FEDERAL RESERVE BULLETIN FEBRUARY, 1930 ISSUED BY THE FEDERAL RESERVE BOARD AT WASHINGTON Bank Credit and Business Conditions Return of Japan to the Gold Standard Earnings and Expenses of Reserve Banks UNITED STATES GOVERNMENT PRINTING OFFICE WASHINGTON: 1930 Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis FEDERAL RESERVE BOARD Ex officio members: ROY A. YOUNG, Governor. A. W. MELLON, EDMUND PLATT, Vice Governor. Secretary of the Treasury; Chairman. ADOLPH C. MILLER. CHARLES S. HAMLIN. J. W. POLE, GEORGE R. JAMES. Comptroller of the Currency. EDWARD H. CUNNINGHAM. WALTER L. EDDY, Secretary. WALTER WYATT, General Counsel. E. M. MCCLELLAND, Assistant Secretary. E. A. GOLDENWEISER, Director, Division of Research J. C. NOELL, Assistant Secretary. and Statistics. W. M. IMLAY, Fiscal Agent. CARL E. PARRY, Assistant Directory Division of Research Chief', Division of Examination, and Chief Federal and Statistics. Reserve Examiner. E. L. SMEAD, Chief, Division of Bank Operations. FEDERAL ADVISORY COUNCIL District No. 1 (BOSTON) HERBERT K. HALLETT. District No. 2 (NEW YORK) WM. C. POTTER. District No. 3 (PHILADELPHIA) L. L. RUE. District No. 4 (CLEVELAND) HARRIS CREECH. District No. 5 (RICHMOND) JOHN POOLS. District No. 6 (ATLANTA) J. P. BUTLER, Jr. District No. 7 (CHICAGO) FRANK O. WETMORE, President. District No. 8 (ST. LOUIS) W. W. SMITH. District No. 9 (MINNEAPOLIS) GEO. H. PRINCE. District No. 10 (KANSAS CITY) W. S. MCLUCAS. District No. 11 (DALLAS) B. A. MCKINNEY, Vice President District No. 12 (SAN FRANCISCO) F. L. LIPMAN. II 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 j W. P. G. Harding.. W. W. Paddock- W. Willett. J. W. Jones.* New York.. G. W. McGarrah I Geo. L. Harrison.._ J. H. Case 1 L. F. Sailer Ray M. Gidney. E. R. Kenzel J. E. Crane.1 A. W. Gilbart.... W. B. Matteson.i L. R. Rounds C. H. Coe.i 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 II. F. Strater. Frank J. Zurlinden Richmond Win. W. Hoxton. George J. Seay C. A. Peple Geo. H. Keesee. R. H. Broaddus- John S. Walden, jr.2 Atlanta Oscar Newton I Eugene R. Black I Hugh Foster M. W. Bell. ' Creed Taylor Chicago Wm. A. Heath j J. B. McDougoL. C. R. McKay W. C. Bachman.2 John H. Blair. K. C. Childs.2 [ J. H. Dillard.2 i D. A. Jones.2 O. J. Netterstrom.2 St. Louis- Rolla Wells . WTm. McC. Martin . 0. M. Attebery | A. H. Haill.* F. N. Hall.2 S. F. Gilmore.2 G. O. Hollocher.2 C. A. Schacht.2 Minneapolis John R. Mitchell. W. B. Geery Harry Yaeger Gray Warren. H. I. Ziemer. Fran" k" C. Dunlop.' 2 Kansas City M. L. McClure W. J. Bailey C. A. Worthington J. W. Helm. Dallas C. C. Walsh Lynn P. Talley R. R. Gilbert I Fred Harris. R. B. Coleman I W. 0. Ford.1 San Francisco- Isaac B. Newton Jno. U. Calkins Wm. A. Day I Wm.M. Hale. Ira Clerk | 1 Assistant deputy governor. 2 Controller. 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 ._ 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 A. H. Dudlev. Dallas: Charlotte branch Hugh Leach. El Paso branch J. L. Hermann. Atlanta: Houston branch . W. D. Gentry. New Orleans branch Marcus Walker. San Antonio branch M. Crump. Jacksonville branch W S. McLarin, jr San Francisco* B irmingham 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. JR. 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. Bailev. 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. 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 Page Review of the month—Bank credit and business conditions 51 Easier credit conditions—"All other" loans—Decline in production—Production analyzed—Build- ing industry—Factory employment—Prices. Earnings and expenses of Federal reserve banks during year 1929 55, 95-96 Return of Japan to the gold standard 72 Recent currency legislation in Denmark &_ 72 National summary of business conditions . 57 Financial, industrial, and commercial statistics: Reserve bank credit and factors in changes 58-60 Analysis of changes in monetary gold stock 59 Discount rates and money rates 61, 62 Member bank credit 63 Bankers' balances 64 Bankers' acceptances and commercial paper outstanding 64 Brokers' loans 64 Commodity prices, security prices, and security issues 65 Production, employment, and trade 66 Industrial production 67, 68 Factory employment and pay rolls 69 Building 70 Trade and distribution 71 Bank suspensions 94 Financial statistics for foreign countries: Gold holdings of central banks and Governments 73 Gold exports and imports 73 Condition of central banks .. 74 Condition of commercial banks 76 Discount rates of central banks 76 Money rates 77 Foreign exchange rates 78 Price movements 79, 80 Law department: Liability incurred by a member bank in purchasing Federal reserve exchange 81 Opinion of Attorney General regarding branches of national banks resulting from consolidation or conversion of State banks having branches 81 Changes in National and State bank membership 83-85 Fiduciary powers granted to national banks 83 Detailed banking statistics for the United States 86-94 IV Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis FEDERAL RESERVE BULLETIN VOL. 16 FEBRUARY, 1930 No. 2 REVIEW OF THE MONTH entire amount of funds released through the return flow of currency and the decrease in Credit conditions became considerably easier member-bank reserve requirements was used in January, chiefly in consequence of seasonal in a moderate reduction of acceptance holdings developments. The return flow and a liquidation of more than $375,000,000 of of $470,000,000 of currency discounts for member banks. from circulation after Christ- The decrease in deposits of member banks mas, an amount larger than usual for the sea- during recent weeks has reflected principally son, enabled member banks further to reduce "Allother" continued liquidation of loans their indebtedness at the reserve banks to loans other than loans secured by $400,000,000, the lowest level in two years. stocks and bonds. Total investments and Member-bank indebtedness decreased in all security loans of member banks in leading cities Federal reserve districts, but especially at New BILLIONS OF DOLLARS BILLIONS OF DOLLARS York City, where in the middle of January 10 member banks were practically out of debt io MEMBE— R BANKS IN LEADING CITIES to the reserve bank for the first time since 1924. Under these conditions open-market money rates at New York City on most classes of loans declined, the prevailing rate on call money to 4% per cent and on commercial paper to below 5 per cent, compared with^K per cent in the autumn of last year. While the post-holiday inflow of currency from circulation was the principal factor mak- ing for ease in the credit situation in January, another factor was the considerable decrease in the demand for credit at commercial banks. Total loans and investments of member banks, 8 8 after the temporary increase at the time of the Feb Mar. Apr May June July Aug. Sept. Oct Nov. Dec Jan liquidation of nonbanking loans in the security have shown little change since the end of No- market at the end of last October, decreased vember, except for a temporary seasonal in- rapidly from November to the end of January, crease in security loans over the turn of the and the resulting decrease in deposits reduced year, but the volume of "all other" loans de- the reserve requirements of the member banks clined rapidly both in December and in the first and thus released funds which became avail- half of January. These loans usually show a able for liquidating discounts at the reserve seasonal decline from the middle of October banks. .In January there was relatively little to the end of January, as is brought out by the change in the open-market holdings of United chart, which shows the course of "all other" States securities by the Federal reserve banks, loans from January, 1926, to January, 1930, so that, with the cessation of gold exports, the with separate curves for each year. In the 51 Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis 52 FEDERAL RESERVE BULLETIN FEBRUARY, 1930 early weeks of last October the volume of these of the third quarter of the preceding year.