FEDERAL RESERVE BULLETIN JUNE 1934 ISSUED BY THE FEDERAL RESERVE BOARD AT WASHINGTON Recent Banking Developments Annual Report of the Bank for International Settlements Securities Exchange Act of 1934 UNITED STATES GOVERNMENT PRINTING OFFICE WASHINGTON: 1934 Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis FEDERAL RESERVE BOARD Ex officio members: EUGENE R. BLACK, Governor. HENKY MORGENTHAU, Jr., CHARLES S. HAMLIN. Secretary of the Treasury, Chairman. ADOLPH C. MILLER. GEORGE R. JAMES. J. F. T. O'CONNOR, J. J. THOMAS. Comptroller of the Currency. M. S. SZYMCZAK. H. WARNER MARTIN, Assistant to the Governor. E. A. GOLDENWEISER, Directort Division of Research CHESTER MORRILL, Secretary. and Statistics. J. C. NOELL, Assistant Secretary. CARL E. PARRY, Assistant Director, Division of Research L. P. BETHEA, Assistant Secretary. and Statistics. S. R. CARPENTER, Assistant Secretary. E. L. SMEAD, Chief, Division of Bank Operations. WALTER WYATT, General Counsel. J. R. VAN FOSSEN, Assistant Chiefy Division of Bank GEORGE B. VEST, Assistant Counsel. Operations. LEO H. PAULGER, Chief, Division of Examinations. 0. E. FOULK, Fiscal Agent. FRANK J. DRINNEN, Federal Reserve Examiner. JOSEPHINE E. LALLY, Deputy Fiscal Agent. FEDERAL ADVISORY COUNCIL District no. 1 (BOSTON) THOMAS M. STEELE. District no. 2 (NEW YORK) WALTER E. FREW. District no. 3 (PHILADELPHIA) HOWARD A. LOEB, Vice President. District no. 4 (CLEVELAND) H. C. MCELDOWNEY. District no. 5 (RICHMOND) HOWARD BRUCE. District no. 6 (ATLANTA) H. LANE YOUNG. District no. 7 (CHICAGO) SOLOMON A. SMITH. District no. 8 (ST. LOUIS) WALTER W. SMITH, President. District no. 9 (MINNEAPOLIS) THEODORE WOLD. District no. 10 (KANSAS CITY) W. T. KEMPER. District no. 11 (DALLAS) JOSEPH H. FROST. District no. 12 (SAN FRANCISCO) M. A. ARNOLD. WALTER LICHTENSTEIN, Secretary 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 F. H. Curtiss. R. A. Young W. W. Paddock... W. Willett. J. H. Case W. R. Burgess C. H. Coe.1 New York_. G. L. Harrison J. E. Crane J. W. Jones.* W.S.Logan W. B. Matteson.i L. R. Rounds J. M. Rice.i L. F. Sailer Allan Sproul.* R. M. Gidney L. W. Knoke.i Philadelphia j R. L. Austin _ G. W. Norris W. H. Hutt C. A. Mcllhenny. J. S. Sinclair W. J. Davis.1 C. A. Mcllhenny_. L. E. Donaldson.1 W. G. McCreedy.* Cleveland L. B. Williams.. E. R. Fancher. M. J. Fleming H. F. Strater. F. J. Zurlinden.... Richmond W. W. Hoxton.. G. J. Seay. C. A. Peple G. H. Keesee. R. H. Broaddus J. S. Walden, Jr.» Atlanta... 0>ear Newton... W. S. Johns 3— H. F. Conniff M. W. Bell. W. S. McLarin, Jr.1 Chicago E, M. Stevens.. G. J. Schaller .. C. R. McKay.. W. H. Snyder.* H. P. Preston.. W. C. Bachman.1 J. H. Dillard... R. H. Buss.1 O. J. Netterstrom.1 A. T. Sihler.1 E. A. Delaney.1 St. Louis J. S. Wood.. W. McC. Martin O. M. Attebery.... S. F. Gilmore.1 J. G. McConkey... A. H. HaillJ F. N. HalU G. O. Hollocher.1 O. C. Phillips.* Minneapolis J. N. Peyton W. B. Geery Harry Yaeger H. I. Ziemer. H. I. Ziemer F. C. Dunlop.8 Kansas City __ M. L. McClure.. G. H. Hamilton C. A. Worthington_ J. W. Helm. J. W. Helm _... Dallas.. C. C. Walsh B. A. McKinney R. R. Gilbert Fred Harris. R. B. Coleman W. O. Ford.1 San Francisco Isaac B. Newton- J. U. Calkins W. A. Day W. M. Hale. Ira Clerk 1 Assistant deputy governor. » Controller. ! Acting governor. • Assistant to the 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.. _ 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. 0. Nevin. Denver branch J. E. Olson. Richmond: Oklahoma City branch- 0. E. Daniel. B al ti more 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... J. H. Frye. 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 J. 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 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. ITI Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis TABLE OF CONTENTS Page Review of the month—Recent banking developments 319 New averages of Treasury bond yields 322 Revised index of factory employment 324 Annual report of the Bank for International Settlements 360 Condition of all member banks on Mar. 5, 1934 (from Member Bank Call Report No. 61) 415, 416 National summary of business conditions 344 Financial, industrial, and commercial statistics: Reserve bank credit, gold stock, money in circulation, etc 345-348 Member and nonmember bank credit: All banks in the United States 351 All member banks 349, 350, 415, 416 Weekly reporting member banks in leading cities 352, 419 Brokers' loans 352 Acceptances and commercial paper 353 Discount rates and money rates 354 Treasury finance 355 Reconstruction Finance Corporation—Loans, subscriptions, and allocations 356 Security prices, bond yields, and security issues 357 Production, employment, car loadings, and commodity prices 358, 422-426 Merchandise exports and imports 359 Department stores—Indexes of sales and stocks 1 359 Freight-car loadings, by classes 359 Financial statistics for foreign countries: Gold reserves of central banks and governments 376 Gold production 377 Gold movements 377-379 Government note issues and reserves ^ 380 Bank for International Settlements 380 Central banks 381-383 Commercial banks 384 Discount rates of central banks 385 Money rates 385 Foreign exchange rates 386 Price movements: Wholesale prices 387 Retail food prices and cost of living 388 Security prices 388 Law department: Rulings of the Federal Reserve Board: Classification of deposits as savings deposits under Regulation Q 389 Deposits represented by certificates of deposit as constituting savings deposits 390 Payment of savings deposits before interest payment dates 391 Accommodation endorsement as "Loan or extension of credit" within section 23A of the Federal Reserve Act 391 Limitations on loans or extensions of credit to affiliates secured by paper eligible for rediscount-- 391 Issuance of permits for interlocking directorates under section 32 of Banking Act of 1933 392 Permits to act as correspondent bar^k under section 32 of Banking Act of 1933 in connection with securities specifically excepted from restrictions of section 5136 of Revised Statutes 392 Applications under Clayton Antitrust Act involving interlocking relationships between national banks and organizations which carry margin accounts 393 Applicability of section 32 of Banking Act of 1933 to persons dealing in securities solely for account of others 393 Absorption of exchange or collection charges by member banks 394 Securities Exchange Act of 1934___ 396 Act providing for punishment for offenses committed against banks 410 Federal Reserve statistics by districts, etc.: Banking and financial statistics 412-421 Industrial and commercial statistics 422-427 IV Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis FEDERAL RESERVE BULLETIN VOL. 20 JUNE 1934 No. 6 REVIEW OF THE MONTH $34,000,000, the lowest level since the early days of the System, has reflected a further Member bank reserve balances continued liquidation of indebtedness, largely by member during May at the high level reached in April banks in country districts. Banks in financial and in the last week of May Excess centers have been out of debt to the Federal reserves were $1,700,000,000 in excess of legal requirements. There were Reserve banks for a long time and in addition no considerable changes during May in any of have had a Jarge volume of excess reserves. the items that affect member bank reserve At the beginning of the year there were still balances. Changes in the stock of monetary many small banks throughout the country, gold and in money in circulation were small and however, that carried a considerable load of there have been no substantial changes in the indebtedness. The liquidation of indebtedness cash and deposit position of the Treasury. by these banks reflects in part improvement in business conditions and the consequent ability For the period from the end of January, when of customers to repay bank loans which had the new parity of the dollar was established, to long been frozen. It constitutes a strengthen- the latest available date in May, member bank ing of the banking position. reserve balances showed an increase of $1,100,- 000,000, reflecting in large part the deposit DISCOUNTS FOR MEMBER BANKS with the Reserve banks by member banks of the MILLIONS OF DOLLARS ( Wednesday figures) MILLIONS OF DOLLARS proceeds of gold imported from abroad and the 700 I 1 1 1 700 disbursement by the Treasury of funds pre- 600 600 viously held in cash or on deposit with the New York City 500 A, 500 Reserve banks.