the 5,205 national banks in existence October 31, 1939. In addition, 1,618 of the national banks in existence October 31, 1939, had an aggregate of $239,292,352 of preferred capital stock outstanding. Since November 2, 1914, there has been a net decrease of 2,373 in the number of national banks in existence but a net increase of $250,803,245 in the amount of the common capital stock and in addition a net increase of $239,292,352 in capital through the issuance of preferred capital stock during the last 61⁄2 years. During this 25-year period, 3,769 new national banks have been chartered, with aggregate common capital stock of $563,736,600 and preferred capital stock of $55,304,300.

During the year ended October 31, 1939, in addition to 19 applications with proposed capital stock of $3,295,000 carried over from the previous year, 34 applications were received to organize national banks and to convert State banks into national banking associations, with proposed capital stock aggregating $5,175,000. Of these applications 21 with proposed capital stock aggregating $3,425,000 were approved; 5 with proposed capital stock of $350,000 were rejected; and the remainder were still pending or had been abandoned on October 31, 1939. From the applications carried over from the previous year and the 21 applications approved during the current year, 19 national banking associations with common capital stock aggregating $2,845,000, 2 of which also had $80,000 preferred capital stock, were authorized to commence business. Of the 19 charters issued, 13 with common capital stock aggregating $2,220,000, 1 of which also had $55,000 preferred capital stock, were the result of the conversions of State banks; and 2 with common capital stock of $75,000, 1 of which also had $25,000 preferred capital stock, were organized for the purpose of acquiring the business of 2 liquidating national banks.

During the year ended October 31, 1939, 4 national banks and 2 State banks were consolidated into 3 national banking associations, under authority of the act of November 7, 1918, as amended February 25, 1927, the common capital stock of the consolidated banks being $649,000 and the preferred capital stock being $700,000. In 1 case there was an increase of $134,000 in the common capital stock and a decrease of $75,000 in the preferred capital stock. Additional assets of approximately $7,721,804 were brought into the national system by reason of the 2 State banks consolidated with national banks. Also, during this period, national banks reported the purchase of the business of 22 State banks, with aggregate capital stock of $894,062 and aggregate assets of approximately $9,469,000.

During the year ended October 31, 1939, 56 national banks with common capital stock of $5,581,500, among which were 19 with preferred capital stock aggregating $1,484,500, went into voluntary liquidation in the manner provided by sections 5220 and 5221, U.S. R. S. Of these banks, 7 with common capital stock of $200,000, and assets of $755,457, including 3 with preferred capital stock aggregating $52,500, paid their depositors and quit business; 26 with common capital stock of $2,508,500 and assets of $49,267,108, including 6 with preferred capital stock aggregating $752,500, were succeeded by other national banks; and 23 with common capital stock of $2,873,000 and assets of $39,615,325, including 10 with preferred capital stock aggregating $679,500, were succeeded by State banks.

Changes in the number and capital stock of national banks during the year ended October 31, 1939, are shown in the following summary: Organization, capital stock changes, and liquidations of national banks during the year ended Oct. 31, 1939

1 Net increase in common capital stock after adjustment for capital stock of 2 receivership banks previously reported in voluntary liquidation.

iNet decrease in number of banks in existence after adjustment for 2 receivership banks previously reported in voluntary liquidation.

BRANCHES

On February 25, 1927, the date of the passage of the McFadden Act, 118 national banking associations had in operation 372 branches, as compared with 192 national banking associations with 1,594 branches as of the close of business October 31, 1939.

In the entire period from February 25, 1927, to the close of business October 31, 1939, 2,076 branches have been added to the national system. Of these branches, 1,240 were de novo branches, 326 were branches of State banks which converted into national associations, and 510 were branches brought into the system by the consolidation of State banks with national banks. During this same period 854 branches have been relinquished, of which number 569 went out of the

consolidations or for other reasons. The net result of these operations was a gain of 1,222 branches since February 25, 1927.

During the year ended October 31, 1939, 33 branches were brought into the national system. Of these branches, 20 were de novo branches and 13 were branches of a State bank which was converted into a national banking association. Of the 20 de novo branches authorized, 16 were authorized under the Banking Act of 1933 to operate in places other than the city in which the parent bank is located. During this same period, 5 branches were relinquished through the liquidation of the parent institution and 4 were discontinued through action of the board of directors of the parent bank. The net result of these operations was a gain for the system of 24 branches during the year ended October 31, 1939.

A summary of the status of branch-banking operations in the various periods appears in the accompanying table:

Number and kind of branches on Feb. 25, 1927, and number and manner of acquisition of additional branches of national banks, by years, to close of Oct. 31, 1939

Number and kind of branches authorized and closed during the year ended Oct. 31,

NOTE.-Branches classified according to the paragraphs of sec. 5155, U. S. R. S., under which they are authorized as a, b, and c.

205927-40 -2

Number and manner of acquisition of domestic branches of national banks during the year ended Oct. 31, 1939

Number and class of domestic branches of national banks closed during the year ended Oct. 31, 1939

CHANGES IN PRINCIPAL ITEMS OF ASSETS AND LIABILITIES OF NATIONAL BANKS IN THE YEAR 1939

Loans and discounts of all national banks in the United States and possessions on June 30, 1939, were $8,574,000,000, an increase of $239,000,000 in 12 months. Loans on real estate increased $202,000,000, and loans to brokers and dealers in securities increased $19,000,000. The change in other loans secured by United States Government and other securities is not available since prior to December 31, 1938, loans to other than brokers and dealers in securities included all loans, except loans to banks, secured by bonds, stocks, and other securities.

Investments increased $909,000,000 and amounted to $12,553,-000,000 at the end of the year. United States Government direct obligations of $6,900,000,000, and obligations guaranteed by the United States Government as to interest and principal of $1,870,000,000, increased in the year $390,000,000 and $392,000,000, respectively. Obligations of States and political subdivisions increased $267,000,000 and amounted to $1,694,000,000 while other bonds, notes, and debentures decreased $90,000,000 to $1,864,000,000. Corporate stocks, including stock of Federal Reserve banks, totaling $225,000,000, decreased $50,000,000 during the 12 months ending June 30, 1939. Cash, balances with other banks, including reserve balances and cash items in process of collection, increased $1,625,000,000 and amounted to $11,075,000,000 at the end of the year.

The total deposits on June 30, 1939, amounted to $29,469,000,000, an increase of $2,653,000,000 during the year. These deposits comprise demand deposits of $21,287,000,000, which increased $2,555,000,000,