912 2,361* 4,591* 391 2,08319,504 32,877* 38,727* 2,938 4,85316,410 3,9*9* 14,252* 2 ,0C3 4,12323,307 17, .515* 24,377* 3,824 1,323

20,690 21,232* 26,402* 1,125 1,40346,113 32,231* 39,313* 5,645 3,25234,868 17,408* 18,874* 5, "33 3,09828,978 20,267* 22, 821* 6,220 2,860

75,936 54,263* 58,884* 4,070 3,12962,800 4,065* 10,333* 1,516 1,537*1,297 24,896* 26,959* 3,457 4,31039,434 22,846* 19,273* 10,067 5,2999,860 29,993- 39 ,499- 6,629 3,754

15, *21 *,698- 9 .5 K - 3,495 1,15 5*,524 25, 230- 30,662- 3,577 1,0586,198 9 ,9 9 * - 15 ,681- 4,412 2,2974,282 25,906- 26,516- 8,963 2,024

7,308 662- 797- *,ee5 2,57932,360 57,179* 65,322* 3,217 3,03742,940 15,536- 12 ,429- 4,696 3,25416,326 38,602* 45,537* 3,296 3,0315*.762 13.383* 37.266* 2.603 1.715

♦1.2*6,754 ♦ 62,778- ♦ 92 ,149- ♦135,645 ♦204,415

42,761 56,534- 73 ,042 - 13,068 7,11364,008 5,149* 4,180* 3,179 87633,718 28,774- 24 ,958- 5,075 3,44020,645 30,555- 39 ,917 - 3,819 3,550

58,211 36,257* 37,319* 7,154 2,14317, 209 19.318- 19 ,707 - 2,615 1,08657,163 • -* t , 701* 4,963* 4,857 1,83754,467 12,031* 18,249* 5,314 10,582

42,469 24,578- 28 ,104 - 11,3*6 5,93916 , SC5 10 ,971- 14 ,664- 3,640 ’ 3,51820,123 62,031- -7 1 ,5 2 1 - 7,753 8,0269,130 73,104* 71,465* 8,007 4,033

41,660 25 , 431* 44,615* 6,719 2,76848,476 34 ,184 - 3 4 , 295- 9.815 2,55252,564 39,89 7* 35,412* 7,240 5,54634,650 45 ,158- 45. 545- 3,844 4.4J422,073 40 ,274- 47,305- 5,044 2,560

8,440 30 ,173- 34 ,361- 2 ,2?5 2,9es36.5C0 1 .3 0 9 - 4 ,1 68 - 2.1*0 2.974

♦631,072 ♦184,209- ♦231,184- ♦123,954 ♦75,9e5


EXHIBIT "B" (a)

CLASSIFICATION BY MATURITIES OF BILLS PURCHASED BY FEDERAL RESERVE BANKS IN IHEIR RESPECTIVE DISTRICTS DURING THE PERIOD FROM JANUARY 3 TO DECEMBER 31, 1929

AND FROM JANUARY 2 TO MAY 14, 1930 _____________(EXCLUDING SALES CONTRACTS)______________

{OOO Omitted)

January 3 to December 31, 19291-30 days 31-60 days 61-90 days Over 90 days Total

Boston $ 24,461 $ 27,309 $ 45,645 $ 3,059 $ 100,474New York 362,675 178,190 261,554 19,993 822,412Philadelphia 28,019 19,535 33,063 0 80,617Cleveland 6,065 3,848 7,440 0 17,353Richmond 2,858 4,222 5,573 0 12,653Atlanta 29,939 5,387 7,356 374 43,056Chicago 21,690 12,838 7*381 0 41,909Dallas 13,254 14,709 7,035 4,432 39,430San Francisco 17,275 34,343 34,454 2,778 88,850

Totals $506,236 $300,381 $409,501 $30,636 $l,-246,754

January 2 to May 14, 19301-30 days 31-60 days 61-90 days Over 90 days Total

Boston 0 14,170 0 7,032 $ 9,291 $ 959 $ 31,452New York 310,275 153,578 51,524 12,774 528,151Philadelphia 5,248 7,980 10,055 0 23,283Richmond 1,162 1,432 1,550 24 4,168Atlanta 14,361 1,195 1,637 0 17,193Chicago 9,868 7,987 707 0 18,562St. Louis 325 0 0 0 325Minneapolis 767 2,153 1,670 0 4,590Dallas 3,679 2,088 708 405 6,880San Francisco 7,885 21,036 10,938 406 40,265

Totals $367,740 $204,481 $88,080 $14,568 $674,869


(

EXHIBIT "C "

SXATSSL2IT SHOWING EARNING ASSET HOLDINGS OF ALL FEDERAL RESERVE BANKS MAY 14 , I930 COMPARED W ith PREVIOUS WEEK AND MAY 1 5 , 1929 : ALSO WEEKLY AVERAGE OF -------»-------------------- .^ . - E T C 2 , l ? 30 ' AY l 4 , 1 930 , INCLUSIVE. CQhPaRSD Ji TH CO R n E o ? ON DING PE R IO D 1929 AND E N TIR E YEAR 1929

Cni ca,-,o a t ,L o u is

B i l l s D iscou n tedN NNet Change

B i l l s P urchased•• tfNet Change

Government S e c u r it ie sN M

Net Change

- May 7 " 14

T o ta l E arning A sse ts - May 7• a *i n ^

Net Change

B oston

$14,97919 ,5 7 8

New York

$57 ,1853 0 ,3 0 4

Phi la ,

$27 ,7 70 28,519

C levelan d

$20,9552 2 ,974

(000 Omi tted )

Richmond A tla n ta

$17 ,6231 6 ,3 0 7

$25 ,190 24, 935

$ 2 1 ,9 0 01 7 ,9 6 7

#13 ,606 1 4 ,5 0 6

i..inn,

#4 ,2493 ,9 5 3

YEAR 1929

Kan, C ity P a ll as San F ran .

#13 ,3251 4 ,718

♦9,1927 ,776

# 1 0 ,9 7 48 ,449

4.599+ 2 6 ,3 8 1 - 7 4 9 * 2 ,019* 8 l6 — 2 55 - 3 ,9 3 3 - 900* 296 - 893* 1 ,4 1 6 - 2 ,5 2 5 -

1 5 ,0 4 71 4 ,6 7 5

3 7 ,0 1 13 5 ,3 0 7

7 ,0215,549

16 ,3 5 313 ,9 4 7

8 ,1469 ,0 0 4

19 ,9111 6 ,4 0 5

1 4 ,37217 ,393

9 ,4 8 01 0 ,4 3 7

7 ,1 6 06 ,9 4 3

11 ,1 4 31 1 ,6 7 8

5 ,6816 ,412

23,97823 ,285

3 7 2 - 1 ,7 0 4 - 1 ,4 7 2 - 2 ,4 0 6 - 858* 3 ,5 0 6 - 3 ,021* 957* 2 1 7 - 535* 731* 5 9 3 -

40 .32340.323

192 .3 6 3177 .363

46 .12546.125

4 9 .99649 .996

•1 2 .6 4 012 .6 4 0

8 ,8 2 78 ,8 3 3

70 ,614 70,649

1 9 .2 6 81 9 .2 6 8

18 ,387 23 ,448

6 ,4 2 41 6 ,4 2 5

2 5 ,68225 ,637

3 6 .6 9 53 6 .6 9 5

- 0 - 1 5 ,0 0 0 - - 0 - - 0 - - 0 - 6* 35‘ - 0 - 5 ,0 6 l* 1 0 ,0 0 1 * 4 5 - - 0 -

71 ,3497 5 ,576

295,65925 2 ,0 7 4

81,91681,193

87 ,3 0 486,917

38,40938,451

5 3 ,9 2 35 0 ,1 7 3

106 ,886106,009

4 2 ,3 5 444,211

29,7963 4 ,344

31 ,3 9 24 2 ,3 2 1

♦0,5553 9 ,3 2 5

71 ,54768 ,429

4 ,2 2 7 * 4 3 ,5 8 5 - 7 2 3 - 3 8 7 - 42* 3 ,7 5 5 - 877- 1 ,8 5 7 * 4 ,548* 11 ,429+ 7 3 0 - 3 ,1 1 8 -

T o ta l s

# 237 ,448210,486

2 6 ,?62-

175,203171,035

4 ,1 6 8 -

5 27 ,844527,902

58*

951 ,0 9 59 20 ,023

3 1 ,0 7 2 -

Com parison o f Weekly Average Qf Aurniiu; A sse ts

Jan, 2 , 1930 t o May 1 4 , 1930 Same p e r io d 1929 E n t ire y e a r 1929

Net Change from same p e r io d 1929 H " e n t ir e y ea r 1929

C om oarieon o f E arning A sse ts

May 1 4 , 1930 " 1 5 , 1929

Net Change

67 ,741113 ,510

9 9 ,6 9 5

4 5 ,7 6 9 3 1 ,9 5 4 -

75 ,5761 2 5 ,9 7 4

3 6 6 ,2 7 43 3 1 ,3 3 83 7 1 ,2 4 8

3 4 ,? 3 6 *4 ,9 7 4 -

2 52 ,074314 ,131

9 3 ,6 1 4128,059120 ,236

3 4 ,4 4 5 2 6,6 2 2-

81,193104,510

100,595 141 ,335 138 ,383

40 , 7903 7 ,7 3 8 -

8 6 ,9 1 7128,663

5 0 ,3 9 8 - 6 2 ,0 5 7 - 2 3 ,3 1 7 - 4 1 ,7 4 6 -

B i l l s D iscounted f o r week B i l l s Purchased f o r week Government S e c u r it ie s f o r week T o ta l E urning A sse ts f o r *eek Com parison o f Meekly Average o f ,

w ith same p e r io d 1929 Com parison o f Weekly Avorage o f j

w ith e n t ir e y ea r 1929

42,4456 0 ,75863 ,530

1 8 ,3 1 3 21 ,085-

38 ,4 5 163,609

2 5 ,1 5 8 -

50 ,86079,94980 ,105

143,049212,302194 ,1 3 5

4 7 ,7 9 4 67 ,241 6 6 ,041

31 ,51737 ,67640 ,016

3 0 ,8 8 0 5 5 ,2 9 7 5 5 ,4 2 0

29 ,0 8 9 2 9 ,2 4 5 -

69 ,7 5 3 5 1 ,0 8 6 -

1 9 ,4 4 7 1 8 ,2 4 7 -

6 ,1 5 9 8 ,4 9 9 -

2 4 ,4 1 7 2 4 ,5 4 0 -

5 0 ,1 7 38 4 ,119

106,009125 ,450

44,2116 3 ,1 9 0

3 4 ,3 4 43 0 ,623

42,8215 9 ,973

3 3 ,9 4 6 - 1 9 ,4 4 1 - 1 8 ,9 7 9 - 3 ,7 2 1 * 1 7 ,1 5 2 -

SYSTEM

# 2 6 ,9 6 2 - 4 ,1 6 8 —

58*

t. 2 , 1930 to May 14, 19303 1 ,0 7 2 -

U 2, 1930 to May 14 , 19303 1 1 ,0 9 8 -

' 15 , 1929302 ,9 7 9 3 0 4 ,3 2 6 -

44 ,38249 ,6 9 651,655

5 ,3 1 4 7 , 273-

3 9 ,8 2 544,752

4 ,9 2 7 -

72 ,820 125 ,358 114 ,486

5 2 ,538— 41 ,666—

68,42979,3551 0 ,9 2 6 -

1 ,0 9 1 ,9 7 11 ,4 0 3 ,0 6 91 .3 9 4 ,9 5 0

311 ,098 3 0 2 ,9 7 9 -

9 2 0 ,0 2 31 ,2 2 4 ,3 4 9

3 0 4 ,3 2 6 -


Exhibit n IT

STATEMENT SHOWING EARNING^ OF ALL FEDERAL RESERVE BANKS FOR THE FIRST FOUR MONTHS OF 1950 ____

Ratios Based on Each Bank's Expenses and Dividends for Year 1929

Gross Earnings First Four

Months of 1930

Percentage of Each Bank's Gross Earnings to Total

Gross Earnings

Actual Net Earnings Available for De

preciation Allowances. Reserve, Surplus and

Franchise Tax

Boston 7 # $ 873,966 5.72 $ 81,224 (A)

New York 24 # 4,883,132 31.97 1,498,960

Philadelphia 7 1/4# 1,314,497 8.61 307,304

Cleveland 9 1/2# 1,504,941 9.85 254,058

Richmond 5 1/4# 632,493 4.14 27,360 (A)

Atlanta 6 3/4# 746,059 4.88 184,688

Chicago 12 3/4# 2,123,538 13.90 238,186

St. Louis 6 # 680,046 4.45 107,481

Minneapolis 3 # 430,492 2.82 45,427

Kansas City 5 # 541,653 3.55 151,879 {A)

Dallas 4 1/2# 603,646 3.95 54,066

San Francisco 9 $ 940,771 6.16 205,168 (A)

Totals 100# $15,275,234 100# $2,224,539

Total net earnings for same period 1929 • • . . $9,872,460

(A) Deficit


EXHIBIT "E*

STATEMENT SHOTTING APPROXIMATE AMOUNT OF NET PROFIT THAT WAS REALIZED ON VARIOUS SALES OF UNITED STATES GOVERNMENT SECURITIES IN THE SYSTEM ACCOUNT

DURING PERIOD OCTOBER 31, 1929 TO MAY 19, 1930... .ALSO THE APPROXIMATE AMOUNT OF NET PROFIT REPRESENTED BY THE DIFFERENCE BETWEEN

THE BOCK VALUES AND THE MARKET BID PRICES, AS OF MAY 19, 1930, °F THE UNITED STATES GOVERNMENT SECURITIES HELD IN THE SYSTEM SPECIAL INVESTMENT ACCOJNT

Net Profit on SalesDuring Period Oct. 31, 1929 to May 19, 1930 on Various Amount of Holdings $445,752.05 * *

Net Profit on Present Holdings as Represented by the Difference Between Present Book Values and Market Bid Prices

* $440,028.75 of this amount is being held by the Federal Reserve Bank ofNew York in Suspense Account, to be distributed at the end of the currenyear.


4 ) (COPY)

New York, N. Y. May 26 414 pm

Young - WashnThe Federal Reserve Bank of New York has received a cable from the Bank% .

for International Settlements inquiring whether the Federal Reserve Bank of New York has any objection to the issue in this market of a tranche of a German thirty five year consolidated loan, the final terns of which are now in process of negotiation. It is understood, however, that the proposed •American tranche is to be for ap proximately an effective net amount of $85,000,000 out of a total of about the equivalent of $300,000,000 net.It is understood that the French tranche to be issued in francs will be approximately equivalent to the amount issued in this market and that the balance of the total loan will be issued in seven other countries in their respective currencies. Considering the matter auite apart from its political or Governmental aspects, which it is understood in this instance have come before the Department of State for its decision, our Directorshave today authorized the officers of this bank to infoim the Bank for

’ \International Settlements when the loan is ready for issue in this market that while the Federal Reserve Bank itself does not accent any responsibility as to the terms and conditions and issue -22L the proposed loan, the Federal Reserve Bank of New York does not wish to interpose any objection to its issue in this market. It was agreed by our directors that advice to this effect should be cabled to the Bank for International Settlements unless the Federal Reserve Board advises us that it objects to the issue of a tranche of such a loan in this market.

VOLUME 204PAGE 20

Harrison324 pm


May 27, 1930,

Harrison - New Yoik

Board acknowledges receipt of your telegram of May 26th and you are advised that it will interpose no objection to the proposed answer of your hank to the inquiry made by the B. I* S. as to whether you will express dissent to the placing in the markets of the United States of the particular issue of reparations bonds referred to. Board construes the words “terms, conditions, and issue” in said proposed answer to include necessarily a denial of responsibility for the worth of such securities, and the Board*s failure to dissent from the issue shall not be construed as a waiver of any of the lawful powers of the Federal Reserve Board or System to take appropriate action at any time to protect credit conditions in the United States.

YOUNG.

VOLUME 204PAG* 22


MOTION BY C.S.H., (AMENDED LATER BYGOVERNOR YOUNG- AND PASSED UNANIMOUSLY.)

That the Federal Reserve Board advise the Federal Reserve Bank: of New York that it will interpose no objection to the proposed answer of said Bank to the inquiry made by the B.I.S* as to whether it will express dissent to the placing of the particular issue of reparation bonds referred to in the markets of the United States.

That the Board advise the Federal Reserve Bank of New York that it construes the words Hterms, conditions, and issue11 in said proposed answer to include necessarily a denial of responsibility for the worth of such securities, and that it understands that there is no difference of opinion between it and said Federal reserve bank that all rights ofthe Federal Reserve System over credit conditions in the United States remain unaffected by the failure of said Bank to dissent.


tF e d e r a l R e s e r v e B a n k

o f R i c h m o n d

May 29, 1930.

Dear Mr. Hamlin:I thank you for your letter of the 28th enclosing a copy of

your address at the dinner of the foreign journalists, which I have just read. It is an excellent survey, in brief, of the high points of the present situation. .

Your allusion to the interchange of trade between the countries is very timely, and while you do not touch upon the proposed tariff, it is there by implication. To my way of thinking, there was never a more inopportune time to increase tariff charges; and, broadly speaking, it is difficult or impossible to see any sound philosophy in it. It has been often stated that the decline of as little as 10$ in the volume of our exports would make the difference between prosperous and depressed times. The recent decline in exports has been very much greater than that, and the influence upon prices is naturally being felt rather severely.

Only the most extraordinary condition here could justify making it more difficult for other countries who become in debt to us in the course of trade to settle their obligations arising therefrom. Y»e will have to lend them money not only to aid them in the restoration of their own commerce but to help them settle their balances. It is easy to see how unsouxlthat situation is, and it is obvious that it cannot go on indefinitely.

Your tribute to the banking situation is, beyond all question, fully merited, and its strength and flexibility and readiness was never shown to better advantage than in October and November of last year and at the present time. It is the most powerful influence at work to aid inovercoming the current depression. It is of course difficult to measure the time needed for recovery, but there are at least no artificial obstacles in the way, and the people have within themselves the forces necessary for recovery.

With high regard, I am,Yours sincerely,

GJS-CCP

Hon. Chas. S. Hamlin, Federal Reserve Board,

Washington, D. C.VOLUME 204PAGE 37

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

Fe d e r a l R e s e r v e Ba n k

o f Ne w Yo r k

June 2, 1930.

\

My dear Mr. Hamlin:I want so much to thank you for your letter of

May 28 with which you were good enough to send me your address at the dinner of Foreign Journalists in Vi/ashington on May 26.

discussion of commercial and financial interdependence of nations. As I think I have mentioned to you in V/ashington, one of the problems still before us is that of supplying capital to those countries which now lack purchasing power for our exportable surplus, for as you so rightly point out these countries must find some way in which to pay for what we export to them. Gold is out of the question; adequate exports to us not yet possible, and loans of capital are the only means left unless we wish to see a further substantial decline in our exports which would only serve to accentuate our present difficulties.

I am most grateful to you for your having thought to send me a copy of your remarks.

I read it writh much interest and particularly your

VOLUME 2 0 U

PAGE 38

Honorable C. S. Hamlin, c/o Federal Reserve Board, Washington, D. C.


Office Correspondence FUD&RAL R E S tR V t HOARD

E W _ May 21, 1930

To _ Mr. Hamlin Subject:_Gold

I have your memorandum of May 17 in which you ask certain questions regarding our gold supply and the connection, if any, “between gold and the present decline in commodity prices. During the past few years, there has been considerable discussion with regard to present and probable future monetary gold stocks and their relation to commodity prices. A number of leading economists hold the view that the annual gold production in the years to come will not keep pace with the increasing gold requirements of central banks and the demands for gold for industrial consumption. At the present time the League of Nations has a so-called gold delegation which is making an exhaustive study of this question. Professor Sprague was a member of the delegation but owing to his acceptance of the position of research advisor to the Bank of England has resigned from the delegation and Mr. George Roberts, Vice-president of the National City Bank has been appointed in his place.

1. Whatever may be waid as to the long term effect of gold on commodity prices, I think it may be safely stated that gold has not been a material factor in the decline in commodity prices during the past year. This decline can probably be ascribed primarily to the decline in business activity coupled with the abnormal credit and banking conditions existing during the past year, notably the extreme demands for funds for speculative purposes and the severe reaction in security prices that followed last October. The movement of gold between countries and the accompanying changes in credit conditions, including interest rates, may have had some effect on prices in certain countries but the decline in industrial production with its consequent unemployment and reduced demand for consumable goods has been the prime factor in the reduction in the general level of commodity prices.

I the year it may be pointed out that at the end of March 1930 gold holdings of central banks and. governments in Ml countries amounted to $1 0 ,̂ 96,000,000 as comoared with $10,091,000,000 at the end of March 1929. During approximately the same period deposits of commercial banks in most of the leading countries declined. Gold holdings of central banks and governments are shown on oage 31̂ of the May bulletin and deposits of commercial banks of leading countries on page 3 1 7.

2. The monetary gold stock of the United States as of April 3 0, 1930 was $1*,1+91f000,000. Of this amount $360,000,000 consisted of gold coin in in actual circulation, $886,000,000 of gold held in the U. S. Treasury against gold certificates in circulation, $1 7 2,000,000 of gold held in the

I Treasury as a reserve against U. S. notes and in the general fund and j $3*073*000,000 of gold held by the Federal reserve banks.

As evidence that there has been no general shortage of gold during

VOLUME 204.PAGE 53


2

3. The amount of free gold held by the Federal reserve banks on May l4, 1930 is estimated at $1,149,000,000. This estimate is based on the assumption that a minimum amount of Federal reserve notes is kept on hand in the vaults of the Federal reserve banks.

4. It is difficult to state how much gold the United States could safely lose. Just how far our free gold of about $1,100,000,000 could be reduced and still leave sufficient gold to take care of all domestic requirements which may reasonably be anticipated is any one*s guess, butI should say that we could lose around $400,000,000 or $500,000,000 in gold without seriously interfering with the efficient functioning of the Federal reserve system. If the Federal reserve banks in the event of a demand for gold for export were to refrain from purchasing U. S. securities to supply such gold and member banks were, therefore, compelled to become heavy and continuous borrowers from Federal reserve banks, we could lose several hundred millions additional. This, however, I assume was not contemplated in your question.


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