is evidenced by the fact that an overwhelming proportion of the decisions rendered in such suits have been favorable to the receivers. This is true with respect to both State and Federal court decisions. All cases which come before the Appellate courts receive special consideration by the legal staff. In many instances the briefs prepared by counsel for the receivers are merely revised, although on occasion they are completely rewritten. All cases which come before the United States Supreme Court are handled directly by the General Counsel's office in order to avoid unnecessary expense to receiverships involved and to insure uniformity in method of presentation. Costs of litigation have been closely watched and no attorney is designated to act for a receiver without an agreement in writing that his employment shall be upon a fee basis and that he will abide by the determination of the Comptroller as to the fairness of fees charged. All fee bills presented by attorneys are made the subject of close scrutiny to the end that the charges may be made commensurate with the services rendered and results obtained. Wherever necessary, and to insure the best results, the courts have been asked to fix dates for hearings upon petitions for orders authorizing sales of real estate, at which hearings dissenting depositors or newly interested buyers may be heard. A similar procedure has been frequently utilized in connection with other important sales, settlements, or compromises and the courts have been very helpful and cooperative in this regard. A uniform method of accounting is used by all receiverships and all receivers are subject to uniform regulations and instructions, developed as a result of many years of experience. Detailed reports containing transcripts of all transactions and showing the current status of all unliquidated assets are made to the Comptroller quarterly. Receivers are bonded to the Comptroller in such penal amounts as are necessary to protect the interests of creditors, and are in turn expected to require that receivership employees in responsible positions be adequately bonded. A force of examiners in the field is constantly engaged in special assignments or investigations, or in making regular audit examinations of active receiverships.

MISCELLANEOUS ACTIVITIES OF THE BUREAU

Organization Division

The Organization Division supervises the activities of national banks where the corporate organization is involved. The Division furnishes general information pertaining to organization to applicants who wish to organize a new national bank. An examiner makes an investigation of the need of a new bank in the community, the probability of its success, and the financial and moral competence of its organizers and proposed directors. If the Comptroller of the Currency approves the application, the Organization Division then prepares and furnishes the applicant with complete organization papers. When these are filed, the charter is issued. The Organization Division receives from every national bank annually lists of all directors elected, copies of their oaths, the official signatures of officers, and any action of the shareholders amending the articles of association. Reports are required of banks in connection with changes of title or location and any changes in the actual capital structure. The bank is also requested to file with the Division a copy of its bylaws.

If a national bank desires to consolidate with another national bank or State bank, to establish or discontinue branches, or to go into voluntary liquidation, or if a State bank wishes to convert into a national bank, the applications are handled by the Organization Division. In addition to the matters described above with respect to national banks, the Organization Division handles similar matters with respect to all banks in the District of Columbia.

Representatives from the Division must be present at conferences having to do with capital readjustments, to suggest methods of procedure as well as plans for capital changes.

Earlier in this report a section deals with transactions handled by this Division during the year.

Statistical Division

The Statistical Division is operated primarily to enable the Comptroller to effect compliance with certain requirements of law relating to supervision of national banks in the United States and its possessions as well as banks other than national, and certain building and loan associations and credit unions in the District of Columbia.

The major function of the Division is the compilation of figures for the information of Congress, the Comptroller, and others, through the tabulation of numerous reports required to be submitted by statute. Among these reports are at least three reports of condition each year required from every national bank, accompanied by reports of holding company affiliates and other affiliates, as well as reports of condition of domestic branches and of foreign branches once a year, and trust department balance sheets once a year from those banks authorized to exercise fiduciary powers. Reports of earnings, expenses, and dividends are required for each half year.

In the year ended October 31, 1939, tabulations were made by the Division from approximately 30,000 condition reports and 10,500 reports of earnings, expenses, and dividends of national banks.

The statutes require the Comptroller to include in his annual report a summary of the condition of every national bank from which reports are received during the year, as well as resources and liabilities of State and private banks in the various States. The latter is obtained from State supervisors of banking. The Statistical Division also compiles for publication an individual statement of condition of national banks at the close of business December 31.

Federal Reserve Issue and Redemption Division

This office prepares correspondence and maintains files with respect to authorizing withdrawals of Federal Reserve notes from the Bureau of Engraving and Printing for shipment; advices to Federal Reserve agents and branch Federal Reserve banks, specifying denomination, amount, and serial numbers of notes shipped; advices to Federal Reserve agents covering the amount and denomination of Federal Reserve notes of their bank received daily from the Treasurer of the United States for verification and destruction.

Fragments and charred particles of Federal Reserve notes are re

Complete records are maintained of shipments and issues as to denominations, amounts, number of notes, and serial numbers. Accounting is also maintained of fit notes returned to the Federal Reserve agents by the banks, reissued by the banks to the Federal Reserve agents, the amount of unfit notes, returned to the Comptroller for destruction, and the amount held by the Federal Reserve agent, and the total outstanding of each Federal Reserve district, at the close of each day's business. Every month the Federal Reserve agent's account with the Federal Reserve bank to which he is accredited is verified by this office.

All orders for the printing of Federal Reserve notes are received direct from the Board of Governors of the Federal Reserve System and Federal Reserve notes are consigned direct from the Federal Reserve vault in Washington. Unfit Federal Reserve notes as they are returned to the office of the Treasurer of the United States are cut in half. The upper halves come to this Division for verification and the lower halves are assorted in the office of the Treasurer of the United States. Records are kept of the amount of unfit notes received and actually destroyed by bank of issue, by number of notes, and by denominations since the formation of the Federal Reserve System. This division also handles retirement and certifications for destruction of national bank notes.

Six hundred and nineteen shipments of Federal Reserve currency were made from Washington, D. C., during the year ending October 31, 1939, to the Federal Reserve agents and Federal Reserve branch banks, aggregating $1,766,920,000, and in addition $35,400,000 was delivered to the Treasurer of the United States.

Fifty-two weekly reports were furnished the Secret Service Division showing the highest Treasury serial number, face plate and back plate serial number appearing on the Federal Reserve notes shipped. This information is useful in suppressing counterfeits.

Three thousand, one hundred and two lots of unfit Federal Reserve currency were received for verification by 100 percent count and certification for destruction consisting of 101,282,386 notes, aggregating $1,348,701,760.

Fifty-six lots of national bank notes were received for verification by 100 percent count as certified for retirement and destruction consisting of 1,980,683 notes aggregating $27,105,030.

Three thousand four hundred and forty-one fragmentary or charred Federal Reserve and national bank notes were delivered to this office for identification and approval.

Semimonthly reports were furnished the office of the Comptroller of the Currency, Board of Governors of the Federal Reserve System, and Federal Reserve agents showing total Federal Reserve notes shipped, by bank and by denomination, the amount printed, and the amount in process of printing by bank and by denomination and the amount on hand available for shipment by bank and by denomination.

Retirement System

As of October 31, 1939, there were 784 active members of the retirement system for national bank examiners, assistant examiners, and clerks. Nine individuals have been retired since the establishment of the system on June 1, 1936, and a total of $21,481.56 has

been paid in retirement benefits to date. During the past year, $2,287.00 in death benefits were paid.

ORGANIZATION AND STAFF

On May 1, 1939, Mr. A. J. Mulroney was appointed a Deputy Comptroller of the Currency.

On December 7, 1938, Mr. L. H. Sedlacek was appointed as Chief National Bank Examiner for the Ninth Federal Reserve District, with headquarters at Minneapolis, Minn.

On June 1, 1939, Mr. H. L. Post was appointed as Chief of the Organization Division.

During December 1938 and the year 1939, a number of district chief national bank examiners were shifted from one district to another as follows:

The personnel of the Bureau of the Comptroller of the Currency at the close of the year ending October 31, 1939, consisted of 1,297 persons, of whom 530 were located in the main office in Washington and 767 in the field. The personnel of the Bureau decreased by 46 during the current year ended October 31, 1939. The decrease in the personnel was chiefly in the Division of Insolvent National Banks and resulted from curtailment of the work in that division as a result of the continued reduction in the number of receiverships administered. During the year 1939, a total of 29 assistant national bank examiners and 13 national bank examiners left the service. During the same year, 54 assistant examiners were appointed and 19 assistants were promoted to examiners. The number of employees in each division of the Bureau is given in the accompanying table:

Personnel of the Bureau of the Comptroller of the Currency, Oct. 31, 1939

Office of the Comptroller and Deputy Comptrollers__

Examining Division__

Insolvent National Bank Division_.

Legal Division_

Disbursement Division_

Organization Division and Preferred Stock

Statistical Division ___

Federal Reserve Issue and Redemption Division....

17

807

295

53

39

30

29

27

EXPENDITURES OF THE CURRENCY BUREAU

The total expenditures of the Currency Bureau for the year ending June 30, 1939, were $5,883,012.58, which was $174,076.22 less than the preceding year. Of these total expenses $5,612,323.88 was reimbursed by the banks. This amount was $165,816.92 less than that for the preceding year. Total expenses paid by appropriation were $270,688.70 which were $8,259.30 less than in the preceding year. The regular pay roll provided by appropriation of $239,223.30 was $11,907.81 less than in the preceding year. Among expenses reimbursed by the banks, those on account of examinations were largest at $3,390,542.33 and were $373,450.12 larger than those of the previous year. Printing of Federal Reserve notes cost $736,922.50, a decrease of $371,260.37 from the previous year. Insolvent national bank pay roll, including retirement deductions, aggregated $766,910.56, a decrease of $152,984.89 from the previous year. Details of expenditures are given in the accompanying table: