Federal Reserve Bulletin July 1926
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FEDERAL RESERVE BULLETIN JULY, 1926 ••* ISSUED BY THE FEDERAL RESERVE BOARD AT WASHINGTON Midyear Summary of Banking Statistics Currency Under the Federal Reserve System Canada9s Return to the Gold Standard WASHINGTON GOVERNMENT PRINTING OFFICE 1926 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, ADOLPH C. MILLER. Secretary of the Treasury, Chairman. 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. _ _ Director, Division of Research and E. M. MCCLELLAND, Assistant Secretary. Statistics. W. M. IMLAY, Fiscal Agent. J. F. HERSON, E. A. GOLDENWEISER, Acting Director, Division of Chief, Division of Examination, and Chief Federal Research and Statistics. Reserve Examiner. E. L. SMEAD, Chief, Division of Bank Operations. FEDERAL ADVISORY COUNCIL District No. 1 (BOSTON)! CHAS. A. MORSS, Vice President. District No. 2 .(NEW YORK)" JAMES S. ALEXANDER. District NO. 3 (PHILADELPHIA) . L. L. RUE. District No. 4 (CLEVELAND) GEORGE A. COULTON. District No. 5 (RICHMOND) JOHN F. BRUTON. District NO. 6 (ATLANTA) P. D. HOUSTON. District No. 7 (CHICAGO) FRANK O. 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. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis OFFICERS OF FEDERAL RESERVE BANKS Federal Reserve Bank of— Chairman Governor Deputy governor Cashier Boston..... Frederic H. Curtiss.. W. P. G. Harding.. W. W. Paddock..— W. Willett. New York. Pierre Jay Benj. Strong J. H. Case L. H. Hendricks.i L. F. Sailer A. W. Gilbart.i G. L. Harrison J. W. Jones.i E. R. Kenzel Ray M. Gidney. L. R. Rounds.* Philadelphia............ R. L. Austin , Geo. W. Norris Wm. H. Hutt —.—., C. A. Mcllhenny. W. G. McCreedy.i Cleveland—......_... George DeCamp.. E. R. Fancher M. J. Fleming H. F.Strater. Frank J. Zurlinden.. Richmond Wm. W. Hoxton... Qeorge J. Seay C. A. Peple .... Geo. H. Keesee. R. H. Broaddus John S. Walden, jr.* Atlanta....... Oscar Newton M. B. Wellborn.... J. L. Campbell M. W. Bell. Creed Taylor Chicago Wm. A. Heath J. B. McDougal C. R. MeKay. W. C. Bachman.1 John H. Blair - K. C. Childs.» J. H. Dillard.i D. A.Jones.1 O. J. Netterstrom.i St. Louis Wm. McC. Martin. D. C. Biggs (X M. Attebery..—. John R.Mitchell... W. B. Geery- . J.W. White. Minneapolis R. A. Young B. V. Moore ..... Gray Warren. Harry Yaeger >.. Frank C. Dunlop.* 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 Franciico Isaac B. Ntwton. J. U. Calkins.... Wm. A. Day W. N. Ambrose. Ira Clerk L. C. Pontious.. * Controller. '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. Schneckenburger. Helena branch R. E. Towle. Kansas City: Cincinnati branch C. F. McCombs. Omaha branch L. H. Earhart. Pittsburgh branch J. C. Nevin. Denver branch. _ J. E. Olson. Richmond: 0klahoma 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 _ i J. B. Fort, jr. Portland branch R. B. West. Chicago: ! Salt Lake City branch W. L. Partner. Detroit branch.. ! W. R. Cation. Seattle branch C. R. Shaw. St. Louis: 1 Spokane branch. .'. D. L. Davis. Louisville branch W. P. Kincheloe Memphis branch. W. H. Glasgow. Littte 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. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis TABLE OF CONTENTS The month: Page Review of the month—Mid-year review of banking developments _ _ _ _ 463 Business conditions in the United States ___ ____ •__• ____„_______ __ 479 Treasury finance. '; : 500 Special articles: Currency under the Federal reserve system 467 Mid-year summary of banking statistics !_ ,, 505 Statistical Work of the Federal Reserve Board and banks 494 Changes in membership in the Federal reserve system _. 503 Canada's return to the gold standard ______• _ _ _. _ 534 Annual report of the National Bank of Austria. 538 Official: Changes in State bank membership. ; __ 504 Changes in national bank membership __ 504 Fiduciary powers granted to national banks.. ____ 504 Business statistics for the United States: Industrial activity _•-•—_.—•— _____ 529 Commodity movements. ___ 531 Wholesale and retail trade ____ ____ 532 Foreign banking and business conditions: Financial statistics for principal foreign countries _ _ _ , : _ _ _ . _ _ _. ----•. 540 Foreign trade of principal countries. 543 Price movements in principal countries— Wholesale prices in principal countries ...... ----- 544 Retail prices and cost of living in principal countries . _ _ 546 Banking and financial statistics: # Federal reserve banks— Condition of Federal reserve banks ... 547 Federal reserve note account .. _. ._... 551 Holdings of bills and securities and earnings thereon ---- 552 Discount and open-market operations __.__ __.__._ 553 Gold settlement fund_____ . 565 Discount rates of Federal reserve banks .__ ___. 565 Member banks— Reporting member banks— Condition of reporting member banks in leading cities _ _ . _ _ _ 511, 554 Condition of reporting banks in Federal reserve bank cities-______-__-_ 518, 556 Loans to brokers and dealers secured by stocks and bonds made by reporting member banks in New York City— - — — ______ 524, 557 All member banks- Deposits, by size of city... -___>_ — ._ 510, 558 All banks in the United States—Condition on April 12, 1926. 525 State banks and trust companies—Condition on April 12, 1926 __________________ 528 Bank debits__._ _ ._.-_____„-__- — ..-_.--- 558 Member banks and nonmember banks on par list and not on par list. „_- — _-____--__- 562 Money in circulation._.___ . ,__•-_ —_____;—-t 562 Money rates in principal cities __. ;_._._-- — __ — __; 560 Gold and silver imports and exports . •.— --_-_; ..-- 563 Foreign exchange rates.... ---_-___.__. .„; 564 iv. '•'••• " ' ' ' ' "•'" " •• •• • Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis FEDERAL RESERVE BULLETIN VOL.12 JULY, 1926 No. 7 REVIEW OF THE MONTH reserve banks for currency, as money in cir- culation both in October and in May averaged Volume of member bank credit, after de- about $4,863,000,000. The gold stock of the clining in the early part of the year, increased country, however, increased by about $75,- once more in recent months. 000,000 during the period, and this inflow of Growth, °/ and in June was at a new high member bank • gold from abroad, by giving member banks ad- credit level, somewhat above the high- ditional reserve funds, resulted in a reduction est figure reached at the end of in the amount of reserve bank credit required 1925, and considerably above the level of last as a basis for the outstanding volume of mem- autumn. This growth of member bank credit ber bank credit. has not been accompanied by an increase of Federal reserve bank credit in use, which was SCALE FOR 1 AHD MILLIONS OF DOLLARS SCALE FOR 2,3 AND 5 in May on the average about $100,000,000 3O0Q lower than last October. With practically no change in the demand for currency, the larger 2500 5500 part of this decrease in the outstanding amount of reserve bank credit is accounted for by the inflow of gold from abroad. That member 2000 5000 banks have been able to increase their loans and investments without obtaining additional 4500 reserve bank credit to support the accompa- nying growth in their deposits is explained largely by the fact that the growth in deposits has been in time deposits, which require relatively small reserves, and that there has at 3S00 the same time been a considerable decline in 1S22 1923 1924- 1925 1326 The figures are arranged for each month and are published on page 506 demand deposits, which carry higher reserve requirements. In its relation to the demand for reserve Changes in the reserve requirements of bank credit the volume of member bank credit member banks, together with changes in the can best be measured by the public's demand for currency Reserve re- total of net demand and time Elements o f and gold movements in and out quirements. deposits, the two classes of reserve bank of the country, are the princi- credit deposits against which reserves pal factors that influence the to be held as balances with the reserve banks demand for reserve bank credit.