FEDERAL RESERVE BULLETIN AUGUST 1936 ISSUED BY THE BOARD OF GOVERNORS OF THE FEDERAL RESERVE SYSTEM AT WASHINGTON Increase by Board in Reserve Requirements of Member Banks UNITED STATES OF AMERICA 1936 Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis BOARD OF GOVERNORS OF THE FEDERAL RESERVE SYSTEM MARRINER S. ECCLES, Chairman JOSEPH A. BRODERICK RONALD RANSOM M. S. SZYMCZAK CHESTER C. DAVIS JOHN K. MCKEE CHARLES S. HAMLIN, Special Counsel LAWRENCE CLAYTON, Assistant to the Chairman ELLIOTT THURSTON, Special Assistant to the Chairman CHESTER MORRILL, Secretary LISTON P. BETHEA, Assistant Secretary S. R. CARPENTER, Assistant Secretary J. C. NOELL, Assistant Secretary WALTER WYATT, General Counsel GEORGE B. VEST, Assistant General Counsel B. MAGRUDER WINGFIELD, Assistant General Counsel J. P. DREIBELBIS, Assistant General Counsel LEO H. PAULGER, Chief, Division of Examinations R. F. LEONARD, Assistant Chief, Division of Examinations C. E. CAGLE, Assistant Chief, Division of Examinations E. A. GOLDENWEISER, Director, Division of Research and Statistics WOODLIEF THOMAS, Assistant Director, Division of Research and Statistics LAUCHLIN CURRIE, Assistant Director, Division of Research and Statistics GEORGE W. BLATTNER, Assistant Director, Division of Research and Statistics E. L. SMEAD, Chief, Division of Bank Operations J. R. VAN FOSSEN, Assistant Chief, Division of Bank Operations J. E. HORBETT, Assistant Chief, Division of Bank Operations CARL E. PARRY, Chief, Division of Security Loans PHILIP E. BRADLEY, Assistant Chief, Division of Security Loans O. E. FOULK, Fiscal Agent JOSEPHINE E. LALLY, Deputy Fiscal Agent FEDERAL OPEN MARKET COMMITTEE FEDERAL ADVISORY COUNCIL MARRINER S. ECCLES, Chairman District No. 1 (BOSTON) THOMAS M. STEELE. GEORGE L. HARRISON, Vice Chairman District No. 2 (NEW YORK) JAMES H. PERKINS. JOSEPH A. BRODERICK District No. 3 (PHILADELPHIA) HOWARD A. LOEB, CHESTER C. DAVIS Vice-President. M. J. FLEMING G. H. HAMILTON District No. 4 (CLEVELAND) ARTHUR E. BRAUN. JOHN K. MCKEE District No. 5 (RICHMOND) CHARLES M. GOHEN. B. A. MCKINNEY District No. 6 (ATLANTA) H. LANE YOUNG. RONALD RANSOM District No. 7 (CHICAGO) EDWARD E. BROWN. GEORGE J. SCHALLER District No. 8 (ST. LOUIS) WALTER W. SMITH, M. S. SZYMCZAK President. District No. 9 (MINNEAPOLIS) THEODORE WOLD. CHESTER MORRILL, Secretary District No. 10 (KANSAS CITY) W. T. KEMPER. WALTER WYATT, General Counsel J. P. D.IEIBELBIS, Assistant General Counsel District No. 11 (DALLAS) JOSEPH H. FROST. E. A. GOLDENWEISER, Economist District No. 12 (SAN FRANCISCO) __M. A. ARNOLD. JOHN H. WILLIAMS, Associate Economist W. RANDOLPH BURGESS, Manager of System Open Market Account WALTER LICHTENSTEIN, Secretary Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis SENIOR OFFICERS OF FEDERAL RESERVE BANKS Federal Reserve Chairman and Federal Bank of— Reserve Agent President First Vice President Vice Presidents Boston F. H. Curtiss R. A. Young.... W. W. Paddock.. W. Willett.2 New York.. Owen D. Young1. G. L. Harrison.. Allan Sproul W. R. Burgess. L. R. Rounds. L. F. Sailer. W. S. Logan. J. H. Williams. C. H. Coe. Philadelphia.. R. L. Austin. J. S. Sinclair.. F. J. Drinnen... C. A. Mcllhenny.3 W. J. Davis. Cleveland E. S. Burke, Jr.. M. J. Fleming.. F. J. Zurlinden.. H. F. Strater. W. F. Taylor.2 W. H. Fletcher. Richmond- F. A. Delano.. Hugh Leach.. R. H. Broaddus. J. S. Walden, Jr. G. H. Keesee.2 Atlanta.. H. W. Martin. Oscar Newton.. R. S. Parker H. F. Conniff. M. W. Bell.2 Chicago.. R. E. Wood1... G. J. Schaller.. H. P. Preston C. R. McKay. W. H. Snyder.s C. S. Young. J. H. Dillard. St. Louis Paul Dillard1 - W. McC. Martin.. O. M. Attebery. J. S. Wood. J. G. McConkey. Minneapolis.. W. B. Geery.. J. N. Peyton.. Harry Yaeger. H. I. Ziemer.s E. W. Swanson. 0. S. Powell. Kansas City J. J. Thomas.. G. H. Hamilton... C. A. Worthington.. J. W. Helm.3 Dallas C. C. Walsh... B. A. McKinney.. R. R. Gilbert. R. B. Coleman.3 San Francisco W. N. Moore W. A. Day Ira Clerk W. M. Hale. C. E. Earhart.2 1 Deputy chairman. 2 Cashier. 3 Also cashier 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 B. J. Lazar. Denver branch J. E. Olson. Pittsburgh branch T. C. Griggs. Oklahoma City branch C. E. Daniel. Richmond: Omaha branch L. H. Earhart. Baltimore branch W. R. Milford Dallas: Charlotte branch._ W. T. Clements. El Paso branch J. L. Hermann. Atlanta: Houston branch W. D. Gentry. Birmingham branch J. H. Frye. San Antonio branch M. Crump. Jacksonville branch G. S. Vardeman, Jr. San Francisco: Nashville branch J. B. Fort, Jr. Los Angeles branch. W. N. Ambrose. New Orleans branch Marcus Walker. Portland branch R. B. West. Chicago: Salt Lake City branch W. L. Partner. Detroit branch R. H. Buss. Seattle branch C. R. Shaw. St. Louis: Spokane branch D. L. Davis. Little Rock branch __ A. F. Bailey. Louisville branch J. T. Moore. Memphis branch W. H. Glasgow. 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—Increase in reserve requirements 613-619 National summary of business conditions 620-621 Summary of financial and business statistics 623 Law department: Supplement to Regulation D, increasing reserve requirements 624 Rulings of the Board: Advances under section 10(b) of the Federal Reserve Act to member banks which have not exhausted their eligible paper 624 Withdrawal from savings deposit upon telephone or other oral order by depositor 624 Loans to partnerships under section 22 (g) of the Federal Reserve Act 625 Applicability of Public Utility Holding Company Act of 1935 to officers and directors of banks 625 Revision of index of department store sales 631 Balance of international payments of the United States 632 International investment position of the United States 633 Financial, industrial, and commercial statistics: Member bank reserves, Reserve bank credit, and related items 636 Federal Reserve bank statistics 637-639 Member bank reserve balances 640 Money in circulation 641 Gold stock and gold movements 642 All banks in the United States 643 All member banks 644-645 Reporting member banks in leading cities 646-649 Banks suspended and placed in liquidation or receivership; bank debits; Postal Savings System 650 Acceptances, commercial paper, and brokers' borrowings 651 Federal Reserve bank discount rates 652 Money rates and bond yields 653 Security markets 654 Treasury finance 655 Governmental corporations and credit agencies 656-657 Production, employment, and trade 658-664 Wholesale prices 665 July crop report 666 International financial statistics: Gold reserves of central banks and governments 667 Gold production 668 Gold movements 668-670 Central banks 671-674 Bank for International Settlements 674 Commercial banks 675 Discount rates of central banks 676 Money rates 676 Foreign exchange rates 677 Price movements: Wholesale prices 678 Retail food prices and cost of living 679 Security prices 679 IV Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis FEDERAL RESERVE BULLETIN VOL. 22 AUGUST 1936 No. 8 REVIEW OF THE MONTH cess reserves have resulted almost entirely Excess reserves of member banks have from the inflow of gold from abroad and not been in extraordinarily large volume for from the System's policy of encouraging full many months as a consequence recovery through the creation and main- Increase in of an inflow of gold from tenance of easy money conditions. This easy abroad. The problems raised money policy remains unchanged and will by these reserves have long be continued. been under consideration by the Board of "The part of the excess reserves thus elimi- Governors. In order to change a part of the nated is superfluous for all present or pros- excess reserves into required reserves and pective needs of commerce, industry, and thus to eliminate the possibility of this part agriculture and can be absorbed at this time of the reserves becoming the basis of an without affecting money rates and without injurious credit expansion, the Board on restrictive influence upon member banks, July 14 decided to exercise its power under practically all of which now have far more the Banking Act of 1935 to raise member than sufficient reserves and balances with bank reserve requirements. The considera- other banks to meet the increases. Further- tions that led the Board to adopt this course more, by this action the remaining volume of of action are presented in a statement to the excess reserves, which will still be larger press, which was issued on July 14 for pub- than at any time in the System's history lication the following day, the text of which prior to the recent large inflow of gold, is is as follows: brought within the scope of control by the 'The Board of Governors of the Federal Federal Open Market Committee which, as Reserve System today increased the reserve constituted by the Banking Act of 1935, con- requirements for member sists of the members of the Board of Gov- f°r banks as follows: on demand ernors and five representatives elected re- deposits at banks in central gionally by the Federal Reserve banks.