Evening star., 1932-04-02
FEDERAL RESERVE
REPORTS ANALyzED
Annual Statements Reveal
Reductions in Loans and
Total Deposits. =
Special Dispatch to The Star.

OpFClSl DlSpdLCn 70 Inc obdIs
NEW YORK, April 2-The COM
pleted figures Of the condition Of the
member banks in the Federal Reserve
System as OF December 81, 1881. are
now available. From them an inter-
esting comparison of the important
changes in the resources and liabilities
Of these institutions, not only last year
but since the end of 1929, may be
gathered. 1t is of interest in view Of
the March call which is now about due.
In the two years between December
81. 1929, and the same date in 1881,
total loans and investments of the
member banks decreased from approx
mately 35,000,000 900 to $50. SIS .0OO.-
900, or about Is per cent. The greater
part of this occurred last year when
these items declined S4.I53.0O0. 900, OF
in excess of II per cent. Total loans
were reduced in the two-year period
from s26, $50, 100000 to $3.50, ,000, 900
Decline in Loans.
Loans on securities dropped from
$40, 0,148,O0o, 900 to S6,s65, ,O00,OOO AT
the same time there was a compare
lively small decrease in real estate
loans. All other loans declined from
$11.5l4, 900, 900 to $8,125 900, 600.
The reduction in total deposits ol
member banks was from about S3s,.
900 100000 at the end of 1929 to $50.
746,000,000 on December 81. 1881
This represented a reduction of l9 pei
cent as against fall of Is per cent in
loans and investments. The decrease
in demand deposits over the two wears
was 20 per cent and in time deposits
under is per cent. Individual deposits
subject to check decreased % per cent
whereas deposits evidenced by saving,
pass books declined less than Is pei
cent. During this period there wa.
considerable shifting of deposits from
weaker to stronger institutions bJ
means Of checks rather than BY the
drawing out Of currency, as in former
times.
The status Of securities held by mem.
Der banks from the end of 1929 tc
December 81, 1881, went through rad.
ical readjustment. For instance, the
total Of United States Government
securities held in the portfolios Of mem.
Der banks increased from $3,863. .0Oo,.
600 in 1929 to S5,318 100000 at the END
OF 1881, reaching its highest point in
september, last year at $5,564 00O, 600
At the same time all other securitie.
held rose from $500, 900, 900 on De,
cember 81, 1929, to s6,886. .000, 900 on
the date Of the March call last year
Between that period and the December
call they dropped to IS, ,995, 900 900, sc
were $4,000, 900 higher than at tn.
beginning of the depression.
In analyzing the holdings of securi,
ties, other than Governments. it i,
found that In the two years there was
an increase in State, county and rni1.
nlclpal bonds and in railroad and pub.
llc service corporation bonds. but 4
decrease in all other bonds. includina
industrial and real estate issues.
Bought Government Securities
The policy Of the banks was to lis,
the proceeds of hquidated loans in
purchasing additional Government OBJ.
ngatlons. The curious feature of the
comparison Is that it indicates such
slight change in holdings OF corpora.
ton issues. in view of circumstantia,
evidence, that banks throughout th1
country were hquidating railroad mort.
cages on a wholesale scale. Whik
.tney increased their investment In
Iorelgn securities quite considerably
between the end Of 1929 and. March
1881, they had approximately $50 900,
900 less Of such issues at the close nj
1891 than on the similar date in 1929
since the end of December there
mas been steady reduction in loans
and investments To the middle Of
February there was a decrease in de,
posits. The falling off in the loan,
and investments of reporting member
banks during the past two and one,
nalf months amounts to S1,429,0 ,0OO, 600
about equally divided between the two
items. Government securities have de-
creased in greater ratio than other
securities. The influence of condition,
in the first half of this quarter will bs
apparent in the March bank state.
ments, in spite of the fact that in the
second half Of the period the banking
situation was decidedly on the mend
Copyright, 1927