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FOURTH ANNUAL REPORT OF THE FEDERAL RESERVE BOARD COVERING OPERATIONS FOR THE YEAR 1917 WASHINGTON GOVERNMENT PRINTING OFFICE 1918 TABLE OF CONTENTS. Fart I.—Report of the Federal Reserve Board Text of report: Letter of transmittal Federal Reserve Banks as fiscal agents of the United States Discount policy of the Federal Reserve Board in connection with war financing War finance and banking : Discount rates and war financing. Effect of amendments of June 21 to the Federal Reserve Act Membership of State banks and trust companies Curtailment of unnecessary credit Private and corporate financing Conservation of gold Check clearing and collection system Operation of the gold settlement fund Establishment of branches of Federal Reserve Banks Enforcement of section 8 of the Clayton Act Supreme Court decision in case brought to test constitutionality of section I l k of the Federal Reserve Act Earnings and expenses of the Federal Reserve Banks Conferences of Board with Federal Reserve agents, governors, and advisory council Reserve cities designated during the year Amendments suggested to the Federal Reserve Act Organization, staff, and expenditures of the Federal Reserve Board Page. 1-34 1 2 5 8 10 11 13 14 I4*20 23 24 24 25 26 27 28 30 31 34 EXHIBITS. Exhibit Exhibit Exhibit Exhibit Exhibit Exhibit Exhibit A.—Discount rates, movement of, during the year B.—Federal Reserve notes C.—Statements of condition of Federal Reserve Banks__ D.—Investment operations of the Federal Reserve Banks E.—Gold settlement fund operations F.—Clearing operations during the year G.—Receipts and disbursements of the Federal Reserve Board Exhibit H.—Earnings and expenses of the Federal Reserve Banks Exhibit I.—State banks and trust companies admitted to membership hi the Federal Reserve system Exhibit J.—Circulars and regulations of the Federal Reserve Board Regulations governing the exportation of coin, bullion, and currency in 37-43 44-59 60-95 96-132 133-139 140 141-144 145-157 158-162 163-186 183-186 IV CONTENTS. Part I.—Report of the Federal Reserve Board—Continued. Exhibit K.—Foreign branches of national banks authorized Exhibit L.—List of national banks granted fiduciary powers during the year Exhibit M.—List of member banks granted authority to accept drafts and bills up to 100 per cent of their capital and surplus Exhibit N.—Personnel and salaries: Salaries of officers and employees of the Federal Reserve Banks Salaries of officers and employees of Federal Reserve Board Salaries of national bank examiners Exhibit O.—Directory of the Federal Reserve Board, Federal Reserve Banks, and Federal Advisory Council Exhibit P.—Description of Federal Reserve districts Map showing Page. 187 188-190 191-193 194-196 196-197 198-200 201-207 208-213 214 CHARTS. Federal Reserve notes outstanding and in circulation, also amounts of gold and required paper held by Federal Reserve agents Movement of reserves of all Federal Reserve Banks during the year Movement of earning assets of all Federal Reserve banks during the year Net deposit and Federal Reserve note liabilities, total reserves, and ratio of total reserves to aggregate net deposit and Federal Reserve note liabilities Cash reserves and excess reserves of Federal Reserve Banks Weekly transactions through the gold settlement fund Map showing Federal Reserve districts Part IT.—Reports of Federal Reserve Agents to Federal Reserve Board District No. 1—Boston District No. 2—New York District No. 3—Philadelphia District No. 4—Cleveland District No. 5—Richmond District No. 6—Atlanta District No. 7—Chicago . District No. 8—St. Louis District No. 9—Minneapolis District No. 10—Kansas City District No. 11—Dallas District No. 12—San Francisco 49 65 70 71 73 139 214 215-607 217-251 253-306 307-358 359-388 389-411 413-432 433-454 455-4S3 4S5-505 507-533 535-571 573-607 ANNUAL REPORT OF THE FEDERAL RESERVE BOARD. FEDERAL RESERVE BOARD, Washington, January 15,1918. SIR : In conformity with the requirements of section 10 of the Federal Reserve Act, the fourth annual report of the operations of the Federal Reserve Board for the calendar year ended December 31, 1917, is submitted herewith. The outstanding feature of the year has been the entry of the United States into the war. The declaration by Congress of a state of war, on April 6, had been preceded by a period of unprecedented activity and expansion in practically all lines of business and industry, tempered, however, in the minds of thoughtful men, by uncertainty and apprehension as to ultimate adjustments. The feverish conditions brought about by an unparalleled increase in business activity, changing our position from a debtor to a creditor nation, the great influx of gold into the country, and the large foreign credits negotiated here, had convinced the Board that the time had come when the Federal Reserve system should be strengthened and brought to the highest state of efficiency, in order that it might perform the most effective service in either one of two events which seemed likely to take place—the conclusion of a general peace in Europe^ or the entry of the United States itself into the war. In the event of peace, a radical readjustment was to be expected, and there would have been a slowing down of those industries which were engaged in supplying war material, a consequent heavy falling off in our exports, accompanied, in all probability, by a strong demand upon us for credit and gold. On the other hand, in the case of our own belligerency, it was foreseen that there would be a greatly increased demand for all articles necessary for the equipment and maintenance of our own military and naval establishments, and much larger demands for the sale of goods and for credit to the countries associated with us in the war, for both of which large loans would be necessary. It was foreseen, in addition, that we should anticipate a cessation of gold shipments to us by the allied powers, as well as a contraction of our export trade to neutrals. For these reasons, the Board felt that it should in either event, during this period of uncertainty, adhere strictly to its policy of 1 2 ANNUAL REPORT OF THE FEDERAL RESERVE BOARD. maintaining the liquid character of the assets of the Federal Reserve Banks, of discouraging any unnecessary expansion of credits, and that it should also cause the reduction to very moderate proportions of the holdings of the Federal Reserve Banks of such investments as bonds and warrants which had heretofore been made primarily for the sake of income. Early in the year, therefore, the Board began to carry out these policies and the end of March found the Federal Reserve Banks in a very strong position. Holdings of municipal warrants, which at times had been freely purchased by some of the banks, had then been reduced to a comparatively small amount. In order better to provide for the strengthening of our banking structure, for the conservation and greater concentration of our gold supply, and for the more effective control of its outflow, the Board in January suggested some amendments to the Federal Reserve Act which were designed to make membership in the system more attractive to the State banks and trust companies, to modify reserve requirements in such a way as to increase the gold holdings of the Federal Reserve Banks and to make their gold more available as a basis for an elastic note issue. These amendments finally became law on June 21 and will be discussed more fully in other parts of this report. In anticipation of these changes and of future contingencies, the Board determined upon the preparation of a much larger supply of Federal Reserve notes. During the months of January and February it placed additional orders with the Bureau of Engraving and Printing, through the Comptroller of the Currency, for more than $900,000,000 of notes, and arranged also that the stock of notes on hand should no longer be reduced through withdrawals for current needs, but that as drawn upon by the Federal Reserve Banks new orders in equal amount should be placed automatically. In order to insure immediate availability, ample supplies of notes were placed at the subtreasuries for delivery to the Federal Reserve agents as required. The precautions taken have been justified by events, as there developed a strong demand for Federal Reserve notes throughout the year. When a state of war was declared on April 6, the reserve position of the Federal Reserve Banks was strong, and gold in the Federal Reserve Banks and with Federal Reserve agents amounted to $943,552,000, the combined reserve against deposits and notes averaging 84.7 per cent. FEDERAL RESERVE BANKS AS FISCAL AGENTS OF THE UNITED STATES. The entry of the country into war resulted almost immediately in the assignment to the Federal Reserve Banks of a new and important fiscal agency function. Under authority of section 15 of the Federal Reserve ANNUAL REPORT OF THE FEDERAL RESERVE BOARD. 3 Act the banks when required by the Secretary of the Treasury shall act as fiscal agents of the United States. The Federal Reserve Banks were charged by the Secretary of the Treasury with the duty of placing issues of short-time Treasury certificates and redeeming them at maturity. During the latter part of April the Secretary of the Treasury made public the details of the first bond issue, known as the Liberty Loan of 1917, and at the same time announced that each Federal Reserve Bank would be constituted a central agency in its district for the organization of a bond campaign, for receiving subscriptions and payments, making deliveries, and managing the necessary details. These new duties have brought the banks into more intimate contact, both with the Treasury Department and with the banks of their districts, and have also increased their operating problems. It has been necessary for them to add to their working space and to more than double their clerical staffs. They have rendered especially valuable service in the prompt flotation of the various issues of Treasury certificates of indebtedness which, running for short periods only, in anticipation of receipts from the longterm bonds, were placed with banks to a greater extent than with the investing public. The initial offering of $50,000,000 of Treasury certificates, in anticipation of income-tax receipts accruing on June 30, was made before rates for money had advanced and before plans could be perfected for the subsequent larger operations. Accordingly, at the request of the Secretary of the Treasury, the Federal Reserve Banks themselves subscribed for the entire issue, at the rate of 2 per cent per annum. This constituted their first direct service to the Government in its war financing. This issue, however, was only a beginning. It was followed by an offering of $250,000,000, at 3 per cent, on April 25, which was quickly distributed by the Federal Reserve Banks among the member and nonmember banks of their respective districts. Since then these issues have been repeated on eleven subsequent occasions, four having been made in anticipation of the first Liberty loan of $2,000,000,000, which was closed on June 15, while six were anticipatory of the second Liberty loan, subscriptions to which closed on October 27. A later issue of approximately $700,000,000, in anticipation of taxes due next June, has a longer time to run than the others and was intended primarily for the convenience of those who will have taxes to pay on account of incomes and excess profits. Subscriptions were opened during the last days of December by the Federal Reserve Banks for a new offering of the same character. While the two classes of certificates appeal to banks and investors in varying degree, they serve similar purposes. The short-time certificates offered in anticipation of Liberty loan issues have in view the important object of enabling prospective investors, banks or 4 ANNUAL REPORT OF THE FEDERAL RESERVE BOARD. individuals, to anticipate their payments on account of their Liberty loan subscriptions. The Government in this manner absorbs accumulated savings as they become available and has thus been enabled to dispose of nearly $6,000,000,000 of long-term bonds without creating at any time disturbance of the money market. In like manner the certificates issued in anticipation of taxes will serve the purpose of avoiding stringency conditions during the second half of June, when it is expected that over $2,000,000,000 of'internal-revenue taxes will be paid. By placing these certificates of indebtedness with taxpayers, corporations, or individuals as they become prepared to set aside the amount of their tax liability, payments to the Government are distributed over several months, and approximately $1,000,000,000 of tax payments have thus been anticipated up to this time, and it may be expected, therefore, as was the case with the Liberty loan payments, that the entire payment on account of taxes due in June will be made without affecting the money market adversely. In his annual report to Congress the Secretary of the Treasury made acknowledgment of the services rendered by the Federal Reserve Banks as fiscal agents as follows: The Federal Reserve system has been of incalculable value during this period of war financing on the most extensive scale ever undertaken by any nation in the history of the world. It would have been impossible to carry through these unprecedented financing operations under our old banking system. The effective machinery afforded by the Federal Reserve Banks has permitted the Government to execute its plans without a tremor of disturbance. Great credit is due the 12 Federal Reserve Banks for their broad grasp of the situation and their intelligent and comprehensive cooperation. The Federal Reserve Banks have from the first met with a prompt and hearty response from the member and nonmember banks in their respective districts, both in the flotation of Treasury certificates and of the Liberty bonds. The Federal Reserve Banks have cooperated with the Treasury in every possible way to avoid and relieve pressure upon the money market. Under the direction of the Treasury, and for its account, they have redeposited funds with subscribing banks and have permitted payments by credit on account of subscriptions due, passing upon and receiving for the Treasury the securities given as collateral for these deposits and deferred payments. Funds accumulating with the Federal Reserve Banks for account of the Treasury have been returned to the market with as little delay as possible, whether funds were disbursed in settlement of purchases made by the United States or deposited with banks acting as agents for foreign Governments associated with us in the war; or whether they were redeposited with subscribing banks in order to remain ANNUAL REPORT OF THE FEDERAL RESERVE BOARD. 5 available for the usual requirements of trade and commerce. So effectively and speedily have these funds been returned to the money market in the manner above described, that the average balances maintained by the Treasury with the Federal Keserve Banks, considering the volume of business transacted, have been low, the average of balances shown in the Board's weekly statements since April 6 being $145,268,000 for the whole system. Notwithstanding the facility wTith which the transactions have been conducted, it is obvious that the shifting of several billion dollars can not be effected without creating temporary demands for funds in various places, and wherever these have arisen an adequate measure of relief has been readily afforded by the Federal ^Reserve Banks through open-market transactions or by means of rediscounts for member banks. DISCOUNT POLICY. Upon the Federal Eeserve Board has fallen the responsibility of directing the policies of the system so as to insure prompt accommodation to banks whose customers required assistance either in providing for commercial demands caused by increased business activities, or in making their payments for bonds, as well as to banks which bought bonds for their own account. It was important that there be no disturbance in the money market and that interest rates should be normal and as1 free as possible from fluctuation. The Board accordingly, before the subscriptions to the first Liberty bond issue were closed, and in anticipation of the amendments which became law on June 21, established a preferential rate of discount for notes of member banks secured by Government obligations, whether certificates or bonds. As a further means of relief, the Board authorized Federal Eeserve Banks to discount for nonmember banks, upon the indorsement of a member bank, notes secured by Government obligations, whether made by the nonmember banks themselves or by their customers, when the proceeds had been or were to be used for carrying Treasury certificates or United States bonds. These measures involved modifications in discount schedules and rates, which may be enumerated as follows: (1) The establishment of a rate of 3 per cent per annum for the discount at Federal Eeserve Banks of notes of member banks running not longer than 15 days secured by Treasury certificates of indebtedness, which certificates had been issued at rates varying from 3 to 3£ per cent per annum. (2) The establishment of a rate of discount at Federal Eeserve Banks of 3£ per cent per annum for customers' notes running up to 90 days, secured by Government obligations and indorsed by mem 6 ANNUAL REPORT OF THE FEDERAL RESERVE BOARD. ber banks, when such notes had been made for the purpose of obtaining funds for the purchase of Government obligations. (3) The authorization of Federal Reserve Banks to discount for member banks, on behalf of nonmember banks, notes of nonmember banks or their customers, secured by Government obligations, for the purpose of obtaining funds with which to purchase United States bonds or notes. (4) The establishment of a one-day rate of from 2 to 4 per cent at Xew York for the purpose of restoring to the market, funds temporarily withdrawn through Government loan operations. In addition, a general assurance was given savings banks and trust companies that the Board desired in every way to cooperate with them in avoiding stringency and that the Federal Reserve Banks were prepared to extend through member banks every reasonable accommodation not inconsistent with law for the purpose of relieving any strain which might result from withdrawals of deposits for purchases of Government securities. The rediscount policy of the Board, which was intended to assist those desiring to subscribe for the first Liberty loan by assuring banking accommodation pending the payment in full of their subscriptions, was amply justified by results. As nearly as can be ascertained, scarcely more than $300,000,000 of the loan was actually subscribed by banks for their own account, and of this amount a very large part was quickly transferred to private investors who had not originally subscribed for or been allotted all the bonds they desired to obtain. The amount of rediscounts at Federal Reserve Banks of notes secured by Government obligations reached its maximum of $83,185,000 on June 22, one week after the closing of subscriptions for the loan, but these notes were paid off so rapidly that the total of such rediscounts had on August 17 fallen to $11,051,000. Reports from all sections of the country indicate that only a comparatively small percentage of the first issue of Liberty bonds is now being carried upon a long-term installment basis, and that as a rule both banks and private investors were able, within a few weeks, to pay for the securities wThich they agreed to take. EFFECT OF ADDITIONAL LOANS. The services rendered by the Federal Reserve Banks during the second Liberty loan campaign, which began on October 1 and ended on October 27, were even more marked than in the first instance. The experience which had been gained on the former occasion, the fact that more time had been afforded for efficient organization, a better understanding by the people of the merits of Government bonds as an investment, and a general awakening of a sense of patri ANNUAL REPORT OF THE FEDERAL RESERVE BOARD. 7 otic duty all combined to bring about the vigorous cooperation of the public generally. The arrangements previously made to accommodate the banks and their customers who desired to subscribe to Government bonds remained effective, and there were no changes in discount rates, notwithstanding the advance of one-half of 1 per cent in the rate of interest carried by the bonds themselves, until the close of November and the middle of December, when general advances of from | to 1 per cent in rates of Federal Reserve Banks were made. The fact that the second loan, as offered to the public, was 50 per cent greater than the first, while actual subscriptions received were in an even greater proportion, naturally increased very substantially the operations of the Federal Reserve Banks in discounting paper secured by Government obligations. The total of such paper discounted at the Federal Reserve Banks reached a maximum on November 30, when the aggregate amount of notes under discount secured by Government obligations was $499,265,000. On December 28 the total amount of discounts of this character had been reduced to $283,421,000, but the greater part of this reduction was due to the payment of maturing Treasury certificates, and there is as yet nothing to indicate that transfers of bonds to investors have been made to so great an extent as was the case with the first Liberty loan. Experience during the year with these operations and an analysis of the consequent changes in the banking situation demonstrate how greatly the entry of the United States into the war has increased the responsibility of the Federal Reserve system in its relations to the Treasury and to the public. Not only have new duties devolved upon the Federal Reserve system, but it has been made more directly responsible for the banking situation as a whole. The Federal Reserve Board is not responsible for the financial policy of the Government, except in so far as the Secretary of the Treasury may choose to call upon its members for service in an advisory capacity. The Board, however, is charged by law with the exercise of a general supervision over the Federal Reserve Banks, both as to their ordinary business and with respect to their functions as fiscal agents of the Government. In the latter capacity they are undertaking grave duties and responsibilities, and their activities are of such scope that any administrative mistakes or errors of judgment might entail serious consequences. This responsibility is fully appreciated by the Board, which, while it has been actuated by a desire to do all in its power to give the country every advantage accruing from the financial resources of the Federal Reserve system, has constantly realized that its primary duty is to maintain the system in the strongest possible position. 8 ANNUAL REPORT OF THE FEDERAL RESERVE BOARD. The discount policy of the Board has accordingly been governed by these two considerations. It was necessary, in order to facilitate the operations of the Treasury, that discount rates at the Federal Reserve Banks be maintained on a basis in harmony with the low interest rates borne by the Government loans during the period from the beginning of war down to the completion of the second Liberty loan. It was fortunate that this policy could be carried out without infringing too greatly upon the resources of the Federal Reserve Banks, for it is obvious that any advance in rates paid by the Government on its obligations was necessarily gradual, moving up from 3 per cent, the rate paid on the certificates issued in May, to 3J per cent and later to 4 per cent, the rate carried by the second Liberty loan issue. A more gradual advance might have endangered the success of the financial operations of the Treasury, while a more rapid movement might have brought about a convulsion in the securities market. As the rates on Government issues advanced it became feasible for the Federal Reserve Banks to raise their rates. These rates were advanced after the banks had responded fully to all calls made upon them during the period when the first and second installments were being paid in on account of subscriptions to the second Liberty loan. It is obvious, however, that it must now be the serious concern of the Board to strengthen the reserves of the Federal Reserve Banks by having them reduce their investments before the opening of the next Liberty loan campaign. WAR-TIME BANKING. Since the beginning of the war, and more especially since the entry of this country into the war, deposits in banks have increased enormously, but it should be remembered that loans and discounts and investments have increased in an even greater degree. The country's gold holdings in three years have increased more than a billion dollars and are now larger than those of any other country, but at the same time the percentage of gold reserve against deposits has decreased. These conditions are not unusual in times of war, and to a certain extent they can not be prevented, but the banks of the country should make it their business to keep these tendencies under control and to prevent too rapid an expansion of credits as far as possible without placing in jeopardy the supreme object of our national effort—the winning of the war. We should realize that in the accomplishment of this purpose the conservation of our economic and financial strength is just as important as the augmentation of our military power, and that upon this conservation our military strength depends. There must be a conservation of credit as well as of goods, and credit, generally speaking, should not be used except where it is required for the common welfare, as in planting ANNUAL REPORT OF THE FEDERAL RESERVE BOARD. 9 crops, the manufacture of necessary articles, the extension of transportation facilities, or in such construction work as may be essential in bringing about increased production. Limitation in ordinary lines of credit is necessary to make room for the credits required by the Government for the purchase of supplies essential for war purposes. It must be expected that the war activities of the Government will bring about a further expansion of deposits and loans in banks, and in order to keep our credit structure strong it is necessary that the banks should exert their influence and lend their energies to a more general absorption of Government loans by savings, and to limitation of private credits wTherever practicable without causing hardship. We must look to the future and prepare unceasingly for further demands which may be made upon us. The products of the fields, the forests, the mines, and the manufacturing establishments of the country are not, generally speaking, in the nature of luxuries. They can, as a rule, be classed as necessaries, and with the outlook ahead of us there seems to be no possibility of overproduction. It seems, therefore, that the banks of the country, from the standpoint of good business as well as from patriotism, should lend their funds and credits freely to those engaged in these productive enterprises, and their power to serve the country in this way will be increased by the curtailment of unnecessary credits and by the adoption by the people generally of a policy of common sense practical economy. NEED OF COOPERATION. The Federal Reserve act as amended last June provides that State banks admitted to membership may retain substantially all of their statutory and charter powers. Thus State-bank members are governed by their own State laws and remain under the supervision of their State banking departments. Their interest rates and the limitations upon their loans are determined entirely by State law. There are hundreds of good banks throughout the country not yet members, but which are eligible for membership, and it seems proper to refer here to a statement issued by the President of the United States on October 13 last in which he called attention to the fact that " the extent to which our country can withstand the financial strains for which we must be prepared will depend very largely upon the strength and staying power of the Federal Reserve banks," and in which he urged the importance of developing our banking power to the maximum degree and of providing financial machinery adequate for the very great financial requirements imposed upon our country by reason of the war. He pointed out that all banks should cooperate in strengthening the position of the Federal Reserve system, thereby strengthening the Nation's banking power, and urged upon every bank officer and director to consider the question of membership in the Federal Reserve system as a " solemn obligation." 10 ANNUAL REPORT OF THE FEDERAL RESERVE BOARD. Since the date of the President's statement the banking departments of nearly all of the States have expressed approval of membership in the Federal Eeserve system on the part of the banks under their supervision, and the response of the banks has been most gratifying. However, the legal requirements in a number of States prohibit or militate against the cooperation of State banks and trust companies with the Federal Eeserve system, making it impossible or impracticable for them to become members or to exchange their gold for Federal Eeserve notes. The Board would suggest to the banks in these States that efforts be made to obtain such legislative action as may be necessary to enable them to cooperate with the system. DISCOUNT RATES. The discount rates of the Federal Eeserve Banks have an important bearing upon the problems of Government financing and upon the condition of the banks of the country as a whole. Since the first adjustment of discount rates, effective shortly after the organization of the Federal Eeserve Banks, changes have been comparatively infrequent and have been discussed in previous reports. At the beginning of the year 1917 money was in abundant supply and discount rates were low. The expectation of some that the entry of the United States into the war would cause an abrupt advance in rates was not realized. While market rates have advanced substantially, the process has been gradual, and there were no changes made in the rates of Federal Eeserve Banks until the flotation of the first Liberty Loan was well under way. Then, in order to facilitate the disposal of the bonds, the Board indicated to the Federal Eeserve Banks that it would be desirable to establish preferential rates in favor of notes secured by Government obligations. In the case of such paper, as with ordinary commercial paper, a distinction was made between short maturities and those running for a longer period. Accordingly, notes of member banks running not longer than 15 days and secured by Government obligations, were in general put upon a 3 per cent basis, while 90-day paper, secured in the same way, was given a rate of 3 | per cent, which rates were about one-half of 1 per cent below the rates fixed for ordinary commercial paper of the same maturities. Because of the generous cooperation of many banks throughout the country in making advances to purchasers of Government bonds at the same rate of interest as that carried by the securities, these bond purchasers have had the full advantage of the facilities afforded by Federal Eeserve Banks in the rediscount of their notes. A firmer tendency became apparent during the summer at some of the financial centers, and the 4 per cent rate borne by the second Liberty Loan ANNUAL REPORT OF THE FEDERAL RESERVE BOARD. 11 (one-half per cent more than the first) suggested the desirability of a general advance of one-half of 1 per cent in Federal Reserve discount rates. As already stated, this advance has been made, but the differential in favor of paper secured by Government obligations is still maintained. The discount schedules have been consolidated and simplified by reducing the number of separate classifications. In connection with the revision of rates, it was deemed proper to merge with the ordinary commercial rates the special rate which was made in the summer of 1915 for paper secured by warehouse receipts for staple and readily marketable products of a nonperishable character, known as commodity paper. The continuance of this rate, which had been made originally for the purpose of assisting the orderly marketing of crops in order to avoid speculation and violent fluctuations, had become unnecessary because of the great advance in the price of agricultural products, and because of the policy of price control adopted by the Government. Changed conditions made it desirable that these products should move steadily to market, and it seemed best in the circumstances not to encourage their unneeess^ry holding by producers or middle men. Complete tables showing these changes in discount rates, are appended to this report. EFFECT OF THE AMENDMENTS OF JUNE 21. The amendments to the Federal Reserve Act which became law on June 21 last, were most opportune, as they added greatly to the ability of the Federal Reserve system to assist in meeting the financial requirements of the Government, and to exercise a controlling influence in the money market, just at a time when much larger demands were being made upon it because of war financing. The amendments are substantially those recommended by the Board in its last annual report, and have brought about greatly increased holdings of gold in the Federal Reserve Banks, and more active cooperation on the part of State banks and trust companies, many of which, attracted by the more favorable conditions of membership, have now allied themselves with the system. The process of issuing notes has been simplified by permitting their issuance- against both gold alone and gold and eligible paper as security—the gold thus acquired being permitted to be counted as a part of the required gold reserve against notes. The effective gold holdings of the Federal Reserve Banks have thus been greatly augmented and their discount power commensurately increased, while the capacity of the system to adapt its operations more closely to the changing requirements of the public has been greatly enlarged. As a result of these changes the Federal Reserve note will more speedily attain the position originally intended for it; from being an occasional emergency currency used to supplement deficiencies in 34365°—18 2 12 ANNUAL REPORT OF THE FEDERAL RESERVE BOARD. the suppty of other existing forms of currency, it is becoming the most important constituent of our circulating medium responding promptly and naturally to currency requirements from whatever source proceeding, thus promising to give to our whole currency a kind and degree of elasticity it has never before possessed. When issued against gold the Federal Reserve note virtually functions as a gold certificate, taking the place in the circulating medium of the amount of gold for which it was exchanged. When issued against commercial paper it has more of the character of bank credit currency. In times when trade is active and the country needs increased currency the Federal Reserve note will be issued in increasing degree against commercial paper as collateral. In times of slackening demand for currency, commercial paper will be withdrawn and gold deposited in its place to provide for the redemption of notes which have been issued to the member banks. While giving greater flexibility to the Federal Reserve note, the recent amendments have not changed its security, for, as provided in the original act, the Federal Reserve note remains covered by an equivalent value in gold, or gold plus commercial paper held in trust for the public by the Federal Reserve agent as the representative of the Government. Amendments to the act have also changed the former reserve requirements for member banks by fixing them at 13 per cent, 10 per cent, and 7 per cent for central reserve city, reserve city, and country banks, respectively, and have, at the same time, strengthened the position of the Federal Reserve Banks themselves by requiring the maintenance with them of the member banks' entire reserves in collected funds, the amount and character of vault cash to be carried by a member bank being left to its discretion, as determined by actual needs. This change, together with the complete transfer of reserves prior to the expiration of the time limit set by the original act, involved the transfer of a large amount of actual money to the Federal Reserve Banks. The termination of the period when funds deposited with banks in reserve cities might be counted as reserve for country banks would not, for reasons explained in the Board's last annual report, have made necessary any material transfer in cash, but the new reserve requirements led to the shifting of about $250,000,000 and a corresponding increase in the cash holdings of Federal Reserve Banks. Another amendment included in the act of June 21 permits nonmember banks to open, for exchange or collection purposes, accounts with Federal Reserve Banks, thereby availing themselves of the facilities of the check clearing and collection system. This change, at the outset, increased still further the cash holdings of the Federal Reserve Banks, as several large nonmember institutions opened accounts of this kind with Federal Reserve Banks. Most of these ANNUAL REPORT OF THE FEDERAL RESERVE BOARD. 13 institutions have since become members of the system, so that the balances now carried by nonmember banks are relatively small, amounting on December 31 to $16,480,000. The gain in actual cash by Federal Reserve Banks, following the amendments, may be best demonstrated by a comparison of their condition on June 1 (three weeks before the amendments were adopted), with their condition on August 3. On the earlier date the gold and lawful money held by Federal Reserve Banks and by Federal Reserve agents amounted to $933,427,000, while on the latter date the total was $1,421,382,000, and for the same period the free gold—that is, the surplus over required reserves—increased $300,000,000. MEMBERSHIP OF STATE BANKS. Second only in importance to the change in the reserve and note issue provisions of the law must be reckoned the amendment to section 9, under which State banks and trust companies may become members of the Federal Reserve system and retain at the same time their full charter and statutory privileges. The law as originally enacted gave the Federal Reserve Board discretionary powers as to the conditions under which State banks and trust companies might become members of the Federal Reserve system. In formulating regulations for the admission of State institutions the Board had to choose between two policies. It could stipulate that State banks in becoming members should conform to the requirements made upon national banks, or else it could admit them upon conditions which would leave them undisturbed in the free exercise of their charter rights and privileges as far as might be consistent with conservative banking. The Board chose to adopt a liberal policy in dealing with the State banks and trust companies, while committing itself to the principle that greater powers should be given national banks in order that there might be, as far as practicable, a basis of equality between all member banks. The Board accordingly issued regulations which were liberal in their terms, both as to the admission of State banks as members and as to their rights to withdraw at their discretion. But there had always been a question in the minds of many as to the permanence of these regulations in the absence of definite statutory guaranties. The action of Congress in confirming what the Board had attempted to accomplish by regulation has given State banking institutions firm assurance that they may continue to carry on their lawful banking business in substantially the same way as they have heretofore done, without fear of future changes in methods prescribed, and it has given them in addition the definite right to withdraw from the system upon six months' notice, subject to conditions which they regard as reasonable. The inducement to the State banks to become members of the system thus held out by the amendment to section 9 of the act was 14 ANNUAL REPORT OF THE FEDERAL RESERVE BOARD. further strengthened by an opinion of the Attorney General of the United States rendered on September 10, in which he expressed the view that this amendment, in reserving to the State banks as members their full statutory and charter powers, released them from the restrictions of section 8 of the Clayton Act, as to interlocking directors, to which they had been previously held to be subject, in common with the national banks. Just at a time when the principal obstacles which had previously stood in the way of the enlargement of the system by State bank membership were thus overcome by statute and by authoritative legal interpretation, an additional incentive was given the State banks and trust companies to apply for membership in the system by reason of the rapid development of the Government's requirements in war financing, the patriotic desire to assist in meeting and supplying these needs, and an appreciation of the added safety to themselves resulting from membership. Compelling reasons for membership in the system from a patriotic standpoint were brought to the attention of all the banks in a strong statement by the President on October 13, to which reference has already been made. Under all these influences many of the strongest State banks and trust companies in the United States have filed their applications and have been admitted to membership. At the time of the passage of the amendatory act 53 State banks and trust companies were members of the system, but on December 31 membership had been increased to 250. The aggregate capital and surplus of the member State banks and trust companies was on that date $525,205,530 and aggregate resources of about $5,000,000,000, as compared with $78,491,165, and $825,000,000 on June 21. It is estimated that the membership of the Federal Reserve system represents at this time about 75 per cent of the total commercial banking assets of the country. Thus it is evident that substantial progress has been made toward the complete unification of our banking system. A table showing the titles, dates of admission, capital and surplus, and aggregate resources of State bank members appears in the appendix. CREDIT EXPANSION. Great as is the admitted power of the Federal Reserve system, equipped with its new resources and supported by the greater part of the banking reserve of the country, there are, nevertheless, limits to its capacity. During the past year there have been, very naturally, some expressions of anxiety on the part of the financial community as to expansion of credits. The Board has fully recognized the dangers of overexpansion and has endeavored in every way not hurtful to war financing to prevent such a condition. The question as to how far expansion may drift toward the danger point, despite concentration and careful use of our banking resources, should be 15 ANNUAL BEPORT OF THE FEDERAL RESERVE BOARD. carefully considered in the development of a sound policy for the future. The following tabulation of combined statements of the 12 Federal Reserve Banks shows the changes in the reserve position of the Federal Eeserve system during the year, the figures being as of December 30, 1916, March 30, June 29, August 3, November 2, and December 28, 1917, the four dates last named reflecting the changes directly attributable to the flotation of the Liberty loans: Combined resources and liabilities of the Federal Reserve system. [000 omitted.] Dec. 30, 1916. Mar. 30, 1917. June 29, 1917. Aug. 3, 1917. Nov. 2, 1917. $283,091 170,470 $374,903 200,061 $484,264 345,845 52,362 $399,785 438,153 52,500 $501,311 378,514 52,500 $499,917 317,520 52,500 Total gold held by banks Gold with Federal Reserve agents Gold-redemption fund 453,561 282.522 1,703 574,964 360,668 2,414 882,471 402,693 9,402 890,438 467,845 9,390 932,325 602,433 11,317 869,937 781,851 19,345 Total gold reserves Legal tender notes, silver, etc. Total reserves. Bills discounted—members and Federal Reserve banks Bills bought in open market Total bills on hand United States Government long-time securities United States Government short-time securities Municipal warrants Loans on gold coin and bullion. 737,786 19,325 938,046 1,294,566 1,367,673 1,546,075 9,282 39,840 50,744 53,709 1,671,133 49,635 757,111 947,328 1,334,406 1,421,382 1,596,819 1,720,768 Dec. 28, 1917. A.—KESOURCES. Gold coin and certificates in vault.. Settlement fund Gold with foreign agencies Total earning assets. Due from other Federal Reserve Banks, net. Uncollected items Total deductions from gross deposits. Redemption fund against Federal Reserve bank notes Other resources 28,552 128,956 20,106 84,473 197,242 202,270 130,948 174,183 503,965 186,012 680,706 275,366 157,508 104,579 399,512 305,131 689,977 956,072 44,247 29,275 36,426 42,422 53,851 48,350 11,167 8,974 18,425 15,715 34,302 2,446 21,850 25,464 1,249 45,211 1,267 58,883 1,005 221, g 167,994 494,536 374,266 790,306 1,064,310 44,543 2,275 132,759 1,448 221,705 4,746 197,058 14,383 317,901 11,976 301,067 44,543 135,034 223,153 201,804 332,284 313,043 400 6,544 400 5,393 500 799 500 492 537 1,588 537 2,813 1,030,494 1,256,149 2,053,394 1,998,444 2,721,534 3,101,471 • Total resources. B.—LIABILITIES. Capital paid in Government deposits Due to members—reserve account Member bank deposits, net Collection items All other deposits, including foreign government credits Total gross deposits. Net deposits Federal Reserve notes in actual circulation. Federal Reserve Bank notes in circulation, net liability All other liabilities Total liabilities Ratio of gold reserves to net deposit and Federal Reserve note liabilities combined Ratio of total reserves to net deposit and Federal Reserve note liabilities combined 55,694 27,662 56,075 57,176 57,881 64,291 20,567 300,966 56,765 175,912 720,411 1,033,460 1,192,887 1,372,023 70,442 108,213 1,453,166 671,793 149,527 132,053 191,811 1,000 14,269 25,310 17,965 841,939 1,484,953 1,395,974 1,765,056 1,771,037 654,912 706,905 1,261,800 1,194,170 1,432,772 1,457,994 274,796 357,610 508,807 540,785 881,001 1,246,488 525 934 1,524 2,828 976 8,000 3,186 8,000 5,504 1,030,494 1,256,149 2,053,394 1,998,444 2,721,534 3,101,471 100,961 9,455 549 191,689 79.4 73.2 78.9 61.8 81.4 75.4 81.9 63.6 16 ANNUAL REPORT OF THE FEDERAL RESERVE BOARD. From the foregoing it will be noted that the increase in the total invested funds grouped as bills discounted and bought, during the months intervening between the beginning and the close of the year 1917, is about $798,564,000. Of this sum, $515,143,000 is represented by purchase or discount of commercial paper, the remaining $283,421,000 representing the discount by the banks of paper secured by Government obligations, for the purpose of enabling buyers of bonds and certificates to carry them during the period necessary for the liquidation of their own obligations thus incurred. The reduction in the reserve percentages of the Federal Reserve Banks against notes and deposits was most marked during the periods between March 30 and June 29 and between August 3 and November 2. During the month of July* there was a notable strengthening of the reserve position, but a similar recovery subsequent to the closing of the second Liberty loan had not taken place up to December 31. Taking the year as a whole, it will be noted that, although there has been a great increase in the total assets of the system, there has been a reduction of gold and lawful money reserves from 81.4 per cent at the beginning, to 63.6 per cent at the end of the year, but it should not be overlooked that the figures for December 28, 1917, represent the condition existing at a time when the process of distributing the second Liberty loan was still uncompleted. The question whether the final absorption by the ultimate investor of the second Liberty loan and the resulting financial adjustments would bring about as favorable a situation as that which existed at the closing of the first loan, is still an open one, but indications are that there will be a larger amount of bonds left in the hands of the banks and that a correspondingly greater volume of discounts secured by Government obligations may remain with the Federal Reserve Banks than was the case at the close of the first Liberty loan. The existing condition is susceptible of improvement and will be improved as the public performs its duty of absorbing the Government loans out of savings. The position of the banks with respect to credit expansion is indicated by the condensed statement of the deposits, loans, discounts, and investments of the national banks as reported to the Comptroller of the Currency on November 20, 1917, as compared with corresponding figures on December 31, 1914; November 10, 1915, and November 17, 1916. [In thousands of dollars; 300 omitted.] Dec. 31,1914. Nov. 10,1915. Nov. 17,1916. Nov. 20,1917. Deposits, net, on which reserve is computed. Loans and discounts, including overdrafts. United States bonds. . Other stocks, bonds, and securities * 1 6,668,325 6,363,435 791,995 1,313,787 8,256,662 7,241,140 777,765 1,343,822 9,976, 980 8,355, 101 7?4, 473 1,747, 794 10 ,348, 800 9 ,550, 571 22 ,354 183 1 ,949, 619 Exclusive of Federal Reserve Bank stock. 2 Includes United States certificates of indebtedness and payments on account of subscriptions for Liberty loan bonds. ANNUAL KEPOBT OF THE FEDERAL RESERVE BOARD. 17 It is proper to point out that while, during the year 1917, there has been a lessening of the fluidity and immediate availability of the country's banking resources, the change is not surprising when there is considered the extent of the requirements which have been made upon our banking system. It is evident also, from an analysis of the figures, that the decrease in reserve strength is attributable only in a minor degree to normal commercial discounts and that it is mainly the result of Government financing and the consequent demands upon our resources. What effect the credit expansion which has taken place in the United States during the past year and the years preceding—since the beginning of the European war—may have exerted on prices should not pass unnoted. Wholesale prices are estimated by the Bureau of Labor Statistics to have advanced during the year 1917 by about 24 per cent, which may be compared with an estimated advance of 47 per cent from July, 1914, to December 31, 1916. Eetail prices of principal articles of food are shown by the same office to have risen 23 per cent between July 15, 1914, and December 15, 1916, and 24 per cent between the latter date and December 15, 1917. The fact that there has been a rise of the general price level is incontestable. Indeed, it has recently become the subject of general observation and comment. There is, however, difference of opinion as to the precise degree of influence to be attributed to the several factors which have produced the result. The entire world is passing through a period of prof ound economic disturbance. In many of the richest producing countries a large part of the able-bodied population has been withdrawn from productive employment for service in the Army. Industry has suffered much dislocation and disorganization. Overseas trade has been suspended or interrupted. There has been much destruction of industrial capital and an enormous consumption of products by the armies. Inevitably, such a condition, involving either an absolute or relative shortage of many primary materials and necessaries, must have advanced values and prices to a very appreciable extent, even had there been no considerable change in the volume of credit and currency0 In thus stating the influence upon prices of unprecedented industrial conditions the Board would not, however, convey the impression that it does not appreciate to its full importance the effect on recent price movements of the rapid and abnormal growth of the volume of credit created by all the warring nations. Indeed, so alive is the Board to the dangers that attend this phenomenon that it regards it as one of its most important duties to prevent, as far as practicable, expansion of banking credit from running an uncontrolled course. 18 ANNUAL REPORT OF THE FEDERAL RESERVE BOARD. Banking expansion, it may be admitted, is an unavoidable incident of war finance, but every effort should nevertheless be made to counteract it as far as possible by limiting banking credit not clearly needed for the purpose of producing or carrying goods necessary for the life of a Nation at war. Goods and credit must be saved to the utmost of our ability in order to check the upward movement of prices and in order to free for the use of the Government the goods and savings required for the winning of the war. To encourage and to foster necessary business and to discourage and curtail unnecessary business must be our national endeavor, and will require the intelligent and zealous cooperation of the banking community. The problem of exercising an effective and proper control over credit involved in the public offering of securities does not present great difficulty. An effective and proper control over individual credits no doubt offers greater, though not insurmountable, difficulties. How to accomplish these results without bringing about unnecessary hardship or acute disturbance or injustice is a matter that will receive the close study and attention of the Federal Reserve Board. PRIVATE AND CORPORATE FINANCING. A feature of the banking and financial situation which has been developing during the past year, and to which the attention of the Board has been frequently directed, is the position of firms and private corporations having short-term obligations maturing in the near future, and which have been accustomed to procure accommodations upon terms not now obtainable. The action of the President in taking control of the railroads and the plans outlined by him for maintaining their revenues and their credit have disposed for the present of a most serious financial problem, but there remains to be considered the question of meeting the requirements of many corporations heretofore accustomed to appeal to the securities market for the purpose of providing themselves with necessary capital. The effect of the Government's borrowing on a very large scale has been to withdraw from the market a large proportion of the funds normally available for other short term or long term loans. The adverse influence thus exerted upon the loan and investment market is necessarily incidental to heavy Government operations of this kind. The resulting situation is more or less disturbing to all who have been accustomed to resort to banks for loans on collateral, but it is particularly distressing to the larger borrowers who rely upon the securities market. The situation has been further complicated by the continuous return of our securities from Europe, and by a comparatively large volume of obligations of foreign Governments carried by member and nonmember banks, resulting in a dimi ANNUAL REPORT'OF THE FEDERAL RESERVE BOARD. 19 nution of their percentage of liquid assets. These conditions are reflected in the requests which the Board has for some time past been receiving from many quarters that the rediscount privilege be extended to paper of a character and form which had never been regarded as eligible. Perhaps the most urgent appeal of this kind has been that the Board permit Federal Reserve Banks to discount notes which have been placed upon the market under an agreement between the borrowers and their bankers, providing for a considerable number of successive renewals, the advances having been made to the borrowers for a definite term of years. Had the Board permitted such paper to be rediscounted, Federal Reserve Banks would in a short time have been burdened with paper which the makers did not expect to liquidate at maturity. The discount of paper based upon such an agreement for repeated renewals is not consistent with the underlying principles of the Federal Reserve Act, and the Board had no hesitation in stating that it did not regard paper subject to such agreements as a proper investment for Federal Reserve Banks. The Board's attitude does not imply any question of the legitimacy of the purpose for which the funds were desired, or of the inherent soundness of the paper itself, but rather that such transactions are not of a kind which Federal Reserve Banks ought to facilitate, as they should never overlook their obligation to preserve the genuine and liquid character of their assets. Other propositions of a somewhat similar character were submitted to the Board for consideration, and their significance is that there is pressure on the part of commercial and manufacturing enterprises to gain access to the rediscount facilities of the Federal Reserve Banks and use the system to supply funds which, properly or in normal circumstances, should be provided by the securities market. The policy of the Board, however, has invariably been to interpret and apply the law in accordance with its manifest intent and underlying principles, with the end in view always of safeguarding and maintaining the liquid character of the assets /of the Federal Reserve Banks. This duty, always present, has become imperative because of the fact that the entire reserves of the member banks, so far as based upon legal requirements, are now, by the act of June 21, 1917, carried on the books of the Federal Reserve Banks. Upon these banks and upon the Federal Reserve Board, therefore, falls the responsibility for the maintenance of a liquid condition, and upon them will justly fall censure for any unauthorized use of these reserve funds which are held under a trusteeship of the highest character. Therefore, in no circumstances, can the Board admit the eligibility of paper, by whomsoever made, which in its essential character fails to conform to sound banking principles and to the provisions 20 ANNUAL REPORT OF THE FEDERAL RESERVE BOARD. of the Federal Reserve Act. In making this statement of its attitude, however, the Board does not ignore or overlook the very serious problems which now confront private enterprises in providing for their financial requirements both as to new money and maturing obligations. Eeference has already been made to the position of the savings banks and investment institutions in general. Undoubtedly some effective measure, not so much of actual relief as of organization to afford relief if required, is desirable, and if made available will be of great benefit to the banking situation. The resulting problem is one which does not come within the scope of the Federal Reserve system, but it is nevertheless one to which the Board can not be indifferent, because, until some satisfactory solution is found, it will be under pressure to sanction practices and to make rulings designed to open the resources of the system to uses manifestly foreign to the intent of the act. The Board therefore respectfully suggests early consideration by Congress of the problem of corporate financing in the belief that no satisfactory solution will be found that does not involve some degree of governmental intervention. The Board is of the opinion that some plan for governmental intervention or aid can be worked out which would meet the requirements of the situation satisfactorily. CONSERVATION OF GOLD. As a result of the entry of the country into the war and of the large credits given the allied Governments there was an almost complete cessation of the movement of gold to this country which had been continuous since the early months of the year 1915. In fact, the movement had begun to slacken as early as November, 1916. Foreign Governments had found it convenient to liquidate their obligations due in other countries by purchasing remittances in our own markets, frequently against credits opened by our banks or by our Government. The aggregate trade balance has continued in favor of this country, even though balances are against it in some cases. During the second quarter of the year there developed a strong tendency to withdraw gold by those neutrals whose supplies of raw materials had been drawn upon by our own Government and by other Governments associated with us in the war, and during the months of June, July, and August, our net loss of gold amounted to about $100,000,000. The movement of gold having already been restricted in all of the belligerent countries, demands for it in settling international accounts, in adjusting exchange rates, and in strengthening reserves, were naturally made in our own markets. ANNUAL REPORT OF THE FEDERAL RESERVE BOARD. 21 As the movement began to assume larger proportions, the President, on September 7, issued a proclamation to the effect that— " except at such time or times, and under such regulations and orders, and subject to such limitations and exceptions as the President shall prescribe, until otherwise ordered by the President or by Congress, the following articles, namely: Coin, bullion, and currency shall not, on and after the 10th day of September, in the year 1917, be exported from or shipped from or- taken out of the United States or its territorial possessions * * *." By Executive order of the same date the President directed that— " 1. Any individual, firm, or corporation desiring to export from the United States or any of its territorial possessions to any foreign country named in the proclamation dated September 7, 1917, any coin, bullion, or currency, shall first file an application in triplicate with the Federal reserve bank of the district in which such individual, firm, or corporation is located, such application to state under oath and in detail the nature of the transaction, the amount involved, the parties directly and indirectly interested, and such other information as may be of assistance to the proper authorities in determining whether the exportation for which a license is desired will be compatible with the public interest. " 2. Each Federal reserve bank shall keep a record copy of each application filed with it under the provisions of this regulation and shall forward the original application and a duplicate to the Federal Reserve Board at Washington together with such information or suggestions as it may believe proper in the circumstances and shall in addition make a formal recommendation as to whether or not in its opinion the exportation should be permitted. " 3 . The Federal Reserve Board, subject to the approval of the Secretary of the Treasury, is hereby authorized and empowered upon receipt of such application and the recommendation of the Federal reserve bank, to make such ruling as it may deem proper in the circumstances and if in its opinion the exportation in question be compatible with the public interest, to permit said exportation to be made; otherwise to refuse it." In pursuance of this order the Federal Eeserve Board, with the approval of the Secretary of the Treasury, issued regulations governing the administrative procedure with regard to the exportation of coin, bullion, and currency,1 and now considers and passes upon all applications for such shipments. Applications for permission to ship gold to European neutral countries have, except for a few days following the date of the order, been invariably declined. A different problem, however, presented itself in the case of applications for shipments of gold to the Orient, to Canada, to Mexico, and to South American countries, which had been furnishing necessary raw materials. It was 1 See page 183. 22 ANNUAL REPORT OF THE FEDERAL RESERVE BOARD. deemed important to continue these trade relationships, while reducing shipments of gold to a minimum. For a short time gold shipments were permitted to go to India, in order to give importers reasonable time to adjust themselves to the new conditions. Silver has been permitted to flow freely to the Orient as a means of payment for Asiatic balances. In addition, as a result of negotiations between the Treasury Department and representatives of the Indian Government, provision has been made for rupee exchange to the extent of 10,000,000 rupees, which were allotted by Federal Reserve Banks to importers according to their necessities.1 In a few cases shipments of gold are being permitted to South American countries, although it is hoped that arrangements can be concluded at an early date which will facilitate exchanges with the.se countries and obviate the necessity of making further gold shipments in any considerable volume. Applications for shipments of gold into Mexico have been granted only for Government account and in cases where such shipments have been shown to be necessary to effect the importation into the United States of necessary products. The exportations have been limited, as far as possible, and the greater part of the gold which has been shipped has been applied to the payment of Mexican export duties and to meeting the requirements of Mexican law as to the return into Mexico of the value of the full gold content and 25 per cent of silver content of ores and bullion exported from Mexico. Each application has been considered upon its own merits, the Board having given notice in its regulations dated September 21, 1917, that the granting of any specific application would not constitute a precedent. In considering applications the Board has adhered strictly to the principle laid down in the Executive order that if, in its opinion, the exportation applied for was not compatible with the public interest it should be refused, and has acted also in close cooperation with the State and Treasury Departments and the War Trade Board. Foreign exchange rates have been abnormal throughout the year, and in many of the countries which send us necessary material, American bills are at a heavy discount due partly to the restrictions placed on our export trade and partly to the adverse trade balances of countries associated with us in the war. The Board is making a close study of our trade relationships with neutral countries and has secured the services of Mr. Frederick I. Kent, of New York, as its foreign exchange adviser. 1 Later an additional credit of 10,000,000 rupees was arranged, and since Jan. 1, 1918, an exchange agreement with the Government of Argentina was entered into. ANNUAL BEPOBT OF THE FEDERAL RESERVE BOARD. 23 CLEARING AND COLLECTION. The volume of checks handled by the Federal Reserve Banks during the year has increased enormously, although there have been no great additions to the number of nonmember banks which remit at par to Federal Reserve Banks. Section 13 of the act was amended last June as recommended by the Board, so as to allow Federal Reserve Banks to receive accounts for collection and exchange purposes from such nonmember banks and trust companies as may agree to remit to Federal Reserve Banks at par for checks drawn upon themselves and which will, in addition, maintain balances with the Federal Reserve Bank sufficient to offset the items in transit held for their account by the Federal Reserve Bank. Comparatively few nonmember banks have, however, availed themselves of this privilege, and the Federal Reserve Banks are still unable to collect checks drawn on many nonmember banks except at heavy expense. An effort was made, in the interest of some member and nonmember banks to amend the act by providing for a standardized exchange charge not to exceed onetenth of 1 per cent, to be made by member banks against Federal Reserve Banks for checks sent for collection. It was not successful, and the act as finally amended provides that a member or nonmember bank may make " reasonable charges, to be determined and regulated by the Federal Reserve Board, but in no case to exceed 10 cents per hundred dollars or fraction thereof, based on the total of checks and drafts presented at any one time, for collection or payment of checks and drafts and remission therefor by exchange or otherwise; but no such charges shall be made against the Federal Reserve Banks." The Attorney General has been requested to give his opinion as to whether this proviso applies to nonmember banks. An affirmative opinion will make possible the establishment of an universal par clearing system, but if, on the contrary, it should be held that the proviso applies to member banks only, the further development of the collection system will necessarily be slow, and in the absence of further legislation will depend upon the voluntary action of many small banks. In order to enlarge the facilities of the clearing and collection system, and to render greater service to the banks and to their customers, the Board authorized the Federal Reserve Banks on July 1 to receive for collection for account of member banks maturing notes and bills and miscellaneous drafts, subject to a moderate collection charge. Consequently, member banks which were obliged to rely upon other banks for service of this sort can now obtain it from the Federal Reserve Banks. There has also been put into operation by all Federal Reserve Banks a system of transfer drafts, which enables any member bank to have its draft drawn upon the Federal Reserve 24 ANNUAL REPORT OF THE FEDERAL RESERVE BOARD. Bank of its own district paid immediately without time allowance or deduction at any other Federal Reserve Bank, adjustments between the respective Federal Eeserve Banks being made through the gold-settlement fund. In this way any member bank has, under the proper and necessary restrictions provided, the same exchange facilities it would have by carrying accounts in each of the 12 Federal Reserve cities. GOLD-SETTLEMENT FUND. The operation of this fund has been described in former reports of the Board and no extended comments upon it seem necessary at this time. Under the act as amended additional safeguards have been thrown around the fund by permitting the Treasurer of the United States to carry a special account upon his books to the credit of the Federal Reserve Board as agent for the respective Federal Reserve Banks and Federal Reserve agents. Payments are now made by checks signed by officials of the Board. The practice of issuing gold-order certificates in denominations of $10,000, representing gold deposited with the Treasurer by Federal Reserve Banks, which were held in the custody of the Federal Reserve Board pending transfers between the banks and the Treasury, is no longer necessary and has been discontinued. The operation of this fund, which is in effect a clearing house for the 12 Federal Reserve Banks, has been particularly useful during the past year by reason of the continuous transfers of very large amounts which have grown out of the sale of Government bonds and Treasury certificates and the redistribution and disbursement of the funds realized. The total volume of clearings and transfers through the gold-settlement fund during the year amounted to $26,962,946,500, as compared with $5,757,836,000 during 1916. The net balances, representing the change of ownership between the Federal Reserve Banks, of gold held in the fund were $272,033,000. Without such an arrangement actual settlements between Federal Reserve Banks would have been accompanied with great expense and loss of time, but by its aid these enormous transfers have been automatic and instantaneous and have been made without the inconvenience and expense which would have been unavoidable had physical transfers or shipments of money been necessary. BRANCHES OF FEDERAL RESERVE BANKS, Questions relating to the establishment and operation of branch banks have been simplified by the amendment to section 3 of the Federal Reserve Act. As originally enacted, this section provided that each Federal Reserve Bank " shall establish branch banks " to ANNUAL REPORT OF THE FEDERAL RESERVE BOARD. 25 be " operated by a board of directors under rules and regulations approved by the Federal Reserve Board," and provided also that there be seven directors having the same qualifications as directors of Federal Eeserve Banks. The section as now amended provides that the Federal Eeserve Board may permit or require any Federal Eeserve Bank to establish branches within its district, and that such branches, subject to such rules and regulations as the Federal Eeserve Board may prescribe, shall be operated under the supervision of a board of directors to consist of not more than seven or less than three directors, of whom a majority of one shall be appointed by the Federal Eeserve Bank of the district and the remaining directors by the Federal Eeserve Board. During the year branches have been established at Omaha by the Federal Eeserve Bank of Kansas City, at Louisville by the Federal Eeserve Bank of St. Louis, and at Portland, Seattle, and Spokane, by the Federal Eeserve Bank of San Francisco, and are now in operation. The Board has, in addition, authorized the establishment of branches at Pittsburgh and Cincinnati by the Federal Eeserve Bank of Cleveland, at Detroit by the Federal Eeserve Bank of Chicago, at Baltimore by the Federal Eeserve Bank of Eichmond, and at Denver by the Federal Eeserve Bank of Kansas City. It is expected that all of these branches will begin business at an early date. The policy of the Board in the establishment of these new branches has been to recognize the unity and paramount responsibility of the Federal Eeserve Bank, while extending full facilities to the banks in the territory served by the branch. By avoiding duplications in bookkeeping, and by a consolidated control of accounts at the Federal Eeserve Bank, it is expected that branches can be operated at a comparatively small expense. INTERLOCKING DIRECTORATES. In its report for the year 1916 the Board gave full details of its work in the application of the provisions of section 8 of the Clayton Act and the Kern amendment thereto. Under authority of the Kern amendment 186 officers or directors of member banks applied to the Board during the year 1917 for its.permission to serve at the same time as officers or directors of not more than two other banks or trust companies, coming within the prohibitions of the Clayton Act. In one case the permission applied for was refused on the ground that the banks involved were deemed to be in substantial competition. In three cases, where the applying member-bank director desired the permission of the Federal Eeserve Board to serve as a director of two other institutions, the Board determined that substantial competition existed between the member bank and one of 26 ANNUAL REPORT OF THE FEDERAL RESERVE BOARD. the other institutions. As a result it gave its consent to the applying director to serve on only one of those other institutions. In the remaining 182 cases the consent applied for was granted by the Board. In its annual report for 1916 the Board noted that "in a large number of other cases the directors affected recognized that substantial competition did unquestionably exist, and so withdrew voluntarily from one or more directorates, thereby bringing themselves into compliance with the act." This was doubtless true in 1917, as in the preceding year. FIDUCIARY POWERS. On June 11, 1917, the Supreme Court of the United States handed down its decision in the case of Bank v. Fellows,1 appealed from the Supreme Court of Michigan, which was referred to in the Board's last annual report to Congress. The lower court was reversed and the court sustained the constitutionality of section 11 (k) of the Federal Reserve Act, which authorizes the Federal Reserve Board " t o grant by special permit to national banks applying therefor when not in contravention of State or local law the right to act as trustee, executor, administrator, and registrar of stocks and bonds under such rules and regulations as the said Board may prescribe." The decision in this case is of far-reaching and vital importance to the Federal Reserve system, in that it not only sustains the right of Congress to vest in national banks the powers enumerated in section 11 (k), but fully recognizes the right of Congress to grant to such banks any and all powers that are necessary to enable them to meet the competition of corporations organized under State law. Prior to this decision the Federal Reserve Board had granted permits to applicant banks except in those cases where the laws of the State in which the bank was located expressly or by necessary implication prohibited such banks from exercising these powers. The language of the court, in the decision handed down on June 11, seemed to be susceptible of the interpretation that these permits might be granted in any case in which the State laws permitted competing banks to exercise such powers. In view of its importance the matter was referred to the Attorney General, who reached the conclusion that while Congress is fully empowered to authorize the Board to grant permits under such circumstances, the act as it now stands does not vest this authority in the Board. There are some States which authorize banks or trust companies created and organized under their own laws to exercise such powers but which expressly prohibit any other corporations from doing so. In order to coordinate the powers 1 First National Bank of Bay City v. Grant Fellows, attorney general, and others. ANNUAL REPORT OF THE FEDERAL RESERVE BOARD. 27 of National with State banks it is recommended that section 11 (k) be amended so as to permit the granting of these powers to national banks in any case in which competing corporations organized under State laws are permitted to exercise such powers. By direction of the Board its counsel, with the consent of the court, took part in the proceedings both in the Supreme Court of Michigan and on appeal before the Supreme Court of the United States. The Board has granted during the year 1917, 112 permits for the exercise of fiduciary powers, making a total to date of 481, EARNINGS AND EXPENSES. The rediscount demands which have been made upon the Federal Reserve Banks during the past year, and the greater employment of their funds, have been reflected in very greatly increased earnings. The combined net earnings of the 12 banks for the year were $11,202,993, or at the rate of 18.9 per cent on an average aggregate capital for the year of $59,260,000. Section 7 of the Act provides that " after all necessary expenses of a Federal Reserve Bank have been paid or provided for, the stockholders shall be entitled to receive an annual dividend of 6 per cent on the paid-in capital stock, which dividend shall be cumulative. After the aforesaid dividend claims have been fully met, all the net earnings shall be paid to the United States as a franchise tax, except that one-half of such net earnings shall be paid into a surplus fund until it shall amount to 40 per cent of the paid-in capital stock of such bank." The Board construes the foregoing as meaning that no contingent fund may be set up against future expenditures or as a reserve for unforeseen losses, but that the surplus fund, which under the law can accumulate until it reaches 40 per cent of the capital of the Federal Reserve Bank, is intended to take care of all such contingencies as ordinarily would be provided for by a profit-and-loss account. The Board has advised the banks that in computing earnings available for dividends and surplus market values of securities held should be taken into account. It has also permitted banks to charge off furniture and fixtures accounts in full, and a reasonable proportion of the cost of vaults. It has authorized the writing off of the amounts actually paid for the printing of Federal Reserve notes, whether the notes have been put in circulation by the bank or held by the Federal Reserve Agent. It has also authorized those banks which own their premises to write off 5 per cent of the total cost per annum as a depreciation allowance. The gross and net earnings of all the banks for the calendar year 1917, and the divi34365°—18 3 28 ANNUAL REPORT OF THE FEDERAL RESERVE BOARD. dends declared by them during 1917, are shown in the following table: Federal reserve bank. Boston New York Philadelphia.. Cleveland Richmond Atlanta Chicago St. Louis Minneapolis Kansas City... Dallas San Francisco. Total. Gross earnings. Net earnings. $1,198,009 4,848,291 1,015,958 1,297,244 770,009 541,823 2,022,278 736,774 628,338 955,950 569,430 854,755 $912,294 3,718,955 753,874 963,152 512,223 327,313 1,509,871 502,156 418,137 684,499 353,475 547,044 15,838,859 Amount of dividends. Fully paid to— $597,829 Dec. 31,1917 1,941,641 Do. 622,150 June 30,1917 715,615 Do. 240,945 Dec. 31,1917 215,972 Do. 860,057 Do. 284,566 Dec. 31,1916 363,876 Dec. 31,1917 360,236 June 30,1917 Do. 187,744 394,490 Dec. 31,1916 11,202,993 i 6,785,121 1 Exclusive of $16,603, representing dividends paid on surrendered stock and miscellaneous adjustments in dividend account. It will be seen from the foregoing that the Federal Reserve Banks of St. Louis and San Francisco have paid their accumulated dividends up to December 31, 1916, that four others—the Federal Reserve Banks of Philadelphia, Kansas City, Cleveland, and Dallas— have paid their accumulated dividends up to June 30, 1917, and that six banks, viz, those of Boston, New York, Richmond, Atlanta, Chicago, and Minneapolis, have paid all accumulated dividends to the end of 1917. These six banks, after charging off their expenses and making the depreciation allowances, which have been previously described, have set aside surplus funds and have paid equal amounts to the Government as a franchise tax, making the total payment to the Government $1,134,234. The Board wishes to repeat the statements made in previous reports that the banks are not operated primarily for profit, but in meeting the demands which are expected to be made upon them during the coming year their earnings will undoubtedly continue to be large. It is hoped that all accumulated dividends will be paid during the year, and that the excess to be paid to the Government as a franchise tax in future will be greater than the payment which has just been made. ADMINISTRATIVE POLICIES. During the period of organization and of development which extended over the first two years of the operation of the system, the Board deemed it advantageous to obtain frequent suggestions from the officials of the Federal Reserve Banks, and to have them confer with each other in order that definite understandings might be reached and uniform methods of operation determined upon. Many of the problems which had to be worked out were entirely new, and ANNUAL REPORT OF THE FEDERAL RESERVE BOARD. 29 because of widely different conditions in the various districts frequent consultations seemed necessary to insure a better knowledge of administrative details. Thus periodical conferences with the Federal Reserve agents and with the governors of the banks were deemed advisable in order to secure more speedily an effective organization. The banks had, however, by the end of the year 1916 become well established and, having had two years of actual experience to guide them in the future conduct of their business, frequent conferences were found to be no longer necessary. Moreover, the activities of the year have been so groat as to require the constant presence of the executive officers at their banks. There have in consequence been no meetings of the Federal Keserve agents during the year, and but two meetings of the Board with the governors of the banks. The events of the past year have done much to bring into their proper relationship as parts of a working whole the several component elements of the Federal Reserve system. Experience has demonstrated that in all vital matters of general policy calling for prompt and decisive action concentration of responsibility without division of authority is indispensable. The position of the Federal Eeserve Board, as the coordinating agency for all of the 12 banks and as the governing body of the Federal Reserve system, is now well defined and the line of distinction between the local management of each one of the 12 banks as a district bank, and the operation of all of the 12 banks as a system, has become more marked. The Board has, from time to time, advised purchases of acceptances by Federal Reserve Banks from each other, and on two occasions during the year has exercised its powers of requiring Federal Reserve Banks to make rediscounts for other Federal Reserve Banks as provided in section 11 of the act. It is the policy of the Board to maintain an approximately uniform reserve position for all of the Federal Reserve Banks and to correct wherever necessary, by means of interbank rediscounts, the inequalities which result from seasonal movements of trade, or, more particularly, from the operations of Government financing. FEDERAL ADVISORY COUNCIL. The Federal Advisory Council, composed of 12 members, chosen by and representative of the Federal Reserve Banks, has held, in conformity with the requirements of section 4 of the Act, four meetings during the year, thus giving the Board, at frequent intervals, the benefit of its views as to the trend of the money market and the proper adjustment of discount rates. Members of the council have reported also upon the general financial, agricultural, commercial, and industrial conditions in their respective districts. 30 ANNUAL REPORT OF THE FEDERAL RESERVE BOARD. RESERVE CITIES. The Federal Reserve Act confers authority upon the Federal Reserve Board to add to the number of cities classified as reserve and central reserve cities, or to reclassify existing reserve and central reserve cities, or to terminate their designation as such. As the reserves of member banks are now carried exclusively with the Federal Reserve Banks, the designation of any city as a reserve city relates only to the percentage of reserve which must be carried by the member banks located therein. The Board has retained the old classification of central reserve and reserve cities and has also designated as reserve cities, making the banks therein subject to increased reserve requirements, the cities of Buffalo, N. Y.; Grand Rapids, Mich.; Memphis, Tenn.; Oakland, Cal.; Ogden, Utah; Peoria, 111.; Toledo, Ohio; and Tulsa, Okla. Without this classification the banks in those cities would have continued to carry the reserve prescribed for country banks—7 per cent—and the Board deemed it equitable to bring their reserves up to the requirements of other cities of their class. The three central reserve cities under the old national banking laws—New York, Chicago, and St. Louis—have been continued in that classification, and the member banks of those cities are required to carry the maximum reserve of 13 per cent. Philadelphia and Boston, although important banking centers, each having a greater population than the city of St. Louis, continue to be classified as reserve cities, and reserves of 10 per cent only are required of the banks located therein. It is difficult to make an equitable and uniform adjustment of reserves under the present law, and the Board is making a careful study of the subject, with the view of considering a recommendation to Congress at a later date of a change in the law which would provide for a differential in reserves to be carried in all towns and cities alike upon certain classes of deposits, with a minimum for time deposits, a maximum for bank deposits, and an intermediate percentage for individual or commercial deposits subject to check. This is a matter, however, which will require careful study and analysis, and the Board is not prepared at the moment to make a recommendation for a change of the law in this respect. The Board desires, however, to call attention to the situation of many banks located in outlying districts of larger cities, or in boroughs, formerly independent municipalities, which are now parts of a greater city. The business of these banks is often local, and it is suggested that Congress authorize the Board to classify banks in outlying districts of large cities as though they were located in independent municipalities. ANNUAL REPORT OF THE FEDERAL RESERVE BOARD. 31 OTHER AMENDMENTS SUGGESTED. The Board sees no occasion at this time to recommend any material changes in the act. It would suggest, however, the following for the consideration of Congress: (1) An amendment of section 4 relating to the election of directors. The law provides that the member banks shall be classified into three general groups or divisions, each group to contain as nearly as may be one-third of the aggregate number of member banks of the district and to consist as nearly as possible of banks of similar capitalization, and that each member bank shall elect by ballot a district reserve elector, and it provides also that each director shall signify his first, second, and third choice, the second and third choice votes being counted in cases where no candidate has received a majority of first-choice votes. This system, which is designed to secure a representative board of directors, is complicated and has resulted in many cases in the choice of directors by a very small minority of the banks. Most of the banks since 1914 have neglected to choose district electors, and there seems to be no reason why the directors of each bank should not be permitted to authorize the president or cashier to cast the vote of the bank. The Board has ruled that electors once chosen may continue to serve until their successors are elected, but since the first year the banks have not as a rule participated fully in these elections. In the election held in December, 1917, by the various groups in the respective districts in nearly every case less than one-half of the banks participated. In the New York district 84 votes were cast out of a total of 224 in the group; in the Richmond district, 72 out of 172; in the Atlanta district, 66 out of 140; in the Chicago district, 86 out of 360; in the St. Louis district 35 out of 162; in the Minneapolis district, 45 out of 283; in the Dallas district, 15 out of 201; in the San Francisco district, 71 out of 178; and in one instance the successful candidate was chosen by 15 votes out of a possible total of 201, and in another by 26 votes out of 162. The Board would suggest, in order to simplify elections, that this section be amended by permitting each member bank, through its president or cashier, to cast a vote for director, and that there be no requirement that the groups be as nearly equal numerically as may be, but that the grouping be left to the discretion of the Federal Reserve Board. The average capitalization of the banks differs so greatly in the various districts that it is impossible to carry out the evident intent of Congress to give the large banks, the medium-size banks, and the small banks equal representation unless the banks can be 32 ANNUAL REPORT OF THE FEDERAL RESERVE BOARD. grouped more strictly with reference to their capitalization than is possible under the law as it now stands. (2) An amendment of section 16, which now permits Federal Reserve notes to be issued in denominations of $5, $10, $20, $50, and $100 only, so as to permit their issue in the larger denominations of $500, $1,000, $5,000, and $10,000. It is thought that such an amendment would tend to increase the gold holdings of the Federal Reserve Banks, particularly those in the larger financial centers. The Federal Reserve Banks receive gold at the present time chiefly from two sources—by registered mail or express from National or State banks, and over the counter in cases where new currency in convenient denominations is required for pay rolls or for other purposes. All avenues for loss of gold are now under control, except direct withdrawals over the counter, and an analysis of counter transactions at some of the Federal Reserve Banks discloses the fact that from $100,000 to $1,000,000 of gold certificates are paid out every business day mainly because many member banks prefer to keep as part of their vault money notes of large denominations, which can now be furnished only in the form of gold certificates. (3) An amendment of section 22. This is a penal section, not altogether definite in its terms, and the Board is constantly receiving requests for an authoritative construction. It has, however, uniformly adhered to the position that a section of this character can be construed only by the courts, and has declined in all cases to express any opinion as to the liability which might be incurred by any bank which acted upon an incorrect interpretation. As amended on June 21 this section permits transactions relating to the discount of notes, drafts, or bills of exchange by a director with his own bank, upon the affirmative vote or written consent of at least a majority of the board of directors of the bank; but there are other transactions, such as the purchase by directors of goods or property taken by the bank for debt, which might in some circumstances be permitted by affirmative vote of not less than three-fourths of its directors. There may be times when a bank can best save itself from loss by being permitted to have a transaction of this kind with one of its own directors. (4) An amendment of section 25 to provide for the Federal incorporation of banking associations whose stock is owned by national banks which operate under the control of the Federal Reserve Banks and which are engaged solely in international and foreign banking. The present law permits any national bank to invest an amount not exceeding in the aggregate 10 per cent of its paid in capital stock and surplus in the stock of one or more banks or corporations chartered or incorporated under the laws of the United States or any State thereof, and principally engaged in international or foreign banking, or banking in a dependency or insular possession of the ANNUAL REPORT OF THE FEDERAL RESERVE BOARD. 33 United States. This language appears to indicate an intention by Congress to permit incorporation under the laws of the United States, and several national banks have become stockholders in banks which have been organized under State laws for the purpose of carrying on a foreign banking business in accordance with the terms of this section. The arguments in favor of Federal incorporation are: (a) The time will probably come when the conflict of the dual control exercised by the Federal Keserve Board and by the banking department of a State may be a matter of embarrassment or operate to restrict the activities of the banking corporation. (&) Such a banking corporation, being essentially a national enterprise, whose stock ownership by national banks was authorized by an act of Congress, would appear to be entitled to the benefits and protection of a Federal charter, which would be of great value in competing for business in foreign countries. (5) An amendment of sections 5208 and 5209 of the Eevised Statutes. These are penal sections relating to the overcertification of checks, to embezzlement, abstraction or willful misapplication of moneys, funds, or credits of national banks by officers, directors, agents, or employees of national banks, and to false entries in books, reports, or statements of national banks with intent to injure or defraud on the part of any officer, director, agent, or employee of a national bank. It is suggested that these sections be amended so as to apply to similar acts committed by officers, directors, agents, or employees of Federal Reserve Banks. (6) An amendment of section 25 to provide-that any national bank located in a city or incorporated town of more than 100,000 inhabitants, and possessing a capital and surplus of $1,000,000 or more, may, under such rules and regulations as the Federal Reserve Board may prescribe, establish branches, not to exceed 10 in number, within the corporate limits of the city or town in which it is located, provided that no such branch shall be established in any State in which neither State banks nor trust companies may lawfully establish branches. State banks which become members of the Federal Reserve system are allowed by law to retain any branches which may already be in existence and, with the approval of the Board, to establish new branches. National banks which have taken over State banks having branches are permitted to continue the operation of these branches. There seems to be no reason for such discrimination between members of the Federal Reserve system, and with the view of placing them more nearly upon terms of equality, besides affording in many cases better service to the public, it is recommended that provision be made for the establishment of branches by national banks, under proper limitations. 34 ANNUAL REPORT OF THE FEDERAL RESERVE BOARD. ORGANIZATION, STAFF, AND EXPENDITURES. There have been no changes in the organization of the Board during the past year. The growth of the system and the expansion of the work of the Board have required some additions to its clerical and examining force. There have been some minor changes due mainly to the fact that several of the Board's staff have engaged in military service, but the Board has thus far been able to fill their places satisfactorily. There are now 76 persons on the staff of the Board. The total cost of conducting its work during the year 1917, including printing of the Bulletin and salaries of members, was $249,302,220. Two assessments totaling $237,776.82 were levied upon the Federal Reserve Banks for the year 1917. This amounts to 0.4 per cent of their average paid-in capital for the year. The cost of operating the gold-settlement fund for the year 1917 was $3,539.79, as compared with $1,343.37 in 1916, the net cost being 0.013 cents per $1,000, as against 0.025 cents the previous year. Further details relating to the operation of the Federal Reserve Board and of the system will appear as exhibits in the appendix of this report, as will the annual reports of the Federal Reserve agents. CONCLUSION. The Federal Reserve system is to-day the ultimate resource of the business and financial community, and its position as such is unquestioned. I t is the Nation's banking reserve and through its control of discount rates its influence in the money market is paramount. The Federal Reserve Board, as the governing body of the system, is charged with the responsibility of so administering it as most effectively to aid the Government in its financial operations, while at the same time assuring beyond peradventure the maintenance of sound and solvent banking conditions. Every step taken and every policy decided upon must be with the view not only of maintaining and strengthening the financial position of the country in these critical times but also of providing for the readjustments which must follow the war. The Board has a profound appreciation of the serious nature of its responsibilities, and its purpose is to exercise its powers and direct the policies of the Federal Reserve system so that, while always rendering the fullest measure of patriotic service, the system shall never fail to arouse the confidence and sense of security which it now inspires as the country's great financial bulwark. By direction of the Federal Reserve Board. W. P. G. HARDING, Governor. The SPEAKER OF THE HOUSE OF REPRESENTATIVES. EXHIBITS. 35 Exhibit A.—DISCOUNT RATES. Changes in discount rates during calendar year 1917. DISCOUNTS, INCLUDING MEMBER BANKS' COLLATERAL NOTES, MATURING WITHIN 15 DAYS. Bank. Boston New York Philadelphia Cleveland.. Richmond Atlanta Chicago St. Louis Minneapolis Kansas City Dallas San Francisco Nov.— Mar.— In effect Jan. Jan. 1, 24. 1917. 1 15 21 14 3 Dec— Apr. May June 10. 11. 23. 26 1 30 5 10 11 In effect Jan. 1, 1918. 21 A S* 1 3i 3i 3 31 31 1 4 4 4 4 4 24 24 4 4 Si 4 4 3i 31 4 4 24 34 4 31 4 4 4 4 4 4 31 4 4 3* 4 1 Discounts maturing within 10 days, 31 per cent. 2 Member banks' collateral notes maturing within 15 days, 3J per cent. 3 Discounts maturing within 10 days, 3 per cent, and from 11 to 30 days, 31 per cent. P A P E R , INCLUDING MEMBER BANKS' COLLATERAL NOTES, SECURED BY U N I T E D STATES CERTIFICATES OF INDEBTEDNESS OR L I B E R T Y LOAN BONDS MATURING W I T H I N 15 DAYS. May— Dec— June— Sept. Nov. 25. 30. Bank. .7 Boston.... New York 1 Philadelphia Cleveland Richmond Atlanta . Chicago St. Louis Minneapolis Kansas City Dallas San Francisco 8 10 19 22 23 25 1 11 12 3 5 21 3* 3 31 3 3 31 31 31 31 3 3| 34- 3 3 3i 3i 31 In effect Jan. 1, 1918. 31 31 31 3* 31 31 31 31 31 31 31 31 1 Rate of 2 to 4 per cent on member banks' 1-day collateral notes in connection with the loan operations of the Government established May 25,1917, and raised to 3-41 per cent Dec. 7,1917. 37 38 ANNUAL REPORT OF THE FEDERAL RESERVE BOARD. Changes in discount rates during calendar year 1917—Continued. PAPER SECURED BY UNITED STATES CERTIFICATES OF INDEBTEDNESS OR LIBERTY LOAN BONDS MATURING WITHIN 16 TO 90 DAYS. May— June— Nov.— 22 Boston New York Philadelphia.. Cleveland Richmond Atlanta Chicago St. Louis Minneapolis... Kansas City.. Dallas San Francisco. 23 25 24 28 1 4 12 Dec— Sept. 25. Bank. 15 25 26 30 1 5 3 31 In effect 11 21 4 ! 4 4 4 3i i 4 3\ 3i ' 1 4 1 3£ 4 3*- 4 | 3?r ; 4 4 3\ i 3-| i I 4 4 3} i J a n . 1, 1918. 4 4 4 4 4 4 4 4 4 4 4 4 i PAPER MATURING WITHIN 16 TO 60 DAYS, INCLUSIVE. In effect Jan. 1, 1917. Bank. Boston New York Philadelphia Cleveland Richmond Atlanta Chicago St. Louis Minneapolis Kansas City Dallas San Francisco T Mar. 1 No ^ .—26 4 4 4 Dec— 30 1 ; 5 10 11 12 21 4V In effect Jan. 1, 1918. 5 4} 41 14 4 4 41 41 41 41 4141 41 4 4 41 41 41 41 4 41 I 4 Ah 4 41 41 4-1 " | 1 Rate of 41 per cent for paper maturing within 31 to 60 days. PAPER MATURING WITHIN 61 TO 90 DAYS. Bank. Boston New York Philadelphia Cleveland R ich mond Atlanta Chicago St Lonis TTfrncQc C l t v Dallas San Francisco In effect Jan. 1, 1917. 4 4 4 41 4 4 Jar 15 Nov.— 24 I 7 26 Dec— ! 30 5 12 | 21 5 41 5 41 41 41 1 41 | 4* 41 41 ' 5 41 4 41 41 41 | 5 i 41 41 41 5 4 In effect J a n . 1, 1918. ; i 5 41 41 41 39 ANNUAL REPORT OF THE FEDERAL RESERVE BOARD. Changes in discount rates during calendar year 1917—Continued. AGRICULTURAL AND LIVE-STOCK-PAPER MATURING AFTER 90 DAYS. Dec— In effect Bank. Jan. 1, 1917. Boston New York Philadelphia Cleveland Richmond Atlanta Chicago St Louis Minneapolis Kansas City Dallas San Francisco . . Jan. 24. In effect Jan. 1, 1918. Nov. 30. Feb. 9. 11 5 5 5 5 5 5 5 5 5 . . . 5 5 5 5£ 5 51 5 5 51 5 5 41 j 5 5 TRADE ACCEPTANCES MATURING WITHIN 1 TO 60 DAYS. In effect Bank. Dec— Jan. 1, 1917. Boston.. New York Philadelphia Cleveland Richmond A tlanta Chicago St Louis Minneapolis Kansas City Dallas San Francisco Jan. Mar. Apr. June Nov. 1 16 5 26 30 1 ! 11 10 7 21 4 31 4 4 1 ' 31 3J 31 31 31 3 i 4 31 24 : 4 4 3: 4 4 31 4 1 ; Sx 4 4 4 4 4 4: 3 In effect Jan. 1, 1918. . 4 4 i 1 Rate of 3 per cent for paper maturing within 30 days. Rate of 4 per cent for paper mauring 16-60 days effective Nov. 26. TRADE ACCEPTANCES MATURING WITHIN 61 TO 90 DAYS. 2 Boston New York... Philadelphia Cleveland Richmond Atlanta . Chicago St Louis Minneapolis Kansas City Dallas San Francisco.. Dec— Nov.— In Bank. effect Apr. June 4 26 Jan. 1, 1917. Oct. 20 26 30 1 5 11 4 3i 31 4 4 Sh2 4 4 3a 3J 31 31 31 4 31 31 21 4 4 4 4 4 1 4 j In effect Jan. 1, 1918. 4 4 4 4 4 4 4 4 4 4 4 4 40 ANNUAL REPORT OF THE FEDERAL RESERVE BOARD. Changes in discount rates during calendar year 1917—Continued. COMMODITY PAPER MATURING WITHIN 90 DAYS. Bank. Boston New York. Philadelphia . Cleveland. Richmond Atlanta Chicago St Louis Minneapolis Kansas City . Dallas . . San Francisco In effect Jan. 1, 1917. Jan.— Apr.— Mar. 1 15 24 Oct. 20 4 Dec. 5 16 Dec. 5 4 Nov. 2 Do. Nov. 5 Nov. 2 3* 4 3J 3 Si 3* 4 . . 4i 4 3 (3) Nov. 7 Dec. 11 Nov. 5 Nov. 2 Do. 1 Rates for commodity paper merged with those for commercial paper of corresponding maturities on dates specified. 2 Commodity paper rates for bills maturing within 30 days, 3J per cent; 31 to 60 days, 4 per cent; 61 to 90 days, 4fc per cent; 91 days to 6 months, 5 per cent. 3 Rate of 3J per cent for paper maturing within 60 days and 4 per cent for paper maturing after 60 days 1 t within 90 days. NOTE.—Rates for acceptances purchased in open market, which ranged from 2 to 4 per cent for all deral Reserve Banks on January 1, had risen to 3 to 4J per cent by the end of the year at all Federal jserve Banks except Boston, Chicago, and Minneapolis, whose rates ranged from 3 to 5 per cent. Discount rates (high and low) in force during the period from Nov. 16, 1914, to Dec. 31, 1917. MATURITIES. Within 10 days. 11 to 30 days. Within 15 days, including member banks' collateral notes. 16 to 30 days. 31 to 60 days. 61 to 90 days. Over 90 days. Trade Trade acacceptances ceptances, within 60 61 to 90 days. days. Commodity paper within 190 days. High. Low. High. Low. High. Low. High. Low. High. Low. High. Low. High. Low. High. Low. High. Low. High. Low. 6 4 4 54 3 3 3 54 4 CO CO CO 6 4 5 5 5 34 34 4 34 3 34 34 34 4 34 3 34 34 5 4 6 4 44 4 4 4 6 4 44 4 4 4 6 5 5 5 5 5 34 34 4 34 34 34 34 34 4 34 34 34 3 44 4 6 4 44 4 4 4 6 4 44 4 4 4 6 44 5 44 44 44 3 34 4 3 3 34 3 34 4 3 3 34 3 44 4 6 44 44 4 4 4 6 44 44 44 44 44 6 5 5 5 5 5 34 34 4 34 3 3 4 4 4 4 34 4 34 44 6 4 6 4 6 5 44 44 34 34 4 34 34 34 4 4 4 4 34 34 4 4 4 34 44 4 44 4 44 4 44 34 4 4 34 34 4 3 3 34 CO CO 4 4 6 5 5 4 4 4 6 4 4 4 4 4 4 4 6 4 6 4 5 CO 54 4 4 4 4 4 4 34 5434 4 6 4 5 4 34 CO 3 3 CO 6 34 CO Boston: Nov. 16,1914, to Dec. 31, 1915 Jan. 1,1916, to Dec. 31,1916 Jan. 1,1917, to Dec. 31,1917 New York: Nov. 16,1914, to Dec. 31,1915 Jan. 1,1916, to Dec. 31,1916 Jan. 1,1917, to Dec. 31,1917 Philadelphia: Nov. 16,1914, to Dec 31 1915 Jan. 1,1916, to Dec. 31,1916 Jan. 1,1917, to Dec. 31,1917 Cleveland: Nov. 16,1914, to Dec. 31, 1915 Jan. 1,1916, to Dec. 31,1916 Jan. 1,1917, to Dec. 31,1917 Kichmond: Nov. 16,1914, to Dec. 31, 1915 Tan 1 1916 to DPP ^1 lQlfi Jan. 1,1917, to Dec. 31,1917 4 4 3 - 3 3 34 34 34 I Discount rates (high and low) in force during the period from Nov. 16, 1914, to Dec. JJ, 1917—Continued. to MATURITIE S—Continued. 16 to 30 days. 31 to 60 days. 61 to 90 days. Over 90 days. Trade Trade ac- Commodity paper acceptances ceptances, within 190 within 60 61 to 90 days. days. days. 3 4 41 4 4 6 4 4 ' 4 4 4 6 4 4 4 4 4 4 4 i 41 4 4 4 4 4 41 4 4 4 41 41 4 41 5 41 51 4 6 4 5 4 5 5 5 5 41 41 41 5 41 41 41 51 5 5 5 41 41 4 4 41 61 5 5 5 5 5 4 41 4i 6 61 5 4 31 31 & a 31 31 31 31 31 4 31 3a- 31 31 3.1, 4 31 3 3 4 3V 3 31 31 31 31 31 31 31 31 31 4 4 31 31 4 31 4* C 6 41 6 4 41 4 4 31 3* 6 41 5 3-J CO 41 6 6 41 4 4 4 6 41 4 4 31 31 CO 6 31 6 4 31 31 31 CO 4 4 31 31 CO 4 41 41 5 5 CO 4 4 5 5 CO 4 4* 61 4 C' 6 31 61 4 41 CO CO 6 CO 4 4 CO 4 4 MM 4 4 CO 6 4 CO 4 4 CO T i n 1 1917 t o D e c 31 1917 6 4 CO Atlanta: Nov. 16,1914, to Dec. 31,1915 Jan. 1,1916, to Dec. 31,1916 . Jan. 1,1917, to Dec. 31,1917 Chicago: Nov. 16,1914, to Dec. 31,1915 Jan. 1,1916, to Dec. 31,1916 Jan. 1,1917, to Dec. 31,1917 St. Louis: Nor. 16,1914, to Dec. 31,1915. Jan. 1,1916, to Dec. 31,1916 Jan. 1,1917, to Dec. 31,1917 . Minneapolis: Nov. 16,1914, to Dec. 31,1915 Jan. 1,1916, to Dec. 31,1916.. Jan 1 1917 to Dec 31 1917 Kansas City: Nov. 16,19i4, to Dec. 31,1915 Jan. 1,1916, to Dec. 31,1916 L o w . High. Low. CO MM High. Low. High. Low. High. Low. High. Low. High. Low. High. Low. High. Low. High. Low. High. CO 11 to 30 days. CO Within 10 days. Within 15 days, including member banks' collateral notes. 31 3 4 4 3 3 fed W o i Dallas: Nov. 16,1914, to Dec. 31,1915 Jan. l, 1916, to Dec. 31,1916 J£ Jan. 1,1917, to Dec. 31,1917 §§ San Francisco: Nov. 16,1914, to Dec. 31,1915 Jan. 1,1916, to Dec. 31,1916 Jan. l, 1917, to Dec. 31,1917 1917. 4 4 4 64 4 4 4 44 34 64 4 44 34 64 34 34 34 34 1 4 4 4 5 44 44 44 64 6 6 54 34 34 54 5V 3 3 4 34 (2) 34 (2) 3 (2) 64 44 44 4 4 4 64 % 14 44 44 44 4 i 34 34 3 3 34 Commodity rates were established during September and October, 1915, and merged with those for commercial paper of corresponding maturities in November and December, 2 Commodity paper rates for bills maturing within 30 days, 34 per cent; 31 to 60 days, 4 per cent; 61 to 90 days, 44 per cent. 3 Oct. 20,1917, rate of 3i per cent for commodity paper maturing within 60 days and 4 per cent for paper maturing after 60 days but within 90 days. w o w H o ft w r w w o Co Exhibit B.—FEDERAL RESERVE NOTES. Net amount of Federal Reserve notes received from the Comptroller of the Currency, issued to each Federal Reserve Bank, and in actual circulation; gold and eligible paper held by each Federal Reserve Agent, also amounts of Federal Reserve notes held by*each Federal Reserve Bank on the last Friday in each month during the calendar year 1917. [In thousands of dollars; i. e., 000's omitted.] New York. Philadelphia. Cleveland. 21,108 25,254 24,724 30,133 29,390 39,960 44,841 50,296 56,074 64,651 74,221 83,817 125,510 184,546 231,590 261,494 310,620 350,352 367,890 377,492 394,620 426,744 490,337 553,939 24,140 30,376 31,510 35,273 48,713 51,846 56,705 60,472 62,118 78,360 95,435 107,486 13,614 19,132 22,345 26,859 29,974 42,068 45,820 57,464 63,684 75,155 94,435 119,650 22,098 21,125 20,337 19,722 19,694 20,606 21,245 25,094 34,191 45,993 58,485 62,680 31,291 31,800 31,227 30,791 30,335 29,796 30,303 30,621 41,358 50,179 70,097 78,757 10,161 15,833 30,679 49,003 62,816 94,383 103,553 113,788 129,397 146,532 185,658 226,080 19,803 19,267 19,350 20,422 20,668 21,639 25,188 27,194 31,927 48,372 61,738 64,153 25,506 30,864 28,716 29,013 29,205 30,662 32,452 31,660 38,691 48, 711 52,283 55,606 25,807 26,161 33,981 35,762 34,295 35,680 35,111 37,105 40,042 46,260 59,375 66,862 30,257 29,373 29,107 29,049 28,405 27,790 27,404 32,815 43,766 52,686 55,689 56,242 13,898 14,694 17,124 21,383 22,640 27,460 107,490 134,546 165,910 193,594 208,620 229,252 16,880 21,136 25,710 30,433 33,373 41,906 10,514 13,232 15,645 21,919 27,334 34,428 18,098 17,225 16,737 16,522 17,014 17,496 23,156 21,415 20,422 19,836 19,130 19,391 7,161 13,333 25,139 40,303 52,476 67,763 16, 763 16,227 15,010 15,482 16,408 17,979 19,886 20,344 20,271 22,563 23,365 24,772 20,849 22,623 23,223 24,992 25,955 26,140 22,271 Boston. Federal Reserve notes received from the Comptroller of the Currency less returned for destruction: Jan. 26 Feb. 23 Mar.30 Apr.27 May 25 June 29 July 27 Aug. 31 Sept. 28 Oct. 26 Nov.30 Dec. 28 Federal Reserve notes issued to Federal Reserve Banks (net amount): Jan. 26 : Feb. 23 Mar.30 Apr.27 May 25 June 29 Richmond. Atlanta. Chicago. St. Louis. Minneapolis. Kansas City. Dallas. San Francisco. Total. 73,905 365,022 449,939 519,783 586,475 665, 969 769,170 816,615 872,436 972,351 1,122,777 1,356,155 1,549,177 14,727 291,693 15,727 16,208 16,217 18,954 21,854 24,388 26,103 28,435 36,483 39,134 58,402 20,486 16,208 331,469 21,156 16,217 382,564 20,563 18,954 446,544 19,919 21,854 488,088 19,529 24,388 550,504 3 W W O July 27 Aug. 31 Sept. 28 Oct. 26 Nov. 30 Bee. 28 Gold coin and certificates held by or to credit of Federal Reserve agent: Jan. 26 Feb. 23 Mar. 30 Apr. 27 May 25 June 29 July 27 Aug. 31 Sept. 28 Oct. 26 Nov. 30 Dec. 28 Eligible paper held by Federal Reserve agent: Jan. 26 Feb. 23 Mar. 30 Apr. 27 May 25 June 29 July 27 Aug. 31 Sept. 28 Oct. 26 Nov. 30 Dec. 28 31,891 35,796 40,674 51.251 63.641 74,297 13,898 14, 694 17,124 21,383 22,640 22,460 21,891 25, 796 25,623 35,371 29,921 37,897 5,026 10,116 10,017 15,069 15,899 33,758 36,668 315, 224 376,917 456,339 42,205 45,472 53,318 63,320 81,355 97,326 39,880 44,024 52,244 64,215 80,495 105,710 18,155 21,994 31,871 44,313 55,485 60,840 21,563 24,661 34,428 47,069 59,157 66,887 73,653 84,688 99,497 116,632 147,358 187,780 20,368 23,204 28,317 41,322 58,828 61,863 25,862 26,870 32,761 40,421 47,193 51,016 25,671 27,825 30,162 37,580 49,475 58,062 18,943 24,370 35,021 42,906 48,039 47,727 584,464 26,103 28,435 644, 911 757,076 36,483 39,134 903,387 58,402 1,126,345 73,905 1,341,752 107,490 134,546 165,910 193,594 208,620 139,252 173,670 208,072' 212,300 187,224 171,097 250,599 16,880 17,076 22,360 26,283 30,463 33,606 32,905 32,072 40,418 48,220 52,025 56,946 10,514 13,232 15,645 21,919 27,334 34,428 30,880 33,024 36,244 47,715 51,995 55,410 13,808 10,565 10,209 5,935 5,655 7,318 7,483 8,714 15,955 28,729 31,867 31,602 18,525 17,634 17,591 17,265 16,859 16,320 18,072 20,650 30,117 40,058 42,341 49,821 7,161 13,333 25,139 40,303 52,476 62,003 56,653 70,568 88,537 81,372 104,783 124,400 12,416 12,380 11,663 13,435 9,781 9,472 14,911 16,537 17,270 27,075 45,831 32,366 17,386 17,244 16,971 20,553 19,205 21,576 21,366 16,274 21,965 35,625 34,197 31,920 18,914 18,788 21,818 24,046 24,090 14,830 14,635 17,428 20,748 30,620 30,146 42,052 21,601 20,486 20,019 19,235 17,634 16,986 15,624 15,615 22,471 26,303 29,023 25,037 14,727 16,208 16,219 18,954 21,854 24,388 26,103 28,435 26,579 26,380 38,598 43,801 273,320 306, 186 360, 668 422, 905 456, 611 402, 639 434, 193 493, 185 558, 227 614, 692 661. 824 781, 851 90,523 77,860 50,155 70,822 133,130 207,362 213,400 4,062 3,390 4,186 2,917 8,306 9,301 13,404 12,906 15,105 29,359 40,981 9,069 11,000 16,012 16,508 29,558 50,825 4,649 8,119 6,728 11,285 11,987 14,134 18,389 16,428 19,182 17,051 30,147 43,386 4,655 3,809 2,856 2,575 2,279 3,078 3,498 4,017 4,329 9,331 16,875 17,805 5,876 17,199 14,339 11,178 35,783 43,186 64,133 4,347 3,850 3,352 2,053 6,635 8,513 5,462 6,670 11,054 14,258 13,012 38,765 2,500 3,100 3,300 2,010 4,160 3,196 4,496 10,596 11,139 8,886 13,392 19,836 1,941 3,836 1,423 1,114 1,892 11,528 11,099 10,402 9,992 7,380 19,777 16,244 1,023 1,842 2,001 2,758 2,815 3,218 4,175 9,191 12,647 17,297 20,000 23,241 10,137 13,076 34,506 41,421 19. 115 28, 618 23. 050 25, 32, 153, 170,664 156,219 204,467 3033 704 490, 932 606, 705 240,170 257,572 282,300 Net amount of Federal Reserve notes received from the Comptroller of the Currency, issued to each Federal Reserve Bank, and in actual circulation; gold and eligible paper held by each Federal Reserve Agent, also amounts of Federal Reserve notes held by each Federal Reserve Bank on the last Friday in each month during the calendar year 1917—Continued. [In thousands of dollars; i. e., 000's omitted.] Boston. NewYork. Philadelphia. Cleveland. Richmond. Atlanta. Chicago. St. Louis. Minneapolis. Kansas City. Dallas. San Francisco. Total. Federal Reserve notes held b y b a n k s : Jan. 26 ! 1 ; 069 18,927 1,342 541 734 1,695 702 2,642 Ill 276 Feb. 23 ! 839 14,958 974 859 620 846 2, 738 1,020 654 236 Mar. 30 ! 1,754 10,035 1,529 753 818 942 4,559 828 401 Apr. 27 | 2, 772 10,974 1,364 I 1,397 776 785 4,061 850 490 2,108 589 1,266 224 May 25 j 2,051 17, 225 729 I 1,699 965 502 5,425 828 974 932 246 J u n e 29 j 2,993 2,446 31,925 1,896 1,098 2,010 24,954 28,298 26,035 2,930 22,080 2,202 I 1,512 712 544 6,029 928 742 1,060 797 429 2,660 33,686 41,697 July 27 5,407 26,988 780 2,398 609 1,65:5 4,841 1,966 1,593 726 482 Aug. 31 5,381 27,948 2,269 1,642 635 1,559 5,930 1,510 2,385 3,665 398 3,006 3,674 50, 449 56,996 3,759 25,901 2,291 2, 754 2,714 1,910 4,664 3,217 1,417 1,522 4,488 2,997 292 6,710 4,574 56,864 3,707 1,872 1,182 212 26,426 1,846 2,740 2,231 3,319 2,198 34,581 3,720 3,585 1,912 1,355 4, 795 342 7,922 59,369 3,683 3,489 2,645 1,379 9,695 1,408 1,412 2,782 2,083 4, 762 1,590 2,763 551 6,605 69,3H2 95,264 16,061 15,207 14,160 14,992 15,480 17,237 18,402 21,694 26,471 38,582 54,066 60,273 17,244 20, 738 21,995 11,734 18,236 21,969 20,250 13,762 Sept. 28 Oct. 26 Nov. 30 1 ...j Dec. 28 ! 55, 8S1 Federal Reservenotesissuedbyeach Federal I Reserve B a n k a n d in actual circulation: Jan. 26 12,829 88,563 15,538 9,621 17,557 22,422 5,466 Feb. 23 13,8.55 119,588 20,162 12,373 16,605 20,569 10,595 Mar. 30 15,370 155,875 24,181 14,892 15,919 19,480 20,580 Apr. 27 18,611 182,620 29,069 20,522 15, 746 19,051 36,242 May 25 20,589 191,395 32,644 25,635 16,049 18,628 47,051 June 29 24,530 207,172 39,704 32,916 16, 784 18,847 61, 734 July 27 26,484 213,182 41,425 37,482 17,546 19,910 68,812 Aug. 31 30,415 229,624 43, 203 42,382 21,359 23,102 78, 758 Sept. 28 36,915 256,399 51,027 49,490 29,157 32,518 94,833 Oct. 26 47,932 288, 798 59, 613 60,998 42,896 45,547 112,144 Nov. 30 61,443 342,336 77,635 76,910 53,573 57,802 142,563 Dec. 28 72,214 396,970 93,643 102, 221 58,195 65,508 178, 085 259,768 503,171 19,682 22,395 20,755 21,735 23,726 20,339 14,321 17,856 22,391 25,023 19,673 19,844 357,610 420,509 454,402 23,712 25,343 19,100 21,728 508,807 24,269 24,945 18,461 24,485 24,160 23,972 23,097 24, 761 534,015 587,915 30,889 27,931 34,809 39,239 34,583 42,614 29,773 34,560 700,212 847,506 45,785 46,693 47,697 50,480 1,056,983 49,604 55,299 47,176 67,300 1, 246,488 ANNUAL BEPOBT OF THE FEREBAL BESEKVE BOABD. 47 Federal Reserve notes outstanding (i. e.t net amount issued to banks), in actual circula" tion, and gold and paper collateral held by Federal Reserve Agents against outstanding notes. [In thousands of dollars; i. e., 000's omitted.] Paper collateral for notes Gold cover for notes issued. Federal Federal Federal Reserve notes Reserve In gold In gold notes Reserve issued to Gold redempheld by notes in Federal and tion settleActual cirExcess ment Federal Reserve coin Total Amount amount of paper Reserve actual fund, fund, culation. Banks, certificates United Federal gold. required. held. Banks. held. net in States amount. vault. Treas-' Reserve urer. Board. 1917. Jan. 5 12 18-19.. '26 Feb. 2 9 16 23 Mar. 2 9 16 23 30 Apr. 5-6 13 20 27 May 4 11 18 25 . June 1 8 15 22 29..-.'. July ' 6 "13 20 27 Aug. 3 10 17 24 31 Sept. 7 14 21.... 28.... Oct. 5 11-12.. 19 26 300,280 293,440 292,014 291,693 290,577 308,348 321,453 331,469 343,847 355,263 363,278 372,244 382,564 400^ 698 431,788 440, 539 446,544 458,874 470,401 478,906 488,088 499,844 512,527 527,971 539,976 550,504 570, 725 579,957 583,937 584,464 590,389 601,227 613,646 627,307 644,911 680,073 700,430 725,397 757,076 797,630 837,425 875,278 903,387 166,827 162,877 163,877 166,174 166,374 178,344 188,144 194,094 204,194 212,094 218,609 219,836 222,377 234,573 248,313 252,194 253,944 258,885 261,025 264,635 264,468 271,365 273,682 255,674 187,667 198,239 203,120 218,118 218,358 230,331 262,328 277,698 287,793 269,015 269,170 256,127 272,682 278,534 276,645 269,471 274,221 282,351 267,166 14,855 14,125 13,554 13,436 12,650 15,126 15,006 14,722 15,587 14,959 15,379 14,353 17,631 17,697 18,583 18,644 20,931 20,634 21,028 20,596 23,233 23,314 24,339 24,538 24,268 23,620 22,805 23,190 22,801 21,568 22,864 24,676 25,051 25,780 24,974 25,232 26,452 28,801 28,028 29,097 30,430 31,604 33,204 99,610 97,510 95,710 93,710 95,050 95,250 94,120 96,560 97,800 101,380 104,620 115,330 120,660 126,180 143,900 147,700 148,030 153,570 156,270 163,080 168,910 172,290 177,180 1;79,730 178,830 180,780 187,790 187,030 182,730 182,294 182,653 183,093 189,744 193,741 199,041 213,420 221,336 228,674 253,554 261,543 276,083 304,872 314,322 281,292 274,512 273,141 273,320 274,074 288,720 297,270 306,186 317,581 328,433 338,608 349,519 360,668 $78,450 410,796 418,538 422,905 433,089 438,323 448,311 456,611 466,969 475,201 459,942 390,765 402,639 413,715 428,338 423,889 434,193 467,845 485,467 502,588 488,536 493,185 494,779 520,470 536,009 558,227 560, 111 580,734 618,827 614,692 18,988 18,928 18,873 18,373 16,503 19,628 24,183 25,283 26,266 26,830 24,670 22,725 21,898 22,253 20,998 22,001 23,639 25,785 32,078 30,595 31,477 32,875 37,326 68,029 149,211 147,865 157,010 151,619 160,048 150,271 122,544 115,760 111,058 138,771 151,726 185,294 179,960 189,328 198,849 237,519 256,691 256,451 288,695 20,272 20,845 20,366 19,115 19,692 21,715 26,746 28,618 28,700 29,686 26,189 24,386 23,050 23,554 22,594 23,826 25,981 27,343 32,776 32,421 32,685 34,441 37,930 69,151 153,136 153,398 162,733 158,473 168,233 170,664 133,478 125,588 120,711 146,664 156,219 187,218 192,200 198,887 204,467 248,912 263,164 270,185 303,704 1,284 1,917 1,493 742 3,189 2,087 2,563 3,335 2,424 2,856 1,519 1,661 1,152 1,301 1,596 1,825 2,342 1,558 698 1,826 1,208 1,566 606 1,122 3,925 5,533 5,723 6,854 8,185 20,393 10,934 9,828 9,653 7,893 4,493 1,924 12,240 9,559 5,618 11,393 6,473 13, 734 15,009 27,407 25,272 29,047 31,925 30,547 29,825 29,614 28,298 29,589 28,651 27,217 25,440 24,799 24,188 29,979 26,182 26,035 30,372 32,183 32,405 33,686 34,979 31,058 36,356 40,255 41,697 43,266 47,449 49,711 50,449 49,604 51,983 54,864 54,258 56,996 58,774 55,863 55,151 56,864 56,714 57,540 60,068 55,881 272,873 268,168 262,967 259,768 260,030 278,523 291,839 303,171 314,258 326,612 336,061 346,804 357, 765 3fl6, 510 401,809 414,357 420,509 428,502 438,218 446,501 454,402 464,865 481,469 491,615 499,721 508,807 527,459 532,508 534,226 534,015 540,785 549,244 558,782 573,049 587,915 621,299 644,567 670,246 700,212 740,916 779,885 815,210 847,506 48 ANNUAL REPORT OF T H E FEDERAL RESERVE BOARD. Federal Reserve notes outstanding (i. e., net amount issued to banks), in actual circulation, and gold and paper collateral held by Federal Reserve Agents against outstanding notes—Continued. [In thousands of dollars; i. e., 000's omitted.] Paper collateral for notes Gold cover for notes issued. issued. Federal Reserve Federal notes Reserve Federal In gold In gold issued to Gold redempnotes Reserve Federal held by notes in and tion settlement Actual Reserve join fund, fund, Total Amount amount Excess Federal actual cirBanks, certifipaper Reserve culation. gold. required. held. ofheld. cates United Federal net Banks. States in amount. vault. Treas- Reserve urer. Board. 1917. Nov. 2.. 9.. 16.. 23.. 30.. Dec. 7... 14... 21... 28... 941,284 995,384 1,038,620 1,102,287 1,126,345 1,184,667 1,229,007 1,295,069 1,341,752 249,495 250,689 243,030 243,111 242,985 240,351 239,833 227,302 250,423 32,111 32,187 31,843 32,524 33,714 35,773 39,471 41,281 41,479 320,827 333,378 355,033 348,313 385,125 407,815 404,074 477,524 489,949 602,433 616,254 629,906 623,948 661,824 683,939 683,378 746,107 781,851 338,851 379,130 408,714 478,339 464,521 500, 728 545,629 548,962 559,901 365,107 439,202 431,182 532,411 490,932 536,473 602,967 602,074 606,705 26,256 60,072 22,468 54,072 26,411 35,745 57,338 53,112 46,804 60,283 62,872 66,035 86,395 69,362 74,130 75,622 67,427 95,264 881,001 932,512 972,585 1,015,892 1,056,983 1,110,537 1,153,385 1,227,642 1,246,488 49 § FEDERAL RESERVE NOTES OUTSTANDING AND INCIRCULATION DURIN6 1917, ALSO AMOUNTS OF GOLD AND REQUIRED PAPER HELD BY FR. AGENTS. j Curve /, JJmounJts of Cold Cover held against SJtMtes issued. Curve Z: JJmounts of'<£**%. JVotes outstanding, (-Cold Cover, filusJhfterCollateral requircjl). Curve 3. Amounts of£"M.JYotes OzJJctual Circulation,, (- Ji1mounts Outstandingr> less Amounts field . by ^BanKs and in jtrocess of Redemption,). 1 i i i I l I I 1 1 1 1 1 1 1 1 1 1 1 II 1 1 II 1 M 1 1 H 1 1 1 1 1 1 | j j i i i i i I i i MILLIONS OF DOLLARS \ ANNUAL REPOET OF THE FEDEEAL RESERVE BOARD. 1500 -1400 mo 1300 - -BOO — zoo -1200 • IlOO \ ^ ^.l / i/ 1000 i -Km f " i' __ 900 900 ~N \ x^ 700 -- 600 - "<$ -600 ^. ^ M ^'^^^ ' S^.^ t 4v TI \ bv ** T r £ --< c \—Cr V ki%'~ SOO ^^ ^^ ^^ N ,S ^^ SOO QY) i A "*^r 400 300 400 -300 200 9stn 100 inn Q m Wem irt 7/ )?/* k'f \ j J"~7iW - f '/ j-; n? 7 ,1 J K> ' p.? 19262 ,. f ?33 1BER \M0 m 50 ANNUAL REPORT OF T H E FEDERAL RESERVE BOARD. Statement of Federal Reserve notes, by denominations, printed, shipped to Federal Reserve agents and United States subtreasnries. and on hand in reserve vault Dec. 31, 1917. Fives. Tens. Twenties. Fifties. Hundreds. $43,320,000 27,160,000 $49,080,000 48,920,000 $19,280,000 18,560,000 $12,800,000 6,600,000 $20,000,000 12,000,000 $144,480,000 113,240,000 16,160,000 160,000 720,000 6,200,000 8,000,000 31,240,000 339,280,000 168,080,000 251., 160,000 155,520,000 47,400,000 46,200,000 126,800,000 95,600,000 1,014,160,000 704,680,000 Bank. Boston: Printed Shipped On hand New York: Printed Shipped 332,600,000 156,200,000 On hand Philadelphia: Printed Shipped 176,400,000 88,120,000 12,560,000 1,200,000 31,200,000 309,480,000 29,000,000 26,440,000 37., 960,000 37,960,000 44,560,000 44,080,000 16,000,000 12,800,000 20,400,000 14,400,000 147,920,000 135,680,000 480,000 3,200,000 6,000,000 12,240,000 2.560,000 On hand Cleveland: Printed Shipped Richmond: Printed Shipped . .. 27,160,000 15,040,000 43., 320,000 32,040,000 66,480,000 60,400,000 23,200,000 19,400,000 11,200,000 9,600,000 171,360,000 136,480,000 12,120,000 11,280,000 6,080,000 3,800,000 1,600,000 34,880,000 23,340,000 16,940,000 28,560,000 25.640,000 27,920,000 26,720,000 7,600,000 5,200,000 7,600,000 3,600,000 95,020,000 78,100,000 0,400,000 2, 920,000 1,200,000 2,400,000 4,000,000 16,920,000 24,740,000 23,880,000 32,280,000 31,680,000 35,600,000 30,240,000 8,000, 000 4,200,000 10,400,000 5,200,000 111,020,000 95,200,000 860,000 600,000 5,360,000 3,800,000 5,200,000 15,820,000 64,080,000 36,460,000 87,080,000 87,080,000 103,120,000 103,120,000 32,400,000 19,000,000 30,000,000 17,600,000 316,680,000 263,260,000 13,400,000 12,400,000 53,420,000 On hand Atlanta: Printed Shipped On hand Chicago: Printed Shipped On hand St. Louis: Printed Shipped 27,620,000 29,940,000 21,380,000 27,760,000 27,680,000 24,800,000 23,600,000 '), 000,000 4,000,000 4,800,000 4,400,000 92,300,000 81,060,000 8,560,000 80,000 1,200,000 1,000,000 400,000 11,240,000 29,900,000 24,900,000 27,520,000 26,200,000 24,880,000 22,080,000 3,400,000 1,600,000 4,400,000 3,200,000 90,100,000 77,980,000 5,000,000 1,320,000 2,800,000 1,800,000 1,200,000 12,120,000 43,520,000 29,180,000 32,080,000 26,560,000 31,120,000 28,560,000 7,200,000 4,600,000 6,400,000 3,600,000 120,320,000 92,500,000 14,340,000 5,520,000 2,560,000 2,600,000 2,800,000 27,820,000 On hand Minneapolis: Printed Shipped On hand Kansas City: Printed Shipped On hand Total. 51 ANNUAL REPORT OF THE FEDERAL RESERVE BOARD. Statement of Federal Reserve notes, by denominations, printed, shipped to Federal Reserve agents and United States subtreasuries, and on hand in reserve vault Dec. 31, 1917— Continued. Fives. Tens. Twenties. Fifties. 20,040,000 17,720,000 26,320,000 24,000,000 24,880,000 23,920,000 6,000,000 2,800,000 7,600,000 4,000,000 On hand 2,320,000 2,320,000 960,000 3,200,000 3,600,000 San Francisco: Printed Shipped 20,640,000 20,340,000 29,320,000 24,080,000 30,480,000 30,320,000 14,000,000 13,000,000 16,400,000 16,000,000 110,840,000 103,740,000 On hand 300,000 5,240,000 160,000 1,000,000 400,000 7,100,000 688,280,000 415,640,000 760,560,000 643,000,000 601,200,000 567,120,000 183,000,000 139,400,000 266,000,000 189,200,000 2,499,040,000 1,954,360,000 272,640,000 117,560,000 34,080,000 43,600,000 76,800,000 544,680,000 Bank. Dallas: Printed Shipped Vault balance: Total printed Total shipped Total on hand Hundreds. Total. 84,840,000 72,440,000 . 12,400,000 Federal Reserve notes by denominations issued through the Federal Reserve agents to the banks, also amounts retired and outstanding Dec. 31, 1917. Fives. Tens. Twenties. Fifties. Hundreds. $22,546,600 9,712,440 .148,525,600 8,048,170 $14,488,200 693,120 $4,102,000 352,650 $7,002,300 561,500 $96,664,700 19,367,880 12,834,160 40,477,430 13,795,080 3,749,350 6,440,800 77,296,820 213,247,800 133,958,400 49,191,995 13,228,530 37,002,450 882,750 84,014,000 26,480,500 601,513,000 145,174,435 164,055,805 120,729,870 36,119,700 57,533,500 456,338,565 Bank. Boston: Issued Retired Outstanding New York: Issued Retired Outstanding Philadelphia: Issued Retired Outstanding Cleveland: Issued Retired 133,290,350 55,390,660 77,899,690 20,692,700 7,818,955 38,594,800 7, 644,000 44,830,200 4,302,290 5,890,000 106,400 7,550,000 360,300 117,557,700 20,231,945 12,873,745 30,950,800 40,527,910 5,783,600 7,189,700 97,325,755 11,620,000 2,672,250 26,640,000 2,931,940 54,800,000 2,934,860 16,000,000 299,250 5,600,000 152,000 114,660,000 8,990,300 8,947,750 23,708,060 51,865,140 15,700,750 5,448,000 105,669,700 18,194,300 7,157,645 27,067,700 7,160,650 28,529,400 5,647,520 5,512,200 1,505,950 3,482,000 543,700 82,785,600 22,015,465 11,036,655 19,907,050 22,881,880 4,006,250 2, 938,300 60,770,135 Outstanding Richmond: Issued Retired Outstanding Total. ANNUAL REPORT1 OF THE FEDERAL RESERVE BOARD. 52 Federal Reserve notes by denominations issued through the Federal Reserve agents to the banks, also amounts retired and outstanding Dec. 3, 1917—Continued. Fives. Tens. Twenties. Fifties. 25,144,050 9,971,965 33,645,800 8,912,195 28,860,980 5,343,600 3,730,450 1,511,000 2,442,900 1,218,000 93,824,180 26,956,760 15,172,085 24,733,605 23,517,380 2,219,450 1,224,900 66,867,420 22,920,050 3,775,000 70,000,000 1,560,730 82,800,600 1,727,840 11,600,250 221,900 10,800,100 47,000 198,121,000 7,332,470 19,145,050 68,439,270 81,072,760 11,378,350 10,753,100 190,788,530 18,632,950 6,073,900 28,672,940 4,439,950 23,452,160 2,248,670 2,960,050 740,550 2,550,000 901,600 76,268,100 14,404,670 12,559,050 24,232,990 21, 203,490 2,219,500 1,648,400 61,863,430 21,082,000 8,151,565 22,695,000 3,998,565 19,655,000 2,604,420 1,010,000 148,900 1,670,000 202,600 66,112,000 15,106", 050 12,930,435 18,696,435 17,050,580 861,100 1,467,400 51,005,950 25,984,000 10,070,640 22,090,000 4,977,690 26,954,000 5,437,050 6,610,000 5,054,100 1,790,000 5,100 83,428,000 25,544,580 15,913,360 17,112,310 21,516,950 1,555,900 1,784,900 57,883, 420 15,380,000 7,138,565 28,440,900 11,229,565 26,618,600 7,499,770 3,270,650 1,566,700 4,635,000 3,193,600 78,345,150 30,628,200 8,241,435 17,211,335 19,118,830 1,703,950 1,441,400 47,716,950 17,140,000 4,657,540 20,960,000 2,539,890 30,320,000 1,763,070 6,400,000 166,050 11,600,000 195,900 86,420,000 9,322,450 12,482,460 18,420,110 28,556,930 6,233,950 11,404,100 77,097,550 352,627,000 132,591,125 580,580,540 112,635,340 515,267,540 53,430,740 104,088,050 12,556,200 143,136,300 33,861,800 1,695,699,430 345,075,205 Total outstanding 220,035,875 467,945,200 461,836,800 91,531,850 109,274,500 1,350,624,225 Bank. Atlanta: Issued... „ Retired Outstanding Chicago: Issued Retired Outstanding St. Louis: Issued Retired Outstanding Minneapolis: Issued Retired Outstanding Kansas City: Issued Retired Outstanding Dallas: Issued Retired Outstanding San Francisco: Issued Retired Outstanding Hundreds. Total. KECAPITULATION. Total issued Total re tired 53 A-tfNUAL EEPOET OP THE FEDERAL RESERVE BOARD. Statement of Federal Reserve notes, by denominations, received by agents, issued to the banks, returned to the Comptroller for destruction, since organization of banks, and on hand Dec. 31, 1917, as reported by Federal Reserve agents. RECEIVED FROM COMPTROLLER OF THE CURRENCY. Federal Reserve agent at— Boston . New York Philadelphia Cleveland Richmond Atlanta Chicago St. Louis Minneapolis Kansas City Dallas San Francisco Total Hundreds. Twenties. Fifties. $24,160,000 $48,920,000 151,200,000 241,160,000 37,960,000 22,440,000 13,040,000 29,640,000 16,940,000 25,640,000 22,820,000 30,680,000 28,460,000 77,600,000 16,580,000 27,520,000 19,700,000 24,240,000 25,540,000 22,160,000 15,140,000 23,280,000 15,340,000 19,880,000 $14,880,000 151,520,000 44,080,000 59,840,000 26,720,000 28,720,000 97,120,000 23,600,000 20,240,000 25,040,000 23,280,000 30,320,000 $5,600,000 44,200,000 9,800,000 18,400,000 5,200,000 3,800,000 16,600,000 3,000,000 1,400,000 3,200,000 2,800,000 6,400,000 $5,600,000 91,600,000 11,200,000 7,600,000 3,600,000 3,600,000 15,200,000 2,400,000 2,400,000 2,800,000 4,000,000 11,600,000 $103,160,000 679,680,000 125,480,000 128,520,000 78,100,000 89,620,000 234,980,000 73,100,000 67,980,000 78,740,000 68,500,000 83,540,000 608,680,000 545,360,000 120,400,000 165,600,000 1,811,400,000 Fives. 371,360,000 Tens. Total. R E T U R N E D BY F E D E R A L RESERVE BANKS. Boston New York Philadelphia... Cleveland Richmond Atlanta Chicago St. Louis Minneapolis Kansas City Dallas San Francisco.. Total. $8,048,170 49,191,995 7,644,000 2,931,940 7,160,650 8,912,195 1,560,730 4,439,950 3,998,565 4,977,690 11,229,565 2,539,890 $693,120 13,228,530 4,302,290 2,934,860 5,647,520 5,343,600 1,727,840 2,248,670 2,604,420 5,437,050 7,499,770 1,763,070 $352,650 882, 750 106,400 299,250 1,505,950 1,511,000 221,900 740,550 148,900 5,054,100 1,566,700 166,050 $561,500 26,480,500 360,300 152,000 543, 700 1,218,000 47,000 901,600 202,600 5,100 3,193,600 195,900 $19,367,880 145,174,435 20,231,945 8,990,300 22,015,465 26,956, 760 7,332,470 14,404,670 15,106,050 25,544,580 30,628,200 9,322,450 132,591,125 112,635,340 53,430, 740 12,556,200 33,861,800 345,075,205 $9,712,440 55,390,660 7,818,955 2,672,250 7,157,645 9,971,965 3,775,000 6,073,900 8,151,565 10,070,640 7,138,565 4,657,540 TOTAL AMOUNTS FOR WHICH FEDERAL RESERVE AGENTS ARE ACCOUNTABLE. Boston New York , Philadelphia.. Cleveland Richmond Atlanta Chicago , St. Louis Minneapolis Kansas City..., Dallas San Francisco. Total.... $33,872,440 $56,968,170 $15,573,120 206,590,600 290,351,995 164, 748,530 30,258,955 45,604,000 48,382,290 15,712,250 32,571,940 62,774,860 24,097,645 32,800,650 32,367,520 32,791,965 39,592,195 34,063,600 32,235,000 79,160,730 98,847,840 22,653,900 31,959,950 25,848,670 27,851,565 28,238,565 22,844,420 35,610,640 27,137,690 30,477,050 22,278,565 34,509,565 30,779,770 19,997,540 22,419,890 32,083,070 $5,952,650 $10,161,500 45,082, 750 118,080,500 9,906, 400 11,560,300 18, 699,250 7, 752,000 6, 705,950 4,143, 700 5,311,000 4,818,000 16,821,900 15,247,000 3,740,550 3,301,600 1,548,900 2,602,600 8,254,100 2,805,100 4,366,700 7,193,600 6,566,050 11, 795,900 $122,527,880 824,854,435 145, 711, 945 137,510,300 100,115,465 116,576, 760 242,312,470 87,504,670 83,086,050 104,284,580 99,128, 200 92,862,450 503,951,125 721,315,340 598, 790, 740 132,956,200 199,461,800 2,156,475,205 54 A N N U A L REPORT OF T H E FEDERAL RESERVE BOARD. Statement of Federal Reserve notes, by denominations, received by agents, issued to the banks, returned to the Comptroller for destruction, since organization of banks, and on hand Dec. 31, 1917, as reported by Federal Reserve agents—Continued. ISSUED TO FEDERAL RESERVE BANKS. Federal Reserve agent at— Fives. Tens. i Twenties. $22,546,600 $48,525, 600 $14,488,200 133,290,350 213,247,800 133,958,400 44,830,200 20,692, 700 38,594,800 26,640,000 54,800,000 11,620,000 27,067,700 28,529,400 18,194,300 33,645,800 28,860,980 25,144,050 70,000,000 82,800,600 22,920,050 28,672,940 23,452,160 18,632,950 22,695,000 19,655,000 21,082,000 22,090,000 26,954,000 25,984,000 28,440,900 26,618,600 15,380,000 20,960,000 30,320,000 17,140,000 Boston New York Philadelphia... Cleveland Richmond Atlanta Chicago St. Louis Minneapolis... Kansas City Dallas San Francisco.. 352,627,000 ! 580,580,540 Total 515,267,540 Fifties. Hundreds. $4,102,000 37,002,450 5,890,000 16,000,000 5,512,200 3, 730,450 11,600,250 2,960,050 1,010,000 6,610,000 3,270,650 6,400,000 $7,002,300 84,014,000 7,550,000 5,600,000 3,482,000 2,442,900 10,800,100 2,550,000 1,670,000 1,790,000 4,635,000 11,600,000 $96,664, 700 601,513,000 117,557, 700 114,660,000 82,785,600 93,824,180 198,121,000 76,268,100 66,112,000 83,428,000 78,345,150 86,420,000 104,088,050 j 143,136,300 1,695,699,430 Total. R E T U R N E D TO COMPTROLLER FOR DESTRUCTION. $9,705,840 55,300,310 7,406,255 2,672,250 5,743,345 5,128,915 3,134,950 3,780,950 5,269,565 7,706,640 5,028,565 2,857,540 Boston New York Philadelphia.. Cleveland Richmond Atlanta Chicago St. Louis Minneapolis Kansas City Dallas San Francisco 113, 735,125 Total $684,920 12,390,130 3,552,090 2,854,860 3,678,120 1,928,120 1, 727,240 1,436,510 1,349,420 1,123,050 2,411,170 1,763,070 $350,650 680,300 16,400 299,250 793, 750 90,550 221,650 40,500 18,900 54,100 96,050 166,050 $559,200 1,666,500 10,300 152,000 261,700 125,100 46,900 1,600 22,600 5,100 18,600 195,900 $19,343,180 119,141,435 17,994,245 8,910,300 15,489,865 10,882,580 6,691,470 8,426,570 9,884,050 12,056,580 12,268,050 6,442,450 93,003,300 | 34,898,700 2,828,150 3,065,500 247,530,775 $8,042,570 49,104,195 7,009,200 2,931,940 5,012,950 3, 609,895 1,560, 730 3,167,010 3,223,565 3,167,690 4,713,665 1,459,890 IN HANDS OF F E D E R A L RESERVE AGENTS DEC. 31, 1917. Boston New York Philadelphia Cleveland Richmond Atlanta . . . Chicago St. Louis Minneapolis Kansas City Dallas San Francisco Total . . $1,620,000 18,000,000 2,160,000 1,420,000 160,000 2,519,000 6,180,000 240,000 1,500,000 1,920,000 1,870,000 $400,000 28,000,000 $400,000 18,400,000 3,000,000 720,000 2,336,500 7,600,000 120,000 2,320,000 1,880,000 1,355,000 37,589,000 47, 731,500 5,120,000 160,000 3,274,500 14,320,000 960,000 1,840,000 2,400,000 1,750,000 $1,500,000 7,400,000 4,000,000 2,400,000 400,000 1,490,000 5,000,000 740,000 520,000 1,590,000 1,000,000 $2,600,000 32,400,000 4,000,000 2,000,000 400,000 2,250,000 4,400,000 750,000 910,000 1,010,000 2,540,000 $6,520,000 104,200,000 10,160,000 13,940,000 1,840,000 11,870,000 37,500,000 2,810,000 7,090,000 8,800,000 8,515,000 48,624,500 26,040,000 53,260,000 213,245,000 55 ANNUAL REPORT OF THE FEDERAL RESERVE BOARD. Statement of Federal Reserve notes, by denominations, received by agents, issued to the banks, returned to the Comptroller for destruction, since organization of banks, and on hand Dec. 31, 1917, as reported by Federal Reserve agents—Continued. TOTAL AMOUNTS OF FEDERAL RESERVE NOTES ACCOUNTED FOR. Federal Reserve Agent at— Boston New York Philadelphia Cleveland Richmond Vtlanta Chicago St. Louis Minneapolis Kansas City Dallas San Francisco Fifties. Hundreds. $32,252,440 $56^568,170 $15,173,120 188,590,660 262,351,995 146,348,530 28,098,955 45,604,000 48,382,290 14,292,250 29,571,940 57,654,860 23,937,645 32,080,650 32,207,520 30,272,965 37,255,695 30,789,100 26,055,000 71,560,730 84,527,840 22,413,900 31,839,950 24,888,670 26,351,565 25,918,565 21,004,420 33,690,640 25,257,690 28,077,050 .". 20,408,565 33,154,565 29,029,770 19,997,540 22,419,890 32,083,070 $4,452,650 37,682, 750 5,906,400 16,299,250 6,305,950 3,821,000 11,821,900 3,000,550 1,028,900 6,664,100 3,366,700 6,566,050 $7,561,500 85,680, 500 7,560,300 5,752,000 3,743,700 2,568,000 10,847,000 2,551,600 1,692, COO 1, 795,100 4,653, COO 11,795,900 $116,007,880 720,654, -ISo 135,551,945 123,570,300 98,275,465 104,706, 760 204,812,470 84,694,670 75,996,050 95,484,580 90,613,200 92,862,450 550,166,240 106,916,200 146,201,800 1,943,230,205 Total Fives. 466,362,125 Tens. 673,583,840 Twenties. Total. RECAPITULATION. Received from Comp$371,360,000 $608,680,000 $545,360,000 $120,400,000 $165,600,000 $1,811,400,000 troller 12,556,200 33,861,800 132,591,125 112,635,340 53,430,740 345,075,205 Returned by bank Total ! 503,951,125 352,627,000 Issued to banks Return for destruction.. 113,735,125 37,589,000 On hand. Total 503,951,125 721,315,340 598,790,740 132,986,200 199,461,800 2,156,475,205 580,580,540 515,267,540 104,088,050 143,136,300 1,695,699,430 93,003,300 34,898,700 3,065,500 2,828,150 247,530,775 47,731,500 48,624,500 26,040,000 53,260,000 213,245,000 721,315,340 598,790,740 132,956,200 199,461,800 2,156,475,205 Mutilated Federal Reserve notes, by denominations, received and destroyed since organization of banks and on hand in vault Dec. 31, 1917. RECEIVED FOR DESTRUCTION. Fives. Tens. Twenties. $9,635,840 55,300,855 7,406,255 2,672,250 5,743,345 5,128,915 3,121,450 3,780,950 5,269,565 7,706,640 5,028,565 2,857,540 $7,912,570 49,106,405 7,009,200 2,931,940 5,012,950 3,609,895 1,554,730 3,167,010 3,223,565 3,167,690 4,713,665 1,469,890 $664,920 12,390,310 3,552,090 2,854,860 3,678,120 1,928,120 1,715,240 1,436,510 1,349,420 1,123,050 2,411,170 1,763,070 $350,650 680,300 16,400 299,250 793,750 90,550 221,650 40,500 18,900 54,100 96,050 166,050 $559,200 1,666,600 10,300 152,000 261,700 125,100 46,900 1,600 22,600 5,100 18, 600 195,900 $19,123,180 119,144,470 17,994,245 8,910,300 15,489,865 10,882,580 6,659,970 8,426,570 9,884,050 12,056,580 12,268,050 6,452,450 113,652,170 92,879,510 34,866,880 2,828,150 3,065,600 247,292,310 Total destroyed.. 110,695,020 90, 408, 220 33,777,150 2,742,450 2,990, 700, 240,613,540 2, 471,290 1,089, 730 85, 700 Bank. Boston Nee York Philadelphia Cleveland Richmond Atlanta Chicago St. Louis Minneapolis Kansas City Dallas San Francisco Total received Balance on hand. 2,957,150 Fifties. Hundreds. 74,900 Total. 6,678, 770 NOTE.—During the year burned, badly mutilated, and fractional parts of Federal Reserve notes amounting to $11,060 have been identified, valued, and the bank of issue determined. 56 ANNUAL REPOBT OF THE FEDERAL RESERVE BOARD. Total amount of Federal Reserve bank currency received since organization of banks, by Comptroller of the Currency from Bureau of Engraving and Printing, issued and on hand, Dec. 31, 1917. Bank. Philadelphia: Printed Issued On hand Cleveland: Printed Issued On hand Richmond: Printed Issued On hand Atlanta: Printed Issued . . . On hand Chicago: Printed Issued On hand Minneapolis: Printed Issued On hand Kansas City: Printed Issued On hand Dallas: Printed Issued Fives. Tens. Twenties. Fifties. Total. $320,000 0 $440,000 0 $240,000 0 0 0 SI, 000,000 0 320,000 440,000 240,000 0 1,000,000 1,000,000 0 2,000,000 0 2,000,000 0 0 0 5,000,000 0 1,000,000 2,000,000 2,000,000 0 5,000,000 200,000 • 0 400,000 0 400,000 0 0 0 1,000,000 ' 0 200,000 400,000 400,000 0 1,000,000 640,000 0 480,000 0 480,000 0 400,000 0 2,000,000 0 640,000 480,000 480,000 400,000 2,000,000 1,600,000 0 1,800,000 o 1,600,000 0 0 0 5,000,000 0 1,600,000 1,800,000 1,600,000 0 5,000,000 1,320,000 0 2,680,000 0 0 0 0 0 4,000,000 0 1,320,000 2,680,000 0 0 4,000,000 4,360,000 3,414,980 5,040,000 4,000,000 3,600,000 2,640,000 0 0 13,000,000 10,054,980 945,020 1,040,000 960,000 0 2,945,020 1,640,000 1,012,400 2,400,000 1,960,000 2,000,000 1,760,000 0 0 6,040,000 4, 732, 400 On hand 627,600 440,000 240,000 0 1,307,600 San Francisco: Printed Issued 1,680,000 0 1,960,000 0 1,360,000 0 0 0 5,000,000 On hand 1,680,000 1,960,000 1,360,000 0 5,000,000 12,760,000 4,427,380 17,200,000 5,960,000 11,680,000 4,400,000 400,000 0 42,040,000 14,787,380 8,332,620 11,240,000 7,280,000 400,000 27,252,620 0 RECAPITULATION. Total printed Total issued Total on hand NOTE.—Plates for fives, tens, twenties, fifties, and hundreds have been engraved for both Boston and New York, andfives,tens. and twenties for St. Louis, but no currency ordered printed. ANNUAL REPORT OF THE FEDERAL RESERVE BOARD. 57 Federal Reserve bank notes issued', redeemed, and outstanding, by denominations. Redeemed. Outstanding. $4,427,380 5,960,000 4,400,000 $706,355 1,014,820 461,040 $3,721,025 4,945,180 3,938,960 14,787,380 2,182,215 12,605,165 Issued. Fives Tens Twenties Total COST O F F E D E R A L RESERVE NOTES. The cost to each Federal Reserve Bank of Federal Reserve notes, including paper, preparing plates, and printing, but exclusive of cost of transmittal, for the calendar year 1917 was as follows: Boston New York Philadelphia Cleveland Richmond Atlanta Chicago St. Louis Minneapolis Kansas City Dallas San Francisco Total $79, 552. 41 548,146..61 55,324. 87 71, 378. 22 44, 072. 58 42, 020. 45 171, 841.46 49, 879.01 49,278. 45 64,147. 60 34, 214. 69 35, 368.18 ; 1,245,224.53 Amounts of Federal Reserve notes received from and returned to other Federal Reserve Banks for redemption or credit by each Federal Reserve Bank during the calendar year 1917. Boston. Received. Returned, New York. Philadelphia. Cleveland. Richmond. Ox 00 Atlanta. Received. Returned Received. Returned. Received. Returned. Received. Returned. Received. S3,064,200 $9,552,800 $368,000 11,169,902 $634,700 5,818,700 5,876,300 11,553,902 $38,915 1,250,300 258,495 $352,900 1,725,105 883,000 835,000 798,005 311,000 406,000 113,000 122,000 129,000 101,000 163,000 247,995 336,670 151,400 357,500 90,600 17,000 12,100 312,450 31,370 $47,500 999,100 323,920 133,950 $263,900 3,600,750 798,000 100,600 101,100 72,680 420,040 176,520 77,030 64,240 36,410 32,595 145,200 285,900 939,500 226,705 53,000 25,000 295,390 67,955 $135,400 1,236,500 150,650 282,150 862,450 $193,200 3,030,710 311,000 72,180 268,520 278,520 128,610 34,250 44,390 34,240 33,500 12, 700 862,450 332,000 122,080 17,000 18,990 91,980 184,485 224,550 424,450 95,900 212,550 960,500 69,245 747,500 820,635 29,000 68,950 525,830 50,450 4,219,425 25,374,715 30,324,987 14,515,907 8,010,485 2,528,325 4,999,655 6,392,235 4,654,345 6,117,975 Returned > Boston New York Philadelphia... Cleveland , Richmond Atlanta Chicago St. Louis Minneapolis Kansas City... Dallas San Francisco. Total $9,482,800 634,700 352,900 263,900 193,200 347,800 99,700 142,200 126,600 141,400 156,500 11,941,700 $3,018,450 368,000 36,415 50,500 135,400 218,500 53,450 16,000 8,815 283,695 30,200 1,720,700 1,216,800 3,680,305 993,100 3,116,410 1,236,100 1,760,420 3,425,000 664,500 878,700 844,375 390,500 976,600 127,750 1,014,415 566,920 2,656,490 383,415 2,070,6 r w w o w H O H ft t/2 w o Chicago. St. Louis. Minneapolis. Kansas City. Dallas. San Francisco. Total. 343 Received. Returned. Received. Returned. Received. Returned. Received. Returned. Received. Returned. Received. Returned. Received. Returned. ° Boston..... J^ New York Q° Philadelphia Cleveland b Richmond Atlanta.... Chicago St. Louis Minneapolis Kansas City Dallas .. San Francisco $232,500 $347,800 3,425,000 1,698,920 357,500 419,000 1,178,650 418,040 312,000 128,610 747,500 223,550 Total $53,450 $100,900 922,200 661,150 90,600 113,000 226,705 183,020 34,250 122,080 820,630 424,450 1,050,350 1,205,000 1,135,000 1,050,350 3,418,000 219,500 328,300 2,652,500 145,550 2,298,000 921,000 129,335 1,961,500 700,000 225,460 148,950 54,500 211,150 373,720 57,540 15,079,650 5,006,115 8,022,765 3,418,680 $15,000 $142,200 390,500 792,325 17,000 12^,000 51,500 116,030 17,000 44,390 29,000 95,900 219,500 3,418,000 54,500 328,300 215,000 58,000 260,000 $283,695 599,420 314,450 299,640 89,330 521,830 128,835 373,720 66,250 754,820 $141,400 964,265 101,000 39,410 33,750 950,600 974,000 1,961,500 58,000 310,950 104,060 225,145 $31,360 $156,500 $4,278,835 $12,012,900 393,580 2,560,440 29,997,052 24,799,975 163,000 8,066,790 14,960,902 31,575 36,840 5,175,740 2,534,070 69,545 14,200 6,450,175 2,083,430 185,015 66,850 6,210,710 4,650,150 50,990 875,000 5,129,265 15,268,500 301,010 148,950 3,344,960 7,979,770 58,170 272,000 5,537,985 1,351,000 266,140 56,100 7,783,185 1,118,755 319,635 106,560 5,765,280 3,506,950 226,605 4,355,640 1,843,080 7,895,375 3,536,050 5,760,020 1,933,625 4,456,440 92,095,617 92,109,482 $8,815 $126,600 127,750 929,160 11,600 129,000 25,000 66,740 18,990 34,240 68,950 217,550 142,150 2,776,500 211,150 2,298,500 133,400 224,500 133,400 66,250 249,295 310,950 52,100 1,327,000 5,508,090 1,110,855 754,820 337,765 o w H O w w w. o en CO Exhibit C—STATEMENTS OF CONDITION OF FEDERAL RESERVE BANKS. Combined resources and liabilities of all Federal Reserve Banks as at close of business on the last Friday of each month during calendar year 1917. RESOURCES. [In thousands of dollars; i. e., OOCTs omitted.] J a n . 26. Gold coin and certificates in vault.. Gold settlement fund Gold with foreign agencies Feb. 23. Mar. 30. Apr. 27. May 25 June 29. July 27. Aug. 31. 302,341 281,355 | 374,903 311,798 334,265 484,126 460,704 416,797 213,771 213,861 207,920 183,590 345,845 405,739 383,937 52,500 52,500 52,500 882,471 402,639 9,402 919,003 853,234 434,193 493,185 9,067 7,079 200,061 Sept. 28. Oct. 26. N o v . 30. Dec. 28. 445,597 342,337 52,500 461,113 363,967 52,500 499,887 395^,236 52,500 499,917 317,520 52,500 Total gold held by banks Gold wjjth Federal Reserve agents.. Gold redemption fund 516,112 495,216 574,964 519,718 517,855 273,320 306,186 422,905 456,611 1,813 1,922 360,668 2,414 2,518 2,905 Total gold reserve Legal-tender notes, silver, etc. 791,245 803,324 938,046 945,141 17,579 15,249 9,282 30,340 808,824 8,573 947,328 15,711 97,697 20,266 20,106 35,043 47,587 197,242 138,459 147,315 123,966 84,473 71,400 107,377 202,270 195,097 154,591 233,539 176,169 397,094 177,590 756,398 205,454 680,706 275,366 36,122 19,617 12,249 29,471 29,275 36,223 36,513 36,426 41,135 18,647 18,425 81,595 81,145 34,302 35,818 17,124 15,715 14,999 14,675 2,446 1,469 45,406 32,521 1,230 55,129 39,876 224 54,166 55,876 233 47,304 41,792 1,429 48,350 58,883 1,005 181,426 209,474 167,994 239,260 287,297 494,536 411,978 504,937 5,929 234,361 684,959 ,052,377 1,064,310 6,890 2-7,091 11,976 281,677 373,160 301,067 240,290 288,573 Total reserves. Bills discounted—members and Federal Reserve banks 1 Bills bought in open market l Loans on gold coin and bullion United States Government long-term securities United States Government short-term securities Municipal warrants , Total earning assets from other Federal Reserve banks—net.. Uncollected items Total deductions from gross deposits 840,434 558,227 9,809 877,580 614,692 11,164 947,623 661,824 12,278 869,937 781,S51. 19,345 977,371 1,294,512 1,302,263 1,353,498 1,408,470 1,503,436 1,621,725 36,892 39,840 49,506 54,486 52,010 49,089 51,789 1,671,133 49,635 G75,481 1,014,263 1,334,352 1,414,052 1,406,108 1,457,559 1,552,942 1,676,211 1,720,768 © H O 21,850 2^4,123 732 2,275 132 10,641 1,448 -11,106 126,437 136,940 132,759 204,842 328,779 221,705 204,756 381,003 10,233 260,184 122,314 137,672 135,034 204,974 339,420 223,153 193,650 270,417 366,069 313,043 td o 5 per cent redemption fund against Federal Reserve bank notes All other resources 537 2,499 537 2, 813 1,126,573 1,174,390 1,256,149 1,425,872 1,647, 804 2,053,340 2,021 ,237 2,058,381 2,203,673 2,528, 365 3,097,693 3,101, 471 400 400 8,271 13,609 Total resources 400 5,393 400 5,757 400 500 799 6, 424 500 1,057 500 293 500 387 537 1, 354 LIABILITIES. Capital paid in Government deposits Due to members—reserve account Collection items Other deposits, including foreign Government credits. 55,694 25,607 687,841 97,374 Total gross deposits Federal Reserve notes in actual circulation Federal Reserve bank notes in circulation—net liability All other liabilities 810,822 259,768 289 Total liabilities 70,442 57,176 57,825 58,904 62,629 68,500 56,991 59,379 108,213 76,114 300,966 143,032 154,358 71,289 132,221 220,962 813,326 1,033,460 1,135,456 1,069,804 1,136,930 1,264,323 1,489,370 1,453,166 191,689 170,151 149,527 137,815 140,278 157,524 174,492 231,776 39,903 76,000 68,433 17,969 1,000 19,473 9,547 36,335 56,075 20,567 720,411 100,961 56,409 99,689 719,785 129,032 303,171 841,939 357,610 948,506 1,135,591 1,484,053 1,425,850 1,404,343 1,434,176 1,607,371 1,961,581 420,509 454,402 508,753 534,015 587,915 700,212 847,506 1,056,983 522 525 •55,989 13,407 692,475 108,826 814,708 448 820 934 1,524 2,459 1,088 6,023 1,195 8,000 1,908 8,000 2,859 8,000 2,629 1,771,037 1,246,488 8,000 5,504 11,126,573 1,174,390 1,256,149 1,425,872 1,647,804 2,053,340 2,021,237 2,058,381 2,203,673 2,528,365 3,097,693 3,101,471 i 2 MATURITIES OF BILLS ON HAND. Within 15 days Over 15 but within 30 days.. Over 30 but within 60 days.. Over 60 but within 90 days.. Over 90 days Total.. 4,957 115,223 44,799 94,431 73,893 5,210 108,291 55,508 89,170 46,124 2,813 178,383 63,712 96,234 09,936 1,443 344,190 51,887 101,512 75,211 1,884 581,704 91,556 140,417 141,927 6,248 395,697 118,545 2S0,138 152,708 8,986 19,512 333,556 301,906 409, 70S 574,684 961,852 956,072 29,402 IS,794 51,790 12,414 1,008 36,912 32,925 49,617 23,915 863 31,061 30,320 30,636 11,735 827 38,021 20,900 29,620 16,735 1,167 43,844 22,370 50,808 35,145 172,168 2,797 113,408 144,232 104,579 106,443 154,964 2 53,754 91,213 77,420 Net amounts due to other Federal Reserve Banks. 62 ANNUAL EEPOET OF THE FEDERAL RESEKVE BOAEB. MOVEMENT OF RESERVES OF ALL FEDERAL RESERVE BANKS DURING THE CALENDAR YEAR 13(7, (N MILLIONS OF DOLLARS. Carvel: J8CLTIXS Gold Settlement fund. Curve2. > Jotal Cold held with t?ie 3\ft. $oard. inrt. Amounts standing to the credit of331 Joents. Carve J; JotaZ6oldSteserveagainstZtefwsits,nlu$ooulheid witfi tMjytJfoamto the credit cfJTJt. Agents. Curve S: JctaLfi&e-rpes.mjct. Silver, tf&Jfotes,etc. | —i—• _, tPOO 1 | «» ,_| 1600 1 1 1500 1500 > M— mo > wo M \ BOO ~1 i —1 j J/ 1 / ) eoo ft— — | -/ D | noo I 1 —' i#. s > IICO — | 1 JiOO / — wo 1300 / 1000 -4 -H 800 900 1 i 1 I#00 soo , > / i ! . ZtO wo —_i— -1-r- 600 s , ( -4J J /' z -f 500 k—I C- 400 V •r 300 j - M k zoo — \r too — 0 T ' f 300 soo 1 '—'—'—^~P* so? 400 700 1 i — roo H -f Hft I JANUARY \ttBRUW Inh *<> M4HCH r? cTg7 i r1 * APRIL i MAY $4- ^; JLriE ) i Jt'Z.K Sr h w 0 I AU6U5T WBT7Mm\ 0CVC6EP \NGW*Br*\D&:5MBER 63 ANNUAL EEPOET OF THE FEDEKAL KESEKVE BOAED. MOVEMENTOFEARtimGASSETSOFALLFEDERALRESERVE BANKS DURING THE CALENDER YEAR 131?, IN MILLIONS OF DOLLARS. Curve / .• Member JSanKs 'Collateral J&fcs. Curve 2.- Total 3C3oouutts. Curve 31 Jotai JSULs JfeUi,ind. Cp4K?{ar?ec£jfaxte0». Curve4-.- JSiOs jtlus U.S. Jhnds. Curves. JtiUsnlus all US. Securities. , CUrvc&; JBiffl^!xrn^M^xeC?,ihcla4iui^JKtuuc^uU7i&rTVUits> \ 1100 HOC s /j 1000 \ 1000 'r w r/k\T/ i3—• n 1 900 l\11 f i\ 1 [/ If/I 800 H W n if\\ A4JI Ifntu 71 / ' in / //r fr ±\ no 600 / v\ 1 L \ SCO \\ \f\ \\\L Ivr // \ \It/ 400 \ii \\V it ill M / 35 •/ • f / 1 '( / > f\' 1 /• ft T t Ja b Iff" j i h j -} u r V s\ / s/ / / ss A >Tr 1 / Y A b / 100 sh s& 9i JANUARY \mHUARA MARCH ! APRIL /\ h 1 h j \ I fr N -L f 1 ±y / mat 5 / 6? !S c\ ~ MAY ij^UtW^ i ./£/£/ j 1 A -4 s i SOO A!/1 A y / / s, S, N \ f\1\\ 11 l 300 M/TT" \ j /\ 1 600 i l l / / I VO \X \£ \ / / [ o 900 \M vt soo 2O0 1 J. —' \ 400 1 \ \ \ \ \ 300 — 200 100 o 101, ' A 12 3S>7/42/a 1 AU6UST \S£PT£MXH\ OCTOBER \^0ifM3£R\PEC£MBm\ Principal resources and liabilities of all Federal Reserve Banks at close of business on each Friday, Jan. 7 to Dec. 28, 1917. [In thousands of dollars; i. e., 000's omitted.] Bills Total cash discounted United United Gold with reserves, for memStates States Gold coin Bills Gold Gold with Gold Federal Governincluding Governand Total gold bought in foreign bers and ment Reserve redemption ment certificates settlement legal open reserves. fund. agencies. Federal fund. in vault. agents. market. long-term short-term tenders, securities. securities. silver, etc. Reserve banks. Jan.5... Jan.12.. Jan.19.. Jan.26.. Feb. 2 . . . Feb. 9 . . . Feb. 16.. Feb. 23.. Mar. 2 . . . Mar. 9 . . . Mar. 16.. Mar. 23.. Mar. 30.. Apr. 6... Apr. 13.. Apr. 20.. Apr. 27.. May 4 . . . May 11.. May 18.. May 25.. June 1... June 8.. June 15. June 22. June 29. 267,169 192,00?. 281,292 292,829 206,541 274,512 286,509 212,051 273,141 302,341 213,771 273,320 306,964 212,961 274,074 274,194 212,961 288,720 274,367 216,221 297,270 281,355 213,861 306,186 304,163 212,031 317,581 330,184 205,561 328,433 355,318 201,661 338,608 350,736 209,281 349,519 374,903 200,061 360,668 362,472 200,125 378,450 338,369 198,271 410,796 330,152 20G, 830 418,538 311,798 207,920 422,905 336,138 218,910 433,089 336.841 221,759 438,323 350,269 187,969 448,311 334,265 183,590 456,611 299,225 187,556 466,969 330,001 205,886 475,201 365,020 221,970 459,942 492.842 267,910 52,500 390,765 484,126 345,845 52,500 402,639 1,600 1,782 1,783 1,813 1,835 1,734 1,804 1,922 2,347 2,325 2,339 2,519 2,414 2,505 2,434 2,651 2,518 2,669 2,687 2,754 2,905 3,053 2,730 3,958 8,001 9,402 742,062 758,242 775,664 792,433 773,484 783,822 791,245 808,824 795,834 808,019 777,609 788,242 789,662 797,271 803,324 818,573 836,122 846,093 866,503 885,616 897,920 914,102 912,055 922,720 938,040 947,328 943,552 902,062 949,870 971,006 958,171 982,633 945,141 975,481 990,786 1,030,201 999,610 1,035,759 989,303 1,016,745 977,371 1,014,263 956,803 993,427 1,013,818 1,051,511 1,050,890 1,075,408 1,212,018 1,247,698 1,294,512 1,334,352 26,217 24,355 17,219 15,711 14,707 16,200 19,553 20,266 18,840 18,500 17,234 18,473 20,106 17,928 22,009 29,737 35,043 35,916 39,534 44,846 47,587 50,854 98,021 202,824 240,981 197,242 121,807 41,052 14,857 115,979 41,106 14,857 108,447 37,899 18,314 97,697 36,122 19,647 93,112 30,550 18,647 112,092 29.470 18,647 126,054 29,471 18,647 123,966 29.471 18,647 114,058 28,650 19,468 108,860 29,126 19,468 97,002 29,155 19,3G8 87,798 29,275 18,818 84,473 29,275 18,425 82,735 30,629 23,042 80,004 36,218 23,370 72,925 36,215 23,360 71,400 36,223 23,450 83,871 36,222 23,450 97,155 36,222 23,450 100,177 36,3SC 23,33S 107,377 36,513 23,338 110,100 36,387 23,338 135,270 36,387 23,338 .164,525 36,400 23,344 194,303 36,427 78,491 202,270 36,426 34,302 Gold coin Gold and certificates | settlement fund. in vault. July 6 . . July 13. July 20. July 27. Aug. 3. Aug. 10. Aug. 17. Aug. 24. Aug. 31. Sept. 7. Sept. 14 Sept. 21 Sept. 28 Oct. 5 . . Oct. 12. Oct. 19. Oct. 26. Nov. 2.. Nov. 9.. Nov. 16. Nov. 23. Nov. 30. Dec. 7 . . Dec. 14. Dec. 21. Dec. 28. 470, 471 488, 460, 399, 413, 399, 426, 416, 414, 408, 430, 445, 481, 482, 419, 461, 501, 507, 526, 530, 499, 500, 502, 524, 499, 371. 388, 403, 405, 438, 409, 410, 397, 383, 395, 384, 373, 342, 334 321, 369, 363, 378, 385, 363, 386, 395, 376, 393, 304, 317 Gold with foreign agencies. 52,500 52,500 52,500 52,500 52,500 52,500 52,500 52,500 52,500 52,500 52,500 52,500 52,500 52,500 52,500 52,500 52,500 52,500 52,500 52,500 52,500 52,500 52,500 52,500 52,500 52,500 Gold with Gold Total gold Federal redemption reserves. Reserve fund. 413,715 428,338 423,889 434,193 467,845 485,467 502,588 488,536 493,185 494,779 520,470 536,009 558,227 560, 111 580,734 618,827 614,692 602,433 616,254 629,906 623,948 061,824 683,939 683,378 746,107 781,851 9,748 12,687 11,691 9,067 9,390 9,274 9,795 7,375 7,079 7,218 9,127 9,442 9,809 9,465 9,717 11,218 11,164 11,317 11,496 11,420 11.549 12,278 17,485 17,710 17,982 19,345 1,317,703 1,353,371 1,380,020 1,362,263 1,367,673 1,370,942 1,374,583 1,372,219 1,353,498 1,364,783 1,374,949 1,402,317 1,408,470 1,438,477 1,447,445 1,471,539 1,503,436 1,546,075 1,573,377 1,584,328 1,604,704 1,621,725 1,631,358 1,650,238 1,645,543 1,071,133 Bills Total cash discounted reserves, for memincluding bers and legal Federal tenders, Reserve silver, etc. banks. 1,356,017 1,400,916 1,430,321 1,414,052 1,421,382 1,424,059 1,427,489 1,424,769 1,406,108 1,415,391 1,426,034 1,452,251 1,457,821 1,486,715 1,495,558 1,520,512 1,552,942 1,596,819 1,625,585 1,636,853 1,658,762 1,676,211 1,683,307 1,700,384 1,093,670 1,720,768 129,853 140,163 161,386 138,459 130,948 134,229 143,946 128,407 147,315 168,217 167,333 183,758 233,539 265,251 293,164 286,615 397,094 503,965 510,154 487,850 650,002 756,398 686,G02 713,431 693,509 (ISO, 706 Bills bought in open market. 201,664 194,937 197,725 195,097 174,183 149,790 155,329 159,557 154,591 173,199 168,445 161,012 176,169 186,162 185,775 171,611 177,590 186,012 181,001 193,869 209,905 205,454 190,682 254,428 277,943 275,366 United States Government long-term securities. 42,935 43,961 42,265 41,135 42,422 41,276 45,129 45,226 45,406 45,394 45,358 53,929 55,129 55,727 54,878 55,088 54,166 53,851 53,743 54,002 53,962 47,304 49,198 53,774 50,438 48,350 United States Government short-term securities. 28,659 30,359 33,050 35,818 25,464 32,604 30,552 30,480 32,521 42,441 42,366 41,070 39,870 73,632 48,517 47,255 55,876 45,211 42,367 187,904 57,850 41,792 50,424 48,016 58,130 58,883 j o w H o fej w wo to Principal resources and liabilities of all Federal Reserve Banks at close of business on each Friday, Jan. 7 to Dec. 28, 1917—Continued. [In thousands of dollars; i. e., 000's omitted.] Total United States securities. Jan. 5... Jan. 12.. Jan.19.. Jan.26.. Feb. 2 . . . Feb. 9... Feb. 16.. Feb. 23.. Mar. 2... Mar. 9... Mar. 16.. Mar. 23.. Mar. 30.. Apr. 6... Apr. 13.. Apr. 20.. Apr.-27.. May 4 . . May 11.. May 18., May 25. Junel... June 8... June 15. June 22., June 29. 55,909 55,963 56,213 55,769 49,197 48,117 48,118 48,118 48,118 48,594 48,523 48,093 47,700 59,671 59,588 59,575 59,673 59,672 59,672 59.724 59,851 59.725 59,725 59,744 114,918 70,728 Municipal warrants. 8,736 9,859 10,596 12,249 12,664 14,833 16,678 17,124 16,798 16,932 16,029 15,761 15,715 15,207 15,212 15,163 14,999 14,755 14,688 14,639 14,675 13,912 5,524 2,470 2,444 2,446 Total earning assets. 212,669 206,156 192,475 181,426 169,680 191,242 210.403 209,474 197,814 192,886 178,788 170,125 167,994 225,541 227,413 227,400 239,260 258,811 269,138 274,052 287,297 294,748 358,500 483,947 552,649 494,536 Total Uncolleeted resources and items. liabilities. 142,629 120,846 132,416 126,437 126,611 121,225 144,249 136,940 154,026 130,411 155,976 145,757 132,759 146,422 169,184 166,966 204,842 184,639 310,685 192,830 328,779 177,092 304,730 290,320 195,826 221,705 1,129,358 1,143,728 1,126,896 1,126,573 1,130,550 1,125,442 1,168,782 1,174,390 1,210,177 1,218,857 1,258,843 1,247,980 1,256,151 1,343,346 1,373,684 1,384,642 1,425,872 1,484,706 1,623,405 1,577,526 1,647,804 1,475,400 1,725,540 1,860,934 1,999,642 2,053,340 Capital paid in. 55,695 55,706 55,642 55,694 55,725 55,713 55,773 55,989 56,045 56,028 56,054 56,057 56,075 56,100 56,408 56,411 56,409 56,859 56,859 56,868 56,991 56,985 57,000 57,171 57,171 57,176 Government deposits. 25,566 27,759 28,410 25,607 23,333 15,525 10,851 13,407 14,162 12,401 18,594 19,702 20,567 46,461 42,247 41,988 99,689 107,868 242,421 187,127 76,114 96,478 228,125 262,581 495,807 300,966 Due to members- Collection reserve items. account. 656,422 680,586 669,874 687,841 689,878 678,170 688,591 692,475 708,893 720,488 726,104 711,117 720,411 758,219 741,542 742,584 719,785 743,143 740,726 748,499 813,326 721,146 775,771 870,734 806,209 1,033,460 118,559 111,238 109,734 97,374 101,232 97,207 121,218 108,826 116,330 102,824 121,550 113,784 100,961 105,436 131,064 128,856 129,032 122,761 134,447 136,750 170,151 134,091 181,321 176,424 137,581 149,527 Other Federal deposits, Federal Reserve Reserve including notes notes in Bank foreign in circulaactual Governtion, net circulation. liability. ment credits. 25,000 10,000 1,000 1,000 1,000 1,000 1,000 1,000 1,000 272,873 268,168 262,967 259,768 260,030 278,523 291,839 303,171 314,258 328,433 336,061 346,804 357,610 376,510 401,809 414,357 420,509 428,502 438,218 448,311 454,402 464,865 481,469 491,615 499,721 508,753 4 > o w H o H W r w o > 776 934 Total United Municipal States warrants. securities. July 6 . . . July 1 3 . . July 20.. July 27.. Aug. 3 . . Aug. 10. Aug. 17. Aug. 24.. Aug. 31. Sept. 7 . . Sept. 14. Sept. 21. Sept. 28. Oct. 5 . . . Oct. 12.. Oct. 19.. Oct. 26.. Nov. 2... Nov. 9... Nov. 16.. Nov. 23.. Nov. 30.. Dec. 7 . . . Dec. 14.. Dec. 2 1 . . Dec. 28.. 71,594 74,320 75,315 76,953 73,880 75,681 75,706 77,927 87,835 87,724 94,999 95,005 129,359 103,395 102,343 110,042 99,062 96,110 241,906 111,812 89,096 99,622 101,820 108,568 107,233 2,442 2,441 2,186 1,469 1,249 1,274 1,223 1,232 1,230 204 214 214 224 79 101 233 233 1,267 1,273 1,273 17422 1,429 914 994 1,102 1,005 Total earning assets. 405,553 411,861 436,612 411,978 374,266 359,173 376,179 364,902 381,063 429,455 423,716 439,983 504,937 580,851 582,435 560,802 6S4,959 790,306 788,538 924,898 979,141 1,052,377 978,120 1,070,673 1,081,122 1,064,310 Total Uncollected resources and items. liabilities. 251,334 253,722 242,967 204,756 197,058 205,761 230,704 210,387 260,184 216,960 224,622 236,794 234,361 230,423 321,205 332,302 281,677 317,901 271,796 428,544 302,525 373,160 310,572 319,656 323,574 301,067 2,033,760 2,074,790 2,116,124 2,021,237 1,998,444 1,988,263 2,048,442 2,001,140 2,058,381 2,074,714 2,081,734 2,132,179 2,203,673 2,301,633 2,417,845 2,447,841 2,528,365 2,721,534 2,697,170 3,012,406 2,956,130 3,104,784 3,001,836 3,125,554 3,142,956 3,101,471 Capital paid in. 57,657 57,681 57,723 57,825 57,881 57,970 58,093 58,484 58,904 59,256 59,368 59,354 59,379 61,027 61,104 61,847 62,629 64,291 65,345 66,691 67,136 68,500 69,048 69,440 69,852 70,442 Government deposits. 143,626 300,872 184,631 143,032 56,765 140,447 110,110 59,972 154,358 39,926 21,602 25,030 71,289 86,310 74,167 76,365 132,221 175,912 59,198 218,887 196,411 220,962 168,568 129,285 221,761 108,213 Due to ! members—| Collection reserve items, account, i 1,112,347 1,019,672 1,164,995 1,135,456 1,192,887 1,101,614 1,130,817 1,121,129 1,069,804 1,138,542 1,139,291 1,151,704 1,136,930 1,148,887 1,265,309 1,230,557 1,264,323 1,372,023 1,406,982 1,480,498 1,426,648 1,489,370 1,437,174 1,549,030 1,389,434 1,453,166 164,588 153,363 165,284 137,815 132,053 122,493 171,916 137,955 140,278 154,112 156,268 164,449 157,524 159,258 173,825 210,048 174,492 191,811 187,022 240,437 215,169 231,776 189,861 196,767 205,819 191,689 Other deposits, including foreign Government credits. 6,000 7,847 5,767 9,547 14,269 11,274 12,637 43,933 39,903 53,339 51,621 51,779 68,433 95,029 52,377 43,262 36,335 25,310 34,866 21,925 23,291 19,473 15,586 14,282 14,258 17,969 Federal Federal Reserve Reserve Bank notes notes in in circulaactual tion, net circulation, liability. 527,459 532,508 534,226 534,015 540,785 549,244 558,782 573,049 587,915 621,299 644,567 670,246 700,212 740,916 779,885 815,210 847,506 881,001 932,512 972,585 1,015,892 1,056,983 1,110,537 1,153,385 1,227,642 1,246,488 1,175 1,960 2,306 2,459 2,828 4,182 4,907 5,473 6,023 6,894 7,561 8,000 8,000 8,000 8,000 8,000 8,000 8,000 8,000 8,000 8,000 8,000 8,000 8,000 8,000 8,000 68 ANNUAL REPOET OF XlilS FEDERAL RESERVE BOARD. CASH RESERVES AND EXCESS RESERVES OF THE ER. BANKS 1917 Carve /. Cash S^eserves required against Jfet Sep-osic and J^.JYbte liabilities combined. Cbure 2.- Jotal Cash 3teserre$ ofChe JTJl. 3anKs. ANNUAL EEPOET OF THE FEDERAL EESEBVE BOARD. NET DEPOSITS & FRNOTE LIABILITIES, TOTAL RESER VES, AND RA TIO OF TOTAL RESER VES TO A6GRE6ATE NET DEPOSITAHD FR.NOTE LIABILITIES, DURING CALENDAR YEAR 1917. Currc Z, CurveI: JfetZkjtosiia. Oznv J .-Jbtal (hsh fleaervea. .- Jtatio ofJatal Cash J&serves Co JgcrtqateJfetZ>c}wsifi4&3lJrGte&at>mie$ 70 ANNUAL REPORT OF THE FEDERAL RESERVE BOARD. Required reserves against net deposit and Federal Reserve note liabilities and amounts of gold held in excess of required reserves. [In thousands of dollars; i. e., 000's omitted.] Net deposits. 1917. Amount. Jan. 5 Jan. 12 Jan. 18-19 Jan. 2G Feb. 2 Feb. 9 Feb. 16 Feb. 23 Mar. 2 Mar. 9 Mar. 16 Mar. 23 Mar. 30 Apr. 5-6 Apr. 13 Apr. 20 Apr. 27 May4 May 11 May 18 May 25 Juno 1 Junes Juno 15 June 22 June 29 July 6 July 13 July 20 July 27 Aug. 3 Aug. 10 Aug. 17 Aug. 24 Aug. 31 Sept. 7 Sept. 14 Sept. 21 Sept. 28 Oct. 5 Oct. 11-12 Oct. 19 Oct. 26 Nov. 2 Nov. 9 Nov. 16 Nov. 23 Nov. 30 Dec. 7 Dec. 14 Dec. 21 Dec. 28 S651, 68' 670, 680, 675, 656, 681, 702, 708, 695, 7O6: 760, 744, 743, 743, 808, 815, 793, 721, 771, 876, 1,014, 1,242, 1,261, 1,155, 1,221, 1,273, 1,232, 1.194, 1,171, 1,183, 1.152, 1,133, 1,156, 1,137, 1.153, 1,193, 1,255, 1, 1.195, 1,318, 1,432, 1,408, 1,515, 1,547, 1,595, 1,474, 1,538, 1,466, 1,457, Required reserve of 35 per cent. $227,938 240,487 234,692 238,092 236,301 229,748 234,000 236,963 238,468 245,756 247,413 243,442 247,417 266,099 260,609 260,396 260,237 283,111 285,447 277,560 252,409 270,181 306,837 355,171 434,774 441,630 404,503 427,359 445,759 431,270 417,960 410,103 414,081 403,326 396,874 404,923 398,162 403,872 417,860 439,772 429,564 418,387 461,579 501,470 492,991 530,378 541,493 558,429 516,000 538,375 513,213 510,298 Federal Reserve notes in circulation. Required Amount. | reserve of | 40 per cent. $272,873 268,168 262,967 259,768 260,030 278,523 291,839 303,171 314,258 326,612 336,061 346,804 357,610 376,510 401,809 414,357 420,509 428,502 438,218 446,501 454,402 464,865 481,469 491,615 499, 721 508,753 527,459 532,508 534,226 534,015 540,785 549,244 558,782 573,049 587.915 621,299 644,567 670,246 700,212 740.916 779,885 815,210 847,506 881,001 932,512 972,585 1,015,892 1,056,983 1,110,537 1,153,385 1,227,642 1,240,488 $109,149 107,267 105,187 103,907 104,012 111,409 116, 736 121,268 125,703 130,645 134,424 138,722 143,044 150,604 160,724 165,743 168,204 171,401 175,287 178,600 181,761 185,946 192, 588 196,646 199,888 203,501 210,984 213,003 213,690 213,606 216,314 219,698 223,513 229,220 235,166 248,520 257 827 268,098 280,085 296,366 311,954 326,084 339,002 352,400 373,005 389,034 406,357 422,793 444,215 461,354 491,057 498,595 Total amount of required reserves. $337,087 347,754 339,879 341,999 340,313 341,157 350, 736 358,231 364,171 376,401 381,837 382,164 390,461 416,703 421,333 426,139 428,441 454, 512 460, 734 456,160 434,170 456,127 499,425 551,817 634,662 645,131 615,487 640,362 659,449 644,876 634,274 629,801 637,594 632,546 632,040 653,443 655,989 671,970 697,945 736,138 741,518 744,471 800,581 853,870 865,996 919,412 947,850 981,222 960,215 999,729 1,004,270 1,008,893 Total cash reserves held. $758,242 792,433 783,822 808,824 808,019 788,242 797,271 818,573 846,093 885,616 914,102 922,720 947,328 962,662 971,606 982,633 975,481 1,030,201 1,035,759 1,016,745 1,014,263 993,427 1,051,511 1,075,408 1,247,698 1,334,352 1,356,017 1,400,916 1,430,321 1,414,052 1,421,382 1,424,059 1,427,489 1,424,769 1,406,108 1,415,391 1,426,034 1,452,251 1,457,559 1,486, 715 1,495,558 1,520,512 1,552,942 1,596,819 1,625,585 1,636,853 1,658,762 1,676,211 1,683,307 1,700,384 1,693,670 1, 720, 768 Gold in excess of required reserves (free gold). $421,155 444,679 443,943 466,825 467, 706 447.085 446,535 460,342 481,922 509,215 532,265 540,556 556,867 545,959 549,673 556,494 547,040 575,689 575,025 560,585 580,093 537, 300 552.086 525,591 613,036 689,221 740,530 760,554 770,872 769,176 787,108 794,258 789,895 792,223 774,068 761, 948 770,045 780,281 759,614 750,577 754,040 776,041 752,361 742,949 759,589 717,441 710,912 694,989 723,092 700,655 689,400 711,875 ANNUAL, EEPOET OF T H E FEDERAL RESERVE BOARD. 71 Commercial paper, exclusive of acceptances bought in open market, held by each Federal Reserve Bank on Dec. 28, 1917, distributed by maturities. MATURITIES. [In thousands of dollars; i. e., 000's omitted.] Federal Reserve Bank. From 16 to 30 days. Within 15 days. From 31 to 60 days. From 61 to 90 days. Over 90 days. Boston New York Philadelphia Cleveland Richmond Atlanta Chicago St. Louis Minneapolis Kansas City Dallas San Francisco 13,047 141,907 20,877 23,767 21,232 10,374 70,316 21,710 2,765 19,904 1,665 7,809 7,804 10,804 2,877 4,573 1,902 1,932 14,385 4,681 1,140 2,736 105 4,428 8,862 78,859 13,133 12,587 5,342 2,728 12,289 10,753 6,776 8,504 5,774 9,399 36,218 23,415 2,634 3,669 1,619 1,179 5,346 2,592 1,384 1,628 439 3,851 5 12 47 4,189 76 1,426 2,042 890 299 Total Percent 355,373 52.3 57,367 8.4 175,006 25.7 83,974 12.3 8,986 1.3 Acceptances Total. 65,931 254,985 39,521 44,601 30,107 16,260 106, 525 39,812 13,491 34,814 8,873 25,786 Per cent. 9.7 37.5 5.8 6.6 4.4 2.4 15.6 5.8 2.0 5.1 1.3 3.8 680, 706 100.0 bought in open market, held by each Federal Reserve Bank on Dec. 28, 1917, distributed by maturities. MATURITIES. [In thousands of dollars; i. e., 000's omitted.] Federal Reserve Bank. Boston New York Philadelphia Cleveland Richmond...". Atlanta Chicago St. Louis Minneapolis Kansas City Dallas . San Francisco Total Percent . . Within 15 days. From 16 to 30 days. From 31 to 60 days. From 61 to 90 days. 981 13,631 2,135 5,177 2,534 1,370 1,493 819 2,284 1,406 1,233 7,258 1,204 22,043 6,823 6,812 4,494 703 1, 649 1,809 3,129 9 6,947 5,555 715 67,700 5,019 7,126 4,113 3,868 1,227 3,076 2,037 10 6,185 4,056 5,441 44,751 4,440 2,911 1,897 994 4, 293 1,676 349 40,321 14.6 61,177 22.2 105,132 38.2 68, 736 25.0 3 1,981 1 Over 90 days. Total. 8,341 148,125 18,417 22,026 13,038 6,935 8,662 7,380 7,799 1,425 14,368 18, 850 Per cent. 3.0 53.8 6.7 8.0 4.7 2.5 3.2 2.7 2.8 0.5 5.2 6.9 275,366 100.0 72 ANXUAL REPORT OF THE FEDERAL RESERVE BOARD. Short-term investments (municipal warrants) held by each Federal Reserve Bank on Dec. 28, 1917, distributed by maturities. MATURITIES. [In thousands of dollars; i. e., 000rs omitted.] Federal Reserve Bank. From 31 to 60 days. From 16 to 30 days. Within 15 days. Boston NGW York From 61 to 90 days. Over 90 days. 511 Total. Per cent. 511 50.9 Philadelphia Cleveland... Richmond . 10 10 1.0 7 7 0.7 Atlanta 28 302 30.0 25 2.5 101 150 14.9 104 1,005 10 141 123 Chica ^o St Louis Minneapolis Kansas Citv Dallas San Francisco Total Per cent 25 46 115 10 652 11.6 1.0 64.9 123 12.2 10.3 100.0 United States securities held by each Federal Reserve Bank on Dec. 31, 1917, distributed by classes and maturities. Federal Reserve Bank. Boston New York Philadelphia... Cleveland Richmond Atlanta Chicago St. Louis Minneapolis... Kansas City.-.. 2 per cent consols of 1930. 2 per cent Panamas of 1936-1933. $750 50 6,400 915,100 640, 600 1,862,500 3 per cent loan of 1918. $100 467,200 237,000 21,000 367,300 2,653, 660 10,300 2,581,000 16,2G0 22,240 281,500 1,199,180 San Francisco. Total... 15, 784,050 1,412,600 7, 563,840 $400 1,0S0, 000 100 3 per cent conversion bonds of 1946-47. S529,000 1,255, 500 549, 200 414, 800 $50,000 323,050 7,155,850 2,450,900 2,428, 750 Dallas 3 per cent loan of 1961. 427, 400 1,153,300 500 114,800 838, 500 1,233,600 900 j 6,526,400 3 per cent 1-year notes. 19 i, 000 493,000 548,000 221,000 969,000 491,000 378,000 444,000 340,000 784,000 430,000 500,000 26, 792,000 ANNUAL REPORT OF THE FEDERAL RESERVE BOARD. 73 United States securities held by each Federal Reserve Bank on Dec. 31, 1917, distributed by classes and maturities—Continued. Federal .Reserve Bank. Boston New York Philadelphia Cleveland Richmond Atlanta - per cent 3* per cent 4Liberty Liberty loan of loan of 1947. 1942-47. $80,000 411,150 249, 850 2, 027,000 42,900 290,900 1 Total 1 27,950 $2,378,200 477,100 20, 250 53,000 3,61? 650 11,769,292 U. S. certificates of indebtedness. 10,384, GOO 3,077, 400 200,250 3,227,990 10,633, 090 5,92G, 100 3,955, 000 500 78,039,182 43,050.500 5,177,450 Total U . S . securities. 1 9,079, 850 $15,000,000 9,649, 950 11,489,010 28,050,000 3 205 450 3,888 000 1,708,000 825,000 7 500 Total U . S . bonds and notes. $2 99<? 742 $118,992 3,470,150 6,302, 800 320, 750 41,450 1,434,200 Chicago St. Louis Minneapolis Kansas Citv Dallas San Francisco 4 per cent loan of 1925. $2,922,742 24, G79, 850 9,649,950 39,539,010 3,205,4,50 3, Sm, 000 10,384,GOO 3, 077, -100 3, 228,490 10,033,090 5,920,100 3,955,000 121,089,632 Includes unpaid portion of 4 per cent Liberty loan bonds sold to individual subscribers. Amount of United States bonds with circulation privilege: 2 per cent consols and panamas 3 per cent loan of 1918 4 per cent loan of 1925 Total. $17,196,650 7,563,480 5,177,450 29,937,940 Amount of United securities without circulation privilege: 3 per cent loan of 1961 3 per cent conversion 3 per cent 1-year notes 3£ per cent Liberty loan 4 per cent Liberty loan U. S. certificates of i n d e b t e d n e s s . . . Total. $900 6,526,40) 26,792,000 3,012,650 11,769,292 43,050,500 91,751,742 Statement showing condition of each Federal Reserve Bank and of the system on Dec. 31, 1917. RESOURCES. [Detailed figures shown for each bank in first column represent items as reported to the board; figures in second column, printed in italics, indicate results of consolidation according to methods used in the compilation of the board's weekly statement.] Boston. Oold. bullion and United States coin Ciiiteu States gold certificates (including clearing-house certificates) Gold ZoitK CTid certificates in vault Gold settlement fund, Federal Reserve Board Gold with foreign agencies $2,749,900.00 15,941,000.00 16,977,000.00 3,675,000.00 Total gold held by hanks Gold with Federal Reserve agents Gold redemption fund with United States Treasurer 40,896,820.00 2,000,000.00 Total gold reserves Legal tender notes (including clearing-house certificates) Silver certificates (including clearing-house certificates) Silver coin . . Legal tender notes, silver, etc Member banks' collateral notes All other bills discounted Bills discounted for members and Federal Reserve Banks Bills bought in open market $18,691,000.00 16,977,000.00 5,675,000.00 5,854,000.00 18,112,500.00 $325,132,000.00 5,854,000.00 18,112,000.00 39,343,000.00 349,098,000.00 40,897,000.00 250,598,565.00 2,000,000.00 10,000,000.00 250,599,000.00 10,000,000.00 82,240,000.00 609,697,000.00 31,322,275.00 8,925,531.00 212.85 32,101,000.00 3,675,000.00 $19,064,000.00 32,101,000.00 3,675,000.00 54,840,000.00 63,945,755.00 1,500,000.00 63,946,000.00 1,500,000.00 40,248,000.00 1,190,000.00 85,814,000.00 649,945,000.00 121,476,000.00 9,037,506.04 250,309,000.00 148,770,000.00 74,920,000.00 399,079,000.00 15,168,599.64 H O H K d 3,574,000.00 65,882,000.00 9,038,000.00 148, 770,185.44 j o w 120,286,000.00 671,100.00 518,262.00 634.10 111,248,943.00 139,060,003.96 1728,742.41 Philadelphia. $147.50 19,064,520.00 7,349,338 00 58,533,021.35 Total bills on hand United States bonds to secure circulation Other United States bonds owned $68,178,991.99 256,952,580.00 988,536.00 2,574,800.00 11,230.00 Total reserves New York. 4,008,400.00 31,903,836.94 18,390,067.91 35,912,000.00 18,390,000.00 54,302,000.00 7,101,950.00 w r w w o > o United States Government long-term securities One-year Treasury notes United States certificates of indebtedness CO United States Government short-term securities & Municipal warrants ° All other earning assets 728,000.00 2,194,000.00 19,493,000.00 77,842,000.00 Exchanges for clearing house Checks and other cash items National bank notes and notes of other Federal Reserve Banks Mutilated currency (other than own Federal Reserve notes) forwarded for redemption Check lost in transit Collection items—Debits: Federal Reserve Banks—Transfers bought Federal Reserve Banks—Other items Member and nonmember banks and bankers Uncollected items 10,000.00 63,962,000.00 2,980,995.71 4,397,568.98 1,353,500.00 469,400.00 476,535.00 56,000.00 58.00 570,000.00 4,006,463.76 10,430,919.68 H O 18,786,000.00 75,962,000.00 35,701,000.00 18,786,000.00 75,962,000.00 '5,701,000.00 182,442,000.00 1,150,159,000.00 S3,365,975.00 25,787,300.00 37,664,000.00 4,725,000.00 O 19,767,938.39 7,144,756.58 29,982,193.73 18,109,596.47 Cleveland. 511,000.00 424,252,000.00 7,309,335.13 19,120,325.61 964,450.00 Total deductions from gross deposits Gold bullion and United States coin United States gold certificates (including clearing-house certificates) Gold coin and certificates in vault Gold settlement fund, Federal Reserve Board Gold with foreign agencies ;ooo.oo 10,000.00 2,300,431.57 916,166.13 92,000.00 Total resources Total gold held by banks. 2,548,000.00 510,701.32 Total earning assets. 7,102,000.00 5,169,000.00 4,493,000.00 15,000,000.00 2,194,000.00 Richmond. $573,457.50 5,728,000.00 $29,153,000.00 37,664,000,00 4,725,000.00 22,116,200.00 1,837,500.00 71,542,000.00 1 Including unpaid portion of bonds sold to individual subscribers. 221,139,000.00 Atlanta. SI, 548,322.72 4,169,000.00 $6,302,000.00 22,116,000.00 1,837,000.00 30,255,000.00 12,482,000.00 1,575,000.00 $5,717,000.00 12,482,000.00 1,575,000.00 19,774,000.00 W O y Statement showing condition of each Federal Reserve Bank and of the system on Dec. 31, 1917—Continued. RESOURCES—Continued. [Detailedfiguresshown for each bank in first column represent items as reported to the Board;figuresin second column, printed in italics, indicate results of consolidation according to methods used in the compilation of the Board's weekly statement.] Cleveland. Gold with Federal Reserve agents Gold redemption fund with United States Treasurer $55, 369, 700.00 98, 800.00 Richmond. $55,370,000.00 $31, 601,850.00 99,000.00 485,087.15 127,011,000.00 Total gold reserves Lesal tender notes (including clearing-house certificates} Silver certificates (including clearin£r-hou°e certificates') Silver c o i n . . . 188, 171.85 . Legal tender notes, silver, etc Total reserves Member banks' collateral notes All other bills discounted Hills discounted for members and Federal Reserve Banks Bills bought in open market .. 127,249,000.00 62,506,000.00 72,010,000.00 4, 171,060.00 8, 268, 42,896,000.00 21,112,000.00 13, 156,126.71 3, 221, 28, 050, x 2,628,250.00 11,895,589.16 29,565,000.00 13,156,000.00 1, 236,450.00 010.00 2,397,000.00 92,344.97 Total earnina9 assets ! w o 1,491,000.00 284,372.00 503,831.60 7, 233.38 All other earning assets 2,897,000.00 1,491,000.00 1,969,000.00 31,271,000.00 14,524,000.00 6,497,000.00 21,021,000.00 1,237,000.00 1, 969,000.00 000.00 000.00 6,497,061.67 42,721,000.00 8,268,000.00 One-year Treasury notes United Statss certificates of indebtedness United States Government short-term securities Municipal warrants o w HI 13,200.00 397,889.00 4,626.00 416,000.00 64,008,000.00 Other United States bonds owned 71,594,000.00 164,000.00 25, 393,314.34 Total bills on hand $50,701,000.00 1,119,000.00 238,000.00 150.00 990.95 $31,602,000.00 $50,701,320.00 485,000.00 1,119,140.98 62,342,000.00 V 1f.S 027.27 21, 111, Atlanta. 112,500.00 51,748.00 16.85 897.00 49, 472.00 OS 7,000.00 92,000.00 788,000.00 103,554,000.00 46,019,000.00 25,697,000.00 Due from other Federal Reserve Banks—Collected funds Due to other Federal Reserve Banks—Collected funds 11,206,000.00 Due from other Federal Reserve Banks—Net Exchanges for clearing house Checks and other cash items National bank notes and notes of other Federal Reserve Banks Mutilated currency (other than own Federal Reserve notes) forwarded for redemption Due from Assistant Treasurer of the United States Collection items—Debits: Federal Reserve Banks—Transfers bought Federal Reserve Banks—Other items Branches and offices * Bond coupons Member and nonmember banks and bankers Uncollccted items Total deductions from gross deposits All other resources: Interest accrued on United States securities Expense current Bank premises Other deferred charges Dividend account, including premium on surrendered stock Disbursements, Liberty Loan No. 2 Disbursements, War-Savings Stamps Overdrafts—Member banks Nickels and cents Total all other resources.. Less all other liabilities: Discount earned on bills discounted.. Discount earned on bills bought Interest earned—Municipal warrants. 2,477,038.78 1,275,547.12 11,206,205.39 924,753.63 458.00 1,080,260.00 1,202,000.00 161,213.03 20,828.26 415,565.00 2,552,616.60 56,940.23 2,395,950.00 232,250.00 494,265.00 252,000.00 1,164,000.00 8,869,384.45 6,858,948.47 803,000.00 3,6C8,787.35 674,174.47 o w 110,433.15 12,633,421.50 10,720,627.38 8,865,130.93 o H 25,529,000.00 18,177,000.00 19,249,000.00 H 36,735,000.00 18,177,000.00 SO, 461,000.00 H 21,575.24 133,315.47 300,000.00 9,065.24 105,253.79 40,971.15 2,250.59 50,074.18 7. 43 662,513.09 306,848.85 114,868.82 164. 77 Statement showing condition of each Federal Reserve Bank and of the system on Dec. 31, 1917—Continued. 00 RESOURCES—Continued. [Detailedfiguresshown for each bank in first column represent items as reported to the Board; figures in second column, printed in italics, indicate results of consolidation according to methods used in the compilation of the Board's weekly statement.] Cleveland. Less all other liabilities—Continued. Interest earned—United States securities Penalties on deficient reserves Sundry profits.. Unearned discount on bills discounted Unearned discount on bills bought Service charges net Difference account Profit and loss Suspense account . . Richmond. Atlanta. $46,492.23 19,585.89 1,010.55 58,610.33 41,594.05 4,386. 69 115.33 28,154.92 20.00 . . o w H o hrj H W hrj Total all other liabilities 621,852.43 $41, 000. GO A11 other resources, net $267,538,000.00 Total resources Chicago. Gold bullion and United States coin United States gold certificates (including clearing-house certificates) Gold coin and certificates in vault Gold settlement fund, Federal Reserve Board Gold with foreign agencies Total gold held by banks $78,345.00 32,110,960.00 . . 58,960,460.00 7,350,000.00 St. Louis. SI, 447.50 5,087,690.00 $32,189,000.00 68,961,000.00 7,350,000.00 98,500,000.00 $118,158,000.00 126,743,000.00 17,884,000.00 2,100,000.00 Minneapolis. SO, 688,900.00 8,270,770.00 $5,089,000.00 17,884,000.00 2,100.000.00 25,073,000.00 19,486,500.00 2,100,000.00 o $14,960,000.00 19,487,000.00 2,100,000.00 36,547,000.00 Gold with Federal Reserve agents Gold redemption fund with United States Treasurer. f 130.723,530.00 646,490.00 I Total gold reserves Legal tender notes (including clearing-house certificates). Silver certificates (including clearing-house certificates)... Silver coin Legal tender notes, silver, etc Due from other Federal Reserve banks—Collected funds Due to other Federal Reserve Banks—Collected funds Due from other Federal Reserve Banks—Net Exchanges for clearing house Checks and other cash items National bank notes and notes of other Federal Reserve Banks., 58,369,000.00 32,910,000.00 878,000.CO 70,335,000.00 179,105.00 231,924.00 2,120.00 767,000.00 413,060.00 230,833,000.00 59,136,000.00 70,748,000.00 105,119,000.00 9,182,000.00 7,362,724.15 33,460,000.00 7,363,000.00 40,823,000.00 2,233,400.00 7,006,600.00 1,444,000.00 20,237,000.00 H W ft 1,888,000.00 ft to 1,340,000.00 25,380.00 960,758.32 566,536.89 804,554.29 H 1,340,000.00 500.00 1,444,000.00 3,378,000.00 13,070,000.00 7,167,000.00 1,887,990.00 2,233,000.00 7,007,000.00 3,378,000.00 7,166,677.76 cj > d o w 1,059,992.00 12,010,457.01 7,905,420.00 25,554,815.60 114,301,000.00 Total earning assets 32,909,950.00 878,225.00 4,000.00 57,742,749.95 47,375,871.75 9,182,429.93 32,366,000.00 930,000.00 395,480.00 370,603.00 543.50 611,500.00 340,150.00 12,152.00 Total bills on hand Other United States bonds owned United States Government long-term securities One-year Treasury notes United States certificates of indebtedness. United States Government short-term securities Municipal warrants. Bill of lading drafts AII other earning assets 32,366,430.00 929,900.00 229,869,000.00 Total reserves Member banks' collateral notes. All other bills discounted Bills discounted for members and Federal Reserve Banks Bills bought in open market 150,723,000.00 646,000.00 w w 805,000.00 567,000.00 986,000.00 w ft 125,491,000.00 45,067,000.00 24,451,000.00 % ft 11,283,058.19 8,449,634.85 40,700,661.92 34,205,435.85 2,834,000.00 6,495,000.00 1,517,549.12 514,252.43 475,000.00 2,047,705.00 W 599,179,46 169,361.00 c > Statement showing condition of each Federal Reserve Bank and of the system on Dec. SI, 1917—Continued. RESOURCES—Continued. [Detailedfiguresshown for each bank in first column represent items as reported to the Board;figuresin second column, printed in italics, indicate results of consolidation according to methods used in the compilation of the Board's weekly statement.] Chicago. Mutilated currency (other than own Federal Reserve notes) forwarded for redemption Collection items—DebitsFederal Reserve Banks—Transfers bought Federal Reserve Banks—Other items Branches and offices . Member and nonmember banks and banker s $8,178,412.26 8,435,661. 74 9 915 446.23 Total deductions from gross deposits Total resources Gold bullion and United States coin United States gold certificates (including clearing-house certificates) Gold coin and certificates in vault Gold settlement fund, Federal Reserve Board Gold with foreign agencies Tctal gold held by banks Minneapolis. 840,000.00 Uncollected items Kansas City. St. Louis. w nj o w SI, 235,000.00 729,552.53 1,465,000.00 6,665,875.45 310,077.65 5 274 225.57 H 3,063,947.48 §28,522,000.00 %1C, 317,000.00 %5,797,000.00 28,522,000.00 22,812,000.00 8,631,000.00 384,846,000.00 127,015,000.00 ion,830,000.00 Dallas. San Francisco. $127,180.00 116,202,525.00 399,633,994.71 1,591,780.00 11,773,000.00 10,238,560.00 $1,711,000.00 87,263,000.00 2,025,000.00 $11,900,000.00 24,520,700.00 24,520,000.00 1,837,500.00 1,838,000.00 17,072,000.00 2,887,500.00 396,715,160.00 $496,349,000.00 $26,441,000.00 17,672,000.00 302,981,237.50 302,981,000.00 52,500,000.00 2,888,000.00 52,500,000.00 41,599,000.00 88,258,000.00 47,001,000.00 H o Total. $118,742.50 37,263,377.50 2,625,000.00 O H 851,830,000.00 m W o Gold with Federal Reserve Agents Gold redemption fund with United States Treasurer 42,025,170.00 507,045.00 Total gold reserves Legal tender notes (including clearing house certificates) Silver certificates (including clearing house certificates) Silver coin Legal tender notes, silver, etc Total Total earning assets 25,037,000.00 46,993,550.00 46,993,000.00 803,169,315.00 803,169,000.00 507,000.00 1,217,607.02 1,218,000.00 24,335.00 24,000.00 19,406,630.15 19,406,000.00 64,513,000.00 94,018,000.00 1,674,405,000X0 11,000.00 155,250.00 66,425.00 34, 715,268.00 45 810.00 843.00 487,436.00 136,020.89 279,284.00 63,113.55 14,272,909.00 231,684.59 1,337,928.75 cj > 58,000.00 779,000.00 409,000.00 49,220,000.00 84,189,000.00 65,292,000.00 94,427,000.00 1,723,625,000.00 17,277,467.89 17,776,976.31 Total bills on hand United States bonds to secure circulation Other United States bonds owned United States Government long-term securities.. One-year Treasury notes United States certificates of indebtedness United States Government short-term securities.. Municipal warrants Bill of lading drafts All other earning assets 25,036,675.00 84,131,000.00 reserves.... Member banks' collateral notes All other bills discounted Bills discounted for members and Federal Reserve Banks Bills bought in open market • 42,025,000.00 35,055,000.00 1,338,000.00 940,000.00 7,799,996.88 2,316,688.32 23,463,512.86 222,381,459.16 437 930 423.43 14,140,549.66 8,740,000.00 14,140, 000. 00 17,082,455.93 25,780,000.00 17,083,000.00 273,235,704.90 660,311,000.00 273,237,000.00 22,880,000.00 42,863,000.00 933,548,000.00 36,393,000.00 8,000,000.00 849,090.00 2,732,400.00 1,763,700.00 8,849,000.00 1,784,000.00 2,455,000.00 4,496,000.00 1 784 000.00 1 500 000.00 1,430,000 00 rrj 51,829,000.00 26 792 000.00 43 050 500.00 1,500,000.00 69,842,000.00 988,145 44 3,610,084.26 150,458.74 682,058.19 29,639,000.00 o 4,598,000.00 832,000.00 47,026,000.00 H O 10,732,400.00 41,096,532.05 2,455,000.00 1 430 000.00 o w 46,818,000.00 1,059,817,000.00 GO Statement showing condition of each Federal Reserve Bank and of the system on Dec. 31, 1917—Continued. 00 to RESOURCES—Continued. [Detailed figures shown for each bank in first column represent items as reported to the Board;figuresin second column, printed in italics, indicate results of consolidation according to methods used in the compilation of the Board's weekly statement.] Kansas City. San Francisco. Dallas. Total. > Due from other Federal Reserve BanksCollected funds Due to other Federal Reserve Banks—Collected funds Due from other Federal Reserve Banks—Net. r $2,731,547.83 $2 732,000.00 72,871.41 Exchanges for clearing house 160,809.46 Checks and other cash items... National Bank notes and notes of other Federal 216,300.00 Reserve Banks Mutilated currency (other than own Federal Reserve notes) forwarded for redemption) Checks lost in transit Due from Assistant Treasurer of the United States Collection items—Debits: Federal Reserve Banks—Transfers bought.. 5,683,982.31 3, 466,329.80 Federal Reserve Banks—Other items Branches and offices Bond coupons Member and nonmember banks and bankers. 15,583,135.50 Uncollccted items Total deductions from gross deposits 44 699 494.34 768 876.52 ... 5 per cent redemption fund against Federal Reserve Bank notes $74,307,445.95 $5,908,933.84 400,000.00 $8,499,000.00 $5,140,000.00 151,154.45 20,566,989.16 25,276,874.76 2 181 816.08 4,598.63 O W H O hxj H 3,780,011.00 877,826.00 13,867,928.00 1 768,450.00 58.00 300,000.00 552,000.00 4,372,699.26 827,144.24 25,426,809.51 95,022,994.73 12 647 648.59 110,433.15 101,875,605.30 1,954,715.68 1,744,714.82 1 747 950.24 5,754,831. 71 4,295,012.50 25,184,000.00 $15,086,000.00 12,806,000.00 297,116,000.00 27,916,000.00 15,086,000.00 17,946,000.00 305,613,000.00 400,000.00 136,700.00 137,000.00 536, 700.00 537,000.00 w o All other resources: Interest accrued on United States securities. Expense current Bank premises Furniture and equipmentCost of unissued Federal Reserve currency. Other deferred charges Dividend account, including premium on surrendered stock Disbursements, transit department Disbursements, Liberty Loan No. 1 Disbursements, Liberty Loan No. 2 Disbursements, War-Savings Stamps Overdrafts—Member banks Difference account Nickels and cents Total all other resources Less all other liabilities: Discount earned on bills discounted Discount earned on bills bought Transfers bought and sold, net charges... Interest earned—Municipal warrants Interest earned—United States securities. Commissions earned Penalties on deficient reserves Sundry profits Unearned discount on bills discounted Unearned discount on bills bought Reserved for sundry expenses Service charges, net Difference account 23,449.37 144,156.27 120,000.00 26,981.09 13,232.19 35,961.05 24,429.49 222,607.05 568.24 523,843.20 464. 72 2,740.82 45,024.61 277,471.74 420,000.00 26,981.09 13,232.19 9,065.24 105, 253.79 35, 961.05 24, 429.49 263, 578.20 2, 818.83 573, 917.38 464.72 2, 748.25 1,138,433.49 1,800,946.58 270,804.44 181,770.29 38,658.39 424.46 79,416.50 52.08 17,297.67 577,653.29 296,639.11 38,658.39 589.23 125,908.73 52.08 36,883.56 1,010.55 166,023.65 87,816.23 50,000.00 26,155.41 115.33 107,413.32 46,222.18 50,000.00 21,768.72 > "A y A d > w w o w H o hrj H w w w w w m M W W o > fcd 00 CO Statement showing condition of each Federal Reserve Bank and of the system on Dec. 31, OO 1917—Continued. RESOURCES—Continued. [Detailedfiguresshown for each bank in first column represent items as reported to the Board; figures in second column, printed in italics, indicate results of consolidation according to methods used in the compilation of the Board's weekly statement.] Kansas City. Dallas. San Francisco. Total. Less all other liabilities—Continued. Profit and loss Suspense account $14,475.91 $42,630.83 20.00 Total all other liabilities 828,303.96 1,450,156.39 Total resources $159,531,000.00 $110,153,000.00 w $.151,000.00 $310,000.00 All other resources, net O .1,089,945,000.00 159,501,000.00 H O M LIABILITIES. Boston. Capital Capital—suspense account Capital paid in Government deposits Due to members—reserve account Due to other Federal Reserve Banks, collected funds Due from other Federal Reserve Banks, collected funds Due to other Federal Reserve Banks, net Cashier's expense, return item, and dividend checks Federal Reserve bank drafts Federal Reserve exchange drafts Collection items—credits: Federal Reserve Banks—transfers sold Federal Reserve Banks—other items $18,684,850.00 11,100.00 $5,858,450.00 2,419,414.94 82,244,369.22 3,870,139.46 New York. $5,858,000.00 2,419,000.00 11,870,707.74 82,245,000.00 652,791,808.26 7,610,609.86 3,870,000.00 23,482.60 4,821,389.92 147.34 $18,696,000.00 11,871,000.00 652,792,000.00 4,832,816.11 84,574,264.34 4,296,240.29 96,142,000.00 4,833,000.00 8/h574,000.00 4,296,000.00 435,026.66 9.00 5,156,779.75 o $6,141,850.00 300.00 7,611,000.00 25.15 2,332,237.7 Philadelphia. 250,000.00 2,850,790.00 W O P Member and nonmember banks Miscellaneous . G ovemment account 11,445,199.35 90.40 ..... 554,672.42 13,801,000.00 Collection items Foreign government credits Due to nonmember banks clearing account 3,335,930.00 10,317,630.16 13,653,000.00 Total gross deposits Total deductions 77,296,820.00 I 121,855,000.00 731,693,000.00 102,335,000.00 | 456,338,565.00 > t-1 97,325,755.00 w O W H j 4,097,520.00 55,844,760.00 3,140,000.00 4,348,590.00 27.50 4,097,520.00 58,984,760.00 4,348,617.50 73,199,000.00 Federal Reserve notes in actual circulation All other liabilities: Discount earned on bills discounted Discount earned en bills bought Transfers bought and sold, net charges Interest earned—Municipal warrants Interest earned—United States securities Profits realized on United States securities Commissions earned Penalties on deficient reserves Sundry profits Discount on U nited States bonds Unearned discount on bills discounted Unearned discount on bills bought Unearned interest on municipal warrants Reserved for sundry expenses Liberty 1 oan bonds—$10 participation certificates 28,152,000.00 45,532,000.00 Other deposits, including foreign government credits.. Federal Reserve notes outstanding Less: Federal Reserve notes on hand Mutilated Federal Reserve notes forwarded for redemption 24,061,904.97 35,553,478.43 94.47 571,117.13 502 397 30 107. 80 5,202.73 94,784. 86 11,101.60 6,938.15 6,105,39 253. 72 6,875. 00 249 459 57 74 220 29 397,354,000.00 2,240,121.86 1,304,701.11 5,776.03 224,780.66 13 680 73 4,815.90 19,458.52 3,833.13 611,916.47 635 158 66 2,366.S8 1,444.55 227,970.00 92,977,000.00 W 302,264.77 300,529.44 1,658.06 66,561.20 4,382.21 3 720 84 1 96,844.03 64,057.37 1.11 19.79 o 00 Statement showing condition of each Federal Reserve Bank and of the system on Dec. 31, 1917—Continued. CO LIABILITIES—Continued. [Detailedfiguresshown for each bank in first column represent items as reported to the "Board;figuresin second column, printed in italics, indicate results of consolidation according to methods used in the compilation of the Board's weekly statement.] Boston. All other liabilities—Continued. Contracts to deliver Liberty loan bonds sold.. Service charges, net Difference account Profit and loss Discount on bills sold Interest on participation certificates Suspense account Total all other liabilities.. Less all other resources: Interest accrued on United States securities Service charges accrued Expense current Exchange paid Bank premises Furniture and equipment Cost of unissued Federal Reserve currency Other deferred charges. .................: Dividend account, including premium on surrendered stock.. Disbursements, transit department Disbursements, Liberty loan No. 1 Disbursements, Liberty loan No. 2 Disbursements, war saving stamps Revenue stamps Repairs and alterations, remodeling account $37,876.35 11,590.56 New York. $6,186.25 80,922.53 339,649.98 8,077.03 316.31 S9,981.08 Philadelphia. S79,581.63 41.51 176,626.52 H O 1,275. 75 1,628,036. 45 5,821,157.68 1,097,564.23 21,958,75 73,620.28 255,690.82 69.10 656,534.85 58,906.44 S, 238.21 141,768.66 4.85 10,000.00 29,123.11 511.99 2,055.51 467,727.53 101,701.36 8,973.83 33,666.91 1,462.24 3,926.85 96,132.22 142,887.62 10,450.00 445,248.14 15,380.02 1,466,719.68 147,206.18 48,041.40 299,982.22 12,326.39 5,078.20 o w 100,032.85 w o 12,804.81 Overdrafts, member banks. Difference account Nickels and cents Total all other resources All other liabilities, net 813.26 2,115.81 628.85 257. 26 209.09 575,470.40 3,171,023.47 933,084.41 ' Total liabilities 1,050,000.00 2,650, 000. 00 165,000.00 182,442,000.00 1,150,159,000.00 221,139,000.00 Cleveland. Richmond. > tr1 Atlanta. O Capital Capital paid in Government deposits Due to members—reserve account Due to other Federal Reserve Banks, collected funds Due to other Federal Reserve Banks, net Cashier's expense, return item, and dividend checks Federal Reser\7e bank drafts Federal Reserve exchange drafts Collection items—credits: Federal Reserve Banks—other items Branches and offices Member and nonmember banks Miscellaneous. Collection items Due to nonmember banks clearing account Other deposits, including foreign government credits $8,026,100.00 ! 30,578,247.23 109,724,561.05 $8,026,000.00 30,578,000.00 109,725,000.00 2,253,761.15 45,356,855.67 3,644,461.78 w $2,812,750.00 $3,664,000.00 2,254,000.00 45,357,000.00 4,476,782.74 36,849,923.90 $2,813,000.00 4,477,000.00 36,850,000.00 Hi M ' 3,644,000.00 30,574. € 75,649.91 15,978.73 115,280.00 3,760,358.95 G, 457,014.59 12,720,415.44 72,739. 80 8,726,400. 22 3,094,279.83 222,655.30 5,423,001.18 .33 16,584,000.00 15,260,000.00 91,160.59 wti i i 8,871,000.00 98)000.00 156,981,000.00 105,669,700.00 r 97,903.27 94,000.00 Total gross deposits Federal Reserve notes outstanding $3,663,950.00 66,515,000.00 60,770,135.00. W O l 50,296,000.00 66,867,420.00 00 Statement shoiving condition of each Federal Reserve Bank and of the system on Dec. 31, 00 00 1917—Continued. LIABILITIES—Continued. [Detailed figures shown for each bank in first column represent items as reported to the Board; figures in the second column, printed in italics, indicate results of consolidation according to methods used in the compilation of the Board's weekly statement.] Cleveland. Less: Federal Reserve notes on hand Mutilated Federal Reserve notes forwarded for redemption Total deductions $4,189,830.00 16,500.00 $1,909,030.00 43,500.00 3,786,525.00 4,200,330.00 1,952,530.00 $101,883,000 00 Total all other liabilities - 333,9C0.67 309,205.71 9,305.10 7,399.92 198,350.57 13,617.31 2,804.95 .. - ... . . . . . Atlanta, $3,666,525.00 120,000.00 Federal Reserve notes in actual circulation All other liabilities: Discount earned on bills discounted Discount earned on bills bought Transfers bought and sold, net charges Interest earned—Municipal warrants Interest earned—United States securities Interest earned—Bill of lading drafts Penalties on deficient reserves Sundry profits Discount on United States bonds Unearned discount on bills discounted Unearned discount on bills bought Unearned interest on municipal warrants . Unearned interest on certificate of indebtedness Reserved for sundry expenses . * Service charges net . Difference account Profit and loss Richmond. 116,570.72 62,600.28 11,472.23 309. 98 41,679.01 184. 66 177,386.94 1,344,968.11 $64,915,000.00 $56,564 000 00 181,023.19 53,291.98 14,177.99 1,903. 75 98,038.45 1,436.95 12,038.82 2,348.03 437. 50 37,292. 75 26,635.01 1,229.25 34,332.08 30,696.91 51,365.93 546,849.19 o w H r1 w o > Less all other resources: Premium on United States bonds Interest accrued on United States securities Expense current Exchange paid .... Sank premises Cost of unissued Federal Reserve currency Other deferred charges Dividend account, including premium on surrendered stock Disbursements, transit department Disbursements, Liberty loan No. 1 Disbursements, Liberty loan No. 2 Disbursements, war saving stamps... . Service charges paid—Collection department Overdrafts member banks Difference account Nickels and cents Total all other resources ! 209,469.52 62,878.48 215 264 85 57.62 25,814.07 101,837.42 140,875.20 588.24 2,237.36 1,650.27 32,973.95 197. 40 56,722. 22 6,260. 62 131,404. 60 1,582. 61 119 10 11,792.01 870.35 272.01 407.51 696,619.38 412,350.10 648,000.00 Total liabilities Due to other Federal Reserve Banks, collected funds Due from other Federal Reserve Banks collected funds 126,7lfS, 000.00 St. Louis. 3,052,436.84 169,174,348.05 6,165,983.77 5 992 720.41 $9 092 000.00 3,052,000.00 169,174,000.00 5,430,359.99 45,796,967.60 118,158,000.00 Minneapolis. §2 612,450.00 7,700.00 $3 474 600.00 $9 091 700.00 Due to other Federal Reserve Baiiks net Cashier's expense, return item, and dividend checks 134,000.00 267,538,000.00 Chicago. Cd'pitdl paid in Governvieni deposits. Due to members—reserve acSbunt w H O A U other liabilities, net Capital Capital—suspense account O 44,514.02 1,180.05 $3 475 000.00 5,430,000.00 45,797,000.00 8, 716,529.47 39,347,899.01 $2,620,000.00 8,717,000.00 39,348,000.00 W O 173 000 00 244,404.64 197,223.90 31,488.47 00 Statement showing condition of each Federal Reserve Bank and of the system on Dec. 31, 1917—Continued. LIABILITIES—Continued. [Detailed figures shown for each bank in first column represent items as reported to the Board; figures in the second column, printed in italics, indicate results of consolidatio: according to methods used in the compilation of the Board's weekly statement.] Chicago. Federal Reserve bank drafts Federal Reserve exchange drafts . Collection items—credits: Federal Reserve Banks—'transfers sold Federal Reserve Banks—other items Branches and offices Member and nonmember banks Miscellaneous Government account 14,639,568.31 34,701.89 22,465.94 7,228.62 * Total gross deposits Federal Reserve notes outstanding . . Less: Federal Reserve notes on hand Mutilated Federal Reserve notes forwarded for redemption circulation w 2,069,429.73 H O 1,125,226.30 163,096.52 $12,151,000.00 w $S,395,000.00 36,300.00 93,432.34 3,198,413.97 Other deposits, including foreign government credits O $820,000.00 1,468,334.24 779,251.41 8,843,947.26 42,724.30 $1,470,000.00 3,619,175.99 $19,438,000.00 Total deductions Minneapolis. $5,096.06 325.90 Collection items. Foreign government credits Due to nonmember banks—clearing account TPpdpTcil"RPVPTVPnote? in actual St. Louis. 3,199,000.00 93,000.00 36,000.00 195,036,000.00 63,471,000.00 51,496,000.00 190,788,530.00 61,863,430.00 9,727,000.00 433,500.00 1,940,400.00 10,160,500.00 1,940,400.00 51,005,950.00 W fed 1,420,8(55.00 171,000.00 W o 180,628,000.00 1,591,865.00 59,923,000.00 49,414,000.00 All other liabilities: Discount earned on bills discounted Discount earned on bills bought Transfers bought and sold, net charges Interest earned—Municipal warrants Interest earned—United States securities Interest earned—Bill of lading drafts Penalties on deficient reserves Sundry profits Collection department service charges Discount on United States bonds Unearned discount on bills discounted Unearned discount on bills bought Unearned interest on municipal warrants Eeserved for sundry expenses Liberty loan bonds—$10 participation certificates Federal Reserve Bank transfer drafts Federal Reserve Bank exchange drafts Service charges, net Difference account Profit and loss Total all other liabilities.. Less all other resources: Premium on United States bonds „, Interest accrued on United States securities.., Expense current Exchange paid Furniture and equipment Cost of unissued Federal Reserve currency Other deferred charges Dividend account, including premium on surrendered stock.. Disbursements, transit department Disbursements, Liberty loan Ko. 2 Disbursements, United States certificate of indebtedness 876,485.79 230,213.05 96,404.08 334.32 291,651.33 3,632.66 6,749.33 723.37 55.36 j ! ? ! ! j I 358,238.50 170,233.26 57,919. 95 13,691.40 110,300.98 7,492.56 14,968.34 920.50 103,036.43 30,385.77 4,833.62 1(53,100.00 1,064.20 283.25 34.075. 853.65 2,150, 383. 93 106, 474.74 63, 695. 00 314, 834.15 223.97 35,117.63 254. 60 49,184. 97 6,535.87 3,909. 94 701.02 59.60 272,959.85 45,127.48 122,690.76 242,284.63 72,476. 74 5,682.39 77,460.09 16,814.30 6.21 ' i* 223.16 50,590.69 I ! 12,748.15 49,383.55 | 920,129.78 610,402.63 I 39,057.53 6,353.15 24.850.94 17,841.63 \ 236,477.15 112,686.71 I 80.19 44,498.74 66,065.25 43; 001.01 16,166.61 32,915.48 784.07 1,626.51 2,127.12 656, 421.38 32, 044.83 284. 904.44 2, 523.49 284,565.61 34,392.40 124,849.47 44,461.13 53,797.73 Statement showing condition of each Federal Reserve Bank and of the system on Dec. 31, 1917—Continued. o LIABILITIES—Continued. [Detailed figures shown for each bank in first column represent items as reported to the Board; figures in the second column, printed in italics, indicate results of consolidation according to methods used in the compilation of the Board's weekly statement.] Chicago. Less all other resources—Continued. Disbursements, war savings stamps Deferred charges, Liberty loan Revenue stamps Liberty loan bonds—$10 participation certificates Overdrafts, member banks Difference account Nickels and cents $329.16 I ! j | i I Total all other resources. $54.067.19 359.48 183,100.00 330,615. S3 539.40 70.27 c H j 774,048.01 Kansas City. Capital j $3,395,750.00 1,000.00 Capital—suspense account Capital paid in 7,860,957.17 Government deposits Due to members—reserve account 72,976,491.13 Due to other Federal Reserve banks, collected funds Due from other Federal Reserve Banks, collected funds Due to other Federal Reserve Banks, net Cashier's expense, return item, and dividend )7O,542.14 checks ...,,.., $90,000.00 $116,000.00 127,01,5,000.00 Dallas. $2,794,900.00 $3, S97,000.00 7,801,000.00 72,976,000. GO 6,609,284.55 44,155,240.99 San Francisco. 12,353,938.63 2,353,933.63 H M H $.100, GOO. CO 103,830,000.00 ! Total. $70,699,100.00 40,800.00 $4,141, 750.00 20,700.00 $2,795,000.00 6,609,000.00 44,155,000.00 hj 310,250.19 I 384,846,000.00 I Total liabilities o 15.37 16. 61 S7S7. 24 2,060,259.27 All other liabilities, net Minneapolis. St. Louis. 740,000. co $4,162,000.00 12,354,000.00 100,455,296.56 100,455, wo. 00 63,780,000.00 1,446,772,639.56 1,446, 773,000.00 O 29,951,099.95 4,363,664.79 2,847,694.30 8,840,414.71 1,516,000.00 104,903.32 ] 2,062,479.92 j . . . 9,013,149.90 , Federal Reserve bank drafts Federal Reserve exchange drafts Federal Reserve transfer drafts Collection items—credits: Federal Reserve Banks—-transfers sold Federal Reserve Banks—other items Branches and offices Member and nonmember banks Miscellaneous Government account Suspense ' Collection items Foreign government credits Due to nonmember banks clearing account Other deposits, including foreign government credits 1 120,523.40 2,605.40 3,142.00 1,027.07 991.19 3,142.00 275,000.00 5,621,630.98 752,924.90 5,355,942.73 4 726 170.00 2,033,496.85 3,567,924.90 44,449,293.87 1,742,956.16 131,989,909.69 395,251.42 2,662,719.31 741,049.45 3,291,101.68 81,803.71 7,228.62 ' 8/250,000.00 11,595.000. GO 3 335 930.00 16,484,145.25 2,620,985.05 25,319.87 191,869,000.00 9,403,000.00 £6,000.00 O o 2 621,000.00 19,820,000.00 87,595,000.00 1,758,917,000.00 fed H3 Total gross deposits Federal Reserve notes outstanding Less: Federal Reserve notes on hand Mutilated Federal Reserve notes forwarded for redemption Total deductions 60,530,000.00 92,458,000.00 58,023,420.00 47,716,950.00 77,097,550.00 1,350,764,225.00 2,410,710.00 735,000.00 9,343,245.00 99,633,475.00 240,000.00 194,500.00 10,000.00 4,369,027.50 2,650, 710.00 929,500.00 9,353,245.00 104,002,502.50 HH hH fed in Federal Reserve notes in actual circulation Federal Reserve Bank notes in circulation, net liability All other liabilities: Discount earned on bills discounted... . Discount earned on bills bought Transfers bought and sold, net charges Interest earned—Municipal warrants Interest earned—United States securities... 55,373,000.00 8,000,000.00 46,788,000.00 8,000,000.00 1,246,762,000.00 67,744,000.00 8,000,000.00 8, 000,000.00 o 438,831.43 171,112.15 45,569.84 5 136.63 256,792.18 160,869. SO 116,481. 74 32,476.91 1,068.29 SO, 743.84 5 705 197.77 3,290,702.37 291,079.36 42,425.73 1,471,189.04 w CO CO Statement showing condition of each Federal Reserve Bank and of the system on Dec. SI, 1917—Continued. O' LIABILITIES—Continued. [Detailedfiguresshown for each bank in first column represent items as reported to the Board; figures in the second column, r rinted in italics, indicate results cf consolidation according to methods used in the compilation of the Board's weekly statement.] Kansas City. All other liabilities—Continued. Interest earned—Bill of lading drafts Profits realized on United States securities.. Commissions earned. Penalties on deficient reserves. Sundry profits Collection department service charges Discount on United States bonds Unearned discount on bills discounted Unearned discount on bills bought Unearned interest on municipal warrants Unearned interest on certificates of indebtedness.. Reserved for sundry expenses Liberty loan bonds—$10 participation certificates Federal Reserve Bank transfer drafts... Federal Reserve Bank exchange drafts Contracts to deliver Liberty loan bonds sold Service charges, net Difference account . Profit and loss Discount on bills sold Interest on participation certificates. . Susioense account Total all other liabilities Dallas. San Francisco. Total. ^ > $3 389. 20 $37 395 78 5.00 50,145.39 35,54^. 03 1,914.19 $22,487.24 11,101.60 20,618.8S 112,939.37 31,003.60 114.96 16,828.02 1,734,703.82 991.323.72 5,517.64 262.25 11,472.23 42,055.92 7.05 119,018. 52 780. 53 h* H C H U l-rj t 1 46, 710. 09 1,604.80 67,025.17 52 923 17 1,189 982 21 544,317.15 391,070.00 1,064.20 283.25 6,186.25 544.113.39 2,189.07 1,008,473.56 8,077.03 316.31 91,256. 83 15 853 791 27 w w N Tfl w < 0 Less all other resources: Premium on United States bonds ... Interest accrued on United States securities. Service charges accrued Expense current Exchange paid Proiit and loss Bank premises Furniture and equipment Cost of unissued Federal Reserve currency. Other deferred charges Dividend account, including premium on surrendered stock Disbursements, transit department Disbursements, Liberty loan No. 1 . . . . Disbursements, Liberty loan No. 2 Disbursements, United States certificates of indebtedness Disbursements, war saving stamps . . . Service charges paid—Collection department Deferred charaes Liberty Joan Revenue stamps Liberty loan bonds account—S10 participa- 1 tion certificates i Repairs and alterations, remodeling account . Overdrafts member banks Difference account Nickels and cents Suspense account Total all other resources All ofJier liabilitifs wt Total liabilities 75 4h2 4 2 60,504. £0 28,1SS. 78 237 377.98 109,502.80 397, 759. S3 438, 259.27 8,238.21 2 441 975 39 | 435.73 55 585 43 55,585.43 i 136,736.31 287,611.51 32 97^ t:3 35,824. 77 217 458 33 42,507. 74 10,161.62 604,737.74 5,766.89 8,579.61 46,019.33 276,581.85 210.72 3,354,843.89 54,906.18 52,540.15 653,080.62 9, 795.22 64,097.24 54,153.44 1,322,976.35 1,057.33 16,798.53 86,449.96 w w o w H C 2,523.49 119.10 54,657.19 5,437. 8S j 163., 100.00 10,450. 00 355.212.07 497.81 2 766 70 350.63 2 168 76 7,253. 53 13,958.35 13,958.35 887,337. 34 ! 504,504. 94 303,000.00 159,031,000.00 10,327,553.51 f,n nnn on 110,153,000.00 5 5°G 000 00 1 159,501,000.00 3,089,945,000.00 CO Exhibit D.—INVESTMENT OPERATIONS OF FEDERAL RESERVE BANKS. CO Commercial paper discounted for members and oilier Federal Reserve Banks during each month in 1917, distributed by maturities, and totals for 1917, 1916, and 1915. PAPER MATURING WITHIN 15 DAYS. Federal Reserve Bank. Boston New York Philadelphia Cleveland Richmond Atlanta Chicago St. Louis. Minneapolis Kansas City Dallas San Francisco Total January. February. March. May. June. July. August. September. $847,389 $1,882,783 $3,816,628 $9,118,269 $9,493. 345 134,571, 777 $35, ,073,960116.1,902, 573 $21,307. 279,272 1,502,805 ,801,099 ,316,507 6,201. 947 547,878, 686 254,,205,950 46,569, 820 307,344. 862,985 14,596, 247,937 1,149,757 ,667,902 ,164,269 18,545; 38,818,843 17,174, 315,850 9,981, 182,617 2,499,000 ,416,237 ,730,998 4,416. 7,072,863 15,123, 559,333 25,063, 6,737,047 3,985,444 ,136,837 ,250,442 20,353. 44,511, 25,174,706 448,953 833,649 1,392, 398,738 1,557, 963,075 384,855 617,866 5,358, ,391,246 ,207,981 2,477. 612,209 12,901, 521,480 1,926,44! 18,656,376 25,552, 080,61 12,181, 400,500 2,324,6626 17,128, 384,908 ,670,566 ,713,018 2,243, 102,081 252,628 1,011, 922,046 3,512, 376,428 4,011,0 ,004 1,953, 577,600 60,223 29,510 2,931, 555,970 17,259, 75,606 25,913, 9,730,3334 10,000 182,886 224,414 330,400 1,630, 162,630 841, 1,929,4400 316,500 3,658, 126,302 392,721 2,482, 4,514 50, 400,9935 25,931 3,320, .0,804,495 1,646,032 Percent April. 0.1 0.2 October. $6,770, ,359,046, 11,962, 22,775, 21,490, 13,236, 80,684, 18,419, 5,120, 41,639, 10,682, 9,609, November. December. Total. $14,243,721 $20,137, 602 $174, 166,003 0,344,746, 768 ,623,764,467 192,834, 17,402,072 32,125, 5,650 175, 777,337 746,220 28,180,622 38,051, 342 50,924,399 112,143, 939 350,;331,151 721,356 18,868.473 18,660, 329 463,238 127,880,288 110,649. 863 25,530,285 36,715, 131, '99,689 14,904,674 3,890, '02 39,i634,387 63,996,325 33,698,L605 209,' 900,693 34,' 057,779 10,981,317 2,117,832 45, 941,273 18,261,156 9,206, Per cent. 2.1 78.0 2.3 1.8 4.2 0.8 5.1 1.6 0.5 2.6 0.4 0.6 o w H o ! !, 694,658134,967,987 69,958,620 691,247,410 403,310,779 164,039,110 488. 1,347,299 2,601,488,919 •*, 014,997,799 016,232,780 8,129,285,894 0. 2 0.4 5. 0 2. 0 6.0 32.0 0.9! ! 100.0 37.1 P A P E R MATURING A F T E R 15 DAYS B U T W I T H I N 30 DAYS. Boston $102,130 SI, 015,170 $298,485 22,354 69,457 23,139 New York $180,269 30,753 Philadelphia 120,203 205,267 Cleveland 271,658 3S2,399 9,748 74,442 572,856 373,112 430,766 125,824 509,808 142,099 181,112 108,269 211,296, Richmond Atla-nta , 137,441 $6,106,821 $2,760,025 $2,179,412 $1,105,029 428,914 1,289,269 747,493 3,151,604 403,791 1,283,516 1,674,570 3D4,123 568,323 275,794 3,338,040 175,775 1,090,043 974,081 $428,92! $770,204 40,873 3,359,466 935,616 897,750 800,459 837,981 1,272,245 421,469 324,1451 235,517 1,019,960 475,233 509,^ 949,270 713,285 964,005, $9,918,861 $14,922,953 1,245,41' 9,777,321 708,9S: 5,174,169 663,990 1,328,520 6,206,425 13,084,185 1,852,203 1,333,061 $39,87S,294 21.8 20,ISO,0601 11.0 12,280,573 6.7 26,101,443: 14.2 9,669, CSOj 5.3 6,745,886 3.7 o o Chicago St. Louis Minneapolis... Kansas City.. Dallas San Francisco. Total... Percent 1,585,208 3,016,285 823,017 2,689,767 1,566,541 136,377 648,012 496,S87 101,493 135,632 474,815 1,879,306 3,841,465 3,486,396 617,798 373,504 66,742 1,863,551 5,105,413 1,423,566 520,369 960,006 387,235 2,073,355 3,737,096 3,927,090 440,027 2,039,877 144,133 3,731,567 26,327,005 14.4 15,030,217 8.2 0,308,2S1 3.4 5,577,321 3.0 1,624,685 0.9 13,542,592 7.4 1,703,682 2,355,001 2,320,539 3,821,098 4,980,467 18,128,601 12,069,528 13,776,695 15,900,769 0.9 8.7 2.1 1.3 6.6 1.3, 9.9 2.7 17,515,171 9.5 29,509,888 16.1 61,202,598 33. 4 183,284,037 337,583 73,000 179,316 5,738 11,630 7,863 23,962 87,317 396,500 15,050 16,143 9,266 552,993 8,061 13,024 142,74 87,179 8,578 451,247 724,023 982,267 88,985 178,608 200,577 258,174 2,234,454 5,183,125 691,898 486,417 615,065 900,098 329,286 220,678 279,022 183,357 344,136 236,006 195,304 64,580 658,891 114,823 2,520,000 100.0 PAPER MATURING AFTER 30 DAYS BUT WITHIN 60 DAYS. Boston... New York Philadelphia.. Cleveland Richmond Atlanta Chicago St. Louis Minneapolis... Kansas City... Dallas San Francisco. Total... Per cent $120,008 123,129 184,102 103.128 626.129 479,583 320,909 31,546 356,354 38,780 111,350 25,509 $702,647 $574,161 $454,771 $445,623 $2,082,554 184,002 39,924 164,070 1,826,898 144,973 234,028 234,570 338,565 1,640,491 53,762 7,490 161,618 2,058,820 67,460 9,249 749,417 830,918 1,393,348 1,021,738 1.522,709 177,403 352,060 420,936 753,648 1,127,223 43, 704 147,414 1,408,387 199,024 2,753,808 84,994 622,850 71,133 188,549 1,423,881 743,568 41,997 2,406,583 1,555,648 2,187,386 23,452 352,915 763,251 39,378 20,137 101,618 314,122 745,610 452,757 427,308 34,705 46,790 216,360 132,380 2,883,932 2,586,587 3,087,028 2,800,771 7,415,839 0.9 1.0 1.1 2.6 $1,583,857 $2,936,784 1,682,261 1,638,995 256,472 940,462 1,052,308 769,585 1,783,789 2,161, 1,602,495 1,422,901 3,805,235 3,354,411 1, 730,948 1,055,282 1,628,948 3,617,620 574,514 828,020 725,686 1,084,736 1,176,061 879,106 $1,567,284 3,575,917 717,629 840,816 2,405,684 1,420,993 4, 784,878 2,918,9.50 1,059,761 864,681 771,092 2,762,084 7,570,418 19,922,679 18,674,460 19,627, 701 23,695,709; 2.6 8.3| 6.5 7.0 o $1,274,929 5,802,649 716,249 1,407,251 1,606,785 1,596,045 6,783,293 1,736,583 1,140,637 826,044 303,531 1,923,762 $4,086,615 $25,837,504 $41,072,737 15.3 6,708,561 40,785,107 62,070,486 18.1 1,575,537 2,897,808 9,789,075 3.6 0,340,481 5,913,400 18,873,618 6.9 1,520,664 2,444,608 18,673,' 6.8 1,886,530 2,850,888 14,090,705 5.2 45,664,391 16. 8 7,961,590 14,101,738 18,213,616 5,258,450 6.7 3,090,450 1,683,851 1,400,3S7 17,828,740 6.5 8,735,283 3.2 1,709,514 2,634,597 6,140,458 2.2 312,128 790,518 23,602,152 8.7 9,718,05' 3,803,274 25,177, 758 16.6 47,309,733 108,020,530 2S5,967,339| 100.0 37.8 37.8 H O W o cO Commercial paper discounted for members and other Federal Reserve Banks during each month in 1917, distributed by maturities, and totals for 1917,O GO 1916, and 1915—Continued. PAPER MATURING AFTER 60 DAYS BUT WITHIN 90 DAYS. Federal Reserve Bank. Boston New York Philadelphia Cleveland Richmond Atlanta . Chicago St. Louis Minneapolis Kansas City Dallas San Francisco Total Per cent..... January. February. March. $122,929 8332,388 $409,489 92,305 126,304 211,842 88,294 30,769 12,080 26,105 16,611 16,690 815,186 639,635 760,054 918,064 367,843 590,678 19,696 141,88*7 47,659 10,811 60,765 67,247 19,706 20,193 197,410 20,515 35,190 49,344 80,110 202,637 199,020 32,344 74,157 37, 707 September. April. May. $196,113 52,039 $934,332 $3,365,573 $3,012,317 U, 358,337 $1,768,744 138,383 1,981,604 6,048,980 4,060,991 5,471,685 2o,477 37,016 927,872 370,824 92,881 266,051 258,107 98,146 388,719 139,828 2,639,640 1,849,289 2,434,735 2,854,073 0.7 0.7 0.6 0.5 June. July. August. October. $2,389,172 November. December. Total. 149,513 1,357,3(>2 1,851,326 1,245,477 1,998,716 4,138,169 1,551,606 1,071,418 925,859 962,097 2,279,956 2,186,082 466,491 1,690,522 1,748,877 1,837,722 1,106, 735 00!), 235 200,778 623,025 311,488 547,589 6(i5,261 1,200,034 310,322 399,209 1,087,612 1,075,555 412,992 337,863 125,995 3,089,878 1,534,758 654,651 1,344,130 1,971,127 $32,169,170 $44,947,757 31,948,847 44,020,836 3, 795,492 11,731,106 6,577,943 7,857,827 3,082, 713 3,163,887 1,782,417 951,589 6,555,669 12,267,641 9,038,535 2,239,404 6,692,991 1,213,629 6,993,324 2,071,544 5,225,533 383,571 6,981,795 2,655,771 6,424,188 17,831,190 23,368,229 21,285,699 18,819,132 34,663,069 9.0 108,053,986 145,695,005 28.1 37.7 380,518,235 $233,060 $1,195,955 14,684,329 258,424 589, 704 1,966,750 2,923, 701 469,187 3,629,448 170,213 960,985 1,212,024 650,069 760,418 1,100,987 1,741,247 2,114,040 2,770,582 2,032,354 1,927,100 1,276,167 366,884 587,870 897,656 937,156 614,208 1,083,456 1.7 4.6 6.0 5.5 4.9 $94,006,321 108,838,145 25,531,432 19,386,888 21,250,837 9,498,645 29,865,996 20,659,831 15,858,618 12,876,238 10,103,143 18,642,141 Per cent. 20. 3 27. S 6.0 2.7 8.4 4.4 3.0 1.4 5.2 100.0 AGRICULTURAL AND LIVE-STOCK P A P E R MATURING A F T E R 90 DAYS. Boston New York... Philadelphia. Cleveland Richmond... Atlanta Chicago St- Louis $200 $4,34<( $800 4,876 10, 878 21,621 $262,07 $580.860 $119,433 $7,089 SI, 067 1,610 $3,472 2,667 10,108 520l $1,295 1,870 2,279 6,897 36,624 34,97 83,039 424,852 388,516 221,913 4,214 4, 486 55,326 5,550 4.1 12,504...... 0.1 30,991 2,425 900 2,707 23,605 4,313 67,940 0.2 14, 722 350j 8,047 1,2S5,53 7J 4,5 28,651 41,813 41,158 131,117 208,036 173,976 113,537 77,639 35,524 93,572 14,257 32,842 1,052,152 3.6 66,532 24,385 71,990 65,935 130,908 158,367 159,532 153,681 283,544 782,108 3,544,270 2,110,221 7,551,473 25.9 27,434 800 26,992 41,714 37,742 37,492 28,917 81,657 9,012 43,194 29,990 43,493 408,437 1.4 Minneapolis Kansas City Dallas San Francisco 117,245 Total Per cent 591,882 2.0 96,827 174,189 47,705 . 56,72-* 25, 796 202,912 53S,469 89,560 59,991 107,617 407,192 207,584 244,041 329,076 629,674 4,540 21,990 21,814 471,254 532,279 1.6 1.8 996,804 3.4 505,121 90,900 173,034 556,680 197,350 311,573 327,289 1,201,66C 340,083 236,814 330,802 293,055 188,277 161,927 20,224 171,165 3,310,352 1,610, 709 11.4 5.5 1,401,135 4.8 2,370,937 8.2 5,955,355 20.4 27,148 1,076,822 445,905 751,949 103,351 1,177,100 511,671 843,9C3 244,687 2, 473, 780 8.5 3,139,952 10.8 1,011,008 1,847,892 745,403 240,221 5,531,811 5,604,527 5,126,573 1,253,049 6,276,500 29,130,949 21.6 19.9 19.3 17.6 .4.3 100.0 TOTx\L AMOUNT O F C O M M E R C I A L P A P E R D I S C O U N T E D . w January. March. April. $9,949,422 2,439,223 2,385,421 6,971,412 S3,932,988 1,925,351 1,682,222 2,542,343 5,784,232 1,153,026 2,038,196 $5,098,763 2,305,530 1,967,822 3,226,431 568,830 1,794,098 1,837,517 3,933,355 203,091 4,102,497 260,295 658,819 123,358 158,577 • 721,955 337,529 1,030,865 151,521 344,395 1,800,427 704,887 20,445,040 4,923,937 25,070, 795 3,202,925 3,215,009 5,949,072 3,792,396 4,236,848 2,273,089 450,600 18,320,286 22,408,601 20, 788,982 50,055,801 91,413,473 Boston New York Philadelphia Cleveland. Richmond Atlanta Chicago St. Louis Minneapolis Kansas City Dallas San Francisco... 51,198,462 Total, 1917. Total, 1916. Total, 1915. Percent, 1917.... Percent, 1916 Percent, 1915.... February. 598,162 565,122 644,971 8,582,382 2,562,072 1,294,103 605,727 1,226,753 106,786 3,062,583 3,009,293 4,017,620 4,193,552 1,541,118 12,164,509 $11,302,429 6,545,273 August. June. July. $46,216,725 U2,430, 484 262,366,105 September. $26,010,286 6,007,118 $20,377,106 53,024,394 18,170,441 14,803,326 29,772,948 5,015,168 19,240,750 15,104,344 11,039,240 19,480,868 4,231,867 4,679,522 750,2C9,838 400,733,354 220,939,974 518,164,104 552,970,457 42,724,903 11,184,990 30,097,727 2,831,080 25,160,367 4,542,803 9,865,832 11,841,537 3,769,321 9, Q5S, 096 22,175,858 10,872,873 34,513,978 4,247,943 33,611,427 15,381,406 8,806,257 16,137,000 4,182,905 319,543,993 18,934,001 17,704,624 50,122,193 7,904,732 35,636,417 25,026,448 4,347,036 28,251, 741 5,215,021 9, 467,612 11,115,000 7,664,600 9,387,300 11,521,500 11,195,500 11,600,000 20,183,000 17,351,800 14,308,800 10,712,800 12,530,300 13,399,700 10,549,300 12,145,700 13,406,000 13,238,000 12,233,700 14,405,000 0.2 0.3 0.3 0.0 1.0 8.4 5.1 2.5 0.1 5.4 3.7 4.5 r r 5.4 5.6 9.7 S.3 0.9 6.7 7.8 8.3 6.5 7.5 8.3 8.2 7.6 8.9 o 1-3 p H W w 9 in o CD Commercial paper discounted for members and other Federal Reserve Banks during each month in 1917, distributed by maturities, and totals for 1917, o o 1916, and 1915—Continued. TOTAL AMOUNT OF COMMERCIAL P A P E R DISCOUNTED—Continued. October. Boston New York November. December. Total, 1917. Total, 1916. Total, 1915. Per cent, 1917. Per cent, 1916. 785,9G9 $60 537,800 $106,078 •12,086,700 3.9 16.3 2,663 667,292 287,418 $350 919,310 6,536 459,903 $33,921,900 ,382, 893,111 22,329,500 4,819,600 73.5 10.7 Philadelphia 16, 819,730 31 478,602 45,025 223 416,008 22,328,400 5,137,100 2.5 10.7 Cleveland 26, 296,120 47 582,704 63,631 211 176,109 6,792,400 4,526,000 2.3 3.3 Richmond 25, 101,509 56 279,290 119,531 Atlanta 16, 973,352 23, 049,3G9 24,666 Chicago 96, 229,904 162 899,350 137,014, St. Louis 25, 871,747 32 313.695 18, 879,203 54,982, 7, 658,319 Kansas City 44 425,928 69, 999,049 47,214, Dallas 11, 721,642 12, 835.696 8,545, San Francisco 15, 388,463 26, 964,721 29,878, Total, 1917. 2,681,165,854 3,206,486,771 937,433,413 Total, 1916. 11,862,900 17,904,100 63,716,000 Total, 1915. 15,050,800 18,269,700 15,412,000 Percent, 1917.... 29.9 35.7 9.9 Per cent, 1916.... 5.7 8.6 30.7 Percent, 1915.... 9.3 11.3 9.6 13,447, 1.3 3.0 3.2 2.8 W o 220,685 34,377,200 44,891,400 4.5 16. 5 114,744 22,323,200 34,209,300 1.1 10.7 27.8 21.2 H 872,103 23,178,100 9,238, 700 2.8 11.2 5.7 O 117,790 8,842,700 6,317,600 3.1 4.3 3.9 85, 161,837 242, 694,062 6,473,500 5,206,500 0.9 3.1 6,817,700 10,875,500 2.7 3.3 3.2 6.8 18,512,500 26,756,900 0.6 8.9 10. G 1,973,400 7,287,700 1.1 1.0 4.5 401 95 521 186 Minneapolis Per cent, 1915. 57, 052,636 102, 981,207 H tn 9,014,186,454 207,870,500 161,353,000 100.0 300.0 o Paper rediscounted for the Boston Federal Reserve Bank during the month of December, 1917, distributed by maturities. Maturities. Rediscounted by Federal Reserve Bank of— New York 16 to 30 days. 31 to 60 days. $2,255,372 ... St. Louis . . . Maturities. Rediscounted by Federal Reserve Bank of— TV 61 to 90 days. $13,468.132 . Kansas City 1 $9,461,539 5 000 138 $25, 185, 043 5 000 138 5,007,121 5, 007, 121 £,003,294 5, 003, 294 Total. 16 to 30 days. 31 to 60 days. 61 to 90 days. Dallas Total $2,255,372 $13,4C8,132 $5,000,036 $5,000, 036 29,472,128 i 45,195, 632 W W m o w H O Figures included with other discounts shown above. Member banks' collateral notes discounted by Federal Reserve Banks during the calendar year 1917. [(a) Secured by Liberty loan bonds or United States certificates of indebtedness; (b) Otherwise secured.] January. February. March. April. (b) (b) (b) (b) $387,730 1,437,000 475,000 1,900,000 3,870,000 242,356 1,911,276 365,000 520,000 10,000 315,000 $1,423,500 287,000 1,605,000 1,600,000 2,075,000 266,000 1,130,729 1,670,000 100,000 5,000 165,000 $2,024,000 1,027,000 1,307,700 4,110,000 8,936,000 735,000 50,000 1,377,879 140,000 June. May. July. H August. w Federal Reserve Banks. Boston New York Philadelphia Cleveland Richmond Atlanta Chicago St Louis Minneapolis Kansas City Dallas $448,699 270,000 230,000 6,667,000 769,000 520,000 375,000 345,000 75,000 162,630 S^in Francisco Total, 1917 Total, 1916 (a) (a) (b) (a) $40,000 $2,990,000 $12,673,210 76,785,175 5,011,500 40,053,045 880,000 14,349,000 16,515,320 2,110,000 10,192,990 550,000 2,170,000 5,081,000 7,025,000 4,339,000 50,000 19,289,550 $1,655,000 175,869,630 1,691,650 2,210,000 1,379,525 642,000 3,881,117 350,000 2,090,000 2,622,300 125,000 400,000 $33 150 985 i SM 573 500 2,037,000 $413,700 336,696,500 680,650 1,957,000 66,500 35,000 6,075,000 60,000 2,243,000 4,231,429 1,557,000 $26,277,500 40,000 25,534,637 1,926,682 22,428,660 192,916,222 10,000 914,000 413,000 1,230,000 575,000 300,325 2,401,000 270,000 225,000 596,205 204,393,534 35,009,849 3,827,600 23,938,750 346,000 7,674,400 2,055,000 1,078,000 5,455,000 305,000 6 000 9,862,329 11,433,362 10,327,229 5,184,000 19,883,579 i w (b) 1,520,000 170,000 > I"1 45,666,080 354,015,779 310,360,633 (b) (b) 632,500 1,006,000 250,000 18,265,000 3,129,000 7,140,805 10,820,000 1,155,000 8,625,000 1, 714,151 1,384,640 1,345,804 11,734,585 3,420,950 13,506,500 1,187,500 474,500 1,050,500 1,115,340 1,261,000 25,000 202,536,193 30,477,772 121,630,514 ft 22 2 W o > Member banks' collateral notes discounted by the Federal Eeserve Banls during calendar year 1917—Continued, o [(a) Secured by Liberty loan bonds or United States certificates oi indebtedness: (b) Otherwise secured.] October. September. .December. November. Total. Federal Reserve Banks. (a) (b) (a) $2,804,700 173,970,000 5,532,500 9,018,000 1,952,290 1,749,400 7,951,900 2,711,500 1,067,000 5,556,450 1,842,500 1,494,400 $18,193,650 129,357,497 10,082,190 6,085,000 41,738,500 3,261,000 16,078,000 11,125,000 771,148 19,767,633 1,788,000 305,000 $2,457,700 2,152,680,000 3,002,500 12,885,000 1,449,500 4,744,000 44,592,000 9,411,000 5,076,900 15,864,000 5, 750,250 4,562,000 215,650,640 25S,552,618 1,410,850 (a) (b) (b) (a) (b) (b) (a) Total member banks' collateral notes. discounted. > IT1 Boston New York Philadelphia Cleveland Richmond ., Atlanta Chicago St. Louis Minneapolis Kansas City Dallas San Francisco Total, 1917 Tota^ 1916 . $4,916,958 $3,586,840 185,687,000 2,398,184,883 9,209,425 8,714,811 13,574,250 9,331,500 15,280,366 19,745,000 5,289,550 7,683,000 78,537,698 31,889,462 12,971,600 7,875,000 12,630,000 23,113,500. 25,452,334 5,296,000 4, 910,654 7,059,500 2,850,000 2,262,474,850 307,725,601 2,076,302 2,586,063,730 $15,535,000 $10,233,286 213,905,000 102,149, 997 9, 096,501 7, 755,505 18,870,300 13,862,000 8,209,060 35,195,902 4,923,850 12,298,500 45,769,000 45,798,250 21, 727, 740 10,948,000 2,685,622 2,098,215 40,273,404 6,984,350 5,369,281 1,000,000 9,004,800 5,127,925 412,043,857 5,587,895 237,377,631 $1,134,315 $25,094,844 45,637,140 5,344,602,510 1,511,250 32,803,226 1,138,000 66,089,550 5,291, 713 30,313,923 3,282,500 18,399,800 59,940,560 190,348,715 3,450,000 48,386,840 27,752,162 588,522 64,193,979 24,730,287 16,270,250 1,084,280 19,904,825 835,000 148,623,567 5,884,160,624 29,892,400 $117,825,429 $142,920,273 900,876,391 6,245,478,901 140,551,841 107, 748,615 119,533,650 53,444,100 245,024,635 214, 710, 712 49,079,656 30,679,856 381,977,197 191,628,482 108,592,719 60,205,879 36,753,327 9,001,165 205,473,722 141,279,743 33,374,300 17,104,050 34,045,965 14,141,140 1,858,645,562 38,967,447 w O w H H M 7,742,8O6,1S6 38,967,447 m Trade acceptances discounted by Federal Reserve Banlcs during each month in 1917, and totals for 1917 and 1916. Federal Reserve Banks. Boston New York Philadelphia..... Cleveland Richmond January. February. March. April. $69,926 10,452 24,199 823 323,779 $62,433 3410,173 §150,730 15,104 1,797 240,283 21,721 29,730 145,962 141,466 May. June. July. August. September. October. $526,388 1.17,000 25,758 28,564 305,146 $334,442 358,264 78,343 499,473 267,503 $322,992 13,000 36,874 66,956 284,741 $638,303 197,918 94,159 13,332 91,848 $141,384 161,845 16,289 70,508 35,926 $333,710 1,121,773 184,701 601,687 214,403 November. December. $436,894 $2,687,752 1,102,357 3,781,191 100,139 99,001 819,959 2,297,491 544,291 , 565,101 Total, 1917. Total, 1916. $6,115,127 $429,200 6,863,800 166,600 726,078 74,800 4,400,590 175,200 3,160,449 1,509,200 w o > w Atlanta Chicago St. Louis Minneapolis Kansas City Dallas San Francisco. -. Total, 1917. Total, 1916. 75,157 8,609 11,930 55,678 227,392 3S8,355 195,600 22,380 30,276 10,263 48,046 195,334 | 43,387 414,448 94,563 8,850 13,465 14,985 12,000 5,197 86,126 9,417 16,134 574,464 444,400 856,078 246,100 762,820 298,700 678,022 210,000 260,903 61,345 90,135 136,788 12,238 40,990 102 11,446 356,345 49,204 305,610 3,016 8,271 1,767,702 2,521,374 1,077,607 298,300 275,700 199,000 Commodity paper discounted by Federal Reserve Banks Federal "Reserve January. February. Banks. Boston New York Philadelphia Cleveland Richmond Atlanta Chicago St. Louis Minneapolis Kansas City Dallas San Francisco $598,807 961,746 $551,076 249,461 March. $635,740 227,190 April. $611,609 243,833 May. $468,420 249,034 June. $209,649 458,873 15,000 131,667 13,569 4,775 12,048 1,363 814,106 1,794,700 879,753 1,719,000 856,805 1,370,700 4,100 Total, 1917.. 1,564,653 Total, 1916.. 1,863,600 1 21,400 65,000 during July. 19,931 46,343 700,669 1,608,063 245,400 August. 159,289 72,505 94,042 11,829 19,000 21,400 53,470 449,894 1,525,200 102,954 13,653 93,137 1,000 1,125.834 593,500 417,228 4,354,747 414,900 11 months in 1917, and $25,000 26,200 152,700 757,102 712,000 442,795 299,981 59,819 420,776 $25,000 2,180 864,121 899,400 124,285 34,912 66,809 42,549 344,017 September. $36,678 463,463 320,949 507,500 500,141 1,636,300 6,959,770 853,300 1,163,800 226,361 982,609 97,243 627,867 7,862 2,888,373 15,424,651 1,103,000 4,562,494 429,845 3,114,503 363,, 673 2,6*6,322 177,953 5,210,298 1,591,000 105'. 200 626,200 41,700 190,900 248,900 53,400 October. November. $25,000 $29,000 131 360 134,125 1,354,252 186,650 1,146,633 December.! 37,771,132 5,212,300 o w 23,921 568,509 1,659,491 2,921,100 2,577,256 1,047,000 Special rate merged with regular discount rate on Dec. 3,1917, and separate classification discontinued. Total, 1917. Total, 1916. H O $25 000 105 200 131 360 3,686,085 $7,025,800 5,438,819 7,500,400 427,278 121,670 196,667 289,896 822,296 310,689 25,400 218,619 % d totals for 1917 and 1916 82,589 104,400 6,008 1,350,141 12,788 651,754 35,679 378,141 37,528 1,490,099 1,534,000 19.800 360,000 225,200 148,000 11,244,271 $816,700 16,813,200 w o 104 ANNUAL REPOET OF THE FEDEEAL RESERVE BOARD. Bills, including member banks1 collateral notes, but excluding rediscounts between Federal Reserve Banks, discounted by each Federal Reserve Bank during the calendar year 1917, distributed by States and maturities as of date of discount. Districts. District No. 1—Boston: Connecticut— - Jan.-Mar Apr.-June.. July-Sept... Oct.-Dec... Member banks at end ofeach quarter. Banks accommodated during each quarter and the year 1917. 55 53 3 6 54 55 8 22 Total MaineJan.-Mar Apr.-June.. July-Sept... Oct.-Dec... 64 3 64 63 14 157 154 160 163 21 46 60 87 Total New H a m p shire— Jan.-Mar Apr.-June.. July-Sept... Oct.-Dec... 56 56 55 55 3 12 13 16 Total Rhode Island— Jan.-Mar Apr.-June.. July-Sept... Oct.-Dec... 17 17 17 18 15 d a y s . From 16 to 30 days. T o t a l bills From 31 to 60 days. From discounted. 61 to 90 90Over days. days. $50,382 $111,790 S2tl,932 $389,773 873,011 882,31? 345,981 289,084 2,653,874 6S8,397 578,463 377,300 3,547,191 2,878,597 1,734,931 5,420,345 $121,632 4,298,024 13,702,696 7,124,458 3,914,831 2,643,247 7,380,827 21,184,995 121,632; $793,877 2,390,388 48 48 225,000 84,131 89,488 108,739 88,890 325 371,573 226,822 212, 727 246,164 614,048 1,487 1,301,248 535,953 307,215 354,903 702,938 1,812 1,902,811 282,077 783,073 9,110,738 62, 759,569 86,399,497 145,491,010 159,272,256 30,616,441 34,427,035 78,399,992 1,045,150 303,760,874 6,356,069 50, 733,451 68,217,769 33,964,967 5,000 4 9 3 11 230,000 422,047 1,291,888 1,040,994 6,222,184 2,262,925 3,541,009 4, 707,923 5,176,2,50 8,035,478 18,394,646 25,946,866 65,401,458 558,259 720,284 13,430 151,251 830,078 1,655,209 3,301,191 2,580,889 1,306', 301 1,097,357 939,842 13, 430 5,937,8:9 85,000 450,801 131,688 1,100,600 109,883 944,488 1,064,730 1 2 Total Vermont—• Jan.-Mar.... Apr.-Juno.. Within 66 Total Massachusetts— Jan.-Mar... Apr.-June .. July-Sept... Oct.-Dec... Maturities. 48,230 18,021 227,877 19,712 262,991 181,825 725,000 510,000 400> 000 1,606,158 1,954,486 2,398,785 5,984,795 15,000 725,000 910,000 11,944,224 2,841,158 2,354,486 2,413,785 5,984,795 13,594,224 15,000 55,349 176.128 12,313 101,166 56,660 34,965 203,082 52,985 200 159,2S7 533,541 ANNUAL KEPOBT OF THE FEDEBAL EESEBVE BOARD. 105 Bills, including member banks' collateral notes, but excluding rediscounts between Federal Reserve Banks, discounted by each Federal Reserve Bank during the calendar year 1917, distributed by States and maturities as of date of discount—Continued. Districts. Member banks at end of each quarter. District No. 1—Bost on—C ontinue d. Vermont—Con. July-Sept... Oet.-Dec... Banks accommodated during each quarter and the year 1917. 48 11 48 15 Total Maturities. Within 15 days. From 16 to 30 days. Total bills From From discounted. 31 to 60 61 to 90 Over days. days. 90 days. $717,311 $158,710 882,501 1,108,831 $162,645 314,043 $144,808 365,169 113,731 $1,183,474 2,662,275 1,811,289 1,379,020 736,410 597,927 13,931 4,538,577 174,166,003 39,878,294 41,672,737 94,006,321 1,195,955 350,919,310 Grand total for Boston 402 218 District No. 2—New York: New YorkJan.-Mar. . . Apr.-June .. July-Sept... Oct.-Dec 478 477 484 519 37,085 370,702 20 4,476,128 390,936 804,386 1,666,814 1,517,885 86 555,447,122 102 599,653,793 3,683,063 6,123,461 14,033,353 222 5,162,573,498 11,377,437 36,097,004 75,908,463 Total New Jersey— Jan.-Mar Apr.-June .. July-Sept... Oct.-Dec 6,322,150,541 15,901,971 44,257, SSI 91,850,637 132 133 132 136 7 20 37 51 Total 61,366 54,101 33,390 551,010 334,378 619,741 504,125 683,687 1,417,700 598,659 2,466,159 3,553,489 20, 787,542 1,713,160 3;538,325 5,624,320 Connecticut— Jan.-Mar Apr.-June .. July-Sept... Oct.-Dec.... 15 15 15 15 670 District No. 3— Philadelphia: Delaware— Jan.-Mar Apr.-June .. July-Sept... Oct-Dec..-Total 11,437 6,474,172,557 1,067 181,772 2,305,147 10,747,197 18,430,293 1,067 31,684.414 75,200 150,000 325,085 1,258,400 16,500 27,300 6,125 5,500 29, 700 34,400 140,824 90,025 130,602 152, 733 1,265,023 1,730,522 125,125 219,600 683,535 4,406,678 1,808,685 315,557 1,412,048 1,901,649 5,437,939 322 6,344,746,768 17,930,688 49,208,354 99,378,606 12,504 6,511,274,920 3 2 10 Total Grand total for New York.... 31, 848 800,018 8,141,685 11,813,991 5,279,199 559,438,207 7,089 623,500, 759 5,285,956,402 4,348 24 22 ! 22 23 1 50,000 50,000 50; 000 50,000 106 ANNUAL REPORT OF THE FEDERAL RESERVE BOARD. Bills, including member banks' collateral notes, but excluding rediscounts betiveen Federal Reserve Banks, discounted by each Federal Reserve Bank during the calendar year 1917 ^ distributed by States and maturities as of date of discount—Continued. Districts. District No. 3—Philadelphia—Contd. New JerseyJan.-Mar Apr .-June . . July-Sept... Oct.-Dec... Member banks at end of each quarter. 72 72 73 Banks accommodated during each quarter and the year 1917. 5 20 17 24 Total . P ennsy 1 vania— Jan.-Mar. . . Apr.-June . . July-Sept... Oct.-Dec.... 53C 534 533 542 Grand total for Philadelphia. 638 District No. 4— Cleveland: Kentucky— Jan.-Mar.. . Apr .-June... July-Sept... Oct.-Dec... 68 68 68 70 24 74 86 152 201 15 days. $22,927 920,274 1,548,940 3,712,282 4 7 From 16 t o 30 days. From 31 t o 60 days. From 61 t o 90 days. $298,495 338,958 224,267 470,633 $14,973 314,641 183,830 422,468 760,207 1,332,353 $144,686 197,758 117,505 300,258 Total bills discounted. Over 90 days. 900 $511,081 1,779,131 2,074,542 4,906,541 965,912 8,400 9,271,295 254,305 86,170 4,042.669 255,226 569,964 58,607,844 2,897, 769 1,693,860 49,084,838 1,218,732 1,690,296 5,175,808 57,787,563 7,124,639 4,718,961 18,733,578 7,286 6, 796 6,084 2,425 4,745,556 63,776,233 57,205,758 88,367,166 169,522,914111 - 526.366! 8.457.32224,565,520 22,591 214,094,713 175,777,337 12,286,573 9, 789,675 25,531,432 30,991 223,416,008 1 2 Tota* 16,100 49,613 991,472 475 48,600 2,000 292,799 1,321 78,269 3,756 232,454 65,738 50,000 700,636 1,057,185 343,874 315,800 816,374 $7,500 1,796 208,707 105,369 2,217,361 2,533,233 i 373 374 374 380 12 54 39 j 42 To+al P enn syl vani a— Jan.-Mar Apr.-June... JuJy-Sept... Oct.-Dec... Within 6,204,423 Total OhioJan.-Mar Apr.-June... July-Sept... Oct.-Dec... Maturities. 299 299 299 301 Total 6,097,854 853,787 173,546 59,406 16,177,210 1,120,680 1,630, 792 896,137 26,357,135 4,637,451 2,650,133 2,508,662 60,479,710 13,254,742 11,440,547 13,200,975 13,545 12,387 10,769 10,625 7,198,133 19,837,206 36,164,150 98,386,599 109 111,909 19,866,660 15,895,018 16,665,180 47,326 161,586,093 206,340 7,013,557 8,465 13,819 53,849 27,011,687 5,510,082 2,053,136 1,630,070 614 3,034,426 7,090,304 36,204,975 36,052,126 5, 740,909 2,650,797 1,890,259 614 46,334,705 1 10 j 8 29 2,026,882 222,362 5,000 578,842 5,000 ANNUAL KEFOKT OF THE FEDERAL EESERVE BOARD. 107 1 Bills, including member hanks collateral notes, but excluding rediscounts between Federal Reserve Banks, discounted by each Federal Reserve Bank during the calendar year 1917, distributed by States and maturities as of date of discount—Continued. Districts. Member banks at end of each quarter. District No. 4— Cleveland—Con. West Virginia— Jan.-Mar . . . Apr.-June... July-Sept... Oct.-Dec... Banks accommodated during each quarter and the year 1917. 13 1 13 1 764 District No. 5—Richmond: District of Columbia— Jan.-Mar Apr.-June... July-Sept... Oct.-Dec... 15 15 15 15 160 4 3 6 Total. 96 96 95 97 9 16 17 31 Total.. North CarolinaJan.-Mar Apr.-June... July-Sept... Oct.-Dec.... 81 80 80 81 48 47 . 37 Total South Carolina— Jan.-Mar... Apr.-June.. July-Sept... Oct.-Dec... 80 82 81 84 Total 34365°—IS- From 1G to 30 days. From 31 to 60 days. From 61 to 90 days. Total bills discounted Over 90 days. 13 Grand total for Cleveland Apr.-June... July-Sept... Oct.-Dec Within 15 days. 13 Total Maryland— Jan.-Mar Maturities. $10,000 5,075 $20,000 $21,000 701,075 15,075 20,000 722,075 146,746,220 26,101,443 18,873,615 19,386,888 67,940 211,176,106 $525,000 $150,000 525,000 150,000 $11,000 1,000 12, OOol 200,000 105,000 721,886 376,709 13,912 70,204 100,171 204,056 22,000 151,772 226,750 22,000 121,347 133,020 448,951 401,954 866,057 835,132 1,403,595 388,343 226,614 533.542 2,552,094 83,267 132,602 181,051 1,285,000 32,984 561,914 922,054 13,108,653 245,022 14,214,268 1,306,141 2,192,807 2,354,406 21,160,115 1,269,064 1,734,053 2,294,309 10,155 1,631,637 14,838,043 20,067,622 26,467,696 49,768,036 2,853,211 5,029,965 5,343,231 10,555 63,004,998 386,893 783,539 507,846 418,962 1,272,338 1,533, 798 238,020 1,078,462 1,574,840 566,605 925,904 1,321,449 1,775 220,231 99,196 9,864 2,749,093 4,798,490 6,297,749 S, 789,126 11,634,736 1,670,480 3,784,550 5,213,626 331,066 22,634,458 1,612,488 1,348,724 89,882 586,082 152,913 2,600 3,492,497 4,807,236 7,070,185 7,693,221 S,859,316 2,079,754 5,095,863 5,196, 729 831,477 23,063,139 1,069,040 1,353,161 3,247,231 5,965,304 40 324,287 53 1,288,085 59 3,418,382 29 4,828,562 688,093 562,968 502,315 328,378 1,335,968 1,190,851 1,384,087 1,184,957 1,056,267 1,179,250 400 108 REPORT OF T H E FEDERAL RESERVE BOARD. Bills, including member hanks'1 collateral notes, but excluding rediscounts between Federal Reserve Banks, discounted by each Federal Reserve Bank during the calendar year 1917, distributed by States and maturities as of date of discount—Continued. Districts. District No. 5—Richmond—Continued. VirginiaJan.-Mar Apr .-June .. July-Sept... Oct.-Dec... Member banks at end of each quarter. Banks accommodated during each quarter and the year 1917. 144 16 145 46 148 47 151 54 102 1 102 1 102 102 9 Total Grand total for Richmond. . . District No. G—Atlanta: Alabama— Jan.-Mar Apr .-June . . July-Sept... Oct.-Dec... 530 246 93 94 20 26 32 94 95 37 Total Florida— Jan.-Mar Apr.-June . . July-Sept... Oct.-Dec... 55 55 9 11 54 19 57 30 Total...... Georgia— Jan.-Mar Apr.-June . . July-Sept... Oct.-Dec... Within 15 days From 16 to 30 days. From 31 to 60 days. Total bills From discounted. 61 to 90 90Over days. days. $9,981,000 $66,395 $94,432 $90,695 38,923,591 1,041,024 1,147,352 1,281,447 76,382,679 665,992 1,631,801 1,129,205 151,292, 744 832,022 1,571,036 1,897,206 276,580,014 2,605,433 4,444,621 4,398,553 Total West VirginiaJan -Mar Apr -June July-Sept . Oct.-Dec.... Maturities. 102 31 101 47 100 54 107 56 Total $1, 565 $10,234,087 89,694 42,483,103 30; 680 79,840,357 500 155,593,503 122,439 28S, 151,060 150,000 935,454 5,000 38,046 29,413 3,900 5,200 42,007 40,760 37,096 528,060 3 900 10 200 207 149 1, 533, 087 1,085,454 72,459 91,867 565,156 1,814,936 350,331,151 9,669,680 18,673,480 21,250,837 1,295,537 401,220,685 452,147 461,525 402,708 920,299 22,605 234,965 58,256 30,989 1,034,605 1,516,692 1,642,709 4,911,539 3,652,683 1,107,422 1,755,946 2,242,679 346,815 9,105,545 329,669 161,502 602,067 2,559,445 37,977 189,193 207,787 672,465 192,207 469,507 371,891 722,341 175,639 470,020 1,361,755 2,318,194 46,420 63,700 251,228 358,039 73,874 171,315 452,699 940,307 63,420 93,733 144,258 193,104 5,250 38,444 4,796 48, 772 304,603 837,212 2,214,736 3,858,416 4,325,608 719,387 1,638,195 494,515 97,262 7,274,967 528,125 269,243 635,532 942,400 1,861,382 520,875 1,261,132 579,574 3,985,049 373,230 1,808,203 801,411 16,585,914 1,843,439 2,956,993 2,084, 795 35,749 227,404 36,216 432 2,411,049 4,450,367 7,004,109 23,471,573 22,9G0,470 3,008,787 6,661,860 4,408,180 299,801 37,337,093 ANNUAL REPORT OF THE FEDERAL RESERVE BOARD. 109 7 Bills, including member banks collateral notes, but excluding rediscounts between Federal Reserve Banks, discounted by each Federal Reserve Bank during the calendar year 1917, distributed by States and maturities as of date of discount—Continued. Banks accommodated during each quarter and the year 1917. Member banks at end of each quarter. Districts. District No. 6—Atlanta—Continued. Louisiana— Jan.-Mar Apr.-June . . July-Sept... Oct.-Dec... 22 22 24 25 4 4 12 7 Total Mississippi— Jan.-Mar Apr.-June . . July-Sept... Oct.-Dec... 18 18 17 18 • Total Tennessee— Jan.-Mar Apr.-June . . July-Sept... Oct.-Dec... . 1 3 7 6 1 92 92 92 90 14 22 33 40 Total Maturities. Within 15 days. From 16 to 30 days. From 31 to 60 days. From 61 to 90 days. Total bills Over discounted. 90 days. 1,000,500 23, 745,852 $40,567 6,500 47,500 174,400 $15,579 $308,760 6,628 8,570 39,499 155,930 754,185 47,133 $10,229 39,647 71,732 $938,485 61,345 1,315,161 24,721,570 25,359,702 268,967 815,891 121,608 27,038,501 50,000 101,318 389,000 1,307,756 13,419 31,770 240,437 36,255 139,137 262,598 42,333 17,898 4,000 1,848,074 285,626 437,990 60,231 4,000 2,635,921 100,100 250,151 976,653 4,247,915 91,852 37,873 163,223 350,970 819,195 1,634,960 703,041 337,406 139,860 182,176 902,380 548,231 37,789 32,699 51,700 60,478 407,474 985,219 4,384,833 5,897,071 5,574,819 1,357,697 2,786,823 1,772,647 182,666 11,674,652 $613,350 520,393 50,000 150,992 606,240 1,828, C89 Grand total for Atlanta 392 228 63,721,356 6,745,886 14,098,705 9,498,645 1,052,152 95,114,744 District No. 7—Chicago: Illinois— Jan.-Mar Apr.-June . . July-Sept... Oct.-Dec... 316 315 323 334 15 31 35 150 91,318 23,804 270,517 725,837 335,395 12,784,664 1,041,757 811,603 782,912 66,855 36,039,895 2,811,436 2,199,997 2,383,516 68,631 206,803,699 4,399,858 4,610,755 9,799,134 1,541,180 1,446,871 15,487, 791 43,503,475 227,154,620 255,898,775 8,978,888 7,957,750 13,056,880 1,700,470 287,592,703 1,018 19,061 49,142 31,233 48,413 2,391,851 263,304 217,270 239,484 118,944 1,825,920 517,901 547,990 275", 502 49,845 11,284,440 2,728,650 5,279,394 1,881,204 297,203 148,807 3,230,853 3,217,158 21,470,951 15,503,229 3,528,916 6,093,798 2,427,423 23,067,829 Total . Indiana— Jan.-Mar Apr.-June . . July-Sept... Oct.-Dec... 195 195 197 200 Total 12 27 33 77 514,465 110 ANNUAL REPORT OF IHE FEDERAL RESERVE BOARD. Bills, including member banks1 collateral notes, but excluding rediscounts between Federal Reserve Banks, discounted by each Federal Reserve Bank during the calendar year 1917, distributed by States and maturities as of date of discount—Continued. Districts. Member banks at end of each quarter. Banks accommodated during each quarter and the Maturities. Within 15 days. From 16 to 30 days. From 31 to 60 days. From Total bills 61 to 90 90Over days. discounted. days. 1917. District No. 7—Chicago—Continued. Iowa— Jan.-Mar Apr.-June . . July-Sept... Oct.-Dec... 354 20 354 23 356 62 358 189 Total MichiganJan.-Mar Apr.-June . . July-Sept... Oct.-Dec 76 76 79 99 10 23 29 44 Total. Wisconsin— Jan Mar Apr.-June.. July-Sept... Oct.-Dec 2 105 105 108 22 109 44 14 Total Grand total for Chicago. 1,100 541 67 66 7 67 20 67 13 District No. 8—St. Louis: ArkansasJan.-Mar Apr.-June.. July-Sept... Oct.-Dec 5 Total Illinois— Jan.-Mar Apr.-June... July-Sept... Oct.-Dec 157 9 7 157 156 13 158 17 Total $21,480 $46,706 $62,806 $35,956 $69,247 949,596 155,765 205,921 108,287 74,133 782,920 862,083 367,414 2,106,323 222,837 27,947,661 1,757,289 5,845,098 7,875,615 4,428,854 $236,195 1,491,702 4,341,577 47,854,517 31,025,060 2,182,597 6,895,745 8,879,941 4,939,648 53,923,991 3,546,160 117,934 62,584 5,000 15,000 5,025,646 432,349 732,366 285,452 62,297 15,289,175 3,849,547 1,348,399 1,170,220 66,398 51,689,363 1,103,494 2,165,665 2,417,608 102,155 3, 746,678 6,533,110 21,723,739 57,478,315 75,550,344 5,503,324 4,309,014 3,878,340 89,486,872 245,850 45 735 185,621 404,199 987,857 6 443 32,981 44,469 67,147 59,278 4,853,411 15, C01,612 42,1S5,314 34,384,797 6,133,280 20,407,086 1,623,412 151,040 62,699,615 412,362,205 26,327,005 45,664,391 29,865,990 7, 551,473 521, 771,070 5 000 2 100 1,190,050 1,050,700 2,394,059 5,704,830 2,382,897 7,065,217 27,489,917 2,694,683 10,945,710 909,377 33,762 812,307 5,612,229 3,044 10,307 144,996 423,138 15,392 27,007 195,851 981,875 8,107 77,889 186,710 456,610 17,541 29,362 79,206 30,296 953,461 178,327 1,419,070 7,504,148 7,367,675 581,485, 1,220,125 729,316 156,405 10,055,006 2,500 98,179 64,191 1,528,250 2,250 9,825 30,214 288,434 27,208 89,694 118, 702 585,006 15,768 61,225 121,398 177,710 5,000 9,060 3,854 31,675 52,726 267,983 338,359 2,611,075 1,693,120 330, 723 820,610 376,101 49,589 3, 270,143 ANNUAL REPORT OP THE FEDERAL RESERVE BOARD. Ill Bills, including member banks' collateral notes, but excluding rediscounts between Federal Reserve Banks, discounted by each Federal Reserve Bank during the calendar year 1917, distributed by States and maturities as of date of discount—Continued. Districts. District No. 8—St. Louis—Contd. IndianaJan.-Mar Apr.-June... July-Sept... Oct.-Dec... Member banks at end of each quarter. Cl 61 C2 63 Banks accommodated during each quarter and the year 1917. 3 6 12 Total KentuckyJan. Mar Apr .-June.. July-Sept... Oct.-Dec... 65 66 66 4 8 17 IS 17 18 18 3 4 6 4 Total.. MissouriJan .-Mar Apr .-June.. July-Sept... Oct.-Dec... W 81 84 87 11 22 14 23 Total.. Tennessee— Jan.-Mar Apr.-June... July-Sept... Oct.-Dec... Within 15 days. From From From 16 to 30 31 to 60 61 to 90 90Over days. days. days. days. T o t a l bills discounted. $125,000 1,262,500 4,032,000 $6,849 136,826 147,695 $5,403 339,904 392,012 $.12,500 116,798 294, 540 4,866,247 5,419,500 291,370 737,319 423.838 6,872,027 222,-060 1,691,070 4,282,941 433,579 35,000 737,668 561,087 1,486,536 75,000 212,778 933,094 332,060 3,075,095 7,263,658 6,196,071 994,666 2,259,20 41.220.872 10,670,813 40,000 900 18,300 59,600 1,000 118,800 $149,752 1,856,028 65 Total.. Mississippi— Jan.-Mar Apr .-June.. July-Sept... Oct.-Dec... Maturities. 20 20 20 20 3 5 12 6 Total.. 19,850 8,000 24,650 23,430 97,142 18,100 60,490 71,374 125,062 6,000 67,100 111,276 122,279 307,654 32,100 153,222 275,026 29,161 COS, 309 35,366 1,125,000 11,119 96,848 6,560,459 1,722,376 1,865,065 2,501,195 37,025,896 3,045,422 3,632,939 3,210,091 58,449,796 6,324,198 4,855,571 4,448,358 32,685 54,540 28,451 48,706 1,301,018 12,703,635 46,942,799 74,126,629 103,161,151 11,103,115 10,388,941 10,256,492 164,382 135,074,081 385,099 150,967 101,706 241,230 148,830 188,461 100, 776 516,807 330,312 656,686 248,763 6,700,236 1,072,649 1,687,342 2,028,509 2,900 6,000 7,843,372 1,702,758 2,634,195 2,378,048 8,900 14,567,273 131,799,689 15,036,217 18,213,616 15,659,693 408,437 181,117,652 4,150 7,100 $21,086 2,075 637,772 682,197 1,758,568 11,488,736 Grand to-. talforSt.. Louis 479 149 112 ANNUAL REPORT OF THE FEDERAL RESERVE BOARD. Bills, including member banks' collateral notes, but excluding rediscounts between Federal Reserve Banks, discounted by each Federal Reserve Bank during the calendar year 1917, distributed by States and maturities as of date of discount—Continued. Member banks at end of each quarter. Districts. D i s t r i c t No. 9— Minneapolis: Michigan— Jan.-Mar Apr .-June.. July-Sept... Oct.-Dec... 32 32 33 34 Banks accommodated during each quarter and the year i917. 2 4 3 8 Total . .. Minnesota— Jan.-Mar Apr.-June.. July-Sept... Oct.-Dec 289 291 293 295 18 37 71 92 Total North Dakota— Jan.-Mar Apr .-June.. July-Sept... Oct.-Dec... 156 156 157 162 11 32 51 40 Total South Dakota— Jan.-Mar Apr.-June.. July-Sept... Oct.-Dec... . 125 126 127 128 8 18 26 30 Total MontanaJan.-Mar Apr.-June.. July-Sept... Oct.-Dec... Total.. . 86 94 108 115 115 3 17 33 45 Maturities. Within 15 days. From 16 to 30 days. Total bills From discounted. 61 to 90 90Over days. days. From 31 to 60 days. $2,081 24,500 39,639 85,301 $2,388 31,732 15,000 30,301 $17,505 6,468 29,639 114,098 $3,289 10,156 5,082 04,643 825,203 72,856 89,3G0 294,343 151,521 79,421 167,710 83,170 4 V 822 1,014,028 569,929 1,064,107 160,625 5,012,122 2,008,665 6,032,198 2, 239,835 8,822,718 1,850,283 5,590,388 3, 730,887 22,895,550 1,274,862 3,309,507 2, 534,989 $36,050 46G, 198 999, 410 572,642 2, 894, 739 15,759,013 20,993,686 30, 587, 550 37,744,418 5,703,739 15,996,200 8,666,336 2,121,300 70,234,993 106,207 144,651 14,525 26,971 59,460 57,501 18,061 10,343 342,492 53,772 44,490 52,750 359,716 229,415 24,302 859,965 261,188 359,804 136,37S 950,029 1,129,033 845,143 285,858 158,457 424,668 686,371'1,505,259 3,060,613 1,998 20,118 16,553 93,514 414,991 70,625 272,340 121,023 159,760 119,291 290,403 315,039 1, 633,192 545.176 623, 748 2,357,925 35,000 37,475 499,966 10,516 79,527 26,550 1,510 52,511 478,948 537,441 92,041 559,519 230,000 355,000 46,861 5,000 7,943 127,866 14,295 42,716 71,373 233,040 8,787 18,788 7,550 219,700 245,073 369,347 168,837 643,011 41,870 504,9C6 1,018, 73G 1,219,615 631,861 150,809 361,424 430,247 1,250,846 2,815,187 i ANNUAL EEPOBT OP THE FEKEKAL RESEBVE BOAEB. 113 Bills, including member banks' collateral notes, but excluding rediscounts betvjeen Federal Reserve Banks, discounted by each Federal Reserve Bank during the calendar year 1917y distributed by States and maturities as of date of discount—Continued. Districts. District No. 9— MinneapolisContinued. Wisconsin— Jan.-Mar Apr.-June.. July-Sept... Oct.-Dec... Member banks at end of each quarter. Maturities. Banks acommo dated during each quarter and the year 1917. Within 15 days. 2 37 37 37 10 38 10 Total Grand total for Minneapolis... District No. 10— Kansas City: ColoradoJan.-Mar... Apr .-June.. July-Sept.. Oct.-Dec... 773 284 Over discounted. 90 days. $1,401 56,382 219,927 41,509 $88,276 259,062 92,859 $22,153 5,505 $6,401 1S3,453 616,649 397,673 283,288 133,814 319,219 440,1^7 27,658 1,204,170 39,634,387 6,308,281 17,828,740 10,851,497 5,531,811 80,154,71(5 1,621 122 1 470,000 5,785 122 1 2,908,440 421,998 1,768 1,439 25,903 4,557 43,877 147,986 48,227 590,457 1,108,672 1,165,645 3,410,012 427,783 642,582 1,158,545 1,341,302 6,980,224 60,223 484,691 1,057,878 4,947,561 139,102 152,138 483,448 211,884 28,742 81,948 361,850 235,644 6,977 94,79 97,02 428,175 58,280 269,472 81,878 255,601 293,324 1,083,046 2,082,075 6,078,805 6,550,353 986,572 708,184 626,970 665,231 9,537,310 28,225 8,565 575 38,936 43,073 10,565,675 44,066,397 80,728,331 76,301 135,403,476 2,95 15,00 425,00C 272,62 6,708,30C 44,850,16. 1,542,21 8,258 10,264 30,60 7,51 7,082 18,851 131,32 336,539 243,094 2,396,145 1,993,23 1,121,021 52,080 473,448 7,691,880 51,902,781 51,983,465 1,832,79 2,668,354 2,162,67 1,472,90C 60,120,189 22226 23 23o 2 3 3 5 5 5 5 3 S 14 V, Total NebraskaJan.-Mar Apr.-June.. July-Sept... Oct.-Dec... Total bills From 61 to 90 days. $30,675 89,002 14,137 31,572 12 Total . . MissouriJan.-Mar Apr.-June.. July-Sept... Oct.-Dec.... From 31 to GO days. $5,000 8,120 26,505 243,663 122 Total Kansas— Jan.-Mar... Apr.-June. July-Sept.. Oct.-Dec... From 10 to 30 days. 19 19 19 19 Total 41 ) 6 2,277 1,282 4,552 356,232 339,407 606 9,809,175 43,685,575 79,386,283 130,00 183,235 381,695 505,390 8,40 52,29 67,01 416,02 132,881,639 869,20 1,032,584 543,74 4,823 64,309 715,875 6,195,212 114 ANNUAL EEPOKT OF THE FEDERAL RESERVE BOARD. Bills, including member banks' collateral notes, but excluding rediscounts between Federal Reserve Banks, discounted by each Federal Reserve Bank during the calendar year 1917, distributed by States and maturities as of date of discount—Continued. Districts. District No. 10— Kansas CityContinued. New Mexico— Jan .-Mar Apr.-June.. July-Sept... Oct.-Dec.... Maturities. Banks accommodated during each quarter and the year 1917. Member banks at end of each quarter. 9 9 9 9 From 16 to 30 days. Within 15 days. 1 4 4 2 $6,252 78,681 31,067 2,028 $13,877 79,865 70,685 49,050 $20,129 187,767 119,463 60,590 19,959 36,485 118,028 217,977 387,949 20,199 56,431 51,367 168,814 684,558 668,103 434,196 1,401,599 1,148,191 814,254 1,483,006 1,259,215 135,970 549,327 359,521 653,167 348,967 4,012,035 9,138,959 11,451,181 15,063,224 1,437,463 3,625,594 3,126,876 1,697,985 24,951,142 1 1 15 $85,000 305 56 89 45 1,941,233 311 Total Wyoming— Jan .-Mar Apr .-June -. July-Sept... Oct.-Dec 36 36 36 36 1 3 4 Total. . Grand total for Kansas City... 958 District No. 11— Dallas: Arizona— Jan. -Mar... Apr .-Jane.. July-Sept.. Oct.-Dec... 6 6 Total bills discounted. Over 90 days. $9,262 17, 711 9,512 ,303 308 From 61 to 90 days. $19,959 Total . . . OklahomaJan.-Mar Apr.-June.. July-Sept... Oct.-Dec-... From 31 to 60 days. 5,795,452 7,241,539 12,000 2,200 1,342 11,500 10,000 16,000 5,850 114,255 20,500 23,410 93,421 36,500 54,960 219,018 12,000 3,542 21,500 136,105 137.331 310,478 209,900,693 5,577,321 8,735,283 7,872,944 5,604,527 237,690, 768 24,886 13,373 18,160 56,419 998 8,745 14,855 82,539 107,137 998 33,631 28,228 100,69S 163,556 3,02.: l,00C 32,92- 10,53S 17,07 3,28 225, (XX 85c 6,75C 94,49C 225, (MX) 102,09*I 35,94< 1 1 Total Louisiana1*> Apr .-June... July-Sept... Oct.-Dec... . Total i 15I 15I 1 1 15J 5 21,958 53,488 319,493 11,531) 20,35 394,939 ANNUAL EEPOET OF THE FEDERAL EESEEVE BOARD. 115 Bills, including member banks' collateral notes, but excluding rediscounts between Federal Reserve Banks, discounted by each Federal Reserve Bank during the calendar year 1917, distributed by States and maturities as of date of discount—Continued. Districts. District No. 11— Dallas—Contd. New MexicoJan .-Mar Apr .-June. . July-Sept... Oct.-Dec... Member banks at end of each quarter. 28 30 31 32 Maturities. Banks accommodated during each quarter and the year 1917. Within 15 days. 5 11 9 11 Total Oklahoma— Jan.-Mar Apr .-June... July-Sept... Oct. Dec... 1 8 8 4 Total TexasJan .-Mar Apr .-June... July-Sept... Oct.-Dec... 551 50 105 151 551 88 541 546 Grand total for Dallas... 632 District No. 12— San Francisco: AlaskaJan .-Mar . Apr.-June July-Sept... Oet.-Dec Over 09 days. $92,485 30,990 322,653 $27,517 $137,573 134,779 214,295 160,000 9,590 500,254 113,781 318,214 180,000 53,452 288,094 258,685 137,842 1,203,486 Total.. . 805,390 1,101,839 492,829 1,273,060 3,481,674 21,000 9,015 1,373 32,140 41,554 9,033 78,246 3,230 154,816 22,047 4,603 246,989 195,862 295,000 370,000 30,015 75,067 87,279 180,093 742,454 433,232 71,142 454,250 485,011 426,349 1,242,971 940,065 1,306,350 407,07 32,006,783 2,373,599 1,077,258 449,168 1,109,337 673,391 793,892 2,105,651 26,107,641 33,020,106 1,353,732 4,792,323 4,441,305 3,662,511 47,269,977 34,057,779 1,624,685 6,140,456 5,103,107 5,126,573 52,052,600 6,413,891 23,081,853 1 1 1 1 6 I $301,385 534, 762 1,162,911 Total Arizona— Jan.-Mar Apr.-June.. July-Sept... Oct.-Dec... Total bills discounted. 30,000 45,000 295,000 662,016 258 From 61 to 90 days. $43,810 2,862,346 Total. From 31 to 60 days. $102,673 442,673 32 32 31 30 From 16 to 30 days. j I 6,778,081 12,278,604 116 AKKUAL REPORT OF THE FEDERAL RESERVE BOARD. Bills, including member banks' collateral notes, but excluding rediscounts between Federal Reserve Banks, discounted by each Federal Reserve Bank during the calendar year 1917, distributed by States and maturities as of date of discount—Continued. Districts. District No. 12—San Francisco—Contd. California— Jan.-Mar Apr .-June... July-Sept... Oct.-Dec... Member banks at end of each quarter. 263 271 271 272 Banks accommodated during each quarter and the year 1917. 13 33 43 48 Total Idaho— Jan.-Mar Apr .-June.. July-Sept... Oct. D e c . . . 57 61 63 65 3 4 14 14 Total Nevada— Jan.-Mar Apr .-June... July-Sept... Oct.-Dec... 10 10 10 10 1 Within 15 days. 3 9 18 Total.. From 31 to 60 days. From 61 to 90 days. Total bills discounted. Over 90 days. $43,895 93,054 141,246 102,839 $294,257 8, 727,503 13,916,711 52,070,236 34,453.443 10,301,178 16,919,189 12,953,863 381,034 75,008,707 26, 700 35,484 119,262 206,891 51,219 66,430 562,500 909,417 388,337 1,589,566 12,646 157,000 293,000 3,578 1,025 8,817 37,422 149,945 20,941 7,650 183,739 222,159 462,646 50,842 253,252 434,489 30,000 20,000 9,625 93,682 50,000 20,000 50,000 25,000 95,000 40,000 50,000 25,000 145,000 4,660 25,000 2,890 230,589 106,834 237,840 274,576 190,805 170,000 42,090 2,027 4,379,675 1,325,764 2,232, 208 1,252,856 3,640 36,190 11,258 861,097 26,613 431,535 31,2 21 9, 221,724 4,681,509 1,565,631 2,551,764 1,678,910 72,732 10,550,546 30,000 81 82 82 85 From 16 to 30 days. $22,129 $104,181 $118,607 $5,445 468,641 2,552,382 2,756,349 2,857,077 5,421,162 2,567,746 3,626,747 2,159,810 28,558,195 5,158,921 10,431,912 7,818,369 1 Total Oregon— Jan.-Mar Apr .-June... July-Sept... Oct.-Dec... Maturities. Utah— Jan-Mar 23 Apr .-June.. „ 24 July-Sept... 24 Oct.-Dec... 24 Total c 9 10 19,370 24,154 192,128 260,000 8,112 492,080 58,075 114,261 299,710 39,895 1,722,437 256,877 315,439 639,220 82,339 503, 764 1,004,021 3,016,312 2,233,887 339,106 621,828 1,198,930 130,346 4,524,097 ANNUAL REPORT OP THE FEDERAL RESERVE BOARD. 117 Bills, including member banks' collateral notes, but excluding rediscounts between Federal Reserve Banks, discounted by each Federal Reserve Bank during the calendar year 1917, distributed by States and maturities as of date of discount—Continued. Districts. Member banks at end of each q tr District No. 12—San Francisco—Contd. WashingtonJan .-Mar.... Apr .-June... July-Sept... Oet.-Dec... 77 78 81 83 Banks accommodated during each quarter and the year 1917. 2 32 19 Total Grand total for S a n Fran Cisco 547 156 Maturities. Total bills Over discounted. 90 days. Within 15 days. From 16 to 30 days. $1,955,256 2,124,532 $385 $376,347 $940,530 699,475 869,488 2,265,589 1,651,088 $4,404 267,876 8,320 $4,789 4,239,484 6,919,017 4,079,788 1,245,835 3, 206,119 2,350,948 280,600 11. 183.23(1 45,941,273 13,542, 592 23,602,152 18,642,140 1,253,049 102,931,200 From 31 to 60 days. From 61 to 90 days. EECAPITULATION. No. 1.—Boston No. 2.—New Y o r k . . No. 3.—Philadelphia No. 4.—Cleveland... No. 5.—Richmond... No. 6.—Atlanta No. 7—Chicago No. 8.—St. Louis No. 9.—Minneapolis. No. 10.—Kansas City No. 11.—Dallas No. 12.—San Francisco Total for calendar year 1917 Per cent Total for 1916. Total for 1915. 402 670 638 764 530 392 1,100 479 773 958 632 547 7,885 7,627 7,648 218 174,166, 003 39,878,294 41 672,737 94,006,321 1, 195,955 350, 919,310 208,354 99,376, 606 12,504 6,511,274,920 322 6, 344, 746, 768 17,930, 201 175,777, 337 12,286,i,573 789, 675 25,531,432 30,991 223,416,003 386, 67,940 211,176,106 160 146, 746, 220 26,101 443 18,873,615 9,669,680 18,673,480 250,837 1,295,537 401,220,685 246 350,331, 228 541 149 284 364 258 156 63, 721, 6, 745,886 14,096, 705 498,645 1,052,152 412,463, 238 26,327, 005 45,664,391 29,865,996 7,551,473 131, 799, 689 15,036, 21 18, 213,616 15,659, 693 408,437 39,634, 209,900, 34, 057, 6,308, 281 17,828,740 10,851,497 5,531,811 735,283 872,944 5,604,527 5, 577,321 103,107 5,126,573 1,624, 685 6,140,456 95,114, 744 521,872,103 181,117,652 80,154,71G 237,690,788 52,052,600 45,941,273 13.542,592 3,602,152 18, 642,140 1,253,049 102,981,206 3,127 8,129, 285,894 181,023,665 272,499,204 357,046,106 29,130,949 8,988,990,818 2.0 90.6' 4.0 3.1 0.3 1,788 115,053,100 34,422,900 41,576, 600 16,817,900 207,870,500 28,509,200 1,920 57,837,400 57,322,40019,684,000 161,353,000 Number of banks, by districts, accommodated through the discount of paper during each month in 1917. 00 January. Boston New York Philadelphia Cleveland Richmond Atlanta Chicago St Louis Minneapolis Kansas City Pallas San Francisco . .. . . . -- Total number of member banks accommodated: 1917 1916 . . . . . Total number of member banks: 1917 1916 17 11 14 12 60 56 37 15 30 19 24 14 February. March. 15 20 17 16 17 21 28 38 18 17 16 43 79 64 67 76 79 6 8 17 16 33 25 30 22 35 68 76 89 115 133 137 132 101 79 102 47 55 56 80 82 87 126 122 151 133 117 228 209 16 33 38 48 85 91 77 127 222 297 373 541 212 11 19 24 30 33 44 40 61 69 78 92 149 114 H 16 13 31 48 83 110 109 54 59 108 123 284 174 O 364 April. May. June. 76 98 July. 69 103 DecemOctober. NovemAugust. September. ber. ber. 63 92 71 65 98 89 127 175 Total, .1917. 218 138 237 322 56 62 116 139 201 143 102 111 160 50 127 246 202 12 18 21 55 71 85 98 87 182 115 112 28 31 39 71 8-5 98 83 69 61 48 9 8 15 18 42 47 102 54 51 41 60 84 156 309 614 262 315 384 590 900 960 655 678 642 1,701 314 3 127 606 1,140 383 1,574 535 990 483 953 451 7,624 7,649 7,635 7,633 7,643 7,659 7,676 7,700 7,733 7,847 7,639 7,631 7,606 7,621 7,621 7,618 7,748 7,624 7,783 7,643 7,626 7,628 448 Total, 1916. 336 .7,885 7,627 o 189 301 76 1 788 w IP w w o > fcd o Acceptances bought in open market and from other Federal Reserve Banks during each month in 1917, 1916, and 1915. Federal Reserve Bank. January. February. March. April. May. June. Boston New York Philadelphia... Cleveland Richmond Atlanta Chicago St. Louis Minneapolis Kansas City Dallas San Francisco.. $3,038,839 2,605,561 2,107,327 1,351,779 2,485,360 1,741,822 1,010,250 1,283,005 1,421,725 385,388 307,374 2,878,750 $5,262,222 20,242,315 10,058,886 6,185,295 6,206,566 944,791 6,701,460 4,653,124 2,543,352 2,684,869 1,665,676 3,492,123 $5,157,262 1,763,414 4,610,296 1,037,722 3,653,874 2,032,077 3,160,135 601,545 2,702,961 145,390 44,458 3,243,504 $1,245,087 9,687,415 5,208,807 2,888,038 5,685,718 1,158,047 2,887,501 1,671,672 5,564,080 745,305 363,128 4,147,293 $10,217,813 28,839,605 5,404,559 7,428,129 3,873,881 1,218,040 11,018,641 4,524,450 951,049 3,814,032 573,090 4,081,083 $8,543,882 83,248,508 3,441,475 3,082,041 4,288,803 1,442,268 19,041,205 993,134 632,000 7,865,082 Total Percent Total, 1916.. Per cent Total, 1915.. Percent 20,617,180 1.9 9,603,000 2.5 70,640,679 6.6 12,416,000 3.2 2,666,000 4.1 28,152,638 2.6 22,918,000 5.9 8,356,000 12.9 41,312,691 3.8 18,499,000 4.8 4,018,000 6.2 82,544,372 7.7 21,912,000 5.7 2,865,000 4.4 135,229,697 12.5 42,325,000 11.0 4,701,000 7.3 2,651,299 July. August. September. $3,403,446 25,012,534 11,472,425 5,681,887 3,869,332 515,469 6,094,057 1,285,644 13,000 3,267,191 2,617,976 3,631,104 $7,551,527 12,512,825 7,450,793 14,531,566 1,490,697 1,859,728 5,693,449 3,735,083 3,109,666 2,842,465 1,510,357 9,834,646 $16,633,620 62,434,840 6,05G, 282 9,855,782 3,025,707 1,533,923 1,924,933 322,696 95,079 9,117 4,225,754 2,928,733 66,864,065 6.2 36,575,000 9.5 5,986,000 72,122,802 6.7 28,447,000 7.4 4,656,000 7.2 109,046,466 10.1 37,087,000 9.6 4,548,000 7.0 w ft o w O ft W ft ft m ft w o >> o Acceptances bought in open market and from oilier Federal Reserve Banks during each month in 1917, 1916, and 1915—Continued. to o Per cent. Federal Reserve Bank. October. November. December. Total, 1917. Total, 1916. Total, 1915. 1917 Boston New York Philadelphia.... Cleveland Richmond Atlanta Chicago St. Louis Minneapolis Kansas City Dallas San Francisco..., $5, 640,728 50, 307,095 4 565,180 7,361,666 5. 620,717 3,470,559 3, 181,598 173,796 536,000 30,535 900,497 105,811 $11,836,348 61,395,916 19,479,626 22,997,670 10,465,939 4,645,617 1,046,114 7,777,937 10,077,199 5,019,267 14,009,013 17,408,076 $12,997,431 106,915,574 5,998,142 8,707,012 7,449,467 5,830,223 4,954,717 2,710,185 5,426,206 16,772 4,799,594 12,203,686 $91,528,205 464,965,602 85,913,798 91,109,193 58,116,061 26,392,564 60,714,061 29,732,271 33,072,316 26,825,413 35,076,917 68,260,108 Total Percent Total, 1916 Percent Total, 1915. Percent 86,894,182 8.1 40,895,000 10.6 6,340,000 186,218,728 17.3 48,547,000 12.5 7,919,000 12.2 178,009,009 16.5 66,871,000 17.3 12,790,000 19.7 1,077,712,509 $52,377,000 123,406,000 53,122,000 27,542,000 11,313,000 12,544,000 27,061,000 20,681,000 13,539,000 8,191,000 3,543,000 32,776,000 $14,105,000 25,834,000 7,565,000 2,963,000 250,000 72,000 5,782,000 1,801,000 1,455,000 1,788,000 3,230,000 8.5 42.9 7.9 8.4 5.4 2.4 6.2 2.7 3.1 2.5 3.2 6.8 1916 13.6 32.0 13.8 7.1 2.9 3.2 7.0 5.4 3.5 2.1 .9 8.5 1915 21.7 39.8 11.7 4.6 .4 .1 o H 2.2 5.0 100.0 386,095,000 100.0 64,845,000 o Acceptances bought in open market during each month in 1917, distributed by maturities MATURITIES. Month. 30 Within 15 days. From 31 to 60 days. From 61 to 90 days. Over 90 days January..... February.. March April May Tune July August September. October November. December.. $177,411 1,368,786 85,221 1,787,866 2,755,184 7,648,046 1,617,112 3,627,609 1,121,029 1,473,265 4,679,280 5,707,389 $1,742,999 8,549,128 8,466,068 8.335,122 9.585,123 15,738,784 5,223,829 7,620,821 11,403,123 10,670,004 26,514,207 15,043,930 $2,871,844 21,438,280 5,733,322 13,953,959 17,226,847 29,561,285 10,001,985 19,060,672 25,096,852 17,790,456 62,133,013 42,166,367 $14,647,328 38,459,632 11,746,055 16,355,820 43,938,859 70,711,531 44,500,009 40,943,315 67,230,371 54,414,621 92,045,346 112,302,369 $1,177,598 824,853 2,121,972 879,924 9,038,359 5,570,051 5,521,130 870,385 4,195,091 2,545,836 846,882 2,848,954 Total 32,048,198 128,893,138 267,034,882 613,295,256 36,441,035 Total. $20,617,180 70,640,679 28,152,638 41,312,691 82,544,372 135,229,697 66,864,065 72,122,802 109,046,466 86,894,182 186,218,728 178,069,009 O n 3 1,077,712,5 Acceptances sold by the Boston and New York Federal Reserve Banks to other Reserve Banks during the calendar year 1917. Purchased by Federal Reserve Bank of— Sold by Federal Reserve Bank of— Total. , New York. St. Louis $2,254,577 $4,689,818 $6,944,395 19,659,207 Minneapolis 0,754,814 9,919,972 16,674,786 12,383,051 15,204,040 Kansas City.... 4,260,291 5,003,971 9,264,262 27,575, SGS 40,102,053 Dallas 3,356,984 3,356,984 1,005,047 1,005,047 5, 572,190 1 Total. Boston. $5,040,527 $5,046,527 $19,659,207 2,820,989 12,526,185 Sold by Federal Reserve Bank of— of— New York. Boston. Boston New York Philadelphia Cleveland Richmond Atlanta Chicago Purchased by Federal Reserve Bank San Francisco.. Total. Figures included with acceptances purchased as shown above. 739,384 24,594,028 25,333,412 10,326,860 9,921,757 20,248,617 64,914,497 103,497,023 U68,411,520 < W O Amounts of United States bonds and one-year Treasury notes (par value) purchased by Federal Reserve Banks during each month in 1917. Federal Reserve Bank. January. February. Maxell. April. May. June. $1,900 750,000 $1,500,000 Boston New York Philadelphia Cleveland» Richmond Atlanta Chicago St. Louis Minneapolis Kansas City Dallas San Francisco 1,240 25,000 25,450 1,735,000 60,000 Total, 1917 Percent 2,431,390 2.7 Total, 1910. Per cent 6,627,180 9, 496,750 5,249,85010, 479,600 ,113,6001,322,440 10.8 2.3 18. 16. 14.5 11.7 $72,500 $1,057,750 $57,500 4,022,000 1,098,260 26,400 46,250 525,000 458,000 Classes of securities purchased each month: 2 per cent bonds 2,370,150 3 per cent bonds 61,240 3£ per cent bonds 4 per cent bonds 1 year Treasury notes. Total, 1917 Total, 1916 !, 490,500 710,500 470,000 1,461,500 45,010 1,094,740 562,750 July. 505,000 583,500 511,000 950 10,522,510 ;, 090,040 600,95 4.6 11.9 0.7 144,500 8,565,51G 2,867,040 3,000 200 50,000 250 25,000 456,000 1,882,000 1,220,000 August. September. October. $80,000 $53,650 380,000 317,700 10,200 15,000 1,059,000 2,000,000 29,600 408,200 9,000 134,600 40,200 26,700 2,450 4,000 192,150 1,100 l,192,5i 560 20,404,600 9,000 50016,918,6001,383, 6,918, 8,000 750 57,800 $2,000 2,000 1,000 50,000 7,500 10,000 3,400 130,700 10,750 190,650 November. December. i $276,346 $2,120 325,000 3,122,950 10,848,050 756,000 1,000 152,050 42,900 9,100 6,539,400 10,000 27,950 500 825,000 15,000 Total, 1917. 501,100 2,193,300 3.9 0.9 50,000 2,000 67,000 1,232,900:18,299,650 3,825,460 20,830,650 9,1 756,000 1,370,000 257,060 5,628,300 5,539,750 9.8 0.4 1917 1916 418, 11612,332,000 1.6 7,818,750 12.3 13.8 883, 2,500,000 13.9 4.4 274, 8,403,160 7.7 14.8 785, 4,335,250 1.8 7.6 593, 2,595,500 9.3 4.6 274, 8,644,100 46.7 15.2 379, 2,419,000 0.7 4.4 650, 615. 2,552,920 0. 4.5 187, 8,362,500 1.3 14.7 394, 4,163,250 1.6 7.3 142, 2,623,750 2.4 4.6 52,000 1,997,900 19,736,650 3,825,460 20,830,650 0,830,i 1.,559,400 U,546,946 21,406,420 18,600,316 2.2 1.8 0.1 4.3 1.7 24.2 23. 22.2 341,250 0.6 Per cent. Total, 1916. . 1100.0 56,750,180 100.0 13,997,200 4 8,12S, 100 15.8 84.8 188,540 3,918,880 0.2 6.9 51 157,650 250,550 1,265,750 45,862,610 29,650 1,294,396 20,), 130,670 21,488,966 4,403,200 24.2 7.8 300,000 8.0 0.5 1,369,000 10,000 7,0C3,000 3,100 2,000 100.0 600,95010,1,522,510 4,090,040 52,000 1,997,900 19,736,650 3,;, 825,460 20,1,830,650 1.'., 559,400 1 1,546,946 21,406,420 88,600,316 56. 750,180 100.0 341,250 501,100 2,193,300 257,060 5,628,300 5,539,750 6,627, 180 9,,496,750 8,249,850 10,1,479,600 6,113, OOOil, 322,440 2,431,390 1 Includes partia payments on Liberty loan bonds sold to individual subscribers. 2 Figures are exclusive of $58,000 of 1-year Treasury notes received from the Secretary of the Treasury in exchange for a like amount of matured notes held by the bank and of $83,700 of coupon bonds exchanged for registered bonds, both of which amounts are included in the Cleveland report. Amounts of United States bonds and one-year Treasury notes sold by Federal Reserve Banks during each month in 1917. co § January. February. Federal Reserve Bank. March. April. $695,000 $30,000 530,000 1,056,100 May. June. July. August. September. October. November. December. Total. o *n Boston 1 New York . . PhiladelDhia . Cleveland Richmond Atlanta Chicago . St. Louis Minneapolis... Kansas City Dallas San Francisco Total sales 2 per cent 3 Der cent. . 3 | percent 4 per cent 1-year Treasury notes Total $556,000 1,495,000 690,000 1,014,100 753,000 1,213,000 1,168,000 $110,000 86,000 136,000 187,000 603,100 655,000 284,000 424,000 106,000 i$380 152,000 3,000 241,000 $100 $780,000 1 000 000 8,313,100 2,367,100 25,000 7,288,100 1,561,100 i$304 30,900 315,000 40,000 1,377,000 1,330,100 100 3,100 100 1,000,000 806,000 1,377,000 1,327,000 8,313,100 2,367,100 1,377,000 1,330,100 780,000 3,850 10,634,400 5,000 12,366,260 34,200 994,600 25,000 164,650 1,000 6,700 150,000 12,565,490 1,069,254 11,139,454 200,000 - i$304 1,650 780,000 12,565,490 1,068,254 780,000 12,565,490 1,069,254 7,450 400 i $3,219 474,480 458,050 70,700 1,000 7,000,000 i $156,969 223,550 5,296,500 27,650 83,000 5,039,550 7,000,000 2,550 300,700 i $827,374 3,451,300 5,449,300 3,276,150 1,650,500 6,920,900 41,370,260 66,550 530,000 10,000 502,100 1,321,350 1,296,268 18,009,999 17,127,919 165,375,784 11,139,454 1,295,218 1,050 2 000 7,726,706 1231,293 50,000 25,000 8,854,400 7,674,838 42,249,900 9,453,081 i 9,685,424 4,561,000 11,139,454 1,296,268 18,009,999 17,127,919 165,375,784 1,000 100 i$198 414,720 11,800 3,250 100,700 5,400 750,000 2,350 i Includes partial payments on Liberty loan bonds sold to individual subscribers. W o to CO United States bonds and 1-year Treasury notes held by each Federal Reserve Bank on Jan. 1, 1917, purchases and sales during the year, and amounts on hand Jan. 1> 1918; also conversion operations of each Federal Reserve Bank during the year. Boston. New York. Philadelphia. Cleveland. Richmond. Atlanta. Chicago. St. Louis. Minneapolis. Kansas City. Dallas. San Francisco. Total. Balance on hand Jan» 1,1917: 1,633,750 $44,,247,650 7,361, $2,!, 192,450 $1,,710,000 $8,5,858, 100 $2,202,900 $2.!, 442,340 $8!,492,850$4,328,250$2 4,328, $1,332,00011.., 042,550 $1.,651,000 $7,361,460 ; : 618,Q00 1,070,000 824,000 1,517,000 891,000 700,000 500,000 11,167,000 1,000,000 1,205,000 1,174,000 963,000 705,000 United States bonds 1-year Treasury notes 2,332,000 2,247,550 2,825,000 7,979,460 3,262,450 2,534,000 10,375,100 3,093,900 3,142,340 9,455,850 5,033,250 3,133,750 55,414,650 Total Purchases during year: 1 United States bonds 1-year Treasury notes Total purchases during year 615,650 1,187,240 1,394,950 2,142,600 to > s 81,537,316 1,418,116 7,646,60012,274,250 4,159,700 1,137,500 7,924,900 40 985,760 3,237,000 456,000 394,000 2,626,000 350,000 650,050 1,418,116 10,883,600 12,274,250 6,785,700 1,593,500 8,274,900 41,379,760 650,050 2 827,374 1,726,300 5,449,300 1,640,150 1,194,500 6,570,900 40, 976,260 456,000 1,725,000 1,636,000 350,000 394,000 66,550 530,000 10,000 502,100 1,321,350 2 60,814,784 4,561,000 2 827,374 3,451,300 5,449,300 3,276,150 1,650,500 6,920,900 41,370,260 6,550 530,000 10,000 502,100 1,321,350 2 65,375,784 7,063,000 615,650 1,187,240 1,394,950 2,142,600 88,600,316 Sales during years United States bonds 1-year Treasury notes Total sales during year Conversions: United States 2 per cent bonds converted during year , 2,389,000 3,552,500 2,749,200 3,227,200 1,799,100 1,335,500 3,722,000 1,106,300 1,281,600 1,642,900 1,451,200 2,000,000 26,256,500 CO fcl Received from United States Treasurer in exchange for bonds converted— 3 per cent conversion bonds of 1947. 1,195,000 1,776,500 1,375,200 1,614,200 900,100 668,500 1,861,000 553,300 641,600 821,900 726,200 1,000,000 13,133,500 899,000 667,000 1,861,000 553,000 640,000 821,000 725,000 1,000,000 13,123,000 3 per cent 1-year gold Treasury notes Total 1,194,000 1,776,000 1,374,000 1,613,000 2,389,000 3,552,5001 2,749,200 3,227,200 1,799,100 1,335,500 3,722,000 1,106,300 1,281,600 1,642,900 1,451,2QQ 2,00.0,0.00 26,25.6,5.00 W O Balance on hand Jan. 1,1918: United States bonds 1-year Treasury notes i 728,742 5,186,850 7,101,950 8,268,010 1,236,450 2,397,000 7,006,600 2,233,400 1,887,990 8,849,090 4,496,100 2,455,000 i 51,847,182 2,194,000 4,493,000 2,548,000 3,221,000 1,969,000 1,491,000 3,378,000 1,444,000 1,340,000 1,784,000 1,430,000 1,500,000 26,792,000 2,922,742 9,679,850 9,649,950 11,489,010 3,205,450 3,888,000 10,384,600 3,677,400 3,227,990 10,633,090 5,926,100 3,955,000 i 78,639,182 Total 1 2 Includes unpaid portion of 4 per cent Liberty loan bonds sold by Boston Federal Reserve Bank to individual subscribers. Includes partial payments on Liberty loan bonds sold by Boston Federal Reserve Bank to individual subscribers. Public debt refunding operations conducted by the Secretary of the Treasury under authority of sec. 18 of the Federal Reserve Act during the calendar year 1917. O & H O i TWO P E R CENT BONDS OF THE UNITED STATES SUBMITTED BY F E D E R A L R E S E R V E BANKS AND CANCELED. Jan. 1,1917. Federal Reserve Bank. Boston New York Philadelphia Cleveland ... Richmond . . Atlanta Chicago St. Louis Minneapolis Kansas City.. Dallas San Francisco Total. 2 per cent consols, 1930. $1,252,000 142,000 1,651,000 903,900 999,100 1,205,100 2,331,000 2 per cent Panamas, 1936-1938. $80,000 900,000 1,500,000 800^000 120,000 559,000 Total for year 1917. Apr. 1,1917. Total. $1,332,000 1,042,000 1,651,000 2,403,900 1,799,100 1,325,100 2,890,000 1,010,000 1,392,900 951,200 2,000,000 50,000 250,000 500,000 1,060,000 1,642,900 1,451,200 2,000,000 13,838,200 4,759,000 18,597,200 2 per cent consols, 1930. $1,057,000 2,185,500 1,092,000 60,000 2 per cent Panamas, 1936-1938. $325,000 6,200 763,300 $1,057,000 2,510,500 1,098,200 823,300 10,400 832,000 1,106,300 221,600 10,400 832,000 1,106,300 221,600 6,564,800 Total. 1,094,500 7,659,300 2 per cent consols, 1930. 2 per cent Panamas, 1936-1938. Total. 9 3 $2,309,000 2,327,500 2,743,000 963,900 999,100 1,215,500 3,163,000 1,106,300 1,231,600 1,392,900 951,200 2,000,000 $80,000 1,225,000 6,200 2,263,300 800,000 120,000 559,000 20,403,000 5,853,500 50,000 250,000 500,000 $2,389,000 3,552,500 2,749,200 3,227,200 1,799^100 1,335,500 3,722,000 1,106,300 1,281,600 1,642,900 1,451,200 2,000,000 1 26,256,500 to Public debt refunding operations conducted by the Secretary of the Treasury under authority of sec. 18 of the Federal Reserve Act during the calendar year to 1917—Continued. THIRTY-YEAR 3 PER CENT CONVERSION BONDS AND ONE-YEAR 3 PER CENT TREASURY NOTES ISSUED TO FEDERAL RESERVE BANKS. Apr. 1,1917. Jan. 1,1917. Federal Reserve Bank. Boston New York Philadelphia... Cleveland Richmond Atlanta Chicago St. Louis Minneapolis... Kansas City... Dallas San Francisco. Total.... One-year Conversion Treasury bonds, series notes, series 1917-1947. Jan. 1, 1917-18. Total. $666, 521, 826, 1,201, 900, 658, 1,445, $666,000 521,000 825,000 1,202,000 899,000 667,000 1,445,000 $1,332,000 1,042,000 1,651,000 2,403,900 1,799,100 1,325,100 2,890,000 530, 821, 726, 1,000, 530,000 821,000 725,000 1,000,000 1,060,000 1,642,900 1,451,200 2,000,000 9,296,200 9,301,000 18,597,200 One-year Conversion Treasury bonds, series notes, series 1917-1947. Apr. 1, 1917-18. Total for 1917. Total. One-year Treasury notes. Total. 3 $528,000 1,255,000 549,000 411,000 $1,057,000 2,510,500 1,098,200 823,300 10,400 416,000 553,300 111,600 416,000 553,000 110,000 10,400 832,000 1,106,300 221,600 3,837,300 3,822,000 7,659,300 $529,000 1,255,500 549,200 412,300 Conversion bonds, series 1917-1947. $1,195, 1,776, 1,375, 1,614, 900, 668, 1,861, 553, 641, 821, 726, 1,000, $1,194,000 1,776,000 1,374,000 1,613,000 899,000 667,000 1,861,000 553,000 640,000 821,000 725,000 1,000,000 $2,389,000 3,552,500 2,749,200 3,227,200 1,799,100 1,335,500 3,722,000 1,106,300 1,281,600 1,642,900 1,451,200 2,000,000 13,133,500 13,123,000 26,256,500 O I W § f W Amounts originally allotted by Federal Reserve Board on basis of capital and actual amounts converted. Federal Reserve Bank. Boston New York... Philadelphia Cleveland.... Richmond... Atlanta Chicago Amounts originally allotted by Federal Reserve Board. $2,696,200 6,412,900 2,814,200 3,227,200 1,799,100 1,335,500 3,722,100 Amounts actually converted. $2,389,000 3,552,500 2,749,200 3,227,200 1,799,100 1,335,500 3,722,000 Federal Reserve Bank. Amounts originally allotted by Federal Reserve Board. Amounts actually converted. St. Louis...... Minneapolis... Kansas City.. Dallas San Francisco $1,504,600 1,281,600 1,642,900 1,451,200 2,112,500 $1,106,300 1,281,600 1,642,900 1,451,200 2,000,000 Total... 30,000,000 26,256,500 s w I W o 0 to Amounts of municipal warrants bought by Federal Reserve Banks, during each month of calendar year 1917. to []JQ thousands of dollars.] January. February March. Boston. . . New York 2,798.0 Philadelphia 1,268.3 Cleveland 838.2 Richmond Atlanta 3.0 Chicago . 1,170.7 St. Louis 466.0 Minneapolis. 151.7 Kansas City 152.2 Dallas . 121.7 San Francisco 760 7 127.0 2,459.8 25.2 1,043.7 15.0 9,88.6 552.5 278.9 362.0 2.6 1,023.3 April. May. 126.7 17.4 50.4 29.2 12.3 7.2 27.0 June. July. OO August. SeptemOctober. November. ber. 1,016.5 10.0 33.5 11.6 145.0 130.6 10.2 15.2 125.9 9.3 4.9 December. 100.0 91.3 5.1 104.2 103.8 25 2 4.9 Total, 1917.. 7, 730. 5 5,852. 7 1,031.0 280.3 118.9 100.0 0.03 Percent 45.96 1.67 0.71 0.59 6.13 34.79 Total, 1916.. 9, 806.3 10,450.8 10,425.9 10,361.1 8,979. 2 5,477.8 7,524.5 11.5 Percent 10.8 11.4 9.9 6.1 8.0 11.5 135.2 0.80 1,602.9 1.8 21.8 1,186. 7 0.13 7.05 5,090.9 10,267.5 5.6 11.3 164.1 0.98 7,565.1 8.3 195. 5 1.16 3,404.0 3.8 Total, 1917. Total, 1916. 127.0 7,621.6 6,324.7 38,432.3 1,621.4 7,823.0 2,949.1 10,660.2 115.0 529.6 415.7 420.3 2,164.4 9,733.3 1,018.5 3,619.2 177.1 3,734.8 431.1 1,996.8 691.7 152.3 785.9 5,962.6 Per Per cent, cent, 1917. 1916. 0.76 37.60 9.64 17.53 0.68 2.47 12.87 6.06 1.05 2.56 4.11 4.67 8.4 42.4 8.6 11.7 0.6 0.5 10.7 4.0 4.1 2.2 0.2 6.6 o hrj H W 16,821.6 100.00 90,686.0 100.0 w NOTE.—The amounts of municipal warrants purchased, as shown above, do not in all cases agree with the amounts shown in the reports of Federal Reserve agents, as figures given above represent amounts charged to investments, while figures shown in some of the agents' reports represent the par value of warrants purchased. O I Investment operations, exclusive of 'purchases of United Stales certificates of indebtedness, of Federal Reserve Banks during 1917 and 1916, by months and classes of investments. Year and month. January February March April May June July August September October November December Total, 1917. Total, 1916. Acceptances bought in open market. United States bonds and Treasury notes. Commercial paper discounted. Bankers. Trade. $18,326,286 22, 408,604 26, 788,982 50, 055,801 91,413,473 750,269,838 460, 733,354 220,939,974 548, 164,104 2,681,165,854 3,206,486,771 433,413 $20,376,041 68,994,291 27,475,820 41,019,251 79,355,481 132,481,554 63,629,153 67,510,898 104,162,500 85,443,102 181,872,277 174,444,166 $241,139 1,646,388 676,818 293,440 3,188,891 2,748,143 3,234,912 4,611,904 4,883,966 1,451,080 4,346,451 3,624,843 $20,617,180 70,640,679 28,152,638 41,312,691 82,544,372 135,229,697 66,864,065 72,122,802 109,046,466 86,894,182 186,218,728 178,069,009 $2,370,150 144,500 8,565,510 2,867,040 50,000 9,014.186,454 207,870,500 1,046,764,534 369,762,300 30,947,975 16,332,700 1,077,712,509 386,095,000 13,997,200 48,128,100 Total. 2 per cent. 3 per cent. 3J per cent. $61,240 200 50,000 3,000 2,000 67,000 3,100 2,000 188,540 3,918,880 4 per cent, $250 25,000 $1,232,900 18,299,650 3,825,460 20,830,650 157,650 250,550 1,265,750 45,862,610 9,000 H O w H O 29,650 1,294,396 20,130,670 21,488,966 4,403,200 i w o to Investment operations, exclusive of purchases of United States certificates of indebtedness, of Federal Reserve Banks during 1917 and 1916, hy monthsCO and classes of investments—Continued. Q United States bonds and Treasury notes. Municipal warrants. Year and month. Total, 1917. 1-year Treasury notes. January February.. March April May June July August September. October November. December.. Total, 1917.. Total, 1916.. $456,000 1,882,000 1,220,000 756,000 1,370,000 1,369,000 10,000 7,063,000 300,000 Total. City. $2,431,390 600,950 10,522,510 4,090,040 52,000 1,997,900 19,736,650 3,825,460 20,830,650 1,559,400 1,546,946 21,406,420 $7,201,908 5,798,677 1,021,383 266,433 75,656 88,600,316 56,750,180 State. $2,040 All other. $526,552 53,985 9,640 13,853 43,265 4,925 124,404 133,052 125,023 2,944 9,278 10,000 10,000 39,050 68,200 $7,730,500 5,852,662 1,031,023 280,286 118,921 4,925 100,000 135,216 21,756 1,186,656 164,073 195,548 $49,105,356 99,502,895 66,495,153 95,738,818 174,128,766 887,502,360 547,434,069 297,023,452 678,062,976 2,770,806,092 3,394,416,518 1,137,104,390 15,769,759 85,662,400 263,059 4,087,100 788,748 936,500 16,821,566 90,686,000 10,197,320,845 100,000 125,938 11,756 1,043,604 Total, 1916. Total. $37,150,980 40,028,950 o 50,981,150 w 50,861,300 48,199,800 60,785,340 64,354,450 H O H W 47,902,200 58,679,500 63,282,160 79,614,600 139,531,250 741,401,6 w W 1 Total investment operations (exclusive of United States certificates of indebtedness) of Federal Reserve Banks during each month in 1917. Federal Reserve Banks. January. February. March. Boston New York Philadelphia Cleveland Richmond Atlanta Chicago St. Louis Minneapolis Kansas City Dallas San Francisco April. May. June. July. August. September. October. November. December. Total. 237,301 $9,322,187 $11,313,775 $11.,194,509 $21,520,242 854,762,507 $45,833,930 S34,008,633 008, $42, !, 643,906 $17,426,697 $72,650,494 $119,078,427 $443,992,608 074,236 24,684,930 537,219 382,032. ,847,997 12,126,638 35,435,315 636,974,965 288,878,639 !,483 2,435,196,730 ,725,388,208 397,456,543 7,018,633,903 940,77111, 766,311 ,720,424 7,780,935 25,878,818 46,166,378 33,648,283 064,872 25,000,483 21,394,910 50,991,728 61,871,567 323,225,480 861,364 9,7771,303 ,078,665 12,367,954 12,364,331 14,286,956 17,613,760 31. 344,170 27,590,006 34,065,986 71,336,386 72,339,201 312,020,076 113,99212,463,798 ,557,926 17,850,227 28,950,676 34,386,530 38,483,310 31 303,845 53,156,900 30,856,826 66,897,279 127,023,937 461,045,246 831,894 097,817 ,043,195 3,638,069 4,447,965 4,300,048 4,764,512 878,896 9,642,351 20,591,323 27,834,659 37,127,114 130,197,843 475,117 728,315 932,290 6,113,932 14,233,710 45,394,072 56,624,084 317,759 57,965,950 99,420,562 163,945,464 141,979,156 632,130,411 439,062 6,188,527 10,473,522 5.543,937 16,724,850 839,427 25,349,894 26,045,543 40,091,632 57,693,031 217,518,606 2,354,689 5,7774,492 951,062 10,177,57' 4,745,445 10,497,832 8,821,257 8,210,489 28,984,352 18,873,321 119,026,868 2,801,402 4,362,900 148,906 4,452,325 577,659 1,089,700 8,100,880 19,706,619 19,411,691 828,926 323,333 28,260,858 44,466,463 75,018,316 47,231,067 271,137,854 122,342 94,216,141 638,073 2,333,321 2,846,179 3,773,121 6,800,881 1,087,911 749,591 742,224 9,440,775 16,625,539 26,904,709 14,273,817 395,025 4,877,429 5,131,683 11,709,395 9,828,872 14, 514,168 12,527,045 5,497,753 658,909 16,505,024 44,373,297 42,157,209 174,175,809 Cj f W O w H O H W fed Total, 1917 Total, 1916 Total, 1915 r 49,105,356 99,502,895 66,495,153 95,738,818174, 7,434,069 297',023,452 78,062,976 2,770,806,092 3!,;394,416,5181[,137,104,39010,1,197,320,845 6: , 502,360 54: ; 37,150,980 40,028,950 50,981,150 50,861,300 48,199,800 60,785,340 64,354,450 47,902,200 58,679,500 63,282,160 79,644,600 139,531,250 741,401,680 33,760,100 307,770,770 23, 450,300 20,345,800 26,834,900 17,838,900 20,242,500 23,179,300 27,048,000 29,375,00C 23,556,300 23,961,000 38,178,720 fed m fed o CO Earnings on investments of Federal Reserve Banks—average amounts of earning assets held by each Federal Reserve Bank, and annual during 1917. Average balances for the year of the several classes of earning assets. Bills discounted for members and Federal Reserve Banks, Bills bought in open market. MuniciUnited pal warStates securities. rants. Total. Bills bought in open market. Municipal warrants. United States securities. CO Calculated annual rate of earnings from— Earnings from— Bills discounted for members and Federal Reserve Banks. rates of earnings Total. Bills discounted Total for Bills Munic- United investmem- bought States ment bers in open war- securi- holdand market. rants. ties. ings. Federal Reserve Banks. o H. o Boston New York Philadelphia.. Cleveland Richmond Atlanta Chicago St. L o u i s . , . . . Minneapolis.. Kansas City-. Dallas San Francisco $12,812,843 $15,463,576 $173,214 78,622,402 55,314,853 2,192,696 9,923,917 14,916,598 628,229 9,531,459 15,348,152 1,457,326 15,792 10,720,028 6,235,457 98,640 5,812,100 3,067,694 24,407,209 12,690,553 1,001,753 9,314,101 5,384,333 446,635 153,483 7,370,500 4,703,067 10,635,571 5,346,357 178,525 4,074,509 262,003 4,666,809 6,468,358 9,501,149 409,914 $3,378,029 14,374,096 4,268,208 11,314,574 3,672,428 4,511,059 15,893,460 4,266,752 3,833,442 11,079,176 0,044,720 5,717,007 Total... 190,285,297 152,046,298 7,018,216 18,352,957 437,702,768 i, 971,479 4,951,732 215,120 2,367,9 $31,827,662 $571,117 $502,397 150,504,047 2,455,533 1,843,325 29,736,952 370,359 474,653 37,651,511 375,169 496,712 20,643,705 418,629 201,008 13,489,499 231,636 102,312 53,992,975 938,543 394,340 19,411,821 358,239 170,233 10,060,492 311,376 148,531 27,239,629 438,831 171,112 15,048,047 209,065 138,513 22,096,428 292,982 308,596 $5,203 66,470 18,170 48,132 560 3,629 30,880 13,691 4,480 5,137 6,833 11,935 194,785 $1,173,502 378,668 4,743,996 123,875 987,057 317,924 1,237,937 96,143 716,340 140,820 478,397 443,958 1,807,721 110,301 652,464 97,936 562,323 256,792 871,872 159,432 513,843 147,355 760,868 14,506,320 4.46 3.12 3.73 3.94 3.91 3.99 3.85 3.85 4.22 4.14 4.48 4.53 3.25 3.33 3.18 3.24 3.22 3.34 3.11 3.16 3.16 3.20 3.40 3.25 3.00 3.03 2.89 3.30 3.55 3.68 3.08 3.07 2.92 2.88 2.61 2.91 2.81 2.63 2.90 2.81 2.62 3.12 2.79 2 59 2.55 2.32 2.64 2.58 3.69 3.15 3.32 3.29 3.47 3.55 3.35 3.36 3.50 3.20 3.41 3.44 3.6 3.26 3.07 2.68 3.31 H M w o Exhibit E.—GOLD SETTLEMENT FUND. Condensed summary of transactions, Jan. 1 to Dec. 31, 1917, both inclusive. [In thousands of dollars.] Federal Reserve Bank of— Balance in fund on opening of business Jan. 1, 1917. Gold. Transfers from agent. Transfers between Federal Reserve banks. "Withdrawals. Deposits. Total.- Gold. 41,300 486,742 225,327 38,395.4 68,674.6 39,147 272,737.5 49,775 43,643.5 40,207.6 19,918 51,775 44,059 131,727 123,499 43,671.4 17,187.4 1,666 75,327 2,834 7,503 3,140 8,559.3 23,685 1,377,642.6 482,858.1 Transfers to agent. Total. Debit. 2,000 100,000 182,990 35,200 31,500 59,430 238,460 39,840 35,020 39,020 16,770 72,651 46,059 231,727 206,489 78,871.4 48,687.4 61,096 313,787 42,674 42,523 42,160 25,329.3 96,336 218,900 560,951 291,868 324,650 228,833 32,907 364,957 61,320 64,630 173,950.5 84,080 236,800 83,183 1,888,938 22,044 1,035 33,409 40,554 221,898 41,480 14,575 10,891 . 27,925.5 257,914 852,881 1,235,739.1 2,643,846.5 2,643,846.5 Credit. o Boston New York Philadelphia. Cleveland Richmond Atlanta Chicago St. Louis Minneapolis.. Kansas City.. Dallas San Francisco 14,737 20,570 8,042 16,953 19,416 6,689 26,183 3,395 7,064 21,235.5 14,966.5 10,489 41,300 461,742 87,496 37,395.4 55,894.6 15,467 160,247.5 33,730 28,123.5 30,387.6 4,742 10,030 25,000 137,831 1,000 12,780 23,680 112,490 16,045 15,520 9,820 15,176 41,745 966,555.6 411,0 n ts 02 Total... 169,740 CO CO Condensed summary of transactions, Jan. 1 to Dec. 81, 1917, both inclusive—Continued. CO {In thousands of dollars.] "Weekly settlements from Jan. 4 to Bee. 27, both inclusive. Changes in ownership of gold through transfer and settlement. Net debits. Total of weekly net decreases. Total of weekly net increases. 142,365 882,318 190,140 131,606 128,823 46,072 219,181 86,368 66,438 83,222.5 63,254.5 106,790 147,364 627,587 202,361 192,793 111,521 74,339 282,367 93,756 78,740 101,026 78,220 156,504 Federal Reserve Bank of— Balance in fund at close of business Total debits. Total credits. Net credits. Dec. 31,1917. Boston New York.... Philadelphia. Cleveland Richmond.... Atlanta Chicago St. Louis Minneapolis.. Kansas City.. Dallas San Francisco 66,007 1,623,827 55,619 17,531 34,539 42,310 116,155 62,197 35,852 8,585 23,605 68,494 1,794,404 8,136,064 2,824,257 1,765,655 1,205,483 695,392 3,140,781 1,699,135 624,475 1,063,314 536,224 833,876 1,935,120 6,553,346 3,106,302 2,150,457 1,383,605 716,012 3,347,026 1,726,363 686,832 1,244,177 607,344 862,476 206,723 41,109 337,664 402,333 212,661 62,930 322,400 89,425 98,209 189,448 94,725 97,094 Total... 2,154,721 24,319,060 24,319,060 2,154,721 14,977 20,854 39,101 37,664 22,101.2 13,007 48,319.5 17,884 20,486.5 37,086.6 24,520.7 15,642 311,643.5 2,146,578 2,146,578 Net decrease Net increase for year. for year. 4,999 254,731 12,221 61,187 HI O 17,302 28.267 63,186 7,388 12,302 17,803.5 14,965.5 49,714 272,033 272,033 W O I 135 ANNUAL EEPOET OF THE FEDERAL RESEEVE BOARD. Gold settlement fund—Changes in ownership of gold through transfer and settlement, by weeks. [In thousands of dollars; i. e., 000's omitted.] Boston. Week ending, 1917— Ian. 1-4 11 18 25 Feb 1 8 15 23 Mar. 1 8 15 22 29 Apr 5 12 19 26 May 3 10 17 24 31 June 7 14 21 28 July 5. 12 . 19 26 Aug. 2 9 16 23. 30 Sept. 6 .. 13.. 20 . 27 Oct. 4 11 18 25 Nov. 1 8 15 22. . 30 New York. InInDecrease. crease. crease. 4,548 1,423 Decrease. 16,801 2,095 3,262 2,414 205 5,414 3,970 10,253 Philadelphia. 179 1,353 5,508 1,347 4,830 5,584 5,755 2,794 1,209 4,625 4,689 6,711 13,784 19,840 3,797 16,106 4,090 5,686 17,751 21,700 2,027 4,362 1,440 3,457 6,874 1,738 1,307 3,909 1,634 28,433 1,247 5,255 1,586 7,965 336 314 4,373 25,382 104,846 1,437 4,400 7,354 19,577 6,067 149,800 3,956 3,698 9,705 4,411 2,478 1,399 2,256 2,620 9,268 6,752 5,516 1,560 6,966 1,617 21,088 1,191 10,163 13,444 8,372 9,555 9,042 10,488 569 1,564 1,685 3,046 1,04 434 1,478 1,148 13,114 1,022 4,019 8,418 12,607 13,610 4,685 34 1,698 696 2,608 6,521 23,590 4,996 578 2,953 6,676 5,262 16,089 2,190 13,906 8,283 15,409 5,847 1,139 8,698 13,281 11,721 1,602 5,965 16,081 40,772 25,280 9,203 2,780 6,627 8,366 4 624 6,032 1 697 4 890 393 19,304 874 5,168 503 5,895 4,798 8,182 10,845 6,113 3,371 432 10,198 7,603 842 64 21,394 4,464 2,152 29,306 28 533 19,898 102 357 7,595 5,265 2,371 7,136 762 44,402 1,23d 350 1,591 4,743 29,751 54,359 10,684 37,430 58,521 8,105 1 6,808 3 980 3,169 38,340 16,350 831 646 3,783 291 4,898 512 4,985 16,464 9,147 102,066 3,693 26,318 16,649 10,067 1,117 93 735 3,561 41,551 9,017 39,655 61,846 54,108 574 882 1,761 1,372 436 7,336 13,890 18,595 284 5,308 88 18,844 7,764 246 350 1,174 44,398 2,176 1,204 1,977 1,926 1,308 15,219 75,722 11,639 3,871 1,716 1,387 1,825 3,225 6,422 3,568 53,775 17,062 Richmond. InInDeInDeDecrease. crease. crease. crease. crease. crease. 11,715 7,007 7,455 124 Cleveland. 6,685 7,194 1,802 432 1,654 6,128 3,542 136 AHNUAL EEPOET OF THE FEDERAL RESERVE BOARD. Gold settlement fund—Changes in ownership of gold through transfer and settlement} by weeks—Continued. [In thousands of dollars; i. e., 000's omiited.] Boston. Week ending, 1917— Dec. 6 13. 20 New York. InDeIncrease. crease. crease, 1.792 . . . 18,174 .... 11,005 7,124 27 15,236 65,638 Cleveland. Richmond. InDeDeInInDecrease. crease. crease. crease. crease. crease. . 19,715 13,580 6,664 33,873 12,456 14,476 3,113 16,560 2,000 1 577 22,523 18,164 20,252 8,000 28-31 Decrease. Philadelphia. 19,792 5,400 882,318 202,361 190,140 192,793 131,606 I l l , 521 128,823 Total 147,364 142,365 627,587 Net increase or de-254,731 12,221 4,959 61,187 crease (—) -17,302 Atlanta Week ending, 1917— 1,788 1,511 3,475 1,283 11 18 25 Mar 310 5,750 23 1 508 11,729 4,703 2,367 665 364 2,019 78 4,581 5 682 210 19 2 ,423 26 Q84 3 1,132" 31 June 7 ,158 14 459 28 19 16 23 30 7,664 5,005 21,746 2,454 7,856 22,855 26,904 2,363 581 . . . 5,172 16,318 1,150 48 1,057 2,057 2, 468 7,986 1 ,559 26 Aug. 2 9 8,534 6,880 3,070 1,777 1,805 2,895 1 558 153 x,fvW 5,356 2,129 3 714 489 1 608 2,290 833 3 981 2,068 6,384 . . . 4,482 2, 046 3, 590 . . . 8,003 9,323 1,110 829 4,031 313 5,310 339 7,122 18,805 959 2,466 1 363 432 638 8, MR 3,985 994 938 10,397 5,392 21 2,231 38 2,155 2,364 2,264 3,299 1,463 598 1,253 24 167 193 1,534 440 360 2, 652 11,338 5,046 51 *> 17 July 5... 12 14.. 042 7,573 2,557 17,925 3,616 10 574 1, 051 443 29 1,177 308 3, 473 3, 673 . . . . 1, 015 3,454 2,955 . . 2, 572 615 3,952 93 14 3,233 878 663 474 6,304 881 1,478 15 12 May 3,128 8 8 Apr 157 5,416 15 22 Minneapolis. 4,540 3,828 1 ,999 1 421 1 St. Louis. Increase. Decrease. Increase. Decrease. Increase. Decrease. Increase. Decrease. Jan 1-4 Feb Chic ago. 3,407 2,652 615 1,222 4,672 ANNUAL REPORT OF THE FEDERAL RESERVE BOARD. 137 Gold settlement fund—Changes in ownership of gold through transfer and settlement, by weeks—Continued. [In thousands of dollars; i. e., 000's omitted.] Atlanta. Week ending, 1917—• 6 13 20 27 Oct. 4 11 18 25 Nov. 1 8 15 22 30 Dec. 6 13 20 27 28-31 Minneapolis. Increase. Decrease. Increase. Decrease. Increase. Decrease. Increase. Decrease. 472 Sept Total Net increase or decrease (—) St. Louis. Chicago. 2,518 7,867 3,141 2,537 1,910 13,376 5,261 31,929 3,207 1,908 9,448 5,724 3,812 1,504 1,042 31,690 157 3,900 46,072 28, 267 282,367 4,251 3,091 1,643 20,581 656 2,269 798 3,494 2,799 498 3,444 5,640 1,865 1,762 2,303 2,944 5,719 7,009 21,807 784 1,031 129 2,763 310 6,613 13,647 7,582 1,341 2,328 2,262 10 034 74,339 1,716 21,834 4 553 1,790 14,718 4,217 4,335 6,191 824 9,649 2,202 14,023 9,638 31,488 6,472 219,181 93, 756 86,368 7,388 63,186 Dallas. Kansas City. 7,161 15,211 7,874 10,708 78,740 12,302 San Francisco. Week ending, 1917— Increase. Decrease. Increase. Decrease. Increase. Decrease. Jan. 1-4 11 18 25 Feb. 1 8 15 23 Mar. 1 8 15 22 29 Apr. 5 12 . . 19 26 May 3 10 17 24 31 14,409 3,369 9,263 28 •431 2,088 421 1,331 1,250 3,970 496 886 1,746 1,244 528 430 2,326 1,986 847 1,194 1,304 791 1,015 681 552 645 714 3,581 959 111 457 362 65 2,185 297 • 628.5 1,486.5 3,828 443 1,275 8,979 9,883 2,646 1,147 552 3,625 2,802 334 419 2,127 1,862 2,382 1,480 1,833 109 5,162 4,846 11,294 6,550 1,879 482 1,497 66,438 2,166 6,117 3, 942 7,954 Total. Increases and decreases,, 31,907 16,358 15,121 12,755 14,384 17,467 16,317 10,430 18,206 20,190 9,316 18,376 12,296 11,780 23, 843 27,845 59,862 76,154 50,438 16, 002 34, 276 24,361 138 ANNUAL REPORT OF THE FEDERAL RESERVE BOARD. Gold settlement fund—Changes in ownership of gold through transfer and settlement, by weeks—Continued. [In thousands of dollars; i. e., OOO's omitted.] Kansas City. Dallas. Sau Francisco. Week ending, 1917— Increase. Decrease. Increase. Decrease. Increase. Decrease. June 7 14 . 21 . 28 July 5 12 19 26 Aug. 2 9 16 23 . 30 . . Sept 6 1,430 2,010 3,653 4,852 5,006 9,817 1,750 3,933 4,529 1,852 6,867 139 5,094 4,214 5,221 2,683 22 30 Dec 6 4,063 5,679 950 1,792 5,564 8,660 11,003 140 20 1,188 27 669 4 888 13,810 147 1,726 7,614 3,822 2,075 3,651 10,470 11,012 9 201 9,681 6,834 500* 83,222.5 2,976 3,065 3,307 2,454 13,176 10,557 1,255 11 111 1,676 28-31 101,026 17,803.5 1,492 552 13,, 857 1,619 628 13 Total Net increase or decrease (—) 34 6 534 3,654 632 6,104 5,856 1,724 1,374 15,533 ... 13,271 3,810 2 900 15 3,032 723 3,483 2,307 1,853 662 . 10,626 853 7,521 362 1,354 13 27 Oct. 4 11 18 25 Nov 1 8 11,206 2,217 5,092 20 7,285 3,426 6,245 6,518 11,020 1,483 2,528 4,330 3,563 359 78,220 14,965.5 63,254. 5 2,000 156,504 49,714 1,937 8,000 106,790 Total. Increases and decreases. 45,054 26 279 50,178 66,851 59,629 110,108 21 483 48,013 149,800 102,066 16,072 30,459 43,588 33,455 43,258 31 608 56,366 28,006 39,802 60,219 17,924 55,889 36,412 44,988 58,411 51,428 38,991 94 302 71,768 62,587 2,146,578 139 ANNUAL EEPOBT OF THE FEDERAL RESERVE BOABD. 14C r/OJ zEh 'LY TF, 7'HR 0U<3H /yp TLL 'ML:NT GO LD\ J AN. ' 71ID EC. 917. Wi 1000 300 \ 'i CUT QUU 1000 • I A\\ i\ s/ 1 i 1m /* A A'/ 300 1 \l 1 tt 900 V 700 / / II I k |V ^\ /uIf n J \\ 400 % 1 I ?00 500 in' i jli cUu•ing 600 li •' re/.- Wee,•tigSettU rneru dan, ve2.- Trot xfers beth CUT i H •If LLt- 600 SOO / *HAJ 300 ZOO 200 100 100 0 0 JAN. FEB. MCH. APR. MAYJUNE JULY 34365°—18 10 OCT. NOV. DEC. Exhibit F.—CLEARING OPERATIONS, JAN. 1 TO DEC. 31, 1917. Federal Reserve Bank. Total number of items handled. Total amounts Disbursements, Cost Cost per Service transit per item thousand charge depart- handled. dollars. per item. ment. Boston New Y o r k . . . . Philadelphia.. Cleveland Richmond Atlanta Chicago St. Louis 1 Minneapolis... Kansas City.. Dallas San Francisco. 13,482,481 17,975,769 11,727,528 5,901,160 5,688,280 4,031,458 7,532,366 2,648,276 4,386,422 4,559,277 3,717,220 3,046,711 $6,951,310,787 14,051,822,671 7,363,095,829 3,932,056,724 3,403,949,500 1,636,315,075 5,363,610,000 1,206,630,532 1,097,635,030 3,537,781,323 990,202,304 2,059,361,119 $96,132 211,216 105,035 83,492 51,186 51,386 72,886 36,332 44,461 57,330 51,263 68,123 Total... 84,696,968 51,593,770,894 928,842 Cents. 0.71 1.11 .9 1.4 .9 1.27 .97 1.37 1.01 1.26 1.38 2.23 1.1 Cents. 1.39 1.5 1.43 2.1 1.5 3.14 1.36 3.01 4.05 1.62 5.18 3.3 Cents. 0.9 1 1.5 L.5 ]L.25 ]L.5 ]1.5 ]L.5 1.5 1.5 1.5 U.5 1.8 1 Exclusive of Government and clearing-house items amounting to $1,172,285 and $1,825,621,615, respectively. 2 Service charge per item was 2 cents until Oct. 15, when it was changed to 1.5 cents. 140 Exhibit G—RECEIPTS AND DISBURSEMENTS OF THE FEDERAL RESERVE BOARD. There is here given a statement of receipts and expenditures of the Federal Reserve Board in 1917. The total expenses of the Board for the calendar year 1917 are shown on the detailed statement of commitments to have been $249,302.22. This amount includes a number of items which have of necessity been estimated. Under the Federal Reserve Act the Federal Eeserve Board is authorized to make semiannual assessments upon Federal Eeserve Banks to cover its expenses. The first assessment for this purpose was made on November 2, 1914. The funds of the Board are carried in a special account with the Treasurer of the United States, and transfers are made by the governor of the Board to the credit of the fiscal agent, as necessary. The accounts of the Board pass through the office of the Auditor for the State and Other Departments and are given the official examination required b}^ the Government. The term " auditor's settlement" under " Disbursements" covers settlements made by transfers of credit authorized and directed by the auditor on the books of the Treasury Department. The term "commitments," where used, covers all obligations entered into by the Board for the periods stated. EECEIPTS. Unexpended balance Jan. 1, 1917 Assessments, 1917 Bulletin, subscriptions to Reimbursements Miscellaneous $14, 005. 96 237, 776. 82 1, 693. 99 11, 479.10 1,917.32 Total available $266, 873.19 DISBURSEMENTS. By fiscal agent Auditor's settlements — Total disbursements Balances Dec. 31, 1917. with Treasurer of Suited States to credit of— Fiscal agent __ Federal Reserve Board 218,507.75 31, 801. 00 250, 363. 75 4,264.71 12, 239. 73 ;1G, 504, 44 266, 873. 19 141 142 ANNUAL REPORT OF THE FEDERAL RESERVE BOABD. GENERAL STATEMENT. Total available $266,873.19 Reimbursable expenditures $11, 235. 00 Balance to credit, reimbursable account __ 500. 71 — 11,735.71 Commitments for general expenses, 1917 Commitments, 1916; paid in 1917 249, 302. 22 4, 000.18 $255,137. 48 253, 302. 40 Unencumbered balance Jan. 1, 1918 Unpaid commitments Dec. 31, 1917 Balance to credit reimbursable account Unexpended balance :__„_____ 1, 835. 08 14,168. 65 500. 71 16, 504. 44 Detailed statement of January. February. Personal services: Board and its clerks Secretary's office Counsel's office Division of audit and examination Division of reports and Division of issue Messengers Charwomen Total Nonpersonal services: Transportation and subsistenceBoard and its clerks.. Secretary's office Division of audit and examination Division of reports and statistics CoiTnp^l's fffif'c Messengers Communication service: TeleDhone Telegraph Postage March. April. May. expenditures. June. July. August. September. . October. November. Decem. ber. Total. $7,373.31 $7,273.31 $7,343.05 $7,383.31 $7,383.31 $7,347.04 $7,476.65 $7,383.31 $7,343.09 $7,379.18 $7,458.33 $7,458.34 $88,602.23 2,618.33 2,591.67 2,478.89 2,475.00 2,481.67 2,481.67 2,305.83 2,379.17 2,379.17 2,427.50 2,393.33 2,430.84 29,443.07 2,126.66 2,176.67 2,176.67 1,901.66 1,960.00 2,026.67 1,780.82 1,785.00 1,785.01 1,815.83 1,846.67 1,846.68 23,228.34 1,358.33 1,758.33 1,758.34 1,618.33 1,458.33 1,348.34 1,393.33 1,499.71 2,165.19 2,499.99 2,591.66 2,281.68 21,731.56 1,080.00 693.33 395.00 60.00 1,120.00 693.33 395.00 60.00 1,130.00 693.34 395.00 54.00 1,130.00 730.83 395.00 60.00 1,130.00 768.33 395.00 60.00 1,080.00 768.34 407.00 60.00 1,216.00 772.49 455.00 63.78 1,245.50 776.66 515.00 66.00 1,212.50 776.68 515.00 66.00 1,129.59 891.50 507.50 66.00 1,279.75 986.66 493.33 65.27 1,373.69 1,041.68 498.33 66.00 14,127.03 9,593.17 5,366.16 747.05 16,068.31 16,029.29 15,694.13 15,636.64 15,519.06 15,463.90 15,650.35 16,242.64 16,717.09 17,115.00 16,997.24 192,838.61 251.14 73.85 321.03 126.14 2,171.26 215.53 805.57 599.04 1,395.94 603.14 7,006.40 15,704.96 23.05 190.39 90.83 745.20 374.82 25.85 172.60 843.00 136.85 536.19 171.68 201.61 284.62 13.30 18.00 211.23 20.30 1,178.12 60.35 22.90 30.00 40.05 22.90 5.00 5.00 58.62 340.18 25.00 56.65 320.50 75.40 343.42 25.00 128.26 492.12 5.00 5.00 188.94 337.40 207.52 525.22 20.00 5.00 166.53 502.98 169.97 349.28 5.00 174.48 711.61 179.17 734.21 180.00 853.38 180.00 801.05 1,765.58 6,311.35 70.00 Detailed statement of expenditures—Continued. January. February. March. April. May. June. July. Printing, binding, etc. o $3,434.62 $1,535.49 $1,446.27 $2,061.15 $1,500.68 $2,789.93 $1,703.58 3.45 5.00 Contract repairs 40.72 15.75 30.00 30.00 Electricity (light a n d power). 30.00 30.00 30.00 30.00 30.00 15.00 15.00 Steam (heat) 15.00 15.00 36.00 25.00 Other nonpersonal services 9.83 56.65 20.00 149.89 22.10 Supplies: Stationery 223.94 64.31 124.81 79.76 135.00 110.34 106.64 Periodicals 61.98 17.60 17.00 22.50 52 61 Other 24.99 7.66 14.07 5.20 21.61 53.05 12.00 Equipment: Furniture and office 126.50 85.00 79.79 182.05 69.50 223.30 750.22 equipment...0 3.00 1.50 Books 38.22 399.47 9.10 12.00 9.75 Gold settlement fund (includ175.29 125.27 244.40 414.30 235.60 208.20 ing salaries) 240.25 Foreign exchange (including Rent Transit (special) Total Grand total 453.76 641.14 August. September. October. $1,470.04 $1,996.57 30.00 30.00 46.20 630.47 $1,716.63 24.97 30.00 15.00 103.79 68.53 10.50 21.61 107.80 22.00 53.00 186.16 118.30 105.60 175.00 160.30 2.79 760.78 11.50 1,037.90 12.46 325.65 447.13 177.93 November. December. $1,374.40 $1,485.55 $22,514.91 102.01 10.12 2.00 360.00 30.00 30.00 105.00 15.00 15.00 63.92 1,236.46 72.61 117.83 16.00 64.61 1,500.12 338.49 451.12 921.24 10.80 71.80 4,468.38 510.59 361.52 387.18 375.00 3,539.79 187.93 188.93 1,806.89 187.93 1,806.89 742.72 1,133.80 5,955.55 56,463.61 67.73 38.90 4,758.17 3,617. 90 4,374. 65 3,940.15 20,463.13 19,686.21 20,403.94 19,634.28 4,592. 77 3,947.33 3,756.63 5,819.06 6,535.61 5,455.82 19,346.61 20,111.83 19,%411.23 19,406.98 22,061.70 23,252.70 22,570.82 3,709.97 Total. 22,952. 79 249,302.22 r W O > Exhibit H.—EARNINGS AND EXPENSES OF THE FEDERAL RESERVE BANKS. Total earnings of the Federal Reserve Banks for the calendar year 1917 were $15,438,858, compared with $4,955,343 for the calendar year 1916, while total current expenses were $4,235,866, compared with $2,204,344 for the previous year. Current expenses for the year under review include $2,669,585 of expenses of operation proper, $1,111,636—the cost, including postage, expressage, insurance, and other expenses incident to the issue and redemption of Federal Reserve notes and bank notes, $299,823—depreciation of bank buildings, furniture, and equipment, and $154,824 the excess of the cost of operation of the transit department over the total of service charges collected by those Federal Reserve Banks showing a deficit from operation of this department. The total is exclusive of expenses of the fiscal agent departments. These expenses are treated separately, being reimbursed by the United States Treasury Department. Net earnings of the banks, i. e., the excess of earnings over current expenses, totaled $11,202,992, or at the rate of 18.9 per cent on an average aggregate paid-in capital for the year of $59,260,000, compared with 9.8 per cent for the first six months of 1917 and about 5 per cent for the calendar year 1916. I t is thus seen that the financial results of operation were especially favorable during the second half of the year when the discount demands upon the Federal Reserve Banks in connection with the loan operations of the Government caused a much larger employment of the banks' funds than during the earlier portion of the year. Three banks report net earnings for the year in excess of 20 per cent on their average paid-in capital; three other banks show net earnings between 15 and 20 per cent, while the remaining six banks show net earnings between 12 and 15 per cent. To the total net earnings above shown should be added the net profits carried over from 1916, $649,302, and miscellaneous adjustments in the profit and loss account amounting to $10,529, making a total of $11,862,823. Deductions from this total, $1,633,914, comprise the cost of notes paid for but not yet issued by the banks, the premium on United States bonds, also special funds set aside to cover depreciation on United States securities owned by the banks, leaving $10,228,909 as the net profits on December 31, 1917. Over two-thirds of this amount, or $6,801,726, represents the amount of dividends paid to member banks during the year, including certain small adjustments in the dividend account. The balance of $3,427,183 was dis- 145 146 ANNUAL REPORT OF THE FEDERAL RESERVE BOARD. tributed as follows: $1,134,234 was paid by six banks as franchise tax to the Government; an equal amount was carried by these banks to surplus, while $1,158,715 was carried to profit and loss by the other six banks. Over 45 per cent of the total earnings for the year, as against 20.7 per cent the year before, was from bills discounted; 32 per cent, as against 31.5 per cent, from acceptances bought in the open market; 15.3 per cent, as against 22.3 per cent, from United States securities; about 3 per cent came from the sale of transfer drafts; and the remainder from municipal warrants, profits on United States securities sold, penalties for deficient reserves, commissions, and sundry smaller profits. Expenses of operation of the banks proper, exclusive of their transit and fiscal agent departments, were $2,669,585, compared with $1,684,501 for the calendar year 1916. Of the total, about 28 per cent went as compensation to the clerical staff and 23.2 per cent as salaries to bank officers. Less than 9 per cent of the total operating expense is represented by contributions of the banks for the support of the Federal Reserve Board. Rent paid by all banks, except Dallas, constitutes less than 7 per cent of the total expenses of operation, while the cost of printing and stationery accounts for about 5.4 per cent of these expenses. Other large items of operating expense, in the order of their importance, were postage, insurance, directors' fees and per diem allowances, compensation to special officers and watchmen, and salaries not specified. Current expenses are exclusive of $183,764 expended on furniture, fixtures, and vault account. During the year the banks wrote off this account a total of $305,421. At the end of the year the furniture and fixtures account was completely charged off by a number of banks, leaving a balance of $133,396 at the opening of 1918, representing the combined furniture, fixtures, and vault account. The Richmond bank owns a banking house for its branch in Baltimore and ground upon which to build in Richmond. Dallas owns a banking house, while Atlanta and San Francisco own ground on which they propose to erect banking buildings for their own use. The total amount reported at the close of the year by these four banks and Philadelphia under the head of " Bank premises" is $707,611, compared with $368,222 at the beginning of the year. Disbursements of the transit departments, not included in the banks' operating expenses, totaled $844,305. As an offset against these disbursements the banks received $704,670 of service charges for handling items received for collection. Aggregate deficits of $154,824 reported by 7 banks were included among the current expenses of the banks, while excesses of service charges appear among the earnings of 5 banks. Earnings and expenses of each Federal Reserve Bank and of the system as a whole for the calendar year 1917. EARNINGS. PhilaBoston. New York. delphia. Bills discounted and bought: Bills discounted—Members and Federal Reserve Banks $571,117 $2,455,533 Acceptances bought in market.. 502,397 1,843,325 Investments: United States securities 94,785 378,668 Municipal warrants 5,203 66,470 Profits realized on United States 11,102 14,335 securities... Transfers—Net earnings 108 Deficient reserve penalties, includ18,565 ing interest 6,105 38,538 6,938 Commissions received Net service charges received in excess of transit department disbursements 32,857 Sundry profits 253 Total earnings 1,198,008 4,848,291 $370,359 474,653 Cleveland. Richmond. Atlanta. Chicago. $375,169 $418,629 $231,636 496,711 201,008 102,311 $938,543 394,340 St. Louis. Minneapolis. Kansas City. Dallas. $358,239 $311,376 $438,831 $209,065 170,233 148,531 171,112 138,512 San Francisco. Total. $292,982 $6,971,470 308,596 4,951,729 123,875 18,170 317,924 48,132 96,143 560 140,820 3,629 443,958 30,880 110,301 13,691 97,936 4,479 256,792 5,137 159,432 6,833 147,355 11,935 2,367,989 215,119 13,768 339 24,261 14,022 16,712 25,569 17,134 25,196 170,634 57,920 45,983 45,570 4,008 34,027 11,250 64,363 146,201 450,100 6,878 17,844 13,527 12,223 14,968 4,468 37,396 12,968 18,222 194,526 45,476 7,917 3,181 4,387 1,208 7,196 1,564 4,940 2,726 8,696 6,129 9,436 1.112 383 4,202 52 15,189 81,050 1,015,959 1,297,244 770,009 541,822 2,022,278 736,774 628,338 955,950 569,430 854,755 15,438,858 31,362 s W ft CO w fed W o Earnings and expenses of each Federal Reserve Bank and of the system as a whole for the calendar year 1917—Continued. 00 CURRENT E X P E N S E S . Boston. Expenses of operation: Assessments account expenses Federal Reserve Board Federal Advisory Council (fees and traveling expenses) Governors' conferences (including traveling expenses) Federal Reserve agents' conferences (including traveling expenses) Salaries— Bank officers Clerical staff Special officers and watchmen Allother Directors' fees Per diem allowance Traveling expenses Officers' and clerks' traveling expenses Legal fees Rent Taxes and fire insurance Telephone Telegraph PhilaNew York. delphia. Cleveland. Richmond. Atlanta. Chicago. St. Louis. Minneapolis. Kansas City. Dallas. San Francisco. Total. $16,560. $237,795 $21,226 $50,252 $22,057 $25,783 $14,256 $10,154 $30,021 $12,733 $10,196 $13,118 $11,439 445 650 350 653 432 479 827 405 150 370 150 150 5,061 539 552 174 251 337 300 432 711 625 665 398 944 5,928 208 215 996 37,782 41,051 56,657 620,392 38,773 39,940 56,891 746,827 110 167 243 113 43,550 49,039 129,247 228,485 46,206 42,615 46,678 33,200 36,471 63,761 48,688 44,861 35,303 37,893 85,865 55,236 37,101 31,926 604 11,017 29,534 12,090 950 1,344 8,311 4,357 2,541 2,120 1,320 1,571 700 3,424 10,289 2,127 1,667 1,419 2,762 434 47,111 5,138 2,043 816 1,062 2,981 160 46,157 2,050 5,450 3,740 3,975 1,575 2,372 46,230 590 1,640 940 2,540 815 465 961 1,843 1,506 5,313 1,132 1,219 361 1,203 775 1,139 3,825 1,500 2,400 1,323 15,948 8,850 13,669 178,623 4,060 1,010 711 921 2,400 15,246 430 4,452 565 2,605 3,590 1,080 1,361 1,882 3,020 1,230 1,806 2,188 2,540 2,471 15,120 20,019 163 954 1,067 1,227 1,700 2,000 500 600 2,750 55,551 9,070 16,625 5,807 12,153 22,915 13,077 5,660 2,629 1,211 1,184 104 5,645 6,464 3,216 2,803 685 535 1,906 711 1,031 810 870 2,313 24,274 657 843 815 769 699 565 585 2,371 12,229 13 325 1,694 817 74 15,353 Insurance and premiums on fidelity bonds Light, heat, and power Printing and stationery Repairs and alterations All other expenses Total expenses of operation... 5,507 3,036 17,374 12,907 1,470 U86 7,940 4,692 2,647 1,651 8,004 1,289 26,191 4,994 4,700 7,416 725 7,544 1,426 193,531 5,210 6,826 14,362 9,477 6,552 4,116 2,483 9,510 2,906 5,030 2,202 2,032 2,070 175 5,876 2,397 2,101 820 9,723 7,063 18,002 4,926 35,067 1,039 100,830 11,296 28 528 386 9,183 5,404 4,683 15,812 37,578 704,278 163,955 194,941 141,095 146,748 343,765 70,340 91,256 54,808 15,010 1,887 3,069 3,626 3,782 30,232 25,726 28,435 7,311 233 3,166 8,424 3,203 1,234 89,925 61,112 43,197 1,871 3,851 3,437 1,185 1,468 464 10,311 7,314 12,180 18,407 143,016 287 2,473 1,506 29,160 % 11,490 7,475 1,267 4,602 17,388 5,029 10,966 249,156 5 318,043 177,938 125,101 155,337 145,220 203,396 2,669,585 159,825 49,363 42,381 48,679 30,911 34,998 1,054,183 ^ 2,314 1,229 1,355 20,886 8,077 57,453 ^ 41,364 38,353 28,142 261,388 38,435 § ^ 33,098 154,824 • Cost of Federal Reserve notes issued, including expressage, insurance, etc Miscellaneous charges account note issues Depreciation of furniture and equipment Depreciation of bank premises Disbursements of transit department in excess of net service charges received Total current expenses Net earnings for year 1917 Per cent of average paid-in capital.. 68,954 14,974 8,256 66,283 22,120 14,594 285,715 912,293 17.4 1,129,336 3,718,955 28.2 262,084 334,092 257,785 753,875 14.1 963,152 14.9 512,224 14.8 8,177 32,225 2,277 214,510 327,312 13.2 32,325 7,500 2,500 8,196 512,407 1,509,871 20.6 234,618 502,156 15.9 210,201 418,137 16.8 271,451 684,499 21.8 215,956 353,474 12.9 4,235,866 11,202,992 13.7 18.9 307,711 547,044 r I gj J^ | W CO Profit and loss account of each Federal Reserve Bank and of the system as a whole for the calendar year 1917. Boston. Earnings Current expenses Net earnings for year Profit and loss account Jan. 1,1917 Miscellaneous adjustments in profit and loss d urine vear Total Less: Cost of Federal Reserve currency not yet issued to bank (including expressage, insurance, etc.).. Premium on United States bonds. Reserved for depreciation on United States bonds New York. Philadelphia. Cleveland. Richmond. Atlanta. Chicago. St. Louis, Minneapolis. Kansas City. FranDallas. San cisco. Total. $1,198,008 $4,848,291 $1,015,959 $1,297,244 $770,009 $541,822 $2,022,278 $736,774 $628,338 $955,950 $569,430 $854,755 $15,438,858 834,092 257,785 214,510 512,407 234,618 210,201 271,451 215,956 307,711 4,235,866 285,715 1,129,336 262,084 912,293 3,718,955 11,597 163,064 753,875 89,966 963,152 94,797 512,224 11,664 327,312 1,509,871 10,120 61,978 33,667 843,841 1,057,949 523,888 337,432 1,573,976 14,320 445,248 209,470 138,267 2 2,127 10,654 923,890 3,892,673 502,156 12,748 50,000 205,880 24,909 514,904 684,499 91,506 -2,127 i 125 460,552 775,880 395,377 42,508 75,462 1,407 91,000 609,316 91,000 1,633,914 43,001 159,515 353,474 41,903 547,044 15,417 10,529 3 21. fi57 77,603 11,202,992 649,302 418,137 44,542 7 562,461 11,862,823 578,744 445,854 209,470 50,000 21,657 117,970 1,407 Net profits Dec. 31,1917 751,956 3,241,545 843,841 848,479 473,888 298,203 1,293,857 514,904 438,895 657,910 393,970 471,461 10,228,909 Dividends paid Dividends accrued and paid on surrendered stock including miscellaneous adjustments in dividend account 597,829 1,941,642 622,150 715,614 240,944 215,972 860,058 284,566 363,876 360,236 187,744 394,490 6,785,121 3,927 1,177 1,453 554 2,231 2,201 19 4,267 490 286 16,605 601,756 1,942,819 623,603 716,168 218,203 862,259 363,895 364,503 188,234 394,776 6,801,726 Total deductions Total dividends paid during year 171,934 651,128 240,944 39,229 280,119 284,566 Profit and loss Pec. 31,1917, after payment of dividends Distribution of profit and loss: Paid to Government account franchise tax Carried to surplus account Profit and loss Jan. 1 1918 Dividends paid to 150,200 1,298,726 75,100 75,100 649,363 649,363 12-31-17 12-31-17 220,238 220,238 6-30-17 132,311 132,311 6-30-17 232,944 80,000 431,598 116,472 116,472 40,000 40,000 215,799 215,799 12-31-17 12-31-17 12-31-17 230,338 75,000 293,407 205,736 76,685 37,500 37,500 230,338 12-31-16 12-31-17 293,407 6-30-17 205,736 6-30-17 76,685 12-31-16 1 Credit. 2 Amount paid to the Chicago Federal Reserve Bank in adjustments of dividends due to banks transferred from the Minneapolis to the Chicago district. 8 Includes $6,500 for abrasion on gold coin. 3,427,183 1,134,234 1,134,234 1,158,715 o w H O W o > Transit department disbursements and net service charges of each Federal Reserve Bank and of the system as a whole for the calendar year 1917. DISBURSEMENTS. Expenses of operation: SalariesBank officers Clerical staff Allother Officers' and clerks traveling expenses. Legal fees Rent Taxes and fire insurance Telephone Telegraph Postage Expressage Insurance and premiums on fidelity bonds Light, heat, and power Printing and stationery Repairs and alterations All other expenses, not specified Total expenses of operation Depreciation ol furniture and equipment Total disbursements Boston. NewYork. Philadelphia. $51,854 $58,871 $55,134 631 213 6,590 1,630 35 7,041 65 53 61 19,157 8,027 1,585 5,350 107 1,938 57 345 22,294 28,850 10,942 17,746 Cleveland. Richmond. Atlanta. Chicago. St. Louis. Minneapolis. $3,563 39,950 228 201 $3,000 29,254 $469 20,279 $35,042 1,200 185 2,750 37 5,013 17,939 11,756 2,232 204 55 32 12,626 66 1 10,659 480 36 15 8,278 11 288 78 8,578 466 247 104 7,799 1,391 235 3,780 118 4,652 138 5,790 420 2,819 747 2,271 148 2,294 130 600 6,157 5,033 48 4,449 240 5,118 19 2,106 $725 15,868 52 1,445 Kansas City. FranDallas. San cisco. $2,169 27,292 655 $23,799 $28,631 3,000 60 48 1,600 8,951 17, $44 656 726 525 304 3,133 152 544 815 240 4,924 52 1,714 4,121 26 $28,922 1,098 750 28 24 127 9,353 2,301 Total. $9,926 414,896 941 1,045 1,320 33,251 392 B 3 8 H 834 312 9,769 14,262 1,075 152,947 67,188 5,077 6,052 9,481 53,858 3,359 43,707 356 3,200 96,132 147,206 96,883 4,818 68,812 15,754 48,498 2,688 39,498 10,746 60,886 34,692 1,640 41,361 3,100 52,465 2,441 49,694 2,846 64,145 800,272 44,033 96,132 147,206 101,701 84,566 51,186 50,244 60,886 36,332 44,461 54,906 52,540 64,145 844,305 § fe SERVICE CHARGES. Member banks Other Federal Reserve Banks , Total service charges received , Service charges paid other Federal Reserve Banks , Service charges, net Transit department disbursements in excess of net service charges received $86,670 $128,271 17,762 12,139 $93,507 16,048 $60:964 26,017 $43,028 22,592 $30,042 $110,243 25,091 17,529 $48,994 22,299 $32,821 20,542 $15,714 34,603 $28,945 25,445 $13,864 20,001 $693,063 260,068 98,809 146,033 109,555 86,981 65,620 55,133 127,772 71,293 53,363 50,317 54,390 33,865 953,131 10,933 87,876 65,110 80,923 29,974 79,581 17,009 69,972 10,047 55,573 7,166 47,967 65,322 62,450 32,235 39,058 2,773 50,590 3,607 46,710 1,467 52,923 2,818 31,047 248,461 704,670 8,256 66,283 22,120 14,594 !4,387 2,277 i 1,564 1 16,129 8,196 1383 33,098 139,635 2,726 g i Excess service charges. Fiscal agent department disbursements of each Federal Reserve Bank, amounts reimbursed, and balances reimbursable by the United States Treasury, to the end of the calendar year 1917. Boston. NewYork. Philadelphia. Cleveland. Total disbursements to Dec. 31, 1917 $294,499 $900,040 $186,008 $237,581 Amounts reimbursed by United States Treasury to Dec 31 1917 151,288 539,690 85,975 98,333 Balances reimbursable 143,211 360,350 100,033 139,248 Richmond. $66,921 Atlanta. Chicago. St. Louis. Minneapolis. $70,380 $458,278 $191,516 Kansas City. $106,338 $114,172 FranDallas. San cisco. Total. $92,798 $376,219 $3,094,750 23,700 24,686 170,850 66,667 52,211 27,722 27,793 128,615 1,397,530 43,221 45,694 287,428 124,849 54,127 86,450 65,005 247,604 1,697,220 i w o J Cost of furniture and equipment, including vaults, also bank premises. Boston. New York. Philadelphia. Cleveland. Richmond. $15,410 $20,164 $12,000 Atlanta. Chicago. St. Louis. Minneapolis. $12,282 i $28,109 Balance as reported Jan. 1,1917 Additional purchases during calendar year ending Dec. 31,1917 Total . . $14,974 14,974 18,771 34,181 25,822 45,986 25,479 37,479 6 641 18,923 Depreciation charged during calendar year ending Dec. 31,1917 14,974 8,600 45,986 28,414 18,923 9,065 300,000 140,875 Balance Jan. 1 1918 "RjvnV promises . ....... '. . . . .r.r 25,581 10,000 Kansas City. FranDallas. San cisco. Total. $28,6£9 $59,274 $41,961 $37,164 4,116 32,225 23,538 52,227 14,691 73,965 12,583 54,544 9,007 46,171 $28,142 28,142 183,764 438,817 32,225 7,728 44,464 40,794 35,171 28,142 305,421 44,499 29,501 13,750 11,000 136,736 120,000 133,396 707,611 i $255,053 § i Refund of $195.50 deducted. w o Cost of unissued Federal Reserve notes. Boston. New York. Balance as reported Jan. 1,1917 Additional cost during calendar year ending Dec. 31,1917 $29,230 $235,599 73,391 Total Cost of Federal Reserve notes charged to current expenses during calendar year ending Dec. 31,1917 $27,708 $39,544 St. Louis. Minneapolis. Kansas City. FranDallas. Sancisco. $9,355 $20,315 $67,958 $19,763 $16,295 i $28,599 $8,940 553,414 43,144 51,712 49,548 49,401 134,868 45,767 39,001 62,588 32,132 102,621 789,013 70,852 91,256 58,903 69,716 202,826 65,530 55,296 91,187 102,621 789,013 70,340 91,256 58,903 69,128 202,826 49,363 16,167 512 Balance Jan. 1,1918 Phila- Cleve- Richdelphia. land. mond. Atlanta. Chicago. 1 588 Total. i $503,306 $34,998 1,169,964 41,072 34,998 1,673,270 42,381 91,187 30,911 34,998 1,632,927 o 12,915 10,161 40,343 O Includes cost of Federal Reserve bank notes amounting to $983.82. »=1 fel' i w o > Or Earnings and current expenses, by months, for the calendar year 1917, of each Federal Reserve Bank and of the system as a whole. Or EARNINGS. Boston. January February.. March April May June July August September.. October November. December.. Total Net service charges in excess of transit department disbursements Total earnings. 153,987 43,978 45,168 53,134 53,867 89,452 104,597 110,323 108,553 126,746 161,013 247,190 New York. Philadelphia. Cleveland. Richmond. Atlanta. Chicago. St. Louis. Minneapolis. Kansas City. $120,886 109,043 91,582 107,644 156,521 437,386 389,244 233,893 315,977 672,011 1,033,209 1,180,895 $48,394 45,091 44,794 47,812 72,047 78,704 87,023 90,314 95,853 85,419 122,933 197,575 $65,114 52,713 51,150 54,016 66,220 73,082 78,742 107,090 117,730 131,306 193, 726 306,265 $44,597 35,136 37,496 44,603 55,669 58,850 66,862 65,074 68,800 69,299 85,379 133,557 $47,800 26,584 21,128 23,870 28,271 28,873 26,861 33,380 44,330 73,964 85,520 101,241 $31,400 31,283 33,052 35,947 43,806 47,167 53,281 55,826 66,900 91,293 96,824 147,269 $32,121 $29,731 68,040 63,591 68,272 89,149 136,407 192,247 160,522 170,449 247,193 336,516 399,360 31,310 31,311 31,094 34,889 34,082 34,955 43,184 42,511 39,952 72,814 49,422 88,498 60,826 97,756 70,234 92,918 1,198,008 4,848,291 1,015,959 1,297,244 765,622 541,822 2,020,714 4.387 770,009 1,198,008 4, 848,291 1,015,959 1,297,244 Dallas. San Francisco. Total. 58,689 106,034 83,836 166,516 87,459 158,017 $20,826 24,678 22,943 28,886 34,747 33,119 36,581 45,805 53,031 79,296 88,510 100,625 734,048 622,209 955,950 569,047 854, 755 15,423,669 1,564 2,726 6,129 383 15,189 541,822 2,022,278 736,774 628,338 955,950 569,430 $49,982 34,413 31,090 38,725 52,476 59,645 62,530 75,312 80,282 91,571 119,352 159,377 854,755 $633,806 533,880 507,977 571,946 738,468 1,155,451 1,235,888 1,136,121 1,285,057 1,832,911 2,573,334 3,218,830 s 15,438,858 o CURRENT EXPENSES. January February March April May June July August September O ctober November December 111,736 14,088 14,908 15,667 14,656 18,226 20,785 22,077 24,428 29,841 30,815 60,232 $53,558 61,972 66,284 61,834 58,375 65,532 73,825 90,565 96,832 136,796 157,874 139,606 $11,354 15,548 15,340 15,703 15,145 19,226 13,530 18,098 23, 618 28,240 25,456 38,706 $12,104 15,153 15,207 18 178 20,215 23,006 20,731 17,048 24,934 28,244 33,251 91,427 $10,395 8,147 8,^72 8,779 10,483 77,994 11,867 10,567 12,425 11,337 16,171 70,948 $10,972 11,424 10,882 10,631 10,566 9,717 12,753 13,232 25,957 29,502 23,787 '42,810 $18,968 23,194 25,960 31,639 34,175 30,258 60,844 36,949 43,408 51,845 59,441 95,726 $12,428 12,183 11,391 11,677 15,228 14,495 16,194 15,961 19,883 33,690 34,034 37,454 $7,705 9,892 8,995 11,889 11,166 11,288 13,378 12,608 18,533 24,655 17,977 62,115 $11,040 11,085 12,537 12,374 13,078 11,789 15,934 18,415 26,535 32,187 31,980 66,301 $10,022 9,271 9,407 9,994 8,988 25,627 10,921 13,579 24,952 23,017 17,810 52,368 $11,244 11,416 10,984 11,076 11,262 33,481 17,132 20,259 20,612 26,830 24,994 75,323 $181,526 203,373 210,567 219,441 223,337 340,639 287,894 289,358 362,117 456,184 473,590 833,016 Total Transit department disbursements in excess of net service charges received 277,459 1,063,053 239,964 319,498 257,785 212,233 512,407 234,618 210,201 263,255 215,956 274,613 4,081,042 66,283 22,120 14,594 33,098 154,824 Total current expenses 285,715 1,129,336 262,084 334,092 307,711 4,235,866 2,277 257,785 214,510 8,196 512,407 234,618 210,201 271,451 215,956 NOTE.—Increases in current expenses shown for the months of June and December are due to the inclusion of special charges account depreciation of furniture and equipment, also cost of Federal Reserve currency during these two months. 3 g W O C7I Exhibit I.—STATE BANKS AND TRUST COMPANIES ADMITTED TO MEMBERSHIP. The following list shows the State banks and trust companies which have been admitted to membership in the Federal Reserve system up to and including December 31, 1917: Capital. Alabama: Birmingham—American Trust & Savings Bank. Eufaula—Bank of Eufaula Marion—Marion Central Bank Montgomery—Sullivan Bank <fc Trust Co Total Surplus. $500,000 100,000 50,000 250,000 $250,000 14,000 100,000 25,750 Total resources. $5,836,700 378,828 497,661 605,582 900,000 389,750 7,318,771 Colorado: Denver—International Trust Co 500,000 500,000 13,803,659 Connecticut: Bridgeport—Bridgeport Trust Co 500,000 650,000 300,000 500,000 7,866,545 4,574,303 New Haven—Union & New Haven Trust Co Total Delaware: Wilmington—Wilmington Trust Co 1,150,000 800,000 12,440,848 1,000,000 500,000 13,141,081 1,000,000 100,000 4,289,237 100,000 250,000 100,000 500,000 1,217,318 3,5,50,995 350,000 600,000 4,768,313 District of Columbia: Washington—Continental Trust Co. Florida: Deland—Volusia County Bank Total. Tampa—Citizens Bank & Trust Co Georgia: Athens—American State Bank AtlantaCentral Bank & Trust Corporation Trust Company of Georgia Brunswick—Brunswick Bank & Trust Co. SavannahCitizens & Southern Bank Savannah Bank & Trust Co West Point Citizens Bank Total. Idaho: Genesee—Genesee Exchange Bank. Kimberly—Bank of Kimberly Total. Illinois: ChicagoAustin State Bank Central Trust Co. of Illinois. Chicago Savings Bank & Trust Co. First Trust & Savings Bank Foreman Bros. Banking Co Harris Trust & Savings Bank Hyde Park State Bank Kaspar State Bank Merchants Loan & Trust Co Noel State Bank Standard Trust & Savings Bank... State Bank of Chicago Union Trust Co United State Bank of Chicago 158 100,000 20,000 538,635 1,000,000 1,000,000 100,000 300,000 1,000,000 72,000 9,620,109 3,893,161 1,049,176 1,000,000 630,000 50,000 1,000,000 570,000 18,537,851 8,415,862 172,477 3,880,000 2,962,000 42,227,271 25,000 35,000 12,500 10,250 482,091 389,592 60,000 22,750 871,683 200,000 6,000,000 1,000,000 5,000,000 1,500,000 2,000,000 200,000 500,000 3,000,000 300,000 1,000,000 1,500,000 1,500,000 200,000 60,000 1,000,000 200,000 5,000,000 500,000 2,000,000 50,000 300,000 8,000.000 75,000 500,000 3,000,000 1,500,000 30,000 2,668,743 54,074,035 12,733,891 84,207,394 18,141,352 33,570,255 1,840,530 6,476,754 109,517,884 2,428,746 9,980,043 38,004,507 37,348,934 869,220 ANNUAL REPOBT OF THE FEDERAL RESERVE BOARD. Capital. Illinois—Continued. Cicero Kirohman State Bank Effingham Effingham State Bank Elmhurst—Elmhurst State Bank .. Evanston— State Bank of Evanston Joliet— Commercial Trust & Savings Bank.. Joliet Trust & Savings Bank Kewanee—Union State Savings Bank & Trust Co Martinsville—Martinsville State Bank Oak Park Suburban Trust & Savings Bank Quincy State Savings Loan & Trust Co Surplus. 159 Total resources. $100,000 50,000 60,000 150,000 $25,000 10,000 25,000 200,000 $613,746 721,719 '703,766 4,142,457 100,000 100,000 100,000 50,000 100,000 1,000,000 5,000 25,000 25,000 17,000 10,000 569,684 766,311 1,170,562 388,031 379,251 8,092,397 25,710,000 22,557,000 429,410,312 100,000 70,000 25,000 50,000 35,000 750 2,484,247 549,592 194,868 195,000 85,750 3,228,707 50,000 50,000 300,000 500,000 25,000 100,000 100,000 100,000 50,000 50,000 10,000 5,000 300,000 100,000 11,000 14,000 30,000 5,000 8,000 672,810 919,170 5,179,745 7,436,044 383,807 1,117,161 1,205,090 277,320 320,203 264,041 1,325,000 483,000 17,775,391 30,000 100,000 100,000 200,000 15,000 26,000 50,000 9,000 291,985 748,859 1,143,410 1,521,337 Total. Kentucky: Louisville—German Insurance Bank Maysville—First Standard Bank & Trust Co Mount Sterling—Exchange Bank of Kentucky 430,000 100,000 3,705,591 250,000 175,000 50,000 500,000 60,000 25,000 7,307,484 1,418,794 434,572 Total.- -. Louisiana: Gretna—Jefferson Trust & Savings Bank Iota—Bank of Iota New OrleansCanal Bank & Trust Co Hibernia Bank & Trust Co. Interstate Trust & Banking Co Metropolitan Bank.. Total. . Maryland: Baltimore— Baltimore Commercial Bank Baltimore Trust Co Maryland Trust Co Total 475,000 585,000 9,160,850 30,000 25,000 20,000 402,332 114,204 2,000,000 1,500,000 750,000 400,000 500,000 2,000,000 500,000 200,000 21,210,372 25,881,516 9,171,943 4,077,889 4,705,000 3,220,000 60,858,256 500,000 1,000,000 1,000,000 100,000 2,000,000 2,668.945 15,990,745 8,974,128 2,500,000 2,100,000 27,633,818 1,000,000 1,000,000 1,500,000 300,000 6,000,000 200,000 500,000 400,000 200,000 100,000 1,250,000 2,000,000 500,000 1,500,000 300,000 7,000,000 200,000 250,000 400,000 25,000 500,000 25,578,848 24,001,520 23,933,840 5,787,080 150,784,124 2,893,283 4,935,072 • 4,889,053 2,563,580 731,236 24,123,410 12,450,000 12,675,000 270,221,046 Total. Indiana: Elkhart—St. Joseph Valley Bank Kentland Discount & Deposit State Bank Paoli Paoli State Bank Total Iowa: Brighton—Brighton State Bank Cedar Falls—Security Trust & Savings Bank Clinton—Peoples Trust & Savings Bank Des Moines—Iowa Loan & Trust Co Gilman—Citizens Savings Bank Mason City—Commercial Savings Bank Ottumwa—Ottumwa Savings Bank Sioux City—Bankers Loan & Trust Co Sutherland First Savings Bank Vail—Farmers State Bank Total. Kansas: Fairview—Fairview State Bank Fort Scott Fort Scott State Bank Hiawatha—Morrill & Janes Bank Wichita—Southwest State Bank Massachusetts: BostonCommonwealth Trust Co International Trust Co Metropolitan Trust Co Old Colony* Trust Co... Cambridge—Charles River Trust Co Fitch burg—Fitchburg Bank & Trust Co Newton—Newton Trust Co Norwood—Norwood Trust Co Winchester—Winchester Trust Co Worcester—Worcester Bank & Trust Co Total ... 160 ANNUAL REPORT OF THE FEDERAL RESERVE BOARD. Capital. Michigan: Albion—Commercial & Savings Bank Charlotte—Eaton County Savings Bank DetroitFirst State Bank Peninsular State Bank Peoples State Bank The Dime Savings Bank Wayne County & Home Savings Bank Detroit Savings Bank Central Savings Bank American State Bank FlintCitizens Commercial & Savings Bank Union Trust & Savings Bank Industrial Savings Bank Fremont—Old State Bank Gladstone—State Savings Bank Grand Haven—Grand Haven State Bank Grand RapidsGrand Rapids Savings Bank Kent State Bank Hart—Oceana County Savings Bank Highland Park—Highland Park State Bank Hudson—Boies State Savings Bank JacksonCentral State Bank Union Bank of Jackson Lansing—Lansing State Savings Bank Lapeer—Lapeer Savings Bank Monroe—B. Dansard & Sons' State Bank Mount Pleasant—Exchange Savings Bank Niles—Niles City Bank Petersburg—H. C. McLachlin & Co. State Bank. Port Huron—St. Clair County Savings Bank Rochester—Rochester Savings Bank Romeo—Romeo Savings Bank Saugatuck—Fruit Growers State Bank Sauft Ste. Marie—Sault Savings Bank St. Clair—Commercial & Savings Bank Surplus. Total resources. $75,000 100,000 $40,000 20,000 $798,485 925,622 500,000 ,500,000 ,500,000 ,000,000 ,000,000 750,000 500,000 500,000 150,000 1,000,000 2,500,000 1,000,000 3,000,000 750,000 100,000 185,130 8,275,489 27,270,333 71,761,759 32,769,194 53,681,743 19,524,470 11,962,743 7,243,617 150,000 100,000 250,000 50,000 50,000 75,000 175,000 135,000 250,000 25,000 15,000 50,000 3,438,805 3,848,355 4,307,935 875,831 571,986 1,662,949 400,000 500,000 40,000 1,000,000 75,000 350,000 500,000 13,000 400,000 25,000 8,479,169 9,419,740 427,901 20,976,678 734,295 100,000 400,000 150,000 50,000 100,000 50,000 100,000 25,000 100,000 50,000 50,000 50,000 100,000 50,000 26,000 100,000 100,000 10,000 20,000 30,000 20,000 5,000 50,000 10,000 30,000 10,000 35,000 10,000 1,062,781 4,388,130 2,632,821 545,282 1,627,265 791,176 699,175 362,541 1,319,436 556,346 1,081,181 476,786 1,140,382 746,874 Total. Minnesota: MinneapolisBankers Trust & Savings Bank... German American Bank St. Anthony Falls Bank St. Paul—Peoples Bank Spring Valley—Farmers State Bank... Winona—Merchants Bank of Winona. 15,490,000 11,139,130 306,387,276 1,000,000 200,000 300,000 300,000 25,000 100,000 200,000 200,000 60,000 50,000 5,000 50,000 2,197,403 4,689,159 3,763,0G2 2,280,204 149,092 2,581,970 Total. Mississippi: Summit—Union Bank of Pike. Missouri: Kansas CityCommerce Trust Co Fidelity Trust Co St. LouisFranklin Bank German American German Savings Institution International Bank of Lafayette South Side Bank Mercantile Trust Co Mississippi Valley Trust Co St. Louis Union Bank 1,925,000 565,000 15,660,800 25,000 4,000 165,516 000,000 000,000 750,000 1,000,000 32,897,159 14,461,776 600,000 000,000 500,000 500,000 800,000 000.000 000,000 500,000 700,000 700,000 1,000,000 500,000 400,000 6,500,000 3,500,000 2,500,000 8,961,674 9,239,685 19,261,222 6,981,718 12,604,870 40,732,458 30,414,523 44,389,921 Total. Montana: Helena—Conrad Trust & Savings Bank Hingham—Hingham State Bank Opheim—First State Bank 14,900,000 17,550,000 219,945,006 200,000 35,000 25,000 100,000 80,000 5,000 5,000 3,042,678 335,296 229,183 748,601 360,000 90,000 4,355,758 Sidney—Yellowstone Valley Bank & Trust Co. Total ANNUAL REPORT OF THE FEDERAL RESERVE BOARD. Capital. Nebraska: Lewellen—Bank of Lewellen. Pender—Ponder State Bank.. Total. New Jersey: Bloomfield—Bloomfleld Trust Co Camden—Camden Safe Deposit & Trust Co. Montclair—Bank of Montclair Passaic—Passaic Trust & Safe Deposit Co... Plainfield—Plainfield Trust Co Rah way—Rahway Trust Co Westfield—Peoples Bank & Trust Co Total. New York: Batavia—The Bank of Genesee BrooklynBrooklyn Trust Co Franklin Trust Co Manufacturers Trust Co Peoples Trust Co BuffaloBuffalo Trust Co Citizens Commercial Trust Co New YorkBankers Trust Co Bank of America Broadway Trust Co Central Trust Co Columbia Trust Co Corn Exchange Bank Equitable Trust Co Fidelity Trust Co German American Bank Germania Bank of the City of Guaranty Trust Co Manhattan Co Mercantile Trust & Deposit Co Metropolitan Bank Metropolitan Trust Co New York Trust Co Pacific Bank Scandinavian Trust Co Union Trust Co U. S. Mortgage & Trust Co W. R. Grace & Co.'s Bank United States Trust Co Ogdensburgh—St. Lawrence Trust Co Utica— Citizens Trust Co Oneida County Trust Co Utica Trust & Deposit Co Watertown—Northern New York Trust Co Oneida—Madison County Trust & Deposit Co.. Rome—Rome Trust Co Elmira—Chemung Canal Trust Co Syracuse-^City Bank Gloversville—Trust Co. of Fulton County Total. North Dakota: Enderlin—Enderlin State Bank.., Hettinger—Hettinger State Bank. Willliston—Bank of WilUston Total Ohio: Cleveland— Citizens Savings & Trust Co Cleveland Trust Co Guardian Savings & Trust Co Columbus—Citizens Trust & Savings Bank... Hillsboro—Hillsboro Bank & Savings Co Massillon—Ohio Banking & Trust Co Newark—Newark Trust Co Steubenville—Steubenville Bank & Trust Co. Toledo—Guardian Trust & Savings Bank Youngstown—City Trust <fe Savings Bank Total. Surplus. 161 Total resources. $25,000 50,000 $10,000 3,000 $250,820 403,036 75,000 13,000 653,856 200,000 500,000 100,000 200,000 300,000 100,000 100,000 100,000 800,000 80,000 100,000 200,000 25,000 80,000 3,213,787 10,352,726 2,799,827 7,130,181 8,749,434 398,277 2,005,718 1,500,000 1,385,000 34,649,950 100,000 100,000 1,151,907 1,500,000 1,000,000 1,000,000 1,000,000 2,898,481 1,000,000 300,000 1,000,000 40,270,926 24,823,842 15,031,812 29,443,301 500,000 1,250,000 500,000 1,250,000 9,621,217 18,196,063 11,250,000 1,500,000 1,500,000 5,000,000 5,000,000 3,500,000 6,000,000 1,000,000 750,000 400,000 25,000,000 2,050,000 1,000,000 2,000,000 2,000,000 3,000,000 500,000 1,000,000 3,000,000 2,000,000 500,000 2,000,000 100,000 11,250,000 6,000,000 750,000 15,000,000 5,000,000 6,991,165 10,500,000 1,000,000 250,000 600,000 25,000,000 4,500,000 • 500,000 1,000,000 4,000,000 10,000,000 500,000 1,500,000 4,500,000 4,000,000 500,000 12,000,000 25,000 327,011,784 60,903,035 34,726.703 209,953,374 124,186,774 153,989,100 230,210,148 13,965,146 8,404,825 8,731,766 613,535,033 82,094,144 8,593,786 28,801,800 63,853,782 90,773,776 13,907,579 11,359,362 87,043, 831 92,377,698 6,675,523 77,455.087 823,362 500,000 '250,000 400,000 400,000 164,100 300,000 600,000 500,000 200,000 400,000 250,000 200,000 400,000 94,870 60,000 400,000 148,000 100,000 10,641,931 2,428,746 11,850,975 7,151,603 2,224,326 3,627, 406 7,301,858 7,442,110 527,339 89,714,100 134,467,516 2,541,105,483 50,000 25,000 50,000 10,000 3,500 395,259 282,089 113,071 125,000 13,500 790,419 4,000,000 2,500,000 3,000,000 700,000 50,000 150,000 200,000 125,000 200,000 200,000 4,000,000 2,500,000 3,000,000 150,000 12,000 37,500 125,000 50,000 200,000 150,000 74,532,631 55,121,784 52,731,355 5,271,822 551,959 1,307,036 2,655,417 1,713,784 4,224,961 4,752,034 11,125,000 10,224,500 202,862,783 162 ANNUAL REPORT OF THE FEDERAL RESERVE BOARD. Capital. Oregon: Hood River—Butler Banking Co North Portland—Live Stock State Bank Portland-^Ladd & Tilton Bank Total. Pennsylvania: Lykens—Miners Deposit Bank New Castle—Lawrence Savings & Trust Co..; PhiladelphiaCommercial Trust Co. . . . . . . . Girard Trust Co Philadelphia Trust Co .. . Penna. Co. for Insurances on Lives and Granting Annuities PittsburghPittsburgh Trust Co Union Trust Co Total. Ehode Island: Providence—Industrial Trust Co South Carolina: Cheraw—Merchants & Farmers Bank Hartsville—Bank of Hartsville . Sumter—Peoples Bank of Sumter Westminster—Westminster Bank Woodruff—Bank of Woodruff Total South Dakota: Sioux Falls—Sioux Falls Savings Bank Tennessee: Memphis—Union & Planters Bank & Trust Co Texas: Bonham—First State Bank. Bremond—First State Bank. DallasCentral State Bank. First State Bank De Kalb—First State Bank Edgewood—Farmers & Merchants State Bank Hamlin—First State Bank Lubbock—Lubbock State Bank Memphis—Citizens State B ank .. Savoy—First State Bank... . . . Wolfe City—First State Bank . . Total. .. Virginia: Chase City—Peoples Bank & Trust Co Harrisonburg—Peoples Bank of Norfolk—Citizens Bank ok Richmond—The Savings Bank of Total Washington: Bellmgham—Northwestern State Bank Chehalis—Coffman-Dobson Bank & Trust Co Coifax—First Savings & Trust Co La Crosse—First State Bank Reardan—Farmers State Bank... Rosalia—Bank of Rosalia . . Seattle—Metropolitan Bank. Spokane—Spokane & Eastern Trust Co Wilbur—State Bank of Wilbur Total West Virginia: Grafton—Grafton Banking & Trust Co Wisconsin: Clinton—Citizens Bank Madison—Bank of Wisconsin MilwaukeeBadger State Bank... Marshall & Illsley Bank American Exchange Bank . Total. Surplus. Total resources. $100,000 100,000 1,000,000 $20,000 10.000 1,000,000 $909,708 872,846 21,427,913 1,200,000 1,030,000 23,210,467 50,000 300,000 110,000 300,000 679,897 3,183,907 1,000,000 2,500,000 1,000,000 1,750,000 7,500,000 4,000,000 24,796,108 61,172,461 26,160,684 2,000,000 5,000,000 43,602,088 2,000,000 1,500,000 1,000,000 34,500,000 21,067,764 137,516,868 10,350,000 54,160,000 318,179,777 3,000,000 4,000,000 71,783,303 100,000 50,000 100,000 100,000 • 40,700 3,000 50,000 19,400 25,000 10,500 338,007 394,626 368,325 453,433 256,874 390,700 107,900 1,811,265 200,000 1,400,000 23,000 200,000 3,852,236 15,307,795 100,000 50,000 14,000 25,000 543,354 232,823 200,000 250,000 25,000 35,000 25,000 100,000 75,000 25,000 50,000 5,000 28,000 25,000 7,000 1,750 13,000 26,400 3,500 20,000 1,698,236 3,016, 796 '2,638,304 95,675 15S, 894 837,114 377,603 120,175 235,461 935,000 168,650 9,954,435 100,000 150,000 600,000 200,000 10,000 20,000 500,000 200,000 173,005 554,154 5,896,002 2,198,163 1,050,000 730,000 8,821,324 100,000 150,000 50,000 60,000 25,000 25,000 200,000 1.000,000 50,000 45^000 100,000 15,000 8,000 7,500 5,000 100,000 200,000 5,000 1,474,055 1,493,790 369,711 715,454 639,855 308, 777 3,559, 260 20,078,867 919,175 1,660,000 485,500 29,556,944 100,000 30,000 1,180,082 50,000 300,000 10,000 60,000 478,360 2,156,438 200,000 1,000,000 250,000 2,000 700,000 50,000 1,506,471 17,405, 264 4,721,622 1,800,000 822,000 26,268,155 Exhibit J.—REGULATIONS OF THE FEDERAL RESERVE BOARD. REGULATION A, SERIES OF 1917. (Superseding Regulation A of 1916.) REDISCOUNTS UNDER SECTION A, 13. NOTES, DRAFT, AND BILLS OF EXCHANGE. I. General statutory provisions. Any Federal Reserve Bank may discount for any of its member banks any note, draft, or bill of exchange provided— (a) It lias a maturity at the time of discount of not more than 90 days, exclusive of days of grace; but if drawn or issued for agricultural purposes or based on live stock, it may have a maturity at the time of discount of not more than six months, exclusive of days of grace. (b) It arose out of actual commercial transactions; that is, it must be a note, draft, or bill of exchange which has been issued or drawn for agricultural, industrial, or commercial purposes, or the proceeds of which have been used or are to be used for such purposes. (c) It was not issued for carrying or trading in stocks, bonds, or other investment securities, except bonds and notes of the Government of the United States. (d) The aggregate of notes, drafts, and bills bearing the signature or indorsement of any one borrower, whether a person, company, firm, or corporation rediscounted for any one member bank shall at no time exceed 10 per cent of the unimpaired capital and surplus of such bank; but this restriction shall not apply to the discount of bills of exchange drawn in good faith against actually existing values. (e) It is indorsed by a member bank. (/) It conforms to all applicable provisions of this regulation. II. General character of notes, drafts, and bills of exchange eligible. The Federal Reserve Board, exercising its statutory right to define the character of a note, draft, or bill of exchange eligible for rediscount at a Federal Reserve Bank, has determined that— (a) It must be a note, draft, or bill of exchange the proceeds of which have been used or are to be used in producing, purchasing, carrying, or marketing goods1 in one or more of the steps of the process of production, manufacture, or distribution. (b) It must not be a note, draft, or bill of exchange the proceeds of which have been used or are to be used for permanent or fixed investments of any kind, such as land, buildings, or machinery. (c) It must not be a note, draft, or bill of exchange the proceeds of which have been used or are to be used for investments of a purely speculative character. (d) It may be secured by the pledge of goods or collateral, provided it is otherwise eligible. 1 When used in this regulation the word " goods " shall be construed to include goods, wares, merchandise, or agricultural products, including live stock. 163 164 ANNUAL REPORT OF THE FEDERAL RESERVE BOARD. III. Applications for rediscount. All applications for the rediscount of notes, drafts, or bills of exchange must contain a certificate of the member bank, in form to be prescribed by the Federal Reserve Bank, that, to the best of its knowledge and belief, such notes, drafts, or bills of exchange have been issued for one or more of the purposes mentioned in I I (a). IV. Promissory notes. (a) Definition.—A.promissory note, within the meaning of this regulation, is denned as an unconditional promise, in writing, signed by the maker, to pay, in the United States, at a fixed or determinate future time, a sum certain in dollars to order or to bearer. (b) Evidence of eligibility and requirement of statements.—A Federal Reserve Bank must be satisfied by reference to the note or otherwise that it is eligible for rediscount. Compliance of a note with II (b) may be evidenced by a statement of the borrower showing a reasonable excess of quick assets over certain liabilities. The member bank shall certify in its application whether the note offered for rediscount has been discounted for a depositor or another member bank or whether it has been purchased from a nondepositor. It must also certify wiiether a financial statement of the borrower is on file. Such financial statements must be on file with respect to all notes offered for rediscount which have been purchased from sources other than a depositor or a member bank. With respect to any other note offered for rediscount, if no statement is on file, a Federal Reserve Bank shall use its discretion in taking the steps necessary to satisfy itself as to eligibility. It is authorized to waive the requirement of a statement wih respect to any note discounted by a member bank for a depositor or another member bank— (1) If it is secured by a warehouse, terminal, or other similar receipt covering goods in storage; (2) If the aggregate of obligations of the borrower rediscounted and offered for rediscount at the Federal Reserve Bank is less than a sum equal to 10 per cent of the paid-in capital of the member bank and does not exceed $5,000. V. Drafts, bills of exchange, and trade acceptances. (a) Definition.—A draft or bill of exchange, within the meaning of this regulation, is defined as an unconditional order in writing, addressed by one person to another, other than a banker as defined under B (b), signed by the person giving it, requiring the person to whom it is addressed, to pay, in the United States, at a fixed or determinable future time, a sum certain in dollars to the order of a specified person; and a trade acceptance is defined as a draft or bill of exchange drawn by the seller on the purchaser of goods sold and accepted by such purchaser. (b) Evidence of eligibility.—A Federal Reserve Bank shall take such steps as it deems necessary to satisfy itself as to the eligibility of the draft or bill offered for rediscount, unless it presents prima facie evidence thereof or bears a stamp or certificate affixed by the acceptor or drawer showing that it is a trade acceptance. VI. Six months' agricultural paper. (a) Definition.—Six months' agricultural paper, within the meaning of this regulation, is defined as a note, draft, bill of exchange, or trade acceptance drawn or issued for agricultural purposes, or based on live stock; that is, a ANNUAL REPORT OF THE FEDERAL RESERVE BOARD. 165 note, draft, bill of exchange, or trade acceptance the proceeds of which have been used, or are to be used, for agricultural purposes, including the breeding, raising, fattening, or marketing of live stock, and which has a maturity at the time of discount of not more than six months, exclusive of days of grace. (b) Eligibility.—To be eligible for rediscount six months' agricultural paper, whether a note, draft, bill of exchange, or trade acceptance, must comply with the respective sections of this regulation which would apply to it if its maturity were 90 days or less. VII. Commodity paper. (a) Definition.—Commodity paper within the meaning of this regulation is defined as a note, draft, bill of exchange, or trade acceptance accompanied and secured by shipping documents or by a warehouse, terminal, or other similar receipt covering approved and readily marketable, nonperishable staples properly insured. (b) Eligibility.—To be eligible for rediscount at the special rates authorized to be established for commodity paper, such a note, draft, bill of exchange, or trade acceptance must also comply with the respective sections of this regulation applicable to it, must conform to the requirements of the Federal Reserve Bank relating to shipping documents, receipts, insurance, etc., and must be a note, draft, bill of exchange, or trade acceptance on which the rate of interest or discount, including commission, charged the maker, does not exceed 6 per cent per annum. (c) Suspension of commodity rate.—As the special rate on commodity paper is intended to assist actual producers during crop-moving periods and is not designed to benefit speculators, the board reserves the right to suspend the special rates herein provided whenever it is apparent that the movement of crops, which this rate is intended to facilitate, has been practically completed. B. BANKERS' ACCEPTANCES. {a) General statutory provisions.-—Any Federal Reserve Bank may discount for any of its member banks bankers' acceptances which have a maturity at the time of discount of not more than three months' sight, exclusive of days of grace, which are indorsed by at least one member bank, and which grow out of transactions involving the importation or exportation of goods; or, which grow out of transactions involving the domestic shipment of goods, provided shipping documents are attached at the time of acceptance; or, which are secured at the time of acceptance by a warehouse receipt or other such document conveying or securing title covering readily marketable staples. Any Federal Reserve Bank may also acquire drafts or bills of exchange drawn on member banks by banks or bankers in foreign countries or dependencies or insular possessions of the United States for the purpose of furnish dollar exchange. (&) Definition.—A banker's acceptance within the meaning of this regulation is defined as a draft or bill of exchange of which the acceptor is a bank or trust company, or a firm, person, company, or corporation engaged in the business of granting bankers' acceptance credits. (c) Eligibility.—To be eligible for rediscount the bill must have been drawn under a credit opened for the purpose of conducting, or settling accounts resulting from, a transaction or transactions involving (1) the shipment of goods between the United States and any foreign country, or between the United States and any of its dependencies or insular possessions, or between foreign countries, or (2) the domestic shipment of goods, provided shipping documents are attached at the time of acceptance; or it must be a bill which is secured at 166 ANNUAL BEPOBT OF THE FEDERAL RESERVE BOARD. the time of acceptance by a warehouse receipt or other such document conveying or securing title covering readily marketable staples. Any Federal Reserve Bank may also acquire drafts or bills drawn by a bank or banker in a foreign country or dependency or insular possession of the United States for the purpose of furnishing dollar exchange and accepted by a member bank in accordance with the provisions of regulation O, page 8. Such drafts or bills may be acquired prior to acceptance provided they have the indorsement of a member bank. (d) Evidence of eligibility.—A Federal Reserve Bank must be satisfied, either by reference to the acceptance itself or otherwise, that it is eligible for rediscount. Satisfactory evidence of eligibility may consist of a stamp or certificate affixed by the acceptor in form satisfactory to the Federal Reserve Bank. REGULATION B, SERIES OF 1917. (Superseding Regulation B of 1916.) CPEN-MAKKET PUECHASES OF BILLS OF EXCHANGE, TBADE ACCEPTANCES, AND BANKERS' ACCEPTANCES TJNDEK SECTION 14. I. General statutory provisions. Section 14 of the Federal Reserve Act permits Federal Reserve Banks under rules and regulations to be prescribed by the Federal Reserve Board to purchase and sell in the open market from banks, firms, corporations, or individuals, bankers' acceptances and bills of exchange of the kinds and maturities made eligible by the act for rediscount, with or without the indorsement of a member bank. II. General character of hills and acceptances eligible. The Federal Reserve Board, exercising its statutory right to regulate the purchase of bills of exchange and acceptances, has determined that a bill of exchange or acceptance, to> be eligible for purchase by Federal Reserve Banks under section 14— (a) Must not have been issued for carrying or trading in stocks, bonds, or other investment securities, except bonds and notes of the Government of the United States. (b) Must not be a bill the proceeds of which have been used or are to be used for permanent or fixed investments of any kind, such as land, buildings, or machinery, or for investments of a merely speculative character. (c) Must have been accepted by the drawee prior to purchase by a Federal Reserve Bank unless it is accompanied and secured by shipping documents or by a warehouse, terminal, or other similar receipt conveying security title. (d) May be secured by the pledge of goods 1 or collateral, provided it is otherwise eligible. In addition to the above general requirements, each bill of exchange and trade acceptance purchased under the terms of this regulation must also conform to the more specific requirements set forth under III, and each banker's acceptance must also conform to the more specific requirements set forth under IV. 1 When used in this regulation the word " goods" shall be construed to include goods, wares, merchandise, or agricultural products, including live stock. ANNUAL REPORT OF THE FEDERAL RESERVE BOARD. 167 III. Bills of exchange and trade acceptances. (a) Definition.—A bill of exchange, within the meaning of this regulation, is defined as an unconditional order in writing, addressed by one person to another, other than a banker as defined under IV ( a ) , signed by the person giving it, requiring the person to whom it is addressed, to pay, in the United States, at a fixed or determinable future time, a sum certain in dollars to the order of a specified person; and a trade acceptance is defined as a bill of exchange drawn by the seller on the purchaser of goods sold, and accepted by such purchaser. (b) Eligibility.—To be eligible for purchase the bill must have arisen out of an actual commercial transaction, domestic or foreign; that is, it must be a bill which has been issued or drawn for agricultural, industrial, or commercial purposes or the proceeds of which have been used or are to be used for the purpose of producing, purchasing, carrying, or marketing goods in one or more of the steps of the process of production, manufacture, or distribution. It must have a maturity at time of purchase of not more than 90 days, exclusive of days of grace. (c) Evidence of eligibility.—A Federal Reserve Bank shall take such steps as it deems necessary to satisfy itself as to the eligibility of the bill offered for purchase, unless it presents prima facie evidence thereof or bears a stamp or certificate affixed by the acceptor or drawer showing that it is a trade acceptance. • . (d) Statements.—Unless indorsed by a member bank, a bill is not eligible for purchase until a satisfactory statement has been furnished of the financial condition of one or more of the parties thereto. IV. Bankers1 Acceptances. (a) Definition.—A banker's acceptance, within the meaning of this regulation, is a bill of exchange of which the acceptor is a bank or trust company, or a firm, person, company, or corporation engaged in the business of granting bankers' acceptance credits. (b) Eligibility.—To be eligible for purchase, the bill which must have a maturity at time of purchase of not more than three months, exclusive of days of grace, must have been drawn under a credit opened for the purpose of conducting, or settling accounts resulting from, a transaction or transactions involving— (1) The shipment of goods between the United States and any foreign country, or between the United States and any of its dependencies or insular possessions, or between foreign countries, or (2) The shipment of goods within the United States, provided the bill at the time of its acceptance is accompanied by shipping documents, or (3) The storage within the United States of readily marketable goods, provided the acceptor of the bill is secured by warehouse, terminal, or other similar receipt, or (4) The storage within the United States of goods which have been actually sold, provided the acceptor of the bill is secured by the pledge or such goods; or it must be a bill drawn by a bank or banker in a foreign country or dependency or insular possession of the United States for the purpose of furnishing dollar exchange. In this latter case the bank or banker drawing the bill must be in a country, dependency, or possession whose usages of trade have been determined by the Federal Reserve Board to require the drawing of bills of character. Digitized forthis FRASER 168 ANNUAL REPORT OF THE FEDERAL RESERVE BOARD. (c) Evidence of eligibility.—A Federal Reserve Bank must be satisfied either by reference to the acceptance itself, or otherwise, that it is eligible for purchase. Satisfactory evidence of eligibility may consist of stamp or certificate" affixed by the acceptor, in form satisfactory to the Federal Reserve Bank. No evidence of eligibility is required with respect to a bill accepted by a national bank. (d) Statements.—Bankers' acceptances, other than those accepted or indorsed by member banks, shall be eligible for purchase only after the acceptor has furnished a satisfactory statement of financial condition in form to be approved by the Federal Reserve Board and has agreed in writing with a Federal Reserve Bank to inform it upon request concerning the transactions underlying such acceptances. REGULATION C, SERIES OF 1917. (Superseding Regulation C of 1916.) ACCEPTANCE BY MEMBER BANKS OF DEAFTS AND BILLS OF EXCHANGE. ACCEPTANCE OF DRAFTS OR BILLS OF EXCHANGE DRAWN AGAINST DOMESTIC OS FOREIGN SHIPMENTS OF GOODS OR SECURED BY WAREHOUSE RECEIPTS COVERING READILY MARKETABLE STAPLES. I. Statutory Provisions. - Under the provisions of the fifth paragraph of section 13 of the Federal Reserve Act, as amended by the acts of September 7, 1916, and June 21, 1917, any member bank may accept drafts or bills of exchange drawn upon it, having not more than six months' sight to run, exclusive of days of grace, which grow out of transactions involving the importation or exportation of goods; or which grow out of transactions involving the domestic shipment of goods, provided shipping documents conveying or securing title are attached at the time of acceptance; or which are secured at the time of acceptance by a warehouse receipt or other such document conveying or securing title covering readily marketable staples. This paragraph limits the amount which any bank shall accept for any one person, company, firm, or corporation, whether in a foreign or domestic transaction, to an amount not exceeding at any time, in the aggregate, more than 10 per cent of its paid-up and unimpaired capital stock and surplus. This limit, however, does not apply in any ease where the accepting bank is secured either by attached documents or by some other actual security growing out of the same transaction as the acceptance. The law also provides that any bank may accept such bills up to an amount not exceeding at any time, in the aggregate, more than one-half of its paid-up and unimpaired capital stock and surplus; or, with the approval of the Federal Reserve Board, up to an amount not exceeding at any time, in the aggregate, more than 100 per cent of its paid-up and unimpaired capital stock and surplus. In no event, however, shall the aggregate amount of acceptances growing out of domestic transactions exceed 50 per cent of such capital stock and surplus. ANNUAL REPORT OF THE FEDERAL RESERVE BOARD. II. 169 Regulations. 1. Under the provisions of the law referred to above the Federal Reserve Board has determined that any member bank, having an unimpaired surplus equal to at least 20 per cent of its paid-up capital, which desires to accept drafts or bills of exchange drawn for the purposes described above, up to an amount not exceeding at any time, in the aggregate, 100 per cent of its paid-up and unimpaired capital stock and surplus, may file an application for that purpose with the Federal Reserve Board. Such application must be forwarded through the Federal Reserve Bank of the district in which the applying bank is located. 2. The Federal Reserve Bank shall report to the Federal Reserve Board upon the standing of the applying bank, stating whether the business and banking conditions prevailing in its district warrant the granting of such applications. 3. The approval of any such application may be rescinded upon 90 days' notice to the bank affected. B. ACCEPTANCE OF DRAFTS OR BILLS OF EXCHANGE DRAWN FOR THE PURPOSE OF CREATING DOLLAR EXCHANGE. 1. Statutory provisions. Section 13 of the Federal Reserve Act also provides that any member bank may accept drafts or bills of exchange drawn upon it having not more than three months' sight to run, exclusive of days of grace, drawn, under regulations to be prescribed by the Federal Reserve Board, by banks or bankers in foreign countries or dependencies or insular possessions of the United States for the purpose of furnishing dollar exchange as required by the usages of trade in the respective countries, dependencies, or insular possessions. No member bank shall accept such drafts or bills of exchange for any one bank to an amount exceeding in the aggregate 10 per cent of the paid-up and .unimpaired capital and surplus of the accepting bank unless the draft or bill of exchange is accompanied by documents conveying or securing title or by some other adequate security. No member bank shall accept such drafts or bills in an amount exceeding at any time in the aggregate one-half of its paid-up and unimpaired capital and surplus. This 50 per cent limit is separate and distinct from and not included in the limits placed upon the acceptance of drafts and bills of exchange as described under section A of the regulation. II. Regulations. Any member bank desiring to accept drafts drawn by banks or bankers in foreign countries or dependencies or insular possessions of the United States for the purpose of furnishing dollar exchange shall first make an application to the Federal Reserve Board setting forth the usages of trade in the respective countries,'dependencies, or insular possessions in which such banks or bankers are located. If the Federal Reserve Board should determine that the usages of trade in such countries, dependencies, or possessions require the granting of the acceptance facilities applied for, it will notify the applying bank of its approval and will also publish in the Federal Reserve Bulletin the name or names of those countries, dependencies, or possessions in which banks or bankers are author 170 ANNUAL REPORT OF THE FEDERAL RESERVE BOARD. ized to draw on member banks whose applications have been approved for the purpose of furnishing dollar exchange. The Federal Reserve Board reserves the right to modify or on 90 days' notice to revoke its approval either as to any particular member bank or as to any foreign country or dependency or insular possession of the United States in which it has authorized banks or bankers to draw on member banks for the purpose of furnishing dollar exchange. REGULATION D, SERIES OF 1917[Superseding Regulation D of 1916.] TIME DEPOSITS AND SAVINGS ACCOUNTS. Section 19 of the Federal Reserve Act provides, in part, as follows: Demand deposits, within the meaning of this act, shall comprise all deposits payable within 30 days, and time deposits shall comprise all deposits payable after 30 days, and all savings accounts and certificates of deposit which are subject to not less than 30 days' notice before payment, and all postal savings deposits. Time deposits, open accounts. The term " time deposits, open accounts," shall be held to include all accounts not evidenced by certificates of deposit or savings pass books, in respect to which a written contract is entered into with the. depositor at the time the deposit is made that neither the whole nor any part of such deposit may be withdrawn by check or otherwise except on a given date or on written notice given by the depositor a certain specified number of days in advance, in no case less than 30 days. Savings accounts. The term " savings accounts " shall be held to include those accounts of the bank in respect to which, by its printed regulations, accepted by the depositor at the time the account is opened— (a) The pass book, certificate, or other similar form of receipt must be presented to the bank whenever a deposit or withdrawal is made; and (o) The depositor may at any time be required by the bank to give notice of an intended withdrawal not less than 30 days before a withdrawal is made. Time certificates of deposit. A " time certificate of deposit" is defined as an instrument evidencing the deposit with a bank, either with or without interest, of a certain sum specified on the face of the certificate payable in whole or in part to the depositor or on his order— (a) On a certain date, specified on the certificate, not less than 30 days after the date of the deposit; or (&) After the lapse of a certain specified time subsequent to the date of the certificate, in no case less than 30 days; or (c) Upon written notice given a certain specified number of days, not less than 30 days before the date of repayment; and {d) In all cases only upon presentation of the certificate at each withdrawal for proper indorsement or surrender. ANNUAL REPORT OF THE FEDERAL RESERVE BOARD. 171 REGULATION E, SERIES OF 1917. (Superseding Regulation E of 1916.) PURCHASE OF WARRANTS. Statutory Requirements. Section 14 of the Federal Reserve Act reads in part as follows: Every Federal Reserve Bank shall have power— (&) To buy and sell, at home or abroad, bonds and notes of the United States, and bills, notes, revenue bonds, and warrants with a maturity from date of purchase of not exceeding six months, issued in anticipation of the collection of taxes or in anticipation of the receipt of assured revenues by any State, county, district, political subdivision, or municipality in the continental United States, including irrigation, drainage, and reclamation districts, such purchases to be made in accordance with rules and regulations prescribed by the Federal Reserve Board. For brevity's sake, the term " warrant" when used in this regulation shall be construed to mean " bills, notes, revenue bonds, and warrants with a maturity from date of purchase of not exceeding six months," and the term " municipality " shall be construed to mean " State, county, district, political subdivision, or municipality in the continental United States, including irrigation, drainage, and reclamation districts." Regulation. I. Any Federal Reserve Bank may purchase warrants issued by a municipality in anticipation of the collection of taxes or in anticipation of the receipt of assured revenues, provided— (a) They are the general obligations of the entire municipality; it being intended to exclude as ineligible for purchase all such obligations as are payable from " local benefit" and " special assessment" taxes when the municipality at large is not directly or ultimately liable; (b) They are issued in anticipation of taxes or revenues which are due and payable on or before the date of maturity of such warrants; but the Federal Reserve Board may waive this condition in specific cases. For the purposes of this regulation, taxes shall be considered as due and payable on the last day on which they may be paid without penalty; (c) They are issued by a municipality— (1) Which has been in existence a for a period of 10 years; (2) Which for a period of 10 years previous to the purchase has not defaulted * for longer than 15 days in the payment of any part of either principal or interest of any funded debt authorized to be contracted by it; (3) Whose net funded indebtedness a does not exceed 10 per cent of the valuation of its taxable property, to be ascertained by the last preceding valuation of property for the assessment of taxes. II. Except with the approval of the Federal Reserve Board, no Federal Reserve Bank shall purchase and hold an amount in excess of 25 per cent of the total amount of warrants outstanding at any time and issued in conformity with provisions of section 14 (b) above quoted, and actually sold by a municipality. III. Except with the approval of the Federal Reserve Board, the aggregate amount invested by any Federal Reserve Bank in warrants of all kinds shall 34365°—18 12 3 See Appendix, p. 172. 172 ANNUAL REPORT OF THE FEDERAL RESERVE BOARD. not exceed at the time of purchase a sum equal to 10 per cent of the deposits kept by its member banks with such Federal Reserve Bank. IV. Except with the approval of the Federal Reserve Board, the maximum amount which may be invested at the time of purchase by any Federal Reserve Bank in warrants of any single municipality shall be limited to the following percentages of the deposits kept in such Federal Reserve Bank by its member banks: Five per cent of such deposits in warrants of a municipality of 50,000 population or over; Three per cent of such deposits in warrants of a municipality of over 30,000 population, but less than 50,000; One per cent of such deposits in warrants of a municipality of over 10,000 population, but less than 30,000. V. Warrants of a municipality of 10,000 population or less shall be purchased only with the special approval of the Board. The population of a municipality shall be determined by the last Federal or State census. Where it can not be exactly determined the Board will make special rulings. VI. Opinion of recognized counsel on municipal issues or of the regularly appointed counsel of the municipality, as to the legality of the issue shall be secured and approved in each case by counsel for the Federal Reserve Bank. VII. Any Federal Reserve Bank may purchase from any of its member banks warrants of any municipality indorsed by such member bank, with waiver of demand, notice, and protest, up to an amount not to exceed 10 per cent of the aggregate capital and surplus of such member bank: Provided, however, That such warrants comply with provisions I and III of these regulations, except that where a period of 10 years is mentioned in I (c) hereof a period of 5 years shall be substituted for the purposes of this clause. APPENDIX TO REGULATION E. " NET FUNDED INDEBTEDNESS. " The term " net funded indebtedness " is hereby defined to mean the legal gross indebtedness of the municipality (including the amount of any school district or other bo ads which depend for their redemption upon taxes levied upon property within the municipality) less the aggregate of the following items: (1) The amount of outstanding bonds or other debt obligations made payable from current revenues; (2) The amount of outstanding bonds issued for the purpose of providing the inhabitants of a municipality with public utilities, such as waterworks, docks, electric plants, transportation facilities, etc.: Provided, That evidence is submitted showing that the income from such utilities is sufficient for maintenance, for payment of interest on such bonds, and for the accumulation of a sinking fund for their redemption; (3) The amount of outstanding improvement bonds, issued under laws which provide for the levying of special assessments against abutting property in amounts sufficient to insure the payment of interest on the bonds and the redemption thereof: Provided, That such bonds are direct obligations of the municipality and included in the gross indebtedness of the municipality; (4) The total of all sinking funds accumulated for the redemption of the gross indebtedness of the municipality, except sinking funds applicable to bonds just described in (1), (2), and (3) above. ANNUAL REPORT OF THE FEDERAL RESERVE BOARD. 173 " EXISTENCE " AND " NONDEFAULT." Warrants will be construed to comply with that part df I (c) of Regulation E relative to term of existence and nondefault, under the following conditions: (1) Warrants issued by or in behalf of any municipality which was, subsequent to the issuance of such warrants, consolidated with or merged into an existing political division which meets the requirements of these regulations, will be deemed to be the warrants of such political division: Provided, That such warrants were assumed by such political division under statutes and appropriate proceedings the effect of which is to make such warrants general obligations of such assuming political division and payable, either directly or ultimately, without limitation to a special fund from the proceeds of taxes levied upon all the taxable real and personal property within its territorial limits. (2) Warrants issued by or in behalf of any municipality which was, subsequent to the issuance of such warrants, wholly succeeded, by a newly organized political division whose term of existence, added to that of such original political division or of any other political division so succeeded, is equal to a period of 10 years will be deemed to be warrants of such succeeding political division: Provided, That during such period none of such political divisions shall have defaulted for a period exceeding 15 days in the payment of any part of either principal or interest of any funded debt authorized to be contracted by it: And provided further, That such warrants were assumed by such new political division under statutes and appropriate proceedings the effect of which is to make such warrants general obligations of such assuming political division and payable, either directly or ultimately, without limitation to a special fund from the proceeds of taxes levied upon all the taxable real and personal property within its territorial limits. (3) Warrants issued by or in behalf of any municipality which, prior to such issuance, became the successor of one or more, or was formed by the consolidation or merger of two or more, preexisting political divisions, the term of existence of one or more of which, added to that of such succeeding or consolidated political division, is equal to a period of 10 years, will be deemed to be warrants of a political division which has been in existence for a period of 10 years: Provided, That during such period none of such original, succeeding, or consolidated political divisions shall have defaulted for a period exceeding 15 days in the payment of any part of either principal or interest of any funded debt authorized to be contracted by it. REGULATION F, SERIES OF 1917. (Superseding Regulation F of 1916.) TRUST POWERS OF NATIONAL BANKS. I. Statutory provisions. The Federal Reserve Act provides: SEC. 11. The Federal Reserve Board shall be authorized and empowered: (k) To grant by special permit to national banks applying therefor, when not in contravention of State or local law, the right to act as trustee, executor, adminisrator, or registrar of stocks and bonds, under such rules and regulations as the said Board may prescribe. 174 ANNUAL REPORT OF THE FEDERAL RESERVE BOARD. II. Applications. A national bank desiring to exercise any or all of the privileges authorized by section 11, subsection (k), of the Federal Reserve Act, shall make application to the Federal Reserve Board on a form approved by said Board (Form No. 61). Such application shall be forwarded by the applying bank to the Chairman of the Board of Directors of the Federal Reserve Bank of its district, and shall thereupon be transmitted to the Federal Reserve Board with his recommendations. III. Separate departments. Every national bank permitted to act under this section shall establish a separate trust department, and shall place such department under the management of an officer or officers, whose duties shall be prescribed by the board of directors of the bank. IV. Provision for keeping trust funds. The funds, securities, and investments held in each trust shall be held separate and distinct from the general funds and securities of the bank, and separate and distinct one from another. The ledgers and other books kept for the trust department shall be entirely separate and apart from the other books and records of the bank. V. Examinations. Examiners appointed by the Comptroller of the Currency or designated by the Federal Reserve Board will hereafter be instructed to make thorough and complete audits of the cash, securities, accounts, and investments of the trust department of every bank at the same time that examination is made of the banking department. VI. Conformity with State laws. Nothing in these regulations shall be construed to give to a national bank doing business as trustee, executor, administrator, or registrar of stocks and bonds under section 11 (k) of the Federal Reserve Act any rights or privileges in contravention of the laws of the State in which the bank is located. VII. Revocation of permits. The Federal Reserve Board reserves the right to revoke permits granted under these regulations in any case where in the opinion of the Board a bank has willfully violatd the provisions of these regulations or the laws of any State relating to the operations of such bank when acting as trustee, executor, administrator, or registrar of stocks and bonds. VIII. Changes in rules. These regulations are subject to change by the Federal Reserve Board; provided, however, that no such change shall prejudice obligations undertaken in good faith under regulations in effect at the time the obligation was assumed. ANNUAL REPORT OF THE FEDERAL RESERVE BOARD. 175 REGULATION G, SERIES OF 1917. (Superseding Regulation G of 1916.) LOANS ON FARM LAND AND OTHER REAL ESTATE. Section 24 of the Federal Reserve Act provides in part that— Any national banking association not situated in a central reserve city may make loans secured by improved and unencumbered farm land situated within its Federal Reserve district or within a radius of one hundred miles of the place in which such bank is located, irrespective of district lines, and may also make loans secured by improved and unencumbered real estate located within one hundred miles of the place in which such bank is located, irrespective of district lines; but no loan made upon the security of such farm land shall be made for a longer time than five years, and no loan made upon the security of such real estate as distinguished from farm land shall be made for a longer time than one year nor shall the amount of any such loan, whether upon such farm land or upon such real estate, exceed fifty per centum of the actual value of the property offered as security. Any such bank may make such loans, whether secured by such farm land or such real estate, in an aggregate sum equal to twenty-five per centum of its capital and surplus or to one-third of its time deposits and such banks may continue hereafter as heretofore to receive time deposits and to pay interest on the same. National banks not located in central reserve cities may, therefore, legally make loans secured by improved and unencumbered farm land or other real estate as provided by this section. Certain conditions and restrictions must, however, be observed— (a) There must be no prior lien on the land; that is, the lending bank must hold an absolute first mortgage or deed of trust. (b) The amount of the loan must not exceed 50 per cent of the actual value of the land by which it is secured. (c) The maximum amount of loans which a national bank may make on real estate, whether on farm land or on other real estate as distinguished from farm land, is limited under the terms of the act to an amount not in excess of one-third of its time deposits at the time of the making of the loan, and not in excess of one-third of its average time deposits during the preceding calendar year: Provided, however, That if one-third of such time deposits as of the date of making the loan, or one-third of the average time deposits for the preceding calendar year, is less than one-fourth of the capital and surplus of the bank as of the date of making the loan, the bank in such event shall have authority to make loans upon real estate under the terms of the act to the extent of one-fourth of the bank's capital and surplus as of that date. (d) Farm land to be eligible as security for a loan by a national bank must be situated within the Federal Reserve district in which such bank is located or within a radius of 100 miles of such bank irrespective of district lines. ** (e) Real estate as distinguished from farm land to be eligible as security for a loan by a national bank must be located within a radius of 100 miles of such bank irrespective of district lines. (/) The right of a national bank to " make loans " under section 24 includes the right to purchase or discount loans already made as well as the right to make such loans in the first instance: Provided, however, That no loan secured by farm land shall have a maturity of more than five years from the date on which it was purchased or made by the national bank and that no loan secured by other real estate shall have a maturity of more than one year from such date. (g) Though no national bank is authorized under the provisions of section 24 to make a loan on the security of real estate, other than farm land, for a 176 ANNUAL REPORT OF THE FEDERAL RESERVE BOARD. period exceeding one year, nevertheless, at the end of the year, it may properly make a new loan upon the same security for a period not exceeding one year. The maturing note must be canceled and a new note taken in its place, but in order to obviate the necessity of making a new mortgage or deed of trust for each renewal, the original mortgage or deed of trust may be so drawn in the first instance as to cover possible future renewals of the original note. Under no circumstances, however, must the bank obligate itself in advance to make such a renewal. It must, in all cases, preserve the right to require payment at the end of the year and to foreclose the mortgage should that action become necessary. The same principles apply to loans of longer maturities secured by farm lands. (7i) In order that real estate loans held by a bank may be readily classified, a statement signed by the officers making a loan and having knowledge of the facts upon which it is based must be attached to each note secured by a first mortgage on the land by which the loan is secured, certifying in detail as of the date of the loan that all of the requirements of law have been duly observed. KEGULATION H, SERIES OF 1917. (Superseding Regulation H of 1916.) MEMBERSHIP OF STATE BANKS AND TRUST COMPANIES. I. Statutory requirements. Section 9 of the Federal Reserve Act, as amended by the act approved June 21, 1917, which authorizes State banks and trust companies to become members of the Federal Reserve system, is quoted in the appendix to this regulation on page 24. II. Banks eligible for membership. A State bank or a trust company to be eligible for membership in a Federal Reserve Bank must comply with the following conditions: 1. It must have been incorporated under a special or general law of the State or district in which it is located. 2. It must have a minimum paid-up unimpaired capital stock as follows: In cities or towns not exceeding 3,000 inhabitants, $25,000. In cities or towns exceeding 3,000 but not exceeding 6,000 inhabitants, $50,000. In cities or towns exceeding 6,000 but not exceeding 50,000 inhabitants, $100,000. In cities exceeding 50,000 .inhabitants, $200,000. III. Application for membership. Any eligible State bank or trust company may make application on F. R. B. Form 83a, made a part of this regulation, to the Federal Reserve Board for an amount of capital stock in the Federal Reserve Bank of its district equal to 6 per cent of the paid-up capital stock and surplus of such State bank or trust company. This application must be forwarded direct to the Federal Reserve agent of the district in which the applying bank or trust company is located and must be accompanied by Exhibits I, II, and III, referred to on page 1 of the application blank. ANNUAL REPORT OF THE FEDERAL RESERVE BOARD. IV. Approval of 177 application. In passing upon an application the Federal Reserve Board will consider especially— 1. The financial condition of the applying bank or trust company and the general character of its management. 2. Whether the corporate powers exercised by the applying bank or trust company are consistent with the purposes of the Federal Reserve Act. 3. Whether the laws of the State or district in which the applying bank or trust company is located contain provisions likely to present proper compliance with the provisions of the Federal Reserve Act and the regulations of the Federal Reserve Board made in conformity therewith. If, in the judgment of the Federal Reserve Board, an applying bank or trust company conforms to all the requirements of the Federal Reserve Act and these regulations, and is otherwise qualified for membership, the board will issue a certificate of approval, subject to such conditions as it may deem necessary to insure compliance with the act and these regulations. When the conditions imposed by the board have been accepted by the applying bank or trust company the board will issue a certificate of approval, whereupon the applying bank or trust company shall make a payment to the Federal Reserve Bank of its district of one-half of the amount of its subscription, i. e., 3 per cent of the amount of its paid-up capital and surplus, and upon receipt of this payment the appropriate certificate of stock will be issued by the Federal Reserve Bank. The remaining half of the subscription of the applying bank or trust company shall be subject to call when deemed necessary by the Federal Reserve Board. V. Powers and restrictions. Every State bank or trust company, while a member of the Federal reserve system— 1. Shall retain its full charter and statutory rights as a State bank or trust company, subject to the provisions of the Federal Reserve Act and to the regulations of the Federal Reserve Board, including any conditions embodied in the certificate of approval; 2. Shall maintain such improvements and changes in its banking practice as may have been specifically required of it by the Federal Reserve Board as a condition of its admission and shall not lower the standard of banking then required of it; and 3. Shall enjoy all the privileges and observe all those requirements of the Federal Reserve Act and of the regulations of the Federal Reserve Board made in conformity therewith which are applicable to State banks and trust companies which have become member banks. VI. Examinations and reports. Every State bank or trust company, while a member of the Federal Reserve System, shall be subject to examinations made by direction of the Federal Reserve Board or of the Federal Reserve Bank by examiners selected or approved by the Federal Reserve Board. In order to avoid duplication, examinations of State banks and trust companies made by State authorities will be accepted in lieu of examinations by examiners selected or approved by the board wherever these are satisfactory to the directors of the Federal Reserve Bank and where, in addition, satisfactory arrangements for cooperation in the matter of examination between 178 ANNUAL REPORT OF THE FEDERAL RESERVE BOARD. the designated examiners of the board and those of the States already exist or can be effected with State authorities. Examiners from the staff of the board or of the Federal Reserve Banks will, whenever desirable, be designated by the board to act with the examination staff of the State, in order that uniformity in the standard of examination may be assured. Every State bank or trust company, while a member of the Federal Reserve System, shall be required to make in each year not less than three reports of condition and of the payment of dividends. Such reports shall be made to the Federal Reserve Bank of its district on call of such bank on dates to be fixed by the Federal Reserve Board. APPENDIX TO REGULATION H. Section 9 of the Federal Reserve Act as amended by the act approved June 21, 1917, provides that: Any bank incorporated by special law of any State, or organized under the general laws of any State, or of the United States, desiring to become a member of the Federal Reserve System, may make application to the Federal Reserve Board, under such rules and regulations as it may prescribe, for the right to subscribe to the stock of the Federal Reserve Bank organized within the district in which the applying bank is located. Such application shall be for the same amount of stock that the applying bank would be required to subscribe to as a national bank. The Federal Reserve Board, subject to such conditions as it may prescribe, may permit the applying bank to become a stockholder of such Federal Reserve Bank. In acting upon such applications, the Federal Reserve Board shall consider the financial condition of the applying bank, the general character of its management, and whether or not the corporate powers exercised are consistent with the purposes of this act. Whenever the Federal Reserve Board shall permit the applying bank to become a stockholder in the Federal Reserve Bank of the district its stock subscription shall be payable on call of the Federal Reserve Board and stock issued to it shall be held subject to the provisions of this act. All banks admitted to membership under authority of this section shall be required to comply with the reserve and capital requirements of this act and to conform to those provisions of law imposed on national banks which prohibit such banks from lending on or purchasing their own stock, which relate to the withdrawal or impairment of their capital stock, and which relate to the payment of unearned dividends. Such banks and the officers, agents, and employees thereof shall also be subject to the provisions of and to the penalties prescribed by section fifty-two hundred and nine of the Revised Statutes, and shall be required to make reports of condition and of the payment of dividends to the Federal Reserve Bank of which they become a member. Not less than three of such reports shall be made annually on call of the Federal Reserve Bank on dates to be fixed by the Federal Reserve Board. Failure to make such reports within ten days after the date they are called for shall subject the offending bank to a penalty of $100 a day for each day that it fails to transmit such report; such penalty to be collected by the Federal Reserve Bank by suit or otherwise. As a condition of membership such banks shall likewise be subject to examinations made by direction of the Federal Reserve Board or of the Federal reserve bank by examiners selected or approved by the Federal Reserve Board. Whenever the directors of the Federal reserve bank shall approve the examinations made by the State authorities, such examinations and the reports thereof may be accepted in lieu of examinations made by examiners selected or approved by the F'ederal Reserve Board: Provided, however, That when it deems it necessary the board may order special examinations by examiners of its own selection and shall in all cases approve the form of report. The expenses of all examinations, other than those made by State authorities, shall be assessed against and paid by the bank examined. ANNUAL BEPORT OF THE FEDERAL RESERVE BOARD. 179 If at any time it shall appear to the Federal Reserve Board that a member bank has failed to comply with the provisions of this section or the regulations of the Federal Reserve Board made pursuant thereto, it shall be within the power of the board after hearing to require such bank to surrender its stock in the Federal reserve bank and to forfeit all rights and privileges of membership. The Federal Reserve Board may restore membership upon due proof of compliance with the conditions imposed by this section. Any State bank or trust company desiring to withdraw from membership in a Federal reserve bank may do so, after six months' written notice shall have been filed with the Federal Reserve Board, upon the surrender and cancellation of all of its holdings of capital stock in the Federal reserve bank: Provided, however, That no Federal reserve bank shall, except under express authority of the Federal Reserve Board, cancel within the same calendar year more than twenty-five per centum of its capital stock for the purpose of effecting voluntary withdrawals during that year. All such applications shall be dealt with in the order in which they are filed with the board. Whenever a member bank shall surrender its stock holdings in a Federal reserve bank, or shall be ordered to do so by the Federal Reserve Board, under authority of law, all of its rights and privileges as a member bank shall thereupon cease and determine, and after due provision has been made for any indebtedness due or to become due to the Federal reserve bank it shall be entitled to a refund of its cash paid subscription with interest at the rate of one-half of one per centum per month from date of last dividend, if earned, the amount refunded in no event to exceed the book value of the stock at that time, and shall likewise be entitled to repayment of deposits and of any other balance due from the Federal reserve bank. No applying bank shall be admitted to membership in a Federal Reserve Bank unless it possesses a paid-up unimpaired capital sufficient to entitle it to become a national banking association in the place where it is situated under the provisions of the national bank act. Banks becoming members of the Federal Reserve System under authority of this section shall be subject to the provisions of this section and to those of this act which relate specifically to member banks, but shall not be subject to examination under the provisions of the first two paragraphs of section fifty-two hundred and forty of the Revised Statutes as amended by section twenty-one of this act. Subject to the provisions of this act and to the regulations of the board made pursuant thereto, any bank becoming a member of the Federal Reserve System shall retain its full charter and statutory rights as a State bank or trust company, and may continue to exercise all corporate powers granted it by the State in which it was created, and shall be entitled to all privileges of member banks: Provided, hoivever, That no Federal Reserve Bank shall be permitted to discount for any State bank or trust company notes, drafts, or bills of exchange of any one borrower who is liable for borrowed money to such State bank or trust company in an amount greater than ten per centum of the capital and surplus of such State bank or trust company, but the discount of bills of exchange drawn against actually existing value and the discount of commercial or business paper actually owned by the person negotiating the same shall not be considered as borrowed money within the meaning of this section. The Federal Reserve Bank, as a condition of the discount of notes, drafts, and bills of exchange for such State bank or trust company, shall require a certificate or guaranty to the effect that the borrower is not liable to such bank in excess of the amount provided by this section, and will not be permitted to become liable in excess of this amount while such notes, drafts, or bills of exchange are under discount with the Federal Reserve Bank. It shall be unlawful for any officer, clerk, or agent of any bank admitted to membership under authority of this section to certify any check drawn upon such bank unless the person or company drawing the check has on deposit therewith at the time such check is certified an amount of money equal to the amount specified in such check. Any check so certified by duly authorized officers shall be a good and valid obligation against such bank, but the act of any such officer, clerk, or agent in violation of this section may subject such bank to a forfeiture of its membership in the Federal Reserve System upon hearing by the Federal Reserve Board. 180 ANNUAL REPORT OF THE FEDERAL RESERVE BOARD. REGULATION I, SERIES OF 1917. (Superseding Regulation I of 1916.) INCREASE OR DECREASE OF CAPITAL STOCK OF FEDERAL RESERVE BANKS. Increase of Capital Stock. Whenever the capital stock of any Federal Reserve Bank shall be increased by new banks becoming members, or by the increase of capital or surplus of any member bank and the allotment of additional capital stock to such bank, the board of directors of such Federal Reserve Bank shall certify such increase to the Comptroller of the Currency on Form 58, which is made a part of this regulation. Decrease of capital stock. I. Whenever a member bank reduces its capital stock or surplus, and, in the case of reduction of its capital, such reduction has been approved by the Comptroller of the Currency and by the Federal Reserve Board in accordance with the provisions of section 28 of the Federal Reserve Act, it shall file with the Federal Reserve Bank of which it is a member an application on Form 60, which is made a part of this regulation. When this application has been approved, the Federal Reserve Board shall take up and cancel the receipt issued to such bank for cash payments made on its subscription and shall issue in lieu thereof a new receipt after refunding to the member bank the proportionate amount due such bank on account of the subscription canceled. The receipt so issued shall show the date of original issue, so that dividends may be calculated thereon. II. Whenever a member bank shall be declared insolvent and a receiver appointed by the proper authorities, such receiver shall file with the Federal Reserve Bank of which the insolvent bank is a member an application on Form 87, which is made a part of this regulation, for the surrender and cancellation of the stock held by and for the refund of all balances due to such insolvent member bank. Upon approval of this application by the Federal Reserve agent the Federal Reserve .Bank shall accept and cancel the stock surrendered, and shall adjust accounts between the member bank and the Federal Reserve Bank by applying to the indebtedness of the insolvent member bank to such Federal Reserve Bank all cash-paid subscriptions made by it on the stock canceled with one-half of 1 per cent per month from the period of last dividend, if earned, not to exceed the book value thereof, and the balance, if any, shall be paid to the duly authorized receiver of such insolvent member bank. III. Whenever a member bank goes into voluntary liquidation and a liquidating agent is appointed, such agent shall file with the Federal Reserve Bank of which it is a member an application on Form 86, which is made a part of this regulation, for the surrender and cancellation of the stock held by and for the refund of all balances due to such liquidating member bank. Upon approval of this application by the Federal Reserve agent the Federal Reserve Bank shall accept and cancel the stock surrendered, and shall adjust accounts between the liquidating member bank and the Federal Reserve Bank by applying to the indebtedness of the liquidating member bank to such Federal Reserve Bank all cash-paid subscriptions made by it on the stock canceled with one-half of 1 per cent per month from the period of last dividend, if earned, not to exceed the book value thereof, and the balance, if any, shall be paid to the duly authorized liquidating agent of such liquidating member bank. ANNUAL REPORT OF THE FEDERAL RESERVE BOARD. 181 IV. Whenever the stock of a Federal Reserve Bank shall be reduced in the manner provided in Paragraphs I, II, or III of this regulation the board of directors of such Federal Reserve Bank shall, in accordance with the provisions of section 6, file with the Comptroller of the Currency a certificate of such reduction on Form 59, which is made a part of this regulation. REGULATION J, SERIES OF 1917. (Superseding Regulation J of 1916.) CHECK CLEARING AND COLLECTION Section 16 of the Federal Reserve Act authorizes the Federal Reserve Board to require each Federal Reserve Bank to exercise the function of a clearing house for its member banks, and section 13 of the Federal Reserve Act, as amended by the act approved June 21, 1917, authorizes each Federal Reserve Bank to receive from any nonmember bank or trust company, solely for the purposes of exchange or of collection, deposits of current funds in lawful money, national-bank notes, Federal Refserve notes, checks, and drafts payable upon presentation, or maturing notes and bills, provided such nonmember bank or trust company maintains with its Federal Reserve Bank a balance sufficient to offset the items in transit held for its account by the Federal Reserve Bank. In pursuance of the authority vested in it under these provisions of law, the Federal Reserve Board, desiring to afford both to the public and to the various banks of the country a direct, expeditious, and economical system of check collection and settlement of balances, has arranged to have each Federal Reserve Bank exercise the functions of a clearing house for such of its member banks as desire to avail themselves of its privileges and for such State banks and trust companies as may maintain with the Federal Reserve Bank a balance sufficient to qualify it as a clearing member under the provisions of section 13. Each Federal Reserve Bank shall exercise the functions of a clearing house under the following general terms and conditions: (1) Each Federal Reserve Bank will receive at par from its member banks and from nonmember banks in its district which have become clearing members, checks x drawn on all member and clearing member banks and on all other nonmember banks which agree to remit at par through the Federal Reserve Bank of their district. (2) Each Federal Reserve Bank will receive at par from other Federal Reserve Banks and will receive at par from all member and clearing member banks, regardless of their location, for the credit of their accounts with their respective Federal Reserve Banks, checks drawn upon all member and clearing member banks of its district and upon all other nonmember banks of its district whose checks can be collected at par by the Federal Reserve Bank. The Federal Reserve Banks will prepare a par list of all nonmember banks, to be revised from time to time, which will be furnished to member and clearing member banks. (3) Immediate credit entry upon receipt subject to final payment will be made for all such items upon the books of the Federal Reserve Bank at full 1 A check is generally defined as a draft or order upon a bank, or order upon a bank or banking house, purporting to be drawn upon a deposit of funds, for the payment at all events of a certain sum of money to a certain person therein named, or to him or his order, or to bearer, and payable instantly on demand. 182 ANNUAL REPORT OF THE FEDERAL RESERVE BOARD. face value, but the proceeds will not be counted as part of the minimum reserve nor become available to meet checks drawn until actually collected, in accordance with the best practice now prevailing. (4) Checks received by a Federal Reserve Bank on its member or clearingmember banks will be forwarded direct to such banks and will not be charged to their accounts until sufficient time has elapsed within which to receive advice of payment. (5) In the selection of collecting agents for handling checks on nonmember banks, which have not become clearing members, member banks will be given the preference. (6) Under this plan each Federal Reserve Bank will receive at par from its member and clearing-member banks checks on all member and clearing-member banks and on all other nonmember banks whose checks can be collected at par by any Federal Reserve Bank. Member and clearing-member banks will be required by the Federal Reserve Board to provide funds to cover at par all checks received from or for the account of their Federal reserve banks: Provided, hoivever, That a member or clearing-member bank may ship currency or specie from its own vaults at the expense of its Federal Reserve Bank to cover any deficiency which may arise because of and only in the case of inability to provide items to offset checks received from or for the account of its Federal Reserve Bank.1 (7) Section 19 of the Federal Reserve Act provides that— The required balance carried by a member bank with a Federal Reserve Bank may, under the regulations and subject to such penalties as may be prescribed by the Federal Reserve Board, be checked against and withdrawn by such member bank for the purpose of meeting existing liabilities: Provided, however, That no bank shall at any time make new loans or shall pay any dividends unless and until the total balance required by law is fully restored. It is manifest that items in process of collection can not lawfully be counted as part of the minimum reserve balance to be carried by a member bank with its Federal Reserve Bank. Therefore, should a member bank draw against such items the draft would be charged against its reserve balance if such balance were sufficient in amount to pay it; but any resulting impairment of reserve balances would be subject to all the penalties provided by the act. Inasmuch as it is essential that the law in respect to he mainenance by member banks of the required minimum reserve balance shall be strictly complied with, the Federal Reserve Board, under authority vested in it by section 19 of the act, hereby prescribes as the penalty for any deficiency in reserves a sum equivalent to an interest charge on the amount of the deficiency of 2 per cent per annum above the ninety-day discount rate of the Federal Reserve Bank of the district in which the member bank is located. The Board reserves the right to increase this penalty whenever conditions require it. For the purpose of keeping their reserve balances intact member banks may at all times have recourse to the rediscount facilities offered by their respective Federal Reserve Banks. (8) Each Federal Reserve Bank will determine by analysis the amounts of uncollected funds appearing on its books to the credit of each member bank. Such analysis will show the true status of the reserve held by the Federal Reserve Bank for each member bank and will enable it to apply the penalty for impairment of reserve. 1 In accordance with instructions issued by the Federal Reserve Board on Apr. 24, 1917, the various Federal Reserve Banks have issued circulars setting forth the conditions under which their respective member banks may draw drafts on their Reserve Bank accounts payable with or through any other Federal Reserve Bank. ANNUAL REPORT OF THE FEDERAL RESERVE BOARD. 183 A schedule of the time required within which to collect checks will be furnished to each bank to enable it to determine the time at which any item sent to its Federal Reserve Bank will be counted as reserve and become available to meet any checks drawn. (9) In handling items for member and clearing member banks, a Federal Reserve Bank will act as agent only. The Board will require that each member and clearing member bank authorize its Federal Reserve Bank to send checks for collection to banks on which checks are drawn, and, except for negligence, such Federal Reserve Bank will assume no liability. Any further requirements that the Board may deem necessary will be set forth by the Federal Reserve Banks in their letters of instruction to their member and clearing member banks. Each Federal Reserve Bank will also promulgate rules and regulations governing the details of its operations as a clearing house, such rules and regulations to be binding upon all member and nonmember banks which are clearing through the Federal Reserve Bank. (10) The cost of collecting and clearing checks must necessarily be borne by the banks receiving the benefit and in proportion to the service rendered. An accurate account will be kept by each reserve bank of the cost of performing this service and the Federal Reserve Board will, by rule, fix the charge, at so much per item, which may be imposed for the service of clearing or collection rendered by the reserve banks, as provided in section 16 of the Federal Reserve Act. REGULATIONS GOVERNING THE EXPORTATION OF COIN, BULLION, AND CURRENCY. EXECUTIVE OEDEE. By virtue of the authority vested in me, I direct that the regulations, orders, limitations, and exceptions prescribed in relation to the exportation of coin, bullion, and currency shall be administered by and under the authority of the Secretary of the Treasury; and upon the recommendation of the Secretary of the Treasury, I hereby prescribe the following regulations in relation thereto: 1. Any individual, firm, or corporation desiring to export from the United States or any of its Territorial possessions to any foreign country named in the proclamation dated September seventh, nineteen hundred and seventeen, any coin, bullion, or currency shall first file an application in triplicate with the Federal reserve bank of the district in which such individual, firm, or corporation is located, such application to state under oath and in detail the nature of the transaction, the amount involved, the parties directly and indirectly interested, and such other information as may be of assistance to the proper authorities in determining whether the exportation for which a license is desired will be compatible with the public interest. 2. Each Federal reserve bank shall keep a record copy of each application filed with it under the provisions of this regulation and shall forward the original application and a duplicate to the Federal Reserve Board at Washington, together with such information or suggestions as it may believe proper in the circumstances, and shall, in addition, make a formal recommendation as to whether or not in its opinion the exportation should be permitted. 3. The Federal Reserve Board, subject to the approval of the Secretary of the Treasury, is hereby authorized and empowered upon receipt of such application and the recommendation of the Federal reserve bank to make such ruling as it may deem proper in the circumstances and, if in its opinion the exportation in question be compatible with the public interest, to permit said exportation to be made; otherwise to refuse it. WOODEOW WILSON. T H E W H I T E HOUSE, September 7, 1917. 184 AisrisruAL REPORT OF T H E FEDERAL RESERVE BOARD. B Y THE PRESIDENT OF THE UNITED STATES OF AMERICA, A PROCLAMATION. Whereas Congress has enacted and the President has, on the fifteenth day of June, one thousand nine hundred and seventeen, approved a law which contains the following provisions: Whenever during the present war the President shall find that the public safety shall so require, and shall make proclamation thereof, it shall be unlawful to export from or ship from or take out of the United States to any country named in such proclamation any article or articles mentioned in such proclamation, except at such time or times and under such regulations and orders and subject to such limitations and exceptions as the President shall prescribe, until otherwise ordered by the President or by Congress: Provided, however, That no preference shall be given to the ports of one State over those of another. Any person who shall export, ship, or take out, or deliver or attempt to deliver for export, shipment, or taking out, any article in violation of this title, or of any regulation or order made hereunder, shall be fined not more than $10,000, or, if a natural person, imprisoned for not more than two years, or both; and any article so delivered or exported, shipped, or taken out, or attempted to be so delivered or exported, shipped, or taken out, shall be seized and forfeited to the United States; and any officer, director, or agent of a corporation who participates in any such violation shall be liable to like fine or imprisonment, or both. Whenever there m reasonable cause to believe that any vessel, domestic or foreign, is about to carry out of the United States any article or articles in violation of the provisions of this title, the collector of customs for the district in which such vessel is located is hereby authorized and empowered, subject to review by the Secretary of Commerce, to refuse clearance to any such vessel, domestic or foreign, for which clearance is required by law, and by formal notice served upon the owners, master, or person or persons in command or charge of any domestic vessel for which clearance is not required by law, to forbid the departure of such vessel from the port, and it shall thereupon be unlawful for such vessel to depart. Whoever, in violation of any of the provisions of this section shall take, or attempt to take, or authorize the taking of any such vessel out of port or from the jurisdiction of the United States, shall be fined not more than $10,000 or imprisoned not more than two years, or both; and, in adition, such vessel, her tackle, apparel, furniture, equipment, and her forbidden cargo shall be forfeited to the United States. And whereas the President has heretofore by proclamation, under date of the twenty-seventh day of August in the year one thousand nine hundred and seventeen, declared certain exports in time of war unlawful, and the President finds that the public safety requires that such proclamation be amended and supplemented in respect to the articles hereinafter mentioned: Now, therefore, I, Woodrow Wilson, President of the United States of America, do hereby proclaim to all whom it may concern, that the public safety requires that, except at such time or times, and under such regulations and orders, and subject to such limitations and exceptions as the President shall prescribe, until otherwise ordered by the President or by Congress, the following articles, namely: Coin, bullion, and currency shall not, on and after the tenth day of September, in the year one thousand nine hundred and seventeen, be exported from or shipped from or taken out of the United States or its territorial possessions to Albania, Austria-Hungary, Belgium, Bulgaria, Denmark, her colonies, possessions, or protectorates, Germany, her colonies, possessions, or protectorates, Greece, Leichtenstein, Luxembourg, the Kingdom of the Netherlands, Norway, Spain, her colonies, possessions, or protectorates, Sweden, Switzerland or Turkey, Abyssinia, Afghanistan, Argentina, Bolivia, Brazil, China, Chile, Colombia, Costa Rica, Cuba, Dominican Republic, Ecuador, Egypt, France, her colonies, pos ANNUAL REPORT OF THE FEDERAL RESERVE BOARD. 185 sessions, or protectorates, Guatemala, Haiti, Honduras, Italy, her colonies, possessions, or protectorates, Great Britain, her colonies, possessions, or protectorates, Japan, Liberia, Mexico, Monaco, Montenegro, Morocco, Nepal, Nicaragua, the colonies, possessions, or protectorates of the Netherlands, Oman, Panama, Paraquay, Persia, Peru, Portugal, her colonies, possessions, or protectorates, Roumania, Russia, Salvador, San Marino, Serbia, Siam, Uruguay, or Venezuela. The regulations, orders, limitations, and exceptions prescribed will be administered by and under the authority of the Secretary of the Treasury, from whom licenses in conformity with said regulations, orders, limitations, and exceptions will issue. Except as hereby amended and supplemented, the above-mentioned proclamation under date of August 27, 1917, shall continue in full force and effect. In witness whereof I have hereunto set my hand and caused the seal of the United States of America to be affixed. Done at the city of Washington, this seventh day of September in the year of our Lord one thousand nine hundred and seventeen and of the independence of the United States of America the one hundred and forty-second. WOODEOW WILSON. By the President: ROBERT LANSING, Secretary of State. ADMINISTRATIVE PROCEDURE, METHOD OF MAKING APPLICATION. Individuals firms and corporations desiring to obtain licenses for the exportation of coin, bullion, and currency, must file an application with the Federal reserve bank of the district in which the applicant resides or where the transaction requiring the shipment originates. These applications must be made on a standard form which has been furnished to all Federal reserve banks. EXPORTS OF GOLD. It will be the general policy of the board not to authorize the exportation of gold unless the shipment applied for is shown to be connected in a direct and definite way with a corresponding importation of merchandise for consumption in the United States, but in any case authorization will be granted only where the exportation of gold in payment for such merchandise is found to be compatible with the public interest. In reaching its conclusions, however, the board will consider all attendng circumstances in each particular case. SHIPMENTS OF CANADIAN SILVER COIN AND CURRENCY. Until further notice the board will approve all applications for the exportation of Canadian silver coin and currency without limitation. The Treasury Department has instructed collectors of customs to pass such shipments into Canada when approved by the Federal reserve bank of the district from which the shipments are made. Continuous permits for shipments of Canadian silver coin and currency without requiring an application in each case, may be granted by Federal reserve banks upon condition that each transaction will be reported to it without delay. The Federal reserve banks will transmit to the board weekly reports of all applications of every kind passed upon by them, showing the amount of each shipment. 186 ANNUAL REPORT OF THE FEDERAL RESERVE BOARD. EXPOBTS OF SILVER BULLION AND SILVER COIN OF FOREIGN MINTAGE. Applications for the exportation of silver bullion and silver coin of foreign mintage will in general be approved by the Federal Reserve Board upon recommendation of the Federal Reserve Bank with which the application is filed. UNITED STATES NOTES, NATIONAL BANK NOTES, AND FEDERAL RESERVE NOTES. Applications for the exportation of United States notes, national bank notes, and Federal reserve notes will, as a rule, be approved by the Federal Reserve Board, but each application must come before the board for its determination before shipment is made.. TRAVELERS LEAVING THE COUNTRY. Instructions have been issued by the Treasury Department to collectors of customs to permit travelers leaving the country to carry on their persons or in their baggage: (a) United States notes, national bank notes, and Federal reserve notes not to exceed $5,000 for each adult; (b) American silver dollars, subsidiary silver coins, and silver certificates not to exceed $200 for each adult; (c) Gold coin or gold certificates not to exceed $200 for each adult. Collectors of customs have been informed that in dealing with travelers they may act in accordance with these regulations, without communicating with the Federal Reserve Board or with the Federal Reserve Bank of their district GENERAL. Shipments of coin or currency which appear for enemy account or for the benefit of the These regulations are issued subject to change tion granted will be regarded as constituting a to be or are suspected of being enemy, will not be permitted. without notice, and no applicaprecedent. FEDERAL RESERVE BOARD, HARDING, Governor. By W. P. G. Approved: W. G. MCADOO, Secretary of the Treasury. WASHINGTON, D. C, September 21, 1917. Exhibit K.—FOREIGN BRANCHES AUTHORIZED. The Board has authorized the establishment of foreign branches and subbranches of national banks as follows: National City Bank, New York City: " Date authorized. Branch at Buenos Aires, Argentina Sept. 2, 1914 Subbranch at Montevideo, Uruguay * Apr. 16, 1915 Branch at Rio de Janeiro, Brazil Sept. 2 ? 1914 Subbranches at Santos, Sao Paulo, Pernambuco, Para, and Bahia, Brazil Dec. 23, 1914 Branch at Habana, Cuba Mar. 17, 1915 Subbranches at Santiago, Matanzas, Cienfuegos, Guantanamo, Camaguey, Cardenas, Manzanillo, Cuba; Kingston, Jamaica; and Santo Domingo, Santo Domingo . Mar. 17, 1915 Branch at Valparaiso, Chile Oct. 18, 1915 Subbranches at Antofagasta and Santiago, Chile Oct. 18, 1915 Branch at Genoa, Italy May 25, 1916 Subbranches at Turin, Milan, Venice, Florence, Rome, Naples, and Palermo, Italy May 25, 1916 Branch at Petrograd, Russia July 5, 1916 Subbranches at Moscow, Odessa, Warsaw, Riga, Baku, Astrakhan, Vladivostok, Sebastopol, Helsingfors, and Vilna, Russia July 5, 1916 Branch at Lima, Peru July 31, 1917 Subbranches at Payta, Callao, and Mollendo, Peru —July 31, 1917 Branch at Caracas, Venezuela July 31, 1917 Subbranches at La Guayra, Porto Cabello, and Maracaybo___ July 31, 1917 Commercial National Bank, Washington, D. C.: Branch at Panama City, Panama Jan. 12, 1915 Branch at Cristobal, Canal Zone Nov. 30, 1914 First National Bank, Boston, Mass.: Branch at Buenos Aires, Argentina Jan. 29, 1917 1 34365°—18 Made an independent branch Dec. 8, 1917. 13 187 Exhibit L.—LIST OF NATIONAL BANKS GIVEN FIDUCIARY POWERS FROM JAJNXTARY 1, 1917, TO DECEMBER 31, 1917, DISTRICT N. 1. Location. Maine: Bar Harbor Massachusetts: Boston Brockton Edgartown Haver hill Gardner Leominster Lynn Plymouth Wareham Worcester New Hampshire: Concord Vermont: Brattleboro Windsor Name of bank. First National Bank Powers granted. Trustee, executor, administrator, and registrar of stocks and bonds. Webster & Atlas National Bank.. Do. Home National Bank Do. Edgartown National Bank Trustee, executor, and administrator. Merrimack National Bank Trustee, executor, administrator, and registrar of stocks and bonds. Do. First National Bank Do. Merchants National Bank Do. Manufacturers National Bank Do. Plymouth National Bank Do. National Bank of Wareham Do. Mechanics National Bank National State Capital Bank Vermont National Bank State National Bank Do. Trustee, executor, and administrator. Do. DISTRICT NO. 2. Connecticut: Bridgeport... New Jersey: Paterson Phillipsburg. Red Bank. Somerville. Sussex New York: New York. Do Oneida First-Bridgeport National Bank... Registrar of stocks and bonds. Paterson National Bank Do. Trustee, executor, administrator, and Phillipsburg National Bank registrar of stocks and bonds. Second National Bank Do. do.. Do. Farmers National Bank Do. Registrar of stocks and bonds. Atlantic National Bank Mechanics & Metals National Bank Do. Oneida Valley National Bank Do. DISTRICT NO. 3. New Jersey: Camden National State Bank Pennsylvania: Maytown Myerstown Philadelphia Do... Topton West Grove Wilkes-Barre Williamsport Maytown National Bank Myerstown National Bank Eighth National Bank Philadelphia National Bank National Bank of Topton National Bank of West Grove Second National Bank West Branch National Bank 188 Trustee, executor, administrator, and registrar of stocks and bonds. Do. Do. Do. Registrar of stocks and bonds. Trustee, executor, and administrator. Trustee, executor, administrator, and registrar of stocks and bonds. Do. Do. ANNUAL REPORT OF THE FEDERAL RESERVE BOARD. 189 DISTRICT NO. 4. Name of bank. Powers granted. First-Second National Bank First National Bank do Union National Bank Citizens National Bank Painesville National Bank German National Bank of Allegheny. First National Bank Trustee and registrar of stocks and bonds. Registrar of stocks and bonds. Trustee and registrar of stocks and bonds. Registrar of stocks and bonds. Do. Do. Trustee, executor, administrator, and registrar of stocks and bonds. Trustee. Location. Ohio: Akron Canton Cleveland Do Mansfield Painesville Pennsylvania: Pittsburgh West Virginia: New Cumberland DISTRICT NO. 5. Maryland: Hyattsville. Rising Sun.. North Carolina: Newbern— Virginia: Appalachia.. Danville West Virginia: Clarksburg. First National Bank National Bank of Rising Sun. National Bank of Newbern.... First National Bank ...do Union National Bank Trustee, executor, administrator, and registrar of stocks and bonds. Do. Do. Trustee. Trustee, executor, administrator, and registrar of stocks and bonds. Do. DISTRICT NO. Alabama: Cullman St. Petersburg Do Georgia: Atlanta Macon Louisiana: Alexandria Leeth National Bank Central National Bank First National Bank Lowry National Bank Fourth National Bank First National Bank Trustee, executor, administrator, and registrar of stocks and bonds. Trustee, executor, and administrator. Trustee, executor, administrator, and registrar of stocks and bonds. Do. Do. Do. DISTRICT NO. 7. Indiana: Crawfordsvile . Mishawaka Monrovia Muncie Iowa: Council Bluffs.. Decorah Dubuque Emmetsburg... Gladbrook...... Kanawha Manchester Red Oak Waverly Michigan: Battle Creek Benton Harbor.. Birmingham. Flint Lansing. Citizens National Bank . First National Bank do Merchants National Bank. First National Bank National Bank of Decorah First National Bank Emmetsburg National Bank. FirstNational Bank ....do do .do. .do. Trustee, executor, administrator, and registrar of stocks and bonds. Do. Do. Do. Do. Do. Do. Do. Trustee, executor, and administrator. Do. Trustee, executor, administrator, and registrar of stocks and bonds. Do. Do. Central National Bank Do. Farmers & Merchants National Trustee, executor, and administrator. Bank. First National Bank Trustee, executor, administrator, and registrar of stocks and bonds. First National Bank .. Do. Capital National Bank. Do. 190 ANNUAL REPORT OF THE FEDERAL RESERVE BOARD. DISTRICT NO. 8. Location. Arkansas: Fordyce Marianna Illinois: Metropolis Indiana: Mitchell Kentucky: Bowling Green Missouri: St. Louis Springfield Powers granted. Name of bank. First National Bank Lee County National Bank City National Bank First National Bank American National Bank National Bank of Commerce Union National Bank Trustee, executor, administrator, and registrar of stocks and bonds. Do. Do. Do. Trustee and registrar of bonds. Trustee, executor, administrator, and registrar of stocks and bonds. Do. DISTRICT NO. South Dakota: Arlington.. Sioux Falls.. First National Bank Minnehaha National Bank. Trustee, executor, administrator, and registrar of stocks and bonds. Do. DISTRICT NO. 10. Colorado: Fort Collins. Hugo.. Kansas: Luray.. Salina.. Missouri: Kansas City. Nebraska: Norfolk Omaha Ord Oklahoma: McAlester Oklahoma City. Wyoming: Buffalo Caster. First National Bank., ....do .do. Farmers National Bank First National Bank Norfolk National Bank United States National Bank.. First National Bank American National Bank Farmers National Bank First National Bank Casper National Bank Trustee, executor, administrator, and registrar of stocks and bonds. Trustee, executor, and administrator. Do. Trustee, executor, administrator, and registrar of stocks and bonds. Do. Trustee, executor, and administrator. Registrar of stocks and bonds. Trustee, executor, administrator, and registrar of stocks and bonds. Trustee. Do. Trustee, executor, administrator, and registrar of stocks and bonds. Do. DISTRICT NO. 11. Louisiana: Shreveport. New Mexico: Carlsbad Roswell.... Texas: Campbell Dallas Orange Palestine San Angelo Commercial National Bank Trustee, executor, administrator, and registrar of stocks and bonds. Do. First National Bank . . Citizens National Bank Trustee, executor, and administrator. Do. Campbell National Exchange B*\nk Tenison National Bank Trustee, executor, administrator, and registrar of stocks and bonds. Do. First National Bank Do. Royall National Bank San Angelo National Bank Trustee, executor, and administrator. DISTRICT NO. 12. Idaho: Boise City. Moscow Oregon: Marshfield Utah: Salt Lake City. Washington: Colfax Boise City National Bank. First National Bank Registrar of stocks and bonds. Trustee, executor, administrator, and registrar of stocks and bonds. First National Bank of Coos Bay.. Registrar of stocks and bonds. Continental National Bank........ Trustee, executor, administrator, and registrar of stocks and bonds. Farmers National Bank. Do. Exhibit M.—ACCEPTANCES TO 100 PER CENT. The following banks have been granted authority by the Federal Reserve Board to accept drafts and bills of exchange up to 100 per cent of their capital and surplus. This list includes all banks which have been granted such powers up to and including December 31, 1917: District No. 1— Hartford Aetna National Bank, Hartford, Conn. Massasoit-Pocasset National Bank, Fall River, Mass. First National Bank, Boston, Mass. Second National Bank, Boston, Mass. Merchants National Bank, Boston, Mass. National Shawmut Bank, Boston, Mass. Old Colony Trust Co., Boston, Mass. Webster & Atlas National Bank, Boston, Mass. National Union Bank, Boston, Mass. Safety Fund National Bank, Fitchburg, Mass. Mechanics National Bank, New Bedford, Mass. Merchants National Bank, Worcester, Mass. Blackstone Canal National Bank, Providence, R. I. District No. 2— American Exchange National Bank, New York City. Bank of New York, N. B. A., New York City. Atlantic National Bank, New York City. Mechanics & Metals National Bank, New York City. Irving National Bank, New York City. National City Bank, New York City. National Bank of Commerce, New York City. Harriman National Bank, New York City. Chemical National Bank, New York City. Chase National Bank, New York City. Corn Exchange Bank, New York City. National Park Bank, New York City. Citizens National Bank, New York City. Guaranty Trust Co., New York City. Liberty National Bank, New York City. Central Trust Co., New York City. Bankers Trust Co., New York City. Equitable Trust Co., New York City. Importers & Traders National Bank, New York City. W. R. Grace & Co.'s Bank, New York City. Franklin Trust Co., New York City. Seaboard National Bank, New York City. Columbia Trust Co., New York City. Mercantile Bank of the Americas, New York City. First National Bank, Utica, N. Y. 191 192 ANNUAL REPORT OF THE FEDERAL RESERVE BOARD. District No. 3— Philadelphia National Bank, Philadelphia, Pa. Tradesmen's National Bank, Philadelphia, Pa. Fourth Street National Bank, Philadelphia, Pa. Girard National Bank, Philadelphia, Pa. Market Street National Bank, Philadelphia, Pa. District No. 4— Fifth-Third National Bank, Cincinnati, Ohio. Union National Bank, Cleveland, Ohio. First National Bank, Cleveland, Ohio. Cleveland Trust Co., Cleveland, Ohio. Union Trust Co., Pittsburgh, Pa. District No. 5: Merchants-Mechanics' First National Bank, Baltimore, Md. Farmers & Merchants' National Bank, Baltimore, Md. Murchison National Bank, Wilmington, N. C. Bank of Charleston, N. B. A., Charleston, S. C. People's National Bank, Charleston, S. C. First National Bank of Danville, Va. Merchants' National Bank, Hampton, Va. Norfolk National Bank, Norfolk, Va. Seaboard National Bank. Norfolk, Va. Merchants' National Bank, Richmond, Va. American National Bank, Richmond, Va. First National Bank, Richmond, Va. District No. 6: Central National Bank, Albany, Ala. Farmers & Merchants' National Bank, Troy, Ala. American National Bank, Cordele, Ga. Fourth National Bank, Macon, Ga. National Bank of Savannah, Ga. Savannah Bank & Trust Co., Savannah, Ga. Whitney-Central National Bank, New Orleans, La. Commercial National Bank, New Orleans, La. New Orleans National Bank, New Orleans, La. District No. 7: First National Bank, Chicago, 111. National Bank of the Republic, Chicago, 111. Continental & Commercial National Bank, Chicago, 111. Merchants' Loan & Trust Co., Chicago, 111. District No. 8: First National Bank, Canton, Miss. District No. 10: First National Bank, Hutchinson, Kans. First National Bank, St. Joseph, Mo. District No. 11: American Exchange National Bank, Dallas, Tex. Tenison National Bank, Dallas Tex. City National Bank, Dallas, Tex. American National Bank, Fort Worth, Tex. South Texas Commercial National Bank, Houston, Tex. ANNUAL REPORT OF THE FEDERAL RESERVE BOARD. District No. 12: First National Bank, Portland, Oreg. Northwestern National Bank, Portland, Oreg. Anglo & London-Paris National Bank, San Francisco, Cal. First National Bank, San Francisco, Cal. Wells-Fargo Nevada National Bank, San Francisco, Cal. Bank of California, N. A., San Francisco, Cal. Crocker National Bank, San Francisco, Cal, American National Bank, San Francisco, Cal. National Bank of Commerce, Seattle, Wash. 193 Exhibit N—PERSONNEL AND SALARIES. Salaries of officers and employees of Federal Reserve Banks. FEDERAL RESERVE BANK OF BOSTON. Number of officers and employees. Salaries. Departments. 1915 Chairman and Federal Reserve agent. Governor Other officers Banking department Bookkeeping department Transit department.: Federal Reserve agent's department.. Fiscal agency department General Total. 20 1916 1917 1915 1916 1917 $10,000 15,000 8,500 6,100 3,100 2,100 2,500 $10,000 20,000 10,900 15,260 11,360 24,460 3,680 13 1 1 5 55 17 30 4 112 23 3,580 10,280 $12,000 20,000 17,500 57,700 16,530 24,964 7,100 106,200 20,378 71 248 50,880 105,940 288,372 $16,000 15,000 20,000 42,000 97,552 10,700 36,480 $20,000 30,000 45.000 56,200 301,648 15,360 94,480 9,520 FEDERAL RESERVE BANK OF NEW YORK. Chairman and Federal Reserve agent. Governor Deputy governor * Other officers Banking department Bookkeeping department '... Transit department Federal Reserve agent's department.. Fiscal agency department: Bond issue Certificates of indebtedness Government deposit General - 1 1 2 8 287 15 168 6 213 34 52 42 73 Total. 173 $16,000 30,000 32,800 60,588 4,620 6,430 5,540 I 155,978 8,460 248,284 45,340 67,308 37,440 246,192 970,580 $10,000 20,000 10,200 15,940 9,360 24,180 7,140 F E D E R A L R E S E R V E BANK OF P H I L A D E L P H I A . Chairman and Federal Reserve agent. Governor Other officers Banking department Bookkeeping department Transit department Federal Reserve agent's department.. Fiscal agency department General Total. $10,000 20,000 5,000 14,400 3,300 5,880 5,976 19 23 45 25 12,480 14,672 $10,000 20,000 21,250 34,084 18,080 47,790 8,060 23,160 16,848 192 77,036 111,492 199,272 $10,000 20,000 10, 750 13,430 4,380 23,370 3,780 FEDERAL RESERVE BANK OF CLEVELAND. Chairman and Federal Reserve agent. Governor Other officers Banking department Bookkeeping department Transit department Federal Reserve agent's department.. Fiscal agency department General Total. 1 1 $10,000 18,000 7,000 16,900 5,160 1,080 3,500 10 10 6,900 8,040 $12,000 20,000 21,050 23,800 19,080 52,710 7,820 87,180 16,440 31 65 68,540 93,750 260,080 3 n 36| 2 » Total deputy governors, 3; one serving without pay. 194 195 ANNUAL REPORT OF THE FEDERAL RESERVE BOARD. Salaries of officers and employees of Federal Reserve Banks—Continued. FEDERAL RESERVE BANK OF RICHMOND. Number of officers and employees. Salaries. Departments. 1915 1916 1917 Chairman and Federal Reserve agent. Governor Other officers Banking department Bookkeeping department Transit department Federal Reserve agent's department.. Fiscal agency department General 30 Total. 63 109 1915 1916 1917 $10,000 10,000 5,978 12,742 4,748 2,278 945 $10,000 12,000 9,428 13,956 5,520 11,599 916 6,439 8,819 $10,000 15,000 14,550 22,880 4,980 21,954 2,400 21,024 8,540 53,130 72,238 121,328 FEDERAL RESERVE BANK OF ATLANTA (INCLUDING NEW ORLEANS BRANCH). Chairman and Federal Reserve agent. Governor Other officers Banking department Bookkeeping department Transit department Federal Reserve agent's department.. Fiscal agency department General Total. $7,500 9,000 13,100 23,928 3,600 1,260 3,200 3,180 41 65 132 $9,000 9,000 12,060 21,828 5,100 15,900 4,380 4,0 $10,000 10,000 11,380 37,690 6,480 20,180 5,220 61,010 3,120 64,768 81,348 165,080 $10,000 20,000 14,000 21,426 4,100 8,700 7,200 $10,000 20,000 17,500 31,880 8.700 30; 240 7,800 11,134 20,985 $10,000 24,000 33,500 47, 880 9,520 49,280 13,800 215, 930 61,130 96,560 147,105 465,040 F E D E R A L R E S E R V E BANK O F CHICAGO. Chairman and Federal Reserve agent. Governor „ Other officers Banking department Bookkeeping department Transit department Federal Reserve agent's department. Fiscal agency department General Total. 13 21 1 1 7 36 10 61 5 166 77 50 110 364 33 F E D E R A L R E S E R V E B A N K OF ST. LOUIS (INCLUDING LOUISVILLE BRANCH). Chairman and Federal Reserve agent. Governor Other officers Banking department Bookkeeping department Transit department Federal Reserve agent's department. Fiscal agency department General * Total. 2,820 $10, 000 $10,000 20,000 20,000 13,500 35,500 17,180 44,500 6,260 5,900 16,140 34,620 5,900 3,340 65, 840 2,820 4,920 80, 900 91,800 224,620 $10,000 20,000 13,500 12,820 6,200 9,660 5,900 39 53 177 FEDERAL RESERVE BANK OF MINNEAPOLIS. Chairman and Federal Reserve agent.. Governor Other officers Banking department Bookkeeping department Transit department Federal Reserve agent's department. Fiscal agency department Total. 20 54 127 $7,500 15,000 3,000 11,940 2,460 2,000 5,520 $9,000 15,000 3,500 15,850 5,540 19,460 4,080 $10,000 18, 000 12,500 29,120 6,040 24,040 4,580 51,180 47,420 72,430 155,460 196 ANNUAL BEPORT OF THE FEDERAL RESERVE BOARD. Salaries of officers and employees of Federal Reserve Banks—Continued. FEDERAL RESERVE BANK OF KANSAS CITY. Number of officers and employees. Salaries. Departments. 1915 Chairman and Federal Reserve agent. Governor Other officers Bookkeeping department Transit department Federal Reserve agent's department.. Fiscal agency department General Total.. 1916 1917 1915 1916 1917 $7,500 7,500 6,000 6,120 $7,500 10,000 8,800 4,500 18,780 4,380 $7,500 12,500 17,400 5,340 22,960 7,680 93,190 27,020 10,980 4,080 12 15 40 27 13,460 153 55,640 18,460 72,420 193,590 $7,500 10,000 11,000 17,140 1,620 2,100 7,400 $9, 10, 15, 17, 5, 20, 3, FEDERAL RESERVE BANK OF DALLAS. Chairman and Federal Reserve agent. Governor Other officers Banking department Bookkeeping department. Transit department Federal Reserve agent's department.. Fiscal agency department General Total. 10 12 10 9,060 $10,000 12,000 19,700 39,300 6,360 33,140 3,700 60,690 7,580 11,680 31 63 170 65,820 93,000 192,470 FEDERAL RESERVE BANK OF SAN FRANCISCO (INCLUDING SPOKANE, PORTLAND, AND SEATTLE BRANCHES.) Chairman and Federal Reserve agent. Governor Other officers Tellers Discount department Transit department Bookkeeping department General Auditixig department Federal Reserve agent's department... Fiscal agency department Total. 22 62 1 1 10 11 8 31 17 61 8 3 122 $12,000 15,000 10,200 4,200 2,820 780 2,520 7,200 2,400 7,000 $12,000 15,000 12,200 4,860 2,880 11,640 4,620 23,810 3,300 1,620 $14,000 18,000 39,500 15,240 11,460 28,740 18,240 63,140 12,186 3,420 146,100 273 64,120 91,930 370,026 SALARIES or OFFICERS AND EMPLOYEES OF THE FEDERAL RESERVE BOARD AS OF DECEMBER 31, 1917. OFFICE OF THE SECRETARY. H. Parker Willis, secretary Sherman Allen, assistant secretary and fiscal agent 1 at $2,250 1 at $2,100 1 at $1,500 2 at $1,440 1 at $1,320 1 at $1,200 1 at $1,000 2 at $900 ~, ™. 5 at $2,700 1 at $1,800 5 at $1,440 $9, 000 6, 000 2,250 2,100 1,500 2,880 1,320 1,200 1,000 1, 800 $29, 050 OFFICES OF MEMBERS OF THE BOARD. 13, 500 1, 800 7, 200 22, 500 ANNUAL REPORT OF THE FEDERAL RESERVE BOARD. 197 OFFICE OF COUNSEL. Milton C. Elliott, counsel J. P. Cotton, consulting counsel Staff: 1 at $4,500 1 at $2,100 _" 1 at $1,800 1 at $1,440 1 at $1,320 $9, 000 2, 000 4, 500 2,100 1,800 1,440 1, 320 $22,160 DIVISION OF AUDIT AND EXAMINATION. Joseph A. Broderick, chief of division 2 at $3,600 1 at $2,800 1 at $1,600 2 at $1,500 3 at $1,320 1 at $1,200 1 at $420 7, 200 7,200 2, 800 1,600 3,000 3,960 1,200 420 27,380 DIVISION OF REPORTS AND STATISTICS. Morris Jacobson, chief of division Staff: 1 at $2,250 1 at $2,000 1 at $1,800 3 at $1,650 1 at $1,500 1 at $1,400 1 at $1,200 1 at $1,000 1 at $3 per diem. 4,200 2,250 2, 000 1,800 4, 950 1,500 1, 400 1,200 1,000 20,300 121, 390 DIVISION OF FOEEIGN EXCHANGE. Staff: 1 at $4,000 1 at $1,320 4,000 1,320 - O, o^U DIVISION OF ISSUE AND REDEMPTION. Willard E. Buell, chief of division Staff: 1 at $1,900 1 at $1,320 1 at $1,200 3 at $960 4 at $900 i 2, 500 1,900 1, 320 1, 200 2,880 3, 600 13,400 MESSENGERS. 2 at $900 5 at $840 1, 800 4, 200 6,000 CHARWOMEN. 3 at $264 Total 792 •__ 146, 902 198 SALARIES ANNUAL REPORT OF THE FEDERAL RESERVE BOARD. OF NATIONAL-BANK EXAMINERS EFFECTIVE IN DEC. 31, 1917. THE YEAR ENDING Stephen L. Newnham, supervising examiner, not assigned to any Federal Reserve District $4, 200 DISTRICT NO. 1—BOSTON. (3S0 national member banks.) James D. Brennan, chief examiner 2 examiners, at $3,600; 1 examiner, at $3,000; 1 examiner, at $2,700; 1 examiner, at $2,400 $8, 000 15.300 23,300 DISTRICT NO. 2 NEW YORK. (624 national member banks.) William P. Malburn, chief examiner 1 examiner, at $4,200; 1 examiner, at $3,900; 1 examiner, at $3,600; 2 examiners, at $3,300; 2 examiners, at $3,000; 3 examiners, at $2,700 15, 000 32, 400 47,400 DISTRICT NO. 3—PHILADELPHIA. (631 national member banks.) Edward I. Johnson, chief examiner 8, 000 1 examiner, at $4,500; 1 examiner, at $4,200; 1 examiner, at $3,600; 1 examiner, at $3,300; 2 examiners, at $3,000; 1 examiner, at $2,700; 3 examiners, at $2,400 31.500 • 39, 500 DISTRICT NO. 4 CLEVELAND. (750 national member banks.) Silas H. L. Cooper, chief examiner 1 examiner, at $5,500; 3 examiners, at $3,900; 2 examiners, at $3,600; 1 examiner, at $2,700; 3 examiners, at $2,400 8.000 34.300 42,300 DISTRICT NO. 5—RICHMOND. (518 national member banks.) James K. Doughton, chief examiner 6,500 1 examiner, at $6,000; 4 examiners, at $3,300; 3 examiners, at $3,000; 2 examiners, at $2,700; 1 examiner, at $2,400 36, 000 • 42,500 DISTRICT NO. 6 ATLANTA. (372 national member banks.) Elmore F. Higgins, chief examiner 1 examiner, at $3,600; 3 examiners, at $3,000; 1 examiner, at $2,400 . 6, 500 15, 000 21,500 DISTRICT NO. 7—CHICAGO. (1,042 national member banks.) Sherrill Smith, chief examiner 12, 000 1 examiner, at $5,000; 1 examiner, at $4,200; 1 examiner, at $3,900; 1 examiner, at $3,600; 3 examiners, at $3,300; 5 examiners, at $3,000; 2 examiners, at $2,700; 3 examiners, at $2,400 54, 200 • 66, 200 ANNUAL REPORT OF THE FEDERAL RESERVE BOARD. DISTRICT NO. 8 199 ST. LOUIS. (466 national member banks.) Joseph M. Logan, chief examiner $7, 500 2 examiners, at $4,200; 1 examiner, at $3,600; 1 examiner, at $3,300; 1 examiner at $3,000; 3 examiners, at $2,400 25, 500 DISTRICT NO. 9 $33, 000 MINNEAPOLIS. (764 national member banks.) Peter M. Kerst, chief examiner 8, 000 2 examiners, at $3,900; 1 examiner, at $3,600; 1 examiner, at $3,300; 2 examiners, at $3,000; 3 examiners, at $2,400 27, 900 DISTRICT NO. 10 35,900 KANSAS CITY. (948 national member banks.) Jay D. Rising, chief examiner 6, 500 2 examiners, at $3,900; 1 examiner, at $3,600; 2 examiners, at $3,300; 1 examiner, at $3,000; 3 examiners, at $2,700; 5 examiners, at $2,400 -, 41,100 47,600 DISTRICT NO. 11 DALLAS. (619 national member banks.) Richard H. Collier, acting chief examiner 4, 500 1 examiner, at $3,900; 2 examiners, at $3,300; 2 examiners, at $3,000; 1 examiner, at $2,700; 1 examiner, at $2,400 21, 600 DISTRICT NO. 12 26,100 SAN FRANCISCO. (534 national member banks.) Claud Gatch, chief examiner 8,500 1 examiner, at $6,000; 2 examiners, at $4,500; 1 examiner, at $3, 900; 1 examiner, at $3,300; 4 examiners, at $2,700; 3 examiners, at $2,400 40.200 48, 700 Total 478, 200 RECAPITULATION. Examining staff: Chief examiners— At $15,000 per annum At $12,000 per annum At $8,500 per annum At $8,000 per annum At $7,500 per annum At $6 500 per annum At $4,500 per annum 1 1 1 4 1 3 3 1 Total chief examiners Salaries, chief examiners 12 99,000 1 Acting. 200 ANNUAL REPORT OF THE FEDERAL RESERVE BOAJEtD. Other examiners— At $6,000 per annum At $5,500 per annum At $5,000 per annum At $4,500 per annum At $4,200 per annum At $3,900 per annum At $3,500 per annum At $3,300 per annum At $3,000 per annum At $2,700 per annum At $2,400 per annum Total other examiners Salaries, other examiners Total examining staff Total salaries 1 Includes 1 supervising examiner. 2 1 1 3 *6 11 11 17 22 18 27 119 $379, 200 131 478, 200 Exhibit O.—DIRECTORY OF THE FEDERAL RESERVE BOARD AND FEDERAL RESERVE BANKS. FEDERAL RESERVE BOARD. W. P. G. HARDING, Governor. PAUL M. WARBURG, Vice Governor. EX OFFICIO MEMBERS. WILLIAM G. MCADOO, Secretary of the Treasury, Chairman. FREDERIC A. DELANO. ADOLPH G. MILLER. CHARLES S. HAMLIN. JOHN SKELTON WILLIAMS, Comptroller of the Currency. H. PARKER WILLIS, Secretary. SHERMAN ALLEN, Assistant Secretary and Fiscal Agent. M. C. ELLIOTT, Counsel. OFFICERS AND DIRECTORS OF FEDERAL RESERVE BANKS. DISTRICT NO. l . - F E D E R A L R E S E R V E BANK OF BOSTON. [Frederic H . Curtiss, chairman and Federal Reserve Agent. Allen Hollis, deputy chairman. Chas. A. Morss, governor.] D irector. Class A: T P Beal . Thomas W. Farnam A M Heard Class B: Chas A Morss E R Morse Chas. G. Washburn Class C: Frederic H Curtiss Allen Hollis . . Residence. . ... Term expires. Boston, Mass New Haven, Conn Manchester N. H Dec. 31,1920 Dec. 31 1919 Dec. 31,1918 Boston, Mass. Proctor Vt Worcester, Mass Dec. 31 1920 Dec. 31,1919 Dec. 31 1918 Boston Mass Coneord, N . H Dec. 31,1920 Dec. 31,1918 DISTRICT NO. 2 . - F E D E R A L R E S E R V E BANK OF N E W YORK. [Pierre Jay, chairman and Federal Reserve Agent. George F . Peabody, deputy chairman and deputy reserve agent. Benjamin Strong, jr., governor.] Director. Class A: William Woodward R. H. Treman F. D. Locke Class B: H. R. Towne W. B. Thompson L. R. Palmer Class C: Pierre Jay George F . Peabody W. L. Saunders Residence. Term expires. New York, N . Y Ithaca, N . Y Buffalo, N. Y Dec. 31,1919 Dec. 31,1920 Dec. 31,1918 New York, N. Y Yonkers, N . Y Croton-on-Hudson, N. Y Dec. 31,1919 Dec. 31,1920 Dec. 31,1918 New York, N . Y Lake George, N . Y New York, N . Y Dec. 31,1919 Dec. 31,1918 Dec. 31,1920 201 202 ANNUAL REPORT OF THE FEDERAL RESERVE BOARD. DISTRICT NO. 3.-FEDERAL RESERVE BANK OF PHILADELPHIA. [Richard L. Austin, chairman and Federal Reserve Agent. H. B. Thompson, deputy chairman. Charles J. Rhoads, governor.] Director. Class A: Joseph Wayne, jr W. H. Peck M. J. Murphy Class B: A. B. Johnson E. S. Stuart G. W. F. Gaunt Class C: Richard L. Austin H.B.Thompson Chas. C. Harrison Residence. Philadelphia, Pa Scranton, Pa Clarks Green, Pa., Philadelphia, Pa do MullicaHill, N. J Philadelphia, Pa Wilmington, Philadelphia, Del.. Pa Term expires. Dec. 31,1920 Dec. 31,1918 Dec. 31,1919 Do. Dec. 31,1920 Dec. 31,1918 Dec. 31,1920 Dec. 31,1919 Dec. 31,1918 DISTRICT NO. 4.-FEDERAL RESERVE BANK OF CLEVELAND. [D. C. Wills, chairman and Federal Reserve Agent. Lyman H. Treadway, deputy chairman. E. R. Fancher, governor.] Director. Class A: Robert Wardrop W. S. Rowe S. B. Rankin Class B: T. A. Combs R.P.Wright John Stambaugh Class C: D C Wills Lyman H. Treadway H. P. Wolfe Residenco. Term expires. Pittsburgh, Pa Cincinnati, Ohio South Charleston, Ohio Lexington, Ky Erie, Pa Youngstown, Ohio Bellevue, Pa . . . . Cleveland, Ohio Columbus Ohio.. Dec. 31,1920 Dec. 31,1919 Dec. 31,1918 Dec. Dec. Dec. Dec. Dec. Dec. 31,1920 31,1919 31,1918 31,1920 31,1919 31,1918 DISTRICT NO. 4.-CINCINNATI BRANCH OF FEDERAL RESERVE BANK OF CLEVELAND. [L. W. Manning, manager.] Director. Residence. Cincinnati, Ohio. do do do do W. S. Rowe L. W. Manning.. W. C Procter.... Judson Harmon.. Chas. A. Hinsch. Term expires. Dec. 31,1918 Do. Do. Do. Do. DISTRICT NO. 4. -PITTSBURGH BRANCH OF FEDERAL RESERVE BANK OF CLEVELAND. [George De Camp, manager.] Director. R.B.Mellon..... Chas. W. Brown. James D. Callery. T. H. Given George De Camp.. Residence. Pittsburgh, Pa.. .do. .do. .do., .do.. Term expires. Dec. 31,1918 Do. Do. Do. Do. ANNUAL REPORT OF THE FEDERAL RESERVE BOARD.. 203 DISTRICT NO. 5.—FEDERAL RESERVE BANK OF RICHMOND. [Caldwell Hardy, chairman and Federal Reserve Agent. James A. Moncure, deputy chairman. George J. Seay, governor.] Director. Residence. Class A: H. B. Wilcox J. F. Bruton Edwin Mann Class B: Edmund Strudwick D.R.Coker D. F. Oyster Class C: James A. Moncure Caldwell Hardy Baltimore, Md Wilson, N. C Bluefield, W. Va Richmond, Va Hartsville, S. C Washington, D. C Richmond, Va Norfolk, Va Term expires. Dec. 31, 1918 Dec. 31, 1919 Dec. 31, 1920 Dec. 31, 1918 Dec. 31, 1920 Dec. 31, 1919 Do. Dec. 31, 1920 DISTRICT NO. 6-FEDERAL RESERVE BANK OF ATLANTA. [M. B. Wellborn, chairman and Federal Reserve Agent. Edward T. Brown, deputy chairman. Joseph A. McCord, governor.] Director. Residence. Class A: L. P. Hillver F. W. Foote P. R. Kittles Class B: Edgar B. Stern J. A. McCrary W. H. Hartford Class C: M. B. Wellborn Edward T. Brown W. H.Kettig Macon, Ga Hattiesburg, Miss Sylvania, Ga New Orleans, La Decatur, Ga Nashville, Term Anniston, Ala Atlanta, Ga Birmingham, Ala Term expires. Dec. 31, 1918 Dec. 31, 1919 Dec. 31, 1920 Do. Dec. 31, 1918 Dec. 31, 1919 Dec. 31, 1920 Dec. 31, 1918 Dec. 31, 1919 DISTRICT NO. 6—NEW ORLEANS BRANCH OF FEDERAL RESERVE BANK OF ATLANTA. [James E. Zunts, chairman. Marcus Walker, manager. W. D. Wellborn, Representative Federal Reserve Agent.] Director. Frank Roberts J. E. Bouden, Jr J . J. G annon H .B. Lightcap Edgar B. Stern A P Bush Jas. E. Zunts Residence. . * Lake Charles, La New Orleans, La . . do Jackson, Miss New Orleans, La Mobile, Ala New Orleans, La Term expires. Dec. 31, 1918 Do. Do. Do. Do. Do. Do. DISTRICT NO. 7.—FEDERAL RESERVE BANK OF CHICAGO. [William A. Heath, chairman and Federal Reserve Agent. James Simpson, deputy chairman. James B. McDougal, governor.] Director. Class A: Geo. M. Reynolds J. B. Forgan E. L. Johnson. Class B: John W. Blodgett M. B. Hutchison A. H. Vogel Class C: William A. Heath James Simpson E. T. Meredith 34365°-—18 Residence. Chicago, 111 do Waterloo, Iowa Grand Rapids, Mich Ottumwa, Iowa Milwaukee, Wis Evanston, 111 Chicago, 111 Des Moines, Iowa Term expires. Dec. 31, 1918 Dec. 31, 1919 Dec. 31, 1920 Dec. 31, 1919 Dec. 31, 1920 Dec. 31, 1918 Do. Dec. 31, 1920 Dec. 31, 1919 204 ANNUAL REPORT OF THE FEDERAL RESERVE BOARD. DISTRICT NO. 7—DETROIT BRANCH OF FEDERAL RESERVE BANK OF CHICAGO. [Robert B. Locke, manager.] Director. Robert B. Locke John Ballantyne - Chas. H. Hodges.. . Emory W. Clark Julius H. Haass . Residence. Detroit, Mich... . .do.... do do .do. . .. . Term expires. Dec. 31, 1918 Do Do. Do. Do. DISTRICT NO. 8.—FEDERAL RESERVE BANK OF ST. LOUIS. [William McC. Martin, chairman and Federal Reserve Agent. Holla Wells, governor.] Residence. Director. Class A: Walker Hill F.O. Watts . . Sam A. Ziegler Class B: David C. Biggs W. B. Plunkett. Leroy Percy Class C: W. McC. Martin John W. Boehne C. P. J. Mooney St Louis, Mo .do . ... Albion, 111 St. Louis, Mo Little Rock,Miss Ark . Greenville, . Term expires. Dec. Dec. Dec. Dec. Dec. Dec. Dec. Dec. Dec. St. Louis, Mo Evansville, Ind Memphis, Tenn 31,1920 31,1918 31,1919 31,1918 31,1919 31,1920 31,1918 31,1920 31,1919 DISTRICT NO. 8.—LOUISVILLE BRANCH OF FEDERAL RESERVE BANK OF ST. LOUIS. [W. P. Kincheloe, manager.] Director. Residence. Louisville Kv George W. Norton W P. Kincheloe F. M. Sackett W C. Montgomery Chas E Hoge . . . Term expires. Dec 31 1918 Do. Do. Do. Do. do .do Elizabeth town, Kv Frankfort Kv DISTRICT NO. 9.—FEDERAL RESERVE BANK OF MINNEAPOLIS. [John H. Rich, chairman and Federal Reserve Agent. Wm. II. Lightner, deputy chairman. Theodore Wold, governor.] Director. Class A: E.W. Decker L. B. Hanna J. C. Bassett Class B: F R Bigelow F. P.IIixon N. B. Holter Class C: John II. Rich Wm II I/ightner John W. Black Residence. Minneapolis, Minn Fargo, N. Dak Aberdeen, S. Dak St. Paul, Minn . La Crosse, Wis Helena, Mont Red Wing, Minn St. Paul, Minn Houghton, Mich . . Term expires. Dec. 31,1919 Dec. 31,1920 Dec. 31,1918 Dec. 31,1919 Dec. 31,1918 Dec. 31,1920 Do. Dec. 31,1918 Dec. 31,1919 205 ANNUAL REPORT OF THE FEDERAL RESERVE BOARD. DISTRICT NO. 10.—FEDERAL RESERVE BANK OF KANSAS CITY. [Chas. M. Sawyer, chairman and Federal Reserve Agent. F. W. Fleming, deputy chairman. J. Z. Miller, jr., governor.] Director. Class A: J.C.Mitchell W. J. Bailey C. E.Burnham Class B: M. L. McClure T.C. Byrne Harry W. Gibson Class C: Asa E. Ramsay F. W. Fleming R. H. Malone Residence. Denver, Colo.. Atchison, Kans.. Norfolk, Nebr Kansas City, Mo. Omaha, Nebr Muskogee, Okla.. Kansas City, Mo. .do. Denver, Colo Term expires. Dec. 31,1918 Dec. 31,1919 Dec. 31,1920 Dec. 31,1919 Dec. 31,1918 Dec. 31,1920 Do. Dec. 31,1919 Dec. 31,1918 DISTRICT NO. 10.—DENVER BRANCH OF FEDERAL RESERVE BANK OF KANSAS CITY. [C. A. Burkhardt, manager.] Residence. Director. Denver. Colo do do ....do Pueblo, Colo. C.C. Parks A C Foster C A Burkhardt John Evans Alva Adams Term expires. Dec. 31,1918 Do. Do. Do. Do. DISTRICT NO. 10.—OMAHA BRANCH OF FEDERAL RESERVE BANK OF KANSAS CITY. [O. T. Eastman, manager.] Director. Residence. Omaha, Nebr Luther Drake J C McNish O T Eastman P L Hall R. O.Marnell... .do do Lincoln Nebr Nebraska City, Nebr Term expires. Dec. 31,1918 Do. Do. Do Do. DISTRICT NO 11.—FEDERAL RESERVE BANK OF DALLAS. [W. F. Ramsey, chairman and Federal Reserve Agent. W. B. Newsome, deputy chairman. R. L. Van Zandt, governor.] Director. Class A: J. T. Scott E. K. Smith B. A. MeKinney Class B: Marion Sansom Frank Kell J. J. Culbertson Class C: W. F. Ramsey W. B. Newsome H. O. Wooten Residence. Houston, Tex Shreveport, La Durant, Okla Fort Worth, Tex Wichita Falls, Tex Paris, Tex . Dallas, Tex ...do Abilene, Tex Term expires. Dec. 31,1918 Dec. 31,1920 Dec. 31,1919 Do. Dec. 31,1918 Dec. 31,1920 Do. Dec. 31,1918 Dec. 31,1919 206 ANNUAL REPORT OF THE FEDERAL RESERVE BOARD. DISTRICT NO. 12.—FEDERAL RESERVE BANK OF SAN FRANCISCO. [John Perrin, chairman and Federal Reserve Agent. Walton N. Moore, deputy chairman. James K. Lynch, governor.] Director. Residence. Class A: C. K. Mclntosh J. E. Fishburn Alden Anderson Class B: A. B. C. Dohrmann.. J. A. McGregor E.H. Cox Class C: John Perrin Edward G.Elliott.. Walton N.Moore... San Francisco, Cal. Los Angeles, Cal... Sacramento, Cal... San Francisco, Cal. .do. Madera, Cal Pasadena, Cal Berkeley, Cal :. San Francisco, Cal. Term expires. Dec. 31,1919 Dec. 31,1920 Dec. 31,1918 Dec. 31,1920 Dec. 31,1918 Dec. 31,1919 Dec. 31,1920 Dec. 31,1919 Dec. 31,1918 DISTRICT NO. 12.—PORTLAND BRANCH OF FEDERAL RESERVE BANK OF SAN FRANCISCO. [W. N. Ambrose, acting manager.] Directors. A L Mills J. C. Ainsworth W N Ambrose Nathan Strauss Thomas C. Burke Residence. . . . Portland, Oreg do .do . . . do do Term expires. Dec. 31,1918 Do. Do. Do. Do. DISTRICT NO. 12.—SEATTLE BRANCH OF FEDERAL RESERVE BANK OF SAN FRANCISCO. [C. J. Shepherd, manager.] Directors. Residence. Seattle, Wash do. do . . do M F Backus N.H. Latimer . .. C J. Shepherd Chas II. Clarke Chas E Peabodv do Term expires. Dec. 31,1918 Do. Do. Do. Do. DISTRICT NO. 12.—SPOKANE BRANCH OF FEDERAL RESERVE BANK OF SAN FRANCISCO. [Chas. A. McLean, manager.] Directors. E.T. Coman D. W. Twohy Chas. A. McLean. Peter McGregor.. G.I. Toevs Residence. Spokane, Wash. do do do do Term expires. Dec. 31,1918 Do. Do. Do. Do. ANNUAL REPORT OF THE FEDERAL RESERVE BOARD. 207 FEDERAL ADVISORY COUNCIL. District No. 1.—Daniel G. Wing, president First National Bank, Boston, Mass. District No. 2.—J. P. Morgan, of J. P. Morgan & Co., New York City. District No. 3.—L. L. Rue, president Philadelphia National Bank, Philadelphia, Pa. District No. 4.—W. S. Rowe, president First National Bank, Cincinnati, Ohio; director Federal Reserve Bank of Cleveland. District No. 5,—J. W. Norwood, president Norwood National Bank, Greenville, S. C. District No. 6.—Charles A. Lyerly, president First National Bank, Chattanooga, Tenn. District No. 7.—James B. Forgan, president First National Bank, Chicago, 111.; director Federal Reserve Bank of Chicago. District No. 8.—F. O. Watts, president Third National Bank, St. Louis, Mo.; director Federal Reserve Bank of St. Louis. District No. 9.—J. R. Mitchell, president Capital National Bank, St. Paul, Minn. District No. 10.—E. F. Swinney, president First National Bank, Kansas City, Mo. District No. 11.—T. J. Record, president City National Bank, Paris, Tex. District No. 12.—Herbert Fleishhacker, president Anglo and London-Paris National Bank, San Francisco. Cal. Exhibit P.—DESCRIPTION OF FEDERAL RESERVE DISTRICTS. Below are descriptions of the 12 Federal Reserve districts, accompanied by estimates of the population of each district recently furnished by the Bureau of the Census. No detailed description of Federal Reserve district^ has been issued since the Organization Committee completed its work about four years ago. A map showing outline of the districts is also appended. DISTRICT NO. 1.—BOSTON (6,963,987). Connecticut (except Fair-field County) (975,434). Maine (777,340). Massachusetts (3,775,973). New Hampshire (444,429). Rhode Island (625.805). Vermont (364,946). DISTRICT NO. 2.—NEW YORK (13,111,816). Connecticut (county of Fairfield) (289,939). New Jersey (counties of Monmouth, Middlesex, Hunterdon, Somerset, Union, Essex, Passaic, Hudson, Bergen, Morris, Sussex, and Warren) (2,361,695). New York (10,460,182). DISTRICT NO. 3—PHILADELPHIA (6,632,611). Delaware (215,160). New Jersey (except counties enumerated under District No. 2) (652,499). Pennsylvania (eastern part) (5,764,952). Counties: Adams. Bedford. Berks. Blair. Bradford. Bucks. Cambria. Cameron. Carbon. Center. Chester. ClearfielcL Clinton. Columbia. Cumberland. Dauphin. Delaware. Elk. Franklin. Pulton. 208 Huntingdon. Juniata. Lackawanna. Lancaster. Lebanon. Lehigh. Luzerne. Lyeoming. McKean. Mifflin. Monroe. Montgomery. Montour. Northampton. Northumberland. Perry. Philadelphia. Pike. Potter. Schuylkill. Snyder. Sullivan. Susquehanna Tioga. Union. Wayne. Wyoming. York. ANNUAL REPORT OF T H E FEDERAL RESERVE BOARD. 209 DISTRICT NO. 4—CLEVELAND (9,314,762). Kentucky (eastern part) (1,039,880). Counties: Bath. Estill. Bell. Fayette. Boone. Fleming. Bourbon. Floyd. Garrard. Boyd. Bracken. Grant. Greenup. Breathiti fc. Campbell. Harlan. Carter. Harrison. Clark. Jackson. Clay. Jessamine. Elliott. Johnson. Ohio (5,212,085). Kenton. Knott. Knox. Laurel. Lawrence. Lee. Leslie. Letcher. Lewis. Lincoln. McCreary. Madison. Magomn. Martin. Mason. Menifee. Montgomery. Morgan. Nicholas. Owsley. Pendleton. Perry. Pike. Powell. Pulaski. Robertson. Rockcastle. Rowan. Scott. Whitley. Wolfe. * Woodford. Pennsylvania (western part) (2,895,090). Counties: Allegheny. Armstrong. Beaver. Butler. Clarion. Crawford. Erie. Fayette. Forest. Greene. Indiana. Jefferson. Lawrence. Mercer. Somerset. Venango. Warren. Washington. Westmoreland West Virginia (northern ]part) (167,707). Counties: Brooke. Hancock. Marshall. Ohio. Wetzel. Tyler. DISTRICT NO. 5—RICHMOND (9,278,461). District of Columbia, (369,282). Maryland (1,373,673). North Carolina (2,434,381). South Carolina (1,643,205). Virginia (2,213,025). West Virginia (all counties except Brooke, Hancock, Marshall, Ohio, Tyler? and Wetzel) (1,244,895). DISTRICT NO. 6—ATLANTA (10,055,640). Alabama (2,363,939). Florida (916,185). Georgia (2,895,841). Louisiana (southern part) (1,260,490) . Parishes: Acadia. Allen. Ascension, Assumption. Avoyelles. Calcasieu. Cameron. East Baton Rouge. East Peliciana. Evangeline. Iberia. Iberville. Jefferson. Jefferson Davis. Lafayette. Lafourche. Livingston. Orleans. Plaquemines. Pointe Coupee. Rapides. St. Bernard. St. Charles. St. Helena. St. James. St. John the Baptist. St. Landry. St. Martin. St. Mary. St. Tammany. Tangipahoa. Terrebonne. Vermilion. Vernon. Washington. West Baton Rouge West Feliciana. Mississippi (southern part) (996,935). Counties: Greene. Adams. Hancock. Amite. Harrison. Claiborne. Clarke. Hinds. Copiah. Issaquena. Covington. Jackson. Forrest. Jasper. Franklin. Jefferson. Jefferson Davis. George. Jones. Kemper. Lamar. Lauderdale. Lawrence. Leake. Lincoln. Madison. Marion. Neshoba. Newton. Pearl River. Perry. Pike. Rankin. Scott. Sharkey. Simpson. Smith. Walthall. Warren. Wayne. Wilkinson. Yazoo. 210 ANNUAL REPORT OF T H E FEDERAL RESERVE BOARD. Tennessee (eastern part) (1,622,250). Counties: Anderson. Bedford. Bledsoe. Blount. Bradley. Campbell. Cannon. Carter. Cheatham. Claiborne. Clay. Cocke. Coffee. Cumberland. Davidson. Dekalb. Dickson. Fentress. Franklin. Giles. Grainger. Greene. Grundy. Hamblen. Hamilton. Hancock. Hawkins. Hickman. Houston. Humphreys. Jackson. James. Jefferson. Johnson. Knox. Laurence. Lewis. Lincoln. Loudon. McMinn. Macon. Marion. Marshall. Maury. Meigs. Monroe. Montgomery. Moore. Morgan. Overton. Perry. Pickett. Polk. Putnam. Rhea. Roane. Robertson. Rutherford. Scott. Sequatchie. • Sevier. Smith. Stewart. Sullivan. Sumner. Trousdale. Unicoi. Union. Van Buren. Warren. Washington Wayne. White. Williamson. Wilson. DISTRICT NO. 7—CHICAGO (14,154,175). Illinois (northern part) (;4,977,386). Counties: Boone. Bureau. Carroll. Cass. Champaign. Christian. Clark. Coles. Cook. Cumberland. Dekalb. Dewitt. Douglas. Dupage. Edgar. Ford. Fulton. Grundy. Hancock. Henderson. Henry. Iroquois. Jo Daviess. Kane. Kankakee. Kendall. Knox. Lake. La Salla. Lee. Livingston. Logan. McDonough. McHenry. McLean. Macon. Marshall. Mason. Menard. Mercer. Moultrie. Ogle. Peoria. Piatt. Putnam. Rock Island. Sangamon. Schuyler. Shelby. Stark. Stephenson. Tazewell. Vermilion. Warren. Whiteside. Will. Winnebago. Woodford. Indiana (northern part) (2,227,340). Counties: Adams. Allen. Bartholomew. Benton. Blackford.. Boone. Brown. Carroll. Cass. Clay. Clinton. Dearborn. Decatur. Dekalb. Delaware. Elkhart. Fayette. Fountain. Franklin. Fulton. Grant. Hamilton. Hancock. Hendricks. Henry. Howard. Huntington. Jasper. Jay. Jennings. Johnson. Kosciusko. Lagrange. Lake. Laporte. Madison. Marion. Marshall. Miami. Monroe. Montgomery. Morgan. Newton. Noble. Ohio. Owen. Parke. Porter. Pulaski. Putnam. Randolph. Ripley. Rush. St. Joseph. Shelby. Starke. Steuben. Tippecanoe. Tipton. Union. Vermilion. Vigo. Wabash. Warren. Wayne. Wells. White. Whitley. Iowa (2,224,771). Michigan (southern part) (2,721,733). Counties: Alcona. Allegan. Alpena. Antrim. Arenac. BarryBay. Benzie. Berrien. Branch. Calhoun. Cass. Charlevoix. Cheboygan. Claire. Clinton. Crawford. Eaton. Emmet. Genesoe. Gladwin. Grand Traverse. Gratiot. Hillsdale. Huron. Ingham. Ionia. Iosco. Isabella. Jackson. Kalamazoo. Kalkaska. Kent. Lake. Lapeer. Leelanau. Lenawee. Livingston. Macomb. Manistee. Mason. Mecosta. Midland. Missaukee. Monroe. Montcalm. Montmorency. Muskegon. Newaygo. Oakland. Oceana. Ogenaw. Osceola. Oscoda. Otsego. Ottawa. Presque Isle Roscommon. Saginaw. St. Clair. St. Joseph. Sanilac. Shiawasee. Tuscola. Van Buren. Washtenaw. Wayne. Wexford. ANNUAL REPORT OF THE FEDERAL RESERVE BOARD. 211 Wisconsin (southern part) (2,002,945). Counties : Adams. Brown. Calumet. Clark. Columbia. Crawford. Dane. Dodge. Door. Fond du Lac. Grant. Green. Green Lake. Iowa. Jackson. Jefferson. Juneau. Kenosha. Kewaunee. Lafayette. Langlade. Manitowoc. Marathon. Marinette. Marquette. Milwaukee. Monroe. Oconto. Outagamie. Ozaukee. Portage, Itacine. Richland. Rock. Sauk. Shawano. Sheboygan. Vernon. Walworth. Washington Waukesha. Waupaca. Waushara. Winnebago. Wood. DISTRICT NO. 8—ST. LOUIS (9,291,698). Arkansas (1,766,343). Illinois (southern part) (1,257,609). Adams. Alexander. Bond. Brown. Calhoun. Clay. Clinton. Crawford. Edwards. Effingham. Fayette. Franklin. Gallatin. Greene. Hamilton. Hardin. Jackson. Jasper. Counties: Montgomery. Morgan. Perry. Pike. Pope. Pulaski. Randolph. Richland. St. Clair. Jefferson. Jersey. Johnson. Lawrence. Macoupin. Madison. Marion. Massac. Monroe. Saline. Scott. Union. Wabash. Washington. Wayne. White. Williamson. Indiana (southern part) (608,152). Counties: Clark. Crawford. Daviess. Dubois. Floyd. Gibson. Greene. Harrison. Jackson. Jefferson. Knox. Lawrence. Martin. Orange. Perry. Kentucky (western part) (1,354,213). Adair. Allen. Anderson. Ballard. Barren. Boyle. Breckenridge. Bullitt. Butler. Caldwell. Calloway. Carlisle. Carroll. Casey. Christian. Clinton. Crittenden. Cumberland. Daviess. Edmonson. Franklin. Fulton. # Gallatin. Graves. Grayson. Greene. Pike. Posey. Scott. Sullivan. Spencer. Counties: Hancock. Hardin. Hart. Henderson. Henry. Hickman. Hopkins. Jefferson. Lame. Livingston. Logan. Lyon. McCracken. Mississippi (northern part) (979,635). Alcorn. Attala. Benton. Bolivar. Calhoun. Carroll. Chickasaw. Choctaw. Clay. Coahoma. De Soto. Grenada. Holmes. Itawamba. Lafayette. Lee. Missouri (eastern part) in district No. 10. Switzerland. Vanderburg. Warrick. Washington. Leflore. Lowndes. Marshall. Monroe. Montgomery. Noxubee. Oktibbeha. Panola. McLean. Marion. Marshall. Meade. Mercer. Metcalfe. Monroe. Muhlenberg. Nelson. Ohio. Oldham. Owen. Russell. Shelby. Simpson. Spencer. Taylor. Todd. Trigg. Trimble. Union. Warren. Washington. Wayne. Webster. Counties: Pontotoc. Prentiss. Quitman. Sunflower. Tallahatchie. Tato. Tippah. Tishomingo. Tunica. Union. Washington. Webster. Winston. Yalobusha. (2,643,367). Counties: All except those included Tennessee (western part) (682,379). Counties: Dyer. Benton. Carroll. Fayette. Chester. Gibson. Crockett. Hardeman. Hardin. Digitized forDecatur. FRASER Haywood. Henderson. Henry. Lake. Lauderdale McNairy. Madison. Obion. Shelby. Tipton. Weakley, 212 ANNUAL REPORT OF T H E FEDERAL RESERVE BOARD. DISTRICT NO. 9—MINNEAPOLIS (5,164,426), Michigan (northern part) (372.533). Counties: Alger. Baraga. Chippewa. Delta. Dickinson. Gogebic. Houghton. Iron. Keweenaw. Luce. Mackinac. Marquette. Menominee. Ontonagon. Schoolcraft. Minnesota (2,312,445). Montana (472,935). North Dakota (765,319). South Dakota (716,972). Wisconsin (northern part) (524,222). Counties: Ashland. Barron. Bayfield. Buffalo. Burnett. Chippewa. Douglas. Dunn. Eau Claire. Florence. Forest. Iron. La Crosse. Lincoln. Oneida. Pepin. Pierce. Polk. Price*. Rusk. St. Croix. Sawyer. Taylor. Trempealeau. Vilas. Washburn. DISTRICT NO. 10—KANSAS CITY (7,404,443). Colorado (988.320). Kansas (1,851,870). Missouri (western part) (786,228). Counties: Andrew. Atchisorr. Barton. Bates. Buchanan. Cass. Clay. Clinton. Dekalb. Gentry. Holt. Jackson. Jasper. McDonald. Newton. Nodaway. Platte. Vernon Worth. San Miguel. Santa Fe. Taos. Union. Nebraska (1,284,126). Colfax. McKinley. Oklahoma Adair. Alfalfa. Beaver. Blaine, Beckhain. Caddo. Canadian. Carter. Comanche. Cotton. Custer. Cherokee. Cimarron. Cleveland. Sandoval. Mora. San J uan. Rio Arriha (all •except southeastern part) Craig. Creek. Delaware. Dewey. Ellis. Garfleld. Garvin. Grant. Grady. Greer. Harper. Harmon. Haskell. Hughes. Jackson. Jefferson. Kay. Kingfisher. Kiowa. Latimer. Le Flore. Lincoln. Logan. Love. McClain. Mclntosh. Major. Mayes. (2,112,489). Counties: Muskogee. Murray. Noble. Nowata. Okfuskee. Oklahoma. Okmulgee. Osage. Ottawa. Pawnee. Payne. Pottawatomie. Pittsburg. Pontotoc. Rogers. Roger Mills. Seminole. Sequoyah. Stephens. Texas. ,Tulsa. Tillman. Washita. Wagoner. Washington Woods. Woodward. Wyoming (184.970) DISTRICT NO. 11—DALLAS (5,637,290). Arizona (southeastern part) (120,828). Counties: Cochise. Pima. Graham. Santa Cruz. Greenlee. Louisiana (northern part) (596,464). Parishes : Bienville. Clalborno. Bossier. Concordia. Beauregard. De Soto. Caddo. East Carroll. Caldwell. Franklin. Catahoula. Grant. Jackson. La Salle. Lincoln. Madison. Morehouse. Natchitoches. Ouachita. Red River. Richland. Sabine. Tensas. Union. Webster. West Carroll. Winn. ANNUAL REPORT OF THE FEDERAL RESERVE BOARD. New Mexico (southern part) (227,209). Bcrnalillo. Chaves. Curry. Dona Ana. Eddy. Grant. Guadalupe. Lincoln. Luna. Otero. Counties: Quay Roosevelt. Sierra. Socorro. Torre nee. Valencia. Oklahoma (southeastern part) (177,366). Counties: Atoka. Bryan. Choctaw. Coal. Johnston. McCurtain. Marshall. Pushmataha Texas (4,515,423). DISTRICT NO. 12—SAN FRANCISCO (6,631,164). Arizona (northwestern part) (142,960). Apache. Coconino. Gila. Maricopa. California (3,029,032). Idaho (445,176). Nevada (110,738). Oregon (861,992). Utah (443,866). Washington (1,597,400), Mohave. Navajo. Counties: Pinal. Yavapai. Yuma. 213 PART II. REPORTS OF FEDERAL RESERVE AGENTS TO FEDERAL RESERVE BOARD. 215 DISTRICT NO. 1—BOSTON. FREDERIC H. CURTISS, Chairman and Federal Reserve Agent. INTRODUCTION. The year 1917 has been momentous in the history of this country through its entrance on the side of the entente powers into the great European war against the central powers in the struggle of democracy against autocracy. The change of financial and commercial activities of the country, brought about by the declaration of war by Congress, has been felt in New England, owing to the character of its industries, probably as much as, if not more, than in any other portion of the United States. The Federal Eeserve Bank of Boston has played no small part in assisting the Government and the New England banks in financing the new requirements brought about by war conditions. War was declared on April 6, 1917, but previous to that time a large portion of the industries in the district were occupied in manufacturing arms, munitions, and other war requisites for the allied powers. The high cost of labor and of such raw materials as wool, cotton, leather, etc., has kept money in good demand throughout the entire year, so that the resources of the Federal Reserve Banks have been employed to a far greater extent than in previous years, both by discounts for member banks and through purchases in the open market of bankers acceptances. FINANCIAL RESULTS OF OPERATION. The activities referred to brought the earnings of the Federal Reserve Bank to a point largely in excess of those of any previous year and these earnings were such that on December 20, 1917, the board of directors, with the approval of the Federal Reserve Board, declared a dividend at the rate of 6 per cent, covering all accumulated dividends up to December 31, 1917. This dividend amounted to $597,828.54, and covered the period from January 1, 1915, to December 31, 1917. 217 218 ANNUAL EEPOKT OF THE FEDERAL RESERVE BOARD. After these dividends were paid and due depreciation of securities had been allowed, a balance of $150,200 still remained, 50 per cent of which was carried to a surplus account and the balance paid to the United States Government as a franchise tax, as provided by the Federal Beserve Act. Schedule 1 shows these earnings in detail as compared with the year 1916. The statement of condition of the bank on December 31, 1917, as compared with December 31, 1916, makes an interesting comparison, as will be seen from Schedule 2. The total resources at the end of the year 1917 were $253,000,000, as compared with $65,000,000 at the end of the year 1916. An increase will be noted in all items making up the balance sheet, the most notable being increases in bills discounted, in deposits of member banks, in Government deposits, and in gold holdings. GENERAL BUSINESS AND BANKING CONDITIONS IN THE DISTRICT. The year opened with peace overtures under discussion by the warring nations. The uncertainty as to the effect of an early ending of the war influenced business men to go slow in their future commitments, but the volume of business in the process of manufacture and orders on hand was so large as to cause great activity in practically all manufacturing lines; more especially those engaged in the making of war materials. Although the high prices prevailing on all raw materials and the increasing cost of labor have made it difficult to forecast the costs of production, the industries in this district for the most part have had a profitable year, and in war lines exceptionally large profits have accrued. Labor troubles, the international situation, embargoes, and other disturbances have created new problems. With the declaration of war, and even before, prices of foodstuffs began to soar and, as the cost of living increased., labor in all lines demanded higher wages. The difficulty in procuring coal and the price of that commodity has been an important factor in the cost of production. With the declaration of war, business more and more turned to Government orders, and banks were called upon to finance to a greater extent industries engaged in such work and subscriptions to bond issues and short-term obligations of the Government. Early in May, business began to show unusual signs of hesitation and the future trend of prices grew more difficult to prognosticate, especially with commodity prices rising and evidences of hoarding and economy appearing. With the successful flotation of the first Liberty loan, business identified with the war was greatly stimulated, but a retarding effect was evident in other lines, especially in luxuries and nonessentials. DISTRICT NO. 1—BOSTON. 219 This resulted in a spotty condition which, with an ever-increasing separation between war and domestic orders, resulted in the two lines diverging more and more as the year went on. Money rates during the first few months of the year remained low, but as the year advanced the tendency was toward higher rates, strengthening with each offering of certificates of indebtedness by the Secretary of the Treasury until June 15, the date of payment on the first Liberty loan, when rates approached a 6 per cent basis. From that date rates held firm until well into August, easing somewhat at that time, but increasing again in the early fall, when certificate offerings were renewed. As the season for crop moving approached and the financing of the second Liberty loan began to be felt rates materially strengthened, and although banks seldom, charged their customers over 6 per cent, their borrowings from the Federal Eeserve Bank became heavier and more frequent. DISCOUNT OPERATIONS. During the first year and a half of operations of this bank rediscounts from member banks were small, never reaching during that time $500,000. During July, 1916, these reached a high point of $5,000,000, from which they quickly receded, and it was not until late in that year that they again expanded, this time to a high point of $10,000,000. During January of the present year, rediscounts again declined to just below $1,000,000 and fluctuations for the balance of the year are outlined in Schedule 4 appended. Early in June, 1917, with the approach of payments on the first Liberty loan, rediscounts expanded to a high point of $25,500,000. From this point they receded to a little over $14,000,000, fluctuating with an upward tendency until October, when they dropped to a low point of $10,800,000. With the approach of payment dates for the second Liberty loan there was a heavy demand for discounts from members, and through them from nonmembers. These, for the most part, were secured by Liberty loan bonds. The highest point for one day was reached on December 4, when on the eve of an increase in discount rates,1 the bank discounted or loaned on 1,280 items for about 60 banks something over $36,000,000. This compares with total rediscounts of $2,386,923 from 29 banks for the first 13| months of operation. In other words, the bank rediscounted about 15 times as large an amount in one day as during the entire first 13| months of operations to December 31, 1915. This brought the total loans to $101,000,000. 1 Member banks had been advised that they would be given 48 hours' notice of any change in the discount rates then existing. 34365°—18 15 220 ANNUAL REPORT OF THE FEDERAL RESERVE BOARD. On December 4, in order to strengthen the bank's reserve, there were sold from the bank's own portfolio to other Federal Reserve Banks $5,000,000 of acceptances, and on December 5 a further lot of $10,000,000. This brought the bank's loans on December 5 down to $91,000,000. With the financing incidental to the second Liberty loan and with the withdrawal of Government deposits from depositary banks, the demand on the Federal Reserve Bank from its member banks for accommodation became so heavy that during December, besides selling to the other Federal Reserve Banks bankers' acceptances referred to elsewhere, on December 11 rediscounts amounting to $20,000,000 secured by Liberty loan bonds were made with other Federal Reserve Banks and on December 18 a further rediscount of $25,000,000. TRADE ACCEPTANCES. The use of the trade acceptance has not broadened during the year and has been confined, as in previous years, largely in connection with the cotton industries. Money conditions were such last year that note brokers could sell trade acceptances in the open market, but banks have been out of the market for outside paper, especially during the period of the movement of cotton and, therefore, these acceptances have been bought by the Federal Reserve Bank, largely from country banks in mill centers and with such member banks' indorsement, and in increasing amounts toward the end of the year, as will be seen by Schedule 7. Few of the larger banks in the district have yet encouraged the trade acceptance, still, being in favor of the single name note and the discount system so long in vogue in this section. The rate on the trade acceptance maintained by the bank has been about one-half per cent lower than the rate on bills discounted. ACCEPTANCES. The acceptance business has shown marked growth during the year, the increased cost of raw material necessary for the industries of the district having influenced this form of financing. The development of foreign bills has been most satisfactory, imported wool, cotton, hides, and jute forming the principal merchandise thus financed. This method of financing has done much to develop banking relations between the United States, South America, and the Far East. The line of development of the domestic acceptance in this district, however, has not been so satisfactory. The fact that rates were maintained for bankers' acceptances by the Federal Reserve Bank below the ruling money rates and the unusual demands for capital which existed, especially in the financing of cotton and DISTRICT NO. 1—BOSTON. 221 other raw material, induced banks to accept bills drawn rather for general financing purposes than for the transportation or carrying of merchandise. Some banks have at times accepted drafts simply to extend additional accommodation to customers who were already borrowing up to their legal limit, and acceptances have been made that were not in strict accordance with the tenets of the Federal Reserve Act and the regulations of the Federal Eeserve Board. It will be seen by reference to Schedule 6 that the investment of the Federal Eeserve Bank in acceptances has fluctuated widely during the year. In order to strengthen the bank's reserve these investments were allowed to run off early in the year so that in April, at the outbreak of the war, the bank held but $6,500,000. While the bank has maintained a policy of buying all eligible acceptances when offered and indorsed by its member banks, it has reduced such offerings by raising its purchase rate so as to send acceptances into the portfolios of other banks. As money rates increased, acceptances were offered more freely, and in October the bank had invested some $30,000,000 in these securities. The raising of the purchase rate has not always been effectual in reducing the volume of offerings of this character coming to the bank, for at times commercial banks were out of the market and other Federal Eeserve Banks were giving preference to the acceptances of members in their own district. While, during the development by the banks of this country of this new class of business, it may have been necessary and desirable for the reserve banks to maintain rates for bankers' acceptances much below the ruling local money rates in order to compete with foreign bankers, this has had the effect of limiting their market to the Federal Eeserve Bank and a few of the large city banks. Both from the buying and selling standpoint it would appear desirable to encourage a broader and freer market for bankers' acceptances. The Federal Eeserve Bank should not feel obliged to support the market for its member banks' acceptances or to restrict its purchases only to its member banks, and the purchase rate should follow more nearly those of similar high-grade short-time investments so as to attract banks throughout the country to cany bankers' acceptances in their portfolios as secondary reserve. Schedules 7 and 8 show the amount and character of these purchasings. Schedule 9 shows the acceptance liability of national banks in New England at date of comptroller's calls. UNITED STATES BONDS. Investments in United'States bonds and other Government securities by the Federal Eeserve Bank have not shown material increase during the year. 222 ANNUAL REPORT OF THE FEDERAL RESERVE BOARD. On April 1, the bank purchased through the Secretary of the Treasury 1,057,750 United States 2 per cent bonds, its proportion of the bonds offered by member banks under section 18 of the Federal Reserve Act. One-half of these bonds and similar bonds already held by the bank were converted into one-year Treasury notes. Schedule 2 shows the bank's investments in Government securities on December 31, 1916, and December 31, 1917. MUNICIPAL, WARRANTS. Municipal warrants have been purchased by the bank only when discounts, bankers' accptances, and other short-time eligible securities wrere lacking. The increased use of bankers' acceptances and trade acceptances, and the demand for rediscounts from member banks has been so large that with the exception of $125,000 city of New York 3 | notes, which matured on June 5, the Federal Reserve Bank has made no purchase of warrants. RESERVE POSITION. The reserve position of the Federal Reserve Bank has changed materially during the year. The gold holdings of the bank have increased, but on the other hand the percentage of reserve against deposits, with the greater activities of the bank, shows a decrease. The increase in the gold has been brought about through several causes: The changes in reserve requirements in the amendments to the Federal Reserve Act of June 21; the admission of State banks to membership; and the process of replacing with Federal Reserve notes gold and gold certificates'carried by State and national banks as till money, and, to some extent, the retention by the bank of gold in circulation. Under a ruling of the Federal Reserve Board, the Boston banks increased their reserve with the Federal Reserve Bank under the new requirements on June 27, the country banks being allowed to maintain their former reserve until July 15. The reserve position of the bank at weekly periods during the year will be found in Schedule 10, and the gold reserve on chart 10A. Schedule 19 showTs the reserve of national banks in New England at date of comptroller's calls. MOVEMENT OF MEMBERSHIP. Changes in the status of national banks in the district during the year, especially as to conversion into trust companies, have been less marked than in previous years, and only 13 member banks have sur- DISTRICT NO. 1 BOSTON. 223 rendered their charters during the year. On the other hand, many of the larger State institutions have joined the system, and the position of this bank has been materially strengthened thereby. There are now 403 member banks in this district as against 399 at the end of 1916. The number of shares in the Federal Eeserve Bank surrendered by the withdrawal of membership during the year amounted to 2,295, as compared to 12,533 subscribed by new members. The details of these changes wTill be seen in Schedules 11, 12, and 13. RELATIONS WITH MEMBER BANKS. Activities in connection with subscriptions to Liberty loan bonds and the financing of such subscriptions, as w^ell as other Government requirements, have brought member banks into closer touch with the Federal Eeserve Bank. More banks have availed themselves of rediscount privileges and to a greater extent. The feeling of the country banker concerning membership in the Federal Eeserve system has shown a marked change during the year, and all banks are apparently coming to realize the advantages offered by the reserve system and the strength given them by membership. More banks have used the check-collection system and to a greater extent, but the charge of nine-tenths of a cent prevents banks from making general use of that facility, especially the country banks, which continue to send their checks largely to their city correspondents. The time-collection system and the transfer-check system have been used to but a limited extent as noted elsewhere in the report. Permission to act as trustee, etc., under section I l k of the Federal Eeserve Act has been granted to the banks named in Schedule 16. The names of banks authorized during the year to accept up to an amount equal to 100 per cent of their capital and surplus will be found in Schedule 17. Schedule 14 shows the borrowings of national banks in New England at the time of the comptroller's calls. RELATIONS WITH STATE BANKS AND TRUST COMPANIES. During the past year the bank has also been brought into more intimate relations with the State banks of this district through governmental operations in connection with Liberty loan subscriptions and Government depositaries. In the handling of Liberty loan operations the officers of State and member banks took prominent parts. Both by redeposits of Government funds and rediscount assistance for carrying bonds, 224 ANNUAL REPORT OF THE FEDERAL RESERVE BOARD. State banks were given the same accommodation as member banks except that rediscounts made for State banks were made only through and with the indorsement of member banks. Under authority of the Federal Eeserve Act, the Federal Reserve Board ruled on May 15 that Federal Reserve Banks might rediscount for member banks notes of State banks issued for carrying Liberty loan bonds and while this permission was granted only for the period from June 15 to July 15, the time was extended throughout the year. As the war progressed, State banks began to be more often called upon to finance customers engaged on Government work and such banks began to appreciate the advantages offered by the Federal Reserve Bank to member banks through rediscounts. This, together with amendments to the Federal Reserve Act of June 21, 1917, wxhich were particularly favorable to State institutions, influenced a number of State banks to apply for membership in the Federal Reserve system. It was not, however, until after the appeal of the President of the United States, on October 13, that State banks began to any great extent to apply for membership, banks applying after that date stating that they were doing so largely for patriotic reasons. Relations between the officers of the Federal Reserve Bank and those of the State institutions have been most friendly and cordial, and during the year State institutions offered to the reserve bank their gold holdings in exchange for Federal Reserve notes in order to strengthen the gold reserve of the Federal Reserve system. The admission of these State banks to membership has given additional strength to the reserve system, as the applications of banks have been approved by the reserve bank's committee only when their condition after careful examination demonstrated that their admission would add strength to the system. The list of State banks admitted during the year and their deposits on admittance will be seen by Schedule 13. There are also some 10 or mere State banks whose applications for membership are pending. In connection with the examination of the applying State banks, the cooperation of the bank departments of the different States has been most helpful. The special committee of the American Bankers' Association has also been of value in influencing several of the State banks to apply for membership. Under the laws of several of the States of the district, savings accounts are required to be segregated and invested in savings banks' securities, and are subject to no reserve requirements. As a number of the State banks of the district have built up savings departments of considerable size and the reserve requirements of the Federal Reserve Act require that 3 per cent reserve be carried against savings de DISTRICT NO. l—BOSTON. 225 posits, this has deterred a number of State banks from applying for membership, as have also5 to some extent, the requirements of section 22 of that act. While the laws of all of the States in the district allow State banks to join the Federal Reserve system, still in several of the States the laws are such that State banks that have been admitted to the reserve system can not take advantage of the reserve requirements and are obliged to carry such reserves as their State laws specify, which has the effect of increasing the reserve which those banks are required to maintain. Schedule 15 contains figures regarding eligible nonmember banks. POLICY IX REGARD TO RATES OX REDISCOUNTS AXD PURCHASES OF ACCEPTANCES. Government necessities have been an important factor in deciding the discount policy of the Federal Reserve Bank from the time of the declaration of war. Early in the year, at the suggestion of the Federal Reserve Board, this bank, together with other Federal Reserve Banks, raised its open-market rates on bankers' acceptances above the outside rate, and as these securities constituted one of the principal investments of the reserve bank, acceptances coming upon the market were purchased by member banks for their portfolios. The volume of the investment of these securities held by the bank was thereby materially reduced and the reserve of the bank was considerably strengthened. On April 6, 1917, at the outbreak of the war, its reserve was 76 per cent. During the subscription period of the first Liberty loan, it became necessary to establish a rate to carry Liberty loan bonds, and the directors of the Federal Reserve Bank were for the first time confronted with the question what effect would be produced by Government needs on what might be called the strictly commercial requirements of the district. While, under normal conditions, a rate somewhat higher than the Government loan yielded would have been deemed proper, the directors finally decided that such a rate might interfere with subscriptions to the Government bond issue, and, therefore, decided to establish a 3 | per cent rate both on the 15-day and 90-day notes secured by Liberty loan bonds. Outside of the marking up of the rate on trade acceptances from 8 | per cent to 4- per cent on June 26,1917, no other changes were made in the discount rate until August, when the acceptance rate was advanced. At that time it was felt that all rates might properly be moved up, for after the payments on account of Liberty loan subscriptions made on August 15, the banks in the district began to feel the drain caused by these payments, and discounts at the reserve banks became more frequent. It was felt, however, that the raising of 226 ANNUAL REPORT OF THE FEDERAL RESERVE BOARD. the discount rate at that time might interfere with the sale by the Secretary of the Treasury of the United States of the certificates of indebtedness which were soon to be forthcoming in connection with the second Liberty loan, especially as the act of Congress prevented the Secretary of the Treasury from issuing such certificates at a rate higher than 3J per cent. From this period on, certain of the member banks began to run up their lines of discount, these banks having demands on them not only for subscriptions to Liberty loan bonds^ but also from customers working on Government contracts. I n order, however, to protect the reserve of the bank, the rates for bankers' acceptances were steadily increased until they wrere about one-half per cent above the rate established by the New York Federal Reserve Bank, thereby sending those created in this market largely to the New York bank. Although it was suggested to these member banks that they endeavor to liquidate their rediscounts, it wTas finally decided that nothing should be done to interfere with Government needs, and liquidation in nonessential industries should be encouraged. If liquidation in the nonessential industries were to take place, it was decided that such liquidation could be safely accomplished only through some indirect influence coming from the Government itself and that banks should be encouraged to expand in financing Government orders and in placing the different Government loans. After Congress met in September and had given the Secretary of the Treasury the discretion as to rates on Government borrowings, the directors of the reserve bank felt freer to establish rates based on prevailing local conditions. With the inauguration of the second Liberty loan the same question as to the policy of establishing a rate for carrying these 4 per cent bonds came up for consideration. I t was deemed inadvisable to make any change in the previous rate of 3 | per cent, either for 15-day loans to banks secured by Liberty loan bonds or for 90-day loans to individuals so secured, and other rates were not raised. Here again it was found necessary to stimulate subscriptions to Government bonds. With the withdrawal of Government deposits in December, banks, as in July, began to feel the strain and the contraction of the money market again brought the banks to the Federal Reserve Bank for rediscounts. This time it was decided to raise the rates in order to encourage some liquidation, and new rates were accordingly put into effect on December 5 and again on December 12, as shown by Schedule 18. CREDIT DEPARTMENT. During the year the credit department, under the supervision of the Federal Reserve agent, began giving more attention to the state- DISTRICT NO. 1—BOSTON. 227 ments of borrowers from member banks when their notes were offered for rediscount, especially from the viewpoint of eligibility. A policy was adopted of requiring banks to furnish statements of the makers of notes offered, whenever notes were for $5,000 and over. This policy was adopted with the idea of influencing member banks to extend their credit departments and to give more attention to the character of notes offered. DEPOSITS. There are appended Schedules 20, 21, and 22, showing the fluctua-1 tion of member bank deposits, United States Government deposits (general account), and United States funds deposited by the bank as fiscal agents with designated depositaries. Member bank deposits, as will be seen by Schedule 20, showed a" very material increase, expanding from a low point of about $43,000,000 early in the year to a high point of nearly $118,000,000 on November 15. This high point, however, was maintained only for a few days for use in payments to be made on the second Liberty loan. Most of the increase in deposits is due to the new reserve requirements of the Federal Eeserve Act as amended in June, 1917, and to the deposits of State banks admitted to membership. Schedule 20 shows the trend of deposits during the year. While the policy of penalizing banks deficient in reserves has been continued, the number of banks so penalized has been comparatively; small. Government deposits are dealt with later in the report. PERIODIC REPORTS REGARDING MEMBER BANKS. Reports of national bank examinations are received regularly, as in previous years, from the chief bank examiner, and similar reports have been placed at the disposal of the Federal Eeserve Bank by the bank commissioners of examinations made by them of State banks admitted to membership. These reports have been of great value to the officers in giving them an intimate knowledge of the financial conditions of member banks. Beginning December 7, weekly reports are being received from member banks in Boston and Springfield, Mass.; Hartford, Conn.; Providence, K. I., and New Haven, Conn., these reports being similar in character to those which the different clearing houses have re€{uired of their member banks. These reports should prove of great value in keeping the bank officials in touch with the financial conditions of the district. EDUCATIONAL AND PUBLICITY WORK. While the officers of the bank have addressed bankers' meetings and trade organizations, the educational and publicity work has 228 ANNUAL EEPOET OF THE FEDERAL RESERVE BOARD. been confined largely to matters pertaining to the Liberty loans and to inducing the State institutions to- join the Federal Reserve system. The close intercourse of the officials of the bank in connection with governmental operations has furnished an opportunity for personal contact, both with the banker and business man, which has been most beneficial. Copies of speeches made by officers of the reserve system and prominent bankers dealing with the different phases of the Federal Reserve Act have been sent from time to timethroughout the district. Banks, and the public in general, have come to appreciate the power of the Federal Reserve system, especially in connection with the financing of the Government loans. The fact that these loans have been financed, as well as the largely increased Government orders, without any undue disturbance in the money market, has done much to impress all thinking banking officials and business men of the potential strength of the reserve bank and the system as a whole. GOVERNMENT DEPOSITS. The deposits of the Government, both in the Federal Reserve Bank and with depositary banks has been of unusual magnitude and activity during the year, as will be seen by Schedules 21 and 22. The Government purchases of ammunition and other war supplies manufactured in the district and the receipts and transfers on account of Liberty loan bonds, has made this bank's position as fiscal agent a most important one. Acting under permission given in Treasury Department Circular No. 81, 245 banks qualified as Government depositaries in connection with the first Liberty loan and payments were made by credit and redeposits amounting to about $82,000,000. In connection with the second Liberty loan, 209 banks so qualified and payments by credit in connection with the November 15 payment amounted to over $170,000,000. The securities offered as collateral against these deposits were approved by a committee consisting of Mr. Charles A. Morss, class B director of the bank, as chairman; Mr. A. L. Aiken, governor of the bank; Mr. F. H. Curtiss, Federal Reserve agent, Mr. J. H. Leman, of Merrill, Oldham & Co., bankers; and Mr. G. P. Fogg, of R. L. Day & Co., bankers. In connection with deposits of securities made against the first Liberty loan payments, several of the larger Boston banks and certain of the Connecticut banks acted as custodians of collateral. Securities pledged in connection with the second Liberty loan were all held by the Federal Reserve Bank of Boston as custodian with the exception of banks in New Haven, Hartford, and Waterbury, Conn., when local banks acted in that capacity. AOTTJAL REPORT OF THE FEDERAL RESERVE BOARD. 229 CERTIFICATES OF INDEBTEDNESS. The financing of Liberty loan subscriptions and tax payments by purchase of certificates of indebtedness issued from time to time by the Treasury Department has been of great value in relieving the pressure that would otherwise have been felt in the money market of the district through the withdrawal at one time of the large sums of money involved. The banks and the larger business houses have appreciated the advantage of the method of financing and have subscribed liberally as each issue of certificates of indebtedness has been offered. Schedules 23 and 24 show in detail the amount of these securities subscribed through the Federal Eeserve Bank of Boston and other data of interest. Redeposits were made with qualified depositary banks in connec-1 tion with each issue of certificates of indebtedness, in a similar man-'; ner as with Liberty loan subscriptions, the deposits being gradually withdrawn by the Government as needs required. The payments by credit in connection with the certificates of indebtedness are included in the figures shown in Schedule 22. LIBERTY LOANS. Immediately following the announcement by the Secretary of the Treasury of the initial offering of the first Liberty loan, a meeting of the executive committee of this bank was held to consider the organization of a Liberty loan committee to distribute and handle all details pertaining to the proposed issue of bonds. Representatives from the more important bond houses were asked to meet and assist in perfecting an organization to handle the necessary details pertaining to the bond issue. An organization was laid out covering New England with the exception of Fairfield County, Conn. The organization for both the first and second loans was practically the same. Special mention should be made of the important part taken by the Boston bankers and brokers to whom is largely due the great success of the distributing end of both Liberty loans. The central committee was representative of the local financial interests and from that the executive committee was chosen. The headquarters of the executive committee were at 50 State Street, in rooms provided by Lee, Iligginsoii & Co. The Federal Reserve Bank has since leased permanent quarters at 30 Kilby Street for the Liberty loan committee. In Boston some 79 committees representing the different lines of trade were formed. In each of the banking centers throughout the district local chairmen were chosen, for the most part prominent bankers, and each heading committees representative of the locality. There were 69 such committees in Maine, 47 in New Hampshire, 146 230 ANNUAL REPORT OF THE FEDERAL RESERVE BOARD. in Massachusetts, 51 in Vermont, 11 iri Rhode Island, and 61 in Connecticut. The governors and treasurers of the different States, the mayors of the cities and other public officials, public-safety committees, labor organizations, all have assisted in making the Liberty loans a success. On the first Liberty loan, the minimum allotment for this district was $240,000,000, the maximum being $300,000,000. Subscriptions of $332,44:7,000 were received and allotments were made of $265,017,900. On the second Liberty loan the minimum allotment was $300,000,000, the maximum being $500,000,000, and subscriptions were received of $476,950,050. Allotments were made of $407,713,700. The basis of the maximum and minimum allotment on the first loan was on the total banking resources of the district, which included savings banks. On the second loan the allotment was on a similar basis, with the exception that but 50 per cent of the savings banks' resources were included. Full details in reference to the allotments and subscriptions by States will be seen by referring to Schedule 25. Schedules 26, 27, and 27A give further details in reference to payments made and various other matters relating to these two bond issues. WAR-SAVINGS CERTIFICATES. In connection with the handling of the war-savings certificates campaign, the Federal Reserve Bank has not taken the same active part as it has in sales of Liberty loan bonds. The war-savings certificates campaign has been handled by an organization headed by Federal appointees and has been entirely apart from the direction and guidance of the Federal Eeserve Bank. This bank has acted only as custodian of the certificates and stamps, delivering those securities on the instructions of the committee. FEDERAL RESERVE NOTE ISSUES. During the year, as will be seen by Schedule 28, an increasing amount of Federal Eeserve notes has been issued each month. This has been brought about by two influences; first, by the nonissuance of gold certificates of $10 and $20 denominations by the Treasury Department, and, second, by the efforts of the Federal Eeserve Bank to strengthen its reserve position through the acquiring of gold held in the tills of member banks and in the pockets of the public, issuing in place thereof Federal Eeserve notes. Banks in this district, both member and nonmember, have responded very willingly to this bank's suggestions that they do not pay out gold certificates but retain them, exchanging them for Federal Eeserve notes. As the demand for Federal Eeserve notes increased, it was found advisable to carry a larger supply on hand not only in our own vaults, DISTRICT NO. 1 BOSTON. 231 but in the subtreasury and with the Comptroller of the Currency at Washington. At the present time there is available $106,700,000 of such notes, a large part of which can be used at once and the balance within 24 hours. Schedule 30 appended shows the amount of Federal Eeserve notes of this bank returned to us by the other Federal Beserve Banks and the amounts of notes outside the district returned to issuing banks by us. Schedules 28 and 29 show Federal Eeserve notes issued and retired by the bank during the year. While the Federal Eeserve Bank has furnished currency through the issue of Federal Eeserve notes to a considerable extent, the bank should have facilities for furnishing currency of all denominations and kinds. The demand for pay-roll needs, with the increased activities in industry, has been felt increasingly during the year. INTERNAL ORGANIZATION. During the year there have been held 25 directors' meetings with an average attendance of 8 members. The executive committee has met 30 times and the average attendance has been 4. At an early meeting of the board of directors, Mr. Daniel G. Wing, president of the First National Bank of Boston, was reelected a member of the Federal Advisory Council. The terms of Thomas P. Beal, class A director, and Charles A. Morss, class B director, expired December 31, 1917. A new election was held by member banks in group 1, who were represented by these directors and they were unanimously reelected, there being no other nominations made for the offices. Mr. Frederic H. Curtiss was reappointed by the Federal Eeserve Board as a director of the Federal Eeserve Bank of Boston for three years ending December 31, 1920. He was redesignated as chairman and Federal Eeserve agent. Owing to the death of Mr. Walter S. Hackney on March 20, 1917, who had been the class C director and vice chairman since October, 1914, Mr. Andrew J. Peters, former Assistant Secretary of the Treasury, was appointed by the Federal Eeserve Board to fill the vacancy caused by Mr. Hackney's death. Mr. Alfred L. Aiken, who had been governor of the Federal Eeserve Bank since November, 1914, resigned to accept the presidency of the National Shawmut Bank of Boston. Mr. Charles A. Morss, formerly treasurer of the Simplex Wire & Cable Co. of Boston, a class B director of the bank, was elected to the position of governor, taking office on December 20, 1917. Mr. Morss has been a close student of finance for many years, and has been connected as director with several of the large local banks. 232 ANNUAL BEPOET OF THE FEDERAL RESERVE BOARD. Mr. Florrimon M. Howe, who has been cashier of the bank since November, 1914, resigned in December to accept the vice presidency of the Industrial Trust Co. of Providence, R. I., and Mr. Chester C. Biillen, formerly assistant cashier, was elected cashier. The organization of the Federal Keserve Bank, both from the executive and the clerical staff, has had to be largely increased during the year, owing to the additional activities of the reserve bank in connection with its position' as fiscal agent for the United States Government. At the time of the first Liberty loan, the subscription department and bond department was handled largely by volunteer forces, wTho were liberally contributed by the local banking houses. I t was deemed necessary, however, to establish in the bank a permanent organization to handle the details incidental to the second Liberty loan and for the handling of future Government loans. A new plan of reorganization of the entire bank was laid out. This new plan of reorganization led to the election of Mr. William Wiliett, former assistant auditor of the bank, as assistant cashier in charge of the clearing department. Mr. Harry A. Saunders, formerly head bookkeeper, was appointed assistant cashier and put in charge of the subscription department. Mr. Chester C. Bullen, assistant cashier, being put in charge of the entire bond department. Mr. Harry F. Currier, former national bank examiner, was appointed chief auditor. With the approval of the Federal Reserve Board, Mr. Russell B. Spear was selected by the Federal Reserve agent as assistant Federal Reserve agent, as provided in the recent amendment of the Federal Reserve Act, and, pending the organization of a special department, the handling of the certificates of indebtedness, Government depositaries, and securities deposited by banks against Government funds, has been carried on in the Federal Reserve agent's department. With the increase of the bank's activities, the greatest problem has been the inadequacy of its present banking quarters, and although considerable more floor space has been added during the year and the clerical force increased from 70 to 256, still it is most important that larger banking quarters be secured and this force materially increased. A committee of the directors has this matter under consideration. CLEARINGS AND COLLECTIONS. During the year the check collection department continued to expand with an increasing number of banks sending their checks to the bank for collection. About 25 banks, having a large number of items on points in other Federal Reserve districts, have taken advantage of the direct routing feature of this system and send their DISTRICT NO. 1 BOSTON. 233 items direct to other Federal Eeserve Banks. About 83 banks in other districts are sending items direct to this bank. The charge for collecting remains the same? at nine-tenths of a cent per item. It is noticeable that some banks are sending only their larger items, their smaller ones going through their city correspondents. In spite of the increase in items handled, it has only been necessary to make a slight increase in the number of clerks. A comparison of figures with other Federal Eeserve Banks shows a very much larger percentage of checks outside of the Federal Keserve city handled in this district than in any other. This is due to a considerable extent to the fact that the New England banks were practically all accustomed to remit to the Boston Clearing House before the establishment of the present collection system. Schedules 31 and 32 contain detailed statistics on the activities of this department. GOLD-SETTLEMENT FUND. The gold-settlement fund, the operation of which was outlined in the report of 1915, has continued to become an increasingly important factor in the settlement of exchange without actual transfer of funds from one Federal Reserve Bank to another. During the year the transfers through this fund were largely increased, as will be seen from Schedule 33. The cost of making these transfers is infinitesimal in comparison with the vast total of transfers made. Late in the year the Boston subtreasury began settling its balances by transfers on the books of this bank instead of by the actual exchange of currency, and this has added to the volume of transfers through this fund. BANK OF ENGLAND STERLING GOLD ACCOUNT. Following an arrangement made between the Federal Eeserve Bank of New York and the Bank of England establishing relations as correspondents in which all the Federal Eeserve Banks might participate, this bank made payment in New York for account of the Bank of England on June 7, 1917, of $3,675,000 in gold, the Bank of England setting aside and holding a similar amount in "earmarked gold " in London subject to this bank's orders. CONCLUSION. There is no better evidence of the important position that the Federal Eeserve Bank of Boston has attained at the present time than a survey of the balance sheet shown in schedule 2. The bank has been tested during the present year in the financing of the great war loans and increased activities of the local industries 234 ANNUAL REPORT OF THE FEDERAL RESERVE BOARD. to such an extent that its policy of discount is closely watched, and its officials are called into consultation whenever any new problem arises, which frequently occurs, owing to war conditions. In outlining the bank policy due regard has been taken of the different interests affected and from the broadest national viewpoint. That the war financing has been accomplished without undue disturbance to the local money market has impressed not only the banks but the public at large of the power, strength, and insurance which the Federal Reserve Bank of Boston and the Federal Reserve system furnishes for the handling of commerce and business of the United States. SCHEDULE 1.—Income and expense. 1916 Expense. Paid in lieu of dividends on stock canceled Current expense Directors7 fees Rent Salaries Exchange paid Cost of Federal Reserve notes Assessment for expense, Federal Reserve Board.. Charged off: Organization Furniture and equipment Difference account.... Cost of unissued curRepairs and Expenses Transit Income. 15,141.36 17,703.57 21,226.35 17,301.73 15,352.04 88.98 in- department, Collateral notes Trade acceptances 258,527.42 Balance to surplus account including payment to United States Govern- $11,596.56 302,612.23 153,039.85 87,962.26 27,502.79 43,303.20 8,973.83 814. 83 Discount on open-market purchases: 33,666.91 Bankers' acceptances, 7,709.16 domestic 10,450.00 Bankers' acceptances, foreign 229,147.58 Trade acceptances, 1,462.24 foreign . . . . 8,255.87 State, city, and town 78,578.27 notes 571,117.13 315,435.01 507,600.03 57,194.16 94,784.86 886,294.79 Commissions Penalties for deficient Service charges Sundry profits 450,213.90 1,209,605. 24 Dividends paid member banks Reserve for depreciation on United States securi- 1917 2,153.23 1,508.14 Interest on United States securities Appreciation and profit on United States securities.. To balance 1916 Balance January 1, 1917... $3,926.85 51,288.75 Discount from member banks on— 5,781.10 Notes discounted 15,246. 49 $39,641.83 Rediscounts secured 93,193. 65 by United States 69.10 bonds. 08,954.48 $2,804.17 25,357.37 5,712.35 15,139.13 77,085.38 .40 altera- paid 1917 1917 1918 246,930.86 597,828.54 107,831.44 377,903.14 16,662.72 5,202.73 20,575.00 11,101.60 77,769.16 105,888.46 10,558.55 6,938.15 6,105.39 3,147.98 361.52 450,213. 90 1,209,605.24 1917 1918 Jan. 2, balance forward... 258,527.42 886,294.79 258,527.42 886,294.79 11, 596. 56 150,200.00 138,260.25 11,596.56 258,527. 42 150,200.00 886,294. 79 Jan. 3, balance DISTRICT NO. 1 BOSTON. 235 SCHEDULE 2.—Comparative balance sheet Dec. 31, 1016, and Dee. 31, 1917. Dec. 31,1916. Dec. 31,1917. RESOURCES. Earning assets: Bills discounted for member banks Acceptances purchased State, city, and town notes United States bonds United States 1-year Treasury notes— Reserve cash: Gold coin and gold certificates Gold settlement fund Gold redemption fund for Federal Reserve notes Bank of England sterling gold account.. Other lawful money With Federal Reserve agent: Gold against Federal Reserve notes Other resources: Interest accrued on United States bonds Check collection expense (recoverable).. Expense Liberty loan (recoverable) Expenses paid in advance Cost of FederalReserve notes (unissued) Due from Liberty loan subscriptions... Due from Federal Reserve Banks Items in process of collection Due from banks (Government deposits) Exchanges for clearing house and cash items Federal Reserve notes and other cash on hand Total assets. $3,745,315.28 12,725,167.81 890,002.23 $65, 882,359.35 037,506.04 1,332,000.00 1,000,000.00 $19,692,485.32 609, 750. 00 \, 194,000.00 • $77,723,615.39 11,774,857.50 14,737,000.00 690,900.00 977,000.00 427,683.00 000,000.00 675,000.00 574,566.00 26,939,540.50 44,917,466.00 113,518,385.00 40,896,820.00 13,870.83 8,384.44 1.564.72 29,230.20 i44,'i67.62 4,836,131.06 12,592,167.39 328,149.59 21,958.75 118,035.40 "*i5,'667,*383*44 66,489,691.55 3,216,597.70 815,595.87 4,661,035.81 65,257,119.92 253,196,771.66 4,989,700.00 5,858,450.00 LIABILITIES. Capital fund: Capital paid in Surplus Profit and loss account Deposits: Due to member banks reserve account.. Due to Federal Reserve Banks collected funds Due to banks uncollected funds Duo to United States Government general account Due to United States special account... Cashier's checks outstanding Federal Reserve notes outstanding Other liabilities: Unearned discount and interest Total liabilities.. 258,'527.*42" 56,757,135.68 82,842,197.76 1,058,988.16 3,870,139.46 13,780,544.93 2,130,617.72 941.30 i 13,518,385.00 61,209.64 65,257,119.92 Liability for rediscount with other Federal Reserve Banks i These items not included in total. 34365° 2,419,414.94 66,489,691.55 20,416.38 77,296,820.00 468,896.64 253,196,771.66 44,477,789.09 236 ANNUAL, REPORT OF THE FEDERAL RESERVE BOARD. SCHEDULE 3.—Money rates in Boston, 1917. Demand money Commercial paper Brokers' 6 months' paper . . . Year money Acceptances. Town notes Certificates of indebtedness.. Jan. Feb. Mar. 3 -6 3 4 3 -44 3-41 3H 3^-4 4-44 4 -5 4f-4| 4i-4f r! 1.00-3.230 2.09-2.70 Demand money Commercial paper Brokers' 6 months' paper... Year money Acceptances Town notes Certificates of indebtedness. Apr. 4J-5 4J-5 44-41 21-34 24-34 1.46-4.00 3-50-4.12 2 May. June. 4 -5 41-0 4H 5 -6 5-6 5 3-3J 5 3 -3* 117-4.55 4.21-5. 39 3 -3| i July. Aug. Sept. Oct. Nov. Dec. 44-6 44-5i 4f-5i 44-5 4f-5i 5-54 44-6 5-6 5 -6 5 -5| 3|-4 4.27-4.34 34-4 4 -6 54-6 5|-6 6 4 -6 44-6 5|-6 5|5 5J-54 3-4 3.98-4.93 31 3.92-4.39 4.24-4.J 4 4.55-4.90 4 3f-4 4.58-5.10 4 SCHEDULE 4.—Bills discounted, including member banks' collateral notes held at close of business each Friday. In Millions '100 90 IS \ 80 70 60 50 1I 40 30 h 20 10 J 0 Jan. / A / / A Feb. Mar. Apr. May June July Aug. Sept Oct Nov. Dec. DISTRICT JSTO. 1 SCHEDULE 5.—Total investments BOSTON. 287 at close of business each Friday. 100 100 ft 90 BO >' 70 I V 90 80 70, €0 60 50 50 A \V / / .40 30 20 s 10 /N ^ V / 40 \ / A 30 20 / 10 0 Jan. Feb. Mar. Apr. May June July Aug. Sept. Oct. Nov. Dec. SCHEDULE 6.—Amount of acceptances held at close of business each Friday. In Millions 35 35 30 30 25 25 ) 20 A 15 10 W V / \J / \/ 1 \ \ 5 0 Jar?. Fed, Mar., Apr. May June July Aug. Sept Oct. Nov. Dec.; 20 238 ANNUAL REPORT OF THE FEDERAL RESERVE BOARD. SCHEDULE 7.—Acceptances Foreign acceptances. Month. Items. Amount. purchased for own Domestic acceptances. Low and high rate. Items. Amount. Low and high rate. account. Foreign trade acceptances. Items. Low and high rate. Amount. P.ct. January February.. March April May June July August September.. October November.. December.. Total.. 90 $2,522,546.66 187 4,461,805.32 163 4,803,854.46 786,937.47 17 233 9,077,342.66 185 6,153,140.45 67 2,300,664.79 228 6,068,80S. 44 409 10,654,363.60 97 4,179,893.80 373 7,831,447.47 123 3,891,621.91 2i-34 24-34 2^-34 38-34 3 -34 3-34 3 -31 3i-4 31-4 31-31 31-41- P.ct. 20 19 8 20 57 70 22 49 102 54 79 266 $516,292.67 800,416.62 353,407.60 458,149.37 1,140,471.04 2,390,740.88 1,102,781.58 1,253,165.94 3,958,850.87 1,400,099.76 3,505,018.51 8,508,144.61 24 $229,553.16 101 2,020,406.37 8 60,733.74 50 499,881.92 45 597,664.73 766 25,387,539.45 2,172 62,732,427.03 228 3,408,239.92 SCHEDULE 8.—Acceptances purchased for oilier Federal Reserve Foreign acceptances. Month. Items. Amount. 4-4 4-4 4-4 4-4 4-4 Banks. Domestic acceptances. Low and high rate. Items. Amount. February.. April....... May June July August September. November. December.. 252 124 255 118 8 281 78 211 584 $6,207, 883.16 3,597, 019.89 6,392, 551.36 5,845, 222.26 686, 000.00 9,854, 040.11 3,244, 386.64 3,88i: 947.48 10,856: 513.55 15 30 44 32 10 19 4 13 289 $326,327.40 1,005,828.17 1,337,453.16 658.055.21 307.853.22 735.022.75 173.805.76 447,560.70 10,514,551.63 Total, 1,911 50,555,564.45 456 15,506,458.00 Low and high rate. Per cent. Ill 3 -3f 3 -3? 3-3| 3f-3f 31-41 SCHEDULE 9.—Acceptance liability of national banks in New England at date of Comptroller's calls. Mar. May June Sept. Nov. 5, 1917 1, 1917 20, 1917 11, 1917 20, 1917 - $24, 372, 000 25,459,000 33,147, 000 35, 082, 000 44, 500, 000 DISTRICT NO. 1 BOSTON. 239 SCHEDULE 10.—Cash reserve at close of business each Friday. PerCenr. 90 60 A 60 50 Jan. Fed. Mar. Apr. May June July /lay. Sept Oct. Nov. Dec. SCHEDULE 10A.—Total gold reserve at close of business each Friday. Mi/lions 110 no <nalf "ansfet*Nafi ?na/i lanfc Fvgserv?stoF ^derat ^i/e Bat u .I 100 90 100 90 A / 80 / A A \ / /. 70 60 / 50 ••/~N 1 40 30 / \ I 2 nl 20 10 u \ / VA A '\A / I J 80 \ 1 / \ \ \ / A/ 70 60 50 40 A t— 1 M \ l — Inch des G old'w renf 2 - Gold heldb y Bar It Ac lenta ndBi.'nkeq vali'zt d,Act \ 3 - Gold v/Y/r 30 \, 20 v 10 0 Jan. Feb. Man Apr. May June July Aug. Sept Oct. Nov. Dec. 240 ANNUAL REPORT OF THE FEDERAL RESERVE BOARD. SCHEDULE 11.—Member banks liquidated during 19.17. Name of bank. Location. Shares surrendered. Disposition. Hadley Falls National Bank... Holyoke, Mass Home National Bank Second National Bank Bangor, Me /Formed Hadley Falls Trust Co., Hol\ yoke, Mass. Consolidated .with Merrill Trust Co., Bangor, Me. Succeeded by Ware Trust Co Ware National Bank Ware, Mass Consolidated with Worcester Bank & Worcester National Bank Worcester, Mass... Trust Co. First National Bank Auburn, Me Succeeded by First Auburn Trust Co. Brooks National Bank Torrington, Conn. Succeeded by Brooks Bank & Trust Co. Taunton National Bank. Taunton, Mass Succeeded by Bristol County Trust Co. Stoneharo. National Bank Stoneham, Mass Succeeded by Stoneham Trust Co Rochester National Bank Rochester, N. H Succeeded by Rochester Trust Co First National Bank Wiscasset, Me Succeeded by Lincoln County Trust Co. Norwood National Bank Norwood, Mass Succeeded by Norwood Trust Co by South Berwick Savings South Berwick National Bank. South Berwick, Me.. Succeeded Bank & Trust Co. Total. "I 180 210 180 234 480 135 75 465 36 60 36 120 84 2,295 SCHEDULE 12.—New members. Name of bank. North Brookfield National Bank Back Bay National Bank Tanners National Bank Second National Bank Commonwealth Trust Co Winchester Trust Co International Trust Co Fitchburg Bank & Trust Co Norwood Trust Co. American Trust Co Newton Trust Co Industrial Trust Co Metropolitan Trust Co Union & New Haven Trust Co Charles River Trust Co Winchester National Bank Worcester Bank & Trust Co Shares subscribed Location. North Brookfield, Mass Boston, Mass Woburn, Mass Maiden, Mass Boston, Mass . . Winchester, Mass Boston, Mass Fitchburg, Mass Norwood, Mass Boston, Mass Newton, Mass Providence, R . I Boston, Mass New Haven, Conn Cambridge, Mass Winchester, Mass.... Worcester, Mass 38 150 68 75 900 1,800 450 120 1,800 480 4,200 360 690 240 39 1,050 Total 12,533 SCHEDULE 13.—State banks admitted to system. Date of admission. 1917. Feb. 12 May 29 June 9 July 26 Aug. 11 31 Nov. 5 9 Dec 4 11 14 Name of bank. Commonwealth Trust Co Winchester Trust Co International Trust Co Fitchburg Bank & Trust Co*.. Norwood Trust Co American Trust Co Newton Trust Co Industrial Trust Co Metropolitan Trust Co , Charles River Trust Co Union & New Haven Trust Co. Worcester Bank & Trust Co.... Location. Boston, Mass Winchester, Mass Boston, Mass Fitchburg, Mass Norwood, Mass Boston, Mass Newton, Mass Providence, R. I Boston, Mass Cambridge, Mass New Haven, Conn Worcester, Mass Capital and surplus. 500,000 125,000 000,000 750,000 200,000 000,000 800,000 000,000 600,000 400,000 150,000 750,000 Deposits when admitted. $18,520,000 530,000 14,772,000 3,485,000 1,771 000 19,905,000 3,629,000 58,765,000 3,559,000 1,881,000 3,156,000 19,790,000 DISTRICT NO. 1 BOSTON. 241 SCHEDULE 14.—Borrowings of national banks in Neiv England. Bills payable with Federal reserve1 bank. Date. Dec. 27,1916. Mar. 5,1917.. May 1,1917... June 20,1917. Sept. 11,1917. Nov. 20,1917. AcceptRedisances redis- counts of Money counted Liabilities Total Federal 1 included borrowed for elsewhere. rediscounts.1 borrowings. in total Reserve Bank borrowof Boston.2 ings.1 $610,000 $4,633,000 $14,547,000 $19,790,000 $8,849,000 110,000 3,089,000 16,299,000 19,498,000 8,733,000 1,740,000 3,077,000 13,098,000 17,915,000 6,951,000 7,445,000 8,131,000 21,376,000 36,952,000 6,654,000 5,177,000 6,124,000 15,883,000 27,184,000 5,738,000 5,439,000 6,701,000 45,479,000 57,619,000 15,496,000 1 2 $4,804,000 2,535,000 4,791,000 15,693,000 13,757,000 32,970,000 From reports to Comptroller of the Currency. As shown by books of Federal Reserve Bank of Boston. SCHEDULE 15.—Number, capital, and surplus, and deposits, by States, of eligible nonmember banks. State. Connecticut Maine Massachusetts New Hampshire . . . . Rhode Island Vermont. - . . . . . Total Number banks. Capital and surplus. 25 37 80 8 10 23 $9,904,300 6,347,900 40,164,000 1,500,200 18,378,000 2,756,000 $56,828,000 59,498,000 269,846,000 8,970,254 154,161,000 30,836,000 183 79,050,400 580,139,254 SCHEDULE 16.—Banks granted fiduciary powers under section Ilk Federal reserve act. Date. Name. Location. 1917 Jan. 29 Merrimack National Bank Haverhill, Mass First National Bank Home National Bank State National Bank Webster& Atlas Nat ional Bank. Aug. 20 Manufacturers National Bank.. 20 Edgartown National Bank Oct. 31 National Bank of Wareham Bar Harbor, Me.... Brockton, Mass Windsor, Vt . Boston, Mass Lynn, Mass Edgartown, Mass.. . . Wareham, Mass 29 Mar. 16 May 14 June 18 31 Nov. 5 10 14 Dec. 28 Deposits. of the Powers granted, . Trustee, executor, administrator, and registrar of stocks and bonds. Do. Do. Trustee, executor, and administrator. Trustee, executor, administrator and registrar of stocks and bonds. Do. Trustee, executor, and administrator. Trustee, executor, administrator, and registrar of stocks and bonds. Do. Worcester, Mass Mechanics National Bank Do. National State Capital Bank.... Concord, N. H Do. Plymouth, Mass... Plymouth National Bank Do. Brattleboro, Vt Vermont National Bank Do. Leominster, Mass.. Merchants National Bank SCHEDULE 17.—Banks granted permission to accept up to 100 per cent of their capital and surplus during 1917. Blackstone Canal National Bank, Providence, R. I. Safety Fund National Bank, Fitchburg, Mass. Hartford-Aetna National Bank, Hartford, Conn. Mechanics National Bank, New Bedford, Mass. Massasoit-Poccaset National Bank, Fall River, Mass. National Union Bank, Boston, Mass. 242 ANNUAL REFOBT OF THE FEDEKAL RESERVE BOARD. SCHEDULE 18.—Discount rates. Maturities of 15 days or less. Date. It Dec. 7,1916 Mar 21,1917.. June 12,1917 Oct 23 1917 Dec 5,1917. . Dec 12,1917. 3i 34 4 AgriculMaturi- tural and Trade ties of live-stock Accept16 to 90 paper 91 ances. days. days to 6 months^ 4 4 4 4 f 5 5 5 5 5 5 Commodity paper. 15 days or less. 34 34 i3i 4 4 Secured by United States certificates of indebtedness or Liberty Loan Bonds. (3) 4 4 4 4 4 2 34 3§ 34 34 16 to 90 days. 1 iJune 26, acceptances under 91 days, 4 per cent. of nonmember banks, 4 per cent. Merged with commercial paper rates of corresponding maturities on Dec. 5,1917. 2 Customers 3 SCHEDULE 19.—Reserves of national banks in Neto England as reported by Comptroller of the Currency. Date. Dec. 27, 1916. Mar. 5, 1917 . May 1,1917.. June 20, 1917. Sept. 11, 1917 Nov. 20,1917 Total reserve. $172,535,000 189,557,000 190,443,000 170,872,000 i 56,725,000 56,069,000 Required reserve. Excess reserve. $111,335,000 119,637,000 117,143,000 111,832,000 55,823,000 54,766,000 $61,200,000 69,920,000 73,300,000 59,040,000 2 902,000 1,303,000 1 Cash in vault and due from national banks, not included as reserve, $108,250,000. 2 Deficiency. 243 DISTRICT NO. 1—BOSTON. SCHEDULE 2O.-Member bank deposits at close of business each Friday. In Millions 100 oo 90 90 80 80 \ f 70 70 V 60 60 50 50 N 40 4< 30 3 20 2 10 0 Jan Feb. Mar. Apr. May'June July Aug.,Jept QG£ uec. 244 ANNUAL REPORT OF THE FEDERAL RESERVE BOARD. SCHEDULE 21.—Treasurer of United States, general account at close of business each Friday. In Mil/ion, is 70 70 60 60 L 50 50 4^ 40 nr i A / 1 \ A1 iV — 30 to 1 40 n 30 M / 1 io / • v XT ft 20 /\ 1 y / \! l V m to 0 -If n. Feb. Mar. Apr. May June July Aug. Sept Oct. Nov. Dec. DISTRICT NO. 1—BOSTON. 245 SCHEDULE 22.—Amount toith Government depositaries each J Friday. In Mil/ions 200 HI] 190 Ii 180 170 160 150 140 130 \ 120 110 100 I1 90 A 80 A 70 A 60 ji \ 50 40 30 20 \ Xzi V \ I / \ 10 0 \ A May V June July August Sept Oct Nov. Dec. 246 ANNUAL REPORT OF THE FEDERAL RESERVE BOARD. SCHEDULE 23.—Certificates of indebtedness issued at Boston. Amount issued in each denomination (in thousands of dollars). Dated. Due. Rate. $500 Mar. 29 Apr. May May May June Aug. Aug. Sept. Sept. Oct. Oct. Nov. June 29 25 June 30 1 ...do 10 July 17 25 July 30 8 ...do 9 Nov. 11 28 Nov. 30 17 Dec. 15 26 . . . d o 18 Nov. 22 24 Dec. 15 30 June 25 $1,000 $5,000 2,007 2,200 3,005 3,590 1,645 1,951 4,149 3,454 2,325 1,650 1,200 1,210 4,310 5,000 5,825 6,790 3,375 3,160 6,495 5,965 4,175 3,580 2 3 3 3 3i 31; 3i 3* 3* 4 4 4 301 Number of Paid for by subcredit. scrip$10,000 $100,000 tions. 3,800 790 4,050 3,700 4,370 3,920 3,620 4,460 8,030 16,630 16,510 13,490 U2 8,800 1 41 68 105 68 74 53 62 45 126 138 102 37 1,800 300 5,000 5,100 6,500 2,600 3,500 4,100 10,000 1,900 $5,450,000 3,652,000 6,500,000 4,593,000 5,195,000 12,245,000 21,349,000 27,590,000 20,090,000 Total issued. $3,000,000 13,800,000 2,000,000 12,167,000 11,200,000 18,200,000 19,400,000 15,140,000 12,171,000 22,174,000 30,149,000 33,010,000 20,921,000 i Federal Reserve Bank took 12 certificates of $250,000 each. SCHEDULE 24.—Certificates of Apr. 25,1917. Amount allotted to subscriber. $25 000 and less Over Over Over Over Over Over Subscriber. Total amount. May 1,1917. Subscriber. Total amount. May 10,1917. SubTotal scrib- amount. er. May 25, 1917. Subscriber. Total amount. $25,000 t o $50,000 $50,000 t o $100,000 $100,000 to $250,000 $250,000 to $500,000 $500,000 t o $1,000,000 SI 000 000 8 10 6 9 3 2 3 $140,000 500,000 600,000 2,110,000 1,200,000 1,750,000 7,500,000 51 11 3 3 $570,000 485,000 275,000 670,000 59 17 12 8 4 3 2 $668,000 761,000 1,003,000 1,635,000 1,850,000 2,750,000 3,500,000 36 11 9 7 1 1 3 $432,000 506,000 770,000 1,292,000 400,000 600,000 7,200,000 Total 41 13,800,000 68 2,000,000 105 12,167,000 68 11,200,000 June 8,1917. Amount allotted to subscriber. $25 000 and less Over $25,000 to $50,000 Over $.50,000 t o $100,000 Over $100,000 to $250,000 Over $250,000 t o $500,000 Over $500,000 to $1,000,000 Over $1 000,000 Total Subscriber. Total amount. Subscriber. Subscriber. Total amount. 21 13 7 6 1 1 4 $290,000 645,000 635,000 1,180,000 400,000 750,000 15,500,000 24 10 12 10 4 $364,000 410,000 960,000 1,680,000 1,326,000 2 10,400,000 74 18,200,000 53 19,400,000 62 15,140,000 Oct. 18, 1917. SubTotal scrib- amount. er. $25,000 t o $50,000. $50,000 t o $100,000 $100,000 t o $250,000 $250,000 t o $500,000 $500,000 to $1,000,000 $1,000,000 15 11 6 5 5 1 2 $277,000 540,000 575,000 1,150,000 1,900,000 729,000 7,000/000 58 26 28 12 6 8 Total 45 12,171,000 134 Total amount. Aug. 28,1917. $423,000 . 470,000 1,230,000 2,107,000 1,520,000 2,950,000 9,500,000 Amount allotted to subscriber. SubTotal scrib- amount. er. $25 000 and less Aug. 9, 1917. 27 10 14 12 4 4 3 Sept. 26,1917. Over Over Over Over Over Over indebtedness. Oct. 24, 1917. SubTotal scrib- amount. er. Sept, 17, 1917. Subscriber. 48 28 16 12 15 4 3> 126 Total amount. $649,000 1,233,000 1,466,000 2,300,000 6,426,000 4,000,000 6,100,000 22,174,000 Nov. 30, 1917. SubTotal scrib- amount. er. 20,200,000 35 24 19 8 9 2 5 $525,000 1,060,000 1,725,000 1,700,000 4,000,000 2,000,000 22,000,000 11 11 4 2 6 1 2 $151,000 500,000 360.000 460,000 2,650,000 800,000 16,000,000 30,149,000 102 33,010,000 37 20,921,000 $806,000 1,129,000 2,540,000 2,674,000 2,800,000 DISTRICT £T0. 1 SCHEDULE 25.—The Liberty Number of subscribers. 247 BOSTON. loans. Subscriptions. Allotment. State. First loan. Second loan. First loan. Second loan. First loan. Total. Second loan. Total. 68,539 68,575 $15,186,800 $24,002,850 $39,189,650 $14,332,300 $22,996,100 $37,328,400 Maine New Hampshire... 55,374 48,548 10,515,150 15,992,900 26,508,050 9.89T,500 15,484,400 25 381 900 33,418 33,769 7,377,650 10,193,250 17,570,900 6^92,150 10,061,550 17,053,700 Vermont 613,651 444,829 234,747,000 325,599,800 560,346,800 177,236,400 273,241,600 450,478,000 Massachusetts 82,391 51,429 25,377,700 38,803,450 64,181,150 23,073,900 33,466,050 56,539,950 Rhode Island 117,418 99,491 39,283,300 62,357,800101,641,100 33,485,650 52,064,000 85,949,650 Connecticut 970,791 746,641 332,447,600J476,950,050 808,427,650 265,017,900 407,713,700 672,731,600 Total Additional allotment transferred from Philadelphia 816,300 Grand total. 408,530,000 SCHEDULE 26.—Subscriptions to Liberty loan bonds. First Liberty loan. Day. Total. $545,800 731,700 825,150 1,168,400 716,900 2,614,350 2,175,000 5,267,300 4,861,750 1,960,700 6,029,800 575,600 29,142, 700 5,959,500 15,386,750 11,932,850 4,524,400 5,146,900 8,266,850 7,493,000 8,794,000 12,817,250 11,710,300 12,785,900 26,073,650 144,941,100 $545,800 1,277,500 2,102,650 3,271,050 3,987,950 6,602,300 8,777,300 14,044,600 18,906,350 20,867,050 26,986,850 27,472,450 56,615,150 62,574,650 77,961,400 89,894,250 94,418,650 99,565,550 107,832,400 115,325,400 124,119,400 136,936,650 148,646,950 161,432,850 187,506,500 332,447,600 Date. May 16 May 17 May 18 May 19 May 21 May22 May23 May 24 May 25 May 26 May28 May 29 May31 June 1 June 2 June 4 June 5 June 6 June 7 June 8 June 9 June 11 June 12 June 13 June 14 June 15 1917. Second Liberty loan. Day. Date. 1917. Oct. 3 Oct. 4 Oct. 5 Oct. 6 Oct. 7 Oct. 8 Oct. 10 Oct. 12 Oct. 1 3 . . . Oct. 15 Oct. 16 Oct. 17 Oct. 18 Oct. 19 Oct. 20 Oct. 22 Oct. 23 Oct. 24 Oct. 25 Oct. 26 Oct. 27 $12,536,000 6,425,000 7,702,000 2,616,000 6,341,000 6,540,000 6,749,000 10,525,000 9,291,000 9,365,000 18,243,000 19,505,000 26,144,000 27,965,000 16,451,000 19,996,000 32,136,000 52,770,000 46,378,000 49,270,000 90,603,000 Total. $12,536,000 18,895,000 26,647,000 29,300,000 35,546,000 42,183,000 48,629,000 59,114,000 68,381,000 77,737,000 95,879,000 115,385,000 141,516,000 169,338,000 185,789,000 205,743,000 237,875,000 290,690,000 337,069,000 386,347,000 476,950,000 SCHEDULE 27.—Liberty loan subscriptions and allotments through Federal Reserve Bank of Boston. First Liberty loan. Second Liberty loan. Total subscribed. Total allotted. S50-$10,000 $10,050-$100,000 $100,050-$250,000 Over $250,000 $203,265,000 65,505,000 22,875,000 40,802,000 $203,265,000 39,303,000 10,294,000 12,155, 000 Total 332,447,000 265; 017,000 Size of subscription. Total subscribed. Total allotted. $50-$10,000 $10,050-$50,000 $50,050-$100,000 $100,050-4200,000 $200,050-$l ,000,000 Over $1,000,000 $186,136,050 73,581,100 50,363,350 31, 734, 450 109,935,100 25,200,000 $186,136,050 73,581,100 45,327,050 23,800,850 66,268,650 12,600,000 Total 476,950,050 407,713,700 Size of subscription. 248 ANNUAL BEPOBT OF THE FEDERAL RESERVE BOARD. SCHEDULE 27A.—Charade?* of Liberty loan payments. FIRST LOAN. By cash. By credit Government deposits. $71,155,767.52 90, 724,358.88 $55,851,455.32 173,622.11 161,880,126.40 56,025,077.43 Date. June 28 Aug. 30 i Total Certificates of indebtedness. Accrued interest. Total.' $43,758,000.00 $170,765,222.84 1,330.000.00 92,227,980.99 45,088,000.00 $89,503.84 513,202.99 262,993,203.83 602,706.83 SECOND LOAN. 2 per cent payments. Cash sales Nov. 15 . Dec. 15 Total« $4 055 738.00 14 345, 150.00 55 630 311.50 14, 183, 028.28 $5,153,004.00 3,084,100.00 170,328,176.50 59,793,191.55 S40 435 000 00 208,742.00 17 329,250.00 393,488.00 73, 869.420.00 $106, 799. 83 88, 114, 227.78 238,358,472.05 40, 435 000. 00 366, 800,900.00 106 799. 83 1 8 Includes all payments after June 28,1917. Final payment is due Jan. 15,1918. SCHEDULE 28.—Federal Reserve notes issued. Denomination. 1915 1916 1917 Total. Fives Tens Twenties... Fifties Hundreds.. $3,620,000 4,680,000 640,000 600,000 980,000 $6,226,600 3,965,600 88,200 42,000 102,300 $12, 700,000 39,880,000 13,760,000 3,460,000 5,920,000 $22,546,600 48,525,600 14,488,200 4,102,000 7,002,300 Total 10,520,000 10,424,700 75,720,000 96,664, 700 SCHEDULE 29.—Federal Reserve notes January. February. Fives Tens Twenties... Fifties Hundreds.. $193,650 209,100 6,900 3,250 4,100 $349,955 372,110 36,110 13,-850 53,200 Total 417;,000 825,225 Denomination. Denomination. September March. April. $264,445 $214,900 149, 800 189,305 12, 700 2,100 32,250 12,750 13,300 12,100 512,000 391,650 August. May. June. July. $432,200 260,800 29,300 17,000 22,300 $255,200 141,000 12,000 1,800 1,100 $230,470 267,300 23,200 16,600 32,100 $531,450 557,100 2,800 1,050 1,300 761,600 411,100 569,670 1,093,700 October. November. December. Fives Tens Twenties.. Fifties Hundreds., $857,600 327,725 33,210 1,800 2,400 $834,700 446,400 74, 900 36,450 62,000 81,278,110 788, 205 87,600 22,200 22,400 $985,650 942, 920 106,200 16,750 32,400 Total 1,222,735 1,454,450 3,198,515 2,083,920 redeemed. Total. $6,428,330 4,651,765 427,020 175,750 258,700 ReRedeemed deemed by by United Federal States Reserve Treasury. agent. $793,330 $5,635,000 732,765 3,919,000 51,020 376,000 25,750 i50,000 28,700 230,000 11,941,565 1,631,565 10,310,000 DISTRICT NO. 1 249 BOSTON. SCHEDULE 30.—Federal Reserve notes of the Federal Reserve Bank of Boston received from other Federal Reserve Banks, and notes of other Federal Reserve Banks returned by Federal Reserve Bank of Boston to bank of issue. Received. 1916 Returned. 1916 1917 New York Philadelphia. Cleveland Richmond... Atlanta Chicago St. Louis Minneapolis.. Kansas City.. Dallas San Francisco $1,361,750 133,380 13,820 15,020 19,465 90,500 11,480 10,440 1,785 4,420 18,240 $3, 064,200 368,000 38,915 47,500 135,400 232,500 53,450 15,000 8,815 283,695 29,025 •3,039,000 180,000 136,000 185,000 112,000 24,000 28,000 68,500 49,000 74,000 57,000 $9,552,800 634,700 352,900 263,900 193,200 347,800 100,900 142,200 126,600 141,400 156,500 Total... 1,680,300 4,276,500 3,952,500 12,012,900 SCHEDULE 31.—Volume of checks handled for members and for other Reserve Banks, Jan. 1, 1917, to Dec. 31, 1917. Date. By whom deposited. Drawn on New Eng1 a n d, including Boston. Items. Jan Members district No. 1 Other Federal Reserve Banks Total Feb... Members district No. 1 Other Federal Reserve Banks Total Mar... Members district No. 1 Other Federal Reserve Banks Total Apr... Members district No. 1 Other Federal Reserve Banks Total May... Members district No. 1 Other Federal Reserve Banks Total June... Members district No. 1 Other Federal Reserve Banks Total July... Members district No. 1 Other Federal Reserve Banks Total Aug... Members district No. 1 Other Federal Reserve Banks Total Amount. 929,029 $211,442,054 82,156 69,467,250 Drawn on other districts. Items. Amount. Federal Total. Items. Amount. 75,036 $76,532,661 1,004,065 $287,974,715 82,156 69,467,250 1,011,185 280,909,304 75,036 76,532,661 1,086,221 357,441,965 764,681 200,232,603 72,938 66,896,145 58,600 81,996,602 837,619 267,128,748 58,600 81,996,602 896,219 349,125,350 916,827 255,083,791 88,453 82,912, 248 69,428 104,044,163 986,255 359,127,954 88,453 82,912,248 1,005,280 337,996,039 907,369 269,959,036 94,424 93,634,390 823,281 282,229,205 72,938 66,896,145 69,428 104,044,163 1,074,708 442,040,202 67,867 118,346,778 975,236 388,305,814 94,424 93,634,390 1,001,793 373,593,426 67,867 118,346,778 1,069,660 481,940,204 990,372 313,277,248 104,794 100,449,534 72,090 120,536,944 1,062,462 433,814,192 104,794 100,449,534 1,095,166 413,726,782 72,090 120,536,944 1,167,256 534,263,726 990,636 376,892,158 96,428 106,836,301, 73,771 145,650,156 1,064,407 522,542,314 96,428 106,836,301 1,087,064 483,728,459 73,771 145,650,156 1,160,835 629,378,615 966,518 385,506,704 97,827 106,362,288 73,512 154,076,421 1,040,030 539,583,125 97,827 106,362,288 1,064,345 491,868,992 73,512 154,076,421 1,137,857 645,945,413 933,950 405,192,613 99,024 101,330,698 76,077 143,438,330 1,010,027 548,630,943 99,024 101,330,698 1,032,974 506,523,311 76,077 143,438,330 1,109,051 649,961,641 Sept... Members district No. 1 Other Federal Reserve Banks Total 866,931 348,442,753 98,289 99,602,284 965,220 448,045,037 78,427 131,225,648 1,043,647 579,270,685 Oct.... Members district No. 1 Other Federal Reserve Banks Total . 1,040,717 415,574,376 117,360 126,244,959 97,447 155,269,617 1,138,164 570,843,993 117,360 126,244,959 1,158,077 541,819,335 97,447 155,269,617 1,255,524 697,088,952 78,427 131,225,648 945,358 479,668,401 98,289 99,602,284 250 ANNUAL REPORT OF THE FEDERAL RESERVE BOARD. SCHEDULE 31.—Volume of checks handled for members and for other Federal Reserve Banks, Jan. 1, 1911, to Dec. 31, i£i7—Continued. Date. Drawn on New Eng1 a n d, including Boston. By whom deposited. Items. Amount. 1,000,347 $488,767,678 Nov... Members district No. 1 120,246 149,586,318 Other Federal Reserve Banks Total. .. 1,120,593 638,353,996 Drawn on other Districts. Items. Total. Amount. Items. Amount. 93,904 $155,026,132 1,094,251 $643,793,810 120,246 149,586,318 93,904 155,026,132 1,214,497 793,380,128 1,024,260 467,096,007 102,094 166,494,366 1,126,354 633,590,373 Dec... Members district No. 1 Other Federal Reserve Banks 140,652 157,883,533 140,652 157,883,533 1,164,912 624,979,540 102,094 166,494,366 1,267,006 791,473,906 Total Grand total 12,544,228J5,398,672,969 938,253 1,552,637,818 13,482,481 6,951,310,787 This schedule does not include Government checks shown in Schedule 32. SCHEDULE 32.—Number of checks drawn on Treasurer of Untied States handled by Federal Reserve Bank of Boston. Month. Number of pension checks. Amount. January February.. March April May June July August September. October November. December. 10,230 2,481 28,622 8,832 1,688 30,311 7,530 1,847 29,520 8,729 1,472 28,802 $517,519.99 110,476. 60 1,797,566.15 486,012.72 96,131.97 1,841,444.80 482,184.15 105,168.96 1,843,009.61 1,917,507.76 94,245.13 2,055,398.14 Total 159,564 11,346,665.98 SCHEDULE 33.—Gold settlement Reserve Bank. New York Philadelphia.., Cleveland Richmond Atlanta Chicago St. Louis Minneapolis Kansas C i t y . . . Dallas San Francisco. Total Gain through settlement Net loss through transfers Net gain through transfers and settlement Number of other checks. 15,390 14,853 22,466 17,571 22,666 23,051 29,299 37,807 40,944 45,475 51,714 53,200 Total number of checks. Amount. $3,400. 482. 59 2,357! 041.29 2,152, 905.35 3,400; 458. ti2 3,681, 789.75 8,280. 477.69 21,143] 385.80 23,762, 400.72 29,400. 409.58 37,614' 297.03 49,737!.209.52 49,926: 034.73 374,436 234,856,892.67 Amount. S3,918 002.58 2,467! 517.89 3,950: 471.50 3,886: 471.34 3,777: 921.72 10,121:922.49 21,625: 569.95 23,867: 569.68 31,243: 419.19 39,53i: 804.79 49,831: 454.65 51,981;432.87 534,000 246,203,558.65 25,620 17,334 51,088 25,903 24,354 53,362 36,829 39,654 70,464 54,204 53,186 82,002 fund operations, Jan. 1, 1017, to Dec. 31, 1917. Amount received in settlement of accounts due from other Federal Reserve Banks. Amount paid in settlement of accounts due to other Federal Reserve Banks. $1,282,707,000 254,752,000 74,426,000 40,147,000 17,834,000 132,500,000 41,699,000 41,871,000 22,856,000 12,340,000 13,988,000 $1,091,785,000 218,375,000 88,571,000 32,286,000 22,961.000 190,376,000 67,800,000 28,471,000 14,338,000 19,142,000 20,299,000 1,935,120,000 1,794,404,000 Gain through weekly settlements. Loss through weekly settlements. $190,922,000 36,377,000 $14,145,000 7,861,000 13,400,000 8,518,000 5,127,000 57,876,000 26,101,000 6,802,000 6,311,000 257,078,000 140,716,000 4,999,000 116,362,000 "i35,*7i7,*666 251 DISTRICT NO. 1—BOSTON. SCHEDULE 84.—Maturities of invested funds (not including United States bonds or notes). Within 15 (lays. 16 to 30 days. 31 to 60 days. 61 to 90 days. Month. January February March April May June July. August September.. October November.. December... $3,384,387.59 4,240,441.40 6,339,579.02 6, 868,449.75 5,782,614.46 13,485,534.92 8,691, 895. 29 13,189,169.97 8,019,481.18 8,624,946.44 11,541,062.63 14,028,234.18 $3,145, 572.37 2,803, 991.97 4,604, 292,08 2,305, 541. 71 1,079,697.43 3,630, 761. 89 4,545, 135.67 9,254, 373. 34 5,288,955. 73 3,497, 694.46 14,128, 035.97 9;007; 576.15 $5,127, 604. 97 5,200,900.14 4,722,577.25 2,971 451.44 3,436,545.90 8,075. 533.98 12,109; 702.11 8,684, 667. 30 11,211, 333.40 16,287, 214.73 10,957. 876.70 9, 576^917.94 Over 90 days. Total. $3,253,854.30 $5,900. 00 $14,917,319.23 3,956,657.32 126,977.75 16,328,968.58 1,945,646.21 17,612,094.56 815,956.80 12,961,399.70 5,304,956.00 15, 603,813. 79 35,183,627.27 9,991,796.48 5,090,152.89 100.00 30,436,985.96 37,864,291.73 6,736,081.12 13,359,830.75 "386.25 37,879,987.31 34,918,852.69 6,508,997.06 71,110,155.82 34,483,180.52 74,271,501.87 41,658,773.60 SCHEDULE 35.—Distribution, by maturities, of tills rediscount ed for member banks, Jan. 1, 1017, to Dec. 31, 1917. Month. January February March April May June July August September... October November... December 1 to 15 days. 16 to 30 days. 31 to 60 days. 60 to 90 days. Over 90 days. $122,928.67 $126,008.50 $847,389. 05 $102,135.52 332,388. 08 702,647.25 1, 882,783.36 1,015,169. 53 409,488.76 574,161. 56 3,816,627. 87 298,484.96 196,113. 46 454,770. 63 9,118,269.32 180,268.91 934,332.06 445,623. 09 9,493,344.80 428,929. 21 3,365,573.33 34,571,777.01 6,196, 820. 77 2,082,554.17 1,583,856. 80 3,012,316. 60 35,073,960.03 2,760,025.49 16,902,573.21 2,179,412. 22 2,936,784.55 4,358,337.48 21,307,151.47 1,105,028.91 1,567,284.14 1,768,743.98 6,770, 804.48 770,203.90 1,274,928.51 2,389,172.12 4,086,615.21 32,169,170.13 14,243,720.77 9,918,880.69 20,137,601.91 14,922,952.50 25,837,504. 02 44,947, 757. 06 T o t a l . . . 174,166,003.28 39,878,292.61 41,672,738.43 94,006,321,73 Total. $1,198,461.74 3,932,988.22 5,098,763.15 9,949,422. 32 $200. 00 11,302,429.16 46,216,725.28 325. 00 42,430,483.92 26,377,107.46 262,077.15 26,010,285.65 580,860. 00 11,785,969.01 119,432.71 60,537,799.51 233,060.01 106,078, 875. 50 1,195,954. 87 350,919,310.92 SCHEDULE 36.—Classification by maturities of investments (exclusive of United States securities) at close of business Dec. 31, 1917. 15 days. 30 days. 60 days. 90 days. Over 90 days. Total. J,$9,116.25 $19. 327,246.08 Bills discounted, members. $3,321,793. 09 m, 527,991. 39163,603,533. 8512!, 864,811.50 Trade acceptances dis816,660.94 counted 358,906.25 1,337,449.03! 287,536.22 ,800,552.44 Member banks' collateral notes 7,349,338.00 ,349,338.00 Rediscounts secured by Liberty loan bonds 151,257.17 493,425.12 3,643,823.77 32,116,718.77 ,405,222.83 Foreign bankers' accept88,302. 369,734.40 1,999,559.41 ances 100,000.00 ,557,596.50 Domestic bankers' accept33,207.10 503,609.00 828,178. ances , 4,438,522.28 72,500.00 ,876,017.36 346,875.40 257,016.78 603,892.18 Foreign trade acceptances, Total 34305° 11,590,006.98 8,687,005.9211,804,177.25 42,757,058.99 81,616.25 74,919,865.39 DISTRICT NO. 2—NEW YORK. PIEREE JAY, Chairman and Federal Reserve Agent. RESULTS or OPERATION. BALANCE SHEET. The following is a statement comparing the condition of the Federal Reserve Bank of New York on December 31, 1917, with that of December 30, 1916, and showing the increase and decrease in the various items of resources and liabilities: Dec. 31, 1917. Dec. 31, 1916. $225. 117,913.30 i4s; 770,185.44 191,033.66 168, 599.64 4, 493, 000. 00 15, 000, 000. 00 510,701.32 $7,071,158.55 41,457,184.04 RESOURCES. Loans and discounts: Bills discounted for member banks Acceptances purchased Rediscounts for other Federal Reserve Banks United States bonds United States 1 year Treasury notes United States certificates of indebtedness Municipal warrants Total investments Reserve cash: Gold with Federal Reserve agent 1 Gold redemption fund for Federal Reserve notes. Gold settlement fund Gold bullion Gold coin and certificates Legal tender notes Silver certificates and coin Total reserves " l , 042,'550. 00 1,205, 000. 00 972,311.62 424,251,433.36 51,748,204.21 250,598,565.00 10,000.000.00 5,854,000. 00 68,113, 616. 99 107,003,765.00 250,000.00 20,570,000.00 275,130,455.00 159,321,257.50 31,322,275.00 11,188, 200.00 8,925, 743. 85 4,077,274. 80 ! 649,944,655.84 I 302,410,497.30 Other resources: Federal reserve notes and other cash. Items in process of collection. Exchangesforclearing house and sundry cash items Interest accrued on United States bonds Cost of unissued Federal Reserve notes. Deferred charges and prepaid expenses Advances made for Treasury, United States, account expenses Liberty loan and war savings committees Total other resources 752,685.24 091,790.20 429,660. 74 73,620.28 20,458.22 360,350.01 134,728,564.69 Total resources 1,208,924,653. Capital fund: Capital paid in. Surplus! Profit and loss . 13,865,897.46 23,077,418.64 2,503,168.21 12,501.88 235', 598.86 8,753.52 39,703,338.57 393,862,040.08 18,695,950.00 649,363.56 11,865,750.00 19,345,313.56 12,028,813.9 163,063.'9*8 Total capital fund 1 Inserted in 1918 report for purposes of comparison. 253 254 ANNUAL REPORT OF THE FEDERAL RESERVE BOARD. Dec. 31,1917. Deposits: Due to United States Government Due to foreign Governments Due to nonmember banks, deposit account Due to member banks—reserve balances Due to member banks—uncollected funds Due to other Federal Reserve Banks—collected funds Due to other Federal Reserve Banks—uncollected funds Cashier's checks outstanding Gross deposits.. Other liabilities: Depreciation reserve Unearned discount and interest Participation certificates Liberty loan bonds. Federal Reserve notes outstanding1 Total other liabilities.. Total liabilities Dec. 31, 1916. $11,870.767.74 3,335,930.00 10,317,630.16 652, 791,808.26 35,553,478.43 7,610,609.86 156.779.75 821,683.09 $3,571,391.94 237,907.354.87 18,552; 984.84 12,373,721.91 2,085,975.49 188,275.81 731,458,687.29 274,679,704.86 205,880.00 1,348,238.04 227,970.00 456,338,565.00 *iO7,* 003* 765.66 149,756.24 458,120,653.04 107,153,521.24 .1,208,924,653.89 393,862,040.08 The great increase in many of the items of resources and liabilities may be traced quite directly to the changed conditions created by the amendments to the Federal Reserve Act approved June 21, 1917. These amendments greatly increased the balances of the member banks, placed on the balance sheet the entire note liability and the gold and lawful money held by the Federal Reserve agent, permitted nonmember banks to open clearing accounts, and b}^ establishing in the statute the rights and duties of State institutions as member banks prepared the way for the membership of a large number of these institutions. The remaining changes are largely due to the activities of this bank in rendering assistance to the Government and to its members in the financial operations entailed by the war. The changes in the balance sheet will later be commented upon in detail under the appropriate headings. INCOME AND EXPENSE. The following statement shows the income and expense of the bank for the years 1916 and 1917: 1917 1916 INCOME. Bills discounted for members Acceptances bought A* United States securities Municipal warrants , Profit realized on United States bonds... Commissions received , Profit on bills sold Penalties for deficient reserves Service charges , Sundry profits Total $2,455,532.87 1,843,324.87 378,668.40 66,470.41 14,335.50 38,537.54 8,077.03 18,565.29 80,922.53 24,779.51 $37,368.26 530,483.75 81,644.49 214,122.13 43,515.01 42,387.09 4,929,213.95 983,609. 22 32,959.90 1,128.59 DISTKICT NO. 2 255 NEW YORK. 1917 . 1916 EXPENSE. Directors' fees, outside conferences, and Federal Advisory Council Salaries Rent General expenses ... Cost of Federal Reserve notes used Assessment for expenses of Federal Reserve Board Total Net earnings Profit and loss balance, Dec. 30,1916 Net debits during year $18,301.61 398 282.81 55,550. 91 329,096. 98 343 764.88 50,252.09 $10,768.34 215,307.51 45,810.04 151,200.36 95,240.00 39,029.38 1,195,249.28 557,352.12 3, 733, 964.67 426.257.10 $163 063. 4 355. ?1 158,708.77 3,892,673.44 Deductions, Dec. 31,1917: Cost of unissued Federal Reserve notes charged oil Depreciation reserve account set up ... Dividends paid during 1917: To liquidated banks Apr. 1, 1915, to Dec. 31, 1915, paid June 30,1917 Jan. 1,1916, to Dec. 31,1917, paid Dec. 31,1917 1 176. 474, 776. 12 . . 1,466,865. 51 445,248. 14 205,880. 00 651.128.14 Paid to Treasurer of United States as franchise tax, Dec. 31, 1917 Carried to surplus Total.. . 1.942,818.17 649,363.57 649,363.56 3 892 673.44 The great expansion which has occurred in the business of the bank during 1917 is reflected not only in the increased earnings but also in the increased expenses for salaries, rent, and printing Federal Ileserve notes, which will be referred to in more detail later. The item " General expenses " includes cost of furniture and equipment, stationery and printing, telephone, telegraph, postage, expressage, insurance, as well as the entire expense of operation of the transit department, including expenditures of the kind just mentioned, salaries -and rent. At the close of the year, after allowing for all current expenses, and paying dividends to date as above indicated, charging off all assets of a nonliquidating character and setting aside a reserve for depreciation on United States 3 per cent conversion bonds and for certain obligations under the lease of the banking office, the Federal Eeserve Bank, under the provisions of section 7 of the Federal Eeserve Act, paid into the Treasury of the United States as a franchise tax $649,363.57, being 50 per cent of the net earnings to date, and carried a like amount to surplus fund. 256 ANNUAL REPORT OF THE FEDERAL RESERVE BOARD. DISCOUNT KATES. The discount rates established by the Federal Reserve Bank of New York during the year, and the rates at which acceptances were purchased in the open market have been as follows: Month. January February..,.. March April May June July August September October November December 1-20.. December 21-31 (Special.) Secured by. Liberty 15 days Agricul- bonds or or less 16 to 90 tHral United (includ- days, paper States in- 91 ing days certifito 6 collateral clusive. cates of loans). months. indebtedness within 16-90 days. •Open-market purchases, bankers' acceptances. (Special.) 1-day collateral notes in Trade connec- accepttion with ances. GovernAuthor- Actual ment ized rates.1 rates. financing. Per cent. Per cent. Per cent. Per cent. Per cent. Per cent. Per cent. Per cent. 5 2 -4 3 4 5 2 -4 3 4 5 2 -4 3 4 5 2J-4 3 4 5 3 4 31 3 -4 5 2-4 3 4 i|-4 3 -4 5 2-4 3 4 24-4 . 3 -4 5 3 4 2-4 24-4 3 -4 5 3 4 2-4 24-4 3-—4 5 3 4 2-4 2.V-4 of-4 5 3 4 2-4 2|-4 5 3 4 1 2 34 4-1 3-4J 3 -44 i U l m 3H1 1 Acceptance rates advanced Dec. 7. To assist the Government financing, a special rate of 8-J- per cent was established on May 22 for discounts maturing within 90 days secured by United States certificates of indebtedness or Liberty bonds. On June 13 a special rate of 2 per cent to 4 per cent was established for advances on member banks' one-day collateral notes secured by eligible commercial paper or United States Government obligations In connection with Government financing, and loans were made between June 5 and June 12 at the rate of 2-| per cent. Subsequently, loans of this character were made at the prevailing rate for maturities within 15 days. During the early part of the year the bank's 90-day discount rate continued, as in preceding years, to be above the open-market rate for commercial paper. Since the declaration of war, however, It has been substantially below the open-market rate for such paper. Th© change In the relative position of the two rates, however, led to no marked Increase in the discounting of this class of paper. Substantially all of the rates of the bank were increased about one-half of 1 per cent shortly after December 15, when the period of Government financing relating to the second Liberty loan had been completed, in order to bring the rates of the bank on commercial paper more nearly In line with the rates prevailing in the open market, and in order to stimulate liquidation of its discounts in anticipation of future 257 DISTRICT NO, 2—NEW YORK. demands upon its credit facilities which will arise during succeeding periods of Government financing. INVESTMENTS OF THE FEDERAL RESERVE B A N K or DURING NEW YORK 1917. MATURITIES OF INVESTMENTS AND LOANS. The following statement shows the maturities of investments, other than United States securities and warrants, held by the Federal Reserve Bank of New York December 31, 1917: Discounts or ad- Discounts or advances based on vances based on Bankers' acceptcommercial ances. United States paper. securities. Within 15 days 16 to 30 days 31 to 60 days 61 to 90 days Total Total. $55,972,882. 45 7,261,070.62 32,153,380. 52 16,327,611. 46 $81, 494,809. 69 1,028,580.10 51,977,627.14 4,093,924. 98 $17,172,201.88 22,354,778.42 82,644,978. 39 26,598,226.75 $154,639,894.02 30,644,429.14 166,775,988.05 47,019,763.19 111,714,945.05 138,594,941.91. 148,770,185.44 399,080,0/2.40 MEMBER BANK DISCOUNTS AND ADVANCES. The early months of 1917 showed the usual small volume of advances and discounts for member banks, but, as the Government financing, which commenced shortly after our entrance into the war, began to assume important proportions, the discount facilities of the Federal Reserve Bank were availed of generally, and as the time for payments due June 15 on the first Liberty loan approached there was a rapid increase in the volume of acceptances purchased in the open market and discounts for member banks. The discounts for member banks, which amounted to less than $1,000,000 on June 1, had increased on June 19 to $168,000,000, while acceptances increased between the same dates from $86,000,000 to $89,000,000 and rose on June 27 to $1O35OOO?OOO. Total investments rose from $66,000,000 on June 1 to $279,000,000 on June 19. The contraction was only slightly less abrupt than the expansion, for by August 15 the total investments of the bank had fallen to $68,000,000. "This sudden expansion of $213,000,000 in 19 days, which exceeded by $104,000,000 the largest amount of clearing-house certificates ever outstanding among the New York Clearing House banks, was due to two causes, which were also operative during the period of Government financing incident to the second issue of Liberty bonds. First, the withdrawal by interior banks of deposits kept with New York institutions in order to make payment in their respective Fed 258 ANNUAL REPORT OF THE FEDERAL RESERVE BOARD. eral Reserve districts for United States certificates of indebtedness and for Liberty bonds purchased by such banks or through them. Interior banks usually make these payments by drafts on New York banks, which are sent to the Federal Reserve Bank of New York for collection through the clearing house and for settlement through the gold settlement fund. By this method the reserves of the New York banks are depleted and gold is transferred to the interior. To maintain their reserves the New York banks are obliged to come to the Federal Reserve Bank for discounts or advances. Usually these have been required only for short periods, running from a few days to a few weeks, because the funds gradually find their way back to New York, also through the gold settlement fund, as the United States Government makes most of its advances to the allied Governments and pays a large proportion of its own expenditures through the Federal Reserve Bank of New York. Second, the requirement for the creation of an immense volume of bank credit represented by short-term certificates of indebtedness, which the Government issues to provide itself with funds in anticipation of the sale of bonds. The total volume of these certificates outstanding in connection with the period of financing which ended with the first Liberty loan was $868,205,000, of which this Federal Reserve district took $479,962,000, or 53 per cent. When these credits are created by the banks, the law does not require any reserves to be maintained against them, but, as they are gradually drawn into the Federal Reserve Bank and disbursed by the Government, they are transformed from Government deposits, free of reserves, into individual deposits, requiring reserves, and, therefore, requiring larger balances to be kept with, the Federal Reserve Bank. As the allied Governments, to whom the bulk of the funds has thus far been distributed, make payments to interior points the banks have to discount with the Federal Reserve Bank to maintain their reserves. When these funds reach interior banks, balances withdrawn from New York for the payment of Liberty bonds are gradually built up again and the New York banks relieved of their strain. Each sale of bonds is, therefore, the culmination of a period of Government financing which begins with tremendous expansion of bank credit in favor of the Government and ends with wThat is in effect,- though not literally, a conversion of these short-time bank credits into long-time investment credits, namely Liberty bonds. This conversion enables the banks to contract their position somewhat and, by canceling the credits they have obtained at the Federal Reserve Bank, thereby contract the position of the Federal Reserve Bank as well and prepare it for another similar period of financing. During the period of financing ending with the payments for the second Liberty loan, the total amount of United States short-term DISTRICT1 ETO. 2—NEW YOKK. 259 certificates of indebtedness issued throughout the country was $2,925,296,000 (including $690,000,000 due June 25, 1918, issued in anticipation of tax payments then due) of which the banks in this Federal Eeserve district purchased $1,961,613,500, or 67 per cent. The increased volume of the temporary financing in this period, compared with that of the. preceding period, involved larger movements of funds to and from the interior, larger fluctuations in bank reserves and considerably larger recourse to the credit power of the Federal Eeserve Bank. The first issue of certificates in connection with this period WTIS on August 9. On this date the total loans and investments of the bank were $78,000,000. On November 30, 15 days after the first payment for the Liberty loan bonds, they had grown to $522,000,000, an increase during this period of financing of $444.000,000. On one day, November 30, the increase was $111,000,000. On December 15, the maturity date of the last issue of certificates of indebtedness, the decrease in loans and investments was $219,000,000, indicating in a very striking way the effect of the Government certificates of indebtedness upon the discount activities of the Federal Eeserve Bank. The chart on the following page shows graphically the closeness of the relation between the Government's short-time financing on certificates of indebtedness and the expansion of the loans and investments of the Federal Eeserve Bank of New York. January March April May July flugusr Ocfoher IZI THE SOLiD LINE SHOWS THE TOTAL LOANS, DISCOUNTS ANO INVESTMENTS OV THE FEDERAL RESERVE BANK OF NEW YORK DURING 1^)7 THE DOTTED LiME SHOWS THE AMOUNTS OF U. S. CERTIFICATES OF tf-!DE':BTEi)Mf:S3 PURCHASED AND OUTSTANDING" IN THE SECOND FEDERAL RESERVE: DISTRICT DURSNO J917 \wuxapw P H O o p Fiaaacmg period of the first Liberty Loan Financingperiod'of'tne second Liberty Losn 261 DISTRICT NO. 2—NEW YORK. The following is a statement of discounts for and advances to member banks, by months, during 1917, together with similar transactions during 1916: 1917 Month. Number of items. January February.. March..!... April May June July August September. October November. December.. 148 171 237 267 523 2,034 1,346 1,254 1,625 2;544 3,213 9,122 Total 22,484 Amount. $598, 162.06 1,925, 351.05 3,062, 583.13 2,439, 223. 25 6, 545, 273.25 552,976, 458.11 262,366, 105. 28 53,024, 394. 91 319,543, 993. 34 2,382,893, 110. 97 2,663,667, 291. 90 262,232, 974.93 6,511,274,921.4 1916 Number of items. Amount. 117 73 249 149 307 325 116 241 105 177 79 567 $125,655. 65 98,304. 35 304,638. 35 149,950.15 191,290. 38 348,405. 34 235,494. 37 586,851. 00 560,583. 29 1,035' 118. 65 715| 293. 90 17,977,996. 38 2,505 22,329, 581. 81 The immense volume of discounts and advances made during October and November, 1917, are due to the fact that many of the banks which borrowed most heavily did their borrowing for periods of from one to five days only, in order to readjust the amounts at each renewal to the requirements of their condition. In this way their borrowing became almost as flexible as if their loans had been on demand. The following figures show certain data concerning the discounts of 1916 and 1917: 1916 Number of apnlionlions received A:>i nr,it of applicuu JIIS r,*:vi\ e'l. Amount of applications aeropi^d end disoount^d or advanced upon. > p Number of piojofj oi'p^por (Us <,auied or advanced u p o n . J v^id piece cf paper d'scoi'i-!,nd or advanced tip. n.' £m iMfst piece ci paper d i s ^ i oJcd c au\ an xd upon A vvru^e L'L,-> of a 4es cliso niiii.sd or ad\ nn xd up ,u IS amber of baiL.s rodio^ountii-g T BANKEES 7 ACCEPTANCES AND THE DISCOUNT MARKET. This year has witnessed a continued increase in the volume of bankers' acceptances created and a steadily broadening open market in which they circulate. At the close of the year 1916 it was stated that there were outstanding about $250,000,000 of dollar acceptances, including bills of foreign origin on American merchants. It is not improbable that the volume of such paper in the United States at the close of 1917 is from four to five hundred million dollars. 262 ANNUAL REPORT OF THE FEDERAL RESERVE BOARD. The increases, while general in all classes of bills eligible for discount with Federal Reserve Banks, are most notable in the bills arising from domestic transactions and from the increasing trade between the United States and the Orient. The following table, gathered from reports made to public officers, shows the amount of acceptance liabilities of national banks in district No. 2, and of State banks and trust companies in the State of New York: September, 1917. National banks Trust companies State "banks.Total , September, 1916. $73,717,000 91,424,509 7,355,910 $44,300,877 68,588,558 2,787,995 172,497,419 115,677,430 The more general recourse during the year to bankers' credits for financing the large seasonal movements in commodities is an indication of a wider understanding and appreciation, by the borrower and banker alike, of the advantages of this form of financing transactions that in themselves furnish the means of discharging the obligations incurred by the taker of credit and the acceptor. With the increased volume of business, the number of accepting banks and purchasers of bills also has steadily increased. The names of many well-known institutions located in the larger cities of the country have now become known as acceptors through their acceptances offered in the open market in New York. Also, dealers report an increasing interest on the part of out-of-town banks as investors in prime bills, evidenced both in the number of new buyers and the volume of their purchases. Indicative of the increase are the reports of two houses whose sales this year have in each case exceeded $300,000,000 and neither of which handled over $80,000,000 of bankers' bills last year. The larger number of dealers and bill brokers specializing in bankers5 acceptances is another indication of the widening interest in the development of the open market. The New York open-market discount rates during the year have advanced gradually until they were at the close about 1 per cent higher that at the end of last year. They have, nevertheless, been the most stable of all the money rates during the period. The purchases of the Federal Reserve Bank of New York have materially assisted in this stabilization, especially at times when, owing to the temporary requirements of the banks in this district and elsewhere, bills were offered in large volume for resale in the market or directly to the Federal Reserve Bank, and also when, during periods of adjustment incident to the large financial operations of the Government, the DISTRICT NO. 2—NEW YORK. 263 market's absorption of newly accepted bills was more or less interrupted. On the whole, however, purchases by the Federal Eeserve Banks have been at rates determined by the law of supply and demand in the open market. By reference to the table showing the monthly purchases of acceptances by this bank for itself and other Federal Eeserve Banks, it will be seen that during March and April, when the open-market rates fell below those at which this bank was willing to purchase, practically the entire volume of acceptances was taken by the open market, and as a result the bill holdings of this bank decreased from $39,000,000 on January 2 to $15,000,000 on April 18. When the rates for money stiffened in June, incident to the transfers between New York and interior points, the market rates rose above those of the Federal Eeserve Bank and bills were taken in large volume by this bank, whose holdings of bills increased $66,000,000 during June. During the period of easy money, which began shortly after July 1, market rates again fell below those of the Federal Eeserve Bank and liquidation of its bills again occurred. The situation was reversed again as the demand for money increased and the time for payment on the second Liberty loan approached. By selling a large volume of its bills early in November to other Federal Eeserve Banks which, had not been drawn on so heavily by their members, this bank was placed in a position to maintain fairly stable rates for the purchase of bills during the strained period between November 15 and December 15, on -which latter date its holdings of bills aggregated $115,000,000. The somewhat higher rates that have obtained during the year, and the resulting wider demand have tended to diminish the distinction that has existed in the open market between the rates at which the acceptances of member banks and other well-known acceptors, private bankers, and others, were sold. This tendency to equalize the open-market discount rates for equally prime bills, makes for greater stability and freer use of dollar bills of exchange in foreign markets, where the fine grades of distinction existing here were not understood. The Federal Eeserve Bank has assisted in this equalization by its forward quotations for and purchase of prime bills to arrive from the foreign countries of origin, as well as by its recognition of the indorsements of both foreign banks and domestic banks and bankers. In its purchases the Federal Eeserve Bank has, by differential rates, emphasized its preference for indorsed paper and the shorter maturities; that is, for paper that has been sold in the market and is re-offered indorsed by the original and subsequent purchasers and is approaching maturity. This ordinarily enables a bank that carries 264 ANNUAL BEPOBT OF THE FEDERAL RESERVE BOARD. a secondary reserve line of bankers' acceptances to make an additional profit or higher average yield on bills carried by purchasing the longer bills at higher rates, and when they come, say, to within 30 days of maturity, indorsing and selling them to the Federal Reserve Bank at the minimum rates obtaining for short-time paper, and reinvesting the proceeds in new long bills. A large proportion of the bills now bought by the Federal Eeserve Bank bear one or more banking indorsements. This development in the practice of the market in New York, which has occurred within the year, is in accordance with the long-established practice in the open markets of Europe and constitutes one of the most significant evidences of the appreciation by our banks and bankers of what will be the logical development of a larger open market in this country and of the normal functions of a Federal Eeserve Bank as a bank of rediscount rather than one of original discount. The monthly purchases of acceptances and indorsed trade bills by this bank for itself and for other Federal Eeserve Banks have been as follows: For account of Federal Reserve Bank of New York. For account of other Federal Reserve Banks. Number of items. Number of items. Month. January February.. March..:... Ar>ril ... May June....... July August..... September. October November. December.. 133 1,004 84 437 1,278 4.025 1^019 439 4,407 2,835 3,079 4.476 23.87' Total Classification: Import and export Domestic Indorsed trade bills of foreign origin Bills drawn to furnish dollar exchange.. Domestic trade acceptances Total. Amount. Amount. $2,605, 561.06 20,242, 314.18 1,763, 414.47 9,687, 414.49 28,839, 604.60 83,248. 507.98 25,012, 533.62 12,512, 824.39 62,434 840.29 50,307 095.52 61,395'. 915.90 100,915, 574.17 396 1,311 230 591 1,459 1,947 1,991 1,672 356 523 314 105 $7,465, 453.54 21,619, 722.70 4,727, 936.26 11,617, 300.68 21,526, 022.56 24,474, 515.37 21,921, 403.75 19,553, 401.32 5,628, 313.38 6,524, 838.02 7,267, 178.15 593, 045.18 404,965,600.07 | 10,895 152,919,830. 91 387.550,190.57 69', 323,528.03 5,755,352.44 1,971.529.03 365', 000.00 111,757,370.47 8,370,500.56 2,452,116.94 340,786.94 461,965,000.67 152,019,830.91 TRADE ACCEPTANCES. Reports from different parts of the country indicate a rapid increase during the year in the use of trade acceptances and, in view of the widespread interest in this subject, this bank has published and distributed to all banks in this district a pamphlet giving Information concerning the advantages to be derived from the substitution of trade acceptances for open book accounts. The great DISTRICT KO. 2 NEW YORK. 265 demand for the pamphlet evidences the consideration now being given by the business interests to the adoption of this system. The Trade Acceptance Council has been organized, composed of representatives from the United States Chamber of Commerce, the American Bankers Association, and the National Association of Credit Men, which plans to inaugurate a campaign of education on the use of trade acceptances. The council has the full support of the Federal Eeserve Bank in this work. UNITED STATES BOND OPERATIONS. Following advice from the Federal Eeserve Board that it would require the Federal Eeserve Banks to purchase on April 1, 1917, United States bonds amounting to $15,000,000, or so much thereof as might be offered for sale on or before March 21 by the Treasurer of the United States, the Federal Eeserve Bank of New York purchased, during the first quarter of 1917, from member banks and in the open market $2,560,000 of United States 2 per cent bonds bearing circulation privilege and has converted $3,552,500 (including bonds held over from 1916) into $1,776,500 30 year 3 per cent conversion bonds, and $1,776,000 one year 3 per cent gold notes of the United States, neither of which has the circulation privilege. No further purchases of the 2 per cent bonds have been made, as the Federal Eeserve Board, on April 18, advised that in view of the coming issue of United States bonds bearing interest at 3J per cent, it would not require the Federal Seserve banks to purchase bonds convertible into obligations bearing only 3 per cent. This was further confirmed by resolutions adopted by the Federal Eeserve Board on June 21. On March 31 the bank purchased from the Government $20,000,000 of 2 per cent certificates of indebtedness maturing June 30, 1917, which were carried to maturity. In connection with its work as fiscal agent in selling later issues of certificates of indebtedness and the two issues of Liberty bonds, referred to elsewhere in this report, the bank has from time to time purchased from holders of such certificates varying amounts which were either carried to maturity, or after a short interval, resold to those from whom purchased. It has also on several occasions purchased direct from the Government certificates of indebtedness payable within a few days, bearing interest at 2 to 4 per cent, the purpose being to avoid constant withdrawals of Government funds on deposit with depositary banks,, The bank purchased Liberty bonds of the first issue amounting to $1,500,000 to be held and delivered to holders of certificates which it issued in denominations $10, five of which could be converted into a $50 bond. Liberty bonds to imim 266 ANNUAL REPORT OF THE FEDERAL RESERVE BOARD. portant amounts were also purchased from subscribers to the first issue who had defaulted in their payments. Details of the transactions in United States bonds will be found in the appendix. MUNICIPAL WARRANTS. Municipal warrants, which, during 1915 and 1916 were purchased in substantial volume when the resources of the bank were not being otherwise drawn upon, disappeared almost entirely from its investments during 1917. The following statement records the purchases during the year. Month. For account of For account of Federal Re- other Federal serve Bank of Reserve New York. Banks. Amount. January February.. May September. Total.. Amount. $2,700,000 2,425,000 50,000 1,000,000 $4,240,000 3,225,000 25,000 0,235,000 7,490,000 Average rate for year, 3.04. FEDERAL RESERVE NOTE ISSUES AND T H E ACCUMULATION OF GOLD. The policy of issuing Federal Reserve notes freely and of maintaining the interchangeability of Federal Reserve Bank deposits and notes, which was described in the last two annual reports, has been pursued consistently throughout the year. The amendment to the Federal Reserve Act of June 21 provided, among other things, that all Federal Reserve notes in actual circulation should be included by the bank among its liabilities, and that it should include among its assets the gold held by the Federal Reserve agent as security for such Federal Reserve notes. The gold delivered to the Federal Reserve agent is thus treated as collateral to Federal Reserve notes instead of, as formerly, a payment to reduce the bank's liability, and the Federal Reserve Bank is made joint custodian of the funds so held. Up to June 15 all outstanding Federal Reserve notes of this bank were secured dollar for dollar by gold or gold certificates. On that date, however, rapid increases in the bank's loans and discounts made it desirable to make a partial substitution of commercial paper for gold as security for the Federal Reserve notes, thereby increasing the gold reserve of the bank, and $25,000,000 was thus substituted. On June 22 an additional $75,000,000 was substituted, and since that date, in accordance with the spirit of the above referred to, the gold held by the Federal Reserve Digitized foramendment FRASER DISTBICT NO. 2—NEW YOBK. 267 agent has been maintained in substantially the same proportion to the net liability on Federal Reserve notes as the proportion of gold held by the bank has borne to its deposit liability. The accumulation of gold throughout the year by the issue of Federal Eeserve notes in exchange therefor has added materially to the strength of the bank. To assist in this strengthening process the Federal Eeserve Bank on August 10 invited the cooperation of all the national banks, State banks, and trust companies in the district and offered to pay the cost to such banks of forwarding to it gold or gold certificates and to ship Federal Eeserve notes free of expense to any such bank forwarding gold or gold certificates. Later it also offered for a limited period to accept gold coin at its face value without deduction for loss by abrasion. The response to these offers has been extremely gratifying not only in the amount of gold accumulated but in the splendid cooperation given by banks in the district, member and nonmember alike. Member banks outside of New York City sent in, between August 10 and December 31, gold and gold certificates amounting to $10,776,000. Nonmember banks outside of New York City sent in gold and gold certificates amounting to $9,312,000. The amounts of gold received from the New York City banks were, of course, far larger. Many of the nonmember banks in New York under authority of the amendment to the Federal Eeserve Act, which permitted accounts to be opened for clearing purposes, deposited with the Federal Eeserve Bank large amounts of gold or gold certificates which they had held in their vaults. Arrangements effected in the early autumn by which the Treasury at Washington and the Subtreasury at New York were supplied with Federal Eeserve notes to meet demands for new currency have also assisted materially in the substitution of Federal Eeserve notes for gold certificates in general circulation. The amount of Federal Eeserve notes of this bank in actual circulation at the end of 1916 was $93,426,100. At the end of 1917 the amount in actual circulation was $397,353,805. This large increase does not represent wholly a substitution of Federal Eeserve notes for gold. Owing to the increase in the gold supply of the bank from other sources it is impossible to estimate at all accurately what part of the total was so accumulated. It is evident, however, that a substantial volume of notes has been issued not covered by gold, which therefore constitutes an expansion of our circulating medium. This, of course, is both natural under the circumstances and in accordance with the letter and spirit of the Federal Eeserve Act, since Federal Eeserve notes are, with the exception of gold, the principal expanding and contracting element in our currency. The higher prices for labor and materials and the greater velocity of business 34365°—18 18 268 ANNUAL REPORT OF THE FEDERAL RESERVE BOARD. and trade require larger amounts of currency to be carried as till and pocket money. The same demand has manifested itself for silver and other coins. The Federal Reserve Bank issues whatever notes the banks of its district require for use of their customers, but the expansion should be regarded as entirely healthy since no one is compelled to receive Federal Reserve notes in payment of debts and since they are redeemable in gold on demand. The redemption of Federal Reserve notes unfit for circulation since November, 1914, has amounted to $119,141,435. The cost of printing the notes has again increased and is now on the basis of $10.80 per thousand bills as against $10.58 last year. I t is interesting to note that while the demand for notes during the latter part of 1916 was heaviest for the $5 denomination, it has since changed so that the tens have been issued in largest amounts and the proportion of twenties issued has distinctly increased. The demand for fifties and hundreds is also heavier, and were notes of denominations of $500, $1,000, $5,000, and $10,000 available, they would doubtless be taken in important amounts by many banks in the larger cities of the district which have need for currency of this size and are, at present, obliged to hold gold certificates and pay them out when necessary. COLLECTIONS AND CLEARINGS, THE COLLECTION SYSTEM. The check collection system described at length in the last annual report has been continued in operation during the year, and the following table shows the various classes and amounts of items handled: [000's omitted in columns headed "Amount."] Items on other Federal Reserve banks. Items on banks in other Federal Items on banks Reserve districts. in district No. 2. Items on New York Clearing House banks. United States Treasury checks. Month. 1917. January February.. March April May June July August September. October November.. December.. Total. 658 502 587 539 49' 416 530 579 509 548 558 460 $3,789 5,324 7,088 7,340 7,915 11,621 7,417 11,903 8,847 6,555 8,365 6,219 367,754 325,367 406,568 407,718 421,991 412,261 373,514 356,429 382,888 510,575 534,942 586, 907 $173,484 620,476 169,128 546,298 202,489 621,938 221,139 702,285 248,645 830,591 250,546 859,104 236,115 866,893 239,075 914,076 266,621 883,781 325,528 975,647 330,062 967,104 339,866 1,065,090 $122,760 105,120 145,303 161,683 186,598 234,054 220,080 258, 670 216,268 299,880 894,848 913,376 114,978 81,733 94,961 96,874 123,702 163,170 132,153 129,921 94,548 132,314 122,932 145,124 $383,380 348,895 459,026 670,211 937,649 1,137,609 1,037,054 978,327 869,452 1,859,986 1,805,131 1,659,628 138,716 141,685 135,047 145,586 205,797 201,668 227,791 280,931 311,473 358,626 442,649 439, 220 $35,217 39,129 45,165 39,401 39,771 43,346 65,037 100,413 138,245 162,534 174,127 217,073 6,383 97,383 5,086,914 3,002,698 9,853,283|3,758,640 1,432,410 12,146,348J3,029,189 1,099,458 I DISTRICT JSTO. 2—STEW YORK. 269 The collection system was extended on September 10, 1917, to include the collection of notes, drafts, bills of exchange, and other collection items. As the handling of items of this kind presents problems quite different from those involved in handling checks, a service charge of 10 cents per item is made, in addition to such collection charge as may be imposed by the collecting bank. In case a collction item is returned unpaid, a charge of 10 cents is imposed to be paid to the bank presenting the item for payment. No charge, however, has been made for the collection of coupons other than the charge made by the collecting bank plus mail or express charges. As far as possible, items are sent direct to their place of payment, and, when payable outside of the district, the collecting bank is permitted to make remittance either direct to the Federal Eeserve Bank of New York in New York exchange, or, if more convenient, in available exchange, to any other near-by Federal Reserve Bank for the credit of this bank. During the early months of the year the number of banks which agreed to remit to the Federal Reserve Bank of New York at par for items drawn upon them included all but 90 out of the 1,049 banks in the district, and, on April 1 this bank announced its readiness to accept at par, subject to the usual per item charge, checks on every bank in the district. Checks on those banks which did not agree to remit at par were collected through express companies and through local agencies established by the Federal Reserve Bank. A number of banks on which items were at first collected in this manner have since agreed to remit at par, and it is hoped that in the interest of the development of the par collection system, the remainder will also in time adopt the same course. On May 31, this bank announced the completion of arrangements with other Federal Reserve Banks for the issuance and sale by member banks of drafts available for immediate credit at any of the 12 Federal Reserve Banks. Under this arrangement, any member bank may draw its draft on its Federal Reserve Bank and have it made available for immediate credit at par in any of the 12 Federal Reserve cities. Under the regulations of the Federal Reserve Board, the Federal Reserve Bank has throughout the year assessed penalties on member banks which have failed to maintain their reserve deposits with the Federal Reserve Bank at the amount required. The member banks report monthly the average reserve required to be kept by them with the Federal Reserve Bank and impairments of this reserve are ascertained by comparing the figures reported by the banks with the average actual reserve shown by the Federal Reserve Bank's books during such month. The penalty, which the board has fixed at a rate of 2 per cent above the 90-day discount rate, has been at the rate of 6 270 ANNUAL KEPORT OF THE FEDERAL RESERVE BOARD. per cent during the year. The amount collected was $18,565.29, and the average number of banks penalized each month, 12. GOLD SETTLEMENT FUND. The operations of the gold settlement fund have become of even greater importance than heretofore in connection with the broadened activities of the Federal Reserve Banks since the entrance of the United States into the war. The banks in other Federal Reserve districts have made payments on account of subscriptions to certificates of indebtedness and Liberty loan bonds, to a very important extent by drawing upon their New York correspondents. Payments by this bank to other Federal Reserve Banks during the year through the gold settlement fund totaled $8,692,024,000, and payments received from other Federal Reserve Banks totaled $8,426,893,000, the net amount paid being $265,131,000. Transfers in immense volume have been made from other Federal Reserve Banks to this bank, both as a natural movement of funds and also for account of the Treasurer of the United States. It seems probable that without the facilities of the gold settlement fund, these heavy transfers could have been accomplished only at considerable expense and with an unfortunate disturbance of domestic exchange at times when it was of the utmost importance that no disturbance should occur. Through the courtesy of the Treasury and subtreasuries these transfers have been made without the shipment of any gold or gold certificates, and at a trifling cost for telegrams and clerical work. The amendments of June 21 provided that the Treasurer of the United States should receive deposits of gold from Federal Reserve Banks or Federal Reserve agents for credit of their accounts with the Federal Reserve Board. The gold settlement fund since June 29 has therefore been carried on the books of the Treasurer of the United States as a deposit repayable in gold to the Federal Reserve Board, which administers the fund. THE TRANSFER SYSTEM. Telegraphic transfers have been made for member banks without limit as to amount and without charge other than the cost of the telegram. That they have become an important part of the exchange operations of the bank, is shown by the following table giving the volume of transactions during the last six months: Month. Daily average amount. $31,801,000 July 28,536,000 August September 30,893,000 Daily average number of transfers. Daily Month. average Daily average number amount. of transfers. October.., November December. $37,304,000 47,191,000 50,308,000 48 73 70 DISTRICT NO. 2 271 NEW YORK. DESIGNATION OF RESERVE CITIES. Under the provisions of section 11 of the Federal Reserve Act, the Federal Reserve Board has designated Buffalo, N. Y., as a reserve city, effective January 1, 1918. RELATIONS W I T H MEMBER BANKS. In Federal Reserve District No. 2, including New York State, Fairfield County, Conn., and the following counties of New Jersey: Bergen, Essex, Hudson, Hunterdon, Middlesex, Monmouth, Morris, Passaic, Somerset, Sussex, Union, and Warren, the number of member banks on December 31, 1917, was 667, as compared with 625 on December 31, 1916, the location of the members being as follows: Number of banks. Location. -L Connecticut (Fairfield County) New Jersey New York, Borough of Manhattan New York, elsewhere 15 134 56 462 518 Total 667 During the year 41 State banks and trust companies were admitted to membership, making a total of 43 such members, the names of the institutions and the amount of their gross resources at the time of last available official statement being as follows: Bank or trust company. Location. Bridgeport Trust Co Connecticut: Bridgeport New Jersey: Montclair Passaic Plainfield Rahway New York: Batavia Brooklyn Do Do Do Buffalo Do Elmira New York City Do Do Do Do Do Do Do Do Do Do.. Do Do Bo Do Bank of Montclair.. Passaic Trust & Safe Deposit Co Plainfield Trust Co Rahway Trust Co Bank of Genesee Brooklyn Trust Co Franklin Trust Co.. Manufacturers Trust Co Peoples Trust Co Buffalo Trust Co Citizens Commercial Trust Co Chemung Canal Trust Co Bank of America Bank of the Manhattan Co Bankers Trust Co Central Trust Co Columbia Trust Co 1 Corn Exchange Bank Equitable Trust Co Fidelity Trust Co German American Bank Germania Bank Grace & Co.'s Bank, W. R • Guaranty Trust Co Irving Trust Co.* Mercantile Trust & Deposit Co Metropolitan Bank 1 Admitted to membership prior to Jan. 1,1916. Resources* $7,866,545.08 3,408,669.31 7,130,181.05 8,749,434.09 398,276.67 1,151,906.81 80,541,258.38 35,397,147.55 15,031,812.26 31,376,550.02 9,624,217.56 18,971,655.31 7,301,857.80 53,142,536.95 77,352,106.80 348, 716,132. 77 227,145,177.86 116,989,761.33 161,838,224.38 308,484,680.75 15,588,505.06 11,743,400.68 9,007,106.55 6,675.523.47 701,118,796.37 39,724,638.23 7,373,524.48 41,620,741.62 272 ANNUAL REPORT OF THE FEDERAL RESERVE BOARD. Location. New York—Continued. New York City. Do Do Do Do Do Do Ogdensburg. Oneida Rome Syracuse Utica Do Do , Watertown Total Bank or trust company. Metropolitan Trust Co New York Trust Co Pacific Bank Scandinavian Trust Co Union Trust Co United States Mortgage & Trust Co United States Trust Co St. Lawrence Trust Co. Madison County Trust & Deposit Co Rome Trust C o . . City B a n k . . Citizens Trust Co Oneida County Trust Co Utica Trust & Deposit Co Northern New York Trust Co Resources. $72,199,002.79 84,935,886.36 16,866,754.73 16,944,327.51 86,701,578.94 96,068,096.07 77,455,086.50 929,679.49 2,224,325.64 3,627,405.80 8,239,911.66 10,641,931.22 2,428, 746. 94 11,850,975.96 7,151,603.95 2,851,735,682.75 The payments to capital stock of the Federal Eeserve Bank made by these institutions amounted to $6,773,700; their reserve deposits on December 31, 1917, were $241,680,500.43 and the amount of their rediscounts and loans with the Federal Keserve Bank on that date were $69,693,287.12. Ten national banks in the district were liquidated during the year, of which five went out of business for one reason or another and five were converted into trust companies. Twelve new national banks have commenced business in the district this year. The relations with member banks during the year have been more active, not only owing to the transactions which the Federal Eeserve Bank has had with each member, as well as nonmember, bank in connection with subscriptions to Liberty bonds and with many of them in connection with sales of certificates of indebtedness, but also owing to the increasing number of member banks which have had occasion to rediscount or obtain advances during the year, the total number of such banks having been 322. With the New York City banks the relations and cooperation have been particularly close. New York City being the principal money market and the financial center of the country, it became apparent when the United States entered the war that the banks of this city not only had a duty to perform to the Government and to their own customers, but had a responsibility to the whole country as well. They have recognized and carried out these obligations in a spirit of wholehearted patriotism, and frequently at a sacrifice of normal banking profits. By close cooperation among all the important banks of the city, every requirement of the Government has been promptly and fully met, and a generous amount of the resources of these banks has been placed at the disposal of the Federal Reserve Bank for the general stabilization of the money market. Had this spirit and this recognition of responsibility been lacking among the New York City DISTRICT NO. 2—NEW YORK. 273 bankers, the heavy financial burdens imposed upon the banking system could not have been discharged without both inconvenience and embarrassment to the Government and serious disturbance to the money markets and the business of the country. Joint meetings of the clearing house committee and the executive committee of the directors of this bank have been held periodically, and this bank has been appointed as settling agent by every member of the New York Clearing House, including the Subtreasury of the United States, thereby enabling all clearing-house balances to be settled on the books of this bank, without the use of any currency whatever in such settlements. This arrangement is of great value to the Federal Eeserve Bank in preventing the drain on its gold which would otherwise occur. The machinery of the Federal Reserve Bank for the rapid creation of credit in hitherto unprecedented volume having been tested during both the first and the second Liberty loan financing periods, there seems to be no longer any inclination to doubt the practical value of the system; on the contrary, among both the country and the city banks there seems to be a general recognition of the indispensability of the system to our banks in their conduct of the immense operations incident to the financing of the war. RELATIONS W I T H NONMEMBER BANKS. The relations with the State institutions, as indicated in the foregoing paragraph, have also become active through transactions with many of them in certificates of indebtedness and with all of them in Libert}^ bonds. The transactions of the bank acting as fiscal agent of the Government have been on exactly the same basis with nonmember as with member banks, and no distinction has been made" between the two classes in respect of the deposit of Government funds. Under authority of the Federal Reserve Board, a Federal Reserve Bank is authorized to accept from member banks paper discounted with them by nonmember banks, provided it was given to purchase or carry Liberty bonds or certificates of indebtedness, but only a very small volume of such paper has been presented to this bank for discount. Nonmember banks have also cooperated cordially and effectively with the Federal Reserve Bank by turning in gold coin and certificates in exchange for Federal Reserve notes. The only note of discord in the relations with State institutions has been that which manifested itself in the development of the collection system. As already stated, a small number of State institutions are unwilling to remit at par to this bank for checks drawn upon them, and this bank, much to its regret, has been obliged to collect such checks at par either through express companies or by the establishment of local collecting agencies. 274 ANNUAL REPORT OF THE FEDERAL RESERVE BOARD. The amendment of June 21, 1917, permitted nonmembers to open acounts for clearing purposes with the Federal Eeserve Bank and enabled them to contribute their gold to the strength of the bank. Balances thus carried with the Federal Reserve Bank at one time aggregated $84,268,259.73, but the entrance into the system of the larger institutions reduced the amount of such balances to $10,317,630.16 on December 31. The entrance of the United States into the war has effected a great change in the attitude of State banks and trust companies toward membership in the Federal Reserve system. On August 1, the Northern New York Trust Co. of Watertown, N. Y., and on September 28, 1917, the St. Lawrence Trust Co. of Ogdensburg, N. Y., became members, and following the entrance of the Guaranty Trust Co. of New York City, which joined on October 4, the great majority of the larger State institutions in New York City as well as a number from other places in the district have become members. Several factors contributed to this important movement: First, the amendment of June 21 under which the rights and duties of State institutions as members of the system were prescribed by law instead of being left to regulation by the Federal Reserve Board. Second, the opinion of the Attorney General of the United States, dated September 10, to the effect that State institutions joining the system were not subject to the restrictions of section 8 of the Clayton Act. Third, and by far the most important, the proclamation of the President of October 13, appealing to State institutions to join the system as a national duty. Although the majority of the larger institutions have already joined the system there are, nevertheless, approximately 260 State banks and trust companies in the district with sufficient capital to qualify them for membership. Many of them are actively considering applying for membership in the near future, and it is hoped that before long the great majority of the State institutions will join, thereby coordinating and concentrating the entire banking power of the district and enabling every member bank in the district to give the fullest cooperation and assistance to the Government in financing the war. The following extract from the report of the executive committee of the United States Trust Co. of New York City to its board of trustees is typical of the patriotic attitude which has led so many of the larger institutions to join the system: During this company's entire corporate existence we have steadfastly adhered, in theory and in practice, to what we believed to be the fundamental distinction between a trust company and a bank. This distinction has heretofore rendered direct membership in the admirable Federal Reserve system Digitized forneither FRASER necessary nor helpful to us. Our designated depositary banks have DISTRICT NO. 2 NEW YORK. 275 fully represented ITS in that system, and our business being strictly confined to that of a trust company as distinguished from the general banking business, we have heretofore considered only our own interest in determining the question of membership in the system. The situation is now, however, radically changed. The appeal of President Wilson and the urgent money needs of the country make it the duty of every financial institution to come forward with all the moral as well as financial aid which it can lawfully furnish. Whether the facilities afforded by membership in the reserve bank are useful to us or not, whether the conditions of membership would, having in ATiew the restricted character of our business, in fact result in a slight pecuniary loss to us or not, such considerations are in our opinion as of no weight whatever, in view of the vital importance to our country under existing conditions of omitting no act which can, either directly or morally, either by the furnishing of resources or the exhibition of a spirit of hearty cooperation, tend to strengthen the financial system of the Nation. RELATIONS W I T H FOREIGN BANKS. Under authority of paragraph (e) of section 14 of the act, and with the approval of the Federal Reserve Board, the Federal Reserve Bank of New York on May 3, 1917, concluded reciprocal arrangements with the Bank of England, appointing the latter its correspondent and agent. On June 20, 1917, the Federal Reserve Bank under its agreement with the Bank of England made payments in New York amounting to $52,500,000 against gold in like amount earmarked and held in London by the Bank of England for the account of the Federal Reserve Bank of New York. Pursuant to arrangements with other Federal Reserve Banks and with the approval of the Federal Reserve Board, participations in this transaction were allotted to other Federal Reserve Banks to the amount of $34,387,500. On February 24 this bank applied to the Federal Reserve Board for authority to appoint the Bank of France its correspondent and agent, and approval was granted on February 26. Correspondence and arrangements of details are in progress looking to the completion of the relationship contemplated. On August 23, with the approval of the Federal Reserve Board, a preliminary agreement was concluded between the Federal Reserve Bank of New York and the Bank of Italy providing that each should act as a correspondent of the other, which was confirmed by the board of directors of this bank on September 5 and by the superior council of the Bank of Italy on September 24. Negotiations are in progress for the arrangement of reciprocal relations with certain other foreign banks. T H E FISCAL AGENCY OF THE UNITED STATES. During the early part of 1917 the operations of this bank as fiscal of the United States were limited as before to and depositary Digitized agent for FRASER 276 ANNUAL, REPORT OF THE FEDERAL RESERVE BOARD. receiving from Government collectors of customs and internal revenue their various receipts and paying checks and Avarrants drawn upon the Treasurer of the United States and coupons of United States bonds. Immediately following the entrance of the United States into the wrar, however, the functions and responsibilities of the Federal Reserve Bank as fiscal agent of the United States were enlarged at the request of the Secretary of the Treasury to include the following: (a) The sale and redemption of certificates of indebtedness; (b) The sale and delivery of Liberty bonds, the payment of coupons thereon, the exchange of bonds of small denomination for bonds of large denomination, and vice versa, and the conversion of bonds of one issue into bonds of another issue; (c) The administration of deposits of the United States Government in depositary banks in this district resulting from sales of certificates and bonds, and the examination, approval, and custody of the- securities pledged to secure such deposits; (d) Later, the sale of war-savings stamps and thrift stamps. At all times throughout the period in which the bank has performed these functions and undertaken these responsibilities as agent of the Treasury Department its work has been lightened and its burdens made possible by the vigorous and cooperative way in which the bank has been supported in the various requests and recommendations which it has made. The method of conducting these operations will be described in the succeeding paragraphs. CERTIFICATES OF INDEBTEDNESS. On March 27 the Secretary of the Treasury offered to Federal Eeserve Banks $50,000,000 certificates of indebtedness due June 30, 1917, at 2 per cent. This bank subscribed for $25,000,000 and was allotted $20,000,000, the balance being taken by the other reserve banks. On April 19 the Secretary of the Treasury offered for subscription through Federal Reserve Banks $200,000,000 of 3 per cent certificates of indebtedness due June 30, 1917, for which subscriptions were received in this district aggregating $135,650,000, and a similar amount allotted. This issue, like some of the later ones, was oversubscribed, and $68,205,000 was issued beyond the original amount offered. In subsequent issues allotments were restricted to the amount originally offered. From the following table it will be seen that, out of a total of $3,843,501,000 offered, the subscriptions received through this bank amounted to 67 per cent and the amount allotted through this bank amounted to 64 per cent of the total. The largest volume of DISTRICT NO. 2 277 N E W YORK. these certificates outstanding at any one time in this district during the first Liberty loan financing period was $479,962,000, and during the second Liberty loan financing period was $1,467,543,000. The cooperation of the banks in this district, particularly of those in New York City, in purchasing these certificates, was of a most gratifying character. Individual bank subscriptions during the second Liberty loan financing period ran as high as $145,000,000 and $150,000,000. Of the 1,076 banks (not including savings banks) outside of New York City, 308 purchased certificates of indebtedness, but of these only about one-half were what might be termed regular purchasers. The others participated in only one or two of the issues. United States certificates of indebtedness issued during 1917. Date of issue. Maturitydate. Per cent. 2 June 30,1917 3 do...— 3 July 17,1917 H July 30,1917 do.. 3i N o v . 15,1917 N o v . 30,1917 Dec. 15,1917 do N o v . 22,1917 Dec. 15,1917 June 25,1918 Mar. 31.. Apr. 25.. May 10.. May 25.. June 8... Aug. 9... Aug. 28.. Sept. 17. Sept. 26. Oct. 18.. Oct. 24.. Nov. 30. Total. 1 Rate of interest. Total amount of issue. Amount subscribed through Federal Reserve Bank of New York. $50,000,000 268,205,000 200,000,000 200,000,000 200,000,000 300,000,000 250,000,000 300,000,000 400,000,000 300,000,000 685,296,000 690,000,000 $25,000,000 135,650,000 98,512,000 175,231,000 116,000,000 211,054,000 188,837,000 204,347,000 212,100,000 179,475,000 543,683,000 494,070,500 3,843,501,000 2,578,959,500 Amount allotted through Federal Reserve Bank of New York. 1 $20,000,000 135,650,000 98,512,000 125,300,000 100,500,000 175,000,000 152,938,000 204,347,000 212,100,000 179,475,000 543,683,000 494,070,500 2,441,575,500 Not offered for public subscription, but taken by Federal Reserve Bank of New York. In order that payments for the large amounts of certificates of indebtedness subscribed for in this district might not disturb the banking situation, arrangements were made beginning with the issue of April 25 to redeposit as large a portion as possible of the funds paid in. This, in effect, amounted to a payment for the certificates by credit on the books of the subscribing banks, and in later issues this was the practice actually pursued. In this manner disturbance to the money market from the absorption of this large volume of certificates was reduced to a minimum. The Federal Reserve Bank itself purchased from time to time various amounts of these certificates of indebtedness from banks and bankers, and on several occasions advanced substantial amounts to the Treasury for temporary requirements through the purchase of special certificates running f or a few days, not included in the totals above referred to. The sale of certificates of indebtedness in anticipation of both Liberty loans enabled the banks to create the short credit required by the Government pending the creation of long-time credit through the 278 ANNUAL REPOBT OF THE FEDERAL RESERVE BOARD. purchase of bonds by investors. With each issue of bonds the short bank credits were, in effect, converted into long investment credits. FIRST LIBERTY LOAN. On May 3 the Secretary of the Treasury announced an issue of $2,000,000,000 3£ per cent 15-30 year Liberty loan bonds exempt from all taxes, except estate or inheritance taxes, imposed by authority of the United States or its possessions or by any State or local taxing authorities. In making the announcement the Secretary advised that the subscription books would close on June 15, and requested the Federal Keserve Banks in each district to act as a central agency for receiving subscriptions, taking payment of subscriptions and delivering the bonds after allotment. He also requested the Federal Reserve Banks to form an effective organization and carry on an energetic campaign for the successful flotation of the loan. The governor of the Federal Reserve Bank of New York appointed a Liberty loan committee for the district, composed of 12 New York City bank presidents and private bankers, together with an alternate for each. At the first meeting of this committee, on May 7, the governor of the Federal Reserve Bank was appointed chairman, the secretary of the bank was appointed secretary, and a plan of organization was determined upon which involved the appointment of subcommittees on distribution, on publicity, and on the receipt and payment of subscriptions. An executive manager was also appointed. The committee met daily except on Saturdays throughout the campaign, and on several occasions, at the request of the Treasury Department, sent subcommittees or representatives to Washington to confer upon some of the many details which were required to be settled in connection with securing and receiving subscriptions and delivering the bonds. The committee on distribution consisted of 12 members, and owing to the active nature of the work assigned to this committee alternates were also appointed. The chairman of the committee was a member of the Liberty loan committee. All of the members were partners of leading bond houses or officers of banks or corporations having bond departments. This committee had charge of organizing the campaign to obtain subscriptions to the loan throughout the entire district, and met daily during the campaign. The committee on publicity carried on a well-organized, vigorous, and effective publicity campaign, reaching all parts of the district, and included in its activities the organization of meetings, the creation of a speakers' bureau, which supplied speakers for over 1,000 meetings, the use of large quantities of newspaper and periodical DISTRICT NO. 2—NEW YORK. 279 news and advertising space, largely contributed by advertisers, and the distribution of posters and other literature. Most of the staff of the publicity department were volunteers from banks, banking houses, and newspapers, and the cooperation of many and varied interests was given ungrudgingly to further the efforts of the committee. The committee on receipt and payment of subscriptions organized a staff of about 300 men and women loaned by New York banks, bond houses, and insurance companies to serve during the period of the campaign and of the subscription payments. This force worked tirelessly in handling the immense amount of detail incidental to the receipt, allotment, and adjustment of subscriptions and the receipt of payments. Some confusion was apparent at times, owing to lack of opportunity for careful organization, to the fact that the entire force were volunteers, and to the unfamiliarity of most of the banks with transactions of the character involved; but, considering the magnitude of the task and the circumstances attending it, the work was handled with reasonable promptness and efficiency. The committee received subscriptions amounting to $1,186,788,400 from 978,959 subscribers. Interim certificates were issued as partial or full payment was made on the bonds, the total number of pieces of such certificates being 2,090,524. The total number of pieces of bonds of the first Liberty loan issued to December 31 was 1,181,469. During the campaign it became apparent that the department dealing with the subscriptions to and deliveries of bonds should become an integral part of the Federal Reserve Bank, and on October 1 the Federal Reserve Bank took over the department, released most of the staff to the institutions by which they had been loaned, and began the organization of a permanent staff. Early in the campaign an informal statement was issued from the Treasury Department indicating the extent to which subscriptions might be expected from each of the Federal Reserve districts on the basis of their respective banking resources. Although the quota of subscriptions expected from the Second Federal Reserve District was $600,000,000, one of the early decisions of the Liberty loan committee was to establish $1,000,000,000 as the minimum amount of subscriptions which the committee should endeavor to obtain in this district, and the whole campaign was organized to this end. The campaign fell naturally into two divisions: (a) New York City; (b) places outside of New York City. CAMPAIGN IN NEW YOEK CITY. In New York City the campaign was organized largely along professional and occupational lines, and the following committees were 280 ANNUAL REPORT OF THE FEDEEAL RESERVE BOARD. appointed, each composed of leading men in their respective occupations : National banks. State banks. Trust companies. Savings banks. Railroads. Industrial corporations. Public utilities. Insurance. Municipal employees. Stock exchange houses. Professions. Lawyers. Engineers. Architects. Physicians. Dentists. Savings and loan associations. Sale of " baby " bonds. Real estate. Automobile trade. Wholesale merchants. Retail merchants. Hotels. Printing houses. These committees were composed entirely of volunteer workers, a very large number of whom participated actively in the campaign. To supplement the work of these occupational committees, a group of about 400 bond salesmen organized in teams with captains, made a house-to-house canvass in New York City with substantial results. The total amount subscribed in New York City was $987,269,450. CAMPAIGN OUTSIDE OF NEW YORK CITY. To assist and advise in the compaign outside of New York City five subcommittees of the distribution committee were appointed, their respective territories being eastern New York, central New York, western New York, northern New Jersey, and Fairfield County, Conn. These five district committees were composed of partners of leading bond houses. They did not become responsible for or undertake local selling campaigns, but acted in an advisory capacity, assisted in organizing local committees and maintained direct contact between the district headquarters at the Federal Reserve Bank and the various local committees, helped the work of the local committees, and furnished them all the literature and material available as the campaign progressed. Owing to the compactness of the Second Federal Reserve district it was possible to have this form of organization, permitting direct contact with headquarters instead of contact through the medium of subcommittees, and experience has demonstrated its effectiveness and desirability where possible. The governor of the Federal Reserve Bank wrote a letter to the banks in this district outside of New York City, asking their officers, in consultation with other bankers in the same place, to undertake the formation of local committees to secure subscriptions for the bonds. Each locality was advised of the amount of subscriptions which it was expected to obtain, the amount being based largely on local bankDigitized foring FRASER resources. These local quotas proved helpful to the local com DISTRICT NO. 2 NEW YORK. 281 mittees by giving them a definite figure toward which to direct their campaigns. No uniform plan of organization was proposed. Each committee was free to operate in the manner which it considered most effective, some making short campaigns after thorough advance preparation, while others carried on the campaign during the entire selling period ending June 15. In all some 231 local Liberty loan committees were formed, nearly all of which worked wTith remarkable zest and enthusiasm, and a large number of the localities covered by these committees exceeded the quotas assigned to them by the Federal Reserve Bank, based on the expectation of raising $1,000,000,000 in the Second Federal Reserve district. The total amount subscribed outside of New York City was $199,518,950. m THE CAMPAIGN IN GENERAL. The progress of the organization at first was hampered by lack of opportunity for preliminary preparation and to unavoidable delay in settling important details of the issue until the campaign had been in progress for some time. These handicaps were in large measure overcome and an effective organization was developed through the large number of efficient and experienced men in every part of the district who were willing, as a patriotic duty, to devote their whole time and energy to the campaign. Early in the campaign a women's committee for the district was organized in cooperation with the women's Liberty loan committee, and headquarters wTere established in New York. An organization was effected for the canvass of New York City, as well as in some of the larger places outside of New York City, and very effective work was done by the committee and by a large number of women who volunteered to assist in obtaining subscriptions. On June 10 the Treasury Department began the publication of the amount of subscriptions reported in each of the 12 Federal Reserve districts. The first publication, which was only one week before the close of the campaign, showed a total of $1,300,000,000, the subscriptions reported for this district being $588,000,000. At the same time publicity was given to the subscriptions reported in the various localities in this district. Although undoubtedly the figures published by the Treasury Department were below the amount of subscriptions which had actually been made up to the date of publication, owing to the slowness with which returns were made by the banks outside of the Federal Reserve cities, the publicity which was given to district and local quotas stimulated very great activity throughout the last week of the campaign, and when the books closed in this district it was found that the total subscriptions 282 ANNUAL BEPORT OF THE FEDERAL RESERVE BOARD. had exceeded the $1,000,000,000 aimed at and actually amounted to $1,186,677,400., out of a total of $3,035,226,850 for the entire country. The following table shows the number of subscribers, the amount of subscriptions, and the allotments actually made, subdivided into five different classes graded as to size of subscription. Amount. $50 co $10,000 $10,050 to $50,000.., $50,030 to $100,000.. $100,050 to $250,000 Above $250,000 Total Number of Amount of subscribers. subscriptions. 973,614 3,582 778 285 700 $274,019,550 172,693,700 79,173,300 660,901,850 978,959 1,186,788,400 Allotment. $274,019,550 127,460,850 35,628,000 180,723,250 617,831,650 The banks of the district, almost without exception, threw themselves into the campaign with energy and enthusiasm, working early and late to obtain subscriptions, agreeing to loan at moderate rates to bond purchasers who wished to borrow, operating for purchasers of small denomination bonds, partial payment plans which entailed much additional clerical work and supervision, taking custody of bonds for safekeeping, and subscribing themselves for substantial amounts of bonds. Without such complete cooperation on the part of the banks the great success of the loan could not have been achieved. The bond houses placed themselves at the disposal of the Liberty loan committee, and the general organization of the selling campaign was placed almost wholly in the hands of the experienced bond men who thus volunteered. Besides organizing the campaign they also secured a large volume of subscriptions from their clients. Employers of labor in industrial centers and elsewhere cooperated by bringing the bonds to the attention of their employees, and providing partial payment plans by which small denomination bonds could be purchased and paid for gradually out of salaries or wages. The campaign called forth a patriotic effort of great intensity on the part of many thousands of volunteer workers who devoted themselves to the one purpose of making the loan a tremendous success. SECOND LIBERTY LOAN. On September 27 the Secretary of the Treasury announced that he would offer for subscription between October 1 and 27 three billion or more dollars of United States 4 per cent, 10-25 year, convertible gold bonds due November 15, 1942, the exact amount of bonds to be issued depending on the amount of subscriptions received. He stated that he hoped subscriptions in excess of $5,000,000,000 would be received from not less than 10,000,000 subscribers, and that bonds would be allotted in excess of $3,000,000,000 to the extent of not DISTRICT NO. 2—NEW YOBK. 283 over one-half of the amount by which the subscriptions exceeded $3,000,000,000. The new series of bonds were made subject to (a) State or inheritance taxes, (b) graduated additional income taxes, commonly known as surtaxes, and (c) excess profits and war profits taxes now or hereafter imposed by the United States. As before, informal apportionment was made by the Treasury Department of the amounts expected to be raised in the various districts, the quota of the second district being a minimum of $900,000,000 (proportionate share of $3,000,000,000) and a maximum of $1,500,000,000 (proportionate share of $5,000,000,000). The Liberty loan committee determined from the outset to endeavor to reach the maximum figure set for the district. The headquarters organization was continued for the second Liberty loan campaign with certain changes which made for greater effectiveness and with great expansion in the number of committees and number of workers who volunteered their services. The Liberty loan committee was enlarged from 12 to 15, and the distribution committee from 12 to 22. The publicity committee was not reappointed, but its work was carried on by a director of publicity. The committee for handling bond subscriptions was not reappointed, as its work had been assumed by the Federal Eeserve Bank. No executive manager was appointed, but an executive secretary was appointed for the distribution committee and the executive committee of the distribution committee was enlarged to include the director of publicity, with a view to obtaining coordination at headquarters of all efforts at distribution. The campaign, as before, was organized in two main subdivisions: (a) New York City; (b) the district outside of New York City. THE CAMPAIGN IN NEW YORK CITY. The work in New York City was organized on the same general lines as in the preceding campaign, but with ample time for preparation the field was covered much more intensively. The various occupational committees of the first campaign were increased, and with the assistance of an advisory trades committee the following committees "were organized and active during the campaign, covering over 30,000 concerns in Greater New York through the medium of approximately 15,000 volunteer workers: Art dealers, art publishers, etc. Automobile and allied. Bakers and confectioners. Banks, national. Banks, State. Banks, savings. Blanket. 34365°—18 19 Books. Brewers. Butter, eggs, and cheese. Caps. Carpenters. Carpet and rug. Cement workers. 284 ANNUAL REPORT OF THE FEDERAL RESERVE BOARD. Chemical and drug. Children's dress manufacturers. China, toy, and house furnishing. Cloaks, suits, and shirt manufacturers. Coal. Collars1 and cuffs. Corset. Cotton goods. Decorators. Department stores. Distillers. Dry dock and repair company of Brooklyn. Electrical. Elevator manufacturers. Fish. Fur. Furniture. General contractors. Glove. Hardware. Hats. Hide and leather. Hotels. Industrial committee. Insurance companies. Iron League. Jewelry. Laces, trimmings1, etc. Ladies' garments. Leather-glove industry. Leather goods (small), trunks and bags. Lighting fixtures. Linen. Lumber. Machinery and machine tool. Marble. Meat, wholesale and retail. Men's clothing. Mens' neckwear. Men's underwear. Metal ceiling. Metal doors and windows. Metal furring. Milk. Mosaic. Municipal employees. New York Cotton Exchange. New York Produce Exchange. New York Stock Exchange, houses. Notion. Ornamental iron workers. Painters. Paints and varnishes. Paper boxmakers. Paper manufacturers. Perfumery and soap. Plastering. Plumbers. Poultry. Produce and fruits. Professions. Public utilities. Real estate. Refrigerator manufacturers. Restaurants. Retal grocers. Ribbon. Roofers and sheet metal. Rubber. Savings bank. Shipping, import and export. Shirts, pajamas, and boys' blouses. Shoe retailers and jobbers. Shoes, wholesale and retail. Silk and velvets. Spice. Sporting goods'. Stationery. Steam and hot water. Steam railroads. Storage warehouse and van owners trade. Sugar trade. Suspenders and garters. Talking machines, pianos, and musical instruments. Tile. Tobacco. Toilet preparations, specialties. Trust companies. Umbrellas and cane. Upholstery and lace curtains. Wall paper. Wholesale grocers. Wine. Wire workers. Women's cotton and silk underwear, Women's dress and waist industry. Women's hosiery and knit underwear. Women's millinerv. Women's neckwear. Women's organizations4. Woodworkers. Woolens and worsted. Wrapper and kimono manufacturers. Yarns and art goods. DISTRICT NO. 2—NEW YORK. 285 A house-to-house canvass of Greater New York was conducted by the metropolitan canvass committee with the assistance of some 35,000 volunteer workers. The entire city was divided among these workers on the basis of election districts and the workers in each election district were furnished with the names of all the voters in the district. The results of this house-to-house campaign were far more effective than those accomplished in the first campaign with less detailed preparation. A number of booths were operated in public squares, on crowded street corners, and in hotels, which served not only as centers for the receipt of subscriptions and the sale of $50 and $100 bonds, but also as places from which addresses could be made. In order that subscriptions received at public meetings, booths and theaters, as well as by the metropolitan canvass committee, might be promptly allocated to banks situated near the residences of subscribers, a subscription department was organized which at one time had as many as 150 workers. This department distributed a very large number of subscriptions, avoided much confusion and congestion which would otherwise have occurred, and made many subscriptions effective which otherwise would not have been followed up. A very successful parade of trade and other organizations, with about 50,000 people in line, and led by a British tank, was held on the day after Liberty Loan Day. The German submarine " TJC-5," which had been captured by the British and sent over for exhibition during the campaign, was set up in Central Park, rechristened " U-Buy-A-Bond," and visited by hundreds of thousands of people. The total subscriptions received in New York City was $1,140,629,300. THE CAMPAIGN OUTSIDE OF NEW YOKK CITY. The general plan of organization which had hitherto prevailed was continued during the second Liberty loan campaign. In order to assist the various local organizations more effectively, the five district committees at headquarters were increased to eight, each committee having a somewhat smaller territory to cover. Through these eight district committees the central Liberty loan committee and the headquarters organization were kept in close touch with the work in every part of the district, and invaluable assistance was rendered in determining the membership of the local committees, all of which were appointed by the chairman of the central Liberty loan committee. The number of local committees operating in the second compaign was about 1,050, as compared with 231 in the first campaign. As a suggestion to the local committees a plan book was issued outlining certain methods of operation which had been found effective. Partial payment cards were furnished upon request to 286 ANNUAL REPORT OF THE FEDERAL RESERVE BOARD. local committees for use in industrial establishments and banks. As in the first campaign, quotas were assigned to each locality, and local publicity given to the progress in filling these quotas resulted in many cases in rivalries between places and an increased volume of subscriptions. Each local committee laid out its plan of organization along the lines which it considered best adapted to its territory, and while a great variety of appeals was made through meetings, advertising, circularizing, and otherwise, the most effective method everywhere of securing actual subscriptions appeared to be a personal canvass properly planned and directed. The total subscriptions received from places outside of New York City was $409,824,200. THE CAMPAIGN IN GENERAL. The publicity work during the second Liberty loan compaign was under a director of publicity and subdivided into four bureaus— news, advertising, features, and service. The news bureau placed news items and articles with newspapers and periodicals of all kinds. It obtained approximately 16,000 columns of newspaper publicity, exclusive of advertising. Among the 2,436 newspapers of the district it placed 41,800 articles, 2,752 editorials, 1,116 cartoons, 489 photographs, and 2,000 articles in foreign language newspapers. The bureau had a staff of 40 well-known writers who volunteered their services. The advertising bureau obtained 1,563 pages of paid newspaper advertising, of which 353 were in New York City. This space was obtained entirely from advertisers who either donated space they had themselves contracted for, or furnished the means of obtaining space, no space being requested from the newspapers themselves. Much of the advertising was illustrated. Forty-five million pieces of literature were distributed. Eighty thousand square feet of electrical and painted sign space was donated, a 24-foot poster prepared in cooperation with the national organization was pasted upon all unused billboards of suitable size in the district, and various other novel devices were employed. The feature bureau dealt with the publicity and educational work in theaters and moving-picture houses, among labor organizations, boards of commerce and trade, clubs, societies and fraternal organizations, churches and church societies, farming and agricultural societies, political parties, and foreign language organizations and newspapers. It also arranged the Liberty loan parade in New York City, the exhibition of the captured German U-boat and the British tank, and the flight of aeroplanes over New York City. The service bureau had charge of the routine wTork of the publicity, including the purchasing, information, stenographic, bookkeeping, DISTRICT NO. 2—NEW YORK. 287 filing, auditing, poster and literature distribution, shipping, messengers, mail, and telephone departments. The speakers' bureau was continued during the campaign as an independent organization. It had about 150 speakers and furnished speakers for about 1,000 meetings, indoors and outdoors, both in New York City and in other parts of the State. As in the first campaign the four-minute men rendered invaluable service. The commissioner of education in New York State appointed two representatives to act at headquarters during the campaign, and through the cooperation of the school authorities, State and local, a very effective campaign was carried on among the teachers and pupils of the schools of New York State. The women's committee in the second campaign had its headquarters with the men's committees, and a much more detailed organization was perfected. The women's Liberty loan committee, with headquarters at Washington, appointed a chairman for the district and chairmen for each of the three States represented in the district, although in the case of chairmen for New Jersey and Connecticut, parts of their districts were outside of the Second Federal Reserve District. The women not only carried on an effective campaign in New York City, but formed committees in 479 other places outside of New York City, and, although organized separately, cooperated harmoniously with the men's committees throughout the campaign and secured subscriptions in excess of $41,000,000. The campaign opened October 1 and closed October 27, and was therefore about two weeks shorter than the preceding campaign. It soon became evident that in order to secure $1,500,000,000 of subscriptions, the maximum amount assigned to this district, it would be necessary for a considerable volume of the subscriptions to be carried by credit. Accordingly, the phrase " borrow and buy " was used freely in all parts of the district, and the banks in New York City and many other places cooperated generously by offering to make loans on the bonds at the coupon rate of interest. It was felt that the obligation of the borrowers to pay off their loans on Liberty bonds during the months succeeding the campaign would be an important stimulus toward effecting the necessary savings. As in the preceding campaign, the central Liberty loan committee and the distribution committee at headquarters met daily, and the staff at headquarters was increased greatly over that of the preceding campaign. The banks and bond houses throughout the district again gave the heartiest cooperation. Almost the entire work throughout the district was carried on by volunteers who labored with untiring energy and zeal to make the loan a success. The number of workers throughout the district was probably over 100,000, and their devo 288 ANNUAL REPORT OF THE FEDERAL RESERVE BOARD. tion to the cause in which they were enlisted was inspiring and beyond all praise. The publication of the subscriptions received in the 12 Federal Reserve districts was begun by the Treasury Department on October 15. As before, reports of subscriptions came in slowly until the last week, but the early publication of the subscriptions received as compared with the subscriptions expected was given much publicity and attention in the newspapers, and undoubtedly had the effect of stimulating rivalry between the various districts and greatly increasing the amount of subscriptions received. The subscriptions received from soldiers and sailors, largely on the partial-payment plan, aggregating $53,000,000, appeared as part of the subscriptions received in this district, since whenever necessary they were financed, at the request of the Secretary of the Treasury, through a group of New York banks. On October 15, the Treasury Department began to furnish this bank with actual bonds in denominations of $50, $100, $500, and $1,000 for sale over the counter during the campaign. About $59,000,000 worth of these bonds were sold in this district during the campaign and a much larger amount could have been sold had the bonds been available. The total amount of subscriptions received in this district was $1,550,453,000, and the total number of subscribers 2,178,359, the distribution being as follows: Size of subscriptions. $50 to $10,000 $10,050 to $50,000... $50,050 to $100,000.. $100,050 to $200,000. Above $200,000 Total Number of subscribers. 2,170,201 5,889 1,099 414 756 2,178,359 Amount subscribed. $441,100,700 168,326, 200 100, 722,650 68,166,700 772,136,750 1,550,453,000 Allotment. $441,001,200 168,326,200 90, 790,900 51,374,800 412,874,350 1,164,367,450 On October 27, at the close of the campaign, the central Liberty loan committee issued the following statement which accurately summarizes the campaign: The second Liberty loan has been a complete success. How high the oversubscription will go can not be known for several days. It is estimated that the total subscriptions in the Second Federal Reserve District will be in excess of $1,500,000,000, and what is equally important, the total number of subscribers in this Second Federal Reserve District is greatly in excess of the number of subscribers to the first loan. Both in the total amount received and in the number of subscribers, the results are beyond our expectations. The reports from the other Federal Reserve districts would indicate a similar surpassing of the estimates. This great success of the loan has been due to two factors. The first is the spontaneous outburst of patriotic feeling and effort that has been common to the whole country. The second is the excellent work of the organizations in DISTRICT NO. 2—NEW YORK. 289 every Federal Reserve district. Without this latter the campaign could not possibly have gained its stupendous success. Naturally our own observation has covered particularly the Second Federal Reserve District. As to this we desire to go on record as stating that we have never before witnessed such an extraordinary response in the way of organized, effective work, and unremitting, intelligent effort. From the moment the campaign started this spirit was manifest, and as time went on it daily grew in loyalty and intensity. The record which the Second Reserve District has made is, indeed, a proud one, and it is a record achieved by the united effort of all—by the villages and hamlets throughout the State as much as by the larger towns and cities. To all the workers who have thus made this result possible we wish publicly to make this expression of our appreciation. Of greater import even than the securing of a great loan for the Government has been this unparallel evidence of a Nation bound together and animated with a single spirit of mutual good-will and devotion to the country. RECEIPTS AND DELIVERIES. The receipt of subscriptions and payments for the second Libertyloan was handled by the officers and about 150 permanent employees of the Federal Reserve Bank. Owing to arrangements which had been made to print the bonds more rapidly no interim certificates were issued in connection with the second Liberty loan, and the work of the bond-issue division of the bank was accordingly much simplified. The terms of payment prescribed by the Treasury Department were as follows: Two per cent with application; 18 per cent on November 15, 1917; 40 per cent on December 15, 1917; 40 per cent on January 15, 1918. From November 15 to 19 the following payments for bonds were received: In full: By banks Individuals Cash sales during campaign 20 per cent payments $807, 858,086 15,010, 080 59,051,300 881, 919, 866 67, 320,114 949, 239, 980 These payments were made in the following manner: By book credit By Treasury certificates of indebtedness By cash '__« 687, 741, 746 153, 972, 000 107, 526, 234 949, 239, 980 Between Saturday noon, November 17, and Monday noon, November 19, deliveries of bonds were made by registered mail and over the counter to a total of $237,342,550, which, added to the amount previously sold for cash, made total deliveries to that date of 290 ANNUAL REPORT OF THE FEDERAL RESERVE BOARD. $296,393,850, or 1,062,918 pieces. The amount of bonds delivered up to and including December 31, was $746,180,100, and the number of pieces, 2,170,665. The bond-issue division of the Federal Reserve Bank also undertook the exchange of interim certificates of the first Liberty loan into definitive bonds, and definitive bonds of the first issue into definitive bonds of the second issue. The number of employees engaged in this work at its busiest period was 125; the number of pieces received from owners for conversion to December 31, 1,624,336; and the number issued, 1,887,188. This division also undertook to exchange $1,000 bonds of both issues for equivalent amounts of bonds of smaller denominations, and vice versa. Up to December 31 the number of pieces handled was 171,804. LIBERTY LOAN EXPENSE. The expenses incurred by the bank in handling the Liberty loans were made with the understanding that the bank would be reimbursed by the Treasury Department for its expenditures. The following itemized list shows the expenses on account of the first and the second loans, as well as the amounts for which the bank was reimbursed up to December 31, the figures for the first loan including all expenses of departments engaged in handling matters relating to this loan up to December 31: First loan. Advertising. Buttons and badges Bond-issue division Circulars General expenses Posters and signs Publicity Postage Rent Salesmen $68. 89 2, 192. 86 127, 120. 12 40, 455. 08 45, 978. 34 18, 861. 85 10, 281. 84 12, 937. 94 41,195.13 9, 008. 37 Telephone, telegraph, and shipping Stationery Traveling expenses Miscellaneous $4,357.91 23, 079. 19 6, 729. 27 3, 085. 00 Total 345, 351. 79 Reimbursed to Dec. 31, 1917__ 297, 310. 39 Net amount due 48, 041. 40 Second loan. Department. Bond issue and certifi- Government cates of indeposit. debtedness. Traveling expenses Printing and stationery Equipment Express Telegraph and telephone Postage Rent Newspapers and directories Miscellaneous Petty cash fund . . .. - — . $51,584.71 255.38 6,159,24 9,842.90 876.33 439.98 2,321.83 6,973.80 6.00 19,913.90 $16,176.30 98,374.07 Total. Distribution. Publicity. 1,935.64 24.00 145.86 $32,851.15 22,003.68 64,818.89 6,595.79 5,079.41 6,968.87 7,705.03 6,891.39 224.00 43,628.71 $26,261.49 $126,873.65 2,664.08 24,923.14 97,382.24 169,990.35 1,071.04 18,901.33 5,318.27 11,274.01 11,205.71 18,615.28 336.71 10,363.57 2,768.10 18,568.93 827.48 1,081.48 75,026.50 138,714.97 21,304.10 196,766.92 222,861.62 1,629.98 1,391.60 .72 542,362.16 242,379.94 Total Reimbursed to Dec 31 1917 Net amount due 539,306.71 3,055.45 ! 299,982.22 DISTRICT NO. 2—NEW YORK. 291 GOVERNMENT DEPOSITS. The act of Congress approved April 24,1917, under which the first Liberty loan was made, authorized the Secretary of the Treasury to deposit in such national banks, State banks, and trust companies as he might designate, upon the pledge of security, the proceeds arising from the sale of bonds and certificates of indebtedness. The responsibility for the appointment of depositaries, the receipt and approval of security, and the deposit and withdrawal of funds were placed upon the Federal Reserve Bank under the instructions and supervision of the Treasury Department. Duly qualified depositary banks were permitted to pay for certificates of indebtedness as well as Liberty bonds by opening book credits therefor in favor of the Treasury. A very large proportion of the deposits in depositary banks were created in this way, and the transfer of funds and disturbances to the money market were thereby reduced to a minimum. During the first loan period a special department with 32 employees, in charge of a volunteer committee appointed by the Federal Reserve Bank, the chairman of which was made an acting deputy governor, undertook all the work connected with the management of Government deposits. During the second loan period this department, with 54 employees, was operated as a department of the Federal Reserve Bank, with the same committee acting in an advisory capacity. During the first loan period 306 banks qualified as depositaries by pledging collateral of a specified character with the Federal Reserve Bank. In order to facilitate the pledging of collateral, local custodians were appointed in 49. cities of the district. The largest amount of collateral held at any one time against redeposit of certificate of indebtedness funds was $172,000,000; the largest amount of securities held against redeposits of Liberty loan funds was $367,280,044 with local custodians and $274,518,118 in the vault of the Federal Reserve Bank. The largest amount of Government funds on deposit at any one time was $171,091,000 of certificate of indebtedness funds on June 11 and $304,353,448.12 of Liberty loan funds on July 5. As the Treasury Department had stated that banks making payment for Liberty bonds by the use of certificates of indebtedness would receive preferential treatment in the apportionment of Government deposits, a readjustment of such deposits in depositary banks was accordingly made on July 19. During the second Liberty loan campaign the redeposited funds were handled in the same manner but, at the request of this bank, a larger number of banks qualified as depositaries, 531 in all. The number of local custodians of securities was increased to 50. The largest amount on deposit with depositary banks was $1,306,118,990.43 on November 30. while the largest amount of securities held 292 ANNUAL REPORT OF THE FEDERAL RESERVE BOARD. was $1,943,625,476.27 on December 1. In order to be prepared for similar work during the next loan the department has been maintained intact and banks have been encouraged to retain their status as depositaries and to leave their securities pledged with the Federal Eeserve Bank for this purpose. The number of qualified depositaries on December 31 was 530, and collateral held aggregated $858,534,219.80. WAR-SAVINGS AND THRIFT STAMPS. Shortly before December 1 the Federal Eeserve Bank was requested by the Secretary of the Treasury and the National WarSavings Committee, acting under the Treasury regulations, to maintain a supply of war-savings stamps and certificates and thrift stamps and cards for sale to agents of the first and second class, also to transmit applications for agencies when duly approved to the Treasury Department. The following supply of stamps was received prior to December 31: War-savings stamps (pieces) Thrift stamps (pieces) 4,000,000 3,500,000 of which on December 31 the following amounts had been sold or consigned to agents: War-savThrift ings stamps. stamps. New York City New York State outside New York City New Jersey Connecticut Total Total. Pieces. 242,022 50,968 19,920 4,400 Pieces. 785,421 144,100 43,628 8,600 Pieces. 1,027,443 195,068 63,548 13,000 317,310 981,749 1,299,059 ORGANIZATION OF THE B A N K . INTERNAL MANAGEMENT. During the year the directors of the bank held 36 meetings. The executive committee, consisting of the governor or deputy governor, the chairman, and four of the directors (all of the directors serving upon it in turn), held 170 meetings. The committee on State bank membership held 26 meetings and other special committees held 14 meetings. At the first meeting of the directors held in 1917 the officers of the bank were reelected for the ensuing year. With the increased scope of the activities of the bank, many additions to the staff of the bank, both official and clerical, have become necessary. J. Herbert Case, 293 DISTRICT NO. 2—NEW YORK. vice president of the Farmers' Loan & Trust Co. of New York, was elected deputy governor September 26 and entered upon his duties October 8. George W. Davison, vice president of the Central Trust Co. of New York, served as acting deputy governor from June 6 to July 31, during which time he conducted in a volunteer capacity the Government deposit department of the bank. Fred I. Kent, vice president of the Bankers' Trust Co. of New York, was elected acting deputy governor September 26 to take charge of the licensing of exports of coin, bullion, and currency under the President's proclamation of September 7, and of other matters pertaining to foreign exchange. He resigned December 31 to act for the Federal Reserve Board in handling these and similar matters. Two additional assistant cashiers were elected during the year, Arthur W. Gilbart on June 6, and Adolph J. Lins on September 5. Two acting assistant cashiers were also elected on September 5 to take charge of the bond issue division of the bank, W. M. St. John, assistant cashier of the National Bank of Commerce of New York, and J. W. Jones, manager of the Long Island branch of the Irving Trust Co. On January 1, 1917, the bank had 9 officers and 164 clerks; at thq close of the year the staff consists of 16 officers and 829 clerks, the increase having been made necessary by the general expansion of the bank's business in all departments, and particularly by work connected with the Government financing. Following is a list of departments and the number of employees in each. Number of employees. BANK DEPAKTMENTS. Number of employees. Auditing and examination 29 Bookkeeping and statements 15 Chief clerk 7 Collection 11 Credit 11 Distribution 5 Discount 21 Federal reserve agent 5 Filing 18 General bookkeeper 1 Mail teller 17 Officers' mail 2, Miscellaneous 3 Money 37 Night force 13 Note teller 8 Pages 9 Paying teller 2 Porters 17 Receiving teller 3 Return item and messenger department 17 Secretaries 3 Shipping Statistics Stenographic Supply Telephone operators Transit Vault Watchmen and floormen Wire transfers Total GOVERNMENT 5 5 23 2 6 167 2 25 7 496 DEPARTMENTS. Bond exchange Bond issue Government check Government deposit Certificate of indebtedness 99 129 19 52 34 Total 333 Grand total 829 294 ANNUAL REPORT OF THE FEDERAL RESERVE BOARD. The year 1917 has made heavy demands on the staff of the bank. The necessity of transacting promptly an unprecedented volume of business, in inadequate and crowded quarters, with many new and inexperienced clerks has thrown a strain on every member of the staff which has been none the lighter on account of the great amount of night work involved. In spite of the overwhelming tasks which have often been imposed upon the bank in connection with the Government financing, the work of the bank has been kept up and a spirit of cheerfulness and loyalty has prevailed among its employees throughout the year. In recognition of increased living costs which war conditions have brought about and of the high pressure under which the entire staff has worked during the past nine months, the directors, at the close of the year, with the approval of the Federal Reserve Board, supplemented the normal compensation of all employees below the rank of cashier by an additional payment equal to 15 per cent of annual salaries not exceeding $1,500, and 10 per cent of salaries exceeding $1,500. At the close of the year the staff of the bank consisted of 498 men and 351 women. Plans are being matured for the conduct of educational courses for both men and women, which will stimulate their interest in the work of the bank and afford opportunities for development and advancement. BAXK PREMISES. During the year the offices occupied by the bank, at the time of the last report, on the ground and fifth floors of the Equitable Building, have been outgrown. The bank has, accordingly, engaged such additional space on the fourth and fifth floors of the Equitable Building as could be obtained and has also found it necessary to lease the entire building at 50 Wall Street. The Liberty loan committee and the departments which handle Liberty bonds have been placed on the fourth and fifth floors of the Equitable Building; while the transit, securities, Government deposit, collection, and bookkeeping departments of the bank and part of its auditing staff, have been transferred to 50 Wall Street. The total amount of space occupied at the close of 1917 was about 65,000 square feet. The capacity of the large vault installed a year ago has become so taxed with Libeirty bonds and other matter relating thereto that it has become necessary again to avail of the courtesy of the New York Clearing House Association and to use one of its vaults to store currency. DISTRICT NO. 2—NEW YORK. 295 ELECTION Or DIRECTORS. To fill the vacancies caused by the expiration on December 31,1917, of the term of Robert H. Treman and William B. Thompson, as directors of class A and class B, respectively, an election was held from November 20 to December 6., Of the 224 banks in the group which voted this year (banks having capital and surplus from $66,000 to $200,000) only 91 chose electors and 84 actually voted. The following candidates for the vacancies were nominated: For class A director: P. A. Canfield, of Kingston, N. Y., nominated by 1 bank; John C. Leggett, of Cuba, N. Y., nominated by 3 banks; Robert H. Treman, of Ithaca, N. Y., nominated by 53 banks; C. P. H. Vary, of Newark, N. Y., nominated by 1 bank. For class B director: Jacob Rice, of Kingston, N. Y., nominated by 1 bank; William B. Thompson, of Yonkers, 1ST. Y., nominated by 54 banks. At the closing of the polls it appeared that the following votes had been cast in the column of first choice : For class A director: P. A. Canfield, 0; John C. Leggett, 2; Robert H. Treman, T9; C. P. H. Vary, 2. For class B director: Jacob Rice, 1; William B. Thompson, 83. Mr. Treman was declared elected class A director and Mr. Thompson class B director, each for a term of three years beginning January 1, 1918. On January 31 Charles Starek, class C director, resigned and the Federal Reserve Board on February 9 filled the vacancy thus occasioned by the appointment of W. L. Saunders to serve for the unexpired term. He has been reappointed for the three-year term beginning January 1, 1918. On December 22 the Federal Reserve Board redesignated Pierre Jay chairman of the board and Federal Reserve agent for 1918. MEMBER OF ADVISORY COUNCIL. On January 3 the directors reelected J. P. Morgan, of New York City, a member of the Federal Advisory Council from Federal Reserve District No. 2 for the year 1917. GENERAL BUSINESS CONDITIONS, BANKING POSITION OF THE DISTRICT DURING 1 9 1 7 . The following table gives comparative figures for important items in the statement of members of the New York Clearing House Asso- 296 ANNUAL REPORT OF THE FEDERAL RESERVE BOARD. eiation, State banks and trust companies in New York State, and national banks in this district (in thousands of dollars) : Dec. 30, 1916. New York clearing house banks: Loans, discounts, and investments Gold and lawful money On deposit with Federal reserve bank. Net demand deposits Net time deposits National-bank note circulation Dec. 29,1917. I Decrease. $3,339,450 439,065 193,698 3,334,272 159,785 28,955 $4,118,775 106,228 561,439 13,885,273 198,492 34,104 State banks and trust companies in New York State: Nov. 29, 1916. Nov. U, 1917. 3,076,129 Loans and investments 2,626,604 Due from banks, bankers, and trust com307,692 panies 373,610 Cash in vault 235,240 124,772 Due from Federal reserve bank 183,367 (2) Customers' liability on acceptances 110,159 83,041 3,449,427 Deposits 3,121,992 97,676 Bills payable and residcounts 521 National banks in district No. 2: Dec. 27, 19:6. Nov. 20, 1917. 2,522,568 Loans and discounts 2,238,642 Customers' liability on letters of credit and acceptances 62,495 73,529 United States bonds and notes and certificates of indebtedness 967,189 87,420 646,296 Stocks and bonds 600,792 448,346 Due from Federal reserve bank 229,662 122,390 Cash in vault 355,830 190,866 Due from banks and bankers 211,865 Due to banks and bankers 1,072,487 1,190,571 699,495 United States deposits (2) Deposits, demand and time 2,587,638 2,316,488 Bonds and securities borrowed 94,435 8,540 Bills payable and rediscounts , 224,812 18,976 1 Includes United States deposits. 2 Increase. $779,837 $332,837 367,741 551,001 38,707 5,149 449,525 65,918 110,468 183,367 27,118 327,435 97,155 283,926 11,034 233,440 20,999 118,084 879, 769 45,504 218,684 699,495 271,150 85,895 205,836 Not shown separately. Among the important changes shown in the statement of the New York Clearing House banks is the transfer of approximately threefourths of the banks' holdings of gold and lawful money from their vaults to the Federal Reserve Bank, due to changes in reserve requirements, discussed earlier in this report, and also to the entrance of practically all of the large State banks and trust companies of the city into the Federal Eeserve system. Loans, discounts, and investments show an increase of $779,000,000, or 23.5 per cent, due principally to investments in or loans upon United States Government securities, the amount of such investments and loans on December 28, 1917, being $604,000,000. Because of withdrawals of deposits from this center by banks in other districts, the increase in net deposits has been much less, totaling only $590,000,000. The proportion of gold and lawful money in vault and deposited with Federal Eeserve Bank to the aggregate net deposit liability shown above decreased from 18.15 per cent at the end of 1916 to 16.35 per cent at the end of 1917. Loans and investments of State banks and trust companies in New York State increased $449,000,000, while deposits show a much smaller increase, the difference being offset almost entirely by an increase in bills payable and rediscounts of $97,155,000. Eeserve de DISTRICT NO. 2—NEW YORK. 297 posits of $183,000,000 have been placed with the Federal Eeserve Bank, reducing cash in vault by $110,000,000 and balances with banks and bankers by $66,000,000. The most important increases in the figures for national banks in the Second Federal Eeserve District are $880,000,000 in holdings of United States obligations, offset in part by an increase of $699,000,000 in United States deposits. Loans and discounts show an increase of $284,000,000, which is slightly greater than the amount of the increase in demand and time deposits. Reserves carried with the Federal Eeserve Bank show an increase of $219,000,000, reflecting transfer of cash from vaults to the Federal Eeserve Bank. The increase in the amount of bills payable and rediscounts of national banks and State institutions, whose reports are summarized above, from $19,000,000 to $322,000,000, is the most significant indication of the strain which has come upon the banking machinery of the district, the major portion of the rediscounting and borrowing having been with the Federal Eeserve Bank. MONEY RATES. Money rates were relatively low in the early months of 1917 and continued so until some time after the declaration of war on April 6. Commercial paper was sold freely at rates ranging from 3 to 5 per cent; bankers' acceptances were sold on a basis of 2J to 3f per cent; call money rates were at or below 2^ per cent, and rates for time money approximated those for commercial paper. A distinctly firmer tendency became apparent as the Government's preparations for placing the first Liberty loan progressed. Call money often touched 6 per cent, and with the higher call rates and the desire of the banks to keep their funds in available form, time loans on stock exchange collateral became difficult to obtain. Member banks in New York City availed themselves freely of the rediscount and loan facilities of the Federal Eeserve Bank, with the result that, though rates were very firm, stability unknown in former periods of strain was given to the money market. Only once during the period of financing the first loan did call money go above 6 per cent. Following the installment payment on the first loan due June 28 and the maturity of certificates of indebtedness which had been issued in anticipation of the loan, rates for call money and commercial paper became easier and continued so for some weeks. As the time for placing the second Liberty loan approached, rates again advanced, commercial paper advancing from 4^-5 per cent in early August to 5-5| per cent in the early part of September, and 5|-6 per cent in October, where it remained until payment of the first installment on the second Liberty loan was made on Novem 298 ANNUAL REPORT OF THE FEDERAL RESERVE BOARD. ber 15, when it declined to 5J—of per cent. Another upward turn came during the last week of the year and carried the rates again to 5|—6 per cent. The call money rate advanced early in September and ruled close to 6 per cent, with one loan of $50,000 on September 25 at 7 per cent. Early in October, however, when the actual campaign for placing the second Liberty loan began, the rate declined to 4 per cent and remained steady at about that figure throughout the month of October and the first half of November, the steadiness in the supply of accommodation having been accomplished largely through the cooperation of all the banks in New York City with the Federal Eeserve Bank and the Liberty loan committee. During the last few months of the year the rates quoted on time loans or collateral were 5|-6 per cent and during the last week of the year call money rates again stiffened and held close to 6 per cent. The tendency throughout the year has been toward firmer rates for loans of all kinds, and the preference given to Government borrowings tended to diminish somewhat the supply of credit available to other borrowers. Commercial paper and banker's acceptances, because of their availability for rediscount with the Federal Eeserve Bank, have been less affected than loans on stock exchange collateral and have found a reasonably favorable market. GOLD MOVEMENT. The United States Treasury statement of money in circulation, dated January 1, 1918, shows gold in the country $3,040,439,343, as compared with $2,864,841,650 on Januarj? 1, 1917, an increase of $175,597,693. The gold production of the United States and its dependencies in 1917 was $84,456,600. Imports of gold from all sources during the year were $553,713,000. Gold exports were $372,171,000, mainly to South American countries, Cuba, Spain, Japan, and India. On August 13 the Federal Eeserve Board requested the Federal Reserve Bank of New York to obtain information relative to the amount and destination of gold exports from this district to foreign countries. On September 7 the President declared an embargo on gold, silver, and currency shipments out of the country, placing in the hands of the Secretary of the Treasury and the Federal Eeserve Board the enforcement of this embargo and granting discretion to issue permits for exports where not contrary to the public interest. Since that date, the Federal Eeserve Bank has received and passed upon applications originating in this district for permission to export gold, silver, or currency and transmitted such applications with its recommendation to the Federal Reserve Board for final action. DISTRICT NO. 2 — N E W YORK. 299 FOREIGN LOANS. In the last annual report extensive foreign borrowings during the war were listed. During 1917 such borrowings almost entirely ceased, the principal loans placed being $250,000,000 British Government one and two year secured notes in January, $8,098,250 ten-year bonds of the Province of Buenos Aires in February, $100,000,000 French Government two-year secured notes in March, $4,000,000 fiveyear bonds of Genoa, Italy, $2,400,000 twelve-year notes of Bolivia, $100,000,000 one-year notes of the Dominion of Canada sold in August, and British treasury bills placed in several issues of $15,000,000 each by Messrs. J. P. Morgan & Co., the amount of this issue outstanding at any one time not having exceeded $100,000,000. During 1917 the Secretary of the Treasury5 under authority of Congress, has advanced to the Governments of Great Britain, France, Italy, Russia, Belgium, Servia, and Eoumania a total of $3,656,129,750, receiving in exchange interest-bearing obligations of those nations. FOREIGN BANKING CONDITIONS. The following statements show the condition of three leading European banks toward the end of 1916 and 1917: BANK OF ENGLAND. Dec. 27,1916. Circulation Public deposits Other deposits Government securities Other securities Reserve Bullion Proportion of resources to liability £39,675,000 52,116,000 126,726,000 57,187,000 106,461,000 33,079,000 54,304,915 18.49 per cent Dec. 27,1917. £45,943,000 42,009,000 J24,161,000 58,303,000 94,888,000 30,843,000 58,337,469 18.56 BANK OF FRANCE. Dec. 28,1916. Gold Silver Discounts and advances. Circulation Deposits Treasury deposits Francs. 5,075,914,550 294,869,000 1,937,278,000 16,678,817,000 2,260,224,000 15,009,000 Dec. 27,1917. Francs. 5,351,524,800 247,656,889 2,136,760,143 22,336,799,275 2,913,741; 500 253,858,163 IMPERIAL BANK OF GERMANY. Dec. 30,1916. Gold Loans and discounts Circulation 34365°—IS Marks. 2,520,473,000 9,609,767,000 8,054,652,000 Dec. 31,1917. Marks. 2,405,580,000 14,596,100,000 11,467,740,000 300 ANNUAL REPORT OF THE FEDERAL RESERVE BOARD. NEW YORK STOCK EXCHANGE. During the early months of the year, trading on the New York Stock Exchange both in stocks and bonds was quite active, but following our entrance into the war the tendency has been toward much lighter trading at decreasing prices. Bond prices had for some time shown downward tendencies and this movement quickly extended to stocks when it became apparent that companies which had profited greatly from war activities prior to our becoming a belligerent would not continue to be permitted to make and retain abnormal profits. As a result of this factor and the competition of Government securities, prices have shown an almost continuous downward trend and have reached levels lower than any recorded since the autumn of 1914.» The New York Times record of the average prices of 50 representative stocks at the high point in 1917 was 90.40 on January 4, 1917, as against 101.51 on November 20, 1916, and 65.88 at the end of 1917, while the low of 57.43 for the year was touched on December 20. The price of 40 representative bonds at the beginning of 1917 was 88.63; the high for the year 88.48, January 26; low, 74.21, December 20; close, 76.80. A decided upward turn in the last week of the year, reflected in the figures given, followed the announcement of Government control of railroads. The following record of comparative figures shows the volume of stocks and bonds dealt in on the New York Stock Exchange for the past seven years. Shares. 1917. 1916. 1915 1914. 1913. 1912 1911. $184,536,371 230,060,900 173,155,644 45,989,158 76,134,996 118,452,676 127,376,149 . Bonds. $1,052,346,950 1,133,935,300 955,525,200 460,472,500 497,158,600 645,300,000 878,933,700 CROPS. As crop planting time approached in the spring of 1917, realization that the world's food supply was in danger of falling materially below demand led to vigorous efforts throughout the country to increase the yield of staple products. This movement was greatly stimulated by the extremely high prices which such products commanded. As a result, a very much increased acreage was planted with resulting heavy yields of several of the more important commodities, though wheat production, upon which attention naturally centered, did not increase very greatly over the short crop of 1916. The corn crop of 3,159,494,000 bushels, valued at $4,053,672,000, the DISTRICT NO. 2—NEW YORK. 301 oats crop of 1,587,286,000 bushels, valued at $1,061,427,000, and the potato crop of 442,536,000 bushels, valued at $543,865,000, are the largest on record. Other crops whose production established records were rye, sweet potatoes, beans, onions, cabbages, and tobacco. The cotton production is estimated at 10,949,000 bales. EXPORTS AND IMPORTS. During the early months of the year exports and imports at the port of New York ruled very materially above those of the preceding year, but in later months have only approximately held their own as compared with a year ago, the difficulties of obtaining shipping space having contributed to the later restriction of foreign trade. Shipments to and from Europe, other than those made by the Government, have shown reductions, while there has been a substantial gain in trade with South American countries. Exports from this customs district for the calendar year 1917, not including Government shipments, aggregate $2,937,000,000, a gain of $147,000,000 over last year, and imports aggregate $1,360,000,000, a gain of $103,000,000. GENERAL'BUSINESS CONDITIONS. The early months of 1917 were marked by great business activity, hampered in some degree by difficulties of transportation and embargoes on freight shipments which the railroads found it necessary to impose. During the late spring, following our declaration of war against Germany, there was a temporary recession of activity in retail lines, occasioned, apparently, by a tendency of large sections of the population to economize. This movement, which created widespread apprehension among dealers in articles in the nature of luxuries, was short lived, and, with the coming of fall, business in most lines revived and became very active, the most marked exception being the building trade, which continued very quiet throughout the remainder of the year. There have been very far-reaching adjustments in business and industry; such lines as machinery, munitions, steel products, cotton and woolen textiles and clothing and similar activities being stimulated by war conditions. On the other hand, the automobile industry, manufacturers of household furniture, manufacturers of various building materials, and many other lines have experienced curtailment of business to a marked degree, but this curtailment has, apparently, not been sufficiently great to offset the expansion in essential war industries; consequently excessively keen competition for rail 802 ANNUAL REPORT OF THE FEDERAL RESERVE BOARD. road transportation facilities, for fuel supplies, and for the products of steel mills has taken place, with the result that the railroads, though doing all in their power to cooperate in handling the unprecedented volume of traffic pressed upon them, have been unsuccessful. Coal production and distribution, though 50,000,000 tons above the normal output, is still estimated by the United States Fuel Administration to be 50,000,000 tons short of the amount required for consumption. Constantly increased difficulty in obtaining and retaining labor supply has been experienced by practically all industries, and heavy advances in the wage scales and salaries have been made in recognition of the higher costs of living. Prices of materials have increased steadily, and in many cases rapidly, so that the whole level of production cost and the selling price of finished products is materially higher than at the beginning of the year. Bradstreet's index number for commodity prices for December 1, 1917, is $17.8113 as compared with $13.6628 December 1, 1916, an increase of over 30 per cent. The tendency on the part of business and manufacturing interests is to proceed with great caution in the purchase of materials and the manufacture of goods, buying orders being restricted, so far as possible, to immediate needs. APPENDIX. Capital account reconciliation, Jan. 1, 1911, to Dec. 31, 1917. Capital paid in Jan. 1, 1917 Sundry increases: Due to increase in capital and surplus of member banks Due to organization of new national banks Due to admission of State banks and trust companies ' $11, 865, 750 $473,150 55, 500 6, 391, 300 6, 919, 950 18, 785, 700 Sundry decreases: Due to decrease in capital and surplus of member banks Due to banks liquidated . 2, 250 98,600 100,850 Paid-in capital Dec. 31, 1917 18, 684, 850 Summary of Federal Reserve notes. Total issued to bank: 1914, 1915, 1916 1917 160, 480, 000 415, 000, 000 575, 480, 000 Less notes unfit for circulation retired 1914, 1915, 1916 — $53, 476, 235 Less notes unfit for circulation retired 1917 65, 665, 200 119,141,435 Amount outstanding Dec. 31, 1917 As follows: In actual circulation : Held by Federal Reserve Bank Dec. 31, 1917 456, 338, 565 397,353,805 58,984,760 On Dec. 31, 1917, the Federal Reserve agent held against Federal Reserve notes: Gold certificates 250, 598, 565. 00 Commercial paper 206, 538, 872. 84 303 304 ANNUAL REPORT OF THE FEDERAL RESERVE BOARD. Total of Federal Reserve notes paid out by the Federal Reserve Bank of New York, by months. 1017. To member banks. January.. February . March April Mav June... July August September... October November December Total paid to nonmember banks . . . $9,164,000 40,294,000 38, 757,000 32,994, 500 25,578,000 27,006,000 25, 598, 000 30,686,000 33,950,250 40,436,000 54 231 000 70,240,000 $670 000 3,914.500 2.644,000 3,657.000 2,086,000 2,424.000 1,361.000 3,122, 000 7,450.500 12,857 800 6 487 000 4,346,000 428,934,750 50,999,800 50,999,800 479,934,550 415,000,000 Total received from Federal Reserve agent Movement To nonmember banks. of Federal Reserve notes between Federal Reserve Bank of New York and other Federal Reserve Banks, Jan. to Dee. 31, 1917. From Federal Reserve Bank of— Notes of Federal Reserve Bank of New York received. Atlanta Boston Chicago Cleveland Dallas Kansas City Minneapolis Philadelphia Richmond St Louis San Francisco Total Summary $1,236,500.00 9,482,800.00 3,425,000.00 1,250,300.00 599,420.00 127, 750. 00 390,500.00 11,169, 902. 50 999,100. 00 922,200.00 393, 580. 00 29,997,052.50 of gold settlement From or to Federal Reserve Bank of— To Federal Reserve Bank of— Atlanta Boston Chicago.. . Cleveland Dallas Kansas City Minneapolis Philadelphia Richmond St. Louis San Francisco $3,030, 710 3,018.450 1,698, 920 1,725,105 964,265 929,160 792 3^5 5,818. 700 3,600,750 661,150 2,560,440 . . . Total 24, 799,975 fund operations, Jan. 1, 1917, to Dec. 31, 1917. Amounts received and paid by the New York Federal Reserve Bank in settlement of accounts due. Received. Net gain. Net loss. Paid. Boston Philadelphia. Cleveland Richmond... Atlanta Chicago St. Louis Minneapolis.. Kansas City.. Dallas San Francisco, $1,269, 785,000 1,986,687, 000 1,114,627, 000 790, 701, 000 256,241, 000 1,196,324,000 338; 856, 000 235, 475, 000 240, 207,000 2 2 , 794, 000 770, 196, 000 $1,289, 707. 000 1, 665,135, 000 935,299, 000 875,366, 000 352,552,000 1,505,874,000 335,296,000 338, 041, 000 203, 552,000 280, 949,000 910,253, 000 Total..., Loss...., 8,426,893, 000 265,131,000 8,692,024,000 Their notes shipped. $321, 552. 000 179,328^ 000 $19, 922, 000 84, 665, 000 96,311, 000 309,550, 000 3,560,000 102, 566, 000 36," 655,666 53,155,000 140, 057, 000 541,095,000 806,226,000 265,131,000 305 DISTRICT NO. 2—NEW YORK. SCHEDULE SHOWING WHEN THE PROCEEDS OF ITEMS WILL BECOME AVAILABLE. Immediate credit: New York (Manhattan, if received by 9 a. m.). One day after receipt: Boston, Philadelphia, Richmond, Baltimore, and Iioanoke. Two days after receipt (business days) : Members of clearing houses in Cleveland, Cincinnati, Chicago, Atlanta, Minneapolis, St. Paul, St. Louis, Kansas City, Mo., Kansas City, Kans. Banks in Connecticut, Delaware, District of Columbia, Maine, Maryland, Massachusetts, 1 New Hampshire, New Jersey, New York,1 Pennsylvania, 1 Rhode Island, Vermont, and Virginia.1 Four days after receipt (business days) : Members of clearing houses in Dallas, NewT Orleans. Banks in Alabama, Arkansas, Florida, Georgia,1 Illinois,1 Indiana, Iowa, Kansas, 1 Kentucky, Michigan, Minnesota,1 Mississippi, Missouri,1 North Carolina, Ohio,1 South Carolina, Tennessee, West Virginia*, and Wisconsin. Eight days after receipt: Banks in Arizona, California, Colorado, Idaho, Louisiana,1 Montana, Nebraska Nevada, New Mexico, North Dakota, Oklahoma, Oregon, South Dakota, Texas 1 Utah, Washington, and Wyoming. NOTE.—Two-day items we forward on Saturday will be available Tuesday; four-day items we forward Thursday will be available Tuesday, and those forwarded Friday and Saturday on Wednesday. Operations in United States Government obligations during 1911. Purchased from United States Treasurer. Issue. Under section 18. Other purchases. $1,776,500.00 Conversion 3s, 1917-1947 2,105,000.00 2 per cent consols, 1930 100,000.00 Panama Canal, 1916-1936 225,000.00 Panama Canal, 1918-1938 521,000.00 1-year notes due Jan. 1,1918 1,255,000.00 $1,532,000.00 1-year notes due Apr. 1,1918. 750,000.00 1-year notes due July 1,1918.. J 955,000.00 1-year notes due Oct. 1,1918... 3 per cent, 1908-1918 50,000.00 3J per cent 15-30 year Liberty 1,500,000.00 loan bonds of 1917 3 | per cent 15-30 year Liberty loan bonds of 1917 (bonds 57,386.68 and interest purchased) 4 per cent 10-25 year second Liberty loan bonds of 1917... 25,000.00 2 per cent certificates of indebtedness due June 29,1917 20,000,000.00 3 per cent certificates of indebtedness, dated Apr. 25, 1917, due June 30,1917 3 per cent certificates of indebtedness, dated May 10,1917, due July 17,1917 7,332,000.00 Z\ percent certificates of indebtedness, dated May 25,1917, due July 30,1917 814,000.00 3£per cent certificates of indebtedness, dated June 8,1917, due July 30,1917 4,977,000.00 3i percent certificates of indebtedness, dated Aug. 9,1917, due Nov. 15,1917 3£ percent certificates of indebtedness, dated Sept. 17, 1917, due Dec. 15, 1917, called for payment Dec. 9, 1917 2,562,000.00 1 Purchased open market. $222,550.00 "906,'666." 66 26,200.00 3,429,698.50 Sold, converted, or redeemed during 1917. Balance on hand Tec. 31, 1917. $521,000.00 $1,255,500.00 2,327,500.00 50.00 100,000.00 1,125,000.00 520,000.00 1,000.00 2,787,000.00 750,000.00 955,000.00 50,000.00 1,118,900.00 2 407,300.00 53,535.54 3,851.14 2,600.00 3,859,198.50 20,000,000.00 18,950,000.00 1,500,000.00 2,590,000.00 1,846,000.00 5,005,000.00 40,115,000.00 18,950,000.00 8,832,000.00 3,404,000.00 6,823,000.00 5,005,000.00 42,677,000.00 Except banks in cities referred to.. 2 Held for delivery to holders of participation certificates and not included in earning assets. 306 ANNUAL REPORT OF THE FEDERAL RESERVE BOARD. Operations in United States Government obligations during 1917—Continued. Purchased from United States Treasurer. Issue. Under section 18. 3 | percent certificates of indebtedness, dated Aug. 28,1917, due Nov. 30,1917 4 per cent certificates of indebtedness, dated Sept. 26, 1917, due Dec. 15, 1917, called for pavment Dec. 11, 1917 4 per cent certificates of indebtedness, dated Oct. 11,1917, due Oct. 18,1917.. 4 per cent temporary loan dated Oct. 16, 1917, due Oct.18,1917 4 per cent temporary loan dated Oct. 17, 1917, due Oct. 18, 1917 2 per cent temporary loan dated Oct. 29, 1917, due Oct. 31,1917 2 per cent temporary loan dated Nov. 15, 1917,, due Nov. 19,1917 1 2 per cent temporary loan dated Nov. 19, 1917, due Nov. 20,1917 4 per cent certificates of indebtedness, dated Oct. 24, 1917, due Dec. 15, 1917 4 per cent certificates of indebtedness, dated Nov. 30, 1917, due June 25,1918.. Other purchases. Purchased open market. Sold, converted, or redeemed during 1917. Balance on hand Dec. 31,1917. $65,045,000.00 $65,045,000.00 6,026,000.00 6,026,000.00 $100,000,000.00 100,000,000.00 10, OW, 000.00 10,000,000.00 20,000,000.00 20,000,000.00 20,000,000.00 20,000,000.00 150,000,000.00 150,000,000.00 150,000,000.00 150,000,000.00 621,000.00 59,992,000.00 59,992,000.00 42,540,000.00 28,161,000.00 $15,000,000.00 United States bonds surrendered for conversion during 1917: United States 2 per cent consols, 193CL _• United States Panama Canal, 1916-1936 United States Panama Canal, 1918-1938 $2,327,500 100, 000 1,125, 000 3, 552, 500 Beceived by conversion during 1917: Jan. 1: United States 1-year 3 per cent notes due Jan., 1918 521, 000 United States 3 per cent convertible bonds of 1917-1947 521, 000 Apr. 1: United States 3 per cent convertible bonds of 1917-1947. 1, 255, 500 United States 1-year 3 per cent notes due Apr. 1 1,255, 000 3, 552, 500 Amount 1-year notes sold Amount of conversion bonds sold 520, 000 521, 000 DISTRICT NO. 3—PHILADELPHIA. R. L. AUSTIN, Chairman <md Federal Reserve Agent. I. INTRODUCTION. The period covered by this report has been probably the most momentous in the life of the Nation since the days of the Civil War. The resources of the banks have been called upon to meet the abnormal demands growing out of the vast increase in business incident to the war, and on account of the floating of the Liberty loans. The Federal Eeserve Banks have enabled them to meet these demands. I I . RESULTS OF OPERATION. Comparative statement of condition of the Federal Reserve Bank of Philadelphia. Dec. 31, 1917. Dec. 30, 1916. Dec. 31,1915. Collateral notes—members Bills discounted—members Bills bought in open market— United States bonds and notes. Municipal warrants $4,008,400.00 31,903,836.94 18,390,067.91 9; 649,950.00 10,000.00 $900,000.00 663,076.79 13,656,430.08 2,825,000.00 465,112.22 $168,274.06 2,542,975.94 1,993,750.00 1,484,147.13 Earning assets.. Interest accrued on United States bonds and notes Cost of unissued Federal Reserve notes Expenses paid in advance Transit department expenses Furniture and equipment—general Furniture and equipment—transit department Organization expense Due from Federal Reserve banks—net Due from banks and bankers Exchanges for clearing house, cash items, etc Due from member banks—overdrafts Federal Reserve notes on hand National and Federal Reserve notes of other banks Nickels and cents Mutilated currency forwarded for redemption Miscellaneous assets Gold settlement fund Gold redemption fund* Gold coin and certificates Bank of England sterling gold account Other lawful money 63,962, 254.85 18,509,619.09 6,189,147.13 906.44 511.99 055.51 17,057.93 27,708.01 2,445.83 1,367.18 10,142.15 43,172.04 1,684.23 25,580.56 15,409.87 12,370, 908.10 1,517, 804.61 7,378, 564.69 12, 804.81 4,348, 590.00 1,353, 500.00 209.09 56, 027.50 110, 032.85 32,101, 000.00 65,445, 755.00 19,064, 667.50 3,675, 000.00 1,189, 996.10 5,382,501.30 609,389.97 3,864,733.22 KESOURCES. Reserve Total resources. 171,140.00 463,476.00 121.89 132,500.00 8,042,000.00 100,000.00 16,988,892.50 18,491.31 31,517.06 3,025,971.02 1,046,543.43 33,959.73 380,267.50 215,885.00 100.83 9,695,000.00 *7,' 445," 485." 66 466,154.30 3,358,145.30 121,476, 418.60 25,597,046.80 20,498,630.30 212,674,169.60 54,794,517.09 31,495,511.73 LIABILITIES. Capital Profit and loss Unearned discount and unearned interest. Government deposits Due to member banks Cashier's checks outstanding Federal Reserve notesl Miscellaneous liabilities Total liabilities. 6,142,150.00 5,228, 100.00 220,238.27 89, 966.68 160,902.51 39, 559.33 5,387,488.53 3,145, 549.05 103,000,930.13 44,965, 072.26 435,026.66 26, 015.72 97,325,755.00 1,300, 000.00 254.05 1,678.50 14,099. 28 787,178.45 25,424,376.56 107.63 212,674,169.60 31, 495,511. 73 54,794,517.09 5,269,600.00 239*8*1 1 In June, 1917, the statement was changed so as to include gold with Federal Reserve Agent under "Gold redemption fund/7 and "Federal Reserve notes" now represent gross liability for Federal Reserve notes, instead of only the net liability. 307 308 ANNUAL BEPORT OF THE FEDERAL RESERVE BOARD. The large increase in the bank's figures is due to the increase in reserve deposits of member banks, resulting from the amendment to the act affecting the reserves, to the admittance to membership of a number of large trust companies, the increase in the amount of Federal Reserve notes outstanding, and the operation of the transit department. Federal Reserve notes in circulation at the close of the year amounted to $92,977,165, and exceeded the net amount of member bank deposits by $226,104. Every effort has been made to accumulate gold through the issue of Federal Reserve notes, and on December 31, the amount of gold deposited against notes was $65,445,755. The accumulation of this fund has largely increased the bank's loaning power, and from time to time transfers have been made from it to maintain the bank's reserve. Due to the admission of new members and the increase in the capital and surplus of member banks, the paid-in capital of the bank increased $914,050 during the year, and at the end of the year amounted to $6,142,150. The following table shows the results of the operation of the bank for the year 1917: Earnings for 1917 $1, 015,959 Expense of operation of bank proper $165, 843 Cost of Federal Reserve currency issued (including expressage, insurance, etc.) 70,340 Miscellaneous charges account note issues Depreciation on furniture and equipment 3, 782 Transit department disbursements in excess of net service charges received 22,120 Total 262, 085 Net earnings for year Profit and loss, Jan. 1, 1917 753, 874 89, 966 Total Dividends paid: Date paid, June 30, 1917; period covered, July 1, 1915, to Dec. 31, 1915; amount 155,320 Date paid, Dec. 31, 1917; period covered, Jan. 1, 1916, to June 30, 1917; amount 466,830 Interest paid on stock surrendered 1, 452 843, 840 Total Profit and loss, Jan. 1, 1918 623, 602 220, 238 RESOURCES AND; LIABILITIES ~ 1916 AMD 1917 FEDERAL RESERVE BANK OP PHILADELPHIA "PP a p T W I FOB.' OF 3TATCKCNT CHANCED TO SHOW FeoeRAU RESERVE J1OTES IM CIRCULATION A3 A LIABILITY OP THE BANK. AHO GOtO WITH PCDERAL RESERVE AGEOT A5 AN ASSET CO CHART N O . 1. o 310 ANNUAL REPORT OF T H E FEDERAL RESERVE BOARD. ASSETS FEDERAL RESERVE BANK OF PHILADELPHIA 1915 1916 WARRANTS «/oo CASH RESERVE S 212.674,169.60 1917 CHART NO. 2. 311 DISTKICT NO. 3—PHILADELPHIA. FEDERAL LIABILITIES ReseRve BANK OP PHILADELPHIA 1916 1915 OTHER LIABILITIES 7 IV >\E/ABER DANK5' DEPO51T5 MEMBER &ANK5 © 31,490,000 S 54.790 000 FEDERAL RESERVE MOTES 4 5 # NET GOY'T. DEP. MEMBER BANKS DEPOSITS 48 % , 674.169.60 1917 CHART NO. 3. 312 ANNUAL REPORT OF THE FEDERAL RESERVE BOARD. EARNINGS AND EXPENSES. During the early part of the year, the greater portion of the earnings was obtained from the purchase of bankers' bills, but with the placing of the Government loans, the member banks began borrowing freely and the amount of their borrowings increased rapidly as the war financing progressed. For the purpose of reserving its funds for discount purposes, the bank early in the year discontinued, as far as possible, its purchases of municipal warrants. Two dividends were declared during the year, one on June 30, 1917, amounting to $155,320.31, covering the period from July 1, 1915, to December 31, 1915, and the other on December 12, amounting to $466,829.62, covering a period of 18 months from January 1, 1916, to June 30, 1917. The invested funds of the bank increased largely during the year, and earnings increased proportionately. Current expenses remained quite steady, the increase, considering the additional work done by the bank, being small. As the number of Federal Eeserve notes issued greatly increased, their cost became a correspondingly greater item of expense. Net earnings reached their maximum in December, when they were at the rate of 30.2 per cent on the paid-in capital. In the following charts are shown the earnings and expenses by months and the rate of net earnings on the paid-in capital. Earnings and expenses. Earnings. Profits from From sale of Sun- Total earninvest- United dry ments. States profits. ings. securities. Expenses. Transit departNet ExDepre- ment Total availpenses Note cia- expense able in exexof ope- issues. tion cess of pense. divi-for ration. charges. net dends. service charges. $36, 836 $11,388 $170 $48,394 $11,354 January 565 45,091 11,228 42,145 2,380 February 1,130 44,794 11,580 43.664 March 874 47,812 11,303 46,938 April 2,521 72,046 12,251 69,525 May 1,770 78,704 12,373 76,934 June 1,026 87,023 12,753 85,997 July 403 90,314 15,036 89,911 August 1,048 95,853 14,991 94, 804 September 1,248 85,419 16,019 84,170 October 1,521 122,933 14,323 121,412 November 2,856 197,573 20,300 194, 717 December Total, 1917. 987,057 13,768 15,132 1,015,959 163,510 Total, 1916. 376,898 11,170 20,137 * 417,939 164,983 $4,320 3,760 4,400 2,880 6,840 760 3,040 8,600 12,160 11,060 12,520 $13 13 17 23 27 61 74 12 i$l,804 131 309 2 260 144 817 976 1,755 4,133 2,386 4,153 5,769 $13,158 15,679 15,649 15, 443 15,288 20,043 14,506 19,854 27,751 30,626 29,610 38,601 8.4 $?5,236 29,411 7.3 29,145 6.5 32,369 7.5 56,758 12.7 58,661 13.5 72,517 16.3 70,461 15.7 68,102 15.7 54,792 12.2 93,323 20.0 158,972 30.2 70,340 240 i22,120 256,210 759,749 17,603 15,653 38,241 167,998 249,941 1 Includes $1,367.18, balance carried over from 1916. 2 Net service charges in excess of disbursements. 3 Includes $9,734 realized by conversion of United States bonds. Annual rate of net earnings. 12.2 4.78 313 DISTRICT NO. 3—PHILADELPHIA. COMPARISON OF EARNINGS AND EXPENSES 1916 AND 1917 FEDERAL RESERVE BANK OF PHILADELPHIA THOUSANDS OF DOLLARS TH0U5AND5 (AN FEB MAR APR M Y JUNE JULY AUG SEPT OCT NOV DEC 0FD0LLAR5 200 eoo 190 190 180 180 170 170 160 160 150 150 140 140 130 130 120 120 110 no 100 100 90 8b 70 60 50 40 30 20 10, ^ BLACK DOTTED LINE = 1 9 t i TOTAL EARNINGS WHITE LIKE = 1916 EXPENSES CHART N O . 4. 314 ANNUAL REPORT OF THE FEDERAL RESERVE BOARD. Ea ta iiiftx <t )t d cepcnscs. 1917 Bills discounted—members Bills bought in open market Investments: United States bonds and notes Warrants Profits realized on United States securities. Sundry profits Total earnings. 1916 $370,359 474,653 $28,391 198,243 123,875 18,170 13,768 15,132 81,081 69,183 36,634 5,407 1,015,959 417,939 22,057 350 174 18, 362 306 749 280 46,206 42,615 8,311 3,590 1,080 1,361 163 1,700 9,070 2,803 326 1,284 4,700 1,426 7,311 233 8,702 39,100 52,398 6,012 3,220 820 895 558 2,000 9.250 1,231 12 11,552 3,415 1, 147 6,648 987 6,041 163,510 70,340 164,983 16,600 1,003 15,653 4,000 CURRENT EXPENSES. Expenses of operation: Assessraent account expenses, Federal Reserve Board Federal Advisory Council (fees and traveling expenses) Governors' conferences (including traveling expenses) Federal Reserve Agents' conferences (including traveling expenses). Salaries: Bank officers Clerical staff Special officers and. watchmen Directors' fees Directors' per diem allowance Directors' traveling expenses Officers' and clerks' traveling expenses Legal fees Rent Telephone Telegraph Postage and expressage Insurance and premiums on fidelity bonds Light, he at, and power Printmgand stationery Repairs and alterations Allother expenses, not specified Total expenses of operation Cost of Federal reserve notes issued, including expressage Miscellaneous charges account Federal reserve note issues Depreciation of furniture and equipment Disbursements of transit department in excess of net service charges received. Total current expenses, exclusive of amortization charges, account organization expenses Less disbursements of transit department Current expenses of bank proper, exclusive of amortization charges, account organization expenses Net earnings for year Per cent of average paid-in capital. 240 22,120 256,210 202, 239 34,241 256,210 167,998 759,749 12.5 249,941 4.7 315 DISTBICT NO. 3—PHILADELPHIA. ANNUAL RATE OF NET EARNINGS AVAILABLE FOR DIVIDENDS-^ AND 1917 FEDERAL RESERVE BANK OF PHILADELPHIA PER CENT PER J|P|A\|A|tt|J JIAI5IOINID J|P|M|A|M|J|J|A|S|O|N|D 40 40 • 38 CENT 38 36 36 34 34 32 32 30 30 28 28 26 26 24 2E 20 18 16 / IT / // ; / 24 22 20 18 16 14 12 11Cp lU 8 ,^ r /' / A 4 10 8 4 c • MM Z A HEAVY LINE= 6 % CUMULATIVE DIVIDEND REQUIRED 5 Y FEDERAL KB5ERYE: ACT CHART N O . 5. 34365°—18 21 316 ANNUAL REPORT OF THE FEDERAL RESERVE BOARD. III. RESERVE POSITION OF THE BANK. The reserve position of the bank on the last Friday of each month is shown below. The bank wishes to express its appreciation of the cooperation of the member banks and State institutions for their services in strengthening its gold reserve. Upon the request of the bank, they deposited their gold and accepted in exchange Federal Reserve notes, and thereby increased the loaning power of the bank. RESERVE REQUIRED AND HELD AGAINST COMBINED DEPOSIT AND NOTE LIABILITIES FEDERAL RESERVE BAMK OP PHILADELPHIA JAN FE6 MAR APR MAY JUNE JULY AUG 5EPT OCT NOY DEC 1 EXCESS RESERVE REQUIRED RESERVES*.3 5 % AGAIN5T DEPOSITS 4 0 % AGAINST MOTES CHART N O . 6. DISTRICT NO. 3 317 PHILADELPHIA. Reserve position on last Friday of each month during 1917. [000's omitted.] Liabilities (net). Deposit. January February Maich April May June July August September October November December Reserve percentage. Reserves. Total Lawful gold money, Total and silver, Total Note. liability. gold and reserves certifi- silver cates. certificates. §49,588 $15,537 $65,125 $55,654 67,809 47,648 20,161 52,100 74,878 50,697 24,181 61,110 29,088 79,102 50,034 54,983 89,254 56,568 32,686 57,804 94,361 39,703 134,064 98,993 82,256 41,257 123,783 98,577 72,214 43,502 115,716 78,945 79,143 51,026 130,169 100,365 81,946 59,612 141,558 108,510 60,103 78,414 144,517 98,106 94,363 93,642 188,005 119,544 $922 233 198 556 445 1,285 1,480 1,061 1,103 759 940 1,148 $56,576 52,333 61,308 55,539 58,249 100,278 100,057 80,006 101,468 109,269 99,046 120,693 Againsi net dedeposit liaGold bilities. against Federal Reserve Gold innotes actual and circulaGold. lawful tion. money. Per ct. Perct. 78.1 80.0 73.5 74.0 76.0 76.5 57.3 58.5 48.2 49.0 69.2 70.8 80.0 81.5 64.8 65.0 75.7 76.5 73.5 74.5 67.4 68.8 64.8 66.0 Perct. 108.6 84.5 92.6 90.5 93.2 84.6 79.5 73.7 79.0 80.9 68.9 62.3 Against combined note and deposit liabilities. Per ct. 86.9 77.1 81.8 70.3 65.3 74.5 80.9 69.1 77.5 77.3 68.5 64.1 Total gold reserve includes gold in the hands of the Federal Reserve Agent on the last Friday of each month. IV. DISCOUNT RATES. The discount rates remained unchanged from September 21, 1916, to May 10, 1917, when the 15-day rate for commercial paper and member bank collateral notes was reduced to 3 per cent. In order that member banks might extend the necessary accommodation to their customers in making payment for Liberty loan bonds, a special rate of 3J per cent was established for the discount of paper and member bank collateral notes having a maturity of not over 90 days and secured by Liberty loan bonds or United States Treasury certificates of indebtedness. The second Liberty loan having been issued at 4 per cent, a general readjustment of the discount rates seemed advisable, and on November 26 the bank's rates for discount were advanced. The changes are given herewith: 318 ANNUAL REPORT OF THE FEDERAL RESERVE BOARD. Changes hi discount rates during calendar year 1911. Rate in effectJan. 1, May 10, June 1, June 11 Nov. 2, Nov. 26, Nov. 30, Dec. 7, Jan. 1 1918. 1917. 1917. 1917. 1917. 1917. 1917. 1917. 1917. Discounts maturing within 15 days, including member banks' collateral notes. Paper including member banks' collateral notes secured by United States certificates of indebtedness or Liberty loan bonds maturing within 15 davs Paper maturing within 16 to 60 davs Paper maturing within 61 to 90 days Paper "secured by United States certificates of indebtedness or Liberty loan bonds maturing froni 16 to 90 days.. . Agricultural and lire-stock paper maturing after 90 days Trade acceptances maturing from 1 to 60 davs Trade acceptances maturing ing from 60 to 90 days Commodity paper maturing within 90 days 3 4 3 4 31. 3i- 4 4\ 41 4 ! 4 ! 3-\ 3 j ! 1 ! 4 4 ; 4& r, i 31 : 0 1 4 4 3i 2,1 2 1 4 2 ' " i ( ) Bankers' acceptances purchased at the market rate, subject to agreement. Rate of 4 per cent for paper maturing 16 to 60 days effective Nov. 26. Rates for commodity paper merged with those for commercial paper of corresponding maturities. 1 2 V. INVESTMENTS. ANALYSIS OF EARNING ASSETS. Operations during the early part of the year were on a relatively small scale. The total loans and investments made during January were only $3,940,771. In the month of May, when the war financing began, there was a large increase in the amount of loans to member banks and the total loans and investments for the month reached $25,878,818. This amount was almost doubled in June. Operations connected with the second Liberty loan again stimulated borrowings during the latter months of the year, loans made in December amounting t<T $45,025,375. Bills discounted for members during 1917 comprised 67.8 per cent of the total operations, compared with 26 in 1916; bills bought comprised 26 per cent in 1917, compared with 62 per cent the previous year. DISTRICT NO. 3 319 PHILADELPHIA. Loans and investments made by months. Month. Bills discounted— members. January February March April May June July August September October November December Total, 1917 Per cent of total Total, 1916 ... Per cent increase or decrease, 1917 over 1916. $565,122 1,682,222 3,009,293 2,385,421 20,445,040 42,724,903 22,175,858 18,170,441 18,934,001 16,819,730 31,478,602 45,025,375 Bills bought United in open States market. securities. Total. Municipal warrants. 1917 $1,268,322 $2,107,327 10,058,886 25,203 4,610,296 $4,598,260 2,575 5,268,807 40 126,667 5,404,559 29,219 3,441,475 11,472,425 7,450,793 317,700 125,938 6,056,282 10,200 4,565,180 10,000 19,479,626 33,500 5,998,140 13,866,050 $3,940,771 11,766,311 12,220,424 7,780,935 25,878,818 46,166,378 33,648,283 26,064,872 25,000,483 21,394,910 50,991,728 64,889,565 $3,012,800 1,948,800 6,542,700 5,296,500 6,562,000 7,329,200 7,318,400 4,476,100 7,571,500 7,469,300 9,462,600 18,781,700 85,771,600 223,416,008 67.8 $22,328,600 85,913,796 26.0 $53,122,000 18,792,250 5.7 $2,500,000 1,621,424 0.5 $7,823,000 329,743,478 100.0 $85,771,600 +900 +61 +650 -80 +284 1916 320 ANNUAL REPORT OF THE FEDERAL RESERVE BOARD. EARNING ASSETS-AVERAGE PAILY AMOUNT OR HAND-1317 FEDERAL "RESERVE BANK OP P H I L A D E L P H I A JAN I F&B [MAR |APR [MAY [JUNE [JULY | AUG [SEPT| OCT |NOVJPEC BILL5 DISCOUNTED MEMBERS C H A R T N O . 7. DISTRICT NO. 3 321 PHILADELPHIA. Average daily holdings of the several classes of earning assets for each month and calendar year 1917. Month, Bills discounted— members. Bills bought. Total. United States securities. Municipal warrants. 1917 1916 January February March April May June July August September October November December $766,946 902,672 1,413,082 1.212,746 6', 285,864 12,394,010 13,852,692 10,540,930 12,656,277 9,958,904 15,756,446 33,346,433 $10,501,049 13,884,435 11,757,278 11,018,096 12,491,969 10,405,492 12,401,444 18,014,284 18,019,258 15,298,910 23,909,654 21,297,307 $2,735,129 2,016,107 2,147,330 6,597,280 6,597,300 6,363,966 3,097,300 3,107,558 3,666,040 3,740,400 3,495,700 7,654,381 $928,012 1,432,016 1,400,076 1,497,731 1,421,461 377,967 158,363 124,946 125,937 7,419 25,633 39,177 $14,931,136 18,235,230 16,717,766 20,325,853 26,796,594 29,541,435 29,509,799 31,787 718 34,467,512 29,005,633 43,187,433 62,337,298 $7,722,182 8,140,448 11,140,662 13,950, 526 16,719,120 17,120,064 18,119,076 17,357,542 17,728,745 18,881,183 17,972,828 22,239,398 Average for year Percent Average for 1916.. Per cent increase or decrease, 1917 over 1916. 9,923,917 33.3 $1,005,376 14,916,598 50.2 $8,585,000 4,268,208 14.5 $3,325,005 628,228 2.0 $2,675,600 29,736,951 100.0 $15,590,981 15,590,981 +890 +74 +27 -76 +91 EARNINGS FROM INVESTMENTS. The total earnings during January amounted to $36,836; these were doubled in June, and in December amounted to $194,717. The month of May marked a sudden increase in earnings from bills discounted and loans to members, and in the month of June they exceeded, for the first time, the earnings from bills bought. Earnings from loans and investments for the calendar year 1917. Bills discounted, members. Month. Bills bought. Total. United States securities. Municipal warrants. 1917 1916 January February... March . April May . . . June JulyAugust . September October November December $3,549 2,700 4,477 3,551 17,705 36,112 43,877 33,022 38,178 31,328 47,258 108,602 $24,499 31, 613 30,441 26,874 33,769 26,927 33,766 48,597 46,982 43,065 65,373 62,746 $6,981 4,693 5,359 13,028 14,391 12,862 7,828 7,858 9,225 9,738 8,696 23,216 $1,807 3,139 3,387 3,485 3,660 1,033 526 434 419 39 85 153 $36,836 42,145 43,664 46,938 69,525 76,934 85,997 89,911 94,804 84,170 121,412 194,717 $14,512 14,113 20,464 25,619 31,969 31,464 36,418 35,596 36,107 40,531 37,362 52,743 Total, 1917 Per cert of tota' Total. 1916 370,359 37.7 28,394 474,653 48.0 198,243 123,875 12.5 81,130 ' 18,170 1.8 69,183 987, 057 100.0 376,898 376,898 RATES OF EARNINGS FROM INVESTMENTS. The annual rate of earnings on invested funds as a whole stood at 2.90 per cent at the beginning of the year. With the exception of a recession in the months of April and May, this rate has been 322 ANNUAL REPORT OF THE FEDERAL RESERVE BOARD. steadily increasing until the rate stood at 4.61 per cent in December. Eeference to the following table shows that the largest rate of return has been from bills discounted for members: Calculated annual rates of earnings from loans and investments. I Bills disBills counted, bought memin open bers. market. Month. January— February... March April May June July August September. October November. December.. Average for 1917. Average for 1916. United States securities. Municipal warrants. Total. 1917 1916 0.0398 .0301 .0373 .0376 .0328 .0354 .0372 .0368 .0367 .0370 .0364 .0383 0.0279 .0296 .0304 .0396 .0396 .0314 .0320 .0317 .0317 .0331 .0332 .0346 0.0299 .0303 .0293 .0248 .0248 .0245 .0297 .0297 .0306 .0306 .0302 .0357 0.0313 .0285 .0284 .0292 .0293 .0332 .0391 .0409 .0405 .0406 .0405 .0461 0.0290 .0301 .0307 .0290 .0298 .0316 .0343 .0333 .0334 .0341 .0342 .0461 0.0221 .0218 .0216 .0224 .0225 .0224 .0237 .0242 .0248 .0253 .0253 .0280 .0373 .0370 .0318 .0231 .0290 .0256 .0289 .0258 .0332 .0242 .0242 DISTRIBUTION BY MATURITIES OF BILLS DISCOUNTED, ACCEPTANCES, AND WARRANTS. The following table shows the total amount of bills, notes, and warrants discounted and purchased by the bank during the year, distributed by maturities. Borrowings incident to the placing of war loans were largely accomplished by obligations having a maturity of 15 days and less. The liquidity of the bank is indicated by the large proportion of maturities within 15 days it has carried. Bills discounted, acceptances, and warrants distributed months for the calendar year 1911. 1-15 days. January February March April May Tune July August September October November December Total, 1917 $247,937 1,307,784 2,667,902 2,208,142 18,545,006 39,039,795 19,000,985 24,596,145 17,175,492 11,962,123 17,859,511 32,125,650 16-30 days. 31-60 days. 61-90 davs. $226,503 2,027,128 1,061,570 874,599 2,785,098 1,839,122 1,429,165 914,557 1,205,851 1,684,876 3,375,295 6,448,283 186,736,472 23,872,047 $850,008 3,329,446 1,055,263 911,719 1,480,976 1,785,845 1,819,689 1,983,641 1,637,175 1,257,125 9,067,163 3,886,982 by maturities Over 90 days. $1,086,242 $1,530,081 5,047,077 54,876 2,616,577 220,852 3,656,296 130,139 2,776,111 291,627 3,475,321 26,295 8,729,150 2,669,294 7,926,931 4,826,189 145,576 6,068,941 421,845 20,575,808 113,951 8,562,600 29,065,032 75,347,243 5,930,434 and Total. $3,940,771 11,766,311 7,622,164 7,780,895 25,878,818 46,166,378 33,648,283 35,747,172 24,990,283 21,394,910 50,991,728 51,023,515 320,951,228 DISTRICT NO. 3 PHILADELPHIA. 323 MATURITIES OP EARNING ASSETS (EXCLUSIVE Of UNITED STATES SECURITIES) FEDERAL RESERVE BANK OP PHILADELPHIA CHART N O . 8. 324 ANNUAL REPORT OF THE FEDERAL RESERVE BOARD. The maturities of the bank's earning assets on the last Friday of the year are shown in the following table: Distribution by maturities of paper and short-term investments held by the Federal Reserve Bank and the Federal Reserve Agent at close of business Dec. 28, 1917. Maturities— Within 15 From 16 to From 31 to From 61 to 30 days. 60 days. 90 days. days. 1. Bills discounted—members: Commodity paper Trade acceptances Member banks' collateral notes All other Total 2. Acceptances bought: Bankers' acceptancesForeign Domestic Dollar exchange bills amended).. . Trade acceptancesForeign Domestic (sec. 13, Total 3. Rediscounts for other Federal reserve banks 4 Short-term investments . . . Amounts 2,848,048 $11,000 48,782 i3,073,44i 2,606,095 $47,950 142,484 5,845,996 33,484,275 2,876,713 13,133,223 2,633,424 39,520,705 1,392,467 730,598 4,847,303 1,702,205 3,428,027 1,384,917 3,822,999 617,100 13,490,796 4,434,820 12,189 273,899 205,559 2,135,154 6,823,407 5,018,503 4,440,099 18,417,163 9,700,120 18,151,726 7,073,523 57,947,868 $74,658 5,845,996 14,956,692 20,877,346 $10,000 17,329 . 491,547 10,000 23,022,500 Grand total $26,950 1,715 Total. 10,000 of the several classes of discounted paper held by the Federal Bank and the Federal Reserve Agent on above date. Secured. Agricultural paper Commercial and industrial paper Member banks' collateral notes All other, n. s $16,514,814 5,845,996 Total bills discounted 22,360,810 Collateral Notes and Bills Unsecured. Reserve Total. $187,639 16,972,257 $187,639 33,487,071 5,845,996 17,159,896 39,520,706 Discounted—Members. Borrowings by member banks, in the form of collateral notes, increased from $1,807,700 in April to $15,229,000 in May and $35,690,499 in June, when they were almost entirely secured by bills receivable. Each month from May showed an increase in the amount of notes secured by United States bonds or Treasury certificates of indebtedness. In December they amounted to $9,550,501 and notes secured by bills receivable amounted to $1,657,250. Discounts of bills receivable increased from $5,216,040 in May to $7,034,954 in June, reaching the large total of $33,817,624 in December. The notes rediscounted DISTRICT NO. 3 325 PHILADELPHIA. ranged in size from a few dollars to $250,000. During 1916, earnings from bills discounted and collateral notes were only 9 per cent of the total, whereas in 1917 they were 38 per cent. Bills discounted during each month by classes of paper; earnings from discounts and average rates of monthly and annual earnings for the calendar year 1917. Members-collateral Earnings. Trade Com- All other accept- modSecured j ity discounts. ances. paper. TTb? A [otherwise United secured. States securities. January February March April May June July August September October November December $880,000 680,650 1,691,650 2,110,000 5,532,500 3.002,500 9,209,425 9.696,501 $319,958 $230,000 $15,164 1,185,501 475, 000 21,7721 1,374,563 1,605! 000 29,7730 1,053,522 1,307! 700 24,1199 5,190,282 14,349^ 000 25,7758 6,956,061 35,009, 849 78,3343 16,515, 320 36,874 $25,000 3,907,014 10,192, 990 26,200 5,747,092 3,303,022 10,082. 190 8,714,811184', 25,000 4,892,718 29,00014,384,533 7,755,505100, 22,950 33,695,673 1,511,250! 99, Total. Average for balance month. Amount. Aver- $565, 122 $766,946 $3,549; 1,682,222 902,672 2,700 3,009, 293 1,413,082 4,477 2,385,421 1,212,746 3,551 20,445, 040 6,285,864 17,705 42,724, 903 12', 394; 010 36,112 22,175, 85813,852,692 43,877 18,170, 44110,540,930 33,022 18,934, 00112,656,277 38,178 16,819, 730 9,958,904 31,328 31,478. 60215.756,446 47,258 45,025! 375 33; 346,433 108,602 Total, 1917..32,803.226 107,748,615 726,078 128,150 82,019,939 223,416,008 9,923,9171 8,609,532 13,644,2681 74,800 " " 22,328,600 ~* "~" — 1,005,376 Total, 1916.. 370,359; 28,395 0. 0398 .0301 .0373 .0376 .0328 .0354 .0372 .0368 .0367 .0370 . 0364 .0383 .0373 .0370 Amount of paper {exclusive of bankers' acceptances) discounted for member banks, distributed by maturities as of date of discount; also number of banks in district and banks accommodated during each month in the calendar year 1917. Member banks in district. January February... March April May June July August September. October November.. December.. 031 632 632 631 630! 628! 628! 628| 627! 627j 630; 636; Total Per cent of total Member banks accommodated. 14 18 17 16 43 79 64 67 76 79 116 139 Total. 15 days or less. $247,937 1,149,757 2,667,902 2,164,269 18,545,006 38,818,843 38,862,985 14,596,145 17,174,648 11,962,123 17,462,072 32,125,650 16-30 days. 31-60 days. 61-90 days. $184,102 $12,080 $120, 88,294 231,028 205, 30,769 234,570 74, 26,477 53,762 137, 268,424 338,565 1,283, 1,674,570 1,640, 491 589,704 940,462 966,750 403, 256,472 923, 701 394. 717, 629 469,187 568, "~">, 448 716,249 509, 708, 987 1,575,537 11,731,106 795,492 6,206,425|2,897,808! 3, Over 90 days. 1917 S565, 1,682, 3,009, 2,385, 20,445, 42, 724, 22.175, 18,170, 18,934, 2,425 16,819, 900 31,478, 45,025, $800 4,876 1,610 3,472 9, 529 1, 295 1,870 $242,773 109,247 212.010 922^ 680 1,590,123 945,730 1,380,125 739,515 546,346 307,303 3,415,021 11,917,727 175,777,337112,286,573 9,789,675j25,531,432 30,991 223,416,008 22,328,600 78.7 5.5 4.3 11.4 .1 100.0 ACCEPTANCES BOUGHT I N THE OPEN MARKET. The total amount of bills bought in the open market amounted to $85,913,796, compared with $53,122,000 the previous year. The 326 ANNUAL REPORT OF THE FEDERAL RESERVE BOARD. average rate of return for the year was 3.18 per cent compared with 2.31 per cent in 1916. in the open Acceptances Bankers' acceptances. January February March April May June July August September October November December Trade acceptances. $2,095,200 9,974,000 4,610,296 5,288,809 5,355,600 3,208,600 11,208,800 7,007,900 5,950,470 4,565,180 18,786,857 5,944,691 Total, 1917. Total, 1916. $12,127 48,959 232,875 263,625 442,893 105,812 692,769 53,449 Earnings. Average i balance j I for month, j Amount. Averag rate. Total. $2,107,327 $10,501,049 10,058,886 13,884,435 4,610,296 11,757,278 5,268,807 11,018,096 5,404,, 559 12,491,969 3,441,475 10,405,492 11,472,425 12,401,444 18,014,284 7,450,793 18,019,258 6,056,282 15,298,910 4,565,180 19,479,626 23,909,654 21,297,307 5,998,140 83,976,401 j 1,937,395 ! 85,913,796 51,769,000 | 1,353,000 | 53,122,000 Bill a bomjht, distributed 14,916,598 8,585,000 $24,499 31,613 30,441 26,874 33,769 26,927 33,766 48,597 46,982 43,065 65,373 62,746 0.0279 .0296 • .0304 .0306 .0396 .0314 .0320 .0317 .0317 .0331 . 0332 .0346 474,653 198,243 .0318 .0231 by maturities. Total. ays January February... March April May June July August September.. October November.. December.. $106,300 1,821,861 987,128 737,158 1,501,582 164,552 1,025,374 520,434 637,528 1,175,391 2,666,308 241,858 $158,027 43,873 220,952 138,000 844 "397," 439 Total, 1917 Per cent Total, 1916 1 -131~ 959,135 I 11,585,474 1.1 13.5 110,322.000 Within 30 days. 61-90 days. Over 90 1917 1916 $1,074,162 $260,959 4,933,580 50,000 216,667 2,585,808 3,629,819 2,507,687 252,879 2,885,617 25,000 6; 762,400 2,667,424 5,003,230 325,898 4,357,002 141,362 2,429,493 419,420 8,844,702 113,051 4,767,108 $2,107,327 10,058,886 4,610,296 5,268,807 5,404,559 3,441,475 11,472,425 7,450,793 6,056,282 4,565,180 19,479,626 5,998,140 $194,000 709,000 4,759,000 3,990,000 4,109,000 5,766,000 5,049,000 3,661,000 6,591,000 5,962,000 5,670,000 6,662,000 19,115,919 49,780,608 4,472,660 58.0 5. 2 22.2 11,566,000 231,324,000 : 85,913,796 100.0 53,122,000 53,122,000 $665,906 3,095,418 820,693 857,957 1,142,411 145,354 879, 227 1,601,231 919,546 540,876 7,458,126 989,174 2 Sixty days and over. UNITED STATES SECURITIES. Early in the year the Federal Reserve Board announced that Federal Reserve Banks would not be required to purchase during the year more than $15,000,000 United States 2 per cent bonds from, member banks, and such bonds would have to be offered to the Treasury Department on or before March 21. The aggregate of bonds offered amounted to $10,877,500, of which amount $1,098,200 was allotted to the Federal Reserve Bank and paid for on April 1. Sub- 327 DISTRICT NO. 3—PHILADELPHIA. sequently $549,200 was converted into United States 3 per cent bonds, and $549,000 into one-year 3 per cent notes. In connection with the Government financing, the bank has from time to time taken over blocks of bonds and certificates of indebtedness, which were disposed of later. Income from this class of investment amounted to $123,875. The average rate of return was 2.90 per cent. Profits realized from the sale of United States securities amounted to $13,768. The following tables show the holdings of United States securities: United States securities. Amount purchased. Income. Average balance. Amount. January February.. March April May June July. August September. October — November. December.. 13,866,050 $2,735,129 2,016,107 2,147,330 6,597,280 6,597,300 6,363,966 3,097,300 3,107,558 3,666,040 3,740,400 3,495,700 7,654,381 $6,981 4,693 5,359 13,028 14,391 12,862 7,828 7,858 9,225 9,738 8,696 23,216 0.0299 . 0303 .0293 .0248 .0248 .0245 .0297 .0297 .0306 .0306 .0302 .0357 18,792,250 2,500,000 4,268,208 3,574,000 123,875 81,130 .0290 .0256 §4,598,200 40 317,700 10,200 Total 1917 . Total 1916 . Rate United States securities held on last day of each month. United States bonds with circulation privilege. 2 per cent 2 per cent consoli- Panama, dated of 1936-1938. 1930. January February March April May June .. . July August September October.. November December. United States bonds without circulation privilege. United States Treasury certificates of 3per cent indebtedness. conver- 3 per cent sion one-year notes. bonds, per 1946-47. 2 per cent. 3-4 cent. $137,000 $1,092,000 $6,260 100 100 100 100 100 100 100 100 100 $3,500,000 3,500,000 3,500,000 I i $658,000 577,000 205,000 549,200 549,200 549,200 549,200 549,200 549,200 549,200 549,200 549,200 Liberty • loan. $1,999,000 1,999,000 1,999,000 2,548,000 2,548,000 2,548,000 2,548,000 2,548,000 $317,700 2,548,000 632,500 2,548,000 1,100 2,548,000 1,100 2,548,000 6,552,650 Total, 1917. $2,135,000 1,999,000 6,597,260 6,597,300 6,597,300 3,097,300 3,097,300 3,415,000 4,387,800 3,675,400 3,303,400 9,649,950 328 ANNUAL REPORT OF THE FEDERAL RESERVE BOARD. MUNICIPAL WARRANTS. Investments in municipal warrants have been very much less than during the previous year. It became apparent early in the year that there would be abundant investment for the bank's funds in rediscounting and open-market operations, and the purchase of municipal warrants was discouraged. Municipal warrants. Earnings. Average balance. City Other warrants. warrants. January February March April . May June July August . September October November December Totals 1917 Totals 1916 $1,268,322 25,203 2,575 126,667 25,219 $4,000 125,938 1,573,924 Warrant a putvhased $1,268,322 25,203 2,575 126,667 29,219 125,938 10,000 33,500 10,000 33,500 47,500 1,621,424 7,823,000 (luring 1917, distributed Amount. Rate. $928,012 1,432,016 1,400,076 1,497,731 1,421,461 377,967 158,363 124,946 125,937 7,419 25,633 39,177 $1,807 3,139 3,387 3,485 3,660 1,033 526 434 419 39 85 153 0.0313 .0285 .0284 .0292 .0293 .0332 .0391 .0409 .0405 .0406 .0405 .0461 628,228 2,675,600 18,170 69,183 .0289 .0258 by maturities. Total. 60 days. January... February March April May j une Julv August. September October November December Total. 90 days. Over 90 days. $1,268,322 . . . . . $25,203 2 575 126,667 29,219 . . . . $125 938 $1,268,322 25,203 2,575 126,667 29,219 125,900 10,000 33,500 10,000 33 500 159,438 1917 37,778 1,424,208 1,621,424 1916. $1,576,000 630,600 855,700 100,000 862,800 617,600 889,800 75,600 434,200 1,200,300 378,200 202,200 7,823,000 DISTRICT NO. 3 VI. 329 PHILADELPHIA. FEDERAL RESERVE NOTE ISSUES. The comparative statement of condition of the Federal Reserve agent's accounts follows: Comparative statement of the Federal Reserve Agent1 s accounts. Dec. 31, 1917. Tec. 30, 1916. Deo. 31, 1915. $10,160,000 $7,260,000 17,069,590 $2,680,000 9,160,000 6,150,410 1,300,000 640,000 3,730,000 4,160,000 RESOURCES. 97,325,755 Federal Reserve notes outstanding Federal Reserve notes sent to Comptroller of Currency for destruction . . 17,994,245 34,855,506 Bills to secure Federal Reserve notes Funds to redeem Federal Reserve notes: Gold coin and certificates on hand 4,220,000 Lawful money on hand 4,966,755 Gold redemption fund 54,759,000 Gold with Federal Reserve Board Total 63,945,755 224,281,261 Total resources... 859,590 11,180,000 5,000,000 15,769,590 9,160,000 47,549,500 21,640,000 30,480,000 1,300,000 15,769,590 12,480,000 47,549,500 21,640.000 LIABILITIES. Federal Reserve notes received from Comptroller of Currency (gross amount) 125,480,000 Collateral received from Federal Reserve Bank 34,855,506 63,945,755 Provision for redemption of Federal Reserve notes Total liabilities. 224,281,261 9,160,000 330 ANNUAL REPOET OF THE FEDERAL RESERVE BOARD. FEDERAL RESERVE NOTES ISSUED BY FEDERAL RESERVE AGENT FEDERAL RESERVE BANK OP PHILADELPHIA MILLIONS OP DOLLARS MILLIONS DFD0LLAR5 140 HO 130 130 120 120 110 110 100 100 90 90 80 80 70 70 60 60 50 50 40 40 30 30 EO 20 10 10 DEC 31.1915 . N O T E S CANCELLED A N D DESTROYED DEC 30.1916 N O T E S IN HANDS OF THE FEDERAL RESERVE AGENT CHABT No. 9. DEC 31.1917 . NOTES 15SUED TO BANK BY THE FEDERAL B&5ERYE AGEKT. DISTRICT NO. 3 331 PHILADELPHIA. The demand for currency has been heavy, due to the abnormal activity in all lines of business. The act of the Pennsylvania Legislature, making Federal Eeserve notes a part of the lawful reserve of State institutions, effected the exchange of a considerable amount of gold held by such institutions for Federal Eeserve notes. The amendment to the Federal Eeserve Act, depriving vault cash of its former character of bank reserve, and requiring that all member bank reserves be carried with the Federal Eeserve Bank exclusively, also induced the member banks to exchange their gold for Federal Eeserve notes. ISSUE OF NOTES BY MONTHS. The amount of notes in circulation increased steadily, as shown by the following table: Federal reserve notes issued and in actual circulation. Outstandat begining of month. January... February.. March April May June July August September. October... November. December. Issued during month. $17,069,590 16,828,690 $6,060,000 22,103,470 4,040,000 25,710,270 5,280,000 30,432,570 4,400,000 34,303,070 8,400,000 41,905,670 1,000,000 42,203,960 4,100,000 45,472,060 10,700,000 53,318,135 14,700,000 65,528,385 17,000,000 81,354,665 17,920,000 34365° OutstandEeat end deemed. ing of month. Held by Federal Reserve Bank at end of month. In actual circulation at end of month. 1917 1916 $240,900 $16,828,690 $741,595 $16,087,095 $8,098,555 785,220 22,103,470 1,253,975 20,849,495 7,485,050 433,200 25,710,270 1,372,835 24,337,435 7,062,455 557,700 30,432,570 1,335,445 29,097,125 6,655,055 529", 500 34,303,070 1,123,155 33,179,915 6,156,380 797,400 41,905,670 2.116,850 39,888,820 6,679,130 846,920 41,351,040 7,322,000 701,710 42,203,960 831,900 45,472,060 2,269,400 43,202,660 6,920,010 2,291,625 51,026,510 7,134,080 53,318,135 1,353,925 1,698,250 65,528,385 4,415,280 61,113,105 8,047,290 2,930,265 78,424,400 12,601,630 81,354,665 1,173,720 1,948,910 97,325,755 4,348,590 92,977,165 16,898,450 332 ANNUAL REPOET OF THE FEDERAL RESERVE BOARD. GOLD AMD COLLATERAL HELD BY FEDERAL" RESERVE AGENT A3 SECURITY FOR FEDERAL RESERVE NOTES OUTSTANDING FEDERAL RESERV6 BANK-OP PHILADELPHIA JAN FEB WAR APR MYUUNCUULY AUC 5CPT OCT NOV DEC FEDERAL RESERVE N0TE3 OUTSTANDING = 1 0 0 % CHART N O . 10. DENOMINATIONS. Notes of the denominations of $10 and $20 were especially in demand and were issued in large quantities, the following table showing the amount of each denomination issued: Denominations of Federal Reserve notes issued during 1917. Total. Fives. January.. February March April. . May Tens. Twenties. Fifties. $100,000 $2,280,000 $3,680,000 360 000 2 400 000 1 280'000 480,000 2,080,000 2,720,000 200,000 1,080,000 2,720,000 1 160,000 2,680,000 3 360,000 $400, 000 480,000 520,000 200, 000 420 000 1 160,000 1 920,000 1 720 000 4,140,000 3,600,000 890, 000 9 , 300,000 4,680,000 4,720,000 1,800,000 1 , 200,000 4,800,000 6,800,000 1,000. 000 3 ,160,000 4,920,000 7,040,000 1,600, 000 June July August September . . October.... November.. December... Total 1017 11,100,000 Per cent of total 11 9 5 , 752,700 Total 1916 30,794,000 38,320,000 40 9 32 8 3,974,800 4,430,200 5,890, 000 6 3 Hundreds. 1917 1916 $325,000 400 ,000 350 ,000 1,200 ,000 3,200 000 1,200 ,000 $6,060, 000 4,040, 000 5,280, 000 4,400, 000 8,400, 000 1,000, 000 4,100, 000 10,700, 000 14,700, 000 17,000, 000 17,920, 000 7,550 ,000 8 1 93,600, 000 100 $400 ,000 800 ,000 1,472,700 900,000 680,000 1,360,000 6,080,000 3,340,000 14, .157,700 DISTRICT NO. 3 Interdistrict 333 PHILADELPHIA. movement of notes. In the following table are shown the amounts of the bank's own Federal Reserve notes received back from other Federal Reserve Banks, also amounts of notes of other Federal Reserve Banks returned to the latter by this bank during 1917: Interdistrict movement of Federal Reserve notes. Received from— Boston. New York Cleveland. Richmond ' Atlanta.. C h i c a g o . . . St. Louis Minneapolis "Kansas . . . City . . . Dallas San Francisco . .... . . . . . Total 1917.. Total 1916 VII. . Returned to— $634,700 5,876,300 258,495 323,920 150,650 357,500 90,600 17,000 11,600 314,450 31,575 $388,000 11,553,902 883,000 798,000 311,000 419,000 113,000 122', 000 129,000 101, 000 163,000 8,066,790 2,110,175 14,960,902 4,411,975 INTERNAL MANAGEMENT OF THE BANK. Directors Federal Reserve Bank of Philadelphia. [Richard L. Austin, chairman and Federal Reserve agent. H. B. Thompson, deputy chairman. Charles J. Rhoads, governor.] Class. Group ] Group S Group c {Group 1 Group 5 Group I { Name. Residence. Term expires. Charles J. Rhoads William H. Peck M. J. Murphy. A. B. Johnson E. S. Stuart G. W. F. Gaunt.. r Richard L. Austin H. B. Thompson l J. Davis Brodhead Philadelphia, P a . . Scranton, Pa Clarke Green, Pa.. Philadelphia, Pa.. .do.. MullicaHill, N. J . Philadelphia, Pa.. Wilmington, Del.. Bethlehem, Pa Dec. 31,1917 Dec. 31,1918 Dec. 31,1919 Do. Dec. 31,1917 Dec. 31,1918 Dec. 31,1917 Dec. 31,1919 Dec. 31,1918 1 Resigned Dec. 12, 1917. DIRECTORS AND OFFICERS. Mr. Levi L. Rue, president of the Philadelphia National Bank, was reelected as a member of the Federal Advisory Council to represent the Third Federal Reserve District. In accordance with the amendment to the Federal Reserve Act approved June 21, Mr. H. B. Thompson became deputy chairman instead of deputy chairman and deputy Federal Reserve Agent. The office of assistant Federal Reserve Agent having been created, Mr. Arthur E. Post, who had acted as assistant to the Federal Reserve Agent, was appointed to that position. On August 1 Mr. Frank M. Hardt, cashier, was elected deputy governor and cashier, and on July 3 Mr. C. A. Mcllhenny, then an officer of the Bank of 334 ANNUAL REPORT OF THE FEDERAL RESERVE BOARD. North America, was elected an assistant cashier, and on December 19 Mr. W. J. Davis was also elected an assistant cashier. These additions to the officers' staff were made necessary by the great in-, crease in the business of this institution. The board of directors continued without change during the year until December 12, wiien the Hon. J. Davis Brodhead felt compelled to resign because of having accepted a position with the Custodian of Alien Property. The regular elections for a class A and a class B director were held from November 20 to December 4. Mr. Charles J. Ehoads, governor of the bank, though eligible for reelection as a class A director, declined to be a candidate, as he believed it to be for the best interests of the bank to have elected as class A directors men who are actively connected with member banks and are thus in a position to represent the stockholders. As the result of the election, Joseph Wayne, jr., w7as elected a class A director by group 1 banks and Hon. Edwin S. Stuart was reelected a class B director by group 2 banks. The votes cast were as follows: GROUP 1, CLASS A. Candidates. William Bromor, vice president National Bank of Schwenksville, Schwenksville, Pa Allen P. Perley, president West Branch National Bank, Williamsport, Pa Joseph Wayne, jr., president Girard National Bank, Philadelphia First Socond Third choice. choice. choice. 11 128 128 14 142 GROUP 2, CLASS B. Robert Brown, manufacturer, Stroudsburg, Pa John C. Ogdcn, general superintendent Cambria Steel Co., Johnstown, Pa... Edwin S. Stuart, merchant, Philadelphia, Pa 52 19 2 At the close of the year the bank had 6 officers and 186 clerks, a total of 192, as compared with, 4 officers and 85 clerks at the end of the previous year. Of this increase in the clerical force, the greatest number has been added to the transit department. The wTork of the teller's department has become heavy, due to the large amount of cash handled daily, and it was necessary to add 15 note counters to the force there. The issues of Liberty bonds have added greatly to the wrork of the fiscal agent's department. Its force was increased in order to handle the work incident to the payment of interest on Government bonds, the payment of Government checks, the handling of war-savings stamps, etc. The force of clerks in this department will probably have to be further increased. The war has thrown much work on the Federal reserve bank, which it had neither the clerical force nor the equipment to properly 335 DISTRICT JSTO. 3—PHILADELPHIA. handle. The quarters of the bank are inadequate and the work was conducted under the greatest handicaps. Notwithstanding these difficulties the officers and clerks have labored without complaint, being on duty long hours, frequently working well into the night— ene department working 40 hours at one stretch—in order to complete in time the figures in connection with the bond issues. It is with great pleasure and due appreciation of these services that this acknowledgment is made of the faithful, efficient, and selfsacrificing work of the officers and clerks of this bank during the year. TRANSIT DEPARTMENT. The check-collection system inaugurated in May, 1916, has been expanded and improved and is becoming of daily increasing service to member banks. The average number of checks handled in the month of January was 9,104, and their value was $7,038,420. The average number handled in December was 15,762, and the value $18,037,952, an increase of 73 per cent in the number and of 156 per cent in the value of items handled during the last and first months of the year. Of the 427 nonmember banks in the district, 310 are now taking items for remittance at par, a gain for the year of 78, and we have hopes that before long all nonmember banks will be included in our list. There are 65 clerks in the transit department, an increase for the year of 25. The cost of the department, including charges on the shipments of money, was $101,701. Of this amount $79,582 was reimbursed through the service charge of 1J cents per item, leaving a balance of $22,120 of the cost of the department to be borne by the bank. Transit department operations. Expenses of Depreciation operation. charges. January February... March April May June July August September. October.... November.. December.. Total, 1917. Total, 1916. 1 Total expense. Service charges. Disbursements in exesss oi service charges. $6,372 5,440 6,361 5,890 5,836 6,825 7,261 8,917 9,284 9,836 10,244 13,249 $308 385 392 393 370 395 398 408 409 425 426 507 $6,680 5,825 6,753 6,283 6,206 7,220 7,659 9,325 9,693 10,261 10,670 13,756 $6,243 5,694 6,444 6,543 6,062 6,403 6,683 7,570 5,560 7,875 6,518 7,987 $437 131 309 1260 144 817 976 1,755 4,133 2,386 4,152 5,769 95,515 34,241 6,185 5,000 101,701 39,241 79,582 22,120 4,000 Service charges in excess of disbursements. OOft OOO ANNUAL ItEPOBT OF THE FEDERAL RESERVE BOARD. TRANSIT DEPARTMENT OPERATIONS AVERAGE NUMBER OP ITEMS HANDLED,DAILY FEDERAL "R&S£RV£ 5ANK Or PHILADELPHIA MUMbER OF 1917 OP ;ULY AUC SEPT OCT ROY DEC JAN FEb /AARjAPR KAY JUNE|JULY AUG[S£?T J OCT[NOV|D&C ITEMS 50,000 45,000 40,000 IT&IAS IT & n S lT£ttS IT£MS KfcY 50,000 OH ALL 3ANKS ON BANKS 1MTH15 DISTRICT OR PHILADELPHIA 5ANK5 OKI BANKS IN OTHER DISTRICTS 45,000 A 40,00,0 35,000 35.000 30.000 30s000 25.000 E5.000 so.aoo 20,000 15.000 15 000 10,000 10,000 5,000 5,000 CHART NO. 11. DISTRICT KO. 3 337 PHILADELPHIA. Total number and amount of checks handled monthly and during the calendar pear 1917. On country banks in this district. On Philadelphia banks. Number. Number. Amount. Amount. 1917. January 236,705 209,967 258,170 271,590 294,068 297,818 325,518 328,261 293,780 367,892 370,357 394,055 $182,998,925 199,859,376 246,290,587 255,466,069 292,196,057 344,434,393 302,315,872 327,342,255 284,939,508 397,418,830 419,819,276 450,948,801 404,966 349,088 445,015 375,565 435,497 429,996 453,704 497,679 431,250 514,031 476,590 526,329 $52,170,483 46,345, 061 54,268,671 56,344, 330 62, 575, 6b i 63? 741, 041 67,128, 277 68,456, 648 68,090, 876 80,355,151 76,022.606 83,281,933 3,648,181 1,121,179 3,704,029,949 1,301,401,864 5,339,710 2,679,110 778,780,708 312,245,482 February.. March April May Juiie July August September. October November. December.. Total, 1917. Total, 1916. On banks in other reserve cities. Number. Total. Amount. Number. Amount. 1917. January February March April May June July August September October November December Total, 1917 Total, 1916 157,938 143,180 167,366 163,116 178,405 178,243 199,866 203,435 203,538 257,420 249,609 262,265 $153,902,963 140,741,052 178,894,749 186,862,433 221,114,500 244,368,130 207,465,530 223,313,333 239,951,955 289,379,806 278,349,990 299,336,688 799,609 702,235 870,551 810,271 907,970 906,057 979,088 1,029,375 928,568 1,139,343 1,096,556 1,182,649 2,364,381 670,454 2,663,681,129 999,204,762 11,352,272 4,470,743 $389,072,371 386,945, 489 479,454,007 498,672, 832 575,886,188 652,543,564 576,909, 679 619,112, 236 592,982, 339 767,153,787 774,191, 872 833,567,422 7,146,491,786 2,612,852,108 Average number of items handled dally. On country banks in this district. On Philadelphia banks. Amount. On banks in other reserve cities. Total. Number. Amount. Number. 1917. January February March April May. June July August... September... October November December 9,104 9,544 9,562 11,316 11,310 11,454 13,021 12,157 12,241 14,150 15,432 15,762 $7,038,420 9,084,517 9,121,874 10,644,420 11,238,310 13,247,477 12,092 635 12,123,787 11,872,479 15,285,340 17,492,470 18,037,952 15,576 15,868 16,482 15,649 16,750 16,538 18,148 18,433 17,969 19,770 19,858 21,053 $2,006,557 2,106,594 2,009,951 2,347,680 2,406,755 2,451,578 2,685,131 2,535,431 2,837,120 3,090,582 3,167,609 3,331,277 6,074 6,508 6,199 6,796 6,862 6,856 7,995 7,535 8,480 9,901 10,400 10,491 $5,919,345 6,397,320 6,625,731 7,785,935 8,504,404 9,398,774 8,298,621 8,270,864 9,997,998 11,129,993 11,597,916 11,973,467 30,754 31,920 32,243 33,761 34,922 34,848 39,164 38,125 38,690 43,821 45,690 47,306 $14,964,322 17,588,431 17,757,556 20,778,035 22,149,469 25,097,829 23,076,387 22,930,082 24,707,597 29,505,915 32,257,995 33,342,696 Total, 1917. 12,087 12,273,306 17,674 2,581,355 7,481 8,825,030 37,603 23,679,692 Number. Amount. Number. Amount. GOLD SETTLEMENT FUND. The gold settlement fund lias been of great use in settling balances Banks and large amounts were cleared between Federal Reserve 338 ANNUAL EEPOET OF THE FEDEEAL EESEEVE BOARD. weekly. The following table shows the summary of operations and the net trains and losses: Gold settlement operations. 000's omitted.) Period covered. Dec. 22, 1916, to Jan. 25, 1917 Jan. 26 to Feb. 23, 1917 Feb. 24 to Mar. 22, 1917 Mar. 23 to Apr. 19, 1917 Apr. 20 to May 17, 1917 May 18 to June 21, 1917 June 22 to July 19, 1917 July 20 to Aug. 23, 1917 Aug. 24 to Sept. 19, 1917 Sept. 20 to Oct. 18, 1917 Oct. 19 to Nov. 21, 1917 Nov. 22 to Dec. 20, 1917 Total of weekly statements for Balance Gold. Transfer. period. Balance after last close stateof busiTotal ment. With- Depos- Debit. Credit. Net Total Net ness for drawn. ited. debits. debits. credits. credits. period. 3,932 185,411 195,564 10,523 158,109 154,297 6,711 ' 10,855 159,994 169,190 9,196 17,441 177,742 184,147 9,167 18,071 199,413 212,116 15,622 4,854 257,653 310,882 53,229 23,433 15,105 11,300 15,117 1,000 550 10,855 4,300 1,690 17,441 6,699 300 552 1,586 18,071 4,120 4,500 26,300 2,919 4,854 3,200 550 32,000 140 1,885 3,044 14,115 15,117 23,433 1,520 19,000 9,147 207,104 220,023 22,066 15,972 15,972 2,250 20, 761 43,000 4,751 278,639 314,023 40,135 26,867 26,867 2,150 27,383 38,131 11,025 234,807 248,211 24,429 27,376 27,376 32,800 30,740 7,000 1,698 253,398 264,029 12,329 41,947 41,947 59,950 44,965 79,000 357,168 442,717 85,549 33,511 33,511 69,570 73,015 45,000 317,400 337,281 29,471 12,837 13,000 1,000 9,590 COLLECTION DEPARTMENT. On September 1, 1917, a collection department was established. Items received for the first four months were as follows: Number of items handled. September October. November December 80 154 186 242 Amount. $89,239 367,246 664,065 1,143,353 Number paid. 74 146 174 219 Amount. $79,553 363,907 661,604 1,119,912 Number returned. Amount. » 8 12 23 $8,836 3,339 2,461 23,440 The greater proportion of this business comes through other Federal Reserve Banks and consists of drafts with bills of lading attached, coupons, notes, and checks on which special advice of payment is requested. The only charges made have been our service charge of 10 cents per item, none of the remitting or crediting banks having made any charge for exchange during the period mentioned in the above table. GOVERNMENT DEPOSITS. The work in connection with the Government department has grown considerably. During the year 375,276 Government checks, amounting to $216,604,043 were handled, 5 clerks being regularly assigned to this work. DISTRICT NO. C VIII. GENERAL BANKING 339 PHILADELPHIA. CONDITIONS IN THE DISTRICT AND RELA- TIONS WITH MEMBER BANKS. On January 1, 1917, there were G31 member banks in the district. During the year 4 national banks were organized; 6 went out of existence, and 7 State institutions joined the system, making a total membership of 636. We give below a table showing the relation of the Third Federal Reserve District compared with the districts of the other banks. I t is interesting to note that while the area of the district is c:ily 1.2 per cent of the entire area of the country, the population is 6.4 pet cent and the resources of the member national banks 8.1 per cent. Federal Reserve district. Boston New York Philadelphia.. Cleveland Richmond Atlanta Chicago . St. Louis Minneapolis.. Kansas City Dallas . . San Francisco Total . . . . Population. Per cent. Square miles. Per cent. Total resources of member banks (000 omitted). Number of member national banks. Per cent. 6,963,987 13,111,816 6,632,611 9,314,762 9,278,461 10,055, 640 14,154,175 9,291,698 5,164,426 7,404,443 5,637, 290 6,631,164 6.7 12.7 6.4 9.0 9.0 9.7 13.7 9.0 4.9 7.1 5.4 6.4 61,345 51,890 36,844 73,310 152,314 247, 209 190, 513 194, 767 414,074 473,611 394,161 683, 852 2.0 1.8 1.2 2.5 5.1 8.3 6.4 6.5 13.8 15.8 13.6 23.0 $1,144,154 4,478,494 1,338,811 1, 719, 441 825,670 539, 923 2,131,874 633,725 784, 745 1,161,353 601,160 1,177, 578 6.9 27.1 8.1 10.4 5.0 3.3 12.9 3.8 4.7 7.0 3.7 7.1 388 624 627 751 514 376 1,036 466 747 949 622 534 103,640,473 100.0 2,973,890 100.0 16,536,928 100.0 7,634 Per cent. 5.1 8 2 8.3 9.8 6.7 4.8 13.5 6.1 9.7 12.7 8.1 7.0 100.0 BANKING POWER OF DISTRICT. The total banking resources of the district reached a new record in 1917. The following figures include national banks (as of Sept. 11), State banks, and trust companies: Banking institutions—District No. 3. 1000's omitted.] Pennsylvania: National banks (535) State institutions (301 reporting) Total (836) New Jersey: National banks (72) . . State institutions (40) Total (112) Delaware: National banks (22) State institutions (27) Total (49) Totals: National banks (629) . . State institutions (368) Total (997) Capital. Surplus. Undivided profits . Individual deposits. Total Bank deposits. resources. $68,877 73,691 $90,385 96,609 $25,053 45,781 $789,138 604,473 $163,938 $1,209,999 70,767 981,010 142,568 186,994 70,834 1,393,611 234,705 2,191,009 6,242 5,336 7,035 5,038 3,017 2,007 82,649 56,197 1,525 959 109,515 71,563 11,578 12,073 6,024 138,846 2,484 181,078 1,589 3,687 1,617 3,933 696 1,962 13,269 44,100 812 874 19,297 56,091 5,276 5,550 2,658 57,369 1,686 75,338 76,708 82,714 99,037 105,580 28,766 49,750 885,056 704,770 166,175 72,600 1,338,811 1,108,664 159,422 204,617 78,516 1,589,826 238,775 2,447,474 340 A1N T KT T AL REPORT OF T H E FEDERAL RESERVE BOABD. COMBINED STATEMENT OF CONDITION OF MEMBER BANKS. A comparative statement of condition of member banks is given in the following; table: Date of comptroller's call. Sept. 12,1914.1 Sept. 2,1915. Sept. 12,1916. Sept. 11,1917 $518,774,000 60,843,000 156,673.000 207,188,000 $527,799,000 61,438,000 198,582,000 267,289,000 $597,371,000 58,812,000 244,462,000 295,338,000 $647,542,000 91,707,000 283,356,000 317,256,000 1,003,478,000 1,055,108,000 1,195,983,000 1,338,811,000 76, 875,000 98, 761,000 20, 759,000 64, 197,000 570, 342,000 159, 796,000 12, 748,000 77,248,000 98,150,000 21,100,000 58,278,000 640,860,000 149,604,000 9,868,000 76,814,000 . 97,304,000 24,460,000 56,291,000 759,894,000 166,926,000 14,294,000 76,708,000 99,037,000 28,766,000 55,596,000 877,549,000 166,175,000 34,980,000 1,003,478,000 1,055,108,000 1,195,983,000 1,338,811,000 RESOURCES. Loans and discounts United States bonds Other bonds, securities, ate. All other resources Total. LIABILITIES. Capital stock Surplus Undivided profits National-bank notes outstanding. Individual deposits Bank deposits All other liabilities Total. 1 Thefiguresfor 1914 include only those banks now in this district. RESERVE CONDITION OF MEMBER BANKS. The banks have maintained strong reserve positions as shown by the following table. On September 12, 1914, two months prior to the inauguration of the new banking system, the banks held excess reserves of only $22,000,000 above the then required reserve of $175,000,000. When the Federal Reserve Act went into operation, $50,000,000 of reserves were released. Reserve condition of member national banks. [000's omitted.] In vault. Date of corap- j trailer's call. I ReI Held. quired. 1914. Dec. 31 With Federal Reserve Bank. With approved reserve agents. Total. Excess. Held. Required. Required. Held. Required. $17,467 j $81,328 $39,612 $159,567 $96,691 $62,876 101,359 106,072 111,402 98,752 94,407 75,215 41,731 42,349 43,189 36,516 38,428 30,957 181,908 180,598 193,104 166,493 165,065 153,368 101,970 103,516 105,613 89,657 94,406 92,872 79,939 77,082 87,497 76,836 70,659 60,496 Held. $59, 727 $39,612 $18,512 59,946 54,066 .-.! 60;453 48,299 50,420 | 50,886 41,731 42,349 43,189 36,516 38,428 37,822 20,603 20,459 21,248 19,443 20.238 27i 267 18,507 18,818 19, 236 16,625 17, 550 24,092 Mar. 7 May 1 June 30 Sept. 12 Nov. 17 Dec. 27 55, 568 51,157 46,863 55,485 51,633 53,492 40,663 40,898 40,324 42,591 44,308 44,038 28,899 26,712 34,108 41,294 47,443 62,114 25,954 26,106 33,013 34,856 44,308 44,038 93,868 87,232 73,487 80,821 78,036 66,690 33,309 33,501 25, 704 27,120 20,222 20,032 178,835 165,101 154,458 177,600 177,112 182,296 99,926 100, 505 99,041 104, 567 108,838 108,108 78,409 64,596 55,417 73,033 68,274 74,188 1917 Mar. 5 Mayl June 20..... Sept. 1 1 . . . Nov. 20.... 54,418 52,661 50,663 46,224 46,579 44, 580 59,877 63,578 64,553 68,347 74,277 46,224 46.579 44.580 70,310 85,007 77,645 64,996 21,067 21,234 20,238 199,302 193,884 180, 212 68,347 74,277 113,515 114,392 109,398 70,310 68,066 85, 787 79,492 70,814 1,963 6,221 1915. Mar. 4 May 1 June 23 Sept. 2 Nov. 10 Dec. 31 1916. DISTRICT NO. 3 341 PHILADELPHIA. DEPOSITS, LOANS, AND BORROWINGS OF MEMBER BANKS. Borrowings by member banks are shown in the following table.: The average ratio between loans and deposits for the past three years has been 79.3 per cent. The banks in the district are generally not heavy borrowers, but they have become accustomed to relying on the Federal Reserve Bank for assistance. On December 31, 1915, of the total borrowings from all sources by banks in the district, only 5.5 per cent was from this institution. On November 20, 1917, this figure was 78.4 per cent. Member hanks—District No. 3. BorrowPer cent Borrowings ings from borrowed from sources Total from Rate. Federal other than borrowings. Fedora! Reserve Federal Reserve Bank. Reserve Bank. Bank. Deposits. Loans and discounts. 1914. Dec. 31 $757,895,000 $629,971,000 Perct. 83.0 $786,000 $6,678,000 $7,464,000 Per cent. 10.5 1915. Mar. 4 Mav 1 June 23 Sept. 2 Nov. 10 Dec. 31 766,350,000 774,550,000 794,940,000 640,859,000 670,195,000 680,957,000 630,516,000 642,200,000 638,372,000 527,798,000 553,856,000 553,338,000 82.3 82.9 80.3 82.3 82.5 81.2 608,000 627,000 599,000 646,000 127,000 168,000 3,245,000 4,654,000 4,773,000 2,880,000 2,049,000 2,887,000 3,853,000 5,281,000 5,372,000 3,526,000 2,176,000 3,055,000 18.0 11.9 11.1 18.3 5.3 5.5 1016. Max. 7 Mayl...... June 30 Sept. 12 Nov. 17 Dec. 27 705,576,000 728,385,000 723,071,000 759,894,000 800,209,000 803,279,000 567,036,000 587,185,000 590,604,000 597,371,000 621,491,000 612,720,000 80.4 80.6 81.6 78.6 77.7 76.2 189,000 502,000 530,000 263,000 563,000 1,563,000 2,041,000 2,380,000 2,108,000 2,323,000 4,151,000 8,538,000 2,230,000 2,882,000 2,638,000 2,586,000 4,714,000 10,101,000 8.5 17.4 20.1 10.1 11.9 15.5 1917. Mar. 5 Mayl June 20 Sept. 1 1 . . . . Nov. 20 819,658,000 856,440,000 834,139,000 877,549,000 1,137,208,000 626,192,000 637,270,000 727,275,000 647,542,000 664,215,000 76.4 73.7 75.2 73.8 58.5 1,080,000 1,261,000 17,108,000 14,080,000 23,101,000 5,132,000 5,843,000 9,738,000 6,771,000 6,427,000 6,212,000 7,104,000 28,846,000 20,851,000 29,528,000 17.7 17.7 63.6 67.5 78.4 Date. RELATION OF LOANS AND DEPOSITS OF PHILADELPHIA MEMBERS. CLEARING-HOUSE The following figures, concerning members of the Philadelphia Clearing House Association, are given as a matter of interest, as the Philadelphia member banks contribute 42 per cent of the capital of the Federal Reserve Bank and carry balances with it amounting to 56 per cent of the total member bank deposits with the Federal Reserve Bank. 342 ANNUAL REPORT OF THE FEDERAL RESERVE BOARD. Philadelphia clearing-house members, 1917. [000's omitted.] Capital. stock. Loans, discounts, and investments. $30,370 $532,200 30,370 545,740 30,370 550,740 30,370 552,330 30,470 561,230 30,470 552,810 31,470 554,910 31,470 550,890 31,470 561,790 31,470 573,160 31,470 600,980 31,470 592,550 January... February. March April May June July August September October... November, December. Deposits. Bank. Individual. Total. $178,360 185,050 188,240 187,020 171,670 169,310 164,680 163,180 164,720 174,340 173,720 169,110 $478,480 482,790 474,620 490,130 486,140 470,230 469,600 466,260 476,310 495,050 492,400 472,070 $656,840 667,841 662,860 677,150 657,810 639,540 634,280 629,440 641,030 669,390 666,120 641,180 Ratio of loans to deposits. 81.0 81.8 83.1 81.5 85.3 86.5 87.5 87.6 87.5 85.6 90.2 92.5 ACCEPTANCES UP TO 100 PER CENT. The following banks, all located in Philadelphia, have been given authority to accept up to 100 per cent of their capital and surplus, as provided by the Federal Eeserve Act: Fourth Street National Bank, Girard National Bank, Philadelphia National Bank, Tradesmen's National Bank, Market Street National Bank. There was approved on June 7, 1917, an act of the State legislature empowering State banks and trust companies to accept drafts and issue letters of credit, and it is expected that the acceptance business of the banks in the district will become an increasing item. Acceptance liabilities of member banks. Amount. Date of comptroller's call— Dec. 31, 1915 Mar. 7, 1916 May 1, 1916 June 30, 1916 Sept. 12, 1916 Nov. 17, 1916 Dec. 27, 1916 Mar. 5, 1917 May 1, 1917 June 20, 1917 Sept. 11, 1917 Nov. 20, 1917 $2, 809, 000 5, 751, 000 6, 219, 000 5, 234, 000 5, 084, 000 8,640,000 8, 309, 000 8, 852, 000 6,154, 000 8, 513, 000 9, .732,000 7, 522,000 BANKS GRANTED FIDUCIARY POWERS. This bank has received many applications from members for permission to act as trustee, executor, etc. There is a conflict of opinion DISTRICT NO. 3—PHILADELPHIA. 343 as to whether or not national banks in the States comprising this district can legally act in fiduciary capacities without enabling legislation, and we do not know which of the following institutions, whose applications have been approved, have actually undertaken to act in a fiduciary capacity. Banks of the district which have J)cen granted special powers. Location. Delaware: Frederica Pea ford Laurel New Jersey: Atlantic City.. Do Cape May Princeton Trenton Do Pennsylvania: Annville Belleville Blossburg Dubois Do Ephrata Harrisburg Hazleton Huntingdon.. . Jenkintown Johnstown Lansdale Lititz Marietta Maytown Mountville Myerstown Nanticoke Nazareth Newville Patton Pen Argyl Philadelphia... Do Do Do Do Reading Scranton Stroudsburg Tioga Topton West Chester.. West Grove Wilkes-Barre... Williamsport... York Powers granted. Name of bank. First National Bank do Peoples National Bank Atlantic City National Bank Union National Bank Merchants National Bank First National Bank do Broad Street National Bank Annville National Bank Belleville National Bank Miners National Bank Deposit National Bank DuBois National Bank Farmers National Bank Merchants National Bank Hazleton National Bank First National Bank Jenkintown National Bank First National Bank ..do Farmers National Bank Exchange National Bank Maytown National Bank Mountville National Bank Myerstown National Bank First National Bank Nazareth National Bank First National Bank do .. do Fourth Street National Bank Eighth National Bank Philadelphia National Bank Quaker City National Bank Southwark National Bank Penn National Bank Third National Bank First National Bank Grange National Bank National Bank of Topton National Bank of Chester County National Bank of West Grove Second National Bank West Branch National Bark Industrial National Bank of West York. Trustee, executor, administrator, and registrar of stocks and bonds. Do Do. Do. Trustee, executor, and administrator. Registrar of stocks and bonds. Trustee, executor, administrator, and registrar of stocks and bonds. Do Do. Do. Trustee, executor, and administrator. Trustee, executor.administrator, and registrar of stocks and bonds. Do. Do. Trustee, executor, and administrator. Trustee, executor, administrator, and registrar of stocks s.pfi bond5? Do. Do. Trustee, executor, administrator. Trustee, executor, administrator, and registrar of stocks and bonds. Do Do. Do. Do. Do. Do. Do. Do. Do. Do. Do Registrar of stocks and bonds. Trustee, executor, administrator, and registrar of stocks and bonds. Registrar of stocks and bonds. Do. Trustee, executor, administrator, and registrar of stocks and bonds. Do. Registrar of stocks and bonds. Trustee, executor, administrator, and registrar of stocks and bonds. Do. Trustee, executor, and administrator. Trustee, executor, administrator, and registrar of stocks and bonds. Do. Do. Do. Do. 344 ANNUAL REPORT OF THE FEDERAL RESERVE BOARD. IX. STATE BANK MEMBERSHIP. The Legislature of Pennsylvania passed an act, approved July " 17, 1917, authorizing any bank or trust company incorporated under the laws of the State to become a member of a Federal Reserve Bank, and in such event to be subject to all the provisions of the act of Congress known as the Federal Reserve Act, allowing any such bank or trust company to comply with the reserve requirements of such act in lieu of those established by the laws of the State, and permitting the commissioner of banking to accept the examinations and audits made pursuant to such act in lieu of those required by the laws of the State, The movement of State banking institutions into the Federal Reserve system began in August when the directors of the Miners' Deposit Bank of Lykens, Pa., resolved to apply for admission. On October 16 the Girard Trust Co. of Philadelphia filed its application, which was approved by the Federal Reserve Board on November 5, and on that date the company become a member. Since then the following trust companies have been admitted: Philadelphia Trust Co., Philadelphia; Commercial Trust Co., Philadelphia; Pennsylvania Co,, Philadelphia; Camden Safe Deposit & Trust Co., Camden, N. J.; Wilmington Trust Co., Wilmington, Del. This makes the number of State member banks 7. The banking institutions that have been admitted have resources of $168,683,000. They have added $831,300 to the capital of this bank and $12,576,000 to its deposits. There are 285 banks and trust companies eligible for membership. Signs of interest in the matter of membership have been manifested throughout the district, and we believe it will not be very long before most of the State institutions have made application for admission. Membership in the Federal Reserve system is looked upon as evidence of the strength of a banking institution, and ultimately we have every confidence that all institutions will be member banks. As shown by the reports of the loan and transit operations there has been a marked increase in the use of the facilities of the Federal Reserve Bank by the member banks, and we hear on all sides expressions of deepest satisfaction with the system. The Liberty loan transactions brought the bank into direct contact wTith all the State institutions of the district and have done much to establish cordial relations with them. X. FISCAL AGENCY OF THE UNITED STATES. The most important function performed by the bank during the year was its part in the placing of the Liberty loans and United States certificates of indebtedness. DISTRICT NO. 3—PHILADELPHIA. 345 Promptly following the receipt on May 3 of word from the Secretary of the Treasury that he had decided to use the Federal Reserve Banks as the central agencies in their districts in organizing the campaign for placing the bonds and certificates of indebtedness, receiving subscriptions, handling payments, delivering bonds, etc., and that he had communicated with all banks in the United States asking them to cooperate with the Federal Reserve Banks, a conference was held with the representatives of all the banking interests and the owners or managers of the newspapers of Philadelphia to consider plans for conducting the work. As a result of this conference, the governor of the Federal Reserve Bank was asked to appoint a general committee to have charge of the campaign, which committee was duly organized. Other committees were formed to conduct particular branches of the work. Committees of bankers and those connected with other lines of business were organized in nearly every local community, and the work of placing the bonds was undertaken with the utmost vigor. Depositors of banks were communicated with—the ptiblic interest was developed and stimulated through addresses at public meetings, at the theaters and other places of amusement, at meetings of employees in shops and stores. Scholars and teachers in the schools were organized for the work, newspaper advertising and posters were freely used. Facilities were furnished by the banks which made it possible to meet subscriptions by weekly payments, for the safe keeping of the bonds without charge, and for making loans on bonds at the same rate of interest as that borne by the bonds. In both campaigns practically the same organization was used, it being, however, more developed and enlarged and made more comj)rehensive for the second campaign. The conduct of the campaigns was actively supervised by committees, upon the chairmen of which fell the greater burden of the work. These men and their associates on these committees were untiring in their work, all their time was placed at the disposal of the committees, and in the successful conducting of the campaigns they rendered services which could not have been bought and which were of inestimable value to their country. Especial acknowledgment should be made of the services of the investment bankers, who practically suspended their private business to undertake the sale of the Liberty loans. They placed at the service of the committee a large and efficient force of bond salesmen whose training and experience did much toward the success of the campaign. 346 AisnsruAL REPORT OF THE FEDERAL RESERVE BOARD. The report of the Liberty loan campaign committee gives the names of over 4,000 persons serving as chairmen of the various general and local committees, cooperating with whom were more than 25,000 people. It is a matter of deep regret that there is not sufficient space in this report to permit the publication of all their names. Many banking institutions throughout the district availed themselves of the opportunity to become depositaries of the proceeds of Liberty bonds, 32 banks, 82 trust companies, and 200 national banks being appointed such depositaries. To pass upon and care for the securities for these deposits, securities committees composed of three bank officers were appointed in 15 cities and banking institutions were appointed as custodians of securities. In Philadelphia committees of bank officers nominated by the Philadelphia Clearing House Association acted as the securities committees and custodians of securities. The securities sent to the Philadelphia custodians were deposited with the clearing house. Securities to the value of nearly $200,000,000 were handled by these committees and custodians. This service was all voluntary, without compensation, and involved a considerable sacrifice of time, but it was of inestimable value in facilitating the settlements for Liberty loan bonds. The amount of Liberty bonds subscribed for and allotted in this district and the number of subscribers were as follows: Amount subscribed. "First Liberty loan... Second Liberty loan. $232,309,250 380,350,250 Amount allotted. Number of subscribers. $165,147,600 280,184,100 476,000 623,000 Of the second Liberty loan $8,167,600 was subscribed for by the scholars and teachers of the public and parochial schools of Philadelphia. The allotments of issues of Treasury certificates of indebtedness to this bank were practically all taken by the banking institutions of the district. At the close of subscription, the bank sometimes had left a moderate amount of certificates, but in all but one instance they were finally absorbed by belated subscriptions. The subscriptions for the certificates made through this bank were as follows: DISTBICT NO. 3 347 PHILADELPHIA. United States certificates of indebtedness. Amount allotted to subscribers. Issued Apr. 25, due June 30; 3 per cent. $25,000 and less Over $25,000 t o $50,000 Over $50,000 to $100,000 Over $100,000 to $250,000... Over $250,000 to $500,000... Over $500,000 to $1,000,000., Issued Apr. 27, due June 30; 3 per cent. $25,000 and less , Over $25,000 to $50,000 Over $50,000 to $100,000 Over $100,000 to $250,000... Over $250,000 to $500,000... Over $500,000 to $1,000,000. Issued May 4, due June 30; 3 per cent. $25,000 and less Over $25,000 to $50,000 Over $50,000 to $100,000 Over $100,000 to $250,000... Over $250,000 to $500,000... Over $500,000 to $1,000,000. Issued May 10, due July 17; 3i per cent. $25,000 and less Over $25,000 to $50,000 Over $50,000 to $100,000 Over $100,000 to $250,000... Over $250,000 to $500,000... Over $500,000 to $1,000,000. Issued May 25, due July 30; 3 J per cent. $25,000 and less Over $25,000 to $50,000 Over $50,000 to $100,000 Over $100,000 to $250,000... Over $250,000 to $500,000... Over $500,000 to $1,000,000. Issued June 8, due July 30; 3J per cent. $25,000 and less Over $25,000 to $50,000 Over $50,000 to $100,000 Over $100,000 to $250,000... Over $250,000 to $500,000... Over $500,000 to $1,000,000. Issued Aug. 9, due Nov. 15; 3! per cent. $25,000 and less Over $25,000 to $50,000 Over $50,000 to $100,000 Over $100,000 to $250,000.... Over $250,000 to $500,000.... Over $500,000 to $1,000,000.. Issued Aug. 28, due Nov. 3G; 3 | per cent. $25,000 and less Over $25,000 to $50,000 Over $50,000 to $100,000 Over $100,000 t o $250,000..., Over $250,000 to $500,000..., Over 1500,000 to $1,000,000., Number Total of subamounts scribers allotted to in each each group. group. $530.000 760,000 1,250,000 1, 760,000 2,700.000 5,000, 000 130 12,000,000 345, 000 305.000 250,000 100,000 55 1, 000, 000 195,000 105.000 100,000 600,000 35 1,000,000 682,000 825,000 1,491,000 1,452,000 2,050,000 3,500,000 184 10,000,000 125 24 29 19 7 3 888,000 610, 000 1,486,000 2,595, 000 1,921,000 1,500,000 207 9,000,000 767,000 939,000 1,492,000 2,315,000 2,741,000 2,146,000 185 10,400,000 687,000 735,000 1,330,000 3,993,030 2,155,000 3,900,030 181 12,800,000 703,000 975,000 1,970,000 1,777,000 2,655,000 1,802,000 9,882,000 34365°—18 23* 348 ANNUAL REPORT OF THE FEDEEAL RESERVE BOARD. United States certificates of indebtedness—Continued. Number of subscribers in each group. Amount allotted to subscribers. Issued Sept. 17, due Dee. 15; 3£ per cent. $25,000 and less Over $25,000 to $50,000 Over $50,000 to $100,000 Over $100,000 to $250,000 Over $250,000 to $500,000 Over $500,000 to $1,000,000 71 22 20 10 6 5 $600,000 555,000 1,012,000 1,350,000 1,700,000 3,000,000 134 8,217,000 633,000 134 8,850,000 129 50 29 30 6 11 1,189,000 1,271,000 1,554,000 3,841,000 1,850,000 10,295,000 255 20,000,000 181 75 45 28 6 14 1,806,000 2,047,000 2,355,000 3,410, 000 1,550,000 12,832,000 349 24,000,000 31 21 13 11 7 8 361,000 628,000 660,000 1,310,000 1,800,000 8,841,000 91 13,600,000 24 2 8 • 216,000 87,000 420,000 1,488,000 400,000 8,881,000 53 11,492,000 Subscribed to by Federal Reserve Bank Issued Sept. 26, due Dec. 15; 4 per cent. $25,000 and less Over $25,000 to $50,000 Over $50,000 to $100,000 Over $100,000 to $250,000 Over $250,000 to $500,000 Over $500,000 to $1,000,000 Issued Oct. 18, due Nov. 22; 4 per cent. $25,000 and less Over $25,000 to $50,000 Over $50,000 to $100,000 Over $100,000 t o $250,000 Over $250,C00 to $500,000 Over $500,000 to $1,000,000 Issued Oct. 24, due Dec. 15; •* per cent. $25,000 and less Over $25,000 to $50,000.. Over $50,000 to $100,000 Over $100,000 to $250,000 Over $250,000 to $500,000 Over $500,000 to $1,000,000 Issued Nov. 30, due June 25,1918, 4 per cent. 125,000 and less Over $25,000 to $50,000 Over $50,000 to $100,000 Over $100,000 to $250,000 Over $250,000 to $500,000 Over $500,0C0 to $1,000,000 * Total amounts allotted to each group. XI. RESUME OF BUSINESS CONDITIONS. January.—The year commenced with an excellent undertone to general business conditions. However, the possibility of peace resulting from the exchange of notes caused hesitation in all lines of business, and developed a spirit of caution on the part of buyers in contracting for goods in excess of immediate wants. Commercial failures during 1916 were fewer than the preceding year and the liabilities of the companies involved were less in amount. Of the concerns failing 94 per cent were conducting business with less than $5,000 capital. The year 1916 was one of comparatively low crop production, but the prices obtained for most of the crops were extraordinarily high. The value of the products of farms in the district shows a gain of about 44 per cent for 1916 over 1915. Rates for money were easier than the preceding month. Call money deDigitized forclined FRASER from 5 per cent to 3i per cent. DISTRICT IsT0. 3 PHILADELPHIA. 349 February.—The difficulties of the railroads and steamship companies in moving goods promptly, the scarcity and inefficiency of labor, and the increased cost and inadequate supply of coal and other materials curtailed production somewhat. Activity continued in practically all industrial and other lines of business, and no difficulty was experienced in disposing of products. In some localities there was much conservatism in the placing of new orders. Quite a number of important industrial concerns enlarged their plants. Collections were generally satisfactory. There was a general feeling of confidence and optimism as to the future, but on account of the extraordinary conditions and the uncertainty of the foreign situation, business was conducted in a cautious and conservative way. Locomotive business was reported as unprecedentedly favorable. Money rates remained easy. The announcement of Germany's new submarine policy resulted in violent declines in the prices of securities. March.—While less active than the preceding months, the volume of business transacted in most lines continued on a large scale. Stimulated by the United States Government's inquiries and orders, prices of many articles were further advanced. Because of the uncertain foreign situation, however, commitments were undertaken with caution. In response to a questionaire to which 362 business concerns replied, 67 per cent reported business " excellent or good," 13 per cent " fair," and 20 per cent " uncertain or bad." Two hundred and thirty-seven concerns reported the outlook to be "excellent or good," and 118 " fair, uncertain, or bad." An average increase during the past year of 26 per cent in wages and 49 per cent in cost of materials was reported. Money rates were easy. April.—The entrance of the United States into the war caused advances in prices, greater demand for goods, and greater scarcity in materials in many lines of trade. Manufacturing plants throughout the district were running as fully as the supply of labor and materials would permit. The problem of deliveries in many cases was very annoying because of the limitation of output and troublesome transportation conditions. The labor situation became very acute. The condition of the winter wheat crop was reported 15 per cent below normal. There arose a patriotic desire on the part of the people in agricultural sections to do their full duty toward producing the maximum amount of foodstuffs, but on account of the high prices and scarcity of fertilizer, the high price of seed, and the scarcity and high wages of labor, it appeared that the acreage planted in food crops could not be increased materially. The attempt was made to have people put forth extra efforts in planting vegetable gardens for their own account. Retail trade during March was reported as the largest in history, but after Easter trade fell off very 350 ANNUAL REPORT OF THE FEDERAL RESERVE BOARD. much. It was felt that this was largely due to the practicing of economy on the part of the public which was so earnestly recommended. The prospect of large Government borrowings caused hesitation in the investment of funds. Sales of securities fell off and prices declined. May.—Manufacturing plants operated as near capacity as possible. A slowing up became noticeable, however, in retail trade and among the jobbers of wearing apparel of all kinds, due to extremely high prices, unseasonable weather, the economy campaign, and the fact that most consumers were pretty well supplied. Some of the department stores were compelled to reduce their staffs of employees because of curtailed sales. The potato acreage in Pennsylvania was estimated at 108 per cent in comparison with last year. Manufacturers of goods not essential to war, such as carpets, lace curtains, and tapestries, did not have enough orders to warrant more than 50 per cent operation. Surplus reserves of the Philadelphia banks decreased $20,000,000. Money rates stiffened considerably, call money advancing from 3 | to 4 per cent. The prevailing rate for paper was 5 per cent. June.—There was a noticeable improvement in business conditions in those lines which are especially dependent upon weather conditions, higher temperatures having stimulated demand for many summer specialities and business in seasonable merchandise wTas well up to normal in volume. The Philadelphia department stores reported considerable improvement and expected business to continue good. The automobile pleasure car business was reported as not very good. Cotton and wool prices were very high. A further decrease in the surplus reserves of the Philadelphia banks to the lowest point since December, 1916, forced up call money to 5 per cent. Commercial paper ruled at 5J per cent. The rediscount feature of the Federal Reserve Bank was availed of to a very considerable extent. Financial institutions were occupied with the flotation of the Liberty Loan. July.—There was no change, generally speaking, in the great business activity prevailing in this section. In nearly every line, the manufacturer, jobber and retailer report the volume of business large and results satisfactory, although there was no cessation of complaints of the difficulty in obtaining workers, the scarcity of fuel, and unsatisfactory transportation conditions. Uncertainty due to possible legislation as to price control adversely affected some lines. Bates for money continued firm, call money and paper being quoted at 5 per cent. Due to the high cost of materials and high wages, very much more money was required to conduct business than formerly, and customers borrowed freely from their banks and lines of credit were used to the full. DISTRICT NO. 3—PHILADELPHIA. 351 August.—There was no important development in the business situation. A strong tendency toward cautiousness existed on the part of buyers, owing to the uncertainty of future prices and the high cost and scarcity of many kinds of goods. There wTas a steady readjustment to war conditions, but business men generally expected an active fall and winter business. Great difficulty was reported in all lines in securing sufficient skilled and unskilled labor and office help, which, in some cases, forced production below normal. The high cost of building materials and labor resulted in the cessation of building for investment. Manufacturing druggists and chemists were taxed to the limit taking care of emergency orders required by the European countries, the United States Government and the Eed Cross. Member banks continued to avail themselves quite freely of the rediscount feature of the Federal Reserve Bank. Financial institutions were well loaned up, and the money market remained on a firm 5 per cent business. There was a good commercial demand for funds. Public interest in the security markets was at a low ebb. September.—Plants throughout the district continued busy and manufacturers generally expected a very large volume of business owing to the tremendous quantities of business needed by the Government for carrying on the war. Retail distribution of fall merchandise showed a very satisfactory increase in activity, demand being stimulated by cool weather and the return of many people to the city, but there was some complaint that the high prices were restricting the movement in certain lines. Wholesale orders were placed in considerable amounts, especially for staples in dry goods, furnishings, notions, underwear, etc. All lines were prevented from working to capacity by the uncertain deliveries, scarcity of raw materials, and the shortage of labor. Money rates advanced, best names selling at 5^ per cent. October.—The outstanding feature of financial and business conditions was the concerted effort of practically all the financial institutions and a great many industrial concerns to make the second Liberty loan an unqualified success. General business conditions continued to be prosperous, and retail trade retained its activity. The predominating influence of the war was felt in nearly all lines of industry, and Government orders took precedence over private business. As a result, the normal demand was somewhat obscured, and a marked conservation in placing orders for deliveries next spring was noticeable. The scarcity of cars resulted in very unsatisfactory deliveries of coal. Government orders for coal produced a shortage in the supply available for the customary needs of domestic and commercial consumers. The production of iron and steel mills was seriously curtailed by the scarcity of fuel. The sugar shortage, caused by the fact that much of the Cuban crop was purchased by the 352 ANNUAL REPORT OF THE FEDERAL RESERVE BOARD. allied Governments., was reported to be purely temporary. Another cause of the scarcity was that consumers were buying far ahead of their needs, thereby reducing the already small supply in the hands of the dealers, but relief was in sight from the new Louisiana and Hawaiian crops, also western beet sugar. Bank clearings readied a high record figure—$1,678,000,000 for the district. Eates for commercial paper were firm at 5^ to 6 per cent. A continuation of liquidation of high-grade investment securities resulted in a further decline in prices. November.—Manufacturing industries were running at high pressure, but were somewhat restrained by the very considerable difficulties encountered in securing supplies and sufficient labor. The large ball-bearing plants in the district were seriously affected by the falling off in the production of automobiles, for which the largest part of the output of ball bearings was used. Cotton prices reached a level hitherto unattained for a long period of years. Retail trade conditions generally appeared to be stationary. Collections were good, except in the case of a few industries which were affected adversely by war conditions and the working out of the new Government policies. Building operations were curtailed owing to the high cost and difficulty in obtaining labor and materials and the difficulty experienced by builders in securing advances of money from financial institutions. Exports from the port of Philadelphia reached $62,724,000, a new record, the increase being largely due to heavy shipments of powder. Opinion throughout the district was unanimous in agreeing that the railroads should receive an advance in freight rates. Eates for paper continued firm at 5^ to 6 per cent. There was an average demand for loans in most quarters, but in some parts of the district borrowers used full lines of credit. December.—The industries engaged in producing supplies for war purposes were running at as near capacity as possible. Other industries, however, felt to a considerable extent the circumstances which tended to cut down their output; the demand for their product decreased, and they were unable to meet the wages which the munition factories offered. Christmas trade was rather disappointing and not up to normal. Many merchants did not cany as large stocks as was their custom in previous years, owing to their unwillingness to put in large stocks of goods at the prevailing high prices and because of their inability in many instances to secure goods from the manufacturers. The coal situation was considerably aggravated by the appearance of cold weather earlier than usual. Some manufacturing plants were forced to operate on a margin of not more than one or two days' supply of coal. Building operations practically ceased, except where absolutely necessary. The total of the Christmas sav DISTRICT NO. 3 353 PHILADELPHIA. ings funds carried by the banks in the district amounted to upward of $10,000,000, which was about $500,000 ahead of 1916. The number, of depositors was approximately 350,000. Payments on account of Liberty loan subscriptions caused a shrinkage in loanable funds, and money rates were firm. The call-money rate was advanced to 6 pei? cent and the rate for paper to 5 | per cent. BANK CLEARINGS. The growth of business in the district during the year is shown in the following table of bank clearings, which are the largest on. record. Of course the high prices of goods constituted a prominent cause for the big increase. Clearings in the Third 1917. January February March April May June July August September October November December Total for rear. Philadelphia. District. District outside of Philadelphia. Total for district. 397, 691,175 251, 517,407 467,016,516 410, 313,000 477, 700,000 503,806,000 331,836,519 368,485,000 337, 772,768 569,400,000 532, 682,000 549,512,824 000,832 83,891,961 97, 276,863 101,560,000 99, 545,000 99,932,000 99, 272,488 92, 576,000 91,846,400 109,360,000 99, 532,000 102,350,996 $1, 494,692,007 335,409,368 564,293,379 511,873,000 577,245,000 603,738,000 431,109,007 461,061,000 429,619,168 678,760,000 632,214,000 651,863,820 17,197,733,209 1,174,144,540 18,371,877,749 26 354 ANNUAL REPORT OF THE FEDERAL RESERVE BOARD. 1915-1917 BANK CL&ARIMGS COMPARED FOR PHILADELPHIA P&DERAL RE5ERV& DISTRICT JAN|FE5|MAR|APR|MAY JUNE[JULY|AUG!5EPT|0CT|N0YlDeC S 2,000,000,000 1,800,000,000 \ N 1 / 1,600,000,000 ***** 1 1,400,000,000 \ 1 / i i t i t 1,200,000,000 i i t 16 , — t +'* / 1,000,000,000 / 800,000,000 / s y / y 600,000,000 400,000,000 • 200,000,000 CHART NO. 12. / f DISTRICT NO. 3 355 PHILADELPHIA. COMMERCIAL FAILURES. The year 1917 showed a continued falling off in the number of commercial failures, and during the month of September there were only 40, the smallest number for any month we reported. Of these, 37 were concerns doing business with a capital of $5,000 or less. The following table has been compiled from Bradstreet's report of commercial failures in the district: Bradstrccfs report of commercial failures in the Third Federal District, classified as to capital employed. $5,000 and less. January February March April May June July August September. . October November December Total $5,000 to $20,000. $20,000 to $50,000. 1917 1916 1917 1916 1917 73 48 56 54 58 40 44 46 37 58 58 57 90 95 96 64 44 46 55 60 69 84 78 88 2 2 3 1 2 4 3 2 1 4 4 7 4 2 2 3 2 5 2 2 1 1 1 1 3 7 1 629 869 27 39 1916 Reserve $50,000 to $100,000. $100,000 to £500,000. 1917 1917 1916 1917 1 1 1 1 75 51 61 56 61 45 48 49 40 65 60 63 96 103 101 67 48 50 57 65 73 87 86 93 5 674 926 1916 1 Total. 1 1 2 1 i 1 2 2 2 2 1 1 1 2 1 1 1 9 2 4 1 1 2 1916 IMPORTS AND EXPORTS. Exports from the port of Philadelphia during the year 1917 were the largest on record, and in October, a neAv high mark of $62,724,000 was reached, due chiefly to heavy shipments of powder. Besides munitions of war, other important items exported in large quantities were grain and petroleum. Naturally, in view of the foreign situation, imports declined in comparison with the previous year. Figures prepared by the Commissioners of Navigation follow: Business through the port of Philadelphia. Exports. 1917 Imports. 1916 1916 January February... March April May June July August September.. October November.. December... $43,634,046 57,652,322 38,879,748 39,889,979 42,507,832 41,284,111 21,451,383 57,381,188 24,093,366 62,724,000 32,309,000 40,158,000 $11,738,378 9,801,012 15,567,739 34,688,268 24,830,464 24.286,752 27,890,704 37,013,839 44,377,332 25,217,112 41,467,209 25,165,429 $9,093,450 9,041,989 7,488,047 11,103,862 11,424,218 14,304,452 8,953,507 9,247,078 8,276,928 4,486,000 4,106,000 4,446,000 $7,387,295 9,176,185 9,625,334 11,336,364 12,854,821 13,552,856 10,740,537 8,221,037 6,806,542 7,602,789 6,946,608 6,712,340 Total. 501,964,975 321,044,815 101,971,531 111,407,851 356 AXNUAL REPORT OF THE FEDERAL RESERVE BOARD. FREIGHT CAR MOVEMENT. We give below tables showing the loaded freight car movement on the Pennsylvania, Lehigh Valley, and Delaware, Lackawanna & Western Railroads during the months of 1917 compared with each month of the preceding year. Pennsylvania R. R. loaded freight car movements at Leiviston Junction. Bituminous coal, eastbound. 1917 Coke, eastbound. 1916 Miscellaneous, westbound. Total. 1917 1916 1917 1916 1917 1916 1917 4,812 5,242 6,277 4,999 5,022 4,701 4,608 4,593 4,668 5,216 5,433 5,088 33,820 31,024 38,833 39,103 38, 085 34,382 33,057 30,618 31,766 30,211 26,917 19,300 36,211 33,113 38,211 43,258 39,304 32,922 32,113 35,059 35,537 37,141 37,629 31,670 21,047 18,733 24,629 24,375 26,201 26,257 25,479 24,775 22,821 20,834 17,641 9,958 20,382 19,565 23,040 24,274 23,648 25,620 28,170 28,452 28,318 27,019 23,857 20,829 101,562 89,263 115,056 110,222 115,714 109,497 106,269 101,631 98,398 94,557 89,993 65,900 January February.. March April May June July. August . September. October November. December.. 54,046 43,711 50,548 44,691 41,527 39,885 42,184 47,027 42,752 43,051 40,088 32.193 38,184 5,563 4,290 5,751 5,552 5/643 6,034 6,366 5,796 5,596 5,503 5,404 4,449 Total 482,249 527,694 65,947 41,132 35,216 45,843 41.192 45, 785 42,824 41,367 40,442 38,215 38,009 40,031 Miscellaneous, eastbound. 1916 115,451 101,631 118,076 117,222 109,501 103,128 107,075 115,131 111,275 112,427 107,007 95, 771 60,659 387,116 432,168 262,750 293.174 1,198,062 1,313,695 Lehigh Valley R. R. loaded freight car movements. 1917 January.. February March April May June July 289,219 244,925 324,971 316,078 382,768 35G,960 334,832 1916 297,819 266,846 325,845 317,627 345,947 313,584 321,923 1917 August September. October— November. December. Total 318,009 327,812 344,041 336, 766 248,001 1916 335,263 324.700 363,008 340,832 300,992 3,824,382 3,854,38G Delaware, Lackavjanna & Western R. R. freight car mileage made on rails in the State of Neiv Jersey. January.... February... March April May June July 1917 1916 2, 694,942 2 241,833 2,964,152 2, 779,917 3 190,253 3,069,278 2, 626,794 2,894,378 2',529,818 2, 798,402 2, 704,331 2, 713, 220 2, 651,817 2,684, 534 STOCK-EXCHANGE 1916 August September.. October November.. December.. Total. 2,539,253 2,391,001 2,685,839 2,498; 603 2,281,811 2,660,504 2,883,8G4 2,883,864 2,805,530 2,607,211 .|31,971,678 32,817,533 TRANSACTIONS. The decline in prices of securities, which reached their high point in November 1916, together with the Government war issues, and the consequent desire of investors to have their money in liquid form, in order to purchase Government obligations, resulted in a marked DISTRICT NO. 3 857 PHILADELPHIA. contraction in transactions on the Philadelphia Stock Exchange. There was little public interest in the market throughout the year. In the month of November, 1916, 1,035,085 shares were traded in, whereas in November of 1917, the number was only 284,170. The bond business, however, was reasonably satisfactory. Transactions on the Philadelphia Stock Exchange are shown in the following table: Philadelphia Stock Exchange transactions. N u m b e r of shares. 1917 January February March April May ... June July Au^u^t September October November December ... . . ... Total Cost of bonds. 1916 1917 404,319 357,474 382,839 278,141 369,140 187,464 393,542 219,187 256,558 327,698 284,170 260,156 388,194 632,619 293,431 235,001 294,750 281,670 169,023 230,882 559,062 508,992 1,035,085 753,417 $2,396,150 2,007,700 1,536,635 2,065,464 1,185,400 796,350 1,657,250 1,269,970 2,054,850 2,507,100 987,300 1,249,250 $2,528,130 1,932,970 1,865,300 1,541,600 1,572,550 1,498,395 1,155,450 1,402,150 1,180,776 1,723,900 1,779,110 1,323,130 3,820,688 5,382,156 19,713,419 19,503,461 1916 BUILDING OPERATIONS. Building operations decreased considerably from the mark reached in 1916. The high cost of labor and materials and inability of builders to secure advances from financial institutions are given as the reasons. Figures of building operations in Philadelphia given below are indicative of general building conditions throughout the district. The bulk of the depreciation was due to the falling off in the construction of twro-story houses, which amounted to $11,438,355. Building operations in Philadelphia. N u m b e r of operations. 1917 J anuary February March... April. Mav.. . June July. August.. September October November December Total „ „ .. .... 1916 592 666 578 748 461 270 $2,144,630 4,042,115 3,470,625 5,009,740 3 558 355 2,328,755 5,195,365 1,554.115 2,252,765 2 030 475 1,629,425 740,020 $1,859,090 2,437,750 4,590,630 6,227,780 4 791 255 5,147,115 3,101,685 4,472,120 3,301,310 4 055 045 4,451,925 5,460,865 8,961 15,613 33,956,385 49,896,520 763 . 1917 736 1,086 1,606 1,915 1,524 1,709 1,040 1,247 1,153 1,337 1,181 1,079 613 815 1,147 1,337 971 . . 1916 Estimated cost. 358 ANNUAL REPOKT OF THE FEDERAL EESEEVE BOARD. POSTAL BUSINESS. Monthly postal receipts at the Philadelphia post office exceeded $1,000,000 for the first time in the month of November, when the figures reached $1,077,115. The increase shown is due, of course, to a large extent, to the higher postage rates which became effective about that time. Comparative statement of the postal and money-order "business of the Philadelphia post office. Postal business. 1917 January . February March.... April... . May June August September October. November December Total. . . . . . . .... 1916 Money-order business. 1917 1916 $887,803 763,553 911,439 845, 997 843,591 785, 701 703,971 734,499 817,806 973,469 1,077,115 1,160,298 $795,730 768,419 848,540 780,454 816,427 753,425 659,289 693,636 750,615 830,311 826,095 968,010 $2,101,685 1,940,608 2,393,709 2,049,152 2,082, 896 2,115,971 2,062,602 2,206,179 2,225,889 2,507,410 2,401,672 2,636,275 $1,764,669 1,773,654 2-005. 4JV7 L, 840, 750 : t, 868,081 ]L, 859,586 1,759,991 1,864,638 :1,832,810 L, 970,602 L. 985.087 2,287,716 10,505,242 9,490, 951 26,724,048 22,813,041 CROPS, COLD STORAGE HOLDINGS, TOBACCO. The farmers in the district harvested good crops, which were in excellent condition for the most part. Farmers were, however, harrassed by inability to secure farm labor, and in many instances were forced to aid each other. Some crops had to be sacrificed, as the farmers were unable to harvest them. The new wheat crop appears to have a good start, but the acreage planted is about the same as last year. Cold storage plants in the district reported an increase of 29 per cent in the holdings of eggs compared with the previous year, 19 per cent in butter, and 53 per cent in cheese. Holdings of meat, however, declined from 10 to 15 per cent on the average. The tobacco fields of Pennsylvania are estimated to have produced over 58,000,000 pounds of tobacco during 1917, according to the Department of Agriculture. This is an increase of approximately 9,000,000 pounds over the 1916 crop. Prices paid averaged as high as 25 to 30 cents a pound. DISTRICT NO. 4—CLEVELAND. D. C. WILLS, Chairman and Federal Reserve Agent. It lias been frequently urged that the primary function of the Federal Reserve Bank is that of service—first, in mobilizing reserves; second, in rediseounting; and third, in providing an elastic currency; and that it did not greatly matter whether or not the Federal Reserve Banks might be money-making institutions. With vastly increased opportunities for service during the past year, however, the Federal Reserve Banks have demonstrated their capacity to earn a very comfortable margin over their expenses. The Federal Reserve Bank of Cleveland has made net earnings during the year sufficient to pay its entire arrearage of accrued dividends; but as a matter of banking prudence, it has been deemed wise to provide an ample reserve against depreciation, and accumulated dividends have therefore been paid to July 1, 1917. All furniture and equipment have been charged off the books. The expenses at the same time have naturally increased markedly with the rapidly expanding activities. Chart No. 1, appended hereto, shows graphically the gross earnings, both in total and divided into the three chief classes of revenue, together with the expenses and net earnings, and Exhibit A gives the data in tabular form. Chart No. 2 shows the relation of revenue-producing assets to capital stock. Exhibit B contains the daily average of invested funds, and the average rate of earnings on each class of investments, for each month of the year, compared with each month of 1916, and summary of investment operations is also shown in this exhibit. Exhibit C is a comparative balance sheet as at the close of business December 30, 1916, and December 31, 1917. Exhibit D is the comparative profit and loss account for the years 1916 and 1917. The extraordinary history of the United States during the year has tended toward a uniformity of experience in business and banking conditions throughout the country. District No. 4 is very largely a manufacturing district, and its record for the year as such is quite similar to that of the other industrial districts. It is the leading dis- 359 360 ANNUAL REPORT OF THE FEDERAL RESERVE BOARD. trict in the production of primary iron and steel products, and its industries of this character have of course been taxed to capacity throughout most of the year, together with industries in most other lines, although there has been some slight recession from the peak after the completion of contracts for munitions, etc., from foreign Governments, and pending the placing of orders for our own Government. This district also ranks high in agricultural products; and although the planting season was late and cold, the crops have been large and profitable. Building industries have been checked somewhat by the high cost of materials and labor. Transportation difficulties have been very great, and in many lines have severely retarded production as well as distribution. The district, although containing a very large part of the bituminous coal supply of the country, has suffered a severe coal shortage during the last part of the year, owing in part to transportation difficulties, in part to the situation which arose from the fixing of coal prices, and in part to the necessities of the Northwest for coal, resulting in the priority order for Lake shipments; in some cases, industries have been obliged to close down for short periods because of lack of fuel. In spite of the untoward conditions above referred to, however, •the general prosperity has been great, and the record of the district in Liberty loan subscriptions is evidence not only of the patriotism and thrift of our people, but also of surplus wealth produced. Between the first and second Liberty loans, the deposits in the banks of the district showed an actual increase of about 3 per cent. The growth of resources of member banks during the year is shown in Exhibit E. DISCOUNTS FOR MEMBER BANKS. The operations of the Federal Reserve Bank of Cleveland in rediscounts have immensely increased during the latter months of the year. This increase has been produced not only by the financing of Liberty loans, but by the demands of industry and commerce, which have required large amounts of working capital for financing current orders and operations, increased notably by high cost of materials and labor and consequent large inventories, and to some extent by the delays in production and deliveries incident to the difficulty of obtaining materials and the inadequate transportation facilities. Exihibit F shows the year's operations in rediscounts for member banks under the several classes of paper, and classified by maturities, with the same data for 1916. While the demand for money has increased and the money rates have tended to harden, no general advance in rates of rediscount at this bank was deemed advisable until December 1, when this bank in common with most of the other Federal Reserve Banks announced slight advances. DISTRICT NO. 4—CLEVELAND. . 361 Exhibit G shows the rates throughout the year for the various classes and maturities of paper. The growth in the use of trade acceptances has been marked during the latter part of the year. It was to have been expected that the usual reluctance to change would deter banks and business houses from the adoption of this new system until an active demand for money and credit and for the facilities of the Federal Reserve Banks should furnish a practical demonstration of the advantages of this kind of paper. From the inauguration of the Federal Reserve system, the best-informed men have felt that the adoption of the tradeacceptance system was only a matter of time, but that a considerable amount of time would be necessary before it should become the commoner method of closing accounts. It nowT seems that in less time than was anticipated, the system may come into very general operation. The Federal Reserve Bank of Cleveland has been active in the promotion of the adoption of the system at every opportunity, having been represented at a number of meetings of trade organizations for conferences on the subject, and having furnished information to a very large number of inquirers both by mail and in person. A large number of copies of the booklet, "Why Accept? " have been ordered through this bank during the year by business houses introducing the system among their trade. BANKERS' ACCEPTANCES. Transactions in bankers' acceptances have been large, although recently the bank has not been actively in the market for bankers' bills because of the needs of our member banks. District No. 4 being rather more self-contained than some of the other districts, however, there have been occasions when the demands of member banks in other districts were so much greater, proportionately, than in this district, that other Federal Reserve Banks have found it desirable to dispose of some of their investments in bankers' bills, and the Federal Reserve Bank of Cleveland has been glad to be of service to the general situation by making large purchases on these occasions—thus providing the intercommunication and leveling up between the reservoirs which was intended in the establishment of the system of 12 banks, but without the necessity of rediscounting for any other Federal Reserve Bank its member banks' paper. A number of the larger banks in district No. 4 have entered the acceptance field, discounting bills for both foreign and domestic trade during the year, and the Federal Reserve Bank of Cleveland has purchased the bills of its own member banks freely when offered. The following member banks have, upon application, been granted the right to accept up to 100 per cent of their capital and surplus 362 ANNUAL REPORT OF THE FEDERAL RESERVE BOARD. during the year: Fifth-Third National Bank, Cincinnati; Cleveland Trust Co.; First National Bank, Cleveland; Union National Bank, Cleveland; Union Trust Co., Pittsburgh. Exhibit H shows the transactions in bankers' acceptances during the year as compared with 1916. UNITED STATES BONDS. Transactions in the older issues of Government securities have of course been practically suspended since the offering of the first Liberty loan. Purchases of small amounts of bonds from member banks have been made as a matter of accommodation. Exhibit I shows the transactions in Government securities. MUNICIPAL WARRANTS. As soon as war was declared and it became apparent that the facilities of the Federal Reserve Banks would probably be needed by their member banks, the Federal Eeserve Bank of Cleveland, in accordance with the wise suggestion of the Federal Reserve Board and in common with the other Federal Reserve Banks, withdrew entirely from the market for municipal warrants, and has since purchased only small amounts of early maturing municipal bonds for which sinking funds had been provided, merely as an accommodation to member banks desiring to dispose of such bonds. The transactions in municipal warrants are shown in Exhibit J. RESERVE POSITION. The reserve position of the bank has remained strong in spite of the demands upon its loaning power. This has been due chiefly to the increased reserve required to be maintained in the Federal Reserve Banks by the amendment of section 19 of the Federal Reserve Act, but also in part to the large increases in capital and reserve deposits on account of the accession of important State banks to our membership, as well as the increase in the capital and surplus of banks already members; and in some degree also to the considerable sums of gold patriotically sent by both member and State banks to strengthen the position of the system, either as excess deposits or in exchange for Federal Reserve notes. Exhibit K shows the changes in reserve position during the year. STATE BANK MEMBERS. The movement of the larger and more progressive State banks to join the Federal Reserve system has been marked in this district. DISTRICT NO. 4 CLEVELAND. 363 This movement was known to be ultimately inevitable, and has been of course stimulated largely by the amendment of section 9 of the Federal Reserve Act as well as by a recognition of the added strength and prestige given to any bank by voluntary membership in the system, but has been also in large part due to a patriotic response to the forceful appeal of the President and a desire to do eveything necessary to fortify the position of our banking system against all possible' contingencies arising from the war. Some considerable credit must also be given to the member banks, who have shown in many cases their growing appreciation of the value of membership, thus encouraging nonmembers to join the system. The following State banks have been admitted to membership during the year: Date of admission. Name of bank. 1917. Apr. 11 July 2 Nov. 1 Nov. 8 Do.... Nov. 21 Do.... Nov. 24 Nov. 30 Dec. 3 Dec. 14 Dec. 28 Cleveland Trust Co Guardian Savings & Trust Co Lawrence Savings & Trust Co Citizens Savings & Trust Co Citizens Trust & Savings Bank Ohio Bank & Trust Co Hillsboro Bank & Savings Co City Trust & Savings Bank Union Trust Co. of Pittsburgh Exchange Bank of Kentucky Pittsburgh Trust Co First Standard Bank & Trust Co Location of bank. Cleveland, Ohio ....do New Castle, y^ciovx^/m Pa.. x ci...... Cleveland, Ohio Columbus, Ohio Massillon, Ohio Hillsboro, Ohio Youngstown, Ohio.. Pittsburgh, Pa Mount Sterling, K y . Pittsburgh, Pa Maysville, Ky i^cvv Capital and surplus. $5,000,000 6,000,000 600,000 8,000,000 850,000 187,500 62,000 350,000 36,000,000 75,000 3,000,000 235,000 Exhibit L shows the changes in the membership, in capital stock, and in reserve deposits during the year. RELATIONS WITH MEMBERS AND THE PUBLIC. Exhibit M shows the accommodation which has been extended to member banks through rediscounts and purchase of acceptances during the year compared with 1916. Overdrafts have been small in volume, and of those which have appeared a number have been due to delays in the mail service. The required reserve deposits of member banks have been quite generally maintained unimpaired, and although it has been necessary to assess penalties for deficient reserves upon a small number of banks each month, the disposition to maintain reserves in conformity with the law, or beyond requirements, has been apparent on the part of most banks. Weekly reports of required reserve are made by banks in the reserve cities and semimonthly reports by all other banks. One member bank has been closed by the comptroller during the year. The Federal Eeserve Bank of Cleveland has had no losses and has no past-due paper on its books. 34365°-—18 24 364 ANNUAL REPORT OF THE FEDERAL RESERVE BOARD. Through its Liberty loan transactions the bank has come into touch with the general public to a far greater degree than would have been thought possible at the beginning of the year. Arising out of this relation has come a realization of the functions played by the Federal Reserve Banks, not only as fiscal agents of the Government, but in steadying the money market and in providing for the distribution of the immense amounts of money and credit which have been moving throughout the country. This practical experience has confirmed the impression which the public very generally entertained even in advance of many banks, that the Federal Reserve system is a tremendously useful and practically indispensable servant of the public welfare; and undoubtedly great good is already resulting from the strengthening of this conviction. RELATIONS WITH THE GOVERNMENT. The relation of the Federal Reserve Bank to the Government is of course the outstanding feature of the year's history. In the Federal Reserve Bank of Cleveland a fiscal agency department, with a staff of 60 persons, has been created in a few months, occupying almost half of the entire floor space required by the bank. This department does not include members of the Liberty loan committees, but is occupied in the distribution of bonds and certificates, the collection of and accounting for payments, the arrangements with depositary banks, tabulation of data, and in general the handling of the business produced by the great success of the " sales force," the Libert}^ loan committee, which has rendered such conspicuous voluntary service. THE FIRST LIBERTY LOAN. The call of the Secretary of the Treasury for organization to obtain subscriptions to the first Liberty loan was received by the Federal Reserve Bank of Cleveland on May 3, 1917, and at an informal conference the immediate formation of a central Liberty loan committee to represent the entire district was deemed advisable. This was accomplished by requesting the clearing house associations in the 13 more important centers of population and banking resources to send one delegate each to the Federal Reserve Bank for a discussion of program and the formation of a permanent organization. These delegates met on May 12, 1917, and after a thorough discussion of the problem, in so far as its details could be foreseen at that time, effected the organization of a central Liberty loan committee. The committee thereupon appointed an executive committee. The members of the central Liberty loan committee were thereupon constituted chairmen of the local organizations in their respec 365 DISTRICT NO. 4—CLEVELAND. tive counties. The rural territory not directly covered by these committees appointed representatives who thereupon organized a separate county organization committee with subcommittees directed from Cleveland, Toledo, Columbus, Cincinnati, Pittsburgh, and Lexington. The 168 county areas within the Fourth Federal Keserve District were completely organized, the various security houses within the district contributing from their sales force members who were assigned to separate counties, and proceeded at once to organize county organizations. The district Liberty loan organization, as such? was compelled under force of circumstances to use the Federal Reserve Bank as headquarters, and under the stress of conditions, this produced some confusion which in some degree hampered the committees, as well as the operating staff of the Federal Eeserve Bank. By June 1, 1917, there was thorough organization in every one1 of the 168 counties of the district, and the effect of this organization, entirely voluntary, became at once apparent. The organization was, of course, more highly developed in the larger centers, although the work of the rural county chairmen can not be spoken of with too high praise. The closing of subscriptions June 15, 1917, showed in possession of the Federal Reserve Bank, qaulified subscriptions in excess of $286,000.000 from 514,000 subscribers. The several areas reported as follows: Quota. Pittsburgh Toledo Cleveland $80,858, 000' 17,121, 100 71,756, 000 Subscription. Sill,047,350 16,008,050 96,998,850 Quota Columbus.. Cincinnati Lexington.. $9 ; 279 000 33, 368, 500 8,025, 000 Subscription. $10,751,550 44,659,450 6,819,750 Exhibit N shows the subscriptions and allotments classified. SECOND LIBERTY LOAN OF 1 9 1 7 . Experiences of the first Liberty loan indicated clearly the wisdom and necessity of a separate location for the headquarters of the central Liberty loan committee and a more comprehensive staff in its organization. The executive committee appointed on the first Liberty loan campaign immediately held sessions with a view of perfecting such an organization. The personnel of the central Liberty loan committee, as well as the personnel of the executive committee, was largely unchanged. There were a few changes in the chairmanships of the various county committees, owing to illness, other activities, etc., but in the main the skeleton organization developed in the first campaign was retained, although extended in detail in many respects. 366 ANNUAL REPORT OF THE FEDERAL RESERVE BOARD. The executive committee determined upon the policy of making a practical requisition upon each bank for its proportionate share of the amount of the second loan which the Secretary of the Treasury expected the fourth district to raise. With this end in view, the executive office of the committee carefully studied methods and means to establish just quotas of the banking resources of the district. In August, 1917, all banks within the district were asked to report the condition of their deposits as of June 15 and August 15, and also the amount of Liberty loan bonds of the first loan still in their possession. The response to this questionnaire was liberal and enabled the committee to establish the interesting fact that only a small percentage of bonds of the first Liberty loan was still in the hands of the banks, and, furthermore, that the deposits of institutions so reporting had increased from June 15 to August 15 between 3 | and 4 per cent. The banks that did not report were considered as possessing the deposits given in the Rand-McNally Bankers' Directory of July 1, 1917, plus 3|- per cent, the average increase shown by the reporting banks. Upon this basis, a quota of so many dollars was fixed upon every banking institution in the district; and each bank was advised by special letter, received on October 1, of their proportion of the $300,000,000 of bonds which was the total minimum subscription asked of the Fourth Federal Reserve district by the Secretary of the Treasury. The effectiveness of the more comprehensive organization and the value of the well-learned lessons of the first loan campaign became quickly apparent as the second loan campaign gathered headway. Every bank in the district was requested to report the subscriptions obtained for each day upon " ke}^ed " cards furnished them for the purpose. This rather burdensome task was faithfully performed by about 80 per cent of the banks, and the committee wTas able to judge of the progress with more than ordinary accuracy from day to day. The entire 168 counties within the Fourth Federal Reserve district in the second campaign were divided into six " areas," administered from Cleveland, Cincinnati, Columbus, Pittsburgh, Toledo, and Lexington. The Liberty loan organizations in these six central points took upon themselves cheerfully, and performed with the greatest skill, the task of coordinating the campaign between each center and the counties assigned to it. Each area organization made every effort to exceed the minimum quota of every county within its area. The rivalry between the areas was healthful and helpful; the work of the county chairmen was most noteworthy in its zeal and efficiency. The organizations in each of the six area centers were highly developed, and were made up of an extremely skillful and high-powered personnel. DISTRICT NO. 4 367 CLEVELAND. The distribution of publicity and its choice and preparation were excellent and far-reaching in their effect. The publicity bureau, which undertook to supply advertising and editorial matter for 912 papers within the district, prepared and distributed a large amount of extraordinary copy, and it is interesting to note that 850 newspapers out of the 912 whose cooperation was so requested, complied in the fullest degree. The result was a total subscription to the second Liberty loan in the Fourth Federal Reserve district in excess of $4865000?0Q0, reported from 867,000 subscribers. The several areas reported as follows : Quota. Cleveland Pittsburgh Cincinnati $92,725,200 127,819,500 36,701,100 Subscription. $151,377,200 205,541,100 74,776,450 Quota. Columbus Toledo.. Lexington 112,511,900 21.054,200 8,732,950 Subscription, 819,502,800 22,648,500 11,385,400 Exhibit O shows the number and amounts of subscriptions and allotments of the second Liberty loan, divided according to size of subscriptions in the classes fixed by the Secretary of the Treasury for the purpose of allotment. TREASURY CERTIFICATES OF INDEBTEDNESS. With each issue of Treasury certificates of indebtedness, an effort has been made not only to secure more than the district's proportion of the total issue, but also to assure as wide a distribution as possible. The earlier issues were brought particularly to the attention of banks throughout the district which had experience as distributors of high-grade bonds and note issues, and their hearty cooperation was uniformly secured. Exhibit P shows the total amount of each issue and the amounts allotted to the fourth district. The Federal Reserve Bank of Cleveland purchased varying amounts of each issue, chiefly for the purpose of having some of the certificates on hand for distribution to intending purchasers who had not subscribed before the subscriptions were closed; and in every case the amount held by the Federal Eeserve Bank found lodgment in the hands of purchasers within a very short time after the date of issue. FINANCING THE CARRYING OF WAR LOANS. For the first Liberty loan and the issues of certificates leading up to it, a rather remarkably small volume of rediscounting by the S68 ANNUAL EEPOET OF THE FEDERAL EESEBVE BOARD. Federal Eeserve Bank was required, and the reports received from the banks under date of August 15 indicated that at that time practically all of the loan had been absorbed by the public, only a small amount of bonds being held by the banks themselves. For the second Liberty loan and the Treasury certificates issued in connection with it, a considerably larger volume of discounting has been done, and the indications are that a considerably larger volume of bonds is still in the hands of banks, although the proportion is not in the least a matter of concern. The total volume of member banks' collateral notes secured by Liberty loan bonds or certificates of indebtedness on July 15 was $1,050,000; on December 15, $10,885,550. The total volume of member banks5 customers9 paper, similarly secured, on our books on December 15 was $10,201,672.94. The exact corresponding figure for July 15 is not ascertainable, the records not being kept at that time to show this amount; but the amount was less than $1,000,000, Exhibit Q shows the total volume of rediscounts, both of member banks' notes secured by Government securities as collateral and of paper of customers of the banks secured by Government securities, for each month of the year. EXPENSE OF LIBERTY LOAN AGEXCY. For the first Liberty loan the sum of $75,000 was named as the amount of expense in the fourth district wThich the Treasury Department would reimburse, upon presentation of vouchers in due form, without question. The attempt was made to keep the expenditure within this sum, but tlie actual expense chargeable to the first Liberty loan to the date hereof is $104,593.05. For the second Liberty loan $200,000 was named as the available amount, and there has been expended to date $131,404.60. With considerable difficulty and gradually a capable office force has been built up for the clerical work of the Liberty loan committee, for the receiving of subscriptions and payments and accounting therefor, for issuing and exchanging certificates and bonds, for handling applications for designation as depositary for war-loan funds and conducting the business incident to such deposits, and for the other necessary work involved in oar functions as fiscal agent; and a total of $49,192.08 has been paid in salaries to date of this report. No fees or commissions have been paid; the banks of the district have performed their arduous duties in handling large numbers of small subscriptions and in many cases very small payments, and in distributing the bonds, without reimbursement of any sort. The expense of all newspaper advertising done in connection with the loans was contributed by public-spirited banks and business houses. The DISTRICT NO. 4 CLEVELAND. 369 actual out-of-pocket expenses of representatives of the Liberty loan committees in traveling, purchasing supplies, etc., were refunded, as far as possible. GENERAL EFFECT OF GOVERNMENT FINANCING. The effect of the Government financing in district No. 4 has been undoubtedly similar to that in all other districts. There has been, naturally, an expansion in banking resources, a tightening of the rates for money, and the loaning ability of all financial institutions has been quite heavily drawn upon. Without doubt a part of the curtailment of building operations is due to the investment of funds in war loans which might otherwise have gone into such operations, as well as to the high cost of building. Many other forms of enterprise which are dependent upon a free supply of money for investment as fixed capital have been curtailed. The flotations of the loans, together with other influences of the war, has resulted in a decided trend toward the gradual exclusion of the purchase, and consequently the manufacture and distribution, of nonessentials. Manufacturers and dealers in nonessentiais are therefore beginning to be quite seriously affected. On the other hand, this tendency toward economy and thrift is undoubtedly having a very beneficial effect on all of the people, and after the pains of adjustment have been passed, the general situation should be sounder than before. Chart No. 4 shows the fluctuation of Government deposits during the year, and Exhibit E gives the same information in tabular form. RELATIONS WITH COMPTROLLER'S OFFICE. The bank has endeavored during the year to keep in close harmony with the office of the Comptroller of the Currency and the chief national bank examiner of the district, whose office is in the same building. Acknowledgment is very glady made of the cooperation which has been rendered by Chief Examiner S. H. L. Cooper and his staff. NOTE ISSUE. In the issue and redemption of Federal Eeserve notes, which has been a conspicuous feature of the year's operations, the experience of district No. 4 runs practically parallel wTith that of ail the other districts. A large number of notes have been issued in exchange for gold and gold certificates deposited with the bank, which have strengthened the general national situation very materially. The demands, however, for pay-roll currency have been constant and increasing, and far in excess of the currency deposited with this bank, 370 ANNUAL REPORT OF THE FEDERAL RESERVE BOARD. so resulting in a large increase in the volume of outstanding Federal Reserve notes. Of course, this currency expansion is in some degree necessary and inevitable at a time of greatly increased volume of business and higher cost of labor and commodities. The gold reserve against Federal Reserve notes, however, has remained strong throughout the year, and there is, in our judgment, little warrant for a fear that undue or unnecessary inflation is taking place. Chart No. 5 shows the movement of Federal Reserve notes and of gold reserve during the year, and Exhibit S shows the denominations issued, destroyed, and outstanding, as well as those exchanged with other Federal Reserve Banks. The cost of Federal Reserve notes issued, including redemption cost, was $75,526.78. BRANCH BANKS. The officers and directors of the Federal Reserve Bank of Cleveland have always had in mind the certainty that sooner or later it "would be desirable to establish branch banks in at least the two other large cities in the district. Upon the enactment by Congress of the amendment to the Federal Reserve Act, faciliating, among other things, the establishment of branches, in June of this year the Federal Reserve Board suggested that in their judgment the time had come when the system would shortly require this additional machinery. The distances in district No. 4 being comparatively short, there is not the same urgent necessity of branches as is evident in some of the districts covering larger areas. However, it was recognized that particularly in the collection of checks and in the payment and receipt of cash, there would be very great conveniences, particularly to the member banks in Cincinnati and Pittsburgh, in the location of branches in those cities. No requests had been made by the banks of either city, however, for the establishment of a branch until July 2, 1917, when the clearing house banks of Cincinnati, through a committee, forwarded to the directors of the Federal Reserve Bank of Cleveland a petition for the establishment of a branch in that city. The clearing house committee was immediately invited to confer with our directors on July 10, and at this and succeeding conferences the situation in Cincinnati was carefully considered. A committee of the board of directors was appointed to meet with Mr. Delano, of the Federal Reserve Board, at Cincinnati about the middle of August, and at the meeting of the directors on September 7 the committee reported, suggesting the establishment of a branch for the handling and collection of checks and drafts and the receipt and payment of cash. After further conference with the Cincinnati representatives, and exhaustive consideration of the by-laws and the probable operation DISTRICT NO. 4 CLEVELAND. 371 of the branch on the part of the Federal Reserve Board and representatives of our directors, involving several conferences, the directors, at the meeting of October 5, recommended to the Federal Reserve Board that they be permitted to establish a branch at Cincinnati. In view of the probability that the plan of operation of this branch would constitute a desirable precedent for branches in other districts, the Federal Eeserve Board at once devoted itself and its counsel to thorough and careful deliberation upon the form and content of the by-laws. The Federal Eeserve Board having approved our recommendation on October 29, at the meeting of November 7 the directors of the Federal Eeserve Bank of Cleveland formally, by resolution, established the branch and named Mr. W. S. Eowe, president of the First National Bank; Mr. W. C. Procter, president of The Procter & Gamble Co., and Mr. L. W. Manning, secretary of the Federal Eeserve Bank of Cleveland, as their three appointees for directors of the Cincinnati branch, subject to the approval of the Federal Eeserve Board. The Federal Eeserve Board approved these appointments and itself appointed Mr. Charles A. Hinsch, president of the Fifth-Third National Bank of Cincinnati, and Hon. Judson Harmon, former governor of Ohio, as its appointees. Since that time the plans for opening the branch have gone forward as rapidly as possible ; quarters have been secured, part of the staff has been employed, vault and other equipment has been ordered, the accounting forms and procedure have been very carefulty worked out, and the beginning of the bank's operations is expected to occur early in January. Under date of October 17 a petition from the member banks of Pittsburgh for the establishment of a branch in that cit}^ was transmitted to our directors, some informal discussion having occurred prior to that time. With the experience and the.plan adopted at Cincinnati as a guide, somewhat more rapid progress was possible than in the case of Cincinnati, and after conference with the committee representing the Pittsburgh Clearing House Association, at the regular meeting of November 7 a resolution was adopted recommending to the Federal Beserve Board that permission be granted to establish a branch in Pittsburgh with powers similar to those of the Cincinnati branch. A committee was appointed to confer with the representatives of the clearing house association in Pittsburgh on November 14, and at the meeting of our board on December 8 the report of the committee was received and Messrs. E. B. Mellon, vice president of the Mellon National Bank; Charles W. Brown, president of the Pittsburgh Plate Glass Co., and George De Camp, national bank examiner, were named as the appointees of the Federal Re 372 ANNUAL REPORT OF THE FEDERAL RESERVE BOARD. serve Bank of Cleveland on the directorate of the Pittsburgh branch. The Federal Reserve Board approved these appointments and named Messrs. T. XL Given, president of the Farmers Deposit National Bank, and J. D. Gallery, chairman of the board of directors of the Pittsburgh Railways Co., as its appointees. Mr. De Camp, designated as manager of the branch, was unable to secure release by the Comptroller of the Currency until January 1, but on that date will assume his duties, and the opening of the Pittsburgh branch should follow closely after that of the Cincinnati branch. INTERNAL MANAGEMENT. The board of directors has met 13 times during the year with an average attendance of eight. Fifty-three meetings of the executive committee have been held. Mr. E. P. Wright, secretary and treasurer of the Reed Manufacturing Co., of Erie, Pa., succeeded Mr. C. H. Bagley, of Cony, Pa., as a class B director on January 1, 1917, Mr. Bagley having been unable to stand for reelection because of poor health; and this has been the only change in the personnel of the board. Mr. W. S. Rowe has remained the member of the advisory council. On January 1, 1917, Mr. Horace G. Davis, then assistant to the Federal Reserve agent, was made an assistant cashier; and on September 1, Mr. F. J. Zurlinden, who had been head of the discount and investment department, was made an assistant cashier, as was also Mr. W. F. Taylor, who had been auditor; and Mr. G. H. Wagner, who had been assistant auditor, was made auditor. At this time areadjustment of the work of the bank, made necessary in large part by the establishment of the fiscal agency department, was effected, and Mr. M. J. Fleming, assistant cashier since January 1, 1916, took charge of the new department, the remainder of the operating departments being distributed under the supervision of the other three assistant cashiers. Owing to the increase in the work of all departments, many additions to the staff have been necessary, and there are now 64 employees in the banking department proper, 75 in the transit department, and 58 in the fiscal agency department. Of the bank employees, six are serving exclusively in the department of the Federal Reserve agent, which has required an increasing organization. On November 27 Mr. L. W. Manning, who had been with the bank since its organization, and had served since January 1 as secretary of the bank and assistant to the Federal Reserve agent, took office as manager of the Cincinnati branch. To accommodate the fiscal agency department it has been necessary to secure additional space, adjoining the quarters on the first floor of DISTRICT 2ST0. 4 CLEVELAND. 373 the Williamson Building which have been occupied by the bank since January 1, 1917; and this space lias had to be built, covering a court between the two wings of the building. Our rapidly expanding functions have made it increasingly difficult to provide and arrange working facilities rapidly enough. An additional supply of vault equipment has been necessary, and the vault is now fully occupied with high-grade modern chests, in units which will be available in the event of any necessity of change in location. EXAMINATIONS. One complete examination of the bank has been made during the year by the Federal Reserve Board examiner and his staff: also a brief examination of the methods of the fiscal agency department while the first Liberty loan was being handled. CHECK COLLECTION AND CLEARING. The check clearing and collection system has grown with the other work of the bank during the year, and as a result of frequent invitations, 70 nonmember banks have been added to the par list, which now includes 5G5 of the 1,170 nonmember banks in the district. Exhibit T shows the volume of clearing operations. The operations of the gold settlement fund during the year ara fully covered in the report of the Federal Reserve Board. The immense usefulness and actual indispensability of this facility has been many times demonstrated in the shiftings of funds incident to th© Government financing. Exhibit U shows the monthly totals of debits and credits to the Federal Eeserve Bank of Cleveland in the gold settlement fund. Exhibit V is a tabular statement of the applications for fiduciary powers granted under the provisions of section Ilk of the Federal Eeserve Act, THE OUTLOOK. The conditions at the close of the year in district No, 4 are somewhat uncertain and difficult, by reason of the many complex problems awaiting satisfactory solution throughout the Nation, and the inevitable adjustments consequent upon the necessary emphasis on economy, and the concentration of effort upon only those enterprises which are essential to the winning of the war. The outlook can not be said to be wholly favorable to the continuance of unbridled prosperity therefore; but there is no pessimism as to the outcome, and no disposition to withhold any ounce of energy or sacrifice that may be called upon. It is evident that the power of service of 374 ANNUAL REPORT OF THE FEDERAL RESERVE BOARD. the Federal Reserve Bank of Cleveland may receive a severer test than any it has yet had; it is also evident that the confidence in the strength of this institution, as an integral part of the Federal Reserve system under the wise leadership that has been so evident during the past year, is unshakable and well founded. The officers and directors of the bank welcome the opportunity of service to the utmost, confidently counting upon the continually increasing cooperation of the banks and the people of the fourth district. DISTRICT NO. 4 M 2 O H i z < a H T •1 \ iL 375 CLEVELAND. \ I V c 0 / / C H A T ^ T K2 2 0 0 CLA55lf l£D EXPENSES AND NET XrAiiNJNqi J / / too N N J 0 (=) / I — — — - t 1 1 j < i V\ J / - 70 t • I 0 f k/ / / A 1 ^ r 7 / y J Q Z \ • / 0 D 0 THO !£} ^> o,/^.. r ^> Jl \\ j / • Co M LLIONO > -j Of i <> DOLLAR ^ > r i _ i > ) i 2 \ F ! )> t ) r j M AT? C.H 0 o w H V O \ K c H L. Z ^ I HI ^jCo n! 10 1 X L \ hrj p c* hv f~i DISTRICT KO. 4—CLEVELAND. HUND^.E^5 I CO ZOO O r MILLION-3 -^OO -40O s50O 60O MA^CH ZJ5- W///A MAY CHAl^T h42^ A///////// MAY zs™ / / C£T2-Tlf"lCATtS Y//' / ///< Of- A ' / / / • / ' / / / ' / / / / / ' 1 NDtI)TJED N E:^)O JUNEr AuqusT T V//'///////// %^^% 3OLIX) = A L L O T Mt-NK r HATCH £!>«= A M O U N T V//A W/Z/WA O ET-5 TE M £) t ^ - W/////A is^ iys/yyyyz/, NOVEK5ER. 1 ^ ^ W//////W/AW\ 00 M I L L S I O N O IO O I ™ DC 1 L L A l ^ v 3 15 2O 23 — 1 N iTin MARCH 0 H N o APRIL P""T1 » * / 0 2: -^ MAY z JUNtr ——. B*- W i JULY (fl H a w —r 10 —«• w o *** *** AUO I OCT •Ma,. MOV "^ JDErC w o o w M I L L 1O N 4O Of45 .50 ,55 <SO 6 5 JD O L L *TO *T5 8O ©5 A IOO »O3 EHT CO CD 380 ANNUAL REPORT OF THE FEDERAL RESERVE BOARD. EXHIBIT A.—Gross earnings, classified, expenses, and net earnings, 1917, Month. January... February.. March April May June July August September. October... November. December. Total BilLs bought in open market. Bills discounted, members. United States securities. All other earnings. $20,558.76 $17,693.35 $24,768.00 22,425.74 15,167.09 11,486.90 19,764 36 15,048.93 10,707.17 12,773.94 22,494.73 11,159.49 23,655.19 26,516.28 9,902.67 28,267.88 22,653.47 6,042.67 29,094.26 19,804.09 5,103.09 51, 709. 62 22,979.42 6,139.90 63,765.62 26,105.75 2,079.48 56,421.88 33,351.16 6,827.76 88,619.75 29,306.82 8,438.52 79,654.58 66,803.33 4,598.59 $2,093.53 3,633.21 5,630.09 7,587. 62 6,145.43 16,118.35 24,740.22 26,261.09 25,779.67 34, 794.80 67,360.98 155.023.91 Total earn- Total ex- Net earnings. ' penses. ings. $65,113.64 $12,104.12 $53,009.52 52,712.94 15,152.89 37,560.05 51,150.55 15,207.13 35,943.42 54,015.78 18,177.89 35,837.89 66,219.57 20,214.55 46,005.02 73,082.37 23,006.16 50,076.21 78,741.66 20,731.55 58,010.11 107,090.03 17,048.01 90,042.02 117,730.52 24,933.76 92,796.76 131,395.60 28,244.19 130,151.41 193,726.07 33,250.99 160,475.03 306,080.41 91,233.07 214,847.34 375,168.90 496,711.58 317,924.42 107,254.24 1,297,059.14 319,304.31 977,754.83 EXHIBIT B.—Average earning assets classified, and average rates for the 12 months of 1911 and corresponding months of 1916, [In thousands of dollars; i. e., 000 omitted.] 1917 Month. January February March .. . May June July August September.. October November . December Total invested funds. . . 1916 dis- Aver- Bills dis- Aver- Bills AverAver- Total Aver- Bills bought age age in age invested age counted, age counted, memopen rate. funds. rate. members. rate. bers. rate. market. rate, 19,079 20,633 19, 356 21,958 25,904 28,780 28,719 38,649 43, 720 44,611 65,010 93,554 2.84 3.00 2.98 2.81 2.92 3.03 3.18 3.18 3.22 3.29 3.47 3.79 January February March April May June July August September October. . November December 6,713 7,593 9,222 11,175 14,551 15,802 18, 4.50 18,306 17,461 18,163 17,576 21,468 2.26 2.71 2.62 2.53 2.44 2.48 2.55 2.60 2.63 2.74 2.72 2.75 1917 1916 Month. 1917 1916 1917 596 1,264 1,816 2,519 1,967 5,245 7,769 8,248 8,695 10,978 21,200 43,105 4.14 3.77 3.65 3.67 3.68 3.74 3.75 3.74 3.61 3.73 3.87 4.24 415 272 254 436 284 277 420 282 598 371 272 1,206 4.59 4.68 4.31 4.10 4.35 4.42 4.26 4.56 4.19 4.49 4.16 3.84 1917 1916 8,718 9,877 7,578 5,025 8,945 10,987 10,935 19, 505 23,976 20,147 31,790 26,175 2.78 2.96 3.07 3.09 3.11 3.13 3.13 3.12 323 3.29 3.39 3.58 1916 Bills Munici- Aver- Munici- Aver- United Aver- United Averbought Average pal war- age pal war- age States age States age in open rate. rants. rate. rants. rate. bonds. rate. bonds. rate. market. 981 976 1,122 1,689 2,613 4,401 6,596 7,052 7,285 6,695 6,884 9,590 1.94 1.93 1.92 1.95 1.99 2.06 2.14 2.25 2.33 2.41 2.41 2.58 1,973 2,670 3,112 2,987 2,891 1,554 1,237 1,075 33 12 12 11 3.40 3.05 3.20 3.21 3.20 3.58 3.63 3.70 3.44 4.62 4.44 4.00 2,816 2,955 3,853 4,869 5,486 4,510 4,781 4,597 2,780 4,219 3,680 2,713 2.97 2.93 2.78 2.55 2.59 2.90 2.85 3.06 3.10 3.27 3.40 3.93 7,792 6S822 6,850 11,427 12,101 10,995 8,778 9,821 11,015 13,475 12,009 24,263 2.66 2.90 2.59 2.48 2.58 2.50 2.66 2.75 2.88 2.91 2.97 3.24 2,501 3,390 3,994 4,181 6,167 6,614 6,653 6,375 6,799 6,878 6,739 7,960 2.57 2,65 2.54 2.56 2.39 2.38 2.63 2.60 2.62 2.65 2.53 2.40 DISTBICT NO. 4 381 CLEVELAND. EXHIBIT B.—Average earning assets classified, and average rates for the 12 months of 1917 and corresponding months of 1916—Continued. SUMMARY O F INVESTMENT O P E R A T I O N S . 1917 Daily average of funds employed during year: Bills discounted, members Bills discounted, bought Municipal warrants United States securities , Total Total volume of business handled: Bills discounted, members Bills discounted, bought Municipal warrants United States securities Total Average capital Rate of gross earnings on capital per cent.. 1910 $9,531,458.45 15,348,152.44 1,457,325. 80 11.314,574.40 $425,175.75 4,672,647.68 3,943,462.52 5,692,548.42 37,651,511.09 14,733,834.37 211,176,105.36 91,109,193. 06 2,949,074. 30 69,707,100. 00 6,792,429.30 27,542,002.24 10,660,237.45 11,721,160. 00 374,941,472.72 6,433,207.00 20 56,715,828.99 5,982,695.00 7.17 EXHIBIT C.—Statement of condition of the Federal Reserve Bank of Cleveland at the close of business, Dec. 31, 1917, compared with Dec. 30, 1916. 1917 1916 RESOURCES. Bills discounted, members Advances to members on eligible collateral Acceptances bought Investments, short-time municipal obligations United States bonds and securities: 2 per cent bonds (consols and Panamas) 3 per cent bonds, 1918 4 per cent bonds, 1925 : 3 per cent one-year Treasury notes 3 per cent conversion bonds 3i per cent first Liberty loan bonds *. 4 per cent second Liberty loan bonds 4 per cent United States Treasury certificates of indebtedness due June 25, 1918 Total funds employed, Accrued ued interest on United SStates securities Cost of unissued Federal Reserve notes Furniture and equipment Expense paid in advance Due from other Federal Reserve banks Due from banks and bankers Deferred debits Gold coin and certificates on hand Gold settlement fund Gold redemption fund Gold with Federal Reserve agent Gold with foreign agencies Legal tender notes and silver certificates Federal Reserve notes on hand Other cash and coin Mutilated currency forwarded for redemption 1 Due from depositary banks and trust companies Other resources $37,163,027.27 33,733,150.00 21,111,990.95 7,233.38 $1,006,773.50 473,600.00 2,653,660.00 2,378,200.00 3, 221,000.00 414,800.00 2,027,000.00 320,750.00 2,403,900.00 2,586,560.00 2,369,200.00 618,000.00 1,800.00 50,000.00 103,554,411.60 62,878.48 45,176,685.19 11,792.01 23,162,771.93 29,153,275.00 37,664,000.00 98,800.00 55,369,700.00 4,725,000.00 238,369.00 3,666,525.00 1,081,302.20 866,265.00 68,051,154.98 139,247. 83 373,022,178.22 Total resources. 10,153,694.75 2,684,589.64 21,824. 517. 89 297; 660.08 39 544.25 20; 163.92 934. 76 14,921, 032.18 129; 610. 22 10,417: 595. 49 15, 76i;382. 50 16,953,000. 00 42, 250. 00 10,832, 305. 00 484,417.00 588,935.00 91,816. 77 140,000.00 28,554.65 92,573,719. 71 LIABILITIES. Capital paid in Profit and loss Unearned interest and discount United States Government deposits Due to member banks (reserve account) Due to nonmember banks (clearing account) Due to other Federal Reserve banks Deferred credits Federal Reserve notes outstanding Treasurer of the United States (special deposit account) Treasurer of the United States (Liberty loan deposit account). Other liabilities Total liabilities., iWar loan deposits. 100.00 132,311.58 190, 643. 23 30,578, 247.23 109,724, 561.05 94, 160.59 33,970, 479.80 16,553, 514.19 105,669, 700.00 34,242, 100.00 33,809,054.98 31, 305.57 6,021,800.00 94, 797. 44 37,978.59 974,809. 73 54,586,226.61 373,022,178.22 92,573,719.71 11,263,136.20 8,759,174. 62 10,832,305.00 3,491. 52 382 ANNUAL REPOET OF THE FEDERAL 'RESERVE BOAED. EXHIBIT D.—Profit and loss account. 1917 Profit and loss balance Dec. 30,1916 Earnings from—• $94, 797.44 Bills discounted members Bills discounted, bankers' acceptances Municipal warrants . . . Interest earned on United States securities Profits realized on United States securities Sundry earnings, including service charge transit department, and exchange bought and sold Total 375,169.00 496,711.58 48,131.73 317,924.42 24,260.69 $18,064.41 106,993.11 116,925.13 144,843.65 37,228.53 63,145.30 5,101.50 1,420,140.16 429,156.33 Expenses: Assessment for expenses of Federal Reserve Board Cost of Federal Reserve notes issued Cost of unissued Federal Reserve notes Premium on United States bonds and securities charged off. Operating expenses, including amortization of furniture, vault and equipment and other accounts Dividend paid Profit and loss credit balance Total 1916 25,783.40 72,280.77 18,975.62 209,469.52 5,876.44 245,150.97 716,168.30 132,311.58 185,251.94 143,236.51 94,797.44 1,420,140.16 429,156.33 Percentage of net earnings to average capital: 1916 1917 EXHIBIT E.—Resources of member 3.98 15.2 banks. Nov. 20, 1917. Member banks, total resources Deposits: Demand Time Nov. 17, 1916. $1,985,977,000 $1,498,515,000 1,172,813,000 402,519,000 930,705,000 235,112,000 COMPARISON OF DEPOSITS OF THE MEMBER BANKS IN THE THREE LARGEST CITIES IN DISTRICT NO. 4. Cincinnati. Cleveland 1 Pittsburgh $108,893,000 318,680,000 411,214,000 1 $97,411,000 146,409,000 315,130,000 Includes three State banks admitted to membership during 1917. EXHIBIT F.—Operations in discounts and investments department. 1917 Bills discounted, members: Commercial and industrial. Trade acceptances. Agricultural and live stock Rediscounts, secured by United States obligations Member bank collateral notes, secured by United States obligations Member bank collateral notes, secured by eligible paper Total.. Classification by maturities: Within 15 days , 16 to 30 days 31 to 60 days 61 to 90 days Beyond 90 days , Total., Average rate per cent: 1917 1916 $72,948,095. 22 4, 400,589.19 167,575.28 15,126,195.67 1916 $4,232, 244.04 175,185.26 66,089,550.00 53,444,100.00 2,385,000.00 212,176,105.36 6, 792,429.30 147,846,219.88 26,101,442.96 18, 773,616.49 19,386,885.84 67,940.19 2,288,100.00 3,203,600.00 778,100.00 376,000.00 146,600.00 212,176,105.36 6, 792, 400 00 . 3.29 . 4.25 DISTEICT NO. 4 383 CLEVELAND. EXHIBIT G.—Discount rates. MEMBER BANK COLLATERAL NOTES. 1 to 15 days. Secured Secured by by eligi- United ble sepaper. States curities. In force— Jan. 1, 1917.. May 10, 1917. Sept. 25, 191/ Dec. 1, 1917. 31 3 31 31 REDISCOUNTS—COMMERCIAL PAPER. Itol5 In force- days. Jan. 1, 1917 Apr. 16, 1917 June 6, 1917.. Dec. 1, 1917.. 16 to 30 days. 31 to 60 days. 61 to 90 days. 4 4 4 4i 4J 41 1 to 15 days. 16 to 30 days. 31 to 60 days. 61 to 90 days. 3 31 4 3 31 31 31 4 4 4 4 16 to 30 days. 31 to 60 days. 61 to 90 days. Beyond 90 days. 4 4 4 41 4\ 4 4 41 41 31 31 31 4 41 41 41 41 4 TRADE ACCEPTANCES. In forceJan. 1, 1917... Apr 16, 1917 Dec. 10, 1917 AGRICULTURAL AND LIVE-STOCK PAPER. Itol5 days. In force— Jan. 1, 1917.. Apr. 16, 1917. June 6, 1917. Dec. 1, 1917.. 31 31 31 4 4:V 41 COMMODITY P A P E R . In force— Jan. 1, 1917... Apr. 16, 1917 Itol5 days. 16 to 30 days. REDISCOUNTS SECURED BY UNITED STATES GOVERNMENT June 15,1917 Sept. 25, 1917... Dec. 10, 1917 Open-market purchases of bankers' acceptances: In forceJan. 1,1917 Dec. 1,1917 Itol5 days. 31 4 31 61 to 90 days. 4 4 f In force— 31 to 60 days. 41 SECURITIES. 16 to 30 days. f 4 31 to 60 days. 61 to 90 days. 31 4 .percent. 21 t o 4 d o . . . 3 to 41 384 ANNUAL REPORT OF THE FEDERAL RESERVE BOARD. EXHIBIT H.—Bills bought in open market {acceptances). 1917 Bankers, export and import.. B ankers, domestic Dollar exchange bills Foreign trade acceptances Domestic trade acceptances.. Total. Classfication by maturities: Within 15 days 16 to 30 days 31 to 60 days 61 days to 3 months j I | Total. "I 1916 $73,538,033.79 15,195,883.59 64,675.00 1,771,711.82 538,888.86 $27,237,090.49 304,905.75 91,109,193.00 27,542,002. 24 3,190,925.72 11,318,356.10 26,055,907.18 50,544,004.06 1,542,425.48 5,788,427.94 20,211,148.82 91,109,193.06 27,542,002.24 Average rate per cent: 1917, 3.23; 1916, 2.29. EXHIBIT I.—Operations in United States securities, 1917. Purchased during 1917. Sold, paid, and converted during 1917. $903,900 1,500,000 $66,400 1,230,500 $963,900 2,263,300 3,500,000 67,100 3,500,000 2,586,560 618,000 4,297,000 1,694,000 3,221,000 1,800 1,616,200 1,203,200 414,800 4,645,000 4,645,000 On hand Dec. 30, 1916. United States Government 2 per cent consols United States Government 2 per cent Panamas United States Government 2 per cent certificates of indebtedness United States Government 3 per cent Spanish war loan. United States Government 3 per cent 1-year Treasury notes... United States Government 3 per cent 30-year conversion "bonds United States Government 3 per cent certificates of indebtedness United States Government 3i per cent certificates of indebtedness United States Government 3£ per cent certificates of indebtedness United States Government 3i per cent Liberty loan United States Governent 4 per cent bonds of 1925 United States Government 4 per cent Liberty loan United States Government 4 per cent certificates of indebtedness United States Government 4 per cent certificates of indebtedness, held under sale and repurchase agreement Total 2,369,200 7,979,460 EXHIBIT J.—Municipal warrants Total. Classification by maturities: 18 to 30 days 31 to 60 days 61 to 90 days Beyond 90 days to 6 months. Total. Average rate of earnings,, per cent: 1917 1916 $6,400 467,200 2,653,000 124,000 124,000 1,460,000 2,280,700 92,700 504,000 1,460,000 253,700 83,700 183,250 2,027,0-30 2,378,200 320,750 15,827,500 15,777,500 50,000 34,000,000 69,711,100 6,000,000 38,151,550 28,000,000 39,539,010 purchased. 1917 City State... County. Other... On hand Dec. 31, 1917. 1916 51,803.22 51,105.08 $10,051,988.72 260,028.02 172,845.36 175,375.35 2,949,074.30 10,660,237.45 $2,846,166.00 2,582.50 5,129.16 692,42"/. 16 2,248,955.48 381,633.20 2,221,525.63. 497,590. 02 7,559,488.57 2,949,074.30 10,660,237.45 3.30 % 97 DISTRICT NO. 4 CLEVELAND. 385 EXHIBIT K.—Changes in the reserve position of the bank during the year. Required (35 per cent). Month. $19,883,243.45 20,140,947.75 21,830,493.30 21,687,821.40 25,065,025.00 36,889,015.84 36,708,766.86 39,388,127.89 33,778,158.72 36,779,019.87 46,830,071.96 42,637,220.05 January February March April May June July August September October November December Carried. $44,595,102.35 41,875,468.60 46,497,955.45 41,690,550.30 48,165,198.00 80,637,413.80 85,612,601.80 90,415,959.50 72,264,790.85 80,024,672.10 90,934,366.65 71,780,815.85 Per cent. 78.5 72.8 74.5 67.2 67.2 76.5 81.6 80.3 74.8 76.2 67.9 58.9 Excess. Per cent. $24,711 858.90 21,734, 520.85 24,667, 462.15 20,002, 728. SO 23,100, 173.00 43,748, 397.96 48,903, 834.94 51,027, 831.61 38,486, 634.13 43,245, 652.23 44,104, 294.69 29,143, 595.80 43.5 37.8 39.5 32.2 32.2 41.5 46.6 45.3 .39. 8 41.2 32.9 23.9 EXHIBIT L.—Member banks, district No. Jf. Number of member banks, Dec. 31, 1916 New national banks organized State banks and Trust companies admitted 753 2 12 Closed by Comptroller of the Currency Liquidated 1 2 Number of member banks Jan. 1, 1918 Distribution : In reserve cities In other than reserve cities 3 764 50 714 Total 7G4 Total capital stock Dec. 31, 1916 •Stock allotted member banks for quarter ending— March 31, 1917 June 30, 1917 Sept. 30, 1917 Dec. 31, 1917 Total Stock surrendered quarter ending— Mar. 31, 1917 June 30, 1917 Sept. 30, 1917 Dec. 31, 1917 . Total capital stock Dec. 31, 1917 ""$12, 043, 600 $145,500 326,900 431, 300 3, 135, 900 4, 039, 600 16, 083, 200 10,400 11, 600 6, 100 2,900 . Total paid-up capital stock Dec. 31, 1916 Subscriptions paid in quarter ending— Mar. 31, 1917 June 30, 1917 Sept. 30, 1917 Dec. 31, 1917 Total Cash subscriptions refunded for surrender of stock quarter ending— Mar. 31, 1917 June 30, 1917 Sept. 30, 1917 Dec. 31, 1917 Total paid-up capital stock Dec. 31, 1917 767 31, 000 16, 052. 200 6, 021, 800 72 750 163 450 215', 650 1,567,950 2,019,8008, 041, 600 5,200 5,800 3, 050 1,450 .__ 15, 500 8,026,100 386 ANNUAL REPORT OF THE FEDERAL RESERVE BOARD. EXHIBIT M.—Accommodation of member banks through discount of paper. Banks accommodated. 1917 Kentucky Ohio Pennsylvania West Virginia Total. 1916 Applications handled. 1917 1916 12 102 44 2 8 32 9 1 70 974 153 9 60 152 26 2 160 50 1,206 240 Total pieces handled in 1917,14,050; in 1916,1,401. Amount of smallest note or bill rediscounted, $28.85. Amount of largest note or bill rediscounted, $13,500,000. EXHIBIT N.—First Liberty loan of 1917. Subscriptions. Class A, $50 to $10,000 Class B, $10,050 to $100,000. Class C, $100,050 to $250,000. Class D, $250,050 and u p . . . Total EXHIBIT O.—Second Liberty $128,811,700 76,365,950 23,239,300 57,814,050 $128,811,700 47,060,450 10,457, 700 16,970,200 286,231,000 203,300,050 loan of 1917. Number of Amount of subscrip- subscriptions. tions. Class A, $50 to $10,000 Class B, $10,050 to $50,000.. Class C, $50,050 to $100,000.. Class D ? $100,050 to $200,000, Class E , $200,050 and up Cash sales Total EXHIBIT P.—Certificates Date of issue. Apr.25 May 10 May 25 June 8 Aug.9 Aug. 28 Amount. $268,205,000 200,000,000 200,000,000 200,000,000 300,000,000 250,000,000 Allotment. $14,000,000 15,000,000 10,800,000 19,100,000 33,592,000 24,157,000 Allotment. of 783,972 2,844 549 218 199 1,265 $172, 996,050 79,545, 600 48,352, 850 35,487,950 136,598, 800 13,125,550 $172,996,050 79, 545, 600 43,553, 700 26,732, 700 74,398, 850 13,125,550 789, 047 486,106, 800 410, 352,450 indebtedness. Date of issue. Sept.17 Sept. 26 Oct. 18 Oct. 24 Nov. 30 Allotment. Amount. $300,000,000 400,000,000 385,197,000 685,296,000 091,000,000 Allotment. $24,180,000 34,209,000 38,863,000 • 26,471,000 115,230,500 DISTEICT NO. 4 387 CLEVELAND. EXHIBIT Q.—Rediscounts of paper secured by Government Member bank collateral notes secured by U. S.bonds and certifi- Rediscounts secured by U. S. bonds and certifi- cates. May June July August September securities. Rediscounts secured by U. S. bonds and certificates. Member bank collateral notes secured by U. S.bonds and certifi- cates. cates. $49 250.00 858,209.25 510,123. 75 $550,000.00 1 957 000.00 2,210,000.00 7,025,000. 00 9,018,000.00 October November December $7,542.50 $12,885,000.00 8,594,833.03 13,574,250. 00 5,106,237.14 18,870,300.00 Total 15,126,195. 07 66,089,550.00 EXHIBIT R.—Government deposits, 1917. January February March April May June $1, 216, 035. 12 712, 815. 21 3, 913, 251. 22 6, 597, 627. 26 5, 182, 731. 99 3, 293, 614. 65 July August September October November December 18, 272, 174. 61 11, 136, 745. 93 6,499, 959. 71 12, 719, 069. 72 22, 179, 485. 22 30, 575, 641. 65 EXHIBIT S.—Federal Reserve notes. COVER OF NOTES ISSUED. Gold coin and certificates United States Treasury gold order certificates Gold redemption fund with United States Treasurer Credit balance with Federal Reserve Board Paper held as collateral for Federal Reserve notes (actual amount, $51,254,883.29) required... Total $5,804,545 9,110,000 5,455.155 35,000,000 50,300,000 105,669,700 DENOMINATIONS OF FEDERAL RESERVE NOTES ISSUED, DESTROYED, AND OUTSTANDING, NOVEMBER, 1914, TO DECEMBER 31, 1917. Issued. Denomination. Fives.. Tens . Twenties Fifties Hundreds Total Destroyed. Outstanding. $11,620,000 26,640,000 '54, 800,000 16,000,000 5,600,000 $2,672,250 2,931,940 2,934,860 299,250 152,000 $8,947,750 23,708 060 51,865,140 15,700,750 5,448,000 114,660,000 8,990,300 105,669,700 Returned for destruction by Federal Reserve agent $720,000 Returned for destruction by other Federal Reserve banks 781,955 Returned for destruction by Treasurer of the United States and Federal Reserve Bank of Cleveland 8,008,345 Total 8,910,300 FEDERAL RESERVE NOTES RECEIVED AND RETURNED. (Amounts of Federal Reserve notes received from other Federal Reserve Banks for redemption or credit and returned to other Federal Reserve banks for redemption or credit by the Federal Reserve Bank of Cleveland for the period Jan. 1 to Dec. 31,1917.) Exchanged with Federal Reserve Bank of— Boston New York... PhiladelphiaRichmond. . . Atlanta Chicago St. Louis Received from. Returned to. $352,900 1,720,700 835,000 133,950 282,150 1,178,650 226,705 $36,415 1,216,800 247,995 100,600 72,180 418,040 183,020 Exchanged with Federal Reserve Bank of— Received from. Returned to. Minneapolis.. Kansas City.. Dallas San Francisco $51,500 25,000 299,640 69,545 $116,030 66,740 39,410 36,840 Total... 5,175,740 2,534,070 388 ANNUAL REPORT OF THE FEDERAL RESERVE BOARD. EXHIBIT T.—Clearings, 1911. Daily average. Number of items. January February.. March April May June July August September. October November. December.. 435,384 377,911 454,580 434,129 471, 797 492,316 463, 713 469, 594 522, 431 573, 698 585y 016 620,591 Amount. Number of items. $218, 777,981.82 186,342,030.19 236,308,813.73 248,982,095.96 299,213,801.47 355,994,450.53 379,309,461.52 368,449,776.41 338,747.136.48 412,879,353.88 434,818,454.55 452,233,367.85 16,745 16,431 16,836 17,365 18,146 18,935 18,548 17,392 20,897 21, 248 22,500 24,824 Total number of items handled Total amount handled Disbursements, Transit Department Cost per item handled Cost per §1,000 Service charge per item EXHIBIT TL- Amount. $8,414,537.76 8,101,827.40 8,752,178.28 9,959,283.83 11,508,223.13 13,692,094.25 15,172,378.46 13,646, 288.01 13,549, 885.45 15, 291,827.92 16, 723, 786. 71 18, 089,334. 72 5,901,160 $3,932,056,724.39 $83,491.93 cents.. 1.41 do 2.12 do 1.5 -MontMy totals of debits and credits to the Federal Reserve Bank of Cleveland in the gold settlement fund. Debits, 1917. January February.. March..!... April May June July August September. October November. December.. Credits, 1917. Debits, 1916. Credits, 1916. $77,036, 000 71, 849,000 105, 615, 000 96,190,000 170,168,000 176,745,000 203,455,600 233, 538, 000 177,293,000 206,495, 800 338, 084, 000 334,888,500 Total. $67,437,000 72,001,000 103,575,000 101,785,000 164, 707,000 155, 822; 000 206,037,000 223, 541,000 193,568,000 199, 039,300 325, 077, 600 358,057, 000 2,191,357,900 2,170,64.6,900 $4, 868,000 4,163, 000 8, 290,000 6,440,000 8,418,000 11,904,000 12,714,000 32,241,000 41,021,000 50,245, 000 57,217,000 70,908,000 308,429,000 Balance Dec. 30,1916.. Balance Dec. 31,1917.. $5,356,000 4,346,000 6,368,000 4,367,000 11, 919, 000 12, 030, 000 13,822,000 30, 773,000 43, 219,000 49,017,000 65,162, 000 67,903, 000 314,340,000 . $16,953,000 . 37,664,000 EXHIBIT V.—Fiduciary powers granted. Powers granted. Total Penn- Ken- West granted syl- tucky. Vir- Total. since vania. organiginia. zation, 1 coco Trustee only Registrar of stocks and bonds Trustee and registrar of stocks and bonds Trustee, executor, administrator, and registrar of stocks and bonds . Total Ohio. 1 6 1 I 1 1 3 3 t 8 6 5 11 7 29 DISTRICT NO. 5—RICHMOND. CALDWEIL HARDY, Chairman and Federal Reserve Agent. This bank, with the other Federal Reserve Banks, as well as member banks of the entire system and country, has been called upon to extend its activities over a wide field in the service of the Government in the floating of bonds and certificates of indebtedness and in the handling of extensive national financing. This country's entrance into the wrar necessitated the immediate raising of large sums of money, followed as early as practicable by more permanent financing. Under the war bill passed in April the early financing, as well as the later interim financing between bond issues hereafter referred to, was effected by certificates of indebtedness. The following table will give particulars as to these issues of certificates of indebtedness, showing the amount subscribed for and allotted in this district. The response in the district in subscriptions to these certificates was prompt and generous, particularly so when it is taken into consideration that the money was required largely during the crop planting and raising period, during which money is always particularly in demand. Certificates of indebtedness. Maturity. Date. Mar. 3 1 . Apr. 25 May 10 May 25 JuneS Aug. 9 Aug. 28 Sept. 17 Sept. 26 Oct. 18 Oct24 1917 Nov. 30 June 29. June 30.. July 17.. July 30.. 1917. .do.. Nov. 15 Nov. 30 Dec. 15 do Nov. 22 Dec. 15 June 25 Amount offered. 150,000,000 200,000,000 200,000,000 200,000,000 200,000,000 300,000,000 250,000,000 300,000,000 400,000,000 300,000,000 0) Rate. Subscription. Allotment. Pr. ct. 2 3 3 3-t ^ 34 31 4 4 4 . $2,000,000 5,850,000 2,753,000 2, 768,000 4,027,000 3,400,000 8,932,000 3,180,000 7,004,000 8,323,000 11,472,000 1918. 4 i Limited amount. S2,000,000 5,850,000 2,753,000 2,000,003 3,601000 2,800,000 7,235,000 .3,180,000 7,004,000 8,323,00(1 11,472,000 2,415,000 2, 415,000 62,124,000 j 58,632,000 389 390 ANNUAL REPORT OF THE FEDERAL RESERVE BOARD. Payments for the above certificates were made through this bank with remarkable facility and without disturbance to the finances of the district. Following the early temporary financing through certificates of indebtedness, came the more permanent financing through the first issue of Liberty bonds. This necessitated a permanent organization of every force to be availed of in the financial campaign. That organization took the following form: GENERAL SCHEME OF THE LIBERTY LOAN ORGANIZATION. A district committee, with the governor of the Federal Reserve Bank as chairman, and consisting of the chairmen of the central Liberty loan committees of the several States. State committees consisting of members from the various important sections of each State, acting with and through the central committee located in the capital of each State. Local committees in all cities and banking places where it was possible to form such committees, consisting of representatives of all important industries of the place. A Liberty loan bureau in each banking institution. A publicity department connected with each State committee, with headquarters in the capital of each State. A speakers' bureau located in the Federal Reserve city—Richmond—operated in connection with the speakers' bureau at Washington. Each banking institution at the beginning of the campaign was advised of its proportionate amount of the loan based upon its resources. In some cities the State committee divided the State into counties and a friendly rivalry between the sections was brought about, as well as a rivalry between the separate banking institutions. In Richmond all members of the committees were assigned to solicit subscriptions from the customers of their respective institutions. Other members of the committees were assigned to the work of arousing interest on the part of members of their respective organizations as selling agents for the bonds. The speakers' bureau carried the message through the theaters, churches, schools, factories, and other gathering places of people. A ladies' committee was authorized to operate booths in the large stores in the retail district and enlisted all the women's organizations of the city. Nearly all the banks adopted a club system for selling DISTRICT NO. 5—RICHMOND. 391 bonds on the installment plan—payments of $1 cash and $1 each week thereafter for each $50 bond. A parade and mass meeting were arranged, the former embracing many societies and the school children of the city. At the mass meeting the public was invited, and the war situation was ably presented by one of our United States Senators. Publicity was obtained by billboards, window hangers, distribution of circulars, stickers, etc., and a news article daily in each newspaper. Business houses contributed the advertising space. These same methods were urged in every locality throughout the district. The amount of subscriptions asked for to the first Liberty loan at 3J per cent was $2,000,000,000; the quota expected from this district was fixed at a minimum of $80,000,000 and a maximum of $100,000,000. The subscriptions amounted to $109,737,100 and the allotment made was $88,593,650. Payments required were 2 per cent with subscriptions and 18 per cent on June 28; 20 per cent on July 30; 30 per cent on August 15; 30 per cent on August 30. While it required a wide and energetic campaign, reaching, so far as possible, every individual and family in the district, when the novelty of the appeal is taken into consideration, the large majority of our population having little or no information in regard to, or conception of, the necessities or conditions relating to the situation, the response might well be regarded as remarkable. The effect of these subscriptions on banking institutions and their condition, and on the industries and commerce of the district, was apparently negligible. The bank deposits in the district more than held their own, and no interests, either agricultural, industrial, or commercial, suffered from lack of banking accommodations. It may be asserted with reasonable safety that the actual effect of this financing was far less than the first estimates placed upon it. It was manifestly impossible to determine accurately the cause for the increased banking accommodations asked for during the financing of these subscriptions, and while this accommodation in amount represented a considerably increased volume, the amount directly traceable to the Government financing was relatively limited, and the whole increase was small compared with the total amount of the financing. The second Liberty loan at 4 per cent was offered on November 15. The quota for this district was fixed at a minimum of $120,000,000 and a maximum of $200,000,000. The amount subscribed for was $201,212,500 and the allotments $182,581,700. Payments required were 2 per cent with subscriptions and 18 per cent on November 15; 40 per cent on December 15; 40 per cent on January 15. 392 ANNUAL REPORT OF THE FEDERAL RESERVE BOARD. The bank's ownership of Treasury certificates and Government bonds on December 31 amounted to $3,205,450, and operations in these securities are fully set forth in the following table: Open-market operations. Balance Securities. Operations for the vear 1917. Dec.31,1916. Purchases, Liberty Loans: 3i per cent 4 per cent (^second) Certificates of indebtedness: 2 per cent 3 per eent : One-year Treasury notes, 3 per cent United Stated conversion bonds, 3 per cent United States consuls, 2 per cent United States Panamas, 2 per cent Total.. 1 Sales. $183,800 1,698,950 $140,900 1,657,500 2,000,000 2,000,000 1,392,450 803,000 259,000 1899,000 i 900,100 521,750 237,000 3,262,450 6,699,600 SI, 070,000 Balance Dec.31,1917. 259,000 900,100 i 999,100 1800,000 6,756,600 $42,900 41,450 1,969,000 915,100 237,000 3,205,450 Conversions. In addition to this, the bank held on December 31 member bank collateral notes to the amount of $4,170,060 and notes of other parties indorsed by member banks to the amount of $5,294,639, all of which were secured by United States bonds and certificates of indebtedness. Our fiscal agency department having charge of the conduct of Liberty loan operations has required the supervision of several of our officers and heads of our departments. Twenty additional employees have been permanently engaged in this work, and 27 more added to the general force. In addition to this, at the height of the campaign many others were temporarily employed. Two of the large audit companies of the city also loaned us many of their expert accountants. The entire expenditure reported for reimbursement in connection with the campaign in the first Liberty loan was $23,700, the entire amount having been reimbursed to us by the Treasury Department. The total expenditure estimated in connection with the campaign in the second Liberty loan is about $60,000, some bills not having yet been put into final shape. None of this has yet been reimbursed to us by the Treasury Department. The amount of member banks collateral notes and notes of other parties indorsed by member banks and secured by United States bonds and certificates of indebtedness reached nearly $9,500,000 on December 31. This indicates the growing extent to which the bank has been called on to extend assistance up to this date in financing bond subscriptions. The natural inference is that as the final payments become due on the last subscriptions and further anticipated issues are offered to the public, the bank will continue to play an increasingly important part in the loans. Increased efforts will con- DISTEICT NO. 5 393 RICHMOND. tinue to be necessary to distribute bonds among private investors in order that excessive demand upon the resources of the bank and its members may be minimized as far as possible, and interference with the process of supplying the regular demands through commercial channels be avoided. BANK ACTIVITIES DURING THE YEAR. The increase in member banks' deposits (reserves) from $25,000,000 to $45,000,000, partly due to a change in the law affecting reserve requirements and partly to the expansion of members' own deposits, coupled with the growth in loans and bills purchased from $7,000,000 to over $42,000,000, are striking illustrations of the growth of wealth and the volume of business within the district. Our loans have been confined entirely to the district except a purchase of $5,000,000 short-time bankers' acceptances from one of the other Federal Eeserve Banks. The increase of something over $300,000 in capital stock is due chiefly to subscriptions from important State banks and trust companies which have recently joined the system, and to substantial additions to surplus of several member banks. The following comparative balance sheet of the bank, as of December 31, 1916 and 1917, shows a growth of nearly $100,000,000 in its resources between the dates mentioned: Comparative balance sheets (condensed). Dec. 31, 1917. Dec. 31, 1916. ASSESTS. Cash: Gold reserve Legal tender, silver, etc $24,532,111.00 64,938.40 562,342,094.05 164,264.85 62,506,359.50 Total reserve 597,613.72 Other cash and cash items. Total cash $63,103,973.22 Depository banks (see contra-U. S. Treasurer special) 24,424,683.36 Transit items (deferred— net) 2,395,561.04 Overdrafts 50,074.18 Productive assets: Loans and bills purchased 42,812,846.02" Municipal warrants United States securities "3* 205* 450." 00 Par values 46,018,298.02 Deduct: Reserve for depreciation $50,000.00 Unearned discount, etc 100,204.38 150,204.38 Liquid values Real estate, furniture, and equipment Deferred charges , , 309,065.24 43,221.74 $26,305,157.27 179,491.01 5,078.43 7,213,968.08 60,750.00 3,262,450.00 10,537,168.08 20,310.96 45,868,091.64 21,575.24 Add accrued interest receivable 24,597,049.40 1,708,107.87 10,516,857.12 4,033.20 45,889,666.88 352,286. 98 136,216,245.66 133,475.77 14,034.57 10,520,830.32 147,510.34 37,158.127, 40 394 ANNUAL REPORT OF THE FEDERAL RESERVE BOARD. Comparative balance sheets {condensed)—Continued. Dec. 31, 1916. Dec. 31, 1917. LIABILITIES. Deposits: United States Government Members... . . Cashier's checks, etc .. . United States Treasury, special (see, contra, depositary banks) Other Federal Reserve Banks (net) Federal Reserve notes outstanding (net) Liability to shareholders: Capital stock. Surplus Undivided profits $2,253,761.15 45,356,855.67 192,256.97 S3,059,731.73 25,450,515.49 2, 718.22 147,802,873. 79 528,512,965.44 24,424,683.36 3,644,461.78 56,563,805.00 1,457,347.26 3,830,000.00 3,663,950.00 116,471.73 3,346,150.00 11,664. 70 3,780,421.73 3,357,814.70 136,216,245.66 37,158,127.40 The expense account of the bank is set forth in the following table: Comparative expense accounts {exclusive of transit expense). 1917 Current: Federal Advisory Council Assessment Federal Reserve Board expense. Directors— Fees Per diem allowances Traveling expense Legal , SalariesOfficers Clerical staff Watchmen Miscellaneous Traveling Conferences— Governors Federal Reserve agents Telephone Telegraph Expressage Rent (including outside vaults). Taxes and fire insurance Fidelity insurance Light, heat, and power Printing and stationery Repairs and alterations Miscellaneous Total current Cost of Federal Reserve notes Depreciation of building and equipment., Total.. i Credit. 1916 $431.60 14,255.60 $150.00 11,743.48 3,020.00 1,230.00 1,806. 49 500.00 3,760.00 1,840.00 2,505.38 1,425.00 33,199.96 35,303.55 700.00 1,882.23 668.67 31,427.97 26,789.12 648.33 1,774.23 406. 93 336. 78 i 68.37 685.33 657.22 5,209.57 4,115. 55 5,807.00 2,629.24 2,202.16 820.14 9,723.02 11,295.63 4,683.25 1,444.78 2 320.89 391.31 225. 79 3,408. 91 779.71 6,034.00 141, 094. 62 62, 529.60 54, 161 45 104, 257 .94 18, 247 .82 713. 95 257,785.67 126,219.71 1,498.85 901.11 3,576.79 44.78 3,160. 58 2 Debit. While expenses show large increases, gross earnings for the year show an increase from $312,000 to $770,000, productive assets from $10,500,000 to $46,000,000, and net earnings from $186,000 to $462,000. The current expense increases are only moderate when the increased volume of business is taken into consideration. The major increases were for repairs and alterations of $11,000 to the building purchased for the use of our Baltimore branch, to be opened early DISTRICT NO. 395 -BICHMOND. in 1918. Federal Reserve notes outstanding have increased during the year from $20,000,000 to $60,000,000, and the increased cost is $44,000. Depreciation on building and equipment for the year of $54,000 represents depreciation in the property purchased for our proposed new building facing Capitol Square, the old buildings on the property having been removed. I t also includes equipment (adding and printing machines, typewriters, etc.), and a portion of the cost of a new vault of moderate size in our present quarters. The removal of this vault to the new building when erected is contemplated. The details of comparative profit and loss accounts for this and the previous year are shown in the following tables: Comparative profit and Joss accounts, dividends, and undivided 1917 Gross earnings: On loans and investments . Profits on United States securities sold Service charges (net over transit expense) Penalties for deficiencies in reserve Miscellaneous Deduct— Expenses Reserve for depreciation Balance Deduct— Franchise tax paid to United States G overnment Carried to surplus account 1916 $716, 340.78 16, 711.75 4, 386.69 31, 362.02 1, 207.69 $286,697.84 12,527.84 1,033.17 12,390.39 142.25 $770,008.93 $312,791.49 126,219.71 257, 785.67 50, 000.00 Net profit for the vear Balance in undivided profits Jan. 1 Dividends paid: 1 per cent—Nov. 16,1914, to Dec. 31,1915 6 per cent—Jan. 1, 1916, to Oct. 31, 1916 6 per cent—Nov. 1, 1916, to June 30, 1917 6 per cent—July 1, 1917, to Dec. 31, 1917 profits. 307,785.67 126,219.71 462,223.26 11,664.70 186,571.78 23,015.26 473,887.96 209,587.04 30,387.65 167,534.69 135, 690. 71 105, 253. 79 240,944. 50 197,922.34 232,943. 46 11,664. 70 116 471. 73 116, 471. 73 232,943.46 Balance of undivided profits, Dec. 31 11,664. 70 This indicates that after charging off liberally on our building site, equipment, etc., paying dividends to our members in full at 6 per cent to December 31, and laying aside a reserve for depreciation, there remained $232,943 of undivided profits. The Federal Reserve Act provides that, after the payment of expenses and dividends in full to date, all remaining earnings shall be paid to the United States as a franchise tax, except that one-half of such earnings shall be paid into a surplus fund until it amounts to 40 per cent of the paid-in capital stock of the bank. Under this provision of the law one-half of the above earnings—$116,471—has been carried to surplus account and the other half paid to the United States Government as a franchise tax. 34365°—18 26 396 ANNUAL REPORT OF THE FEDERAL RESERVE BOARD. The following table giving the daily averages of member banks' deposits and of United States Government deposits for 1916-17 will be of interest and give evidence of the growth of banking resources in the district: Deposits—Daily averages by months; 1917 compared with 1916. Member banks. United Statc-3 Government. Month. 1916 1917 January February March April May June , July August September. October November December Year $26,023, $26,023,616.67 25,719,944.94 26,255,281.88 25,649,251.37 25,600,111.52 28,290,347.84 33,950,883.34 37,060,405.42 36,922,969. 42 40,217,988.13 42,282,302.89 43,673,086.54 31,704,938.90 1917 $11,199,805.77 11,483,882.66 11,545,076.04 11,536,144.10 13,249,437.88 14,901.902.86 15,956,127.43 16,330.973.91 16,615,271.11 20,013,963.91 23,466,288.63 25,486,796.81 15 999,616.04 $1,940,979.43 1 460,930.46 4,086,850.04 1,188,082.41 3,468,857.52 7,979,110.88 10 375.597.34 5,148,718.32 3,310,445.18 3,466,750.03 11,646,835.94 11 607,529.73 5,524,462.85 1916 So, 658,432.64 6,328,866. 43 6,420,260.32 6,875,443.03 6,346,514.23 7,191,234.53 0,671,597.44 3,320,534.36 2,988, 816. 83 3,594,049. Dl 2,921,533.37 2.845,368. 45 5,014,378.72 This growth of business is further illustrated by the following table showing the volume of discounts of over $100,000,000 during the current six months. Bankers' acceptances to the amount of $58,000,000 were purchased in addition to these discounts. Discounts during the year 1917. Maturities as of date of acquisition. 15 days and less. $104,652,137.05 Notes Member banks' collateral notes.. 245,024,635.04 108,166. 29 Trade acceptances. 546,212.04 Commodity paper. Bill of lading drafts 1,747,294.11 Total 16 to 30 days. 31 to 60 days. 61 to 90 days. Over 90 days. Total. $8,233,035.22 $16,006,334.97 $19,162,471.99 $1,295,537.41 $149,349,516.64 '*4i7,'566.99" "i,"229,"72L65" 1,019,084.71 1,437,422.62 "i," 405," 666." 35* 683,365.71 352,078,444.53 9,669,680.92 18,673,479.24 21,250,838.05 1,295,537.41 245,024,635.04 3,160,449. 28 3,686,085.08 1,747,294.11 402,967,980.15 Of this total over one-half is represented by member banks' collateral notes having less than 15 days to run. This illustrates the importance of the facilities extended member banks for short loans. The handling of large transactions, necessitating frequently the temporary use of large sums, is economically facilitated by means of these short loans. The moderate rates at which these large transactions have been handled are set forth in the following table and are a further illustration of the liberal facilities extended to members bv the bank. DISTKICT NO. 5 397 RICHMOND. Discount rates current for the year 1911. Effective Jan. 1, 1917, un- Effective Effective Effective Effective changed Apr. 23, Mav 25, Nov. 5, Nov. 30, 1917. since 1917. 1917. 1917. Oct. 1, 1916. Classification. Member banks' collateral notes: Secured by customers' notes Secured by United States securities Commercial paper: 15 days or less 16 to 90 days Agricultural and live stock paper: 15 days or less 16 to 90 days 91 days to 6 months Notes secured by United States securities-: 15 days or less 16 to 90 days Commodity paper: 15 days or less 16 to 90 days Trade acceptances: 60 days or less 61 days to 90 days il oh 4 4 3-1 34 4 4 4 4* 3i 3£ 3V 3} 3-1 31 3i 4 3} 3t 3j The following table shows the productive assets acquired during the year, analyzed as to class and rates. The amount of discounts held under each rate is shown with the average number of days each amount has to run. The total of $42,800,000 has an average of only 23 days to run, which gives a forcible illustration of the very liquid condition in which the bills of the bank are kept. Productive assets acquired during the year 1917, classified as to rates. 2 per cent. 3 per cent. Zl per cent. 31 per cent. 3* per cent. United States Govern$2,768,750.00 $259,000.00 ment securities Warrants 30,492,613.73 $2,078,049.37 S3,456,933.96 SI, 537,878.97 Bankers' acceptances. Commodity paper Trade acceptances Bill of lading drafts Unsecured notes Notes secured by: Merchandise United States securities Member bank collateral notes secured by: United States securities disjoin fiT "f>' TI nfps Total Owned Dec. 31,1917: United States Government securities Loans and bills Average unexpired term in days 3 | per cent. $638,800.00 115,000.00 18,698,692.81 3,566,960.08 2,492,327.34 755,058.48 10,543,950.43 2,500.00 24,049,078.01 30,313,922.05 206,108,999.99 2,768,750.00 30,751,613.73 2,078,049.37 3,456,933.96 1,537,878.97 297,2So, 289.79 1,152,100.00 1,969,000.00 1,332,840.58 26 100,000.00 36 42,900.00 590,521.36 18,248,155.93 21 23 398 ANNUAL REPORT OF THE FEDEBAL RESERVE BOARD. Productive assets acquit cd during the year 1911, classified as to rates—Continued. 3| per cent. 3* per cent. United States Government securities Warrants Bankers' acceptances $454,510.27 $1,397,380.87 Commodity paper Trade acceptances Bill of lading drafts Unsecured notes 1- -- - - Notes secured by: Agricultural products Live stock Merchandise United States securities Member bank collateral notes secured by: United States securities Customers' notes Total Owned Dec. 31,1917: United States Government securities Loans and bills Average unexpired term in days 4 per cent. 4$ per cent. $2 305,950.00 ii9,"i25*66 668,121.94 992,235.63 106,434,776.64 $5,836,430.80 275,461.58 6,980.89 10,000.00 1 890,490.53 299,847.16 Total. $5,962,500.00 115,000.00 58,116,059.98 3,686,085.08 3,160,449.28 1,747,294.11 122,815,157.87 575,308.74 6,980.89 12,500.00 25,939,569.14 30,313,922.05 214,710,712.99 8,601,713.00 454,510.27 1,397,380.87 121,304,855.21 6,136,277.96 467,161,540.13 191,727.05 1,397,380.87 41,450.00 16,575,520.39 4,370,699.84 3,205,450.00 42,812,846.02 17 61 13 39 23 The volume of paper handled is almost wholly determined by the terms of the paper, whether of short or long maturities, and the following table will show7 daily averages of outstanding bills for the entire year, and will indicate the average continuous service rendered. Daily averages of productive assets for the year 1917. Classification. United States securities Agricultural products Live stock Merchandise Trade Commodity. acceptances. $402,623.93 Bankers' acceptances. Foreign. Domestic. Member bank collateral notes. $608,293.24 $8,521.18 2,248,983.37 Nonmember bank Total collateral Unsecured 402,623.93 8,521.18 406,737.89 $5,017,198.22 $1,218,258.46 Total loans Warrants United States bonds 402,623.93 415,259.07 5,017,198.22 1,218,258.46 2,857,276.61 402,623.93 415,259.07 5,017,198.22 1,218,258.46 2,857,276.61 Grand total 2,857,276.61 Held by Classification. Notes. United States securities Agricultural products Live stock Merchandise • ....... 1538,928.86 71,658.56 1,306.17 2,732.90 United States bonds and investments. Combined Federal Reserve agent. $1,147, 222.10 432,645.09 1,249.73 2,595.90 1,361,328.85 19,396.05 $50,158.58 56.44 137.00 887,654.52 Bank. 19,396.05 $1,147,222.10 482,803.67 1,306.17 2,732.90 2,248,983.37 19,396.05 Total collateral Unsecured 634,022.54 6,410,846.15 3,902,444.26 13,053,040.72 2,964,437.72 12,526,260.52 938,006.54 526,780.20 Total loans Warrants United States bonds 16,955,484.98 15,791.78 """ii5,*79i."78" 3, 672,427.81 3.672,427.81 7,044, 868.69 3,688,219. 59 20,643,704.57 15,490,698.24 1,464,786.74 15,791.78 3,672,427.81 15,490,698.24 5,153,006.33 Nonmember bank Grand total 7,044,868.69 DISTRICT NO. 399 -RICHMOND. The productive assets owned December 31, 1917, are again analyzed in the following table, which gives the volume of paper maturing within 15 days and later maturity periods, from which it will be seen that over $24,000,000 out of the total of $42,000,000 had less than 15 days to run at the close of business December 31. This gives another forcible illustration of the extreme liquidity of the larger portion of the bank's paper. Analysis of productive assets as of close of business Dee. 31, 1917. Bankers' acceptances. Commodity. Trade acceptances. Foreign. Domestic. Member bank collateral notes. CLASSIFICATION. Ignited States securities Agricultural products... Total collateral $4,171,060.00 $97,400.00 97,400.00 Unsecured 4,171,060.00 $1,057,053.93 $8,935,465. 95 $4,220,660.76 Total loans 97,400.00 1,057,053.93 8,935,465.95 4,220,660.76 4,171,060.00 Grand total 97,400. 00 1,057,053.93 8,935,465.95 4,220,660.76 4,171,060.00 15,150.00 41,500.00 40,750.00 231,346.50 260,327.35 437,722.37 127,657.71 1,812,773.36 4,104,215.69 1,728,437.26 1,290,039.64 1,186,947.43 554,686.00 1,689,568.21 789,459.12 4,171,060.00 97,400.00 1,057,053.93 8,935,465.95 4,220,660.76 I 4,171,060.00 United States bonds and investments. Combined. MATURITIES. Within 15 days 16 to 30 days 31 to 60 days 60 to 90 days.. Grand total Notes. Federal Reserve agent. Bank. CLASSIFICATION. United States securities Agricultural products Bill of lading drafts Nonmember bank $5,294,639.88 291,070.16 92,344.97 707,956.00 $9,465,699. 8S $9,465,699. 88 388,470.16 388,470.16 92,344.97 92,344.97 707,956.00 707,956.00 Total collateral Unsecured.. 6,386,011.01 17,946,194.37 10,654,471.01 32,158,375.01 10,654,471.01 32,158,375.01 Total loans United States bonds.. 24,331,205.38 42,812,846.02 3,205,450.00 42,812,846.02 $3," 205,450.'66 Grand total 24,331,205.38 3,205,450.00 46,018,296.02 42,812,846.02 3,205,450.00 16,967,056.89 1,244,820.00 4,965,373.47 1,141,207.52 12, 747. 50 3,205,450.00 24,384,334.18 6,205,549.04 8,861,851.31 3,348,363.99 3,218,197.50 24,384,334.18 6,205,549.04 8,861,851.31 3,348,363.99 12,747.50 3,205,450.00 24,331,205.38 46,018,296.02 42,812,846.02 3,205,450.00 $3,205,450.00 MATURITIES. Within 15 days 16 to 30 days 31 to 60 days 60 to 90 days Over 80 days Grand total 3,205,450.00 The following table compiled by quarters gives the volume of paper in pieces and by amount, the daily average, the annual rate earned, the amount of discount earned during each period, and the rebates on anticipated payments with the resulting earnings. 400 ANNUAL REPORT OF THE FEDERAL RESERVE BOARD, Productive assets icitli earnings and averages, 1917. Volume of investment operations. Days income in on period. Quarterly periods, 1917. Items. Jan 1 to Mar. 31. Apr. 1 to June 30.. July 1 to Sept 30 Oct. 1 to Dec. 31 Total Jan. 1 to Mar. 3 1 . . . . Apr. 1 to June 30 July 1 to Sept. 30.... Oct. 1 to Dec. 31 Total earned tual). Items. Balances current. Amount. 3,345 7,236 7,990 5,215 $33, 679, 716.17 81,446,432.97 123,044, 054. 72 228,991,336.27 37 80 87 56 $11,818,978.88 19,117,894.00 21,289,594.24 30,139, 924.38 90 91 92 92 3.28 3.17 3.54 3. 63 23, 786 467,161,540.13 65 20,643,704.57 365 3.47 Discount and interest. Quarterly periods, 1917. Annual rate Daily averages, holdings. AnMiniEarned mum ticipa(actual). charges. tions. Sundry profits. Total earnings Profits on Penalties of sales of for Miscel- product! VQ United deficiency laneous. assets. States in securities. reserve. Total. $94,675.06 153,075.82 191,954.81 275,879.68 5.56 9.72 8.71 4.11 95.33 104. 62 203.00 324.36 $94,775.95 $16,711.75 $5,982.70 5, 793.43 153,190.16 8,153.79 192,166. 52 11, 432.10 276,208.15 715, 585.37 28.10 727.31 716,340.78 $58.18 138. 96 415. 81 594.74 $117, 523.58 159,122. 55 200, 736.12 288, 234. 99 16,711.75 31,362.02 1,207.69 765, 622.24 This includes penalties which we are compelled under the law to charge members for deficiencies in reserve, and we would urge members to give this matter careful consideration. Demands for funds can be much more economically met by rediscounting at our moderate current rates than by impairing reserves, thus creating deficiencies on which we are required to charge 2 per cent above the current rate for 90-day paper, but not less than 6 per cent per annum. The productive assets are again analyzed by quarters in the following table, giving distribution by States, and showing the number of banks in each State accommodated at each different period. Productive assets acquired—Distribution Jan. 1 to Mar. 31. Banks. Marvlsiid. District of Columbia Virginia West Virginia North Carolina South Carolina Other Federal Reserve Banks. Discounts and bills purchased. Warrants purchased.. . United States securities purchased Total 12 3 20 1 30 42 Amount. Apr. 1 to June 30. Banks. Amount. $9,080,017.27 648,951.65 11,099,707.69 3,900.50 5,160,343.11 4,913,046.45 17 $21,525,542.79 4 701,954.17 44 45,146,407.24 10,200.00 7,122,200.02 48 6,681,128. 75 54 30,905,966.17 15,000.00 81,187,432.97 33,679, 716.17 July 1 to Sept. 30. Banks. 17 4 48 3 49 56 168 81,446,432.97 Amount. $23,307,621.93 1,116,057.16 81,967,017.92 267,148.31 8,152, 249.12 7, 629, 760. 23 122, 439, 854. 72 100,000.00 259,000.00 2,758,750.00 108 by States, 1917, 504,200.00 177 123,044,054.72 DISTRICT NO. 5 RICHMOND. Productive assets acquired—Distribution l)y States, 1917—Continued. Oct. 1 to Dec. 31. Banks. Maryland District of Columbia Virginia... West Virginia North Carolina South Carolina Other Federal Reserve Banks 31 6 54 9 37 29 1 Discounts and bills purchased. Warrants purchased United States securities purchased Total Amount. $22,837,696.57 1,035,131.91 151,464.357.05 1,533,686.70 13,057,207.44 31,604,760.02 5,017,946.58 Total period. Banks. 32 7 71 11 59 65 1 226,550,786.27 2,440, 550.00 187 401 228.991,336.27 246 Balance as of Dec. 31. Amount. $76, 750,878.58 3, 502,094.89 289,677, 489.90 1,814,935.01 33,491,999.69 50,828,695.50 5,017,946.58 $10,239,075.93 437,412.53 18,649,937.43 549,350.64 6,172,265.08 4,505,727.36 2,259,077.00 461,084,040.13 115,000.00 5,962,500.00 42,812.846.02 467,161,540.13 46,018,296.02 3,205.450.00 Virginia shows the largest volume of bills discounted, this being partly due to the fact that our members in Richmond have found it convenient to avail of, to a large extent, frequent leans running from 1 to 15 days. The following table on clearing operations gives full details as to number of items, amounts, averages, and costs: Clearing operations for the year. Daily averages, 304 business days. Number of items. Government cheques Through Richmond Clearing House Total free On other points in district No.5 On points in other Federal Reserve districts Amount. Number of items. Average Equivalent cost per amount $1,000, with service charge at 1J per cents per item. item. Amount. 81,040 $24,119,000 266 $79,339 $298 339,677 882,652,100 1,117 2,903,461 2,598 420,717 906,771,100 1,383 2,982,800 2,157 4,726,700 1,439,595,700 15,548 4,735,512 305 540,863 1,057,582,700 1,780 3,478,890 1,955 No charge made. " Do. 4 11/100 cents. 64/100 cents. Total service 5,267,563 2,497,178,400 17,328 8,214,402 474 2 64/100 cents. Grand total 5,688,280 3,403,949,500 18,711 11,197,202 599 2 09/100 cents on grand total. Disbursements for transit department, $51,186.57. Cost per item on total handled, 0.90 cent. Cost per item subject to service charge, 0.97 cent. Cost per $1,000 on total handled, 1.50 cents. Cost per $1,000 subject to service charge, 2.04 cents. Service charge per item, 1.25 cents. This volume of business is constantly increasing, and as our members are becoming more familiar with our methods, we anticipate increasingly extensive use of the facilities which wTe offer them. FEDERAL RESERVE BANK AND MEMBER BANKS. The following table analyzing capital stock for the year gives comparison with December 31, 1916, showing additions and reduc 402 ANNUAL REPORT OF THE FEDERAL RESERVE BOARD. tions in the number of banks by States, with a resulting membership of 530 as against 520 at the close of 1916, and an increase of capital from $3,346,150 to $3,663,950: Capital stock—Analysis for the year 1917. District of Co- Virginia. lumbia. Maryland. Balance Dec. 31,1916 Additional allotments on increases of capital or surplus of members Reductions on decreased capital or surplus of members Additions to memberships during the year Liquidations during the year., West Virginia. North Carolina. South Carolina. Total. 96J16,065 15 8,09814519,055104 8,463 81 7,570 79 7,672 520 66,923 1,029 26 1,506 233 391 227 3,413 96J17,094 15 8,124 145 20,561 104 8,696 817,961 79 7,899 520 70,336 30 9617,094 1518,124 145 20,561104 8,666 2,160 1,152 87 126 29 185 7,835 79 7,870 520 70,151 21 130 18' 3,549 98 19,254 15js, 124 153 21,713 106 8,753 82 7,856 84 8,000 538 73,700 ~~ ~ 421 20 151 22 213 15 19,234 15 8,124 151121,500 103 8,602 81 7,841 Balance Dec. 31,1917.... 7,978 53073,279 The number of national bank and State bank stockholders, distributed by States, the amount of stock held in each State, and the dividends paid thereon are shown in the following table: Capital stock and dividends. 6 per cent dividends paid. 50 per cent of par of Shares allotallotted. From Nov. From ments 1, 1916, to July 1 to Total. paid. Dec. 31, June 30, 1917. 1917. Number of members. National. Maryland District of Columbia Virginia ^rest Virginia North Carolina South Carolina Total 95 14 • 147 102 81 State. 2 1 4 1 97 15 151 103 81 78 5 83 517 13 530 961,700 19,234 406,200 8,124 21,500 1,075,000 430,100 8,602 392 050 7 841 398,900 7,978 73,279 3,663,950 33,203.95 16,224.38 38, 772. 56 16,921.05 15 210.44 15,358. 33 26,529.13 12,180.00 30,521.15 12,728.44 11,537.91 11,751.16 135,690. 71 105,253.79 The amendment to the Federal Keserve Act passed in June reduced the reserves required to be carried by member banks to 7 per cent against demand deposits and 3 per cent against savings accounts, 10 per cent being required in reserve cities against demand deposits, but all of these reserves are required to be carried with the Federal Reserve Bank. Banks are not now being required to carry reserves in their own vaults, but are left free to use their own judgment as to the amount of their cash needs at home and the character of DISTRICT NO. 5—RICHMOND. 403 them. Under these conditions, Federal Reserve notes are available instead of legal tender and gold certificates. Member banks and many State banking institutions have freely sent in gold and gold certificates, which has caused a largely increased demand for the use of Federal Reserve notes, and the amount of such notes outstanding increased during the year about $40,000,000. Relations with member banks have been cordial, and during the eventful year we have had their loyal support and cooperation. The effectiveness of the system and the impracticability of doing without it are universally recognized. I t remains only to bring about the final establishment of a universal par collection plan (which will remove the necessity for balances at central points for the purpose of clearing the numerous State bank items) to round out the system to the complete satisfaction of all members. The discount facilities offered by the bank, and the established fact that these can be relied upon with assurance, have been a general source of confidence to the officers of our member banks, in regard to which we are constantly receiving gratifying expressions. While the present unusual and in some respects trying conditions ft re fully recognized, the bygone doubts of the adequacy of our banking facilities have been replaced by a feeling of confidence. We are glad to express the belief also that there are few cases in which there is any marked disposition to overtrade; the character of loans is becoming more varied, better scattered, and therefore more liquid. Cooperation in the securing of credit statements is increasing, the necessity for and advantage of obtaining them being more fully recognized both by the banks and their borrowers. The irregularity in mails, we regret to report, is more frequent, due to inadequate postal facilities, aggravated by congested traffic conditions on the railroads. These facilities, which appear to have been inadequate in normal times, have been swamped under existing war conditions. During the year the following banks have been authorized to act as trustee, executor, administrator, and registrar of stocks and bonds: First National Bank, Hyattsville, Md.; National Bank of Rising Sun, Rising Sun, Md.; First National Bank, Appalachia, Va.; First National Bank, Danville, Va.; Union National Bank, Clarksburg, W. Va.; National Bank of New Bern, New Bern, N. C. FEDERAL RESERVE BANK AND STATE BANKS AND TRUST COMPANIES. On January 1, 1917, we had six State bank members, with aggregate resources of $7,800,000. The general attitude of State bank officers has apparently been more friendly than heretofore, evidenced chiefly by a frank admis 404 ANNUAL BEPOBT OF THE FEDERAL RESERVE BOARD. sion, almost universally, that the Federal Reserve System has been the salvation of the country—agriculturally, commercially, and financially—and that the State banks indirectly have been the beneficiaries in this to the same extent practically that members of the system have shared in it. They say frankly they would be unwilling to see former conditions restored. Financially, their attitude is that while they might be willing to come in as members, notwithstanding some loss of interest which they now get on balances, they are unwilling to forego the present returns from exchange charges. They are satisfied to enjoy the stability and prosperity and the profits arising from such conditions, due to the operation of the Federal Reserve System, but want to retain every source of profit which existed under the old system. They admit they want their items cleared at par. They are carrying at central points for this purpose considerable balances on which they are receiving a low rate of interest, whereas, these balances could be more profitably employed in regular loans, provided they could clear all items at par through the Federal Reserve Bank. Many express a willingness to become members " if all the others would come in," thus establishing a universal par clearing plan, but each one hesitates about being the first and alone in going " over the top." Notwithstanding this, we have received during the year applications from nine State banks and trust companies, of which seven were admitted up to December 31, their resources aggregating over $27,000,000. We have had many inquiries as to membership, have sent out considerable literature on the subject and had lengthy personal discussions and correspondence. We have the assurance of several additional applications, and are discussing membership with others, who have the matter under consideration. In this connection, with the approval of the Federal Reserve Board, our board has authorized the report of examinations of the State banking departments in this district to be accepted, in connection with the application of State banks and trust companies for membership. Some institutions which desire to join are conducting lines of business which are not regarded as altogether desirable in association with regular banking, and action as to membership hinges upon the possibility of elimination of these lines. While the movement for membership is not in such volume as is desirable, the interest in the question of membership is gratifying and encouraging. With reference to the admission of a State bank as a member of the Federal Reserve system, the Federal Reserve Act provides that— No applying bank shall be admitted to membership in a Federal Reserve Bank unless it possesses a paid-up unimpaired capital sufficient to entitle it to become a national banking association in the place where it is situated, under the provisions of the national banking act. DISTRICT NO. 5-—RICHMOND. 405 The limit of minimum capital is fixed by the national banking act as follows: In cities or towns not exceeding 3,000 inhabitants, $25,000. In cities or towns exceeding 3,000, but not exceeding 6,000 inhabitants, $50,000. In cities or towns exceeding 6,000, but not exceeding 50,000 inhabitants, $100,000. In cities exceeding 50,000 inhabitants, $200,000. Out of approximately 1,500 State banks and trust companies located in the fifth district about 500 are eligible to membership under this provision of the act. Of the remaining banks about 200 are sufficiently wTell provided with surplus to enable them to qualify; under the capital-stock requirement without the contribution of additional capital by stockholders by the simple expedient of transferring a certain amount from surplus fund to capital stock. We can see, therefore, that out of the 1,500 State institutions in this district approximately one-half are qualified or could easily qualify for membership in the system. While a number of the larger and more substantial State institutions have been admitted to membership, or have applications pending, quite a large number of qualified institutions (or institutions which could qualify) have not clone so. A number of these institutions, as well as a number of State banks that are unable to meet the capital requirements requisite for membership, have cooperated with the Federal Eeserve system, at least as far as the collection system is concerned, but they are not cooperating in such a way as to strengthen the resources and increase the lending power of the system, as they would by participation as full members of the system. Since many of these institutions are depending upon (member bank) correspondents with whom balances are carried by them, for a large part if not all, of the accommodation which they require, and since these correspondents are in many cases borrowing more largely from the Federal Eeserve Bank than they would be required to borrow, were it not for this dependence, the nonmember State institutions are really occupying the position of liabilities rather than assets of the Federal Eeserve system. By becoming members of the system they would, through their capital subscriptions and reserve deposits, increase the resources of the Federal Eeserve Bank, and add to its strength and lending power. By remaining out of the system they constitute an element of weakness in our financial structure instead of adding to its strength. FEDERAL RESERVE BANK AND THE PUBLIC. Our relations with the public through member banks and by direct contact have been cordial, and on every hand we hear universal expression that the Federal Eeserve system has been a balance wheel 406 ANNUAL REPORT OF THE FEDERAL RESERVE BOARD. which has stabilized and aided agricultural and commercial developments and aided in bringing unmeasured prosperity to the district. The Government and its representatives have the cordial support and cooperation of every interest in the district, with an increasing resolution to carry our participation to a successful conclusion in behalf of world-wide freedom. FEDERAL RESERVE BANK AND NOTE ISSUES. The following table gives the interdistrict movement of Federal Reserve notes for the year, indicating the extent to which these notes travel abroad throughout the country as illustrated by the amounts and the district from which they are returned for redemption. Interdistrict movement in Federal Reserve notes for tlie year ended Dec. 31, 1917. Tens. Frv es. Federal Reserve Bank of— Received from. Boston New York Philadelphia Cleveland Atlanta Chicago St. Louis Minneapolis Kansas City Dallas San Francisco Total Returned to. Boston New York Philadelphia Cleveland Atlanta Chicago St Louis Minneapolis.... Kansas City Dallas San Francisco Total Received from. Returned to. $12,250 197,750 65,500 16, 750 94,750 4,950 6,150 5,250 8,750 6,500 2,610 $82,350 1,155,130 247,000 29,680 304,000 98,000 41,400 4,810 6,990 14,910 111,200 $32,070 345,260 130,640 36,910 100,450 22 230 14,000 26,490 11,990 13,680 1,890 $98,080 1,071,000 280,500 45,660 265,500 106 000 44,380 7,080 5,700 12,940 61,620 $3 980 263,240 126,780 77 640 67,820 30 980 13,000 12,000 12,000 12,920 7,500 1,734,995 421,210 2,095,470 735,610 1,998,460 627,860 Received from. .. Returned to. $55 920 1,042,325 185,505 16.810 264,500 72 500 28,100 3,610 4,450 58,580 2,695 Fifties. Federal Reserve Bank of— Received from. Twenties. Hundreds. Returned to. Received from. Total. Returned to. $19,750 213,450 57,500 8,350 20 350 29,600 6,600 1,400 1,250 1,900 6,500 $1,200 28,350 11,150 11,400 2,500 13,050 1,000 350 1,400 650 1,300 $7,800 198,400 27,500 600 8,100 5,900 1,600 100 600 1,000 3,000 $1,000 158,500 2,600 2,500 3 000 57,400 100 300 366,650 72,350 254,600 226,400 100 900 Received from. Returned to. $263,900 3,680,305 798,005 101,100 862 450 312,000 122,080 17 000 18,990 89,330 185,015 $50 500 993,100 336,670 145,200 268 520 128,610 34,250 44 390 34,240 33,750 14,200 6,450,175 2,083,430 The following table gives the denominations and aggregate amounts of Federal Eeserve notes received since the organization of the bank, the amounts on hand, and the aggregate amounts returned to the Comptroller of the Currency for destruction. Over $60,000,000 was in the hands of the public at the close of the year, as compared with DISTRICT NO. 407 -RICHMOND. $20,000,000 outstanding December 31, 1916. In accordance with a suggestion from the Federal Eeserve Board, this bank has authorized the maintaining of a reserve supply of unissued Federal Reserve notes at a minimum of $40,000,000 and a maximum of $61,000,000. Number of Federal Reserve notes, by denominations and aggregate amounts, received, issued by the bank, and returned to the comptroller since organization and on hand at close of business Dec. 31, 1917. Number of notes. Fives. Tens. Twenties. Fifties. Hundreds. Aggregate amount. Received from comptroller 3,388,000 2,564,000 1,336,000 104,000 36,000 $78,100,0^0 Received from Federal Reserve Bank... 280,000 213,500 14,200 2,800 98,250 6,490,000 Received from Treasurer of United 44 States (fit notes) 1,270 220 20 2,860 35,600 Received by comptroller from Treasurer of United States for destruction and credit of Federal Reserve agent's account (unfit notes): ' From other Federal Reserve Banks.. 7,000 2,475 200,000 16,100 Direct from reporting Federal Reserve Banks and from other sources 1,132,569 494,295 181,431 15,875 2,617 15,289,865 Total 4,819,529 3,280,065 1,618,376 134,119 41,437 100,115,465 Issued to Federal Reserve Bank 3,638,860 2,706,770 1,426,470 110,244 34,820 82,785,600 Returned to Comptroller of the Currency for destruction, including notes returned by United States Treasurer for credit of Federal Reserve agent's ac183,906 15,875 2,617 count 1,148,669 501,295 15,489,865 Notes on hand at end of month 32,000 72,000 8,000 8,000 4,000 1,840,000 Total 134,119 41,437 100,115,465 Actually destroyed, per "Washington certificates 182, 751 15,739 2,599 1,140,917 496, 359J In hands of public (including Federal 80,261 29,401 Reserve Banks) 2,215,083 1,995, 640* 1,145,249 72,000 4,000 32,000 In hands of Federal Reserve agent 8,000 8,000 Total received from comptroller... 3,388,000 2,564,000 1,336; 000 104,000 36,000 4,819,529 3,280,065 1,618,376 60,889,950 1,840,000 15,370,050 78,100,000 NOTE.—Present cost of Federal Reserve notes: Per M pieces. Per $1,000. At Washington Postage to Richmond Insurance.. $9.14 .81 .53 $0.87 .08 .05 Total... . 10.48 1.00 A supply of Federal Eeserve notes is maintained at the bank in the custody of the Federal Eeserve agent. These notes are shipped to him by the Federal Eeserve Board upon his request, are receipted for jointly by him and a representative of the bank, and are kept under the joint control of himself and the bank. Under this arrangement, they are always promptly available for use under the provisions of the Federal Eeserve act. Notes and bills discounted held by the Federal Eeserve agent as security for Federal Eeserve notes are indorsed by him 10 days in advance of maturity to the Federal 408 ANNUAL REPORT OF THE FEDERAL RESERVE BOARD. Eeserve Bank for collection for his account, and are accounted for to him by the bank as they mature. Federal Eeserve notes have been issued during the year in considerable amounts in exchange for gold, but chiefly for the use of member banks in exchange for notes and bills discounted for them. An increase of $4O3OOO,OOO in the amount outstanding is tangible evidence of the credit facilities extended to member banks, and through them to the business interests of the district. The abundant security for these Federal Eeserve notes placed by the bank in the hands of the Federal Eeserve agent (the representative of the Federal Eeserve Board) in the shape of notes discounted and gold, makes them absolutely good, to say nothing of the fact that the Federal Eeserve notes are the direct obligations of, the Government, The law provides that the amount of gold held as reserve for these notes shall be not less than 40 per cent, and the bank is always, therefore, in a position promptly to redeem its notes whenever they are presented. INTERNAL MANAGEMENT OF THE BANK, The growth in the transactions of the bank has necessitated during the year an increase in the number of officers, members of the staff, and other employees from 63 to 110, and even with this increase, it has been necessary for a large majority of the officers, staff, and force to work overtime. This has involved constant night work for weeks at a time. The service has been rendered cheerfully and ungrudgingly. The chief cause for this overtime work has been due to the difficulty of securing efficient help, which has been greatly in demand, this demand to a considerable extent being due to the draft to direct Government activities and indirectly to the large volume of business placed by the Government with large manufacturers and producers. Women are discharging a growing percentage of bank work, just as they are doing in many industrial lines, and lack of training has naturally had to be overcome. Of the entire bank force of 110, 49 are women. The difficulty of securing experienced men as heads of departments for the purpose of giving this necessary training has been a leading phase of the situation, but by earnest cooperation of all employed, the situation has been satisfactorily solved, and our force to-day is better rounded, better equipped, more efficient, and better qualified than ever before to discharge its duties and responsibilities. Some further adjustments are necessary, particularly with the view for providing the necessary force for opening our Baltimore branch early in the new year. At the beginning of the year Mr. James A. Moncure was reappointed class C director for a period of three years, and reappointed DISTRICT K"0. 5—BICHMOKD. 409 deputy chairman and deputy Federal Reserve agent. In accordance with amendments to the Federal Reserve act passed in June, the office of deputy Federal Reserve agent was abolished and Mr. Moncure's appointment to this position terminated. He was reappointed OB July 25 deputy chairman for the remainder of the year. At the opening of the year. Mr. Caldwell Hardy was reappointed chairman of the board and Federal Reserve agent. The following officers were reelected for the year 1917: Mr. George J. Seay, governor; Mr. Charles A. Peple, deputy governor ; Mr. George II. Keesee, cashier and secretary of the board and executive committee. Mr. J. W. Norwood was reelected member of the Federal Advisory Council and attended meetings of the Federal Advisory Council held in February, April, September, and November. On May 17, the bank was designated as fiscal agent for the United States and the activities of the bank under this appointment are elsewhere reported. The establishment of a branch bank at Baltimore was authorized by our board after due consideration, and received the approval of the Federal Reserve Board. A committee, consisting of Messrs. Seay, Brtrton, and Hardy, was appointed by our board with authority to procure satisfactory banking quarters for the branch at Baltimore, and the building of the former National Mechanics Bank of Baltimore (which was consolidated with the Merchants National Bank) has been acquired for the Baltimore branch at a cost of $200,000. The necessary alterations and improvements are being made and it is anticipated that the branch will be opened early in the new year. Deputy Governor Peple and Auditor Cadwallader visited some months ago the Federal Reserve Bank of Atlanta and the New Orleans branch, with a view to studying the methods there in use and formulating plans for the organization of our proposed branch. In May, a plan for inter-reserve rediscoxinting was inaugurated by the Federal Reserve Banks, at the suggestion of the Federal Reserve Board. This was done with the view to mobilizing resources at the point of the greatest demand, through the cooperation of those of the Federal Reserve Banks having at the time the largest amount of available resources. Under this arrangement, our bank bought during the past few months from one of the other Federal Reserve Banks $5,000,000 of bankers' acceptances. In June Mr. Thomas Marshall, jr., and Mr. C. V. Blackburn were appointed assistant cashiers. Mr. Marshall has special charge of correspondence in regard to discounts, and Mr. Blackburn is in charge of our transit department. In July Mr. M. F. H. Gouverneur, class C director, resigned, owing to his removal from the district, creating a vacancy to be filled byFRASER appointment by the Federal Reserve Board. Digitized for 410 ANNUAL EEPOET OF THE FEDERAL RESERVE BOARD. BANK BUILDING. Our main quarters, at 1109 East Main Street, are inadequate and anything but modern. Although we are occupying five floors in the building, the extension of our activities under the appointment as fiscal agent for the United States Government necessitated our acquiring the street floor and basement of the adjoining building, 1107 East Main Street, in addition to which we have rented the main banking room of 1016 East Main Street, the building formerly occupied by the Richmond Banking & Trust Co. Our need for vault space increased to such an extent that we were unable to secure the necessary space among the other banks, to say nothing of the inconvenience and risk of transporting securities back and forth, and we recently had completed and installed a new and modern vault of moderate size in the fiscal agent department. This has proven of invaluable service and simplified to a marked degree our difficulties in this direction. The removal of this vault to our proposed new building at the corner of Ninth and Franklin Streets, facing Capitol Square, is contemplated. Having acquired last year the site referred to above, we proceeded early in the year with specifications for a competition for designs for the proposed new building, the competition being under the direction of Mr. Waddy B. Wood, of Washington, D. C. Eight architects, or firms, entered the competition and the designs were submitted in April. After a careful consideration of all plans by a jury of award, consisting of three of our officers and directors and two prominent architects, a design was selected which was made by Messrs. Sill, Buckler & Fenhagen of Baltimore, to whom was awarded a contract for the plans for the building. Messrs. Carneal & Johnston, with A. C. Bossom, of New York, associate, were awarded the second prize of $500, and Messrs. Parker, Thomas & Rice, of Baltimore, were awarded the third prize of $250. The plans were selected by the jury without knowledge as to the author. The architectural design for the building has been completed, the details of the interior have received much consideration and study and it is hoped to have the whole design completed at an early date. The functions of the bank are new and unusual, necessitating much study and consideration in arranging the interior details. Thomas Bruce Boyd (Inc.), engineers, of New York, have been engaged in conjunction with our architects on these details, and it is hoped to construct an attractive and monumental building, wTell adapted to the use of the bank. GENERAL. The activities of the Government in the district at Charleston, Henry, and the adja'cent waters in Virginia, ,W. Va., Norfolk, Cape DISTRICT NO. 5 RICHMOND. 411 and Army and aviation camps at different points, have become an active factor and element in the development of the district. The expenditure of vast sums in connection with these developments has stimulated the demand for material and labor. The maintenance of them in the future will put in circulation in the district large sums for labor and supplies. Parties in this district desiring farm loans should apply to the Federal Land Bank at Baltimore if located in Virginia, West Virginia, Maryland, and the District of Columbia, and to the Federal Land Bank at Columbia if located in South Carolina and North Carolina. There has been but .one small and unimportant member bank failure in the district during the year. It is noted that some of our packing houses maintaining large distributing plants throughout the country, including this district, are arranging lines of credit with our member banks predicated ap-* parently upon balances carried with these member banks. This indicates a desire to finance in the district the approximate volume of their business therein. The pursuit of this method will distribute their financing more evenly throughout the country instead of its being concentrated at the location of their main office, and we regard it as a healthy sign. Earnings and expenses for the year have been satisfactory, as indicated by a payment to the Government of over $116,000—one-half of our undivided profits to date. This result was reached through the extension of liberal accommodation to our member banks at minimum prevailing rates. A moderate proportion of our loans to member banks have no doubt been due to Government financing, and the amount of this will no doubt be maintained and probably increased as other loans are issued. Even in the event, however, of peace and the curtailment or elimination of further Government financing, we anticipate that the normal business activities of the district will make a demand on us for loans, which will maintain our earning power on a satisfactory basis. The developments in the district have been highly satisfactory and the general outlook is favorable. 34365°—18 27 DISTRICT NO. 6—ATLANTA. M. B. WELLBORN, Chairman and Federal Reserve Agent. Substantial progress has been made during the year 1917, in broadening the activities of the Federal Reserve Bank of Atlanta proper, and in the extension and development of the fiscal agency department in its connection with Government financing. The resources of the institution have grown from $38,337,736.01 on December 30, 1916, to $121,798,371 on December 31, 1917; the bank has paid a full 6 per cent dividend to date; and in accordance with the act has paid to the United States 50 per cent of its net earnings, in amount, $40,000, as a franchise tax, the remainder being carried into a surplus fund. The member banks have more extensively availed themselves of the rediscounting privileges; the " rediscounts and paper bought " on hand December 31, 1917 being $21,020,900, as compared with $7,411,829.98 as of December 30, 1916. The increase in acceptances offered shows a better understanding«of the advantages of this class of paper. The institution has strongly encouraged the use of acceptances and looks for still greater offerings in the coming year. FINANCIAL, RESULTS OF OPERATION. As to earnings, expenses, dividends, etc., a comparative statement, marked "Schedule No. 1," is attached hereto, showing earnings and expenses for the calendar years 1916 and 1917, and amounts of net earnings; also amounts required to pay the 6 per cent dividends. Comparative balance sheets for December 30, 1916 and 1917, Schedule No. 2, attached, shows combined results of the Atlanta office and the New Orleans branch. Profit-and-loss statements for 1917 are shown in Schedule No. 3, attached. GENERAL BUSINESS CONDITIONS. The year 1917 opened in a period of general activity in all commercial lines, which has increased monthly. Wages have advanced with rising prices and business has been restricted only by inability 413 414 AHNUAL EEPOET OF THE FEDERAL EESEEVE BOARD. to secure goods and transportation facilities, with certain limitations of raw materials and labor. The numerous Army camps in the district have added materially to the retail and wholesale business. Eailroads have been handicapped in handling both passengers and freight, and there has been more or less congestion during the entire year. The closing of the }^ear finds industrial plants operating at full speed, with the exception that mills in some localities are operating on short time on account of lack of sufficient coal supply. Excellent seasons prevailed during the year and the agricultural producer was rewarded with bountiful harvests. The district produced the largest crops of food and feed stuff in its history. The cotton crop was up to normal and high prices prevailed for all farm products, giving this district a full measure of prosperity. Among the events of special business interest is the revival and enlargement of the shipbuilding industry at Savannah, Brunswick, Mobile, Pensacola, New Orleans, and other Gulf points. The labor situation at the end of the year does not present a very promising outlook. Many of the laborers have been drafted into the Army and with permanent emigration of many negroes to the North in the early part of the year, and the anticipated additional draft, the situation presented is a rather serious one, viewed from the future. Despite the great commercial and industrial activities a plentiful supply of loanable funds have been available throughout the year, and bank rates have been low and steady. The resources of the banks have been largely increased. FEDERAL RESERVE BAXK AND MEMBER BANKS. The most pleasant relations exist between the Federal Reserve Bank and the member banks, and the spirit of cooperation grows stronger with a clearer understanding of the advantages of the system, and the dissipation of the early fear of "red tape.'5 There is still some difficulty in obtaining credit statements of customers from the smaller member banks. The member banks, even in the smaller towns, appear to be able to more clearly judge the eligibility of paper from the Federal reserve standpoint, and it is seldom that paper sent in for rediscount has to be returned for reasons affecting its eligibility. During the year only one bank was closed by the Comptroller of the Currency. This bank had a capital and surplus of $1,250,000, and to date has paid the creditors 55 per cent. Five national banks, with a total capital and surplus of $2,245,000 liquidated in* order to consolidate with other national ban'ks. Thirteen national banks liquidated during the year, representing a capital and surplus of $802,000. Seventeen State banks in this district, representing a total capital and surplus of $13,281,000, became members of the Federal Keserve System. DISTRICT NO. 6—-ATLANTA. 415 Paid-in capital of the Federal Reserve Bank of Atlanta amounted December 31, 1916, to $2,450,000, and on December 31, 1917, $2,812,750. On December 31,1916, the capital and surplus of member banks in the sixth Federal Reserve district amounted to $81,666,667, and on December 31, 1917, to $92,408,300. The stock of the Federal Reserve Bank of Atlanta shows a net increase of 6,445 shares in the year 1917. DISCOUNT ACTIVITIES OF THE FEDERAL RESERVE* BANK. Schedule 4, attached hereto, shows the discount operations of member banks during the first half of the year, which were about normal as compared with previous years; but since the latter part of August there has been a steady increase in offerings; the highest point being reached on December 7, with a total of $22,754,273. MEMBER BANK DEPOSITS EXCESS DEPOSITS OVERDRAFTS. Schedule No. 5, attached hereto, shows the gross balances, overdrafts, required reserves, uncollected balances, and deficient reserves, by States, in the district as of close of business December 31, 1917. REPORTS AND EXAMINATIONS. A splendid spirit of cooperation exists between the officers of this bank and the chief national bank examiner of the district and has proven highly valuable. Frequent conferences are held and views exchanged of value to both offices. Examinations preliminary to admission of a number of State banks entailed considerable work on the auditor of the Federal Reserve Bank of Atlanta. It was decided at the November meeting of the board of directors to accept the examinations of State bank members as conducted by the State authorities, and reports of all such examinations are being mailed to the Federal Reserve agent. During the year one bank was closed on orders from the Comptroller of the Currency; and while the institution had. large rediscounts with the Federal Reserve Bank at time of closing, the indebtedness was adjusted without loss to the system. Several examinations of the Federal Reserve agent's department and one general examination of the bank and the branch at New Orleans were conducted by the Federal Reserve Board examiners during the year. THE FEDERAL RESERVE BANK AND THE PUBLIC. For the first three months of the year there was a very small amount of discounting. During the next three months there was an 416 ANNUAL KEPORT OF THE FEDERAL RESERVE BOARD. increasing demand for accommodation from our member banks, largely due to the agricultural conditions in our district. The bankers, especially those of the interior, were carrying out the wish of the Government in aiding the farmers to plant extraordinary crops. The banks of the district in general came to the relief of the farmers and aided them very materially in this respect. Earnings of the bank were largely affected by the issuance of United States Treasury certificates of indebtedness, in. whose purchase the Federal Reserve Bank of Atlanta participated. Another source of revenue was found in the fact that the member banks, who had bought of the first issue of bonds, qualified as depositories of funds derived from that source, and just as these funds were called in the member banks, to a certain extent, discounted paper to meet the withdrawals. However, it was not until August that our earnings increased materially, and since that time they have increased. Several causes, one of which was the high price of cotton, entered into this increased demand, and called for a great deal of money to market the crops. The banks availed themselves of the amendment to the Federal Reserve Act, which enlarged their acceptance powers. A considerable volume of cotton was handled in that way, and in some cases wheat and other commodities were handled by the use of these bankers5 acceptances. The member banks of the district subscribed freely to the second issue of the Liberty loan bonds, qualified as depositories, and when the deposits were called in they in many instances rediscounted with us to meet the withdrawals. All of these sources produced a good revenue for this bank, and enabled us at the close of the year to write off all the furniture and fixtures, set up a depreciation fund sufficient to cover any depreciation of securities, declare a dividend on our capital stock up to December 31, 1917, and pay into the Treasury of the United. States a like amount as a franchise tax covering the operations of this bank up to this time. Present indications point to a very active money market for the coming year. We believe that the revenues of the bank will keep pace with those of the past six months. We anticipate that there will be another offering of bonds to the public, and as noticeable in previous issues, our reserves will naturally decline during such period. We may also expect redemption of a considerable number of our bills during the months of January, February, and March, and, as these will be retired at 100 per cent gold, our reserve condition will naturally decline. From the present conditions, we need not be surprised to see our reserves reduced to probably 50 to 55 per cent, and for a short period of time they may drop lower than 50 per cent. DISTRICT NO. 6 OPEX MARKET OPERATIONS ATLANTA. 417 TRADE ACCEPTANCES. The Federal Reserve Bank of Atlanta has not been in the open market to purchase bills from nonmember banks since July and August of this year. Forecasting at that time that we would need our reserve to handle the business offered us by our member banks, we have kept out of the open market except for the purchase of $175,000 school warrants. While it is true that our statement shows a very satisfactory volume under the head " open-market operations," yet in the, true sense of the term " open-market" this is not the case. The items that we are carrying under that head are purchases of acceptances secured by cotton and other readily marketable commodities stored in warehouses, covered by insurance. These are acceptances of our member banks to purchase for the account of the drawers. This we consider a member bank operation, and though these papers are accepted by member banks they are not indorsed by member banks, and must be carried in the " open-market operations " column. We regard this as excellent paper, due to the fact that we are in control of the commodity against which the acceptance is issued. There has been only a limited development of trade acceptances in this district. However, a campaign of education is being conducted by credit men's associations in all the larger cities of the district in behalf of the use of trade acceptances. There has been a gradual increase, and we believe this business will continue to increase in consequence of the efforts that are being put forth. PUBLIC RELATIONS WORK. Considerable public relations work was conducted during the year. Monthly reports of business conditions, weekly bank reports, and items of general banking interest are furnished to the press. The press of the district have evidenced a deeper interest in the Federal Eeserve system than at the outset, and generously give of their space to its promotion as being of great benefit to the general public welfare. They more frequently bring to the public mind the value of the system in Governmental finance and its practicability in rediscount facilities. FEDERAL RESERVE BANK AND NOTE ISSUE. While the amended Federal Reserve Act permitting the issuing of Federal Reserve notes direct against gold is an added asset, the bank has not yet strongly felt the need of this policy, inasmuch as rediscounting has kept pace with the growing volume of outstanding Federal Eeserve notes. In view of the high price of cotton and other products of farm and factory, the demand for money has been correspondingly increased. & ANXTJAL REPOKT OF THE FEDERAL RESERVE EOARD. The increased demand for Federal Reserve notes has caused the Federal Eeserve agent at Atlanta to double the supply of notes kept on hand at Washington for use of this bank, from $50,000,000 to $100,000,000, in order to insure a plentiful supply at all times. The chief demand has been for fives, tens, and twenties; there being practically no call for fifties or hundreds. Schedule No. 6, made a part of this report, shows the denominations of Federal reserve notes issued and the cost of these notes. The outstanding Federal reserve notes on December 31, 1917, amounted to $66,867,420, as compared with $25,919,530, December 30, 1916, and were secured by $16,178,637 collateral, and $50,701,320 gold in the hands of the Federal Eeserve agent. The notes issued are not being returned in proportion to the usual after-crop movement period of previous years and with continued high prices and great Government activity in our district a normal return is not looked for. CLEARINGS. Schedule No. 7, made a part hereof, shows the transit operations for the year, by months, together with the cost of operation and revenue. Under the amendments to the Federal Eeserve Act, member banks are permitted to open checking accounts with Federal Eeserve Banks solely for the purpose of making use of clearing facilities, and in this way new par points have been added to the list. Further to extend the number of par points, we have permitted State banks to remit to us in eastern exchange in payment of letters— it being impossible to get any of these in Atlanta exchange, since the banks that have agreed to remit in some cases had no Atlanta account. In doing this, however, we of necessity had to give the same privilege to our member banks and in this way our " float" has increased to a certain extent. We believe that later on it will be possible to arrange with our member banks to send in their exchange on eastern points for credit and pay for items sent them either by remitting us check on ourselves or authorizing us to charge their account with outstanding letters, thus reducing the amount of " float" carried. Another feature that has encouraged the use of the par collection facilities of this bank has been that beginning with September 1 we put into effect a rule whereby member banks are permitted to clear through us, without any charge whatsoever, checks to the number of 500 each month; over and above 500 being charged for at the rate of 11 cents per item. An analysis of our transit department, prior to the interruption of the mail service on account of handling war supplies, shows that we were clearing points in the district on an average of two and three-quarters DISTRICT NO. 6 ATLANTA. 419 days. Tills, however, has shown an increase within the last few months, requiring at the present time something like three days, or more, and it is possible that we may have to increase our time of deferred availability on items in this district, unless the mail service improves. The number of items handled shows a steady increase, and taken as a whole the system is working with general satisfaction. STATE BANKS. The State bank interest in the Federal Reserve System, culminated in the addition of a number of the larger banks in this district which quickly came into the system in response to the President's appeal. The State banks are better informed as to the working of the system and the advantages accruing from membership therein. The President's appeal forcefully drew public attention to the necessity of strengthening the Nation's financial structure through war's demands, and the advisability and practicability of unification for after-war world financing. The recent amendments to the Federal Reserve Act, permitting State bank members to retain their State charters and exercise all statutory rights; to continue to make loans in excess of 10 per cent of their capital and surplus to any one borrower; and the acceptance by the Federal Reserve Banks of examination as conducted by State banking authorities have been instrumental in the change of view. The State banks in the district eligible for membership in the system total 534, representing a total capital and surplus of $47,640,437; divided into groups as follows: Banks with capital and surplus not over $30,000 Banks with capital and surplus $30,000 to $75,000, inclusive Banks with capital and surplus over $75,000 $3,652,550 12,800,387 31.187,500 The eligible State banks are as follows: Alabama, 110; Florida, 47; Georgia, 237; Louisiana, 64; Missisippi, 20; Tennessee, 56. " The following State banks joined the Federal Reserve Bank of Atlanta in 1917: Bank. Marion Central Bank Citizens Bank & Trust Co American Trust Co Volusia County Bank Citizens Bank American State Bank.' Central Bank & Trust Corporation. Trust Company of Georgia Brunswick Bank & Trust Co Citizens & Southern B ank Savannah Bank & Trust Co Union Bank of Pike Hibernia Bank & Trust Co Interstate Bank & Trust Co Metropolitan Bank Canal Bank & Trust Co Jefferson Trust & Savings Bank Location. Capital and surplus. Marion, Ala., Tampa, Fla. Jacksonville, Fla., DeLand, Fla West Point, Ga.. Athens, Ga , Atlanta, Ga , .do. Brunswick, Ga Savannah, Ga .do. Summit, Miss New Orleans, La.. .do do.. do Gretna, La 5150,000 750,000 210,000 200,000 50,000 120,000 1,300,000 2,000,000 172,000 2,000,000 1,200,000 29,000 2,500,000 1,250,000 600,000 700,000 50,000 420 ANNUAL REPORT OF THE FEDERAL RESERVE BOARD. EFFECT OF STATE BANKS REMAINING OUT OF SYSTEM. If the eligible State banks continue to remain out of the Federal Eeserve System, it will materially affect the strength of the Federal Reserve Bank of Atlanta, because in the event of a great financial disturbance the Federal Reserve Bank of Atlanta will necessarily have to come to the assistance of the State banks through the medium of the member banks who act as their correspondents in the district. It must be borne in mind that the eligible State banks in the sixth Federal reserve district that have not joined the system outnumber the member banks about 33 J per cent; and in the event of trouble they would certainly call on their correspondents in the district for help, and we in turn would have to aid our member banks. It is imperative that some means be found to bring into the system those State banks which to date have refrained from making application for membership either through indifference or lack of interest in the conditions that confront us. EFFECT OF DISCOUNT-RATE POLICY OF THE BANK UPON GENERAL MARKET RATES. The discount policy of our bank has been an appreciable influence upon the general market rates of the district. When we advance rates, our advance, as recently evidenced, has materially stiffened rates charged by member banks, especially in the larger cities of the district. The rates of the banks in the smaller cities and towns, as a general thing, are little affected by a change of rates as fixed by the reserve bank, though of late we have noticed a tendency in cities ranging in population from 15,000 to 30,000 to offer lower rates to their customers. It is also quite noticeable that when we increase our rates it has the effect of causing member banks to reduce their loans, thereby contributing to a more healthy condition in the matter of credits. INTERNAL MANAGEMENT OF THE BANK. Little change has been made in the internal management of the bank as to division of work between the bank proper and the office of chairman of the board and Federal Eeserve agent. At the time of the last yearly report the force consisted of 51 employees, including officers, but due to the increased work in the bank itself and added work in connection with the fiscal agent's department the force was increased to 135. Out of the original 51, 15 enlisted in the Army and Navy and the difficulty in replacing these experienced men reduced the efficiency of the institution. In replacing these men it has been necessary to pay larger DISTRICT XO. 0 ATLANTA. 421 salaries, and the higher cost of living has necessitated a general increase in the pay of all employees. Mr. M. W. Bell, assistant cashier, has temporarily been relieved of his duties and detailed to act as manager of the fiscal agent's department, embracing the bond issue division, conversion division, securities division, and the war-savings and thrift stamp division. Mr. Jos, M. Slattery was appointed assistant Federal .Reserve agent and elected secretary to the board of directors. Mr. W. H. Toole resigned as a class A, group 3, director in October. ±vo election was held to fill the vacancy until December 6. Mr. P. IT. Saunders resigned as a class B, group 1, director in May, and Mr. Edgar B. Stern, of New Orleans, La., was elected to fill the vacancy. At the December election Mr. P. E. Kittles, of Sylvania, Ga., was elected a class A, group 3, director, and Mr. Edgar B. Stern reelected a class B, group 1, director, both for a term of three years. After an absence of several months on special duty Mr. J. B. Pike returned to assume his duties as cashier of the bank. Mr. Jos. A. McCord was reelected governor of the bank for the year 1918. Mr. W. H. Kettig, of Birmingham, Ala., was reappointed a class G director for a term of three years, ending December 31, 1919. BANK QUAKTEES AND VAULT FACILITIES. At the June meeting of the board of directors it was voted to authorize the erection of a building on the Marietta Street lot, previously purchased, at a cost not to exceed $170,000, on a basis of labor and materials in prewar times. Work was begun on the excavation and building during July, the building to be ready for occupancy prior to August, 1918. The building will be two stories, reinforced concrete with granite exterior, fireproof, and equipped with all the latest devices for protection. Work is progressing well and it is expected that the building will be ready within the allotted time* Contracts for the vaults were let separately. Considerable investigation and thought were given to the matter of vaults, and it was determined to erect vaults along the latest lines of construction, with all the improved electrical burglar-proof devices. The present quarters of the bank are wholly inadequate, both in floor space and vault room; and it has been necessary to rent additional space in the office building of our present location, and vault space in outside banks. NEW ORLEANS BRANCH OF THE FEDERAL RESERVE BANK. The number of banks allotted to the New Orleans branch has been increased during the year by the addition of four banks in the city 422 ANNUAL REPORT OF THE FEDERAL RESERVE BOARD, of New Orleans and two outside of the city, representing a capital and surplus of $5,129,000. Little change has been made in the operation of the branch, and the results have been satisfactory during the year. In order to permit of a more intelligent comparison of the operating results of the branch and the parent bank, an agreement was reached as to the proper adjustment of administrative expenses. The branch bank serves the territory allotted to it in the same manner as the parent bank, subject to supervisory control of the parent bank. It retains all collateral deposited for Government deposits; holds all paper discounted and paper bought, and handles subscriptions to Treasury certificates and Liberty loan bonds as a separate unit. Federal Reserve notes are kept on hand in the United States subtreasury and issued on order from the Comptroller of the Currencjr by request of the Federal Reserve agent at Atlanta. The clerical force of the branch consists of 17 employees. THE FEDERAL RESERVE BAXK AND THE GOVERNMENT. The exigencies of Government financing in connection with the war has called into play to the fullest possible extent all of the admirably designed machinery of the Federal Reserve Banks, which has been employed in the handling of the various issues of Treasury certificates of indebtedness and subscriptions to the first and second Liberty loans of 1917. The Federal Reserve Banks are required by provision of the Federal Reserve Act to discharge, in the discretion of the Secretary of the Treasury, the functions of fiscal agent of the LTnited States Government, and while the authors of the Federal Reserve Act probably did not have in view the necessity for using the system to the extent that war conditions have incurred, and preparations were not made in advance for the transaction of business in volume such as the war financing has developed, the Federal Reserve Banks have been equal to the responsibilities and have developed organizations and perfected machinery for the handling of financial operations that have exceeded any previously experienced by Government agencies or departments since the foundation of our Government. The Federal Reserve Bank of Atlanta and its New Orleans branch have, without stint or restraint, given to the Government the use of their facilities in successfully handling and discharging the responsibility of properly putting before the public—through the instrumentality of its member banks, nonmember banks, trust companies, and other agencies in the sixth Federal Reserve district—every DISTRICT XO. 6 ATLANTA. 423 • to and paying for certificates of indebtedness, Liberty loan bonds, war-savings, and thrift stamps, the sale of which securities have approximated $200,000,000 from April 25 1917. to the end of the year. The officers and employees of the Federal Reserve Bank of Atlanta and its New Orleans branch, assisted by numerous public-spirited citizens, have worked with patriotic devotion to make war financing a success in the district; and while the results accomplished did not largely surpass expectations, they exceeded the anticipation of those in position to know the conditions financially and what the people of the district might be reasonably expected to do in lending to the Government the use of their financial resources in investing in Government securities. It has been necessary to increase the clerical force of the bank about 150 per cent during the past six months. This involved the organization of seven new departments and the employing of a clerical force almost entirely untrained and inexperienced in this character of work. The matter of subscriptions to first and second Liberty loan bonds are about completed, but the details of conversion, sale of war savings certificates and thrift stamps and the formulation of plans for the handling of new issues of Government securities are engaging the attention of these new departments. The experience gained has been invaluable to the Federal Reserve Bank and will enable it to render much more efficient and effective services in the future. Our facilities and organization will be devoted with even greater patriotic devotion to the interests of our Government as the financing of the war progresses; and we know that the banks and other organizations, as well as the patriotic citizens who have given so freely of their time and talents, can be counted on to make additional sacrifices in the future. LIBERTY LOAN ORGANIZATIONS. The first Liberty loan campaign opened on May 1-1 and closed on June 15, 1917. The second Liberty loan campaign opened on October 1 and closed on October 27, 1917. The district was thoroughly organized on the plan of subdividing each State into a number of zones, with a chairman in charge of each zone. These zones reported direct to the Liberty loan committee for the entire district, with headquarters in the Federal Reserve Bank, Atlanta, Ga. 424 AKXUAL REPORT OF THE FEDERAL RESERVE BOARD. SUBSCRIPTIONS TO LIBERTY LOAN BONDS. First Liberty loan: Subscription $57, 878, 550 Allotment $46, 283, 150 Number of subscriptions bandied by Federal Reserve Bank of Atlanta— Nonmember banks 636 Member banks 397 Individuals subscribed direct through this bank 1, 632 Estimated number of purchasers of the first Liberty loan 150. 000 Second Liberty loan: Subscription $92, 140,000 Allotment $83, 065, 600 Number of subscriptions handled by Federal Reserve Bank of Atlanta— Nonmember banks ' 878 Member banks , 484 Individuals subscribed direct through this bank 398 Estimated number of purchases of the second Liberty loan 275. 000 Total amount of certificates of Indebtedness of all issues allotted to subscribers in the sixth- Federal Reserve district. Amount allotted to subscriber. $25,000 and less Over $25,000 to $50,000 Over $50,000 to $100,000 Over $100,000 to $250,000... Over $250,000 to $500,000.... Over 6500,000 to $1,000,000., Over $1,000,000 , Total. Number of! amounts subscribers I Total allotted to in each I each group. group, i 454 112 91 60 19 3 6 $5,333,000 5,666,000 8,388,000 10,713,000 7,017,000 2,500,000 8,848,000 748 48,495,000 The extent of Federal Reserve Bank's ownership of Treasury certificates and Government bonds amounts to . $8, 281, 900. The amount of loans made by Federal Reserve Bank upon United States bonds and Treasury certificates as collateral .amounts to_ 22, 772, 600. There are 55 special employees engaged in the bond department, and there is attached as a part of this report a statement showing the expenditures in the conduct of Liberty loan operations, and the extent of the bank's reimbursement by the Treasury Department for the outlay—Schedule No. 8. The subscriptions for the Liberty loan bonds did not materially affect finances of either banks or business houses in the district. Deposits are greater now than they were before the first Liberty loan, eliminating the amount of Government deposits still held by banks as a result of the second Liberty loan. The expenditures of the Government for materials and provisions bought in the district about offset Government withdrawals as a result of purchase of Liberty bonds. DISTRICT HO. 6 ATLANTA. 425 SCHEDULE 1.—Con)partitive statement of earnings and expenses. 1917 1916 $231,635. 57 102,311.56 $141, 774. 27 52. 473. 79 140,820. 48 3, 629. 26 25,568. 99 17,134. 05 725. 41 101.85 COMBINED EAENINGS. Bills discounted and bought: Bills discounted—members Acceptances bought in open market Investments: United States securities Municipal warrants Profits realized on United States securities Transfers—net earnings Commissions received Purchase of United States bonds Deficient reserve penalties (including interest) Sundry profits Total earnings.. 153.07 1,, 530. 27 13, 526. 88 6, 758. 45 "26" 185.'94 541, 385. 24 261, 944. 60 9 442. 27 466. 63 299. 98 8; 546. 82 357 1, 095. 89 182 60 36,470. 93 37,892. 48 31,016.63 31,317.33 3.258.15 2, 790. 00 2,038. 00 2,251. 46 1, 299.44 1,400. 00 EXPENSES. Assessments, expenses Federal Reserve Board., Federal Advisory Council Governors' conferences Federal Reserve agents 7 conferences Salaries: Ofiicers Clerks Special officers and watchmen Directors' fees Directors' per diem Directors 3 traveling expenses Officers and clerks traveling expenses Legal fees Rent Taxes and fire insurance Telephone Telegraph Postage Expressage Insurance and premiums on fidelity bonds Light, heat and power Printing and stationery Repairs and alterations All" other expenses 3, 424.10 2,188. 08 2,540. 00 2, 471. 42 1,066.94 600. 00 12,152. 92 1, 210. 64 535. 05 842. 86 6,825. 77 2, 483. 33 1,801. 90 174. 67 7,062. 67 27.86 16, 494. 72 11,572.18 348. 69 569. 63 4,569. 70 661. 87 1,192. 23 141. 78 4,240. 33 205. 55 7, 427. 05 Total expenses of operation Cost of Federal Reserve notes issued Cost of Federal Reserve notes unissued (on hand) Depreciation: Furniture and equipment Bank premises Gross earnings Less total expenses, SCHEDULE NO. 1A.—Statement of capital stock and dividend' of the Federal Reserve Bank of Atlanta. Number Paid in capiof banks. tal stock. State. Alabama Florida Georgia . Louisiana Mississippi Tennessee Total . . . . Accrued dividend to Dec. 31, 1917. 95 57 107 25 18 90 $544, 200.00 319,100. 00 854. 250. 00 48i; 450.00 116, 600. 00 497,150. 00 $32,271. 65 16, 895. 47 39,696. 75 20,530. 75 6,945.41 29,125. 58 392 2,812, 750. 00 145, 465. 61 426 AKNUAL REPORT OF THE FEDERAL RESERVE BOARD. SCHEDULE NO. 2.—Statement of the condition of the Federal Reserve Brink of Atlanta. Dec. 31, 1917. Dec. 30, 1916. COMBINED RESOURCES. Bills discounted—members Member banks' collateral notes Acceptances bouglit in open market. $11,805. 589.16 2,628. 250. 00 6,497^ 061.67 $2,414,133.02 550,000.00 4,447, 696.96 Total bills discounted and bought. Other United States bonds owned One-year Treasury notes Municipal warrants Bill of lading drafts Interest accrued on United States securities. 21,020,900.83 7,411,829.98 2,397, 000.00 1,491, 000.00 284, 372.00 503, 831. 60 25, 814.07 1,710,000.00 824,000.00 401, 509.00 Total. Cost of unissued Federal Reserve currency. Other deferred charges Furniture and equipment Bank premises Expense: Liberty loan War savings 4,702,017.67 2,949,895.66 588.24 2,:,237.36 20,314.87 517.43 12,282.26 102,500.00 Total.. Due from other Federal Reserve banks, collected funds Due from member banks—overdrafts Due from branches and offices Due from banks and bankers Exchanges for clearing house Checks and other cash items National bank notes and notes of other Federal Reserve banks. Other mutilated currency for redemption Deferred debits Federal Reserve banksTransfers bought Other items Branches and offices Member banks Nonmember banks and bankers Total.. National bank notes and F ederal Reserve notes of other banks. Federal Reserve notes on hand Mutilated Federal Reserve notes forwarded for redemption Nickels and cents Total.. Gold settlement fund Due from United States Treasury gold redemption fund.. Gold bullion and coin Gold certificates (including clearing-house certificates) Silver certificates (including clearing house certificates)... Legal-tender notes (including clearing-house certificates). Silver coin Bank of England—Sterling gold account Gold with Federal Reserve agent '140,875.20 514.02 180.05 189,394.87 2,182,401.91 14,386.6 135,614.56 5,312,435.71 4,819.11 354,061.46 2,552. 616. 60 so; 940.23 950.00 2,395. 250.00 232; 341,704.52 825,242.33 21,806.71 5,117,731.24 803,000.00 3,668,787.35 674,174.47 8,315,185.16 519,945. 77 21,785,312.95 11,623,739.62 1,909,030.00 43,500. 00 407. 51 1,677,795.00 1,241,765.00 180,000.00 160. 83 1,952,937.51 i 3,099,720.83 12,482,000.00 1,119,140.98 1,548,322.72 4,169,000.00 397,889.00 13,200. 00 4,626.00 1,575,000.00 50,701,320.00 7,439,000. 00 348,778.29 1,354,671.07 3,891,860.00 67, 467.00 13, 752. 00 1,407.00 Total reserve... 72,010,498.70 13,116,935.36 Total resources. 121,661,062.53 38,337,736.01 Capital paid in. Profit and loss. 2.812,750.00 80,000.00 2.450,000.00 10,120.04 Total. Unearned discount: Bills discounted, members Acceptances bought in open market... Unearned interest on municipal warrants. Reserved for sundry expenses Service charges (net receipts) 2,892,750.00 2,460,120.04 37,292. 75 26,635.01 1,229.25 59,492.92 9,522. 43 12,631.55 1,557.47 460.64 2,483.24 COMr.INED LIABILITIES. Total.. 124,649.93 | 26,655.33 DISTRICT NO. 6 427 ATLANTA. SCHEDULE NO. 2.—Statement of the condition of the Federal Reserve Bank of A tla nta—Conti n ued. Dec. 31,1917. United States Government deposits Due to member banks, reserve account Due to other Federal Reserve Banks Cashier's checks . Expense checks Dividend checks.. Federal Reserve Bank drafts Due to nonmember banks and bankers Deferred credits Federal Reserve banks Branches and offices Member banks. Miscellaneous... Nonmember banks .. Return item checks.. Total Federal Reserve notes outstanding Total liabilities $4,476,782.74 36,849,923.90 1.334,971. 71 13, 783. 26 2,195.47 145,465. 61 115,280.00 97,903. 27 3,094,279. 83 222,655.30 5,376,124.80 .33 46,876.38 51,776,242.60 Dec. 30, 1916. $3,821,076.20 21,812,983.12 5,762,247.41 52,828.06 1,007.16 70,941.30 58,727.49 50.00 31,579,860.64 66,867,420.00 4,271,100.00 121,661,062.53 38,337,736.01 SCHEDULE NO. 3.—Earnings and expenses for calendar year 1917; also profiit and loss, Dee. 31, 1911. Earnings for 1917, as shown by Form 95 Discount on United States bonds Total earnings for 1917 Expenses of operation (bank proper) Cost of Federal Reserve notes issued Cost of Federal Reserve notes on hand and unissued. Depreciation: Furniture and equipment Bank premises Transit department disbursements in excess of service charges Reserved for depreciation of securities Difference account Total expenses for 1917 Net earnings for 1917 Profit and loss, Jan. 1, 1917 $341, 385. 24 437. 50 $541,822.74 146,475.22 54, 808. 22 14, 320. 00 8,177. 80 2, 500. 00 2, 277. 04 "24, 909. 00 272. 01 253, 739. 29 288, 083. 45 10,120. 04 Total 298; 203.49 Dividend paid July 1, 1917, period covered July 1, 1916-Dec. 31, 1916 70, 506. 87 Dividend paid Jan. 1, 1918, period covered Jan. 1, 1917-Dec. 31, 1917 145, 465. 61 Premium on surrendered stock in 1917 2, 231. 01 218, 203. 49 Profit and loss Jan. 1, 1918 34365°—18 28 80, 000. 00 428 AIsXUAL EEPORT OF THE FEDERAL RESERVE BOAED, Total profits to date; Dividend No. 1, paid June 30. 1916, covering period Nov. 14. 1914-Dec. 31, 1915 $129,19S. 00 Dividend No. 2, paid Dee. 81. 1017, covering period Jan. 1, 1916-June 30, 1910 70,949.30 Dividend No. 3, paid July 1. 1017, covering period June 30, .1916-Dec. 31, 1910 70,506.87 Dividend No. 4, paid Jan. 1. 1918. covering period Jan. 1, 1917-Dec. 31. 1917 145,465.61 Premium paid on surrendered capital stock. 101-3 2, 879.17 Premium paid on surrendered capital stock, 1017 2. 231. 01 5,110.18 Total dividend to date Undivided profits, Dee. 31, 1917 421,229.915 80, 000. 00 Total net profits to date 501,229.96 SCHEDULE NO. 4.—Bills discounted and member banks1 collateral notes for 1917. Member banks' collateral notes: Secured by— Liberty loan bonds or certificates of indebtedness Bills receivable Bills discounted—members : Within 15 days Within 30 days Within 60 days Within 90 days Over 90 days Total Bills bought in the open market during 1917: Bankers' acceptances— Foreign and domestic Trade acceptances Total United States securities (exclusive of bonds held under repurchase agreements shown below.* held Dee. 31, 1917: United States bonds— 2 per cent consols 1030 2 per cent Panama bonds 1916-36 3 per cent conversion bonds 3 per cent one-year Treasury gold notes 3§ per cent United States Liberty loan bonds 4 per cent United States Liberty loan bonds Total bonds $18,399,800.0030, 679, 856. 00 14,014,698.34 6,745,886.20 14, 096, 707. 66 9, 498, 642. S3 1,052,151.67 95,114, 742. 70 26, 373, 464. 00 19,100. 00 26, 392. 564. 00 640, 600. 00 21, 000. 00 10, 300. 00 1, 491, 000. 00 215, 900. 00 9, 200. 00 2, 388, 900. 00 DISTRICT ISTO. 6—ATLANTA. United States certificates of indebtedness: 2 per cent: Bought ______ -___ Sold 3i per cent: Bought Sold . 3 per cent, bought 3* per cent, bought—— 4 per cent: Bought Sold 429 $1, 750, 000. 00 250,000.00 $1,500,000.00 1, 066, 000. CO 933, 000. 00 ——— 73, 000. 00 506, 000. 00 4, 293, 000. 00 4, 781, 000. 00 410, 000. 00 4} 371^ ooo. 00 Total United States certificates of indebtedness on which accrued interest was collected at maturity 10,743,000.00 United States Liberty loan bonds bought under repurchase agreement: 4 per cent. Total bought to Dec. 31, 1917 0, 464, 400. 00 Total repurchased by member banks 5,039,400.00 31 per cent. 75, 000. 00 Total held Dec. 31, 1917 1, 425, 000. 00 Investments in municipal warrants made during 1917: Within 30 days Within 60 days Within 90 days Over 90 days 75, 000. 00 61,000.00 20,479.00 57,937.00 276,019.00 Total 415, 435. 00 SCHEDULE N O . 5.—Due to member hankx at the clone, of business Dec. 31, 1917. Number of banks. Gross balance. Alabama Florida Georgia Tennessee New Orleans. 94 57 107 90 44 $6,132,734. 05 3, 830, 533. 29 12, 595, 666.18 7,036, 223. 59 12, 630, 891. 59 Total... 392 42, 226,048. 70 Due to nonmember banks, clearing account, $144,759.65. SCHEDULE XO. 6.—Federal Reserve notes. TOTAL NUMBER OF NOTES ISSUED IN 1917 AND 1916. 1916 Amount. Number. Amount. Number. Amount. 604,000 344,000 192,000 13,400 4,000 $3,020,000 3,440,000 3 ; 840,000 670, 000 400, 000 2,280,000 1,880,000 848,000 22,200 1,500 $11,400,000 18,800,000 16,960,000 1,110, 000 150,000 2,884,000 2,224,000 1,040,000 35, 600 5,500 $14,420,000 22,240,000 20, 800,000 1,780, 000 550,000 1,157,400 11,370,000 5,031,700 48, 420,000 6,189,100 59, 790,000 Number. Fives Tens Twenties Fifties Hundreds Total Total. 1917 430 ANNUAL REPORT OF THE FEDERAL RESERVE BOARD. SCHEDULE NO. G.—Federal Reserve notes—Continued. ON HAND DEC. 31, 1917. Number. Fives Tens Twenties. .. Fifties Hundreds . . Total SCHEDULE 7A.—Revenue and expenses of the transit Amount. 503,800 233,650 163,725 29, 800 22,500 $2,519,000 2,336,500 3,274,500 1,490,000 2,250,000 953,475 11,870,000 department. July 15 to Dec. 30, 1916. Service charges (net receipts).. Service charges—balance 1916.. Total. Salaries: Officers Clerks Officers' and clerks' traveling expenses, Legal fees Rent Telephone Telegraph Postage Expressage Light, heat, and power Printing and stationery All other expenses £45,484.29 2,483.24 $20,058.77 47,967.53 20,058.77 468. 77 20,278.53 850.00 8,421.00 546.25 185.00 2, 750.04 36.25 15.66 8,278.98 10.80 147.75 2, 293. 82 5, 032.75 39,498.35 10, 746.22 Total expenses of operation Depreciation—furniture and equipment. Total transit department expense. Total revenue received. Less expense Excess. Deficit. 16, 963. 77 611.76 50,244. 57 17, 575.53 47/967.53 50,244. 57 20,058. 77 17, 575.53 2,277.04 SCHEDULE NO. 7-B.—Transit department 1,273.02 12.80 3.79 3,364.48 2.20 18.65 1,232.77 1,238.81 2,483.24 operations. NUMBER OF ITEMS CLEARED. Clearing house. | Within district. January February.. March April May June July August September. October November. December.. Total 31,807 23,396 27, 747 28,058 29,165 30, 651 29, 557 30,064 28, 714 34, 806 37,267 38,196 Other districts. Total. 268, 881 228,466 267, 534 253, 849 242, 621 231, 258 225, 321 225, 621 231,197 296, 883 305, 046 306,311 42, 816 40,541 45,454 39,088 36,499 34,134 34,183 34,139 35, 066 37, 791 34,014 38,018 343, 504 292, 403 340, 735 320,995 308, 285 296,043 289,061 289, 824 294, 977 369,480 376,327 382, 525 3, 082, 988 451,743 3, 904,159 431 DISTRICT NO. 6—-ATLANTA. SCHEDULE 7-B.—Transit department operations—Continued. AMOUNTS CLEARED. Clearing house. Within district. Other districts. Total. January February.. March April May June July August September. October November. December.. $27, 825, 651.51 17, 633, 626.06 20, 833, 334. 68 25,165, 742.17 29,459, 619.00 27, 607, 361.38 28, 013, 801.65 20,264, 544.39 30, 841, 993.37 47, 703, 371.19 61, 830, 910. 53 61,355, 280.72 $47, 587,689.44 37,454, 504. 79 44, 779,542.44 46,036, 180.98 45, 541,331.01 41,073,446.12 41,469, 304.45 44,371,427.31 52,044, 034. 71 76,776,793.76 74, 848,193. 93 69,414, 140.17 $34,117, 698.13 28,516, 879. 66 37, 086,899. 83 41,665, 839.85 36,453, 216. 82 36,957, 908.66 44,112, 210. 92 35,869,246.00 39,333, 788.35 56,537, 781.25 57, 779,171.28 71,766,475.11 $109, 531,039.08 83, 605,028.51 102, 699, 776.95 112,867, 763.00 111, 454,166.83 105, 638, 716.16 113, 595,317.02 106, 505, 217.70 122, 219, 816.43 181,017,946.20 194,458,275. 74 202, 535, 896.00 Total. 404, 535,236.65 621,396,589.11 520,197,115. £ 1, 546,128,959.62 Average number of items handled daily Average amount of items handled daily 12,514 $5,085,950.52 GOVERNMENT CHECKS HANDLED FROM MAR. 16 TO DEC. 31, 1917. Number of items drawn on U. S. Treasurer. Amount of items drawn on U. S. Treasurer. March April May June July August September. October November. December.. 2,275 8,664 12, 714 10, 802 12, 057 13,227 13,512 19, 680 18,500 15, 868 $285,181 920,772 1,181,112 13,578,654 13, 823, 742 6,622,022 7, 723,104 11,775,962 16,101, 691 18,173, 875 Total. 127, 299 90,186,115 SCHEDULE NO. 8.—Expense of the first and second Liberty loan, to the close of business Dec. 31, 1917. Salaries: Bank officers $2, 985. 00 Clerical staff 16, 834. 61 Officers' and clerks' traveling expenses 2, 053.13 Rent . 641.27 Telephone 464. 33 Telegraph 4, 025. 30 Postage 4, 837. 44 Expressage 206. 66 Printing and stationery 16,074.24 Advertising 3, 978. 76 All other expenses 17? 099. 66 Total expenses Less reimbursements- 69, 200. 40 24, 686. 38 44, 514. 02 432 ANNUAL REPORT OF THE FEDERAL RESERVE BOARD. WAR-SAVINGS CERTIFICATE AND STAMP ACCOUNT. Salaries, clerks Officers' and clerks' traveling expenses Telegraph Postage Printing and stationery All other expenses .__. Total expenses of operation $922, 94 63. 41 .65 .28. 00 35. 05 132. 00 1,180. 05 DISTRICT NO. 7—CHICAGO. WM. A. HEATH, Chairman and Federal Reserve Agent. GENERAL BUSINESS CONDITIONS. The beginning of 1917 found generally satisfactory business conditions in the seventh Federal Reserve district, with some indications of increasing activity and a plentiful supply of money at low rates. The entrance of the United States into the war constituted a factor which up to that time had not been taken into serious consideration and necessarily brought about a great deal of readjustment. The promotion of new enterprises was, of course, greatly curtailed, and as the year advanced it was increasingly evident that expansion of already existing activities should be carefully guarded, except as necessitated by the demands of the Government in connection with carrying on the conflict. Some lines of commercial operation have suffered greatly. The distilling business, because of legislation enacted by the last Congress, has greatly diminished. The seventh Federal Reserve district has felt this for the reason that a large amount of such business was conducted within its bounds, perhaps the largest internal revenue producing district in the country being located within its limits. Building, construction, and engineering lines have also been very quiet and their operations much reduced. Those lines of business, however, which have been directly affected through Government contracts for food, clothing, munitions, and other supplies have seen greatly increased activity. Bank clearings have increased and indications are that the current year will show largely increased profits for banking institutions in general, except along the line of investment banking. Legitimate business, except as above noted, has, of course, felt the effects of the war, but it is becoming increasingly evident that the business public is adjusting itself to the situation and that the people are learning that commerce and trade may, notwithstanding such conditions, be transacted, if not as usual, at least on a sane and conservative basis. Notwithstanding the fact that some of the greatest industrial centers of this country are located within its borders, the district, as a 433 434 ANNUAL REPORT OF THE FEDERAL RESERVE BOARD. "whole, is largely an agricultural one. The rural communities have been the last to appreciate that the country was really and actually in war and to comprehend the seriousness of the situation which confronts the Nation. In the northerly States of the district beans, potatoes, and other vegetables constitute this year a large part of the farm product, and these suffered from early frosts. The wheat crop for the district was probably not more than two-thirds of an average yield. The prices for the above-mentioned articles, however, were so satisfactory that the financial return will probably equal that of the ordinary 100 per cent crop. The hay crop was somewhat below normal, but prices were good. The oats crop was the largest on record all over the district, and prices w7ere more than satisfactory. While the corn crop is rated as the largest on record the quality can not yet be determined. Much of it is not fully matured owing to unseasonable summer conditions and early frosts. Much of that which is at present unmarketable can, however, by proper handling and treatment, be made of commercial value, but a goodly proportion of the crop is available only for stock-feeding purposes, and within the last month or two a very strong demand has arisen in the country districts for funds for purchasing cattle and hogs to thus utilize this otherwise useless product. Prices are such, however, that notwithstanding the poor quality of much of the crop the returns will be very satisfactory, and all kinds of live stock are selling at high figures. Whatever the complete returns may demonstrate, the impression is general that money paid out on account of the war is slow in returning to this district, and with the value of our great staple, corn, yet undetermined, it is evident that a comprehensive forecast of conditions in the district might widely miss the mark. LOANS AND REDISCOUNT OPERATIONS. Applications for loans (including advances on bill of lading drafts) and rediscounts to the number of 3,747 were approved, amounting to $521,771,070, at 3 to 5 | per cent basis from 541 banks, as follows: Illinois, 158 banks Indiana, 88 banks Iowa, 198 banks Michigan, 51 banks Wisconsin, 48 banks $2S7, 592, 763 28, 067, 829 53,923,991 89, 486, 872 62, 699, 615 Trade acceptances amounting to $429,845.08 are included in the above total. Loans and rediscounts secured by Liberty bonds and Treasury certificates of indebtedness amounting to a total of $191,757,389.66 are also included in the above figures. Loans and redis 435 DISTRICT NO. 7—CHICAGO. counts were at their lowest ebb on April 23, when the combined total w^as but $780,423.38. The highest point reached wTas on December 26, the combined figure being $112,164,286.96. OPEN-MARKET OPERATIONS. Investments.—Municipal warrants amounting to $2,164,488.64, representing the obligations of seven municipalities, all maturing within six months, were purchased during the year at 2|- to 4 per cent. Acceptances.—Bankers' acceptances and foreign trade acceptances totaling $66,714,060.14 were purchased during the year at 2J to 4 per cent, all represented by bills drawn in connection with imports or exports, these being acceptances by 89 institutions of known responsibility and purchased in the open market. United States Government bonds.—Two per cent consols and Panamas to the extent of $1,461,500 were purchased and converted during the year. Three and one-half per cent Liberty loan bonds amounting to $39,524,260 were purchased and sold by the bank during the year. Treasury certificates of indebtedness purchased by the bank. Amount. Date. Mar. 31. Apr. 25. May 10.. $5,000,000 785,000 1,252,000 1 000 000 1,000,000 An? Q Aug. 28 Rate. Per cent. 2 3 31 33i Date. Sept. 17 Sept. 26 Oct. 18 Total Amount. $2,060,000 5,150,000 250,000 Rate. Per cent. 4 16,497,000 The above figures include the bank's own direct subscriptions to the various issues. m OFFICERS AND DIRECTORS. An amendment to the Federal Eeserve act was passed during the current year abolishing the office of deputy Federal Eeserve agent and authorizing the Federal Eeserve agent to appoint one or more assistants. Mr. W. F. McLallen, who held the office of deputy Federal Eeserve agent, was at once appointed assistant Federal Eeserve agent for the remainder of the calendar year. Toward the close of the year Mr. Mark A. Lies was appointed an additional assistant Federal Eeserve agent. Mr. McLallen was also designated by the Federal Eeserve Board as deputy chairman of the board of directors. Additional assistant cashiers were appointed during the year as follows: Mr. F. J. Carr, Mr. Clarke Washburne, and Mr. D. A. Jones, 486 ANNUAL EEPOET OF THE FEDERAL RESERVE BOAKD. At the annual election for directors in December, 1017, Mr. E. L. Johnson was elected to succeed himself for the full three-year term as a director of class A, group 3, and Mr. M. B. Hutchison was elected to succeed himself for the full three-year term as a director of class B, group 2. On December 19 the Federal Reserve Board elected Mr. James Simpson, of Chicago, class C director for three years and designated him deputy chairman for one year. On December 21 the Federal Reserve Board redesignated the present incumbent as chairman and Federal Reserve agent of the Federal Reserve Bank of Chicago for a period of one year, dating from January 1, 1918. MEETINGS. Directors.—The board of directors has held 12 regular meetings during the year. Executive committee.—The executive committee is composed of Gov. McDougal, Mr. W. F. McLallen, Mr. J\ B. Forgan, Mr. G. M. Rejaiolds, and the Federal Reserve agent. This committee has held regular meetings once each week, but the great increase of businesb toward the close of the year has necessitated two regular meetings each week. Membership.—This committee is composed of Gov. McDougal, Mi-. A. H. Yogel, and the Federal Reserve agent, Officers.—Early in the year there was inaugurated a plan of holding informal meetings of the officers daily before business hours. This plan has been followed throughout the year except as it has been interfered with to some extent through unusual activities in connection with the Liberty loan campaigns and other emergencies. MEMBERSHIP. Seven national banks have surrendered their charters during the year, the total reduction of Federal Reserve Bank stock from this source amounting to $45,400. Twelve new national banks have been organized during the year. Applications for membership from 63 State banks have been approved during the same period. Of these, 51 have paid in their capital stock and reserve. Three have paid in their capital only. The remaining nine were approved so recently that their payments could not be made before the first of the year. Fifty-two banks were transferred to this district from the Minneapolis district at the beginning of the year. Membership December 31, 1916, 993; December 1, 1917, 1,100. The net increase in the stock of the Federal Reserve Bank of Chicago from ail sources during the year has DISTRICT NO. 7—CHICAGO. 437 been $2,408,150. A complete list of State bank members will be found in the appendix, The prospect for a branch of the Federal Reserve Bank at Detroit, Mich., has had a stimulating effect on State bank membership in that city. In November a special session of the Michigan Bankers' Association was held at Lansing, Mich., at the instance of the governor of the State, the bank commissioner, and the president of the bankers' association, for the special purpose of arousing interest among State banks concerning membership in the Federal Reserve system. Addresses were made at this session by the above-named officials, and also by Mr. Frederick R. Fenton, Federal Reserve chairman for Michigan; and the results were most gratifying, as will bo seen by the increased membership from that State. The appeal of the President of the United States urging State banks to join the system has not, up to this time, met with a generous response. Two or three of the larger State institutions in Chicago and a few scattering banks throughout the district came in as a direct result of that appeal. There are, however, approximately 2,000 State banks in the district which are eligible for membership and less than 100 applications, all told, have been received up to this time. It is nevertheless evident that greater interest in this subject is being manifested throughout the district than heretofore. Many of the larger State institutions are seriously considering the matter, and some of them have signified their intention of applying for membership in the near future. BANKING QUARTERS. The Federal Reserve Bank of Chicago has very inadequate quarters, both as to working space and vault capacity. At the present time the bank is occupying space in four different buildings in Chicago. The executive committee has been instructed to investigate the question of new and adequate quarters for the bank, but there is nothing available in Chicago at the present time and no one seems willing to take the responsibility of constructing an entirely new building until after the war is over. BRANCHES. The board of directors at its regular meeting on November 27 authorized the establishment of a branch of the Federal Reserve Bank of Chicago to be located in the city of Detroit, Mich. The following have been chosen as directors of the branch: Mr. Robert B. Locke, at present manager of the Detroit Clearing House Association; Mr. John Ballantyne, president of the Merchants' National Bank, Detroit; Mr. Charles H. Hodges, president of the Detroit Lubricator 438 ANNUAL REPORT OF THE FEDERAL EESEEVE BOARD. Co., Detroit; Mr. Emory W. Clark, president of the First and Old Detroit National Bank; Mr. Julius H. Haass, president of the Wayne County and Home Savings Bank, Detroit. Mr. Kobert B. Locke "will be the manager of the branch. It is the expectation that this branch will be formally opened for business shortly after the first of the year. PTTBLicrrr WORK. The publicity work of the bank during the past year has been conducted through personal interviews, correspondence, and attendance by the bank's officers at many bankers' conventions and group meetings. The monthly business reports of the bank have been circulated as bulletins. A special pamphlet on trade acceptances has been printed and widely circulated, and Mr. Clarke Washburne, assistant cashier, has made a number of informal talks to various trade organizations on that subject. FEDERAL RESERVE TRANSFER AND EXCHANGE DRAFTS. During the year five banks in this district have ordered a supply of Federal Reserve transfer and exchange drafts. But one of the banks is using the plan. Twelve member banks in other districts have drawn Federal Reserve transfer drafts on this bank. The total transactions have been small. GOLD SETTLEMENT FUND. A complete statement showing the volume of transactions through this fund on a basis of weekly averages appears in the appendix. FEDERAL RESERVE NOTES. The Federal Reserve agent maintains in Chicago constantly a reserve supply of Federal Reserve notes amounting to $41,500,000. There is held in the subtreasury in Chicago an additional reserve supply of Federal Reserve notes amounting to $26,160,000, and in Washington, printed or in process of printing, in round numbers, $185,000,000, it being the desire of the board of directors to keep always in sight a total reserve stock of over $250,000,000. In addition to the above there are $5,000,000 of Federal Reserve bank notes printed and held in stock in Washington. An exhibit in detail of the various issues appears in the appendix. NONMEMBER BALANCES—CHICAGO CLEARINGS. During the summer a plan was agreed upon whereby all nonmember banks belonging to the Chicago Clearing House should open accounts with the Federal Reserve Bank and clearing house balances DISTRICT NO. 7—CHICAGO. 439 be settled by certified check on the Federal Reserve Bank. This plan became operative September 1 and seems to have worked to the satisfaction of all concerned. Eleven nonmember banks at that time opened accounts with the Federal Reserve Bank. Four of these have since that date entered the Federal Reserve system, leaving seven nonmember banks still carrying balances with us. These balances total about $5,000,000 on the average. One of these nonmember banks is using the Federal Reserve collection system. FIDUCIARY POWERS. Permits have been issued during the year to a number of institutions for the exercise of various trust functions which are permitted under the Federal Reserve act. A detailed list of these permits appears in the appendix. PERMITS TO ACCEPT UP TO 100 PER CENT. During the current year the Federal Reserve Board has granted to the National Bank of the Republic of Chicago, and the Continental and Commercial National Bank of Chicago, the right to accept up to 100 per cent of their capital and surplus. RESERVES. Fluctuation in reserves during the year is indicated as follows: Against deposits: Gold (high), 81.5 per cent on February 2, 1917. Gold (low), 50.9 per cent on June 20, 1917. Gold and lawful money (high), 83.2 per cent on February 2, 1917. Gold and lawful money (low), 52.2 per cent on June 20, 1917. Against Federal Reserve notes": Gold (high), 157 per cent on January 2, 1917. Gold (low), 59.5 per cent on November 23, 1917. Against combined note and deposit liability : Cash reserve (high), 85.9 per cent on February 2, 1917. Cash reserve (low), 60.6 per cent on November 23, 1917. DIVIDENDS AND EARNINGS. During the year dividends amounting in all to 12 per cent have been paid. All dividends accrued to December 31, 1917, are therefore paid in full. Also payment to the United States Treasury of its pro rata of surplus earnings has been made, amounting to $215,799.18. Furniture and fixtures, depreciation on bonds and the cost of Federal Reserve notes issued to the bank have all been charged off in full. A detailed statement of profit and loss appears in the appendix. 440 ANNUAL REPORT OF THE FEDERAL RESERVE BOARD. OPERATIONS OF THE FEDERAL RESERVE COLLECTION SYSTEM. There have been handled during the year 7,532,366 items as follows: Items. Amount. per Total cost. Cost item. Items on banks in Chicago 1,807,728 $3,985,878,000 $7,200.00 $0,004 Items on banks in district outside of Chicago. 4,362,436 987,821,000 / .0125 187,450,000 } t>u,8fco.8/ \ .0125 Items on banks in other districts.. 511,438 Government checks .0056 850,764 202,461,000 • 4,800.00 Total . 7,532,366 5,363,610,000 72,885.87 .00967 Cost per Service charge $1,000. per item. $0.0018 .0518 X .0518 .0237 $0.0 .015 .0 .0136 The disbursements or expenses of the transit department made necessary by and in connection with the handling of items drawn on " Banks in district outside of Chicago," and " Items on banks in other districts," total $60,885.87, while the net service charges assessed against the member banks and other Federal Reserve Banks covering same total $62,449.87, a net profit in handling these two classes of transit items during the year of $1,564. Adding, however, the cost of handling items on banks in Chicago ($7,200) and Government checks ($4,800) it increases the total expenses ($12,000) to a total of $72,885.87, or a net cost for the year in handling the above four classifications of $10,436. There have been added to the Federal Eeserve par list from January 1 to December 31, 1917, 618 points or towns and 1,082 banks—975 nonmembers and 107 members. The bank has handled a small amount of collections, drafts, notes, etc., for its customers during the year on a basis of actual cost. But one nonmember bank carrying an account with the Federal Eeserve Bank is making use of its collection system. FISCAL AGENCY OPERATIONS, FIRST LIBERTY LOAN. When the Secretary of the Treasury offered the first issue of $2,000,000,000 of 3J per cent bonds, a meeting of representatives of prominent banks, trust companies, and bond houses was called to consider ways and means for its sale. There were present at this meeting some 50 or 60 representatives. This body appointed an executive committee, which committee in turn organized itself into a publicity committee. The publicity committee took charge of the selling campaign and appointed an assistant to the chairman, a corresponding secretary, and a recording secretary. The assistant to the chairman was the active officer in the conduct of the campaign. Another important committee appointed was the distribution committee, which consisted of a chairman and six other members, one being named for each State in the district and one for the Digitized forChicago FRASER territory. DISTRICT NO. 1 CHICAGO. 441 These chairmen for the various sections secured the services of several hundred experienced bond salesmen and sent them out all over the district, building up working organizations in every section. These organizations were by counties, cities, and towns. The chairman for Chicago organized a flying squadron of several hundred volunteers and these men made an office-to-office canvass within the " loop district." Among other committees covering district-wide activities were the following: Public speakers, advertising, foreign-language papers, posters, insurance companies, churches, moving pictures and fourminute men, fraternal societies, public utilities, etc. The governors: of all five States united in issuing proclamations making one week " Liberty loan week." Partial payment plans were devised for banks and other organizations to carry those subscribers who were not prepared to meet their subscriptions in full. Secretary McAdoo visited the district during the campaign and spoke in several cities. The district's quota of bonds was oversubscribed. SECOND LIBERTY LOAN. This campaign was organized by an executive committee composed of the same members as the former executive and publicity committees and with the same chairman as the old publicity committee. Several additions were made, however, to the membership before the campaign began. An executive secretary was chosen and placed in active charge of the campaign. The active work of the campaign was carried on under the following divisions: Department of sales; department of publicity; department of public speaking; and woman's work. Additional committees covering district-wide activities were appointed as in the first campaign and the same chairmen served as before for Chicago and the various States. The unit of organization for the second campaign was the county, and this organization was subdivided so as to reach down to the city, the town, the school district, and in some cases the voting precinct. In addition thereto, all of the larger cities formed their own organizations, Volunteer workers from banks, bond houses, stock exchange firms, commercial paper houses, insurance companies, and so on, canvassed the entire district, encouraging local workers and doing pioneer work in different communities. In each State an advisory committee was formed, consisting of the Governor, the State superintendent of banks, the president of the State bankers' association and representatives of labor, religion, agriculture, commerce, industry, State council of defense and others. The district's quota of the four billions of bonds offered was oversubscribed. 442 ANNUAL REPORT OF THE FEDERAL RESERVE BOARD. The work of the second Liberty loan campaign was. much better organized and more efficiently conducted than that of the first. It is a matter of regret that space forbids personal recognition of the many workers and instrumentalities cooperating toward the success of the two campaigns. They are numbered by the thousands. Their names are on file with the Federal Reserve Bank and the result of their effective labors will not be forgotten. A list of officers and executive committees is given in the appendix. GOVERNMENT BOND DEPARTMENT. The Federal Eeserve Bank organized a Government bond department through which the actual accounting for and distribution of Liberty bonds has been handled. A statement of the expenses of this department appears in the appendix. In the appendix will be found an exhibit of the result of both the first and second Liberty loan campaigns. TREASURY CERTIFICATES OF INDEBTEDNESS. A table showing the sales of the different issues of these certificates will be found in the appendix. WAR-SAVINGS CERTIFICATES. The Secretary of the Treasury has designated the Federal Eeserve Banks as fiscal agents for the distribution of war-savings certificates and stamps. The Federal Reserve Banks become the warehouses to which banks, express companies, railways, and other authorized agents go to receive their supplies and to whom they account for the proceeds. Up to and including December 31 the Federal Eeserve Bank of Chicago has accounted for $915,725 par value from the proceeds of these certificates. DEPOSITORIES FOR PROCEEDS OF LIBERTY BONDS AND TREASURY CERTIFICATES. Many banks throughout the district qualified as depositories under the regulations prescribed by the Treasury Department. In order to accommodate the various sections of the district, securities committees and custodians for collateral were appointed in each State, serving without compensation. A list of such securities committees and custodians appears in the appendix. CONCLUSION. The Federal Eeserve system has already justified the expectation of those who were instrumental in framing the act and responsible DISTRICT NO. 1 443 CHICAGO. for its enactment. Through it the reserves of the country have been largely mobilized and much of the free gold brought into its coffers. As a result of its establishment public confidence exists and the integrity of our business fabric has been maintained, although our country has entered upon what is perhaps the most momentous epoch in its history. In all this the Federal Reserve Bank of Chicago has borne its part. With all other Federal Reserve Banks its note issues have largely increased during the year. Much of this increase has been directly against gold, and the greater demands of business have necessitated the remainder. The board of directors of this bank, slow in the beginning to make use of this issue power, have not hesitated to avail themselves of it when the situation demanded, and yet further use of it will be inevitable during the continuance of the war. The problem of differentiating between necessary expansion on the one hand and dangerous inflation on the other is yet to be solved. The wise conservatism which has thus far directed the operation of the Federal Reserve Banks and the administration of the system may be trusted to handle this situation in a satisfactory manner when it is presented for solution. EXHIBIT A.—Comparative yearly statement. Dec. 31,1917. Bills discounted, members Bills discounted, bought United States bonds and notes. Investments Total. Interest accrued on United States bonds and notes Premium on United States bands liberty loan bonds—$10-participation certificates Furniture and fixtures Cost of unissued Federal Reserve notes Due from member banks, overdrafts Due from Federal Reserve Banks Federal Reserve Banks, transfers bought Transit and exchanges for clearing house Federal Reserve and national bank notes Gold coin and gold certificates Bank of England sterling gold account Other lawful money Gold settlement fund Gold with Federal Reserve agent Five per cent redemption fund Total cash reserve Other assets $105,923,175.99 9,182,429.93 10,384,600.00 $4,437,460.35 10,337,101.09 10,375,100.00 1,325,700.88 125,490,205.92 26,475,482.32 —; ; - — -, 50,896.48 193,311.66 63,695.00 "163,166.66 - .*. 330,615.85 5,992, 720.41 8,178,412.26 19,868,657.09 10,635,500.00 28,304.53 67,957.83 1,723.57 29,913,819.08 "*4,'692,*553."7i 2,986,185.00 32,189,305.00 7,350,000.00 963,872.27 58,960,460.00 130,723,530.00 646,490.00 396," 102." 95 26,183,000.00 230,833,657.27 54,379,727.95 27,600,625.00 200,000.00 349,181.34 401,905,745.14 34365°—I Dec. 31,1916. 118,789,962.13 444 ANNUAL REPORT OF THE FEDERAL RESERVE BOARD. EXHIBIT A.—Comparative yearly statement—Continued. Dec. 31, 1917. Dec. 31,1916. LIABILITIES. Capital paid in Surplus Profit and loss Discount on United States bonds Unearned discount Unearned interest—investments Reserved for sundry expenses Difference account , Federal Reserve notes outstanding Federal Reserve bank drafts , Liberty loan—$10-partieipation certificates sold. Uncollected funds United States Government deposits Due to Federal Reserve Banks Due to member banks—reserves Due to nonmember clearing banks Gold reserve against net deposit liabilities (per cent) Cash reserve against net deposit liabilities (per cent) Gold reserve against Federal Reserve notes in circulation (per cent). $9,091,700.00 215,799.18 77,603.50 318,087.33 4,833.62 254.61 190,788,530.00 1,471,347.45 163,100.00 18,183,306.82 3,052,436.84 6,165,983.77 169,174,348.05 3,198,413.97 1,683,550.00 " 61,* 978.07 46,451.23 6,051.22 5,391.08 2,045,784.95 14,550,742.93 95,390,012.65 401,905,745.14 118,789,962.13 59.2 59.7 72.7 69.8 70.3 158.0 EXHIBIT B.—Earnings and expenses for calendar year 1917; also profit and loss on Dec. SI, 1917. Earnings for 1917, as shown on Form 95 $2, 020, 714.10 Net service charges in excess of transit department disbursement 1, 564. 00 Total Expense of operation of bank proper Cost of Federal Reserve currency issued (including expressage, insurance, etc.) Cost of Federal Reserve currency unissued, charged off Miscellaneous charges account note issues Depreciation on furniture and equipment Depreciation United States bonds $2,022,278.10 320, 357. 29 157,510.57 43, 001. 01 2, 314.11 32, 225. 53 237,118. 24 Total 792, 526. 75 Net earnings for year Profit and loss, Jan. 1, 1917 Amount paid by Federal Reserve Bank, Minneapolis, Jan. 30, 1917, to equalize stock of said bank transferred to Federal Reserve Bank of Chicago capital stock 1, 229, 751. 35 61, 978. 07 Total Dividends paid: Date paid June 29, 1917, period covered Jan. 1, 1916, to June 30, 1916, inclusive, amount Date paid Dec. 28, 1917, period covered July 1, 1916, to Dec. 31, 1917, inclusive, amount Interest paid on stock surrendered 1, 293, 856. 64 $205, 710. 22 654, 347. 08 2, 200. 98 862, 258. 28 431, 598. 36 Profit and loss—Dee. 31, 1917. Distribution of profit and loss: One-half of balance Dec. 31, 1917, remitted to United States Treasury—franchise tax paid United States Government One-half of balance transferred to surplus fund 2,127. 22 215, 799.18 215,799. 18 431, 598. 445 DISTRICT NO. "7—CHICAGO. EXHIBIT C.—Transactions through the gold-settlement fund weekly. [000's omitted.] Week ending— Debits. Credits. Balance. 1917. $36,705 42,545 39,225 38,210 42,329 40,607 38,004 32,352 41,375 43,094 33,111 36,584 32,368 33,794 45,617 52,304 46,735 68,944 59,718 75,741 59,791 58,235 53,944 60,305 85,672 76,628 $29,668 43,911 36,097 39,688 36,913 42,929 34,554 39,706 29,686 40,391 32,704 40,207 41,109 35,466 42,095 48,531 65,540 57,446 68,082 70,614 53,417 67,661 45,587 72,705 85,008 61,133 $33,220 31,854 34,982 33,504 38,920 36,598 40,048 32,694 44,383 47,086 47,493 43,870 35,129 33,457 36,979 40,752 21,947 33,445 25,081 30,208 36,582 27,156 35,513 23,113 23,777 39,272 Subtotal July 4 July 11 July 18 July 25 Aug.l Aug. 8 Aug. 15 Aug. 22 Aug. 21 Sept. 5 Sept. 12 Sept. 19 Sept. 26 Oct. 3 Oct. 3 0 Oct.17 Oct. 24 Oct. 31 Nov. 7 Nov. 14 Nov. 21 Nov. 28 Dec. 5 Dee. 12 Dec. 19 Dec. 26 1,273,937 87,051 87,111 69,563 105,694 72,032 "80,092 72,749 75,508 79,741 76,009 94,597 77,424 97,064 80,385 96,884 92,012 113,536 102,053 119,920 102,504 173,061 125,307 107,425 98,909 155,930 124,405 1,260,848 54,661 84,045 85,890 111,159 99,326 60,819 77,592 67,984 66,681 56,454 104,320 92,864 100,034 98,027 76,345 80,947 107,828 126,580 107,316 103,579 166,149 125,771 110,780 101,001 157,816 132,109 71,662 74,723 58,401 52,936 25,642 44,915 40,072 47,596 60,656 80,211 70,488 55,0 43 52,078 34,436 54,975 66,040 71,748 47,221 59,825 58,750 65,662 65,198 61,843 59,751 57,865 50,161 Total Total, 1916 Increase, 1917 3,840,903 798,567 3,816,925 774,570 3,042,336 3,042,355 Jan. 3 Jan.10 Jan. 17 Jan. 24 Jan. 31 Feb.7 Feb.14 Feb. 21 Feb. 28 Mar. 7 Mar. 14 Mar. 21 Mar. 28 Apr. 4 Apr. 11 Apr.18 Apr. 25 May2 MayQ May 16 May 2? May SO June 6 June 13 June 20 June 27 EXHIBIT D.—Federal Reserve notes. Notes outstanding Dec. 31, 1916: 683,839 fives 67,780 tens 125,850 twenties 3,490 fifties 3,950 hundreds $3,419, 677, 2, 517, 174, 395, Notes issued to bank during year 1917: 3,496,000 fives 6,924,000 tens 4,004,000 twenties 228,000 fifties 104,000 hundreds 17,480,000 69, 240, 000 80,080,000 11, 400, 000 10, 400, 000 Total 195 800 000 500 000 $7, 183, 495 188, 600, 000 195, 783, 495 446 ANNUAL REPORT OF THE FEDERAL RESERVE BOARD. Notes retired during year 1917 : 350,829 fives 147,853 tens 76,212 twenties 3,923 fifties 419 hundreds $1, 754, 145 1 478,530 1,524,240 196, 150 41, 900 Notes outstanding Dec. 31, 1917 Notes outstanding Deo. 31, 1917: 3,829,010 fives 6,843,927 tens 4,053,638 twenties 227,567 fifties 107,531 hundreds 19,145,050 68,439,270 81, 072, 760 11,378,350 10, 753, 100 Total notes retired since organization : 626,990 fives 156, 073 tens 86,362 twenties 4,433 fifties 469 hundreds 3,134,950 1, 560, 730 1, 727, 240 221,650 46, 900 Total notes returned to agent since organization : Unfit notes—128,000 fives Fit notes— 10 fives 30 twenties 5 fifties 1 hundred $4, 994, 965 190, 788, 530 190, 788, 530 6, 691, 470 640,000 50 600 250 100 641, 000 198, 121, 000 Total notes issued and reissued since organization : 4,584,010 fives 7,000,000 tens 4,140,030 twenties 232,005 fifties 108,001 hundreds Total notes on hand by agent Dec. 31, 1917 : 1,236.000 fives 760,000 tens 716,000 twenties 100,000 fifties 44,000 hundreds 22, 920, 050 70,000,000 82,800,600 11, 600, 250 10, 800, 100 6, 180, 000 7,600,000 14,320,000 5, 000, 000 4, 400, 000 = 198, 121, 000 37, 500, 000 EXHIBIT E.—Member banks in seventh Federal Reserve district to whom permits have been granted for the exercise of trust powers. City. State. Indiana. Anderson .do.. Batesville Battle Creek Michigan Do do.. Bay City do Beaver Dam j Wisconsin Belvidere j Illinois Benton Harbor ! Michigan Birmingham i do Bloomington j Illinois Boone ! Iowa Boyne City ! Michigan. Brazil Indiana .do. Do do Brookville do Do Illinois Casey Iowa Cedar Rapids do Do Illinois Chicago Iowa Clarence Clinton do do Coon Rapids do Council Bluffs do Do Indiana Crawfordsville Illinois Decatur Iowa Deeorah... do Des Moines Name of bank. Peoples State National Bank First National Bank Central National Bank Old National Bank First National Bank Old National Bank Second National Bank Farmers & Merchants National Bank First National Bank State National Bank First National Bank .do. < do.. Riddell National Bank Franklin County National Bank. National Brookville Bank First National Bank Cedar Rapids National Bank Merchants National Bank National City Bank First National Bank City National Bank First National Bank City National Bank First National Bank Citizens National Bank Millikin National Bank National Bank of Decorah Des Moines National Bank Date of permit. June 8, 1915 Sept, 13, 1916 Oct. 6, 1917 Apr. 29, 1915 Apr. 13, 1915 Apr. 29, 1915 Do. Aug. 18, 1917 Sept. 22, 1917 Jan. 18, 1916 Oct. 9, 1916 June 1, 1915 Oct. 13, 1916 Apr. 29, 1915 Sept. 30, 1915 Aug. 23, 1916 Dec. 30, 1915 M a y 9, 1916 Apr. 24, 1915 Aug. 9, 1915 Apr. 19, 1916 Nov. 8, 1915 Dec. 29, 1916 June 8, 1915 Mar. 9, 1917 M a y 5, 1917 Jan. 18, 1916 Sept. 20, 1917 July 20, 1916 DISTRICT NO. "7—CHICAGO. 447 EXHIBIT E.—Member banks in seventh Federal Reserve district to tvhom permits have been granted for the exercise of trust powers—Continued. City. Dubuque Dyer Emmetsburg Flint Fonda Franklin Freeport Gladbrook Grand Rapids Greencastle Humboldt Independence Indianola Janesville J oliet Kanawha Kokomo Bo Lansing La Porte LeMars Liberty Logansport Macomb Manchester Marengo Marion Do Marseilles Mattoon Michigan City Mishawaka Monroe Monrovia Montezuma Moweaqua Muncie Odebolt Oskaloosa Peterson Petoskey.... Port Huron Red Oak Richmond Do Rochester Do Rockford Do Rockville Rushville Do Russiaville St. Clair Heights Saginaw Sheridan Do Sibley Sioax Rapids South Bend Stanton Story City Tipton Traverse City Valparaiso Wabash Waterloo Do.... Waukesha Waverly Webster City..; Whiteland Wilkinson State. Iowa Indiana... Iowa Michigan.. Iowa. Indiana... Illinois Iowa. Michigan.. Indiana.. Iowa. do .do Wisconsin.. Illinois Iowa. Indiana... .do.. Michigan.. Indiana.., Iowa. Indiana... do Illinois Iowa .do.. Indiana. do..., Illinois., do.. Indiana do Wisconsin.. Indiana. Iowa Illinois.. Indiana. Iowa. .do .do Michigan.. .do Iowa. Indiana. do.. do Michigan.. Illinois .do.. Indiana. do... do do Michigan., .do.. Indiana... do Iowa. do Indiana... Iowa. do.... Indiana.. Michigan., Indiana.. do... Iowa. do Wisconsin.. Iowa do Indiana ....do Name of bank. First National Bank do Emmetsburg National Bank First National Bank .do.. Franklin National Bank. First National Bank .do.. Old National Bank... First National Bank, .do ..do.. ..do... ...do .do.. .do.. Citizens National Bank.. Howard National Bank. Capital National Bank.. First National Bank do.. Union County National Bank. First National Bank Union National Bank First National Bank do Marion National Bank First National Bank National Bank of Mattoon. Merchants National Bank.. First National Bank .do ..do.. ..do., .do.. Merchants National Bank. First National Bank Oskaloosa National Bank.. First National Bank .do .do.. ..do.. ..do.. Second National Bank. First National Bank .do.. Rockford National Bank Third National Bank Rockville National Bank Rush County National Bank.. Rushville National Bank First National Bank Michigan National Bank Second National Bank Farmers National Bank First National Bank .do .do.. do do .do.. Citizens National Bank First National Bank Farmers National Bank, Farmers & Merchants National Bank. Commercial National Bank Leayitt & Johnson National Bank National Exchange Bank First National Bank Farmers National Bank Whiteland National Bank Farmers National Bank Date of permit. May 5, 1917 June 8, 1915 May 5, 1917 Dec. 26, 1917 July 26, 1915 Do. Apr. 26, 1915 Aug. 27, 1917 Apr. 29, 1915 Oct. 9, 1916 Jan. 18, 1916 Aug. 26, 1915 Jan. 18, 1916 May 5, 1915 Apr. 15, 1915 Jan. 25, 1917 Jan. 26, 1916 Aug. 26, 1915 Aug. 15, 1917 June 8, 1915 July 20, 1916 June 4, 1915 Oct. 13, 1916 Apr. 13, 1915 Dec. 1, 1917 Oct. 9, 1916 Aug. 26, 1915 Feb. 21, 1916 Apr. 13, 1915 Dec. 29, 1915 Oct. m, 1916 Mar. 7, 1917 Apr. 29, 1915 Oct. 6, 1917 Oct. 9, 1916 Jan. 17, 1916 Mar. 14, 1917 Sept. 13, 1915 Jan. 17, 1916 Aug. 10, 1916 Dec. 2, 1915 Feb. 23, 1916 June 15, 1917 Apr. 29, 1915 Apr. 24, 1915 Oct. 18, 1916 July 26, 1915 June 1, 1915 Apr. 29, 1915 June 8, 1915 Apr. 13, 1915 June 8, 1915 Apr. 29, 1915 Feb. 21, 1916 Apr. 15, 1915 Apr. 7, 1916 Dec. 27, 1916 Apr. 13, 1915 Mar. 28, 1916 Feb. 21, 1916 Aug. 9, 1916 June 8, 1915 Sept. 13, 1915 Nov. 8, 1915 May 14, 1915 Dec. 2, 1915 Aug. 9, 1915 Dec. 29, 191f> Apr. 24, 1915 June 15, 1917 June 8, 1915 Nov. 25, 1916 July 1, 1915 NOTE.—National banks in the State of Illinois are not as yet exercising trust powers. It is understood that the supreme court of the State is shortly to pass on a test case now pending, to determine whether the State laws permit the exercise of such powers by national banks. 448 ANNUAL REPORT OF THE FEDERAL RESERVE BOARD. EXHIBIT F.—State member banks in seventh Federal Reserve Austin State Bank, Chicago. Central Trust Co. of Illinois 1 (1914), Chicago. Chicago Savings Bank & Trust Co., Chicago. First Trust & Savings Bank, Chicago. Foreman Bros, Banking Co., Chicago. Harris Trust & Savings Bank, Chicago. Hyde Park State Bank, Chicago. Kaspar State Bank, Chicago. Merchants' Loan & Trust Co., Chicago. Noel State Bank, Chicago. Standard Trust & Savings Bank, Chicago. State Bank of Chicago, Chicago. Union Trust Co., Chicago. United State Bank, Chicago. Kirchman State Bank, Cicero. Elmhurst State Bank 1 (1915), Elmhurst. State Bank of Evanston, Evanston. Commercial Trust & Savings Bank 1 (1915), Joliet. Joliet Trust & Savings Bank, Joliet. Union State Savings Bank & Trust Co., Kewanee. Mq^tinsville State Bank,2 Martinsville. Suburban Trust & Savings Bank, Oak Park. St. Joseph Valley Bank, Elkhart. Discount & Deposit State Bank, Kentland. IOWA. Security Trust & Savings Bank, Cedar Falls. Peoples' Trust & Savings Bank, Clinton. Iowa Loan & Trust Co., Des Moines. Citizens' Savings Bank, Gilman. Commercial Savings Bank, Mason City. Ottumwa Savings Bank, Ottumwa. Bankers' Loan & Trust Co.,1 (1916), Sioux City. First Savings Bank,3 Sutherland. Farmers State Bank,2 Vail. MICHIGAN. 1 Commercial & Savings Bank (1915), Albion. Eaton County Savings Bank, Charlotte. American State Bank,2 Detroit. Central Savings Bank, Detroit. Detroit Savings Bank, Detroit. Dime Savings Bank, Detroit. First State Bank, Detroit. 1 2 8 Banks which joined the system before 1917. Banks approved ; capital and reserve not paid. Banks approved; capital paid, reserve