FEDERAL RESERVE BULLETIN FEBRUARY, 1932 ISSUED BY THE FEDERAL RESERVE BOARD AT WASHINGTON Recent Banh ng Developments Reconstruction Finance Corporation Act UNITED STATES GOVERNMENT PRINTING OFFICE WASHINGTON: 1932 Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis FEDERAL RESERVE BOARD Ex officio members: EUGENE MEYER, Governor. A. W. MELLON, , Vice Governor. Secretary of the Treasury, Chairman. CHARLES S. HAMLIN. J. W. POLE, ADOLPH C. MILLER. Comptroller of the Currency. GEORGE R. JAMES. WAYLAND W. MAGEE. FLOYD R. HARRISON, Assistant to the Governor. LEO H. PAULGER, Chief, Division of Examinations. CHESTER MORRILL, Secretary. E. A. GOLDENWEISER, Director, Division of Research E. M. MCCLELLAND, Assistant Secretary. and Statistics. J. C. NOELL, Assistant Secretary. CARL E. PARRY, Assistant Director, Division of Research WALTER WYATT, General Counsel. and Statistics. W. M. IMLAY, Fiscal Agent. E. L. SMEAD, Chief, Division of Bank Operations. FEDERAL ADVISORY COUNCIL District No. 1 (BOSTON) THOMAS M. STEELE. District No. 2 (NEW YORK) ROBERT H. TREMAN. District No. 3 (PHILADELPHIA) HOWARD A. LOEB. District No. 4 (CLEVELAND) J. A. HOUSE. District No. 5 (RICHMOND) HOWARD BRUCE. District No. 6 (ATLANTA) JOHN K. OTTLEY. District No. 7 (CHICAGO) MELVIN A. TRAYLOR, Vice President. District No. 8 (ST. LOUIS) WALTER W. SMITH, President. District No. 9 (MINNEAPOLIS) THEODORE WOLD. District No. 10 (KANSAS CITY) WALTER S. MCLUCAS. District No. 11 (DALLAS) J. H. FROST. District No. 12 (SAN FRANCISCO) HENRY M. ROBINSON. WALTER LICHTENSTEIN, Secretary. n Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis OFFICERS OF FEDERAL RESERVE BANKS Federal Reserve Bank Chairman Governor Deputy governor Cashier of— W. Willett. • Boston fc_ Frederic H. Curtiss... Roy A. Young__ W. W. Paddock ._ New York J. H. Case .. Geo. L. Harrison _ W. R. Burgess C. H. Coe.1 J. E. Crane Ray M. Gidney.1 A. W. Gilbart J. W. Jones.i E. R. Kenzel W. B. Matteson.1 Walters. Logan _ J. M. Rice.1 L. R. Rounds Allan Sproul.i L. F. Sailer L. Werner Knoke.1 Philadelphia R. L. Austin Geo. W. Norris Wm. H. Hutt C. A. Mcllhenny. W G McCreedy 2 Cleveland. George DeCamp E. R. Fancher M. J. Fleming H. F. Strater. Richmond Win. W. Hoxton George J. Seay C. A. Peple Geo. H. Keesee. 2 R. H. Broaddus John S. Walden, jr. Atlanta Oscar Newton Eugene R. Black W. S. Johns M. W. Bell. H. F. Conniff W. S. McLarin, jr.1 Chicago Eugene M. Stevens... J. B. McDougal C. R. McKav W. C. Bachman.i John H. Blair. __ D. A. Jones.i J. H. Dillard.... 0. J. Netterstrom.i E. A. Delaney.i St. Louis— John S. Wood W~m. McC. Martin... 0. M. Attebery S. F. Gilmore.2 A TT TTnill 2 F. N. Hall.2 G. 0. Hollocher.2 0. C. Phillips.2 •: Minneapolis __.• John R. Mitchell W. B. Geery Harry Yaeger H. I. Ziemer. H. I. Ziemer Frank C. Dunlop.2 Kansas City M. L. McClure Geo. H. Hamilton C. A. Worthington.... J. W. Helm. J. W. Helm 1 Dallas C. C. Walsh B. A. McKinney R. R. Gilbert Fred Harris. 1 I R. B. Coleman W. 0. Ford.i I San Francisco • Isaac B. Newton Jno. U. Calkins ._ Wm. A. Day Wm. M. Hale. Ira Clerk i Assistant deputy governor. 2 Controller. MANAGING DIRECTORS OF BLANCHES OF FEDERAL RESERVE BANKS Federal Reserve Bank of— j Managing director Federal Reserve Bank of— Managing director New York: Minneapolis: Buffalo branch R. M. O'Hara. Helena branch R. E. Towle. 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... Hugh Leach. Dallas: Charlotte branch W. T. Clements. El Paso branch.. J. L. Hermann. Atlanta: Houston branch. _. W. D. Gentry. New Orleans branch Marcus Walker. San Antonio branch M. Crump. Jacksonville branch. Hugh Foster. San Francisco: Birmingham branch. A. E. Walker. Los Angeles branch W. N. Ambrose. Nashville branch 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: Spokane branch D. L. Davis. Louisville branch. _. John T. Moore. 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 communi- cation with member banks of the Federal reserve system and is the only official organ or periodical publication of the board. 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. in Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis TABLE OF CONTENTS Review of the month—Recent banking developments 89 Reconstruction Finance Corporation Act 94 Changes in foreign central bank discount rates 94 Earnings and expenses of Federal reserve banks 130, 131 National summary of business conditions 100 Financial, industrial, and commercial statistics: Reserve bank credit, gold stock, money in circulation, etc 101-103 Member and nonmember bank credit— All banks in the United States 104, 128 All member banks 104, 129 Weekly reporting member banks in leading cities 105, 127 Discount rates and money rates 107, 126 Bankers' acceptances, commercial paper, brokers' loans 105 Security prices, security issues, United States Government securities 108 Production, employment, car loadings, and commodity prices 109, 135-137 Merchandise exports and imports 110 Department stores—Indexes of sales and stocks 110 Freight-car loadings, by classes 110 Financial statistics for foreign countries: Gold reserves of central banks and governments 111 Gold production 112 Gold movements 113-114 Foreign exchange rates 115 Bank for International Settlements 115 Central banks 116-118 Government note issues and reserves 119 Commercial banks 119 Discount rates of central banks 120 Money rates 120 Price movements— Security prices 121 Wholesale prices _ 122 Retail food prices and cost of living 122 Detailed Federal reserve statistics, etc 123-138 Index - 139 IV Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis FEDERAL RESERVE BULLETIN VOL. 18 FEBRUARY, 1932 No. 2 REVIEW OF THE MONTH purchase any of these obligations, and at any time to sell any of them. The obligations of The principal development affecting the the Reconstruction Finance Corporation are banking situation in January was the enact- ment of not eligible for discount or purchase by the Reconstruction legislation creating the Federal reserve banks. Finance Corpo- Keconstruction Finance Cor- ration Loans may be made by the Reconstruction poration with a capital of Finance Corporation to banks—including, up $500,000,000. The Reconstruction Finance to $200,000,000 in the aggregate, loans secured Corporation Act, designed principally "to by the assets of banks that have been closed or provide emergency financing facilities for are in process of liquidation; to other specified financial institutions/' and "to aid in financing 7 kinds of financial institutions—of which certain agriculture, industry, and commerce/ was agricultural credit institutions are among those approved by the President on January 22, .pecifically enumerated; and to railroads, upon 1932. In announcing his approval the Presi- the approval of the Interstate Commerce dent said of the new corporation: Commission. In addition, the Act requires "It brings into being a powerful organiza- that certain funds be allocated and made tion with adequate resources, able to strengthen available to the Secretary of Agriculture, to weaknesses that may develop in our credit, backing, and railway structure in order to* per- be used by him for the purpose of making mit business and industry to carry on normal loans to farmers. The loans to be made by activities free from the fear of unexpected the corporation must be "fully and adequately shocks and retarding influences. secured" and may bear such rates of interest "Its purpose is to stop deflation in agriculture as the corporation may determine. They and industry and thus to increase employment may be made for periods not exceeding three by the restoration of men to their normal jobs. It is not created for the aid of big industries years, and may be renewed from time to time, and big banks. Such institutions are amply but the time for payment can not be exceeded able to take care of themselves. beyond five years from the date of the original "It is created for the support of the smaller loan. The full text of the Reconstruction banks and financial institutions, and through Finance Corporation Act is printed at the end rendering their resources liquid to give renewed support to business, industry, and agriculture. of this review. It should give opportunity to mobilize the The board of directors of the corporation gigantic strength of our country for recovery." consists of seven members, of whom three are In addition to its capital of $500,000,000 members ex officio—the Secretary of the Treas- subscribed by the United States Treasury, the ury or in his absence the Under Secretary of corporation may obtain other funds up to the Treasury, the governor of the Federal $1,500,000,000 by the issue of its own notes, Reserve Board, and the farm loan commis- debentures, bonds, or other obligations, which sioner—and four are members appointed by gives it potential resources of $2,000,000,000 the President of the United States, with the ad- The obligations of the corporation must mature vice and consent of the Senate.