FEDERAL RESERVE BULLETIN JANUARY, 1925 ISSUED BY THE FEDERAL RESERVE BOARD AT WASHINGTON Banking Position at the Close of 1924 Business Conditions in the United States Gold Movements in 1924 WASHINGTON GOVERNMENT PRINTING OFFICE 1925 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. WALTER W. STEWART, W. M< IMLAY, Fiscal Agent. Director, Division of Research and]Statistics. J, F. HERSON, Chief, Division of Examination, and Chief Federal E. A. GOLDENWEISER, Statistician. Reserve Examiner. E. L. SMEAD, Chief, Division of Bank Operations. FEDERAL ADVISORY COUNCIL District No. 1 (BOSTON) CHAS. A. MORSS. District No. 2 (NEW YORK) PAUL M. WARBURG, President. District No. 3 (PHILADELPHIA) L. L. RUE. District No. 4 (CLEVELAND) C. E. SULLIVAN. District No. 5 (RICHMOND) JOHN M. MILLER, Jr. District No. 6 (ATLANTA) OSCAR WELLS. District No. 7 (CHICAGO) JOHN J. MITCHELL. District No. 8 (ST. LOUIS) FESTUS J. WADE. District No. 9 (MINNEAPOLIS) G. H. PRINCE. District No. 10 (KANSAS CITY) E. F. SWINNEY, Vice President. District No. 11 (DALLAS) W. M. MCGREGOR. District No. 12 (SAN FRANCISCO)_.__ D. W. TWOHY. n Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis OFFICERS OF FEDERAL RESERVE BANES Federal Reserve Bank of— Chairman Governor Deputy governor Cashier Boston Frederic H. Curtiss W. P. Q.Harding.. W. W. Paddock W. Willett. Benj. Strong J. H. Case.. L. H. Hendricks.* New York. Pierre Jay L. F. Sailer A. W. Gilbart.i G. L. Harrison J. W. Jones.1 E. R. Kenzel G. E. Ohapin.1 Ray M. Gidney. Philadelphia R. L. Austin Geo. W. Norris.. Wm. H. Hutt W. A, Dyer. E. R. Fancher... M. J. Fleming , J. O. Nevin. Cleveland D. C. Wills Frank J. Zurlinden.. Richmond Wm. W. Hoxton.. George J. Seay__. C. A. Peple Geo. H. Keesee. R. H. Broaddus. John 8. 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. McKay W. C. Bachman.1 John H. Blair. K. O. Cbilds.i J. H. Dillardv* D. A. Jones.* O. J. Netterstrom.i Clarke Washburne.1 St. Louis Wm. McC. Martin D. C. Biggs O. M. Attebery J. W. White. W. B. Geery Gray Warren. Minneapolis.. John R. Mitchell R. A. Young B.V.Moore Frank O. Dunlop.1 Harry Yaeger • Kansas City- M. L. McClure.. W. J. Bailey...... C. A. Worthington- J. W. Helm, Dallas Lynn P. Talley.. R. R. Gilbert R. B. Coleman. B. A. McKinney.. Val. J. Grand San Francisco. John Perrin J. U. Calkins Wm. A. Day W. N. Ambrose. Ira Clerk» L. C. Pontious»_____ Controller. ' Assistant deputy governor. MANAGERS OF BRANCHES OF FEDERAL RESERVE BANES Federal Reserve Bank of— Manager Federal Reserve Bank of— Manager New York: Minneapolis: Buffalo branch W .W. Schneckenburger. Helena branch R. E. Towle. Cleveland: Kansas City: C incinnati branch L. W. Manning. Omaha branch L. H. Earhart. Pittsburgh branch Geo. DeCamp. Denver branch... J. E. Olson. Richmond: Oklahoma City branch 0. E, Daniel. Baltimore branch A. H. Dudley. Dallas: Atlanta: El Paso branch D. P. Reordan. New Orleans branch Marcus Walker. Houston branch Fred Harris. Jacksonville branch Geo. R. De Saussure. San Francisco: Birmingham branch A. E. Walker. Los Angeles branch 0. J. Shepherd. Nashville branch J.B. Fort, jr. Portland branch Frederick Greenwood. Chicago: Salt Lake City branch R. B. Motherwell. Detroit branch .._ W. R. Cation. Seattle branch. _. C. R. Shaw. St. Louis: Spokane branch ._ W. L. Partner Louisville branch W. P. Kincheloe. Memphis branch V. S. Fuqua. Little Rock branch A. F. Bailey. SUBSCRIPTION PRICE OP 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. in Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis TABLE OF CONTENTS The'month: Review of the month—Banking position at the close of 1924 1 Treasury finance _ 6 Business conditions in the United States 9 Gold movements in 1924 --- 27 Official: Rulings of the Federal Reserve Board— Loans on real estate and farm lands by national banks having no time deposits 28 Necessity of new Clayton Act application where director has resigned from and again is elected to serve the same institution 28 Effect of consolidation of State banks on Clayton Act permits 28 Law department— Decision of United States Circuit Court of Appeals in the case of City of Douglas, Tex., v. Federal Reserve Bank of Dallas _ _ 30 Court decision in Atlanta, par clearance case 32 State banks admitted to system 33 Fiduciary powers granted to national banks 33 Charters issued to national banks 33 Business statistics: Estimate of production of crops, by Federal reserve districts 33 Industrial statistics in the United States ._ 35 Wholesale and retail trade 41 Industrial statistics for foreign* countries 43 Foreign trade of principal countries __ __. 44 Financial statistics for principal foreign countries _ 45 Price movements in principal countries: Federal Reserve Board wholesale price indexes 46 Comparative wholesale prices in principal countries _ _ _ 48 Comparative retail prices and cost of living in principal countries 49 Banking and financial statistics: Federal reserve banks— Condition of Federal reserve banks 50 Federal reserve note account 54 Holdings of earning assets 55 Discount and open-market operations of Federal reserve banks 56 Gold settlement fund _. 66 Discount rates of Federal reserve banks ^ 66 Member banks— Condition of member banks in leading cities 57 Bankers' balances at reporting member banks in Federal reserve bank cities 58 Changes in membership in the Federal reserve system 59 Deposits of all member banks 65 Condition of all banks in the United States on October 10, 1924 61 Bank debits ._ - 64 Money rates in principal cities 67 Money in circulation - 65 Gold and silver imports and exports _ 68 Foreign exchange rates and index 69 IV Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis FEDERAL RESERVE BULLETIN VOL. 11 JANUARY, 1925 No. 1 REVIEW OF THE MONTH member banks, which began several months earlier and which was more rapid during the Growth in the volume of Federal reserve spring and summer, when industrial activity was bank credit during the last five months has relatively slack and balances were accumulating Growth of been sufficient to offset the de- at the banks. These balances, inactive during reserve bank cline in the earlier part of the the summer, strengthened the cash position cre lt# year, and has brought the of business concerns and were available for earning assets of the reserve banks at the close current use as business activity increased. of the year to about the same level as at the end During the earlier part of 1924, a period of of 1923. Increased use of reserve bank credit business recession, deposits accumulated at in recent months has been for the purpose of the banks but were relatively inactive, and meeting the larger demand for currency, partly seasonal in character, and of furnishing member the volume of money in circulation declined. banks with reserve balances necessary to sup- More recently, with the revival of business port the growth of their deposits. In the first there has been a growth in the volume of half of 1924 the decrease in the demand for payments by check, and this increase in the reserve bank credit reflected in part the large use of deposit currency has been accompanied volume of gold imports, while in the second by a growth in hand-to-hand currency, as half of the year gold imports were relatively shown by the increase in the volume of money small, and in December there was a net out- in circulation. ward movement of gold for the first time in A larger demand for currency to meet pay- four years. With the reduced amount of gold roll, till-money, and pocket-money require- coming in from abroad, the larger demand for ments leads to a larger demand Currency de- f v bank credit, since, currency and for reserve balances has resulted mand and the or reser e J . ' in an increased demand for reserve bank credit reserve banks, as has been frequently pointed and a consequent growth of the earning assets out, when the public requires of the Federal reserve banks. currency the member banks are under the Between the first of August and the first of necessity of borrowing from the reserve banks December total money in circulation increased the full amount of the currency paid out, while Currency and by about $330,000,000, a con- when the demand is for deposit credit, reserve bank deposits, siderably larger increase than balances need to be increased on the average for the corresponding period of either 1923 or by only one-tenth of the increase of deposits.