Federal Reserve Bulletin March 1927
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FEDERAL RESERVE BULLETIN MARCH, 1927 ISSUED BY THE FEDERAL RESERVE BOARD AT WASHINGTON Bank Credit and Money Rates Text of the McFadden Act Condition of All Member Banks UNITED STATES GOVERNMENT PRINTING OFFICE WASHINGTON 1927 Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis FEDERAL RESERVE BOARD Ex officio members: D. R. CRISSINGER, Governor. EDMUND PLATT, Vice Governor. A. W. MELLON, Secretary of the Treasury, Chairman. ADOLPH C. MILLER. CHARLES S. HAMLIN. J. W. MCINTOSH, GEORGE R. JAMES. Comptroller of the Currency. EDWARD H. CUNNINGHAM. WALTER L. EDDY, Secretary. WALTER WYATT, General Counsel. J. C. NOELL, Assistant Secretary. E. A. GOLDENWEISER, Director, Division of Research E. M. MCCLELLAND, Assistant Secretary. and Statistics. W. M. IMLAY, Fiscal Agent. J. F. HERSON, CARL E. PARRY, Assistant Director, Division of Re- Chief J Division of Examination, and Chief Federal search and Statistics, Reserve Examiner. E. L. SMEAD, Chief, Division of Bank Operations. FEDERAL ADVISORY COUNCIL District No. 1 (BOSTON) __>_ ARTHUR M. HEARD. District NO. 2 (NEW YORK) JAMES S. ALEXANDER. District No. 3 (PHILADELPHIA) L. L. RUE. District No. 4 (CLEVELAND).„ ___„ HARRIS CREECH. District No. 5 (RICHMOND) JOHN F. BRUTON, Vice President District No. 6 (ATLANTA) „ P. D. HOUSTON. District No. 7 (CHICAGO) _. FRANK 0. WETMORE, President. District No. 8 (ST. LOUIS) BRECKINRIDGE JONES. District No. 9 (MINNEAPOLIS) THEODORE WOLD. District No. 10 (KANSAS CITY) P. W. GOEBEL. District No. 11 (DALLAS). B. A. MCKINNEY. District No. 12 (SAN FRANCISCO) ____ HENRY S. MCKEE. II Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis OFFICERS OF FEDERAL RESERVE BANKS Federal Reserve Bank of— I Chairman Governor Deputy governor Cashier Boston. ! Frederic H. Curtiss W. P. G. Harding W. W. Paddock W. Willett. Benj. Strong J. H. Case A. W. Gilbart.i New York ___.! _ L. F. Sailer J. W. Jones. 1 G. L. Harrison Ray M. Gidney. E. R. Kenzel _ L. R. Rounds.i Philadelphia j R. L. Austin Geo. W. Norris.. Wm. H. Hutt C. A. Mcllhenny. W. G. McCreedy.i Cleveland. J George DeCamp .__ E. R. Fancher... M. J. Fleming H. F. Strater. Frank J. Zurlinden _. Richmond...... Wm. W. Hoxton...... George J. Seay-._ C. A. Peple Geo. H. Keesee. R. H. Broaddus John S. Walden, jr.* Atlanta .^-._ Oscar Newton M. B. Wellborn.. Creed Taylor M. W. Bell. J. B. McDougaL. C. R. McKay W. C. Bachman.1 Chicago , Wm. A. Heath JohnH. Blair K. C. Childs.i J. H. Dillard.i D. A. Jones. 1 0. J. Netterstrom.i St. Louis Wm. McC. Martin_ D. C. Biggs O. M. Attebery J. W. White. JohnR. Mitchell... W. B. Geery Gray Warren. Minneapolis. R. A. Young B.V.Moore........ Frank C. Dunlop.* Harry Yaeger 2 Kansas City M. L. McClure.. W.J. Bailey.... C. A. Worthington.. J. W. Helm. C. C.Walsh Lynn P. Talley. R.R.Gilbert....... Fred Harris. Dallas R. B. Coleman , San Francisco Isaac B. Newton J. U. Calkins.... Wm. A. Day „ W. N. Ambrose. Ira Clerk... L. C. Pontious _, * Controller. 2 Assistant deputy governor. MANAGING DIRECTORS OF BRANCHES OF FEDERAL RESERVE BANKS Federal Reserve Bank of— Managing director Federal Reserve Bank of— Managing director New York: Minneapolis: Buffalo branch W. W. Schneekenburger. Helena branch... R. E. Towxts. Cleveland: Kansas City: Cincinnati branch C. F. McCombs. Omaha branch L. H. Earhart. Pittsburgh branch J. C. Nevin. Denver branch .... J. E. Olson. Richmond: Oklahoma City branch. C. E. Daniel. Baltimore branch.... -._ A. H. Dudley. Dallas: Atlanta: El Paso branch _. M. Crump. New Orleans branch_____„„.._ Marcus Walker. Houston branch... D. P. Reordan. Jacksonville branch .... Geo. R. DeSaussure. San Francisco: Birmingham branch A. E. Walker. Los Angeles branch.. R. B. Motherwell. Nashville branch ___„ J. B. Fort, jr. Portland branch R. B. West. Chicago: Salt Lake City branch W. L. Partner. Detroit branch WT. R. Cation. Seattle branch _ ._ C. R. Shaw. St. Louis: Spokane branch D. L. Davis. Louisville branch W. P. Kincheloe. Memphis branch... W. H. Glasgow. Little Rock branch . A. F. Bailey. SUBSCRIPTION PRICE OF BULLETIN THE FEDERAL RESERVE BULLETIN is the board's medium of communication with member banks of the Federal reserve system and is the only official organ or periodical publication of the board. It contains, in addition to the regular official announcements, the national review of business conditions, detailed analyses of business conditions, research studies, reviews of foreign banking, and complete statistics showing the condition of Federal reserve banks and member banks. The BULLETIN will be sent to all member banks without charge. To others the subscription price, which covers the cost of paper and printing, is $2. Single copies will be sold at 20 cents. Outside of the United States, Canada, Mexico, and the insular possessions, $2.60; single copies, 25 cents. 111 Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis TABLE OF CONTENTS The month: Page Review of the month—Bank credit and money rates 149 Condition of all member banks- 152 Business conditions in the United States 155 New index of industrial production 170 Changes in membership in the Federal reserve system 178 Money rates in principal countries. 193 Currency reform in Brazil 194 Annual report of the Bank of France 197 Annual report of the Bank of Switzerland 201 Official: Law department—Text of the McFadden Act 181 Changes in State bank membership 1 187 Changes in national bank membership 188 Fiduciary powers granted to national banks 187 Cuban agency „__„ 188 Business statistics for the United States: Production, employment, and pay rolls 189 Commodity movements „ . 190 Wholesale and retail trade 191 Foreign banking and business conditions: Financial statistics for foreign countries 205 Condition of central banks 205 Condition of commercial banks 1 207 Discount rates of central banks 207 Money rates in foreign countries 208 Gold movements _. „ 209 Silver movements 210 Foreign exchange rates. - 211 Price movements in principal countries— Wholesale prices in principal countries 212 Retail prices and cost of living in principal countries..- 215 Industrial statistics for England, France, Germany, and Canada . 216 Banking and financial statistics: Federal reserve banks— Condition of Federal reserve banks 218 Federal reserve note account 222 Holdings of bills and securities and earnings thereon 223 Discount and open-market operations 224 Gold settlement fund _ . 247 Discount rates of Federal reserve banks 247 Member banks— Reporting member banks— Condition of reporting banks in leading cities 225 Condition of reporting banks in Federal reserve bank cities 227 All member banks— Condition on Dec. 31, 1926, and on a series of other call dates . 152, 229 Deposits, by size of city : 240 Bank debits- - „.___ 241 Money rates in principal cities » _- — _-. 242 Member banks and nonmember banks on par list and not on par list._» _„ „ 246 Money in circulation , „ 246 IV Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis FEDERAL RESERVE BULLETIN VOL. 13 MARCH, 1927 No. 3 REVIEW OF THE MONTH chart, which shows the course of reserve bank Liquidation of reserve bank credit, which is credit outstanding in comparison with cur- usual after the Christmas holidays, has been in rency in circulation. Changes from Decem- larger volume this year than in ber to February are always considerable, and Reserve bank the change in reserve bank credit is usually of credit* any of the preceding four years. In 1927, as in earlier years, about the same amount as the change in the main factor in the reduction of member currency in circulation, though liquidation at bank indebtedness at the reserve banks in the reserve banks is also influenced by the the early weeks of the year has been the return direction and volume of international gold flow of currency from circulation, but the movements. Both this year and last year principal reason for the exceptionally large there were gold imports in January and Feb- volume of the reduction this year has been ruary, in addition to the return flow of the magnitude of gold imports, which was MILLIONS OF DOLLARS CURVE 2 greater in January than in any other month 5500 in the past five years. Liquidation of reserve bank credit since the turn of the year has been accompanied by a considerable reduction in the demand for loans at member banks, both 5000 loans on securities and other loans, largely commercial, with the result that ^ the loans of reporting banks in leading cities were in Feb-' ruary at the lowest point since midsummer of 4500 1926. In the money market these conditions CURRENCY AND have been reflected in a downward movement RESERVE BANK CREDIT of money rates, which are at present at about 4000 the same level as a year ago. 1923 1924- 1925 1926 1927 The decrease in demand for reserve bank Series underlying both curves are monthly [averages. Latest figures, credit after the Christmas holidays, follow- February, 1926, partly estimated ing the increase at the end of the year, reflects currency, but while the return flow of currency primarily the diminution in the demand for was about the same in both years, gold imports currency on the part of retail stores and their this year were considerably larger and were the customers. Return of the currency that has principal factor in accounting for the greater gone out in December to finance the holiday liquidation of reserve bank credit. trade, chiefly in the cities, as well as of cur- Imports of gold in January amounted to rency that has gone out earlier to finance the about $62,000,000, the largest amount re- harvesting of crops in country districts, fur- ported for any single month nishes funds to the member banks which they Gold move- ments since September, 1921, as is use in large part to reduce their indebtedness brought out by the chart, at the reserve banks.