1937 Directors Frb Minneapolis

AUDITOR* S REPORT

ffEDKEtAL RISSJSRVB BA1JK OF MINNEAPOLIS

FOR THE YEAR 19 3 7

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To the Directorsi

In presenting the results of our 193? operations, wo draw attention to the fact that decreased expense rather than expanded incone has made possible a net Increase of approximately $37,000 in our surplus. This was accomplished after transferring to Reserve for Losses and Contingencies the full amount of the profit on sales of Government securities from System Account* Nearly 96fo of our current Incane lias been in the form of interest on Governments.

The reduction in expense of $90,000 covered many items, the most important “being salaries and note costs. .Amounts reserved for taxes showed an increase which re hope to see reversed when our tax suit is decided.

There has "been contraction in the volume of some of our services compared to 1936, especially during the closing months of 1937. Corrency and collection volumes have been reduced with not much change in transit volume* Deposits averaged $14,000,000 higher in 1937 through increase in the reserve requirement, Member aiike wore reduced fourteen in number during the year.

The auditing schedule presented covers the entire year and confonas with the frequency approved at the last Auditors* Conference,

Respectfully submitted,

Auditor.

January 1, 19 S3.


M m

Auditing.................................................. ... 23-25Bank Examinations............................................. 44-45Bank and Public Relations.................................. ... 43Bank Premises........ ........................................ 26-28Chock Collections - Transit Department ........ ............. ... 32-33Closed Banks........ ........... ........................ . • 31Collections - Non?-Cash........................................ 34Currency and Coin................... ...................... ... 36-37Custodies .................. ..... ......................... ... 35Deficient Reserve Penalties ...... .......................... ... 42Discounts and Industrial Loans...................... ..... ..... 29Dividends...................................... ........... ... 18, 22Earnings

Comparative statement 1937-1936 ............................. 3Average rates on earning assets................ ..... ....... 30Comments ........................... ....................... 4-5

ExpensesComparative statement 1937-1936 ............................. 6Comments........................... ......... ......... .... 7-16Reimbursable Expenditures ................................ ... 16

Failed Bonks ............................... ......... ......... 31Federal Reserve Hotos .......................................... 38-41Fiscal Agoncy Functions ........... ......................... ... 46-48

- •Franchise Tax paid since organization.......................... 18Furniture and Equipment ........................................ 14Liabilities............................... ................... 2Member Banks •» Changes in membership......... .......... ....... 34Hon-Cash Collections .......................................♦ 34Profit and Loss ......... ............. ..................... ... 17-22Reconstruction Finance Corporation................ ......... ... 48Rein'bursable Expenditures.......... ........ .............. .... 16Resources................................................. ... 1Securities

Safekeeping................................................ 35Investments...........................*....... ......... ... 5

Surplus............... ................................... .... 18Jaxes.................................. ......... ......... ... 12Telegraph...........................*................. ....... 42Transfer of Funds.......................................... ... 42

Transit Functions .......................... ................ ... 33-33Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

FEDERAL RESERVE BAM OF MINNEAPOLIS AND HELENA BRANCH (After closing entries)

COMPARATIVE STATEMENT OF RESOURCES

December 31. 1937 December 31. 1936Cash Reserves?Gold certificates with F. R. Agent ....... $ 140,500,000.00 $ 128,000,000.00Redemption fund - F. R. Notes ........... 445,958.09 914,568.48Inter«di3trict settlement fund .......... . 45,247.038.71 47.995.044.65Total gold certificate reserves ........ $ 186,192,996,80 $ 176,909,613.13

Other cash ................................ 9,671,749.67 7,301,328.40Total cash reserves................... $ 195,864,746.47 $ 184,210,941.53

Bills and Securities:Bills secured by U. S. Government obligations, direct or fully guaranteed ......... - 3,000.00Bills otherwise secured and unsecured.... 174,980.81Bills bought in open market .............. 54,398.87 60,662.78Industrial advances ..................... 636,851.23 1,063,812.01U. S. Government securities ............. 83,008,500.00 90,707,500.00Foreign loans on gold................... - 7,200.00Total bills and securities .............. $ 83,874,730.91 $ 91,842,174.79

Due from Foreign banks............. ...... 1,986.41 2,991.32F.R. Notes of other Federal Reserve Bmjks.. 1,920,000.00 1,740,000.00

Uncollected Items:Transit items ........................... 16,937,208.97 17,202,493.07Exchanges for clearing house............ 477,559.17 584,938.78Other cash items ........................ 663,625.49 748,758.76

Total uncollected items ................ 18,078,393.63 18,536,190.61Bank premises - Les3 depreciation reserves ., 1,477,340.02 1,487,513.72Miscellaneous Assets:Premium on securities................... 689,975.19Interest Accrued.................... .... 264,360.74 13,567.73Reimbursable expenditures ..... .......... 26,416.29 18,346.21Deferred charges ........................ 14,567.15 15,722.22Claims Account Closed Banks.......... . 14,605.53 93,601.67Miscellaneous assets acquired in settlement of claims account closed banks .... 102,094*57 77,570.26

Industrial Advances past due three months ... 203,551*11All other resources ....................... 22,284.96 13,531.48

Total miscellaneous assetsTOTAL RESOURCES ..

$ 1,337,855.54 t> 232,339.57 $ 302,555,052.98 $ 298,052,151,54


FEDERAL RESfrlRVE BAIIK OF MIJTOAPOLIS AND HELENA BRANCH (After closing entries)

COMPARATIVE STATMMT OF LIABILITIES

Desember 31, 1936F. R. notes in actual circulation ......... $ 137,569,170.00 $ 136,096,365,00Deposits:U. S. Treasurer - General account ......... 4,339,424.48 5,470,909.59Members - Reserve account ................. 126,011,198.87 120,530,139.28Due to foreign 'banks .......... ......... . 3,990,198.57 2,376,383.54Other deposits ............................ 3,227,235.08 5,445,070.43

Total deposits ........................ $ 137,568,057.00 $ 133,822,502.84

Deferred availability items .............. .. $ 18,082,089.10 $ 18,825,773.16Miscellaneous Liabilities:

Sundry itesas payable .................... $ 108,071.88 $ 83,505.52Unearned discount ........ ............... 704.98 333.03All other.............................. 68,940.82 64,045.49

Total miscellaneous liabilities ......... $ 177,717.68 $ 147,884,04Capital stock paid in ........ •............ $ 2,893,050.00 $ 2,943,050.00Surplus Fund - Section 7 .................. 3,153,413.69 3,116,430.29Surplus Fund - Section 13-*b............... 1,001,162.98 1,002,914.21Reserve for self insurance............ . 515,379.97 515,379.97Reserve for prior service liability toRetirement System ....................... 166,088.00 249,128.00

Reserve for other losses and contingencies... 1,428,924.56 1,332,724,03

TOTAL LIABILITIES $ 302,555,052.98 $ 298,052,151.54


COMPARATIVE STATEMENT OF GROSS EARNINGrS

FEDB3AL -RESERVE B A M OF ^IMNlilAPQLIS AND HSLENTA .BHANGH

M inneapolisEarnings From 1937

Discounted M i l s ............................................. £ U,601.49Purchased bills . . ............... ......................... 4 6 3 . 5 6Industrial advances „ ...................................... 43,381.11Commitments to make industrial advances . . . . „ . „ „ . „ 6 3 6 . 6 1U« Sn Government securities ............... 1 ,2 9 2,^b? „ 5 3Deficior.t reserve penalties . „ . ................. 1*530.. 93Interest received on past-due paper of closed banks . « . . 339»11Interest on past-due industrial advances . . . ........ „ . 6,1 7 8 . 6 8Sale of waste paper, money bags, etc, . . . . ........... .. 1 3 1 . 1 9Service charges on collection items returned unpaid. . . . . 3 6 .60Monthly letters sold . .......... .. • . . . .C le a r in g house f in e s . . . . 0 . ........................................... . . „ . 57.00All Other ......................... . ........................ 1.5G

Total Earnings $ 1,3^9,820.31

Helena Branch Combined Combined1937 1937 1936

156.97 U.758.U6 1,048.76463.56 560. 76**3 , 3 8 1 . 1 1 79,125.14636.61 979.46

1,292,462.53 1,265,518,86381.42 1,912.35 350*29339.11 13,962*20 6,178.6s1 3 I0I9 75* b5

36060 39<> 90

57«00 34.001 .50 5 M

53So39 1,350,358-70 1 , 36 1 , 700.50


EARNINGSEarned at Minneapolis $ 1*349,820c31Earned at Helena 538,39 & 1,350,368*70

Current earnings for the year were $11,341.80 less than for 1936 principally because of the falling off in Industrial advances. Since 1933 over 90$ of our current income has come from interest on Government holdings. During the year just passed 95.71# of our earnings, or $1,292,462.53, m s obtained from such investments. In no year since 1929 has the volume of discounted pape? exceeded the amount invested in United States securities.

During December the average amount of Governments held in System Account increased $455,228 to $83,051,661 through additional purchases by the Open Market Committee. These purchases and exchanges resulted in a further lowering of the aver» age rate on Governments. From April to October, inclusive, the earning rate showed gains each month, the rate of 1.58$ in December reflecting a slight downward trend for the past two months. For the year 1937 the average rate obtained on Governments was 1.557$ compared to 1.539# in 1936. During the year 1936 we held an average of $82,203,000 in Governments, or $816,000 less than the average in 1937, with the income from this source $26,943.67 greater in 1937, On December 31 our participation in♦System Account amounted to $83,008,500 compared to $90,707,500 held at the close of 1936. Each quarter holdings are revised based on the needs of each bank in relationship to the System as a whole. Our allotment on January 1, 1938 has been increased $237,000. Daily earnings on Governments as of the same date are $3,573.69, compared to $3,434.94 one year ago.

Industrial advances current on December 31, 1937 of $637,000 were $53,000 less than at the close of November and $427,000 below the current advances on December 31, 1936. 1?e also have past due advances at this time of $203,551.11, with none uncurrent one year ago. For the year, current advances averaged $723,000, compared to $1,315,000 in 1936. Earnings from current advances in 1937 were $43,381.11 to tdiich must be added $636.61 for commitments and £6,178.68 for interest received on past due advances, making a total of $50,196.40, compared to $80,104.60 in 1936. Of the funds used in making industrial advances, 97.753$ m s supplied by the Treasury Department. All profit, expenoe and loss is allocated to the Treasury on the same basis* After providing for expense and estimated losses, Treasury funds as represented by Surplus, Section 13-b, were reduced $1,751.23.

Member bank discounts were current at Head Office practically throughout the year and also at Helena after the first four months. The greatest average amount

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under discount m s during October, reaching $801,000. For the year 1937 daily aver* age of discounts to meabers m s $262,000, compared to $47,000 in 1936. Earnings although greater than in 1935 and 1936 amounted to but $4,758.46. The discount rat© Tihich had been 2$ since May 14, 1935, m s reduced to ihf? on August 24, 1937.

Earnings from purchased bills show a total of $463.56, practically all of which came from our participation in investments made through foreign banks by the Open Market Committee. The only other purchased paper we had during 1937 was in the nature of bankers * acceptances allotted us in the amount of $18,694.39 on May 13 and maturing before June 15.

All earning assets held in 1937 averaged $84,141,000 compared to $83,732,000 held in the previous year. Because of the greater amount of industrial advances in1936, the average earning rate obtained m e 1.609$ in comparision with 1.595$ received in the year just closed.

Earnings in the miscellaneous classification, in addition to Interest on past due industrial advances, amounted to $2,477.75. Of this total, $1,912.35 came from deficient reserve penalties. Considering the fact that reserve requirements were increased 100$ between August 15, 1936 and May 1, 1937, the amount of penalties assessed is not large. During 1936 penalties of $350.29 were charged. In the process of settling final claims at closed banks, rre collected $339.11 in past due interest on such claims* One year ago settlements resulted in crediting $13,962.20 collected as past due interest. Other minor receipts Included $131.19 from the sale of mste paper, money sacks, etc., $36.60 in service charges on collections returned unpaid, and $57.00 imposed as fines in connection with the operation of the Twin City Clearing House.

With further reference to our participation in the System holdings of UnitedStates securities, our proportion of the total of $2,564,014,850 is 3.2374$, or$83,003,500, made up as follows:

United States Bonds $ 24,331,500United States Treasury Notes 37,392,000United States Treasury Bills 21.285.000

$ 83,008,500In the classification of maturities, 49.51$ of the total matures within two

years; 72.67$ within five years; and 27.33$ over five years. One year ago 82.2$ of all holdings matured within five years and we held 3.73$ of the $2,430,226,850 of securities making up the System Account.

BAHNINSS - Cont 9d


COMPARATIVE STATEMENT

CURRENT EXPENSES OF THJal FEDERAL RESERVE BANK OF MINNEAPOLIS AND

HELENA BRANCH

Minneapolis Helena Branch Combined Combined1937 1937 1937 1936

Salaries^ Officers . . . . . . . . . . . $ 85*752., 69 1^,691 <>52 100, W*. 21 12 0,661*6839^8927-97 J42»1S7-1+1 ’437#!15032 ^3*173*99Retirement System contributions for current service 0 „ „ „ 2Ue222ol6 2 ,790c!! 27*0X2*27 29P9Sio36

9„l60o6H 35»oo 9,X95o6H 9e926o8610,9^3*59 1 ,160.50 12,X0Uo09 1 0,2 9 3.15

995«Q5 - 995*05 1 ,20U, 57T ra v e lin g expenres . . . „ 0 . o o . . . . . . . . . . . . 2le07S,73 1 .551-70 22,630.^3 29,279.10

98#U0Xol6 1 5 .9TO.u5 1 1M 8I06X 1 1 9 ,912 A 9Telephone and telegraph . . . . . . . 13*358.07 U»H57„28 17,815.35 20,028.8223,327.53 3,1 9 1o06 26,518*59 31,700*17

Insurance on currency and security shipments « . . • . . . 7,521*3^ 1 ,196.03 Ss717.37 9*338.83Other Insurance . . . . e . . . . . . . . . . . . . . . 0 « 1 7 ,608*10 2,069.05 19.677.15 20,9^7ol6Taxes on ’bank: premises........... . . . . ........ 70,927*03 1 j.1U.s9 72,X01o92 66,8X6076Depreciation on hank "building 0 0 ................. . 28,809.3>+ - 28,809.3^ 29,232.59Light, heatr cower* and water „ o . . . . . . . . . . . . . 15*63503^ !,5?5.38 1 7 ,160.72 20, 067c, 21Repairs and alterations to bank building 1 ^ 938.66 212.07 1 5 , 150.73 6 , 8U0o 52

90,00 - 9Q .00 —Furniture and equipment , . .......... .............. . « 19s25So05 520^51 19,778.56 11,410.91A l l Other .................... . . . . . . . . . . . . . * 23*335*93 2,098.07 25,143,4.00 33,732o75

Total Operating Expense . . . .................Received from Government agencies for

$ B80,351,3S 9**, 7210 03 975,132.^1 i b05H ,55M *Rental of st)ace .................................... 10^75*95 - 10SU75. 95 12*317*22Rental of Furniture and eauipment . . ............... 2 ,2 ^ 2 .3 1 - 2 ,2 1*2 *31 2 ,U o i« 3 3

$ 867,633.12 9U,7Slo03 962.HlU.i5 1 ,039,836.U3

Board A ssessm ent ...........................................................................................Federal Reserve Currency?

U0, 3 6o2 - Uo,3U6.2U 39,750.73Original Cost, including shioping charges . . . . . . * ^3,739-82 - **3.739.82 5 7,825.66

6,359.07 - 6,359*07 5^57.81

T o ta l Current Exoenses . . . . . . . ......... $ 958,072.25 9U,7Siu03 1 ,052,859.28 l , l U 2 , 87O0 63


EXPENSES Minneapolis $ 958,078.35Helena .. 94,781.03 $ 1,052,859.28

The 1937 “budget placed Minneapolis coots at $924,883 r>nd thoso of Helena at $98,871. After the figures had "been submitted, we were advised by the Board that depreciation on bank premises should be apportioned monthly and charged to Expense. This raised the Minneapolis budget figures to $953,692.34 and the combined figures to $1,052,563.34. In comparison with the like costs of 1936, our expenses of 1937 show a reduction of $90,000. Other changes have been made in tho method of reporting certain items under instructions from the Board, but in making comparisons with previous years the necessary allowances have been made.In addition to the change in method of handling normal depreciation, collection of rent for space and equipment from fiscal agents is now deducted fron expense rather than added to current earnings as in 1936*

Rental of space paid by fiscal departments in 1937 amounted to $10,475.95 with $2,242.31 collected for the use of our furniture nnd other equipment. The total amount of all sorvices in 1937 for which reimbursement is obtained was $153,449.21, compared to $198,294.83 in 1936. Servlcos performed for the Government, the expense of which was absorbed by the Bank, amounted to $36,305.65 at Minneapolis and $5,537.14 at Helena.

Gross expenses of making industrial loans was $36,987.88 in 1937, with income from advances $13,208.52 in excess of expenses. It was estimated at the beginning of the year there would be sufficient income to make it unnecessary for the bank to absorb any expense or possible loss in connection with these loans.The bank has assumed no expense and the proportion of funds set aside for possible losses is $40.25.

SALARIES Minneapolis $ 480,680.66Helena 56.878.93 $ 537,559.59

Net Changes from 1936Ket Decreases

In payments to officers $ 20,217.47In payments to all other employees 46,058.61Total decrease for 1937.......$ 66,276.08

Decrease at Minneapolis $ 59,954.27Decrease at Helena 6.321.81

$ 66,276.08It was indicated at the beginning of 1937 that our salary payments, less

recoveries from fiscal agencies, would be approximately $533,000. On thi3 basisDigitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

EXPENSES ~ Cont5d

the ejected reduction was $70,500 for the year. Salary recoveries for fiscal services were less in 1937, a total of $118,427,10 "being received, compared to $127,533*95 in 1936, The Bank pay roll was inflated $6,165 through the payment of dismissal wages to ten fiscal employees* These persons although hired tempor- arily had boen with ua for an extended period and were treated the same as regular tanking employees, but it is not permissible to recover a dismissal payment from fiscal agencies.

Changes in the staff were few in 1937, compared to 1935 and 1936* During1937 the net change was thirteen persons* At present there are fifty persons regularly assigned to fiscal work compared to forty**five one year ago. Other Minneapolis employees have decreased fifteen with Helena having twenty«*nine persons now and thirty-*two one year ago. Transfer of Reconstruction Finance Corporation duties to Minneapolis caused the reduction at the Branch, In addition to dismissal wages paid fiscal employees, we paid $1,897,50 to five employees of banking departments during the year. As of January 1, 1938, the total number of employees at Minneapolis and Helena was 334, The pay roll basis for 1938 is approximately $25,000 less than in 1937,

jpiTIREMEHT SYSTEEiCURRENT SERVIC3S CONTRIBUTIONSMinneapolis $ 24,222,16Helena 2.790.11 $ 27,012,27

The above payments are the monthly contributions during 1937 based on the actual salaries paid during each month at a rate of 5,28$ of the pay roll.No change was made in this percentage during the year. Payments for service prior to March 1, 1934 are also made monthly to the Retirement System from funds already provided,

LEGAL FEES Minneapolis $ 9,160,64Helena 35«00 $ 9,195,64

Payments at Minneapolis were $160,64 in addition to the regular retainer paid Ueland and Ueland, At Helena the small disbursement of $35,00 was for a legal opinion in connection with the payment of State income taxes by Branch employees.


DIRECTORS1 FEES M S EXPENSES Minneapolis $ 10,943.59Helena 1.160.50 • $ 12,104.09

.Directors® expenses were $1,752.49 greater at Head Office and $58.45grnater ^t Helena during the past year than in 1936. These costs at Minneapoliswere distributed as follows:

Regular meetings $ 4,134.40Executive Committee Meetings 130.00Discount Committee Meetings 5,080.00Audit Committee 69.00Directors1 meeting at Rapid City, S.D. 1,273.67Air-conditioning Committee 60.00Luncheons 159.67Football tickets 36.85

$ 10,943.59

Branch directors held ten regular Board meetings during the year, none being held in April or December. No other meetings were held.

FEDERAL ADVISORY COUNCIL $ 995.05Three meetings were attended by our representative, with $350.00 also

paid as our portion of secretarial expense.

TRAVELING EXPENSES Minneapolis $ 21,078.73Helena 1.551.70 $ 22,630.43

Included in the above are expenses of the President attending conferences in Washington ?nd Industrial Loan Committee expense formerly shown separately.The items below which come in this classification have required approximately $6,600 less of expense than in 1936:

Industrial Loan Committee expense $ 648.75Industrial Loan investigations 2,594.46Showing Bank movie 1,493.55Bank examinations 4,008-97Bank visitations 4,352.65Closed bank representatives 3,113.34Conferences 710.26Conventions 1,512.21Retirement System meetings 96.10Presidents* Conferences 352.15McConnell and Grangaard (Credit training) 856.65Open Market Committee meetings 231.71Attending Directors1 meeting in South Dakota 208.88

(Peyton and Powell)Attendance of Directors at opening of Boardbuilding in Washington 546.25

Miscellaneous 352.80$ 21,078.73

Branch travel expense was $800 less than in 1936 r'nd consisted chiefly of visits


TRAVELING EXPENSES - Cont*d

to "banks and attending group meetings and conferences* Any expense incurred in making industrial loan investigations is assumed at Head Office* Included in Helena travel expense is $424.85 caused through, the examination of the Branch "by Minneapolis auditors.

FO STAGE A-!ID BXPRESSAGE Minneapolis $ 98,401.16Helena 15.980.45 $ 114,381.61

Compared with 1936, Minneapolis and Helena show reductions of $4,744.12 and $786.76, respectively. There was not much change at Minneapolis in the total postage required for money shipments, but there was a change in the volume received rnd shipped. We absorbed $4,140.20 more on currency sent us than in1936 and paid $3,832.66 less on money shipped by us than in 1936. Total postage required on money shipments at Minneapolis during the year was $49,251.98 compared to $48,944.44 required in 1936. Ordinary mail postage, including transit letters, required $40,654.38, compared to $43,771.54 in the previous year. One reason for the lowered postage expense was the recovery of approximately $1,850 more than tho cost of postage used on security shipments. One year earlier we had a loss of $787.06 in this respect. Surcharges included in our postage expense amounted to $14,430.48 in 1937 and $14,969.99 in 1936.

Express charges absorbed at Minneapolis amounted to $10,356.26, compared to $9,642.24 in 1936. Incoming coin shipments required $5,453.44, or approximately $500 more than last year, and checks sent to member banks by express cost $3,423.25 which was $935 greater than the amount paid in 1936. Shipment of Government vouchers cost $459.43, or nearly $100 less than one year ago. All payments for operating the bank truck and mall car cost $938.01. This expense is $600 less than in 1936 irhen the truck was overhauled.

At Helena more expense was incurred through shipments of money to members than was absorbed on Incoming shipments. Of the total expense, $9,800 was used in money shipments, the balance covering ordinary mail, checks sent by express, and armored car maintenance.


TKL-TCPHOHE AND TEIjEG-RAPH Minneapolis $ 13,358.07Helena 4.457.38 $ 17,815.35

The above costs were formerly shown separately. The reduction of approximately $2,200 from 1936 expenses is mostly in telegraph costs* At Head Office the proportion of salary expense was $2,342.78 in 1937, compared to $2,105,74 in1936. Leased wire costs were lowered from $4,563.80 in 1936 to $3,449.90 for the past year. The cost of messages over outside wires was approximately $1,400 less than in 1936. Payments to telephone operators have decreased from $3,246.35 in 1936 to $1,971.54 with this reduction reflected in the salary payments.

At Helena the total telephone expense was $160 less thru in the previous year. The Branch uses the commercial wires entirely, with such messages costing $4,262.54 in 1936 and $3,977.21 for 1937. For messages relayed by Minneapolis, the Brmch was charged $88.52 of our leased wire expense.

PRIIITINGi STATIONERY AND SUPPLIESMinneapolis $ 23,327.53Helena 3.191.06 $ 26,518.59

A very marked reduction is noted in these costs for 1937, being equivalent to 16.4$ of the 1936 total. There has not been any important reduction in prices nnd there was no marked decrease in the number of employees as in 1935 and 1936. An analysis of expenditures shows that the following were the principal causes for reduced pnyments: Changing of safekeeping methods and filing equipment required $2,970.59 es^ense in 1936, with $1,199.51 needed during the past year. Publications sent member banks and others were reduced $552.13 in1937. Additional film, etc., in connection with bank movie required $1,116.74 in 1936 find $200.12 in 1937. Changes in methods nnd supplies in connection with currency shipments reduced these expenses nearly $1,500 from such costs in 1936. Unifome costing $792.00 were purchased for the guards in 1937, with none bought the previous year.

All purchases are carefully considered by a committee of officers nnd employees before ordering and requirements over $500 are referred to the Discount Committee for action.

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INSURANCE OH CURRENCY AMD SECURITY SHIPMENTS

Minneapolis $ 7,521.34Helena JU196.fia $ 8,717.37

The decrease of $621,46 compared to the previous year ie largely the result of greater recoveries of expense from member banks for securities shipped for their account. There was a small net increase in the amount of insurance absorbed on money shipments with incoming shipment costs increasing $300 and outgoing shipments costing $200 less.

OTHER INSURANCE Minneapolis $ 17,608.10Helena 2.069.05 $ 19,677.15

Insurance coverage of all kinds cost less in 1937 than for many years previous. Changes mnde in 1936 were more apparent during the past year. The prem- tom for blanket bond was reduced in August 1936 from $14,000 to $13,250, bringing a saving of approximately $400 more in 1937. Workmen* s Compensation and Group Life premiums were lower because of further reduction in pay roll. Various policies covering the building cost more than in 1936, because of the fact that we received credit in 1936 for cancelled policies which had several years to run. Automobile insurance expense, which, in addition to truck and mail car Includes one-half the premivim for collision insurance on employees* cars used on bank work, was $370 less than one year ago. The higher payment in 1936 was due to the holding over of the premium due on November 1935 for policy protecting the bank against contingent liability for damage done by employees* cars.

1937$

1£2£Jhployees Fidelity $ 250.00 241.70Bankers* Blanket Bond 12,290.44 12,676.34Workmen* s Compensation 1,387.56 1,502.65Fire on Building, Equipment, etc. 1,367.24 1,332.52Contributory Group Life 1,562.64 1,823.93Automobile 750.22 1.129.12

$ 17,608.10 $ 18,706.26Helena expense is lower by $170 because of the reduction in Branch portion

of blanket bond and changes in staff and pay roll.

TAXKS ON BANK PREMISES Minneapolis $ 70,987.03Helena -1.114.89 $ 72,101.93

Until December, r;e reserved at Minneapolis $6,487.78 each month based on the valuation we had been given one year ago and a rate of 93 mills. Late in

December we were advised the rate for 1937 would be .10025 mills, making itDigitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

TAX3S ON BATIK PREMISES - Cont’d

necessary for us to reserve $10,621.45 to provide the required amount. The total of our 1936 taxes is $65,853.30, of which 75$ has been paid under protest by our counsel. Our tax case will bo heard in Federal Court beginning Monday, January 17,1938.

Taxes on the present quarters at Helena were paid during November, being reserved monthly and paid in the tax year. The payment for 1937 was $144.40 grentor than in 1936. The Branch also paid taxes of $366.62 on the property acquired for a new building, but this amount was charged off at the close of the year after having been added to the cost of tho land.

DEPRECIATION OH B AM BUILDING^Minneapolis $ 28,809.34Helena None $ 28,809.34

This item formerly was treated as a separate charge in profit and loss at the close of each year. Since the first of 1937, we have reserved the required proportion each month, Normal depreciation for many years has been $25,665.63, r/hich is 2$ of estimated replacement value of our property. The additional amount of $3,143.71 represents depreciation allowances on protection equipment, deep well and air-conditioning machinery recently installed. No further depreciation of this equipment will be required, because a special reserve providing for the bal~ ance of $35,264.58 was set up at the close of 1937.

LIGHT. HEAT, PO’M R AND WATERMinneapolis $ 15,635.34Helena 1.525.38 $ 17,160,72

All costs of the above character were lowered during the past year at Minneapolis. The number of gallons of fuel oil paid for in 1937 was 112,102 at a cost of $5,959.57, compared to 151,401 gallons in 1936 at a cost of $8,265.18.Our oil contract gives us the advantage of any price cut and protects from increases over a price of $5.50 per 100 gallons. Recent purchases rcere on a basis of $5.10 for 100 gallons, compared to $5.50 one year ago.

Electricity for power and light has shown further reduction in total cost with the expense of $9,210.38 nearly $400 less than in 1936. Usage of city water has been less5 the 1937 cost of $430.59 being a reduction of $208.57 from 1936.

Helena costs for gas heat required $518.29 during the past year, compared to $509.40 one year earlier. Light and power expense of $942.19 was $59.21 in excess of 1936. The Branch paid $64.90 for city water during the year.


REPAIRS M U ALTERATIONS Minneapolis $ 14*928*66Helena 212*07 $ 15,150.73

A considerable amount of renovating was necessary during the past year, some of the work "being carried over from the previous year* The more Important items ?nd costs at Minneapolis were as follows: Plastering stock room, locker rooms and other smaller rooms, $1,723*61; new ceilings on second and third floors, $6,144*40; new sidewalk on Marquette Avenue and Fifth Street, $1,390; Otis elevator maintenance contract, yearly payment $2,166*00* In addition to the above, we charged out of expense $2,263, the estimated cost of alterations in the currency and coin department.

At Helena no expense w^s incurred since oarly in the year. The amount spent by the Branch was for labor and material used in making the walls safer after the earth tremors*

S M SMinneapolis $ 90*00

The bank car used in transportion of movie equipment is kept in a down town garage, for which we pay a monthly rental*

FUBNITUKB AND EQUIPMENTMinneapolis $ 19,258*05Helena . 520*51 $ 19,778*56

Beginning with 1937, all purchases of furniture and equipment are made direct charges to expense and not placed in a separate accornt as heretofore to be written off in profit and loss at the close of the year.

Buying of equipment has been held back until recently, because of the desire to avoid replacements until necessary* With income in excess of current needs, it was deemed advisable to set aside sufficient funds in 1937 to purchase equipment needed during the early months of 1938* We, accordingly, charged expense in December with $16,763*91 to be applied on the following purchases:

1 Duplimat $ 325*00 4 Typewriters 314*202 Burroughs, portable 455*40 1 Hototyper 705*601 Pay roll machine 900*553 Remington-Rand chairs 81*55 Q Currency counting machines 12,800.002 Desks 127*64 1 Machine for Federal Reserve accounts 1,031*47 1 Do-Hore chair 22.50

$ 16,763*91The balance of the 1937 purchases amounting to approximately $3,000 consisted

of steel shelving, Chevrolet coupe, typewriters, addressograph, paintings, rugs, etc* Credits for equipment sold amounted to $817.19 mostly fans, not needed after the installation of air-conditioning*Digitized for FRASER

http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

FURNITURE AND EQUIPMEBTC* - Cont»d

As the Branch needs were taken care of one year ago* the only purchases In1937 covered one adding machine, one typewriter and a few minor items making a total of $520*51*

ASSESSurns FOR EXPENSES 0?TKE BOARD OF GOTONORS OFTHE FEDERAL RESERVE.SYSTEM ' $ 40,346.24

The above assessment has no reference to funds used in providing a building for the Board, but for all operating coats of the Board and its staff* During the first half of 1937 our portion of the assessment was less than in 1936* With theBoard moving into its new quarters during the last half, assessments were increased• i, ■ ; :■ i ' 1 : ' U: ! |making the total for the year $595*51 greater than in 1936* For the first half of1938 our payment to the Board will be $20,085*74, compared to $17,973*51 for the like period of 1937*

FEDERAL RESERVE CURRENCY Original cost and shipping charges $ 43,739*82

Although new currency costs showed an improvement of $14,000 when compared with 1936, we were $11,700 over the amount estimated at the beginning of the year*A part of this increase came from an upward adjustment in printing costs as of July 1 from $93.50 per 1000 sheets, to $96.00 per 1000 sheets* The note expense of 1937 was distributed as follows: $35,662*50 to the Bureau of Engraving for printing; $2,779.19 for postage and $4,069.20 for surcharges; $1,035.00 for insuring shipments to Minneapolis and Helena, and $193.93 as our share of salaries paid in the Issue and Redemption Division*

The supply of new notes needed at Helena is shipped direct from Yfashington to the Branch, with all expense paid by Minneapolis office.

FEDERAL RESERVE CURRENCY Gost of redemption including shipping charges $ 6,359*07

This charge is made up of several items and includes insurance coverage on our notes returned to us by other Federal reserve bmks, postage on fit notes of other Federal reserve banks returned to bank of issue, and the cost of shipping unfit notes to Washington* Ho insurance is placed on unfit notes, because they are cut before shipping* The Redemption Agency expense at Washington is borne by the banks and we reserved $100 monthly in 1937 for this purpose* Y/e paid $1,117.71 for Agency expense during the fiscal year and in addition, charged expense $400*61 to cover salaries of Treasury employees handling redemptions. A further charge of $117.68 was made


FEDERAL RBSKRVE CURRENCY - Cont*d

later in the year which will provide for all redemption costs in connection with any of our hank notes still outstanding* At the close of the year ue had a balance of $1,244,24 reserved for redemption of our notes and no further amounts will he set aside until the beginning of the next fiscal year.

MISCELLANEOUS EXPENSES Minneapolis $ 23,335.93Helena 2,098.07 25,434.00

Miscellaneous payments have shown a distinct downward trend during the past two years6 with 1937 costs of this nature $8,300 less than in 1936 and $15,500 decrease compared to 1935. Important items ($500 or over) given the above classification are as follows: Rental, repairs and maintenance of furniture and equipment $2,268.46; outside protection, vault inspection, etc. $704.51; outside laundry and cleaning charges $1,118.91; post office box and postage meter rental $554.86; newspapers, books, binding, etc., $1,986.18; copies of bank examination reports $4,038.50; commercial agency credit reports and services $620.17; cafeteria, net expense, $3,449.45; entertainment of bankors and others not in bank*s employ, $1,061.19; employees education - American Institute of Banking, $2,098.00; donation to Federal Reserve Club $1,500.00; membership dues and donations $1,460.50; our share of net loss Foreign Department, Federal Reserve Bank, New York, $2,157.99; miscellaneous expenses in connection with closed banks, $683.08.

EEIMBURSABLE EXPENDITURES $ 153,449.21The current expenses previously described are the actual costs assumed by

the Bank. Approximately $45,000 more was recovered from fiscal agencies in 1936than for the past year. The 1937 recoveries wore apportioned to the followingagencies:

Treasury Department:U. S. Government issues Reporting foreign exchange transactions Work Relief Checks Adjusted Service Bonds

Reconstruction Finance Corporation Farm Credit Administration:Federal Farm Mortgage Corporation Federal Land Banks Federal Intermediate Credit Banks

Federal Emergency Administration of Public Works Federal Home Loan Banks & Home Owners* Loan Corp.

$ 48,242.96 181.24

22,084.39 16,247.67 49,676.874,981.033,646.34

40.003,999.414.349.30

Total $ 153,449.21


PROFIT AND LOSS ACCOUNT OF ytDOmtAL RSS.Kr.Vhi bank OF MINNEAPOLIS DURIt'G 1937

Head Helena£££i£& 2tt$al

Current earnings $ 1,349,820.SI $ 538.39 $ 1,350,358.70Current expenses 958,078.25 94,781.03 1.052.859^28

$ 391,742.06 (~) 94,242.64 $ 297,499.42

Additions to Current Net EarningsProfit on sales of United States Government

securities $ 82,118.73 $ $ 82,118.73Recoveries of expense in connection withclosed banks 1,904.90 1,904.90

Proceeds cf sale of other real estateacquired for other than banking housepurposes 150.00 150.00Recoveries on transit items previouslycharged off 8.64 8.64Sale of scrap metal 107.02 107.02

Profit on mutilated coin and torn andmutilated currency 181.36 .87 182.23Difference account 34 ,13 51.35 85.48Withdrawn from reserve for prior serviceliability to Retirement System 83.040.00 83.040.00Total Additions ....................... $ 167,544.78 $ 52.22 $ 167,597.00

Deductions from Current Net taming'sSpecial reserve for depreciation on fixedmachinery and equipment $ 35,264.58 $ $ 35,264.58

To reduce book value of land - old building site at Helena 4,999.00 4,999.00Incidental expense in connection withpurchase of land - new building siteat Helena 681.92 681.92

Preliminary expenses in connection withnew building at Helena 891.89 891.89

Assessment for building for Board ofGovernors of Federal Reserve System 33,087.60 33,087.60

Reserve for losses on industrial advances 15,000.00 15,000.00Counterfeits, and discount on foreigncurrency 157.70 11.00 168.70

Net expense, other real estate acquired forother than banking house purposos 263.67 263.67

Claim for reimbursement of fiscal agencyexpenses disallowed 34.58 34.58

Loss on sale of francs through System OpenMarket account 256.27 256.27

Contributions to Retirement System forprior service liability 75.6Q7.22 7.432.08. 83.040.00Total Deductions ..................... $ 159,672.32 $ 14,015.89 $ 173,688.21

Net additions to or deductions fromcurrent net earnings M 7,872.46 <-) 13,963.67 (--) 6,091.21

Net earnings $ 399,614.52 (-) 108,206.31 $ 291,408.21Dividends paid $ 174,057.31Withdrawn from Surplus, Section 13-b $ 1,751.23Transferred to Surplus, Section 7 $ 119,102.13


DIVIDENDSCumulative dividends at the rate of six per centum per annum on paid in capital stock paid to December 3191936

Dividends paid during 1937 Total dividends paid since organisation . . . . . .

FRANCHISE TAXTotal of franchise tax paymenta to the United States Government since organisation

These payments were made out of earnings during the period 1918 to 1932. The Federal Reserve Act as amended by Section 4 of the Banking Act of 1933 no longer provides for payment of a franchise tax.

SURPLUS. SECTION 7Balance in Surplus Account, Section 7, Dec. 31* 1936 Dec. 31, 1937 Transferred Surplus, net earningsduring 1937 $ 119,102*13

Dec. 31, 1937 Transferred from Surplus to Reserve forLosses and Contingencies 82.118.73

Net CreditBalance in Surplus, Section 7, January 1, 1933 , .................

SURPLUS. SECTION 13>BBalance in Surplus, Section 13-b, December 31, 1936 December 31, 1937 Withdrawn - Net expense over income on funds invested, after establishing a reserve of $15,000 for possible losses on industrial loans

Balance in Surplus, Section 13-b, Jnnuary 1* 1938 . . . . . .RESERVES

(Other than Bank Premises Depreciation Reserves) Reserves at beginning of yearCredits during years Recovery of loss on discounted bills $ 4.33Net profit on sales of Ue S. Government securities thru Federal Reserve System Open Market Account transferred from Surplus? Section 7 to Eeserve for Losses and Contingencies 82,118.73Transferred from Profit & Loss to Reserve for losses on Industrial Loans 15,000.00 Total Credits ................................... $ 97,123.06

Debits during year;Loss on discounted bills $ 922.53Payments of prior service liability to Retirement System 83*040.00Total Debits . . . . . . . . . . . . . . . . . . . . $ 83,962.53

Net Credit............... .....................Reserves after closing entries for:

Self InsuranceTrior service liability to Retirement System Losses and contingencies created from net profits prior to 1937

Losses and contingencies created from surplus subsequent to January 1„ 1937

Losses on bills discounted Losses on Hungarian credits Looses on past due industrial advances

Total January 1, 1938 . . . . . .................

$ 3{>9919475.20 $4,165,532.51

$ 5,202,898.50

$ 3,116,430.29

36«983.40 $ 3,153,413.69

$ 1,002,914.21

1.751.23 $ 1,001,162.98

$ 2,097,232.00

$ 13,160.53

515,379.97 166,088.00

1,185,866.2182,118.7393,444.0052,495.62

$ 2,110,392.53

.18Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

PROFIT AND LOSS

As indicated on preceding pages, our current earnings in 1937 were $1,350,358 „70 with current expenses $1,052,859.28, Each year there are quite a number of items credited or charged, direct to profit and loss which, ‘because of their character, are not penaittedj under Board instructions, to he included with current income or expense* Miscellaneous additions to net earnings in recent years have been helpful in covering our needs. For the first time since 1932, however, we have h^d sufficient current income to take c- re of all needs including dividends and depreciation. In t-.iis respect our current income has been sufficient only because of the fact that our operating costs have been lower than in previous years. The reduced expense has also come at a time when collection of interest end expense at closed banks have ceased to be prominent items in our yearly calculations* The only important addition to our current earnings during 1937 was $82,118.73 obtained as the not profit on Bales of United States securities from System Account. This la the smallest proportion of profit we have received in recent years and is $109,197*83 less than the amount received from the some source in 1936.

ivith reference to the profit of $82,118.73 from System sales, it will be noted that the sane amount was added to account “Reserve for Losses and Contingencies'* but not as a direct charge to profit and loss as heretofore. The Board has indicated that reserves of this character should be sot aside only as a charge to Surplus Account. Amounts collected by our representatives at closed banks to be applied on expense created prior to 1935 amounted to only $1,904.90, in comparison with $18,705.01 collected during 1936.

The credit of $83,040 in profit and loss represents the transfer, from the amount set aside at the close of 1935, of the 1937 portion of the bank*s contribution to the Retirement System for service prior to March 1, 1934. It will be noted that the 1937 payment to the Retirement System was handled as a direct charge to profit and loss. In 1936 the payment was Included with current expenses.

For the first time since our organization the various difference accounts at Minneapolis and Helena show a net credit. There have beenmrmy small differences with results for the year as follows:

MIHLKAPOLISNet Credit

General Accounts Transit Department Cash Department

$ 1.35 $2.3133.17

$

HELENATransit Department Cash Department

48.30..,.3 5

$ 1 . 35 $ 86.83 $ 85.48Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

PROFIT AMD LOSS - Cont'd

Other miscellaneous income included $150 paid us in connection with the sale of other real estate taken to secure debt at closed banka; $8.64 representing recovery of transit items previously charged off; $107,02 from the sale of metal scrap. We also received $182,23 from sale to the Mint of mutilated and worn coin which had been purchased by us in small lots at bullion value.

Including current earnings and the miscellaneous income previously describeds total Income for 1937 was $1,517*955.70* The distribution of these funds was made as follows;

CURRENT EXPENSES Minneapolis $ 958,078,25Helena 94.781,03 $ 1,052,859,28

The 1937 budget estimates placed total operating costs at $1,023,754, After we had prepared our estimates* we were advised by the Board that normal depreciation on building and fixed machinery and equipment should be treated as an expense. Such depreciation charged expense in 1937 amounted to $28,809.34, which brings the final results quite close to total estimates. Compared to the actual costs of the previous year the 1937 current expenses are $90,011,35 less* detail of which is given in the Expense analysis.

SPECIAL RESERVE FOR DEPRECIATION ON FIXED MACHHP3RY AND EQUIPMENT

Minneapolis only $ 35*264.58 This amount represents the balance of $40,378.80 expended since 1934 on pro

tection equipment, water pump installation and new air-conditioning equipment. At the close of 1934 depreciation for all our original fixed machinery and equipment had been provided. The special reserve now approved by the Board eliminates any depredation needs of this character at Minneapolis in 1938, unless some major change is later found necessary.

jamUQTIQa^LJBQQK VALUE OFPLD BUILDING SITE - HELENA $ 4,999.00

Since the close of 1936 the book value of Branch premises was $5,000* representing the site only. There had been no change in the book value of the land since the Helena office was opened. With the new premises to be occupied during 1937, the old site is of questionable value. The Board authorized reducing the book value to the estimated market value which we will now show in our records as $1.


CHARGE-OFF OF INCIDENTAL EXPENSESIN CONNECTION WITH LAUD ~ HSLSNA $ 681.92

These were items which in no way increased the value of the land and shouldnot appear in the book value. They were as follows:

Fee for funds held in escrow $ 5.00Cost examination of title 150.00Quit claim deed re: replacement of sewer 160.30City, County and State taxes 363.62

PRELIMINARY EXPENSES IN CONNECTIONWITH HEW BUILPIN& - EKLBKf $ 891.89

This total does not include architects fees tut does include fees paiddirectors for attending "building committee meetings. Items which we consider propercharge-offs are listed below.

Travel expenses of Messrs Towle and Shanley inconnection with building matters $ 748.31

Published notice to contractors 15.00Survey of property showing elevations 30.00Incidental expense incurred at Head Office 98.58

ASSESSMENT FOR BUILDING FOR BOARD OF QOVERNORSOF THE FEDERAL RESERVE SYSTEM $ 33,087.60

The above charge represents the final payment in connection with the Board building and makes a total of $105,007.19 contributed by this bank during the past three years.

RESJSRVE FOR LOSSES ON INDUSTRIAL ADYANCES $ 15,000.00

It was estimated that our losses in connection with industrial loans would reach the amount stated. As the excess of profits from industrial loans over expenses was $13,208.52, we withdrew from surplus account, Section 13»b, $1,751.23, the amount necessary to provide the Treasury proportion of the required reserve, the balance of $40.25 being assumed by the bank. The amount of funds originally made available by the Treasury Department for industrial loans was $1,007,746.96 and this amount has been reduced by $6,583.98 because of an excess in expenses during 1934 amounting to $4,832.75 and the additional amount just charged to provide the estimated reserve.

COUNTERFEITS AND DISCOUNT ON FOREIGN CURRENCY

Minneapolis $ 157.70Helena 11.00 $ 168.70

We continue to have more losses from counterfeit money than from shortages in the count. During the past year the amount charged off for counterfeits is less than one-half the amount so absorbed in 1936.


JfBT MPEKSE - QTHKR RfclAL ESTATEOTHERWISE ACQUXRBD $ 263.67

This charge represents the excess of expense over income in connection withproperty we have taken over to protect our interests at closed banks. The costs arefor taxes, insurance of various kinds, cost of seed, threshing expense, offset in partby soil conservation payments, proceeds from crops, etc.

FISCAL AGENCY REIMBURSABLEKXPENSK PIS ALLOY/ED $ 24.58

Payment of above amount refused by Treasury Department because originals oftelegrams presented for reimbursement in June, 1935, were reported missing. Telegraphcompany could not produce copies.

LOSS ON SALK OF FRAffCSTHROUGH SYSTEM ACCOUB? $ 256.27

This was an exchange loss on 2,100,000 francs converted into dollars in connection with Foreign investments made through System Open Market Account.

DIVIDENDS PAID $ 174,057.31The average amount of capital stock necessary to produce above dividends is

$2,900,950, or a reduction of $83,250 in the average holdings of members during 1937. Paid in capital stock on December 31, 1937 amounted to $2,893,050, compared to $2,943,050 at the close of 1936. Membership was made up of 404 national hanks and 66 state banks on December 31, 1937, a reduction of 13 national and 1 st^te member during the year. Total dividends paid since organization, $4,165,532.51.

TRANSFER TO SURPLUS. S5CTI0N 7 $ 119,102.13Under the Banking Act any profits remaining after providing for operating

costs, depreciation and dividends must he placed in Surplus Account. Provision for possible losses may then he arranged for "by a charge to Surplus. Under this plan we have charged Surplus $82,118.73 and transferred a like amount to "Reserve for Losses and Contingencies” being the net profit on 3ales of Governments from System Account during 1937. The net credit of $36,983.40 increases Surplus, Section 7, to $3,153,413.69 on December 31, 1937.

TRANSFER FROM SURPLUS. SECTION 13-3 $ 1,751.23 Net earnings from Section 13-b funds used in making industrial advances were

$12,911.76. M the Treasury portion of estimated losses on such advances is $14,662.99,

the above charge to Surplus was necessary.


FEDERAL RESERVE BAM OF MINKEAPOLIS - HEAD OFFICERETORT OF AUDITS - YEAR 1937

Dr>tes of AuditsGASH

Cash in Vault - Bank Officers* Reserve Cash with TellersF.R, Ho tea in Transit from Other Federal Reserve Banks F.R. Notes forr/arded for Redemption Other Cash in Transit Redemption Fund - F. R. Notes Inter-District Settlement Fund F.R. Agent1s Gold Certificate Fund Unissued F.R. Curre cy held by F.R. Agent Currency Received account of Non-Member Banks

BARKING ASS STS Bills Discounted Industrial Advances Bills Bought in Open MarketParticipation in System Open Market Acct. U.S.Securities Participation in Investments through Foreign Banks Participation in Foreign Loans on Gold

UNCOLLECTED ITEMSTransit Items - F.R. Banks Transit Items - District 9 Exchanges for Clearing House Federal Returns and Other Deductions Return Items - Member and Non-Member Banks Government Suspense AccountCollection Items Debits - Misc. Vault Coupons 1-20 to 2-3: 11-2 to 11-15Coupons on H^nd 1-18, 4-27, 7-11, 10-25Due from Branch MonthlyChecks and Other Cash Items 3-30, 5-20, 6-14, 10-18

MISCELLANEOUS ASSETS Misc. Assets acquired acct. Industrial Advances Industrial Advances past due Three Months Other Bills and Securities pas t due Three Months Misc. Assets acquired in Settlement of Claims

account Closed Banks Claims account Closed Banks Advances to protest Collateral Other Real Estate F.D.I.G. StockFiscal Agency Expenses Reimbursable Interest accrued on U.S. Securities Interest accrued on Bills and Advances Premium on Securities OverdraftsCoupons paid before Maturity Deferred Charges Difference Accounts Sundry Items Receivable Suspense Account - General Cost of Federal Reserve Currency Other Current Expenses Dividends accrued since Closing Books Profit and Loss

BANK PREMISESLand CurrentlyBuildings CurrentlyFixed Machinery and Equipment Currently

FEDERAL RESERVE NOTESFederal Reserve Notes Outstanding 2-15, 4^19, 6-24, 8-24, 12-8

DEPOSITSMember Bank Reserve Accounts MonthlyNon-Member Clearing Accounts MonthlyU.S. Treasurer - General A.ccount MonthlyForeign Banks 3-9, 6-2, 10-11Officers* Checks MonthlyFederal Reserve Exchange Drafts Monthly 9Other Deposits Monthly

3-9, 6-2, 10-11 3-9, 6-2, 10-11 3-9, 6-2, 10-113-15 3-15 3-15 3—152-15, 6-24, 8-24, 13-8 Monthly3-9, 6-2, 10-11 Monthly3-9, 6-2, 10-11 Currently 2-20, 8-10 Semi-monthly Currently Monthly Weekly Currently Currently Monthly Monthly

2-15, 4-19, 6-24, 8-24, 12-8 2-15, 4-19, 6-24, 8-24, 12-8 Dally DailyM-15, 4-19, 6-24, 8-24, 12-8MonthlyWeekly2-15, 4-19, 6-24, 8-24, 12-8 2-15, 6-24, 8-24, 13-8 Currently

3-9, 6-2, 10-113-9, 6-2, 10-113—9, 6—2, 10—113-9, 6-2, 10-113—9, 6—2, 10—113—9, 6—2, 10—11

3-30, 6-14, 7-24, 10-183-30, 6-14, 10-183-30, 5—20, 6-14, 10-183-30, 5-20, 6-14, 10-183-30, 5-20, 6-14, 10—183—30, 6-14, 10-18


FEDERAL RESERVE BAKE OF MINNEAPOLIS - HEAD OFFICERE3 0RT OF AUDITS - YEAR 1937

DEFERRED AVAILABILITY ITEMS Deferred Credits - Member end Non-Member Banks Deferred Credits - Other Federal Reserve Banks Deferred Credits - Government Items Deferred Credits - Misc. Vault Coupons Deferred Credits - Non-Cash Collections

CAPITAL STOCK AND SURPLUS Capital Stock Paid in Surplus Fund (Section 7)Surplus Fund (Section 13-b)

RESERVES FOR:Self-InsurancePrior Service Liability to Retirement System Losses not elsewhere provided for

EARNINGS FEfoM:Bills Discounted Bills Purchased Industrial AdvancesCommitments to make Industrial AdvancesParticipation in System Open Market Acct. U.S. SecuritiesInvestments through Foreign BanksDeficient Reserve PenaltiesMiscellaneous

MISCELLANEOUS LIABILITIES Unearned Discount - Bills Discounted Unearned Discount - Bills Purchased Unearned Commitment Fees Discount on Securities Accrued Dividends Unpaid Sundry Items Payable Suspense Account - GeneralMISCELLANEOUS OPERATIONS AND ACCOUNTS SUBJECT TO AUDIT

COLLATERAL AND CUSTODIES Securities held as Collateral for:Bills Discounted Industrial Advances War Loan Deposits

Securities held in SafekeepingCash Held in Custody for Treasury Department

FISCAL AGENCY OPERATIONS Subscriptions to and Allotments of U.S. Securities Balances due from Depositary Banks Securities on HandSecurities in Process of Redemption, Exchange* Transfer of Registration, Etc., - Due from Treasury

Securities Delivered Coupon Securities Redeemed Reports to Treasury Department - Chocked Purchase and Sale Transactions

Dates of Audits

Monthly3-30, 6-14, 10-11 3-30, 6-14, 10-111-20 to 2-3; 11-2 to 11-151-20 to 2-3: 11-2 to 11-15

10-31, 11-30, 12-312-6, 3-4, 4-15, 6-30, 7-31, 9«30e CurrentlyCurrently

CurrentlyCurrentlyCurrently

DailyDailyDailyMonthly3-9, 6-2, 10-11 3-9, 6—2, 10—11 Currently Monthly

MonthlyMonthlyMonthly3-9, 6-2, 10-11 Monthly Monthly Weekly

2-202-202-20

2-202-15, 4-19, 6-24, 8-24, 12-8

Currently2-202-8, 5-17, 8-102-8, 5-17, 8-10 Daily Currently MonthlyMonthly test checks

RECONSTRUCTION FINANCE CORPORATIONNON-CASH COLLECTIONSBALANCE SHEET AUDIT OF HELENA BRANCH

4-291-20 to 2-3l 11-2 to 11-159-16


FEDERAL RESERVE BANK OF MINNEAPOLIS - HELENA BRANCHREPORT OF AUDITS - YEAR 1937

CASHCash in Vault - Officers* Reserve Cash \7ith Sellers

earning assetsBills Discounted

UNCOLLECTED ITEMSTransit Iteme-Federal Reserve BanJcs Transit Iteme-Montana Division Exchanges for Clearing House Federal Returns rnd Other Deductions Return Items-Member & Non-Member Bks Government Suspense Account Coupons on HandChecks and Other Cash Items

MISCELLANEOUS ASSETSFiscal Agency Expenses ReimbursableOverdraftsDeferred ChargesDifference AccountsSuspense Account - GeneralExpenses

DEPOSITSMember Bank Reserve Accounts Non-Member Clearing Accounts Officers* Checks

DEFERRED AVAILABILITY ITEMSDeferred Credits:Member and Non-Member Banks Other Federal Reserve Banks Government Items Non-Cash Collections

EARNINGS FROM;Bills Discounted Deficient Reserve Penalties

MISCELLANEOUS LIABILITIESUnearned Discount - Bills Discounted Sundry Items Payable Suspense Account - General

MISCELLANEOUS OPERATIONS AND ACCOUNTS SUBJECT TO AUDIT

Non-Cash CollectionsNon-Cash Collections - Test checkCash Held In Custody for Treasury Department

Dates of Audits1-19, 2-6, 3-16, 4-12, 5-4, 6-7, 7-19, 8-24, 10-7, 12-61-19, 2-6, 3-16, 4-12, 5-4, 6-7, 7-19, 8-24, 10-7, 12~6

10-5

2-6, 3-24, 4-10, 5-20, 6-26, 7-19, 8-16, 10-11, 12-22-6, &-22, 4-26, 5-25, 7-7, 8-16, 10-11, 12-21-4, 2-6, 3-16, 4-10, 4-26, 5-28, 7-7, 8-16, 10-11,12-22-6, 3-22, 4-26, 5-25, 7-7, 8-16, 10-11, 12-22-6, 3-22, 4-26, 5-25, 7-7, 8-16, 10-11, 12-22-6, 4-19, 6-24, 8-16, 12-21-16, 2-6, 3-8, 4-13, 5-10, 6-11, 7-13, 8-9, 9-15,

10-20, 12®81-4, 2-6, 3-16, 4-10, 4-26, 5-28, 7-7, 8-16, 10-11,12-2

MonthlyCurrentlyWeeklyWeeklyWeeklyCurrently

MonthlyMonthlyMonthly

Monthly2-6, 3-24, 4-10, 5-20, 6-26, 7-19, 8-16, 10-11, 12-22-6, 4-19, 6-24, 8-16, 12-22-6, 6-9, 31-2

MonthlyCurrently

MonthlyMonthlyWeekly

3-6 to 3-15: 6-9 to 6*22: 11-2 to 11-161-26, 3-6, 4-20, 5-19, 6-23, 7-16, 8-23, 9-13, 10-20,

11«21-19, 2-6, 3-16, 4-12, 5-4, 6-7, 7-19, 8-24, 10*7,12-6


BANK PRBKISBS - YMAR 1937

Helena Branch Helena Branch Head Present Neu Office_____ Property_______ Property

LAMPGross Book Value: Beginning of year Additions during year Deductions during year End of yenr

$ 500,520.66 5,000.00

$ 500,520.66 1.0015,681.92 ___681*3215,000.00

BATIK BUILDINGGross Book Value: Beginning of year Additions during year Deductions during year

$ 1,283,281.50 135,000.0013,081.91

891.89ICnd of year $ 1,283,281.50 135,000.00 12,190.02

Reserve for Depreciation: Beginning of year Credits during year

$ 307,987.5625*665.60

135,000.00 «•

Bnd of year $ 333,653.16 135,000.00 -ITet “book value end of year $ 949,628.34 — 12,190.02

FIXED MACHINERY AMD EQUIPMBHTGross Book Value:Beginning of year $ 628,666.15 16,108.99 -Additions daring year 31.709.20 mI5nd of year $ 660,375.35 16,108.99

Reserve for Depreciation:Beginning of year 621,967.03 16,108.99 -Credits during year -a. Iloraal depreciation 3,143.74 - -1). Other 35.264.58 mk #■»

$ 660,375.35 16,108.99 -

515,521.66

961,818.36

Hot Book Value end of Terr...........................Grand Total - Net Book Value of Bank Premises end of Year

None $ 1,477,340.02


BAHK PRIfttlSKS

More repairs and alterations were carried out during the past year than in any other year since our occupancy of tho building. This work required an expense of $14,938.66 in addition to the labor contributed by our own salaried workmen. A heavy item in the repair work was for plastering, a great deal of this being necessary in the basement rooms and on the second and third floors.New ceilings on the upper two floors, replacing the old sound-proof material, cost $6,144.40. Painting and renovating was done on all floors by our own men, with considerable expenditure for materials. A new sidewalk was constructed on the Marquette Avenue and Fifth Street sides at a cost of $1,390.00. The Otis Elevator maintenance contract requiring yearly payment of $3,166.00 is .also included in the total for repairs and alterations. Provision for rearranging the Currency Department was made by a charge to Expense of $2,263.00 in December.This work is now under way.

Expenditures during the year for the efficient operation of the building, but charged against Fixed Machinery and Equipment Account, were as follows: Air- conditioning, $29,064.04; automatic sprinklers, $229.95; water cooling system, $2,080.56; hot tsater herter, $334.65.

Because the amount of several items could not be foreseen, our building operating costs were in excess of the budget. This, as previously noted, was especially true in connection with repairs and also in the hi$ior t^xes paid, com** pared to 1936. After deducting $10,475.95 received as rental income from fiscal agencies, total operating cost of our building was $157,822.01, compared to $117,309.71 in 1936. Included in 1937 costs was depreciation of $28,809.34, formerly treated as a direct charge to profit and loss. The 1938 building operating costs is estimated at about $10,000 less than in 1937, but a favorable decision in our tax suit could bring a substantial credit in Expense for amounts reserved in 1937 ^nd 1938, and a further credit in Profit and Loss based on the 1936 assessment which is being tested in Court.

Total salaries paid in connection with building work amounted to $30,817.75, compared to $30,755.53 one year earlier. Staployees, other than charwomen, numbered 15 on January 1, 1938, and two persons less than on January 1, 1937. Fuel purchased cost $5,994.37 during the past year, with $9,640.97 expended for power and li$it.In 1936 tho fuel bill was $8,374.18, and light and power costs $10,248.20.


BANK PI&JMISKS — (Depreciation)

Beginning in 1937, we are required to charge in "Expense monthly, a proportionate amount of depreciation instead of m i ting until the close of the year and making a direct chrrgo to Profit and Loss, On the "building proper, we have, for the past ten years, set aside $25,665.63 Tshich is 2$ on a gross hook value of $1,283,281,50. The original cost of fixed machinery and equipment had ‘been provided through amounts reserved to the close of 1934. Partly in 1934 and since that time we have added $40,378.80 to our fixed machinery and equipment, frith the air-conditioning equipment installed during 1937 making up most of the cost. In view of the fact that we had sufficient excess earnings to do so, re set aside a special reserve of $35,264.58 at the close of 1937 to provide the full cost of all added machinery and equipment. With the special reserve and $3,143.74 normal depreciation provided during the year, a total of $660,375.35 has "been accumulated for building equipment depreciation, leaving no further charges needed in 1938.

The normal amount provided for building depreciation raises the total to $333,653.16 and makes the net "book value of our building $949,628.34.

At Helena, the total depreciation for the building and equipment now in use has already been provided. The net book value of our Branch property had been $5,000, represented by the land. On December 31, 1937 we'Charged profit and loss $4,999.00 and wrote the book value down to $1.00.

ICT PROPERTY AT HELENA In July 1937 a resolution was approved authorizing the Branch officers to

exercise the option held on the site located on the comer of Lawrence Street and Park Avenue, Helena, at a total cost of $15,000. Under the agreement, taxes of $366.62 were paid on this property during 1937. Other items amounting to $315.30 were added to the Land Account and written off at the close of the year. The Land Account is carried on the books at Minneapolis for $15,000.

Work done in connection with the building cost $13,081.91 during 1937. Incidental expenses, mostly for traveling, amounting to $891.89, were written off on December 31, 1937, leaving a net book value for the Helena building at the close of the year of $12,190.02. The Building Account will be carried on the books at Helena until completed.

BANK PREMISES - (Taxes)(See under Expense)


LOANS. REDISCOUNTS AND ACCEPTANCES

While the activity in this department has increased in 1937, it may "be said that there is still very little demand from member banks for discount accommodations* During the past year 27 banks have availed themselves of the rediscount and loan privileges, having borrowed an aggregate amount of $16,189,032.34, Two hundred thirty-three items were received. On December 31, 1937 loans and rediscounts amounted to $174,980,81 as compared with $3,000*00 at the end of the previous year, aad $33,478,38 on December 31, 1935, As reported a year ago, there was a several month period in 1936 during which member banks were entirely out of debt to the Federal Reserve Bank, During 1937 the only period that member banks were entirely out of debt to us was from April 1 to April 10, Our discount rate remained at 2$ until August 24, on which date it was reduced to li$.

The activities of the Industrial Loan Division commenced in August,1934, advances for working capital being made to industrial and commercial enterprises. Under the Act such advances may be made for a period of not exceeding five years. Interest charged by the Federal Reserve Bank of Minneapolis on such loans is six per cent.

The volume of activity in industrial loans showed a decrease for the year 1937, during which 32 advances were made in the aggregate amount of $217,750.35 with participating institutions taking $53,411.00 of this amount, leaving a net advanced by the Federal Reserve Bank of $164,339.35. Repayments on advances during the year reduced the balance $387,749.02, leaving a balance of $840,402.34 at the close of the year. Repayment of 12 loans in the amount of $30,759.15 can be traced to refinancing during 1937. In this year commitments to make industrial loans amounted to $25,000.00 and the contingent liability as a result of commitments outstanding at the end of the year was $50,666.19.

In addition to advances made and commitments given during 1937, three loans totaling $815,000.00 were recommended favorably by the Industrial Advisory Committee and approved by the Discount Committee. One of these loans is in the process of being closed at this time. Closing of the other two loans is delayed pending compliance by the applicants with certain conditions imposed*


1937193<>1935193^19331932193119301929

1937193°193519^41933193219311930

DAILY A VERAS S HOLDINGS OP JSARfllflGASSETS

Bills Discounted

$

B i l l sPurchased

26lP9lU 47,206 US, 594

531,212 6,267.577 l l , 9 3 3 * gOlM i s , 935U,042,859

21.624,673

Bills Discounted

; 60.46560,86469.523

589,43s2.936,4561,649,4147.607,3247.870.0076.328,387

BillsPurchased

Industrial Advances

■is 723.0501.314,7841.936.117

265,476

IndustrialAdvances

Federal Into Foreign Commitments toUo Stt Se Credit Bank Municipal Loans on make Industrialcurities Debentures Warrants Gold Advances

$ 83,024,195 J 0 $ $ 1.635 $ 60,53882.208,224 0 6,308 94.39072.398.064 02,5^5

1,469 92.56865.803,357 0 1H .09358.209,321 0 64,520 043.724,651 6S,904 152.197 026,761,330 156,671 97.671 6.27522,786,786 0 34,220 09.812.359 2,579,65s 140,326 2S.340

AVERa GU h at e OF aARCINGS ON EARNING ASSETS

Up So Securities

Federal Int. Credit BankDebentures

Municipal Foreign Warrants Loans on

GoldCommitments to make IndustrialAdvances

i- 755* *7672 6.G00$ 1-557* 0 0 10 463$ I.052g2.008 -921 6„000 1*539 0 0 1.595 I.O382.090 .844 6.000 1-785 0 0 1 .5 5 5 1.0092o 9^2 - 5^7 6„000 2.046 G 3.500$ 1.5003.538 1.2S0 2*027 0 3c500 03«507 3-961 2.107 2-773# 3.500 03.500 1«. 748 2.233 2.598 3.500 1.7794,265 2.904 3*280 0 3*877 04CS45 4.902 3.960 4.763 4„989 5.031

Discount rate effective January 1, 1922 9 $Discount rate lowered January 11, 1922 to 5 iDiscount rate lowered August 1 5 , 1922 toDiscount rate lowered October l4„ 1924 to 4 *Discount rate lowered Seuternber 13,1927 to 3^.Discount rat* raised February 8t 1928 to 4 %Discount rate raised April 25.. 1928 to 4|$

. Discount rate raised May 14, 1929 to 5 iDiscount rate lowered February S, 1930 to 4£<Discount rate lowered April 1 5 . 1930 to 4 iDiscount rate lowered September 12. 1930 toDiscount rate lowered March lb, 1^3^ to 3 $Discount rate lowered January 8, 1935 to 2&«Discount rate lowered May 14, 1935 to 2 iDiscount rate lowered .August 24. 1937 to


F A I L F, 3) B A N K S

INDEBTEDNESSNo banks suspended during 1937 that were indebted to us*

Principal liability December 31, 1937 ...........................$ 116,700*10Estimated value of collateral to apply on this balance......... 44.400.10.Estimated Loss (Against a $93,440.00 reserve) ....................$ 72,300.00It is estimated that from the collateral held, we will collect, in addition to the $44,400.10 above-mentioned, approximately $29,000.00 which will be applied on expense incurred and interest accrued.

COLLECTIONSCollections for 1937 in reduction of original liability......... $ 53,901.63In addition, overpayments of original liability which willbe applied on recovery of expense . .......................... 8.767.81Total collections for 1937 ................................... $ 62,669.44

EXPENSECost of field operations for year 1937 ..........................$ 6,581.97Recovery during 1937 ........................................... 1,904.90

CHARGES TO SPECIAL RESERVEAggregate charges to special reserve at close of 1936 ........... $ 252,991.12Charges for 1937 .............................................. 918.20Total charges to special reserve........... .................$ 253,909.32Probable future charges . . . . . ............................ 73.?00.00

$ 326,209.32

BSAL ESTATEV/e own 21 pieces of real estate carried on our books at $21.00 consist

ing of 20 farms (improved and unimproved) and one small-town house, which properties are situated in North and South Dakota and Montana. Some ye^rs back in an endeavor to protect our collateral, we obtained this real estate. Voluminous reports could be written regarding this real estate, but suffice to sajr that our ultimate recovery will be exceedingly small. For some considerable time, the income derived from this real estate has been virtually negligible.


CHECK COLLECTION FUNCTION(Head Office Only)

The Check Collection Department handled 28,778,033 cash items totaling $4,902,409,983.53 during the year 1937, which was only 81,592 items less than the number handled daring 1935. V/e are giving below the number and amount of items handled, the average number of employees and the total expense of the Check Collection Function for the years 1936 m d 1937 nnd also for 1930 for comparison:

AverageNumber Number of Total

Isos sL J A s m M z& ojs&si 3 s m mt1937 28,778,033 $4,902,409,983.53 57.25 $ 90,839.751936 28,859,625 4,754,957,277.09 60.91 92,961.491930 21,139,178 3,224,678,472.48 43.57 77,873.79

tfe hcmdled approximately the some number of chock3 in 1937 as in 1936 with less employees and a reduction in expense. The U. S. Government made a lnrge reduction in the work relief pay roll during 1937 nnd consequently we hnndled 1,626,429 less checks in 1937 than in 1936. However, the volume of city ~nd country checks increased which offset to a large extent the reduction of work relief checks handled in 1937.

The following table indicates the number of items handled by the subdivisions of the Check Collection Function for the years 1936 and 1937:Items Handled on 1936 1937

1,I5S,3S$ Twin City Banks (Clearings) 4,094,207 4,368,218y 95-9 9* / Member and non-member Banks (This district) 15,627,522 16,231,681), Other Federal Reserve Districts 2,139,902 3,101,316

Llftx7v Direct to Member banks other F. R. Districts 49,382 48,524To Helena Branch, Helena, Montana 53,647 63,f77

Z^.2^7 Trensurer of the United States 2,690,227 2,385,108— U.S. Government Y/ork Relief Checks 4.204.738 2.573.309

28,859,625 28,778,033The cost of handling 100 items in three units of this function for the

years 1930, 1936 and 1937 follows:

City Checks Country Chocks ReturnYear (Clearings)^ (.Outgoing). . Items _1937 17.9 cents 21.6 cents $ 1.221936 18.0 " 20.02 « 1.281930 20.1 24.9 * 1.36


CHSCK COLLECTION FUNCTION - Continued

The average number of Items handled per person per d*y in these three units during tho years 1930, 1936 and 1937 follows:

Ye.agCity Checks tCleariiursl

Country Checks (Outgoing)

ReturnItems

1937 2,793 2,126 4961938 2,537 2,273 4321930 2,156 2,063 482

Daring 1937 we handled 260,032 return items totaling $26,951,732.58 as compared to 244,773 items totaling $22,545,802.82 in 1936. Included in these figures are nonpar items sent us in error, noncrsh items forrarded to us as c-sh items, items returned by drawee banks for various reasons rnd other items returned to depositors.

The daily average number of cosh letters received and sent, the number of banks reported closed, number voluntarily liquidated, number reopened, and the number added to or removed from our par list during the years 1936 and1937 are given below.

. Hoad office only___ ___________ _______________________________________Letters Letters Banks Banks vol~ Banks Banks add- Banks re-received sent reported untarily reported ed to our moved from

lear daily______ drilly...closed___ llflflldfltefl.. list...1937 1,252 958 16 3 0 1 201936 1,263 851 4 8 0 2 32

During the first part of June, 1937, we commenced operating on a 40 hour per week basis in the Check Collection Department. This change required additional employees and increased our expense in the second half of 1937 over our cost for the first six months of the year.’


W1UQASE COLLECTIONS(Head Office Only)

As a result of the drouth conditions of 1936 rrhich caused a sharp decrease in the number of grain drafts, rm handled 110,954 fewer city collect tions during the first seven months of 1937 as coopted to the same period of the previous year. Daring the last five months, tie handled 163,140 more city collections, including grain drafts, than during the same period in 1936.

The number of country collection items handled during 1937 -eras 65,437. There m s a decrease in the number of items handled in each of the first eleven months of the year, compared to the same months in 1936, with a slight increase during the month of December resulting in a net decrease of 7,394 Items. The value of the items handled, however, increased from $48,271,000 for the year 1936 to $52,397,000 in 1937.

Coupon and country security collections fell off each month in 1937, showing a total decrease of 4,603 items for the year. Most of this reduction is due to a consolidation of records in our Safekeeping Department, resulting in all coupons of like issues owned by a member bank being placed in a single envelope.

Member banks forwarded 6,851 collections totaling $17,585,000 direct to other Federal Reserve Banks for their credit with us during 1937, and 7,026 items totaling $16,245,000 during 1936.

C0?£PART SPIT OF MOMBISR OF ITEMS RECEIVED FOR COLLECTION

G&by.. C-QJLlectioaa Secarlty Collections1326_______ Xm . 1226__________ 1922 1226___________ 1922632,713 684,839 72,831 65,437 48,229 43,626Amount (000) omitted1936 $255,632 $ 48,271 $ 47,3261937 260,083 52,397 32,974


BJ3P0RT OF SAFSKI3EPIHG’ DKPARmSNT ______ FOR THE TOAR 1937_______

Securities held in our custody for safekeeping and for collateral purposes, exclusive of unissued stock held for the Treasury Department and other governmental agencies, reached a new high of $431,373,149.81 on March 1, 1937. The figures at the close of 1937 showed a decrease of $29,778,754.71 compared to the close of 1936, as indicated in the statement shown at the bottom of this page.

The total government and miscellaneous securities held in safekeeping for our member banks decreased $50,175,000, while the total of pledged securities increased $14,616,162.32. The increase of $3,705,750.00 over last year!s total of U. S. Savings Bonds held for individuals, firms, corporations, and non-member banks indicates the tremendous increased demand for this type of Investment. During 1937, we issued 817 receipts ( of which 107 were issued in December), which is more than ne had the previous twenty-two months. Tho total as indicated below does not include U. S. Savings Bonds hold for member banks.

The increase of $7,022,000 in tho total held for the Reconstruction Finance Corporation was caused principally by transfer of the Helena Branch R.F.C. custodianship to Minneapolis. The Reconstruction Finance Corporation also purchased a considerable amount of bonds from the Public Works Administration, a large part of which it still holds. The decrease of $1,798,000 of securities held for the Public Y/orks Administration represents resale of holdings purchased from municipalities, school districts, etc. to the Reconstruction Finance Corporation, who offered ^nd sold to the highest bidders a large part of such take-ovor.

In 1937, we received 61,279 pieces compared to 109,720 in 1936, -~nd delivered 68,077 pioceB, compared to 90,865 delivered the previous year. The number of coupons clipped last year was 277,327, as compared to 278,916 the year before.

COMPARATIVE STATEMENT OF SECURITIES HELD DECEMB15R 31, 1937 and 1936

Dec. 31. 1937 Dec. 31, 1936Government and Miscellaneous securities held

in safekeeping for members: $ 235,812,351.10 $ 285,987,444.70Securities pledged to secure public deposits: 93,300,539.35 78,684,377.03 U.S. Savings bonds held for individuals, firms,corporations, and non-member banks: 5,580,150.00 1,874,400.00

Securities held for U.S. Govt, officials: 7,375,000.00 8,498,000.00Securities held for Public Works Administration: 421,241.00 2,220,147.00Securities held for Reconstruction Finance Corp.: 42,142,396.79 35,119,968.72Collateral to War Loan Deposits: 1,957,500.00 4,080,850.00 Collateral to Discounts, Rediscounts andIndustrial advances: __ 451.084.00 353.829.50Totals .................................... $ 387,040,262.24 $ 416,819,016.95


currency and coin(Minneapolis Only)

THE TABLE GIVEN BELOW SHOWS THE VOLUME OF CURRENCY TRANSACTIONS AMD SHIPPING CHARGES ABSORBED FOR THE YEAR 1937 AS COMPARED TO THE YEARS 1936 and 1935

TWIN CITY MEMBER BAMS:

5B5^c^(jceixeOZ-M: 1921 1936 1935Amount.. *.................... $ 88,575,862 $109,750,002 $107,885,645Number of their shipments..... 3,299 3,447 3,429

Currency delivered by us;

Amount....................... 95,174,600 119,627,300 109,709,600Number of our shipments....... 1,482 1,513 1,480

OTHER MEMBER AND NON-MEMBER BAIIKfoCurrency received by us;Amount....................... 68,144,810 57,466,666 59,089,530Number of their shipments..... 13,972 11,745 13,585Shipping charges absorbed..... 30,409.13 25,711.60 24,820.09

Currency sliiTroed by us:Amount..................... . 78,823,888 94,906,022 77,313,796Number of our shipments....... 20,852 23,311 21,796Amount of our shipping C03ts... 19,681*73 22,063.81 19,760.39

COIN RECEIVED BY US FROM MEMBER AND NOVEMBER BANKS:

Amount....................... 3,445,070 2,471,279 2,596,055Number of shipments....... ... 2,698 1,850 1,927Shipping charges absorbed...... 5,453.44 4,938.11 5,013.60

COIN SHIPPED BY US TO MEMBER AND N0&-MEMBER BANKS:

Amount....................... 2,633,532 2,966,121 2,810,392Number of shijsaents....... 6,947 7,667 7,506Shipping charges absorbed..... 5,903.28 6,499.25 6,809.96

THE FOLLOWING TABLE SHOV/S THE NUMBER OF NOTES RECEIVED AND SORTED, AND A COMPJ\RISOIT OF ____________________ THE EXPENSES FOR SPECIFIED. .PETlIQD______________ ______________ _

1237 1936 1935Receiving and Sorting Costs 19,213.84 21,088,00 23,430.00Average number of receivingtellers and sorters 10.90 12.99 14.05

Number of notes received and counted 43,367,625 45,696,000 42,814,000Average number of notes sorted dailyby each employee 13,131 11,610 10,057

Our average currency receiving andsorting costs per each 1000 notes 44# 46# 55#


CURRENCY AMD COIN (OTT*D)

THE FOLLOWING- SCHEDULE SHOWS THE AMOUHT OF COINS RECEIVED AND COMPARISON OF THE _________ ___________ EXPENSES FOR THE SPECIFIED PERIODS___________________

igaz 19 ssExpenses $ 3,167.69 $ 6,359.99 $ 7,719.09Average number of coin tellers 1.57 2.27 3.37Number of coins received & sorted 20,620,499 18,290,610 18,133,000Average number of coins handled byeach employee daily 43,347 26,592 21,304

Unit cost per 1000 coins 15£ 35£ 43£

The latest comparative operating expense figures of the Federal Reserve Bank, Head Offices (first half of 1937) indicate that the average cost for the System for sorting each 1,000 notes was 50(5, as compared to our cost of 44£ for the year 1937, and that the System’s average notes sorted daily per employee was11,449, compared to our average of 13,131.

The total cost of the Currency and Coin function for 1937 m s $99,240 as compared to the 1936 cost of $103,504. The 1937 cost includes the absorption by us of $62,077.37 in shipping charges on currency and coin as compared to $61,225 in 1936. The 1937 total espense includes $13,215 of costs incident to retiring unfit currency from circulation and the expense of preparing currency shipments to member banks, and in 1936 such costs were $13,252.


The total of notes issued “by the .Agent to the Bank during 1937 was $40,295,000 which is the smallest amount required by the “bank since 1930, and nearly $18,000,000 below the 1936 payments* Coupled with the decreased demand for note issue m s the greater amount of our notes retired from circulation. Notes actually destroyed aggregated $33,818,000, which is also the hoariest destruction schedule of any other year since 1930,

During the last half of 1937 the changes in circulation from month to month were minor, but the amounts necessary to take care of demand from our district were much smaller than during the sane months of 1934, 1935 and 1936, We issued $21,260,000 in notes during the last six months of 1937, compared to $3 1,735,0nn in the came period of 1936. With the falling off in normal demand has cone a strong inflow of unfit currency. The amount of unfit notes destroyed during the last half of 1937 w^s over 43^ greater than during the first half.

On December 31, 1937 there was held, in the Bank*s cash, our own notes to the emouut of $5,317,000. The amount of outstanding notes shown by the Agent was $142,886,000. This indicated the amount of our notes held by banks and the public to be $137,569,000, or an increase of $1,473,000 during the year. For 1936 our circulation showed an increase of $25,534,000.

Of tho new currency issued by the Agent during the year, $34,080,000 consisted of 10*s and 20*s. The only 5*s called for were fit notes reissued in the amount of $200,000. During the past 12 months the Treasury Department shipped us for credit $14,700,000 in silver certificate 5*s, and $4,900,000 in legal 5*8. This supply made it unnecessary for us to use any of our own supply of new $5 Federal reserve notes.The supple of new silver and legal 5*s on hand at the close of 1937 was $3,800,0^0, besides which we also held $1,900,000 in new silver $1 bills. Because of the steady flow of 5®s from the Treasury and somewhat slackened demand, our note printing costs are lower than might be indicated by the amount of our outstanding circulation. Of the total of $142,886,640 outstanding notes, as shown on the Agent's records, $2,655,270 only represents $5 notes. Outstanding 10fs and 20*s make up $116,nno#0n0 of the total.

At the close of 1937 our supply of 1934 Series notes in Washington, printed and paid for, amounted to $99,220,0(0. Of the total $75,120,000 was in 5*s, 10's and 20*s. At Minneapolis our supply of 1934 Series notes amounts to $15,820,0^0 of which $13,280,000 is in the smaller denominations. Including $39,600,000 o^ 10*s pad 20*s to be printed by June 30, 1938, our supply of new smnll bills is sufficient to last approximately four ye^rs, based on the requirements of 1937.

FEDERAL RESifllYS NOTJ^


FJSBERAL iliSSKRVK XJOTES Tl'KCEIViD AITl) ISSUED BY AGi£!T i)U':lDG 1937

Ilf HAI»D3 OF AGM? UaC313:SH 31, 1936

IIEW FIT-FOH-USK TOTALFives $ 10,400,000 $ 0 $ 10,400,000Tens 4,680,000 0 4,630,000Twenties 5,440,000 0 5,440,000Fifties 12,950,000 1,900,000 14,850,000Hundreds 10,240,000 4,350,000 14,590,000Five Hundreds 6,700,000 615,000 7,315,000Thousand3 6,400,000 725,000 7,125,000

Total $ 56,810,000 $ 7,590,000 $ 64,400,000iraCEIY-2) FROM ILJTUlCTilD BY TOTALOOIiPTllOLLSR BAXJK RECEIV!©

FIT-F0R-USI5Fives 0 200,000 200,000Tens 20,080,000 2,600,000 22,680,000Twenties 13,760,000 2,700,000 16,460,000Fifties 0 0 0Hundreds 400,000 100,000 500,000Five Hundreds 0 0 0Thousands 0 100,000 100,000

Total $ 34,240,000 $ 5,700,000 $ 39,940,000ISSUKD TO BAHK

M 7 FIT-FOB-ITSIS TOTALFives 0 200,000 200,000Tens 20,400,000 2,100,000 22,500,000Twenties 13,680,000 1,000,000 14,680,000Fifties 50,000 500,000 550,000Himdreds 100,000 1,550,000 1,650,000Five Hundreds 0 215,000 215,000Thousands 0 500,000 500,000

Total $ 34,230,000 $ 6,065,000 $ 40,295,000IN HANDS OF AGI5NT DiSGhl IBKR 31, 1937

M l FIT-F0E-U5E TOTALFives 10,400,000 0 10,400,000Tfctfi3 4,360,000 500,000 4,860,000Tv/entios 5, o20,000 1,700,000 7,220,000Fifties 12,900,000 ' 1,400,000 14,300,000Hundreds 10,540,000 2,900,000 13,440,000Five Hundreds 6,700,000 400,000 7,100,000Thousands 6,400,000 325,000 6,725,000

Total $ 56,820,000 $ 7,225,000 $ 64,045,000RA.TIO OF ISSUM BY M O ! llKATIOHS1937 1936 1935 1934 1933

Fives .50 4«09 1.47 25.27 18,90Tens 55.04 49.63 51.66 40.25 30.05Twenties 36.43 37.69 38.76 32.31 26.26Fifties 1.37 2.28 2.02 .72 5.94Hundreds 4C 09 4.67 3.79 1.24 12.31Five Hundreds .53 .43 .76 0 2.05Thousands 1.24 1.21 1.54 .21 4.49

100.00$ 100.00# 100.00# 100.00$ 100.00$


F:ff)EHAL RESERVE NOTES ISSUED TO BANKCOMPARATIVE BY MONTHS 1957-1933

1937 1936 ‘ 3-935 1934 1933January $ 865,000 $ 1,190,000 $ 1,000,000 $ 3,175,000 $ 3,980,000February 3,660,000 3,540,000 3,770,000 5,385,000 12,590,000liar ch. 4,290,000 . 4,185,000 1,984,000 4,430,000 35,185,000April 4,720,000 3,795,000 2,688,000 1,940,000 1,680,000May 3,080,000 3,100,000 2,550,000 2,640,000 1,170,000June 2,420,000 10,505,000 2,300,000 2,360,000 2,160,000July 2,570,000 4,275,000 1,625,000 4,780,000 4,730,000August 3,930,000 5,930,000 4,470,000 8,060,000 4,100,000September 4,780,000 3,680,000 6,380,000 5,250,000 7,205,000October 3,120,000 5,330,000 4,660,000 3,180,000 1,940.000November 3,100,000 6,260,000 4,325,000 3,215,000 1,700,000December 3,760,000 6,260,000 5,110,000 3,985,000 5,165,000Total forYear $40,295,000 $58,050,000 $40,862,000 $48,400,000 $81,665,000

FEDERAL RESERVE NOTES DESTROYED AT WASHINGTONCOMPARATIVE BY !JOimiS 1937-1933

1937 1936 1935 1934 1933January $ 2,449,950 $ 2,928,505 $ 2,920,050 $ 1,969,650 $ 1,763,650February 1,923,970 1,568,905 2,038,050 2,532,360 1,178,300March 2,147,635 2,378,850 2,357,250 2,503,550 1,107,100April 2,089,050 2,069,250 2,326,850 3,172,550 1,540,410May 2,594,450 2,629,000 2,640,200 3,120,000 2,451,100June 2,678,935 2,338,850 2,237,650 2,497,150 1,513,050July 2,650,500 2,390,050 2,894,800 2,930,250 1,990,250August 2,978,200 2,352,650 2,282,275 2,157,950 2,769,400September 3,764,450 2,591,180 2,754,400 2,604,450 1,854,350October 3,676,450 2,702,650 2,833,050 2,872,980 2,598,500November 3,070,200 2,957,950 2,671,650 2,674,200 2,463,800December 3,794,585 2,440,450 2,321,550 2,432,850 2,129,550Total forYear ^33,818,375 $29,348,290 $30,277,775 $31,467,940 $22,359,460

FEDERAL RESERVE NOTES ISSUED AND DESTROYED SINCE ORGANIZATION

Issued to Destroyed atBank Washington

1914 $ 260,000 $ 01915 13,742,000 01916 9,880,000 895,9551917 42,230,000 8,988,0951918 57,140,000 9,421,5401919 39,990,000 36,771,8051920 39,450,000 40,766,7851921 39,265,000 49,748,5801922 43,360,000 32,784,3201923 40,205,000 27,320,3301924 52,030,000 28,173,3951925 44,330,500 30,108,3551926 46,702,000 31,835,9501927 36,694,500 23,970,3351928 40,015,000 26,808,0351929 73,754,000 55,134,9501930 39,052,000 43,217,2651931 42 *180,000 19,595,9951932 55,905,000 19,894,8301933 til,665,000 23,359,4601934 48,400,000 31,467,9401935 40,862,000 30,277,7751936 58,050,000 29,348,2901937 40,295,000 33,818,375TOTAL $1,025,457,000 $633,708,360


ISSUE, REISSUE AND DESTRUCTION OF FEDERAL RESERVE NOTES SINCE OPENING- OF BANK AS OF DECEIVER 51 > 1937.

FivesTensTwenties Fifties Hundreds Five Hundreds Thousands

Total

Received from Comptroller$201,400,000287.640.000254.400.00023.800.00043.800.00011.400.00014.200.000

$840,640,000

Returned to iW:ent fry Bankt 42,000,00082.750.00085.400.0009.985.00018.035.0002.944.0007.768.000

Total$243,400,000^70,390,000339,800,00038.765.00060.835.00014.344.00021.968.000

$248,862,000 $1,089,502,000ISSUED TO BANK

FivesTonsTwenties Fifties Hundreds Five Hundreds Thousands

Total

FivesTensTwentiesFiftiesHurrL redsFive HundredsThousands

New$191,000,000283.280.000248.880.00015.900.00032.260.0004.700.0007.800.000

$783,820,000

Fit-For-Use$ 42,000,00082.250.00083.700.0008.565.00015.135.0002.544.0007.443.000

Total$ 233,000,000

365.530.000332.580.00024.465.00047.395.0007,244,00015.243.000

$241,637,000 $1,025,457,000

DESTROYED AT WASHINGTONReturned lie turned fry Returned fry Returned fry Otherfry A/rent Treasurer Minneapolis Fed.Res.Banks Total

$4,260,000 $ 4,550,0502.545.0001.020.000

25.00030.000 00

6,031,5205,872,420525,550

1 ,000,000131,000231,000

$ 98,643,900119,006,000 32,383,6005.615.0008.290.0001,507,5001.963.000

$ 80,890,780 101,325,39095,709,300 3,990,7506,289,100810,500

1,062,000

$188,344,730228,907,910184,985,32010,156,30015,609,1002.449.0003.256.000

Total $7,880,000 $18,341,540 $317,409,000 $290,077,820 $633,708,360

In Hands of Agent OutstandingDecember 31, 1937 December 31, 1937

Fives.................................. $10,400,000 $ 2,655,270Tens .................................. 4,860,000 53,872,090Twenties................................ 7,220,000 62,194,680Fifties ................................ 14,300,000 4,343,700Hundreds................................ 13,440,000 13,750,900Five Hundreds ........................... 7,100,000 1,851,000Thousands . ............................. 6,725,000 4,219,000

Total $64,045,000 $142,886,640


TBAITSFMR AliD COD33 DKPARBUM (Minneapolis Only)

The Transfer Deportment handled 21,525 transfers amounting to $1,795,356,000 during 193?, compared to 20,306 transfers totaling $1,719,291,000 in 1936. This represents an increase of 1,219 transactions, nnd an increase in amount of $75,965,000.

The number and amount of incoming and outgoing wire transfers handled during the past five years were as follows:

giitgolng Wire Transfers Incoming V/ire TransfersI§or M m & lumber Mowti

1937 6,566 $ 360,148,000 7,411 $1,038,897,0001936 6,111 370,723,000 6,624 914,381,0001935 5,666 344,724,000 5,870 724,422,0001934 5,332 268,776,000 6,723 758,917,0001933 6,184 420,027,000 9,461 967,900,000

Messages coded and decoded during 1937, other than transfers, numbered 16,894, compared to 18,390 In 1936.

TELEGRAPH UNIT (Minneapolis Only)

During 1937 ue sent 354,519 words over the Federal Reserve Systemleased wires, in comparison with 468,939 in 1936.

COMPARISON OF MBMBHR AND N01MEEMB5R BA!JK BALANCES (Thousands only 000 omitted)Dec. 31, Dec. 31, Dec. 31, Dec. 31, Dec. 31,. 1937 __1936 1935 _ 1934 _ 1933

Michigan S 6,329 $ 5,146 $ 3,485 $ 3,403 $ 3,635Minnesota 86,458 80,885 58,772 68,750 43,404Montana 16,009 15,876 17,068 11,121 7,160North Dakota 5,266 5,175 6,137 3,893 3,398South Dakota 8,015 9,578 7,297 6,869 3,613v/isconsin _ 4.729 ___ 3.-871 3.469 ____3.385 . 3.120

$126,806 $120,531 $ 96,228 $ 97,421 $ 64,330

DSFICmiT KKS1OTE PKHALTIBSMinneapolis Helena Combined Combined

1937 1937 ■ 1937________ 1936Amount of Penalties $ 1,530.93 $ 381.42 $ 1,912.35 $ 350.29Ifumber of “banks penalized 92 14 106 51Maximum penalty rate 4$ 4$ 4$ 4$


REPORT OF BANK ASTI> PUBLIC RELATIONS ACTIVITIES AT THE FEDERAL RESERVE BASK OF MINNEAPOLIS

DURING- 193?

Thirteen bank officers and other representatives travelled 80,729 miles on public relations work during 1937 at a travel cost of $6,934,03*They attended sis bankers * conventions and fifty other meetings, delivered 34 addresses (including two radio talks) to an estimated known audience of 2,470 people, and made 769 visits at member basics and 1,066 visits at non- member banks in the district* Practically every bank in the district was visited at least once during the year.

The attendance at showings of the Federal Reserve Bank movie during 1937 was 130,450 people. The bank continued its cooperation with the Wisconsin Bankers Association with regard to showings of the Federal Reserve movie.

The Board of Directors of this bank held their June meeting in Rapid City, South Dakota, and attended the South Dakota Bankers Association convention. Enroute to Rapid City, the directors gave a dinner for bankers at Mobridge and a luncheon at Faith.

A supplement to our library catalogue was mailed to all member and non-member banks offering them the use of any book in our library without cost, except that of the postage involved.

President Peyton wrote a personal letter to the executive officer of every bank in the district enclosing a copy of an article which had appeared in the Commercial West dealing with our industrial loans and renewing our offer of service in this connection.

A program was begun of inviting officers of Twin City banks to have lunch with our officers at this bank.

Early in December we began visiting eligible non-member banks on the par list to discuss with them the advantages of membership in the Federal Reserve System.

In May, 1937, Mr. Peyton wrote a letter to the executive officer of each member bank in the district asking for the bank’s recent experience with loans and investments and its current cash position.

Twelve Issues of the Monthly Review were printed and distributed to a mailing list which, in December, consisted of 5,725 names.


REPORT FOR THE CALENDAR YEAR 1937 BANK EXAMINATION DEPARTMENT

FEDERAL RESERVE BANK OF MINNEAPOLIS

There were on December 31, 1937, sixty-six State member bonks* Each St<>te member bank in this district received at least one examination by examiners for the Federal Reserve Bank of Minneapolis during the calendar year 1937*

Ten State member banks are exercising trust powers, and eleven examinations were made of trust departments of State member banks during 1937, (nine by the trust examiner r>nd two by other examiners). Elghty-nino national banks have full or limited trust powers, and fifty of those banks are exercising such powers. The trust examinor has made no examinations of trust departments of national banks during 1937. The trust examinor reviewed during the year sixty reports of trust departments attached to national bank examiners* reports.

One application by a national bank for additional fiduciary powers was received during 1937, which application is being investigated before being forwarded to Washington. Applications for surrender of trust powers of two national banks were approved during the year.

The five of our men holding commissions, with six assistants, traveled 53,555 miles in examining 71 State banks, 11 trust departments, and making four special visits

Reports of Examination of State Member BankaThe number of reports of exr^nination received from the various St^te Banking

Departments in the Ninth District during 1937, of State member banks examined independently by them, was as follows:

State Bank Arrnlic.-.tlons for Membership - 1957Three applications were received from State banks in this district for

membership in the Federal Reserve System. The applications were from the Stockmen* s Bank, Cascade, Montana, The Citizens* Stato Bank of Chotean, Montana, Choteau, Montana, and Merchants State Bank, Rhinelander, Wisconsin. Tho Stockmen’s Bank, Cascade, was examined as of October 11, 1937, the application was approved by the Board at Washington on November 16, 1937, and membership was completed as of November 30, 1937. The Citizens1 State Bank of Choteau was examined as of October 23, 1937, the application was approved by tho Board at Washington on November 17, 1937, and membership was completed as of November 30, 1937. Examination was made of the Merchants State Brink, Rhinelander, but membership of that bank was not completed as of December 31, 1937.

Michigan . . Minnesota . Montana . . South Dakota

31253


.RETORT of M PLBW U m oB DEPARTT.UffTT - 1937 (Cont»d)

BANK CHANQBS XH 1937 (Per Stock Book Records)

Total inmbar of member banks in the district January 1, 1937 ............. 484New national banks organised.................................... . 0State hanks admitted......... .................................. ...4

488National banks absorbed by other national b a n k s ............... 2National banks absorbed by nonmember State institutions ........ 2National banks succeeded by nonmember State institutions........ 7National banks liquidated................................... 2State member bank withdrawals................................ 2State member banks absorbed by national banks .................. 3 18

Total number of member banks holding stock in the FederalReserve Bank of Minneapolis at the end of the year............. . 470

MembershipAt the closo of the year there were 470 member banks in this district, as

compared with 484 member bank3 at the beginning of the year. There was a net loss of thirteen national banks and a net loss of one State bank. The total membership at the close of the year was divided into 404 national banks and 66 Strte banks.

State Bank Membership According to States

No* of StateNo. of State Banks Withdraw- No. of State No. of StateBank Members ing from Member- Banks Admitted Bank Members

State 1-1-37 ship During Year During Year 12-31-37Michigan 7 0 0 7Minnesota 14 2 0 12Montana 21 0 3 24North Dakota 0 0 0 0South Dakota 23 3 1 21Vfisconsin 2 0 0 ___2Totals.......... 67 5 4 66


FISCAL ACSSNCY FUNCTIONS - 1937

VOLUME OF OPERATIONSIssues, redemptions or exchange of various United States Government

securities, including United States Savings “bonds and Adjusted Service bonds handled for the United States Government, numbered 186,502 pieces and amounted to $216,905,702.50 as compared with 878,903 pieces amounting to $374,648,313,75 in 1936.

We handled 1,819 purchases and 3,8t<® sales of Government securities totaling $23,237,400; for delivery or payment or both, we handled for banks and trust companies 887 transactions in Government securities amounting to $145,960,300. There were also 3,916 transactions of Government guaranteed and miscellaneous general market securities aggregating $17,381,997. Altogether, of these various transactions there were 10,452 totaling $186,579,697, as compared to 15,401 totaling $306,536,824.25 in 1936.

Delivery of 25,558 pieces totaling $96,177,333.67 was made on purchase and resale transactions for other than our own account. In addition, on exchange transactions, such as denominational exchange, the exchange of coupon for registered securities, etc., 17,424 pieces were delivered, amounting to $114,896,300. The total number of pieces delivered was 42,982 amounting to $211,073,633.67 in comparison with 55,591 totaling $315,669,697.50 during the preceding year.

On exchanges and redemptions of bonds handled for the Federal Farm Mortgage Corporation there were 6,012 pieces amounting to $2,602,100. There were also 5,824 pieces totaling $3,857,875 for the Home Owners* Loan Corporation and 4,416 pieces aggregating $7,366,720 for the Federal Land Banks. In addition, 189 Federal Intermediate Credit Bank debentures amounting to $5,820,000 were redeemed. Altogether, on issues, exchanges and redemptions of other than direct United States Government securities, there were 16,441 pieces, contained in 3,202 applications, totaling $19,646,695.

The total number of individual securities received and delivered by the Fiscal Agency Department (including other than the direct United States Government securities) during 1937 was 245,925 totaling $447,626,031.17, as compared with 978,940 totaling $727,964,086.25 in 1936.

We redeemed 334,070 Government coupons amounting to $10,763,591.46 during the past year as compared to 334,528 coupons totaling $10,249,024.39 during 1936. We also redeemed 307,725 Federal Land Bank, Federal Farm Mortgage


Corporation and Home Owners* Loan Corporation coupons amounting to $3,434,435*82 during 1937 as compared to 358,095 totaling $3,630,146.46 in 1936.

other SERVICESDuring 1937 we received 7,311 individual orders for United States

Savings bonds representing 16,835 pieces, amounting to $6,507,850, as compared with 1,826 individual orders representing 5,706 pieces, amounting to $2,508,625 in nine months during 1936.

On January 16, 1937, we were designated agents for the redemption of Adjusted Service bonds, and thereafter redeemed 127,558 individual bonds amounting to $6,377,900.

On May 12, 1937 we were designated agents for the redemption of United States Savings bonds and thereafter we received for redemption 14,972 individual bonds amounting to $3,950,750.

During the year we issued 48,070 United States Treasury checks in payment of Adjusted Service bonds, United States Savings bonds end other Public Debt redemptions.

Without inclusion of Treasury bills, there were seven offerings of United States Government securities during 1937. Two of such issues were long term and five short term. We received and handled 1,989 Individual subscriptions contained in 1,324 different applications aggregating $149,233,550. The amount allotted on these subscriptions was $30,093,600. Daring 1936, 6,492 Individual subscriptions were submitted in 3,732 different applications covering seven similar offerings and $117,832,550 was allotted.

During 1937, 168 tenders amounting to $23,140,000 wore received by this -Agency on 75 offerings of Treasury bills* Of these, 61 tenders on a discount basis ranging from .04 percent to .74 percent and amounting to $9,525,000 were accepted. Daring 1936, 96 tenders amounting to $14,490,000 were received and 22 tenders totaling $4,135,000 were accepted on the 69 offerings of Treasury bills mpde that year.

At the close of 1937 there wore 132 banks and trust companies in this district which were designated as special depositaries of public moneys, ns compared to 184 banks and trust companies so designated in 1936.

Including the weekly circular giving current market quotations on the outstanding Government issues, 109 circular letters were sent to banks and trust companies in the district during 1937 in connection with Fiscal Agency operations

as compared to 110 circulars in 1936.Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

RECONSTRUCTION FINANCE CORPORATION

The volume of burliness which we handle for the Reconstruction Finance Corporation continued fairly oven through the year, repayments about offset by new business until the forepart of November, when the Helena Branch custodianship was transferred to Minneapolis, which transfer increased our Minneapolis figures considerably.

The Corporation has purchased a considerable amount of bonds from the Public Works Administration, a largo part of which it still holds. The largest reductions In holdings have been of preferred stock and debentures issued by banks.

The Disaster Loan Corporation Is a new subsidiary of the Reconstruction Finance Corporation and we have a number of such loans, made at Billings. Yte received from the Helena Branch a number of loans made at Helena, account of earthquake damage, rchich loans were made by the Reconstruction Finance Corporation direct through a local organization known as the Capital City Rehabilitation Corporation. Another subsidiary, the Commodity Credit Corporation, is again making loans on com secured by Farm V/arehouse receipts, advancing 50-cents per bushel. It appears there may be a considerable volume of this during 1938.

LOAN BALANCES, ADVANCES, ETC., AS OF ______DECEMBER 31. 1937____________

Banks, trust companies, and Mortgage Loan $Companies 815,648.72

Industrial and commercial businesses 950,531.20Repair and Reconstruction (Earthquakes) 77,325.44Drainage, Levee and Irrigation 856,167.70Preferred Stock of banks 15,134,880.00Secured by preferred stock 225,966.10Debentures of Banks 6,643,210.90Bonds (from Public Works Administration) 3,997,553.43Relief Advances 22,619,161.,00U.S. Treasury obligations (accepted accountpreferred stock and debenture payments) 2,921,600.,00

R. F. C. Mortgage Company (loans) 383,290.,68R. F. C. Mortgage Company (Federal Housingloans purchased) 418,723.,04

Disaster Loan Corporation 92,314,,97Miscellaneous 5,581,499.,64

Total...................................... $ 60,717,872.82

FEDERAL EMERGENCY ADMINISTRATION OF PUBLIC WORKS

The number of blocks of bonds purchased through us during 1937 was considerably less than previous thereto. Most of its holdings were sold during the year to the Reconstruction Finance Corporation and it now holds with us an aggregate of only $421,200.00 of bonds.


1937 Directors Frb Minneapolis

Documents