FEDERAL RESERVE AGENT

Transcription

1 EIGHTEENTH ANNUAL REPORT TO THE FEDERAL RESERVE BOARD BY THE FEDERAL RESERVE AGENT FEDERAL RESERVE BANK SAN FRANCISCO FOR THE YEAR ENDED DECEMBER 31,1932

2 EIGHTEENTH ANNUAL REPORT TO THE FEDERAL RESERVE BOARD BY THE FEDERAL RESERVE AGENT FEDERAL RESERVE BANK SAN FRANCISCO FOR THE YEAR ENDED DECEMBER 31,1932

3 DIRECTORS AND OFFICERS OF THE FEDERAL RESERVE BANK OF SAN FRANCISCO Class Group A 1 B C C January 1, DIRECTORS C. K. MCINTOSH, San Francisco, California - President, The Bank of California, N. A., San Francisco, California. THOMAS H. RAMSAY, Red Bluff, California ". " ". " President and General Manager, Pacific National Agricultural Credit Corporation, San Francisco, California. KEITH POWELL, Woodburn, Oregon - President, Bank of Woodburn, Woodburn, Oregon. A. B. C. DOHRMANN, San Francisco, California Chairman of the Board, Dohrmann Commercial Company and The Emporium Capwell Corporation, San Francisco, California. a MALCOLM MCNAGHTEN, LOS Angeles, California - President, Broadway Department Store, Inc., Los Angeles, California. ELMER H. COX, San Francisco and Madera, California President, Madera Sugar Pine Company, Madera, California. ISAAC B. NEWTON, LOS Angeles, California - Chairman of the Board. Term Expires Dec WALTON N. MOORE, San Francisco, California - Deputy Chairman, President, Walton N. Moore Company, San Francisco, California. "WILLIAM SPROULE, San Francisco, California - President-Retired, Southern Pacific Company; President, and Director, Central Pacific Railway Co. and Southern Pacific Railroad Co., San Francisco, California. MEMBER OF FEDERAL ADVISORY COUNCIL HENRY M. ROBINSON, Chairman of the Board, Security-First National Bank, Los Angeles, California ISAAC B. NEWTON, Chairman of the Board and Federal Reserve Agent S. G. SARGENT, Assistant Federal Reserve Agent, Chief Examiner, and Secretary OLIVER P. WHEELER, Assistant Federal Reserve Agent F. H. HOLMAN, General Auditor R. T. HARDY, Auditor OFFICERS JNO. U. CALKINS, Governor WM. A. DAY, Deputy Governor IRA CLERK, Deputy Governor W. M. HALE, Cashier CHESTER D. PHILLIPS, Assistant Cashier C. E. EARHART, Assistant Cashier H. N. MANGELS, Assistant Cashier E. C. MAILLIARD, Assistant Cashier J. M. OSMER, Assistant Cashier *Resigned March 11,. Succeeded by Andrew Welch, President, Welch and Company, San Francisco.

4 DIRECTORS AND OFFICERS OF BRANCHES January 1, SPOKANE BRANCH Directors STANLEY A. EASTON,* Chairman. PETER MCGREGOR*. D. W. TWOHY! - R. M. HARDY!. - D. L. DAVISI.. Term Expire* Dee. 31 Officers D. L. DAVIS, Managing Director J. M. LEISNER, Assistant Manager A. J. DXJMM, Assistant Cashier CHARLES H. CLARKE,* Chairman. HENRY A. RHODES*. M. A. ARNOLD!. M. F. BACKUS!.. C. R. SHAWI... SEATTLE BRANCH C. R. SHAW, Managing Director B. A. RUSSELL, Assistant Manager G. W. RELF, Assistant Cashier PORTLAND BRANCH HARRY M. HALLER,* Chairman. EDWARD C. PEASE*. J. C. AnrewoRTHt - RICHARD S. SMITH! - R. B. WEST!. R. B. WEST, Managing Director S. A. MACEACHRON, Assistant Manager J. P. BLANCHARD, Assistant Cashier SALT LAKE CITY BRANCH LAFAYETTE HANCHETT,* Chairman.... G. G. WRIGHT*... H. E. HEMINGWAY!. E.O.HOWARD!... W. L. PARTNER!... W. L. PARTNER, Managing Director H. M. CRAFT, Assistant Manager W. M. Smoot, Assistant Cashier LOS ANGELES BRANCH CHARLES B. VOORHIS,* Chairman. JESSE B. ALEXANDER* F. J. BELCHER, JR.!. A. J. CRUICKSHANK! W. N. AMBROSE! W. N. AMBROSE, Managing Director M. MCRITCHIE, Assistant Manager FRED C. BOLD, Assistant Cashier L. C. MEYER, Assistant Cashier Appointed by Federal Reserve Board. ^Appointed by Federal Reserve Bank.

5 LETTER OF TRANSMITTAL Sirs: Federal Reserve Bank, San Francisco, California, March 23,. I have the honor to submit the following report concerning conditions in the Twelfth Federal Reserve District and the operations of the Federal Reserve Bank of San Francisco, for the year ended December 31, Yours respectfully, Federal Reserve Board, Washington, D. C. Chairman of the Board and Federal Reserve Agent.

6 ECONOMIC REVIEW OF THE YEAR 1932 Industry, Trade, Banking Business activity in the Twelfth Federal Reserve District continued to contract sharply during the first half of Most of the decrease during this period took place in January, February, and March, in which months industrial output, employment, retail trade, check payments, the volume of railroad traffic, and commodity prices declined substantially. Not only did industry and trade decrease during those three months, but pressure upon banks grew rapidly during January and February, culminating late in February in one of the most critical situations thus far experienced by banks in this District. Large withdrawals of deposits from both member and non-member banks were accompanied by numerous bank failures. The marked reductions in deposits resulted not only from increased demand for currency for hoarding, but also from heavy transfers of funds to other parts of the United States for use in meeting commercial and financial obligations. Although interest rates did not advance during this period, commercial banks were steadily reducing outstanding loans in an effort to secure some of the funds needed to meet the demands upon them, and were rapidly increasing their borrowings from the Federal Reserve Bank of San Francisco. so 00 * \ V \ \ 30 / V VOLUME OF INDUSTRIAL PRODUCTION-Twelfth District Annual indexes. ( ) Credit extended to the Twelfth District by this Bank, principally through discounts, increased by 80 million dollars from the beginning of the year to February 17, at which time locally employed credit of this Bank totaled 147 million dollars, an amount higher than at any time since In the third week of February demand upon banks for payments of currency to depositors reached a temporary peak, and currency started to return to the banks, approximately 26 million dollars being redeposited in the following six weeks. A small return of currency to the banks at that time was in keeping with the seasonal expectancy, but the bulk of this particular movement appears to have represented a decrease in hoarding. This was an important factor marking a turn in the banking situation and bringing to an end the drastic decline in deposits which had been taking place for several immediately preceding months. Furthermore, at the end of February,

7 EIGHTEENTH ANNUAL REPORT movements of funds into the District reached an approximate balance with the outflow, thus relieving the banks from meeting what had been a most severe drain upon their resources during January and February. The principal element bringing about a balance in inter-district transactions at this time was a substantial increase in the net movement of United States Government funds into the Twelfth District, which funds were used in part for meeting the ordinary expenses of the Federal Government and in part for disbursements as loans through the Reconstruction Finance Corporation. The payments of Federal Government funds for both ordinary purposes and in the form of loans were made to individuals, banks, and other business organizations of the District, thus tending to stimulate business and employment and helping to maintain time and net demand deposits. The currency received from depositors, as well as the large disbursements by the Government enabled banks to start repaying borrowings from the Reserve Bank during March, a movement which generally continued throughout the remainder of the year. The principal changes in the supply and use of funds are shown in the following chart and in the table on page 7. MILLIONS OF DOLLARS DEMAND FOR CURRENCY MEMBER BANK RESERVE DEPOSITS I I I I I I I I I I I 1-iO SOURCES OF BANKING RESERVES AND THEIR PRINCIPAL USES Twelfth District (Changes cumulated from December 30, 1931) During the first three months of 1932, large commercial and financial transfers of funds to other parts of the United States more than offset gains from United States Treasury disbursements in excess of collections, making necessary a sharp increase in the use of Reserve Bank credit. With the cessation in April of the loss through commercial and financial transfers, and with the continued receipt of funds from United States Treasury operations and new issues of national bank notes, Reserve Bank credit declined during the remainder of the year, except in June and July when there were substantial withdrawals of currency for hoarding. During April, May, and June, the rate of decline, in industry, employment, trade, and commodity prices was considerably less than in the first three months of the year. The banking situation was eased during these months by funds which continued to be received from the Recon-

8 Larger than seasonal increases in railroad freight traffic, in waterborne commerce, and in department store sales, took place during the third quarter of the year, and commodity and security prices advanced substantially during most of that period. At the same time, a period of relative industrial stability the first since 1929 became apparent, although activity in most industries remained at extremely low levels. In late September, commodity and security prices renewed the declining tendency of the first half of the year, a movement which continued to the end of Declines in those measures during October were followed in November by a moderate contraction in industry and trade, department store sales in particular showing a sharp decrease which, after seasonal allowance, was recovered only in part during December. The mild expansion, or at least absence of decline, in business activity in the early autumn was accompanied by further improvement in the condition of banks and by some strengthening of public confidence. Member banks were able to continue making repayments of their borrowings from the Reserve Bank during August, September, and October, reflecting largely the availability of funds resulting from the issuance of about 50 million dollars of new national bank notes. In November and December, an increase in net disbursements by the Federal FEDERAL RESERVE BANK OF SAN FRANCISCO 7 struction Finance Corporation and by a reduction in the outflow of funds to other districts. Money in circulation and in hoarding showed practically no change during. April and May. The stability thus brought to the banking structure was reflected principally in a decrease in the number of bank failures and in a reduction in borrowings from the Reserve Bank. Loans by commercial banks continued to decrease fairly steadily and interest rates on such loans averaged slightly higher than in the first quarter of the year. Improvement in the District banking situation during April and May was temporarily offset in late June and early July by a renewal of hoarding. SUPPLY OF AND DEMAND FOR FUNDS USED AS BANKING RESERVES Twelfth District Changes in millions of dollars during the periods indicated, SOURCES OF FUNDS v Reserve Commercial Bank and Financial Treasury Total Credit Transactions Operations Supply Dec. 30, 1931-Mar. 2, Mar. 2, 1932-July 6, July 6,1932-Dec. 28, Dec. 30,1931-Dec. 28, , USES OF FUNDS, Member Bank Demand for Currency Reserve Deposits Other* Total Demand Dec. 30, 1931-Mar. 2, Mar. 2,1932-July 6, July 6, 1932-Dec. 28, Dec. 30,1931-Dec. 28, *"Other" includes (1) unexpended capital funds of the Federal Eeserve Bank and (2) deposits of non-member banks in the United States and of foreign banks and governments.

9 Agriculture In contrast with the near-drought conditions of 1931, weather conditions during 1932 were favorable for the growth of crops, and harvests of agricultural products exceeded those of the preceding year. Despite this increase in production, the volume of crops sold was no larger than in 1931, the prices for some products, especially for certain varieties of deciduous fruits, having been too low to cover costs of marketing. A further sharp drop in agricultural income was recorded, this Bank's index of the value of products marketed declining to 47 ( average = 100) compared with a previous low of 58 in The index has been compiled since Livestock producers, like other agriculturalists, experienced favorable production conditions during 1932, but extremely low prices resulted in further contraction in aggregate returns to cattle and sheep raisers. Tax delinquencies and defaults on farm mortgages and on irrigation district bonds were much more numerous in 1932 than in other recent years. 8 EIGHTEENTH ANNUAL REPORT Government furnished banks with funds which permitted further reductions in borrowings from the Reserve Bank. Commercial banks' loans continued to contract during the last half of the year, however, and a tendency toward slightly higher interest rates in the principal money centers was apparent. Investments of city banks showed some increase during these months, almost entirely as a result of larger holdings of United States Government securities. Difficulties of banks in certain country areas became acute during October, and in Nevada a statewide banking moratorium was declared effective November 1. Temporary suspension, of banking operations was also authorized in a few small cities in other states of the District during the autumn of (Several of the banks taking advantage of the state and local moratoria definitely suspended operations during December.) In partial reflection of the uncertainties resulting from these moratoria, deposit withdrawals from District banks increased considerably during the first ten days of November. Currency was returned to banks during the last three weeks of that month, however, and practically no change in demand for currency was recorded during December, although an increase of around 10 million dollars is customary immediately preceding Christmas. As stated above, retail trade increased somewhat more than usual in December, but the amount of currency already outstanding was apparently sufficient for business needs. No other unusual demands upon the credit structure of the District occurred during November or December and on the whole it may be said that banks about held the gains made between March and October, the year ending with most banks under less pressure than they had been at its beginning. Bank Failures A total of 146 Twelfth District banks closed during 1932, compared with 76 closed during Deposits of the 49 member banks which closed in 1932 totaled $36,887,000 at the time of closing, while deposits of the 97 non-member banks totaled $58,964,000 at the time of closing. Of the banks which had suspended operations, 20 reopened during the year, 4 members and 16 non-members comprising this group.

10 FEDERAL RESERVE BANK OP SAN FRANCISCO INDEXES OF INDUSTRY AND TRADE Twelfth Federal Reserve District ( Annual Averaee-100) Industrial Production Electric Power Production Manufactures Poods Butter Canned Fruits Canned Vegetables Canned Fish Flour Slaughter of Livestock Wool Consumption Lumber Paper and Pulp Eefined Mineral Oils Cement Metals and Metal Products Minerals Petroleum Copper Lead Silver Building and Construction Building Permits Larger Cities Smaller Cities Engineering Contracts Awarded Excluding Buildings Trade Oarloadings Industrial Merchandise and Miscellaneous Foreign Trade, excluding raw silk Imports, excluding raw silk Exports Intercoastal Trade Eastbound Westbound Wholesale Sales Agricultural Implements Automobile Supplies Dry Goods Electrical Supplies Furniture Groceries Hardware Shoes Paper and Stationery Department Store Sales Los Angeles Oakland Salt Lake City San Francisco Seattle Spokane Department Store Stocks Automobile Sales New Oars Passenger Commercial "

11 10 EIGHTEENTH ANNUAL REPORT STATEMENT OF CONDITION Federal Reserve Bank of San Francisco RESOURCES December 31, 1932 December 31, 1931 Cash Reserves held by this bank against its deposits and note circulation: Gold and Gold Certificates in vault $ 29,585, $ 18,925, Gold in the Gold Settlement Fund lodged with the Treasurer of the United States for the purpose of settling current transactions between Federal Reserve Districts 15,810, ,617, Gold Held by the Federal Reserve Agent as part of the collateral deposited by the bank when it obtains Federal Reserve notes. This gold is lodged in his name partly in the vaults of the bank and partly with the Treasurer of the United States 177,262, ,662, Gold Redemption Fund in the hands of the Treasurer of the United States to be used to redeem such Federal Reserve notes as are presented to the Treasurer for redemption 5,621, ,268, Legal Tender Notes, Silver, and Silver Certificates in vaults of the bank (available as reserve against deposits only) 9,139, ,812, Total Cash Beserves $237,418, $272,286, Loans and Investments Loans to Member Banks: Against pledge of obligations of the United States 1,844, ,844, Against eligible commercial, industrial, and agricultural paper or acceptances discounted or pledged, or the pledge of other collateral 21,215, ,898, Acceptances bought in the open market 2,526, ,013, United States Government Bonds, Notes, etc. 123,443, ,810, Federal Intermediate Credit Bank Debentures 1,870, Total Loans and Investments (or Earning Assets) $149,030, $127,436, Uncollected Items Checks and Other Items not yet collected... 18,633, ,081, Miscellaneous Resources Bank Premises 4,244, j 4,433, Non-Reserve Cash, consisting largely of National Bank notes and minor coin 8,896, ,394, All Other Miscellaneous Resources 1,829, ,474, Total Miscellaneous Resources $ 14,970, $ 12,302, TOTAL RESOURCES $420,052, $439,107,542.96

12 FEDERAL RESERVE BANK OF SAN FRANCISCO 11 LIABILITIES December 31, 1932 December 31, 1931 Currency in Circulation Federal Reserve Notes in actual circulation, payable on demand. These notes are fully secured. The security may be gold, discounted or purchased paper or direct obligations of the United States Government $226,610, $231,077, Deposits Reserve Deposits maintained by member banks as legal reserves against the deposits of their customers 138,747, ,600, United States Government Deposits 341, ,193, Other Deposits, including foreign deposits, deposits of non-member clearing banks, etc. 6,767, ,679, Total Deposits $145,855, $154,473, Deferred Availability Items Deferred Items, composed mostly of uncollected checks on banks in all parts of the country 16,370, ,447, Miscellaneous Liabilities Reserves and All Other Miscellaneous Liabilities 1,037, ,063, Capital and Surplus Capital Paid In, equal to 3 per cent of the \ capital and surplus of member banks $ \10,478, $ 11,339, Surplus as permitted by law 19,700, ,706, Total Capital and Surplus $ 30,178, $ 29,045, TOTAL LIABILITIES $420,052, $439,107,542.96

13 12 EIGHTEENTH ANNUAL REPORT OPERATIONS OF THE FEDERAL RESERVE BANK OF SAN FRANCISCO DURING 1932 Functional operations of the Federal Reserve Bank of San Francisco reflected the changes in general business volume during Reduced check payments, transfers of funds, and actual use of currency in commerce and finance were accompanied by reductions in both the number and value of most types of credit instruments handled. As would be expected during a period of declining prices, the average amount per item was generally smaller than in previous years. Operations associated with the supplying of credit to member banks were more active, however, than in The more important functions of the Bank are discussed below. PRINCIPAL OPERATIONS 1932 Number of Pieces Handled (In thousands) Bills discounted 38 Bills purchased for own account 4 Currency feceived and counted 127,217 Coins received and counted 139,273 Checks handled for collection 48,513 Other collection items handled drafts, notes, and coupons 1,479 United States Government securities issued, redeemed, or exchanged 72 Transfers of funds 117 Amounts Handled (In thousands of dollar's) Bills discounted 3,990,835 Bills purchased for own account 75,040 Currency received and counted 774,135 Coins received and counted. 37,142 Checks handled for collection 9,617,628 Other collection items handled drafts, notes, and coupons 240,374 United States Government securities. issued, redeemed, or exchanged 506,240 Transfers of funds 10,274, , ,158 61,547 1, ,182, , ,157 63,220 13,176, , ,591 17,325, , ,439 67,180 1, ,109, , ,188 74,913 15,322, , ,343 25,282,661 Discounting for member banks increased markedly during The number of bills discounted was larger than at any time since 1923 and their total amount the largest since In contrast with the movement in the preceding year, discounts reached their peak early in 1932 and declined irregularly during the remainder of the year, as funds were made available to District banks through loans by the Reconstruction Finance Corporation and through Government expenditures in excess of collections. Because of the extremely easy money conditions prevailing during most of 1932 and the shortage of prime short-term investments, bankers ' acceptances were retained by accepting banks to an unusual degree with the result that the number of bills purchased locally for the account of this Bank was the smallest since the War.

14 FEDERAL RESERVE BANK OF SAN FRANCISCO 13 A marked reduction in the number of checks collected was apparent during the second half of 1932, in which period the Federal Government tax upon checks was in effect. The number of drafts, notes, and coupons collected during the year increased. The value of all collection items declined. Changes in the amount of these items correspond in a general way with changes in the value of debits to individual accounts at commercial banks, all of them being dependent upon the level of business activity. Telegraphic transfers of funds by this Bank continued to decline sharply, reflecting to a considerable extent decreased activity at securities markets. A large volume of sales at such markets ordinarily stimulates transfers between Twelfth District and eastern money markets. The quantity of currency counted was but little smaller than in 1931, although the decline in value was fairly large. The number of coins counted, however, increased during the later year, but their value declined relatively more than the value of currency. The decrease in the value of coins was the result almost entirely of a marked reduction in the imports of gold coins deposited at the Federal Reserve Bank of San Francisco, which coins, of course, have a high unit value. Nearly all of the United States Treasurer's financing during 1932 took the form of short-term obligations, and as a result the number and value of Government obligations issued, redeemed, or exchanged in the District remained at the relatively high levels of Earnings and Expenses Earnings of the Federal Reserve Bank of San Francisco increased sharply during 1932, principally because of the larger value of discounts for member banks and the higher average discount rate than in Earnings on United States Government securities allotted to this Bank by the Open Market Investment- Committee were considerably above those of the preceding year, while returns from acceptances purchased declined. Increases in expenditures during 1932 for current bank operation and for furniture and equipment were approximately offset by reduced amounts spent for Federal Reserve currency and miscellaneous items. In addition to these usual deductions from earnings, however, $500,000 was set aside for self-insurance and $101,700 for losses resulting from bank failures. Notwithstanding these last two charges against earnings, neither of which appeared in 1931, net income available for distribution at the end of 1932 was markedly in excess of the corresponding amount for the year before. Dividend payments as provided by the Federal Reserve Act, 6 per cent of paid-in capital, required a somewhat smaller disbursement in 1932 than in 1931 because of the reduced amount of capital stock held by member banks during the year. The $1,657,521 added to surplus in 1932 contrasts with deductions from surplus of $431,859 in 1931 and $1,038,635 in The table on the following page shows the more important sources of income during 1932 and 1931, as well as the principal items of expense, the payment of dividends, and the amounts added to or deducted from surplus during those years.

15 14 EIGHTEENTH ANNUAL REPORT INCOME AND DISBURSEMENTS Federal Reserve Bank of San Francisco Earnings On Loans to Banks and Paper Discounted for Them $3,104, $1,091, On Acceptances Purchased 285, , On United States Government Obligations Owned 1,641, , Other Earnings 256, , Total Earnings $5,288, $2,717, Additions to Earnings $ 212, $ 116, Deductions from Earnings For Current Bank Operations $2,187, $2,129, For Assessments for Federal Reserve Board Expenses 50, , For Federal Reserve Currency, mainly the cost of printing new notes to replace worn notes in circulation, and to replenish the stock unissued and on hand 120, , For Furniture and Equipment 44, , For Reserves and Depreciation, Self-Insurance, Losses, etc 790, , All Other 2, , Total Deductions from Earnings $3,195, $2,580, Net Income available for dividends, additions to surplus, and payment to the United States Government $2,306, $ 253, Distribution of Net Income Dividends Paid to Member Banks, at the rate of 6 per cent on paid-in capital $ 648, $ 685, Excess of Dividends Over Net Income 0 $ 431, Addition to Surplus The bank is permitted by law to accumulate out of net earnings, after payment of dividends, a surplus amounting to 100 per cent, of the subscribed capital; and after such surplus has been accumulated to pay into surplus each year 10 per cent, of the net income remaining after paying dividends $1,657, Payment to the United States Government as a franchise tax representing the entire net income of the bank after paying dividends and making additions to surplus (as above). No balance remained for such payments in 1931 and 1932 _ 0 0 Additions to Surplus Account Net Earnings $1,657, Restoration of Depreciation Reserve on United States Government Securities 336, Total Additions to Surplus Account $1,994, Deductions from Surplus Account Excess of Dividends Over Net Income 0 $ 431, Depreciation Reserve on United States Government Securities _ 0 336, Total Deductions from Surplus Account.. 0 $ 768,435.29

16 FEDERAL RESERVE BANK OF SAN FRANCISCO 15 Changes in Membership The number of Federal Reserve System member banks in the Twelfth District decreased more sharply during 1932 than in any preceding year. As in 1931, most of the reductions in membership resulted from bank failures, although mergers between member banks, while they did not affect total resources within the System, were responsible for a considerable loss in members. During the year the net decline in resources because of changes in membership amounted to $54,022,000 compared with a decrease in member bank resources resulting from the liquidation of loans and for other reasons of $270,115,000. CHANGES IN BANK MEMBERSHIP DURING 1932 i I National Active Member Banks, December 31, Additions to Membership: Organization of National Banks 1 0 Eesumption following suspension Absorption of non-member banks by member banks 13* 0 TOTAL ADDITIONS 3 2 Losses to Membership: Mergers between member banks 16 5 Banks closed or liquidated Absorption of member by non-member banks 4 1 Withdrawal of State banks.. 1 TOTAL LOSSES Net Change Active Member Banks, December 31, Member r DauKS' Numbe: \ State Total * Resources (000 omitted) $3,705, ,098 6,458 $ 14,641 $ 105, ,136 4, $ 68,663 54,022 $3,381,736 *Does not affect total number of member banks. tdoes not affect total resources of member banks. Bank Organization and Personnel In the annual election of directors held in 1932, two places on the Board of Directors were filled. The banks of Group One (those having a combined capital and surplus in excess of $599,999) reflected A. B. C. Dohnnann, Chairman of the Board, Dohrmann Commercial Company and The Emporium Capwell Corporation, a Class B director for a threeyear term ending December 31, The banks of Group Two (those having a combined capital and surplus not exceeding $599,999 and not less than $125,000) reflected T. H. Ramsay, President and General Manager, Pacific Agricultural Credit Corporation, Fresno and San Francisco, California, as a Class A director for a similar three-year term. The Federal Reserve Board at Washington, D. C, reappointed Isaac B. Newton, Los Angeles, California, a Class C director for the

17 1G EIGHTEENTH ANNUAL REPORT three years ending December 31, 1935, and also redesignated him Chairman of the Board and Federal Reserve Agent for the year. Walton N. Moore, President, Walton N. Moore Company, San Francisco, was redesignated Deputy Chairman of the Board to serve during the year. To represent the Twelfth Federal Reserve District in the Federal Advisory Council during the year, the Board of Directors selected Henry M. Robinson, Chairman of the Board, Security-First National Bank of Los Angeles, Los Angeles. At the Portland Branch, Director Nathan Strauss resigned on December 8, 1932, and was succeeded by Harry M. Haller, and Richard S. Smith replaced John F. Daly as a director on February 18, At the Spokane Branch, Stanley A. Easton succeeded G. I. Toevs (deceased August 18, 1932) as a director on December 8, There were no changes in the official staff of this Bank during PERSONNEL AND SALARIES Federal Reserve Bank of San Francisco (including Branches) i -Number ^, Annual Salaries i Jan. 1* Jan. 1 Jan. If Jan OFFICERS $ 252,400 $ 252,400 EMPLOYEES BY DEPARTMENTS : Banking Department ,117,448 1,077,300 Federal Eeserve Agent's Department ,400 54,240 Auditing Department ,540 13,020 Fiscal Agency Department ,080 19,080 TOTAL $1,460,868 $1,416,040 EMPLOYEES WHOSE SALARIES ARE REIMBURSED TO BANK: Fiscal Agency Department 4 2 8,520 4,320 Other Employees ,820 36,600 GRAND TOTAL $1,637,208 $1,456,960 TEMPORARY EMPLOYEES (not included). 7 5 $ 12,900 $ 4,808 *Does not include employees taken on as a result of the '' share-the-work plan.'' tbefore deductions from salaries as a result of the "share-the-work plan." Branch Banking The establishment of branches of banks was prohibited in all states of the District except Arizona and California throughout 1932.* Opera- *Durlng the first three months of, legislation permitting branch banking has been extended rapidly in the Twelfth District. Laws permitting establishment of branches by banks operating under state charters have been passed in all District states, except Arizona and California, where branch banking was already legal. These laws are now effective in all states except Utah, where the new statute will not apply until the Revised Code becomes effective a few months hence. Restrictions upon the establishing of branches vary in the several states, but in all eases state laws are now more liberal than national laws on this subject. In some states a larger minimum capital is required for state-wide branch banking than for local branch systems.

18 NOTE Detailed statistical tables pertaining to the Twelfth Federal Reserve District, and the Federal Reserve Bank of San Francisco will appear in the Annual Report of the Federal Reserve Board. Copies of the Board's report may be obtained, when published, from the Federal Reserve Board at Washington, D. C. FEDERAL RESERVE BANK OF SAN FRANCISCO 17 tion of branches existing at the time of passage of the laws in effect during 1932 was permitted in Washington and in Oregon, although there were no branch operating banks in the latter state during that year. The total number of banks operating branches decreased from 59 on December 31, 1931, to 52 on December 31, The entire decline was in non-member banks. Accompanying this reduction in branch operating banks, the number of branches decreased from 833 to 811, this decline also taking place principally in branches of non-member banks. The following table shows by States the number of branch operating banks and their branches, classified as national, state-member, or nonmember banks. Branches are also grouped according to those within the home city of the parent bank and those outside that city. BRANCH BANKS IN THE TWELFTH DISTRICT December 31, 1932 : i r Branches ^ Banks Operating t Operated by ^ Located i Branches \ Mem- Non- Out- Num- Na- State Non- Na- ber Mem- In side State ber of tional Mem- Mem- tional State ber Home Home \ Banks Total Banks ber ber Total Banks Banks Banks City City Arizona 16*' t 0 9t 4t 0 13 OaUfornia..' * 528* * Washington *Does not include a part of the State of Arizona which is in the Eleventh Federal Reserve District, t Includes three branches of member state banks located in Eleventh Federal Reserve District with home office in Twelfth Federal Reserve District. Does not include one branch of non-member state bank located in Twelfth Federal Reserve District with home office located in Eleventh Federal Reserve District, t Includes three branches of Bank of California, N. A., San Francisco, located in Oregon and Washington. Does not include one foreign branch of Bank of America National Trust and Savings Association, San Francisco. BRANCH BANKS IN CALIFORNIA Number Number ' of of Total December 31,.1932: Banks Branches Resources National banks having branches $1,885,310,000 State member banks having branches ,318,000 Non-member banks having branches ,200,000 Total $2,838,828,000 December 31, 1931: National banks haying branches $1,767,958,000 State member banks having branches ,040,000 Non-member banks having branches ,,000 Total $2,853,112,000

19 18 EIGHTEENTH ANNUAL REPORT TWELFTH FEDERAL RESERVE DISTRICT Includes the States of Arizona, except the five southeastern counties, California, Idaho, Nevada, Oregon, Utah and Washington SAN FRANCI 100 MILES Map showing territory of Head Office and Branches of the Federal Reserve Bank of San Francisco