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FIFTH ANNUAL REPORT OF THE FEDERAL RESERVE BANK OF BOSTON FOR THE YEAR ENDED DECEMBER 31, 1919 BOSTON, MASS LETTER OF TRANS M ITTAL. BOSTON, MASS., January 29, 1920. SIR: I have the honor to submit herewith the Fifth Annual Report of the Federal Reserve Bank of Boston covering the operations of that bank for the period from January 1, 1919, to December 31, 1919. Respectfully yours, FREDERIC H. CURTISS, Chairman and Federal Reserve Agent. Hon. W. P. G. HARDING, Governor, Federal Reserve Board, Washington, D. C. TABLE OF CONTENTS Page. Introduction Review of industrial conditions during 1919 Balance Sheet Financial results of operations Discount rates Loan and Discount Operations (a) Trade acceptances (b) Bankers' acceptances (c) United States securities (d) Credit department and bank examinations Reserve Position (a) Bank of England Sterling accounts Relations with commercial banks Deposits Currency (a) Federal Reserve notes (b) Federal Reserve bank notes Collection of checks Internal Organization (a) Banking quarters (b) Federal Reserve Society Operations as fiscal agent of the United States Government (a) Certificates of indebtedness (b) Victory loan (c) War savings division (d) Custody department Special War Activities (a) Warfinancecorporation (b) Foreign exchange Conclusion 7 8 10 10 11 11 13 14 14 15 16 16 17 18 19 19 20 20 20 21 22 24 25 26 26 27 27 28 SCHEDULES. 1. 2. 3. 4. 5. 6. 7. 8. 9. 10. 11. 12. 13. 14. 15. 16. 17. 18. Comparative balance sheet Expense and income Distribution of earnings Discount and loan transactions, 1919 Maturities of invested funds on the last Friday of each month, 1919 Reserve position on the first of each month Rediscounts with other Federal Reserve Banks Summary of weekly transactions in the gold settlement fund with other Federal Reserve Banks, January 1 to December 31, 1919 Currrency transactions Federal Reserve Bank notes, December 31, 1919 Federal Reserve notes issued by Federal Reserve Agent Federal Reserve notes issued and retired by denominations Federal Reserve note movement between districts, 1919 Available supply of Federal Reserve notes on December 31, 1919 Amount of checks handled by the transit department Custody department —• Volume of securities handled, 1919 Custody department — Character of securities held Collateral department — Coupons cut, 1919 3 30 31 31 32 33 33 34 34 35 35 35 36 36 37 37 38 38 38 4 TABLE OF CONTENTS. 19. Items of interest from the schedules of this and other official reports in connection with the fiscal operation of the United States in this district during 1919 20. Certificates of indebtedness and payments 21. Distribution by issues of certificates of indebtedness 22. Subscriptions to certificates of indebtedness classified by states 23. Subscriptions to Victory notes by days 24. Subscriptions to Liberty loans and Victory notes classified by states 25. Subscriptions to Liberty loans and Victory notes classified by number of subscribers 26. Classification of subscriptions by amounts — Victory Liberty loan 27. Sales of War savings stamps 28. Character of payments on Government loans 29. Liberty loan conversions 30. Bond and certificate deliveries 31. United States certificates of indebtedness redeemed from January 1, 1919 to December 31, 1919 32. Coupons redeemed during 1919 33. Government deposits, 1919 34. War Finance Corporation 35. Change in membership of national banks 36. List of member trust companies 37. Member trust companies compared with eligible non-member trust companies, 38. Amounts due to member banks and rediscounts by states 39. Reserves of national banks in New England as reported by the Comptroller of the Currency 40. Condition of national banks in New England on dates of Comptroller's calls . 41. Comparison of items reported by member banks in selected cities on the first Friday of each month — member banks in four cities outside of Boston . 42. Acceptance liability of national banks in New England 43. Member banks authorized to accept drafts and bills of exchange up to 100% of their capital and surplus 44. Other accepting member banks 45. Non-member accepting banks and other acceptors in this district 46. Acceptances outstanding, November 17, 1919 47. Banks granted fiduciary powers under the Federal Reserve Act 48. Discount rates 49. Money rates in Boston, 1919 50. Debits to depositors' accounts by the Clearing House banks in the larger cities of this district 51. Building permits for new construction issued in leading cities in this district, 52. Business through the Port of Boston 53. Commercial failures in New England 54. Number of employees in the various departments—-December 31, 1919, and December 31, 1918 Page. 38 39 40 41 41 41 41 42 42 43 44 44 45 46 46 46 46 47 47 48 48 48 49 50 50 51 51 51 52 53 53 54 55 55 56 56 CHARTS. A. B. C. D. E. F. G. H. I. J. Total earning assets at close of business each Friday Bills discounted at close of business each Friday Bills discounted secured by United States war obligations Acceptances held Gold reserves held Percentage of reserve to combined note and deposit liability Federal Reserve notes in circulation Deposits of Treasurer of United States Due from depositaries of public money Member banks' reserve deposits 57 58 59 60 61 62 63 64 65 66 EXHIBITS. A. Movement of earning assets during year B. Movement of gold and cash reserves, net deposits, etc., during year 68, 69 70, 71 FEDERAL RESERVE BANK OF BOSTON. OFFICERS AND DIRECTORS 1980 Officers FREDERIC H. CURTISS, Federal Reserve CHARLES A. MORSS, Governor. Agent. CHARLES E. SPENCER, Jr., Deputy Gov- ernor. CHARLES F. GETTEMY, Assistant Federal CHESTER C. BULLEN, Deputy Governor. WILLIAM WILLETT, Cashier. Reserve Agent. HARRY F. CURRIER, Auditor. FRANK W. CHASE, Assistant Cashier. ELLIS G, HULT, Assistant Cashier. WILLIAM N. KENYON, Assistant Cashier. ERNEST M. LEAVITT, Assistant Cashier. HARRY A. SAUNDERS, Assistant Cashier. L. WALLACE SWEETSER, Assistant Cashier. Class and group Directors A 1 THOMAS P. BEAL, A 2 F. S. CHAMBERLAIN, A 3 EDWARD S. KENNARD, B 1 PHILIP R. ALLEN, Term Expires 1920 President, Second National Bank, Boston, Mass. Cashier, New Britain National New Britain, Ct. 1922 Bank, 1921 Cashier, Rumford National Bank, Rumford, Me. Paper Manufacturer — Bird & Sons, E.Walpole, Mass. 1920 1922 Treasurer, Vermont Maible Co. Proctor, Vt. Worcester, Mass. 1921 B 3 CHAS. G. WASHBURN, President, Wire Goods Co. 1920 C FREDERIC H. CURTISS, Chairman, Boston, Mass. C ALLEN HOLLIS, Concord, N. H. 1921 Vice-Chairman, Lawyer, C JESSE H. METCALF, Providence, R. I. 1922 President, Wanskuck Co. B 2 EDMUND R. MORSE, ARTHUR H. WEED, Counsel and Secretary. Member of Advisory Council PHILIP STOCKTON, President, Old Colony Trust Company. FIFTH ANNUAL REPORT OF THE FEDERAL RESERVE BANK OF BOSTON. INTRODUCTION. Active hostilities with the Central Powers of Europe ceased with the signing of the armistice on November 11, 1918, but the after-effects of the Great World War dominated finance and industry in this Federal Reserve District during the entire year of 1919. Well into the New Year the industries of New England were occupied on Government orders and the settlement and adjustment of Government contracts, but gradually, as spring approached, they were able to readjust themselves from a war to. a peace basis, domestic demands bringing increasing business, so that throughout the year almost all industries were running at top notch, a condition which, with increasing costs in labor and raw material, called for unusually heavy credit expansion. This demand for credit was reflected in the loans of the Federal Reserve Bank of Boston. Throughout the year the financing of the war debts incurred by the Government, while decreasing in volume toward the year's end, overshadowed and took precedence over the local credit situation, influencing the adjustment of discount rates and making it difficult for the Federal Reserve Bank to adequately control commercial credits or to encourage the reduction of loans made by banks in connection with subscriptions to Government securities. During the year there was but one public offering of long-term securities, — that of the Fifth or Victory Liberty Loan in April, 1919 but shorttime borrowings of the Treasury Department on loan and tax certificates of indebtedness were continuous throughout the year, and these shorttime notes, together with the new income and excess profits taxes,1 placed a continuous and insistent demand upon the banks of the district which, with the increased commercial demands, made recourse to the Federal Reserve Bank heavier than in any previous year. In order, therefore, to maintain reserves above the legal limit this bank was obliged frequently to rediscount2 with other Federal Reserve Banks of the system; on the other hand, this bank did not rediscount for any other Federal Reserve Bank. 1 See Schedule 19. 2 See Schedule 7. 8 ANNUAL REPORT OF FEDERAL RESERVE BANK OF BOSTON. REVIEW OF INDUSTRIAL CONDITIONS DURING 1 9 1 9 . The year opened with retail trade extremely good, stimulated by patronage of wage earners who had shown no disposition to curtail their expenditures and whose purchases included many luxuries,— a condition which offered opportunity for retailers to dispose of stocks at prevalent high prices; but in view of uncertainty concerning the future, dealers were generally cautious in placing orders and replenishing depleted inventories. Merchants were expecting lower prices, and, as a result, manufacturers and distributors found their activities greatly restricted pending the establishment of a more stable price level, while curtailment of production was releasing many employees; some mills reporting an over-supply of help as high as 33 1-3 per cent. The demobilization of troops, and the dismissal of civilian employees engaged on war work with but few increased domestic activities to absorb them, brought about a condition in some localities which threatened for a time to be serious; in Springfield and Boston there were demonstrations by unemployed soldiers resulting in the appointment of committees to handle the problem, and it was estimated that there were several thousand out of work in Boston. By another month, however, there was apparent throughout the entire district less apprehension regarding future conditions; confidence was beginning to return and there was more general inclination to enter into future commitments; by April the turn in the tide was increasingly evident each week and the impression was becoming general that no lower commodity price level was likely to be established for some time to come. Buyers were encouraged to place orders with more confidence, and manufacturers went ahead with less hesitation. There was still, however, a considerable amount of unemployment in certain localities which had enjoyed large war contracts that had attracted employees from distant places by high wages; on the other hand, skilled labor of many kinds was scarce and some manufacturers were obliged to restrict production because of inability to secure the proper kind of help. But the return of workmen to their old homes and employment, and the absorption of the returning soldiers was, nevertheless, proceeding steadily, and fear of widespread distress on account of general unemployment was vanishing so rapidly that employers were everywhere being met with demands for shorter hours or more pay or both, and there was a general disposition to grant, and even to anticipate in many instances, these demands. The summer found manufacturers and merchants in practically all lines doing a large business, and buyers who had withheld orders awaiting lower prices were now purchasing heavily in anticipation of costs advancing still further; moreover, the removal of numerous government restrictions had gone far toward substantiating the belief that the price level would be no lower until production was sufficient to fill the vacuum in inventories ANNUAL REPORT OF FEDERAL RESERVE BANK OF BOSTON. 9 created during the war. But the raw material market and labor unrest were creating new problems which our manufacturers faced with increasing difficulty and which would have been well nigh unsurmountable had it not been for the fact that orders continued to come in, the wholesaler, jobber and retailer having such demands from the public that they did not hesitate to place orders even on the higher level. The general business situation was, nevertheless, unsettled, for, in spite of boundless activity and surface prosperity, the industrial unrest by the late summer overshadowed all other factors. The constant threat of strikes, and the interference with transportation facilities, traction and railroad, had begun to be a burden on all lines of industry, causing a general slowing down, which, however, was traceable more to apprehension on the part of the manufacturers than to any direct slackening of demand for goods. The strike of the railroad shopmen and others resulted in a freight embargo, which, during its continuance, prevented shipments to and from the mills; substantially the only unemployment was that caused by unwillingness to work, the only idleness being due to strikes. Employment offices had more requests for workers than could be supplied, even unskilled labor being decidedly short. Except for the desertion of duty by about two-thirds of the police force of Boston on September 9, with civil disturbances and apprehension as to its reactionary effect on organized labor following in its wake, autumn was ushered in with no appreciable change in the general labor situation which was largely a state of mind, consisting chiefly in speculation on the part of the workman as to whether he would benefit by further strikes for higher pay, and apprehension and anxiety on the part of the employer lest he do so. A more optimistic tone in the general business situation followed adoption by the public authorities of a positive policy dealing with the situation and returns to the Massachusetts Bureau of Statistics showed a marked decrease in the number of strikes after October 1, while the cotton manufacturers of Fall River and New Bedford the first week in December adjusted the complaints of seventy thousand operatives on the basis of a reasonable compromise. Thus the year ended with general business conditions in the New England district reflecting unprecedented prosperity as defined in terms of high wages and purchasing power, high prices, orders booked by manufacturers in some cases far into 1920, projected plans for expansion of plants and equipment which in some cases are already taking the form of actual building construction, and the absence of serious or widespread dislocation of working relationship between employer and employee in any of the great basic industries. Practically the only exception to this general condition of business activity is in the field of dwelling-house construction, which has shown no broad recovery from the stagnation of the war period, high prices of material and labor deterring individuals and contractors from entering upon the construction of private houses or 10 ANNUAL REPORT OF FEDERAL RESERVE BANK OF BOSTON. apartments, though there has been a noticeable inauguration of new projects for large-scale construction of working men's homes by some of the great industrial concerns. The expansion in banking and other activities has caused also several new projects for construction in financial centers. This is especially the case in Boston where several new bank and office buildings are being planned, the demand for office space being greatly in excess of the supply. This situation has contributed to very high rents and considerable real-estate activity. The apprehension of mills and factories, which were running on full time and as a rule to capacity on December 1, that they might be gravely affected by a coal shortage due to the strike in the bituminous fields and that as a consequence considerable unemployment might result in the closing days of the year, happily did not prove seriously embarrassing, partly because of ample reserve supplies in most cases where coal is still used for power purposes and partly because of foresight in installing fuel-oil plants. Commercial failures1 have been less in number and less in volume of liabilities than in the two previous years. The bank clearings in the larger cities emphasize the increasing business activity of the year.2 The business through the port of Boston3 shows some change, although it must be borne in mind that Boston is one of the terminals for the entire country. BALANCE SHEET. The comparative statement of the condition of the bank4 on December 31 for the years 1917, 1918 and 1919 reflects clearly the large increase in its operations. The total resources amounting to 521 million dollars, it will be noted, are over twice those of 1917, not including the increase in rediscounts with other Federal Reserve Banks. The important changes in this statement are referred to later in this report. FINANCIAL RESULTS OF OPERATIONS. While the heavy increase in bills discounted for member banks and the high discount rates maintained during the year have brought increased earnings5 to the bank, the increase on the other hand in service furnished to member banks, more particularly in connection with currency transactions and the handling of checks and other items, has entailed heavy increases in expense. Dividends at the rate of 6 per cent per annum were paid on the stock holdings of member banks on June 30 and December 31, and $5,362,934.40 was added to the surplus fund, making the total surplus fund $8,359,034.406 or 59 per cent of the subscribed capital of the bank. Under the amendment to the Federal Reserve Act of March 3, 1919, Federal Reserve Banks may accumulate a surplus fund equal to their 1 See Schedule 53. 4 See Schedule 1. 2 See Schedule 50. 5 See Schedule 2. 3 See Schedule 52. 6 See Schedule 3. ANNUAL REPORT OF FEDERAL RESERVE BANK OF BOSTON. 11 subscribed capital, and thereafter 10 per cent of earnings. The success of a Federal Reserve Bank should not be measured, however, by its earning capacity, but by the service it renders the commercial and agricultural interests of its district through its member banks. DISCOUNT RATES. As in the immediate war period the policy as to rates of discount during the year 1919 has been dominated by the necessities of the Treasury Department. The changes in rates were slight during the year,1 and not sufficient to give the bank satisfactory control of the credit situation. The preferential rate of 4 per cent on loans secured by and carrying the coupon rate of the Fourth Liberty Loan Bonds was withdrawn February 15. The rate in connection with loans secured by the bonds of the War Finance Corporation went into effect automatically on April 12, at 5f per cent or 1 per cent above the commercial rate, when the first offering of its bonds was made, but the rate was so high that it was used only to a very small extent. There were no further changes in discount rates, not even in connection with the flotation of the Fifth or Victory Liberty Loan, until November 4 when the preferential rates on maturities of 15 days or less were discontinued and rates on loans secured by Government obligations slightly increased. On December 12, the rates on all classes of paper, including trade acceptances and loans against United States Government long-term securities, were raised to the commercial rate of 4 ^ per cent, the rates being still continued on loans secured by certificates of indebtedness at the interest rate which such securities bore — 43^ to 4 ^ per cent. The gradual raising of rates on loans secured by long-term Government securities has had some effect in keeping the volume of that class of loans out of the banks,2 for in the latter months of the year when the discounts of the Federal Reserve Bank customarily increase heavily, the increase was almost entirely in commercial paper. LOAN AND DISCOUNT OPERATIONS. The year 1918 ended with the loan of this bank at nearly its maximum point, a point which proved to be almost the low point of the year 1919.3 The high state of industrial activity during the war and the character of the subscriptions to the Fourth Liberty Loan which had been placed under a "borrow to buy" policy were the principal causes for the year opening with loans high and with reserves low. While in 1918 there had been an improvement in general conditions, final payments on Liberty Loan Bonds and certificates of indebtedness financing, together with the slow adjustment of payments on account of 1 See Schedule 48. 2 See Chart C. 3 See Schedule 4 and Charts A and B. 12 ANNUAL REPORT OF FEDERAL RESERVE BANK OF BOSTON. Government contracts, soon brought loans to a new high mark. The loan continued at a high level until the middle of July. As payments began to come in on the Victory Liberty Loan, the first of which on May 20 and June 3 brought in 116 million dollars, it became evident that this loan had been placed more largely in the hands of investors than previous loans and had not been subscribed to so large an extent on borrowed money, as partial payment plans had been encouraged. Certificates of indebtedness financing made it possible for banks to meet their payments without recourse to this bank for any considerable amount of new loans. Even the heavy tax payment of 140 million dollars in June was met without additional borrowings from this bank as redemption of certificates of indebtedness provided much of the necessary money. Ordinarily, the demands of the mills for money with which to purchase raw materials appear in the late summer or early fall. This year, price uncertainty delayed these demands two or three months. The same held true in the case of other seasonal demands. In August, as all indications were that these demands would hold off and as reserves were at the high point of the year, being 55.6 per cent on August 15, this bank became a free buyer of acceptances.1 This policy was continued until early in November when open market purchases of acceptances were only made at rates above the discount rate, when open market rates on acceptances were raised above the discount rate. By November, a marked change had occurred in the demands made upon member banks. The ever-increasing price level due largely to the demands of labor; the financing of local taxes; the heavy purchases of raw material; the final payments on subscriptions to Victory Notes; high stock exchange call rates in New York, rates which attracted the balances the country banks had been carrying on deposit with their Boston correspondents, all together greatly augmented the demands upon this bank and made necessary heavy rediscounting with other Federal Reserve Banks.2 From then on to the end of the year, an increasing demand on the part of the commercial borrowers of member banks caused a marked change in the character of this bank's loan. Commercial paper discounted, which had averaged under 10 million dollars up to November 1, rose to 63 million dollars by the end of the year, an increase caused in part by the changes in discount rates on November 4 and December 12, which tended to eliminate the preferential rate that had led commercial borrowers to use United States obligations rather than their unsecured notes when seeking accommodation. Early in December, payment of 30 million dollars in this district on the part of the United States Railroad Administration to the Boston & Maine Railroad brought an easing of conditions which, however, lasted but a i See Chart D. 2 See Schedule 7. ANNUAL REPORT OF FEDERAL RESERVE BANK OF BOSTON. 13 few days, the money being rapidly distributed to other districts. From then on, commercial demands on member banks and Government financing necessitated further rediscounts with other Federal Reserve Banks. The December 15 tax payment in this district was directly felt in the loan of this bank which rose to 218 million dollars and was one of the factors which made the year close with the loan at 289 million dollars including rediscounts, or almost 85 million dollars higher than the previous year, notwithstanding the fact that constant pressure had been brought to bear on individual banks which were rediscounting undue amounts. As in previous years, borrowings were made by banks largely on short maturities,1 thus keeping the banks' investments in a satisfactory liquid state. TRADE ACCEPTANCES. Although the larger city banks are still disinclined to encourage borrowing for commercial purposes through the use of trade acceptances, preferring the single name note, there has been a tendency on the part of note brokers and merchants to increase the volume of this class of commercial obligations. While, in certain cases, the firms using trade acceptances have not been those enjoying the highest credit, some merchants have found that they could get increased credit from their banks through the use of paper of this character and that brokers were inclined to favor it. During the past year, a number of corporations have been organized in some cases under the general corporation laws of the State, and in others under the State banking laws, corporations whose principal operations are confined to the financing of automobiles, both in connection with sales to dealers and to individual purchasers. The relation of these corporations to member banks, to the Federal Reserve system and the character of the obligations which they handle as they pertain to the development of the general acceptance business, should be given careful consideration. For a short time the Federal Reserve Bank purchased in the open market trade acceptances endorsed by member banks.2 Foreign trade acceptances have also made their appearance in this market to a marked degree and have been carried by the large city banks in their portfolios. These have been purchased at somewhat higher rates by this bank under open market operation, but only when endorsed by member banks. Inasmuch as it has been deemed desirable to increase rates whenever possible and to bring about a closer uniformity of discount rates on all classes of pappr, the preferential rate for trade acceptances was withdrawn on December 12. 1 See Schedule 5. 2 gee Schedule 4. 14 ANNUAL REPORT OF FEDERAL RESERVE BANK OF BOSTON. BANKERS' ACCEPTANCES. Increased demand for credits has produced a marked increase in the volume of bankers' acceptances created in this Federal Reserve district,1 and every encouragement has been given to the brokerage houses and discount companies to handle and distribute bankers' acceptances. This has led to frequent carrying of acceptances by this bank on repurchase agreements, only acceptances being taken, however, that this bank would purchase and then at rates slightly above the open market. Several of the large city banks have followed the same practice. There has been evidenced, as a result of this encouragement, a wider distribution of these acceptances among commercial and savings banks during the past year than ever before. With the Treasury out of the market for short borrowings the banks in this district should be in a position to carry large portfolios of acceptances as secondary reserves. During the entire year the Federal Reserve Bank has been a purchaser of acceptances in the open market. Banks have preferred to sell their acceptances to the Federal Reserve Bank even at rates considerably higher than the current discount rates, rather than offer their holdings for rediscount. As referred to elsewhere during the months of August, September, October and early November, the Federal Reserve Bank was a heavy purchaser of bankers' acceptances. The general policy of having differential rates with reference to the character or maturity of acceptances has been maintained, but purchases of bills have been confined to those either accepted by or endorsed by member banks. The outstanding acceptance liability in this district of member banks on November 17 was 83 million dollars and private bankers and non-member state banks brought the total up to over 109 million dollars. This bank has maintained the policy of requiring the endorsement of all acceptances rediscounted with or for other Federal Reserve Banks. During the year a number of member banks have been given the special privilege by the Federal Reserve Board of accepting up to 100 per cent of their combined capital and surplus,2 while several banks" have entered the acceptance field for the first time.3 A policy has finally been adopted whereby bankers' acceptances payable in Federal Reserve Bank cities become reserve funds to the holding bank on the date of payment, settlement being consummated through the gold settlement fund in Washington. This arrangement has greatly aided the distribution of these bills among the various districts. UNITED STATES SECURITIES. The principal changes in the amount of United States securities held by this bank have been in connection with Certificates of Indebtedness i See Schedule 42 and Schedule 46 and Chart D. 3 See Schedule 44 and Schedule 45. 2 See Schedule 43. 4 See Schedule 1. ANNUAL REPORT OF FEDERAL RESERVE BANK OF BOSTON. 15 issued under the Pitman Act which provides for their use as security for Federal Reserve Bank Notes which have been issued to take the place of silver certificates. January 1, 1919, $666,000 of these were purchased to replace a like amount of United States one year 3 per cent notes which matured on that day and had been used as security for Federal Reserve Bank Notes. In addition to these, $14,020,000 Certificates of Indebtedness were purchased to be used as security for additional Federal Reserve Bank Notes. Anticipating receipt of funds occasionally, the Treasury Department has sold to the Federal Reserve Bank special Certificates of Indebtedness maturing in one or two days and carrying 2 per cent interest. The funds so obtained have been used to meet its current obligations. The largest amount of these certificates held at one time was 30 million dollars on September 15 and the total amounted to 36 million dollars. CREDIT DEPARTMENT AND BANK EXAMINATIONS. The expansion of the general credit situation has called for a more careful scrutinizing of credits than ever before. Careful investigations have been made both of notes offered for discount by member banks and of notes and securities carried in their loans. In the past, credit analysis has been conducted in connection with the examining department, but this work has now increased to such a point that after the first of the year it is planned to organize a separate credit department which will be under the immediate supervision of Frank S. Hughes, who, for many years, has been associated with R. G. Dun & Company. The scope of the department will be considerably extended as it is proposed to follow more closely the different lines of commercial activity in New England in order that the Federal Reserve Bank may be kept in closer touch with the credit situation and the needs of the industrial, commercial and agricultural communities in this district. The work of the examining department has been largely increased during the past year in connection with both state member and national banks. It has been found desirable in the case of state banks, both when applying for admission to the Federal Reserve System and in following their condition after membership, to pursue the policy of making independent examinations. This policy has been adopted not through any lack of co-operation on the part of the various state banking departments or through lack of confidence in their examinations but rather in order to bring about a uniformity of detail in the information obtained and greater regularity of making examinations. During the past year every state member bank has been examined either independently or in conjunction with state banking departments in which latter case independent reports have been made by the Federal Reserve examiner. 16 ANNUAL REPORT OF FEDERAL RESERVE BANK OF BOSTON. It has been found necessary to keep in closer touch with the condition of all national banks and to work in even closer co-operation with the Chief National Bank Examiner of this district than in previous years, and satisfactory results have been obtained thereby. RESERVE POSITION. Although the reserve position of the bank1 would appear to show less fluctuation than in 1918, this has been brought about only through the adjustment of reserves by rediscounts with other Federal Reserve Banks. The bank's reserve position has been affected quite as much by transfers of funds by the Treasury Department out of the district2 as by actual commercial demand. The transfers made from the proceeds of the sale of government securities were mostly to the Federal Reserve Bank of New York. The marked increase in reserves during July and August was partly due to transfer of gold held by the Federal Reserve Bank of New York for the account of the Argentine Government and the seasonal lessening of the local money market requirements. A heavy decline in the reserve position appeared early in November, due to heavy demand on the local banks for commercial purposes and incidental to the payment of local taxes. Municipal obligations created in this district in anticipation of these tax payments having been largely purchased outside of the district, presumably for investment in temporary foreign balances in New York, becoming due, withdrew quite an amount of the tax money from the district. The adjusted reserve percentage, eliminating gold received from rediscounts with other Federal Reserve Banks, has been unusually low except during the months of July, August and September, the year ending with an adjusted reserve of 27 per cent and on one occasion falling as low as 23 per cent. BANK OF ENGLAND STERLING ACCOUNT. On April 2, 1919, final payment was received by this bank on account of its share of the gold which had been deposited with the Bank of England on June 27, 1917. The original amount apportioned to this bank was $3,675,000. During the summer of 1919, the United States Grain Corporation received payment in gold for food sold in Germany. The gold was forwarded to the Bank of England to be held for the account of the Federal Reserve Bank of New York. As this was received by the Bank of England and counted, the various Federal Reserve Banks assumed the proportionate share of the total. The first allotment of this gold was made on September 17, 1919, and the final one brought the total allotment for this bank to $12,638,000. However, before all adjustments had been made, the Federal Reserve Bank of New York commenced to sell i See Chart E and Schedule 6. 2 See Schedule 8. ANNUAL REPORT OF FEDERAL RESERVE BANK OF BOSTON. 17 part of this gold. The first sale was on October 2, 1919, and sales continued during the remainder of the year; as the year closes, this account stands at 9 million dollars. RELATIONS WITH COMMERCIAL BANKS. The Treasury financing and commercial expansion during the year have necessitated the closest co-operation between the officials of the Federal Reserve Bank and those of the commercial banks of the district. In connection with the Treasury financing it was found necessary, in order to meet the quota of Treasury certificates placed on this district at each issue, to allot a percentage to each commercial bank in the district, that percentage being based upon each bank's total resources. In the case of member banks, this brought about a situation calling for constant pressure and tact, for while urging these banks on the one hand to expand through the purchase of these government securities, the officials of the Federal Reserve Bank had to constantly bring pressure on the same banks to reduce their rediscounts at this bank. With the demands of their commercial customers constantly increasing and the tempting rates on commercial and call money,1 the greatest credit is due to the banks in this district, most of whom not only took their full quota of Treasury certificates without complaint, but against their own interest, so far as possible profit was concerned, kept their commitments down and met the suggestions of this bank's officials regarding their credit lines. This is especially so in the case of the large clearing house banks in Boston, between whom and the Federal Reserve Bank there has been the very closest co-operation. The Governor and Chairman of the Board of Directors of the Federal Reserve Bank have had meetings when conditions seemed to make it necessary with the Executive Committee of the Boston Clearing House, and discussed matters pertaining to the general credit situation in the district, which meetings have been of the greatest value in solving the problems that have arisen from time to time. Seven new national banks opened for business during the year, all but one being located outside of Boston. Four national banks went into liquidation, all but one of these, which consolidated with another member bank, being converted into state banks.2 Five trust companies were admitted during the year, all from Massachusetts, bringing the total number of trust companies to thirty-six,3 and the total member banks to 432. While there are apparently a number of trust companies in the district that are not members of the Federal Reserve system,4 a large percentage i See Schedule 40, Schedule 41 and Schedule 49. 3 See Schedule 36. 2 See Schedule 35. 4 See Schedule 37. 18 ANNUAL REPORT OF FEDERAL RESERVE BANK OF BOSTON. do a character of business that probably does not warrant their joining the Federal Reserve system, both from the position of the Federal Reserve Bank and the state institutions. Of the total liabilities of non-member banks, over 135 millions, or 30 per cent, are composed of savings deposits. Under the banking laws of most of the New England states, the investments of savings departments of trust companies not only must be segregated but are chiefly limited to investments of a character that are not eligible for rediscount purposes in the Federal Reserve Bank, — these investments being largely in real estate mortgages and securities. State laws also require against savings deposits either no reserves or reserves considerably lower than called for by the Federal Reserve Act. Although non-member state banks in many cases no doubt indirectly used the resources of the Reserve Bank for accommodation, i.e., through their Boston correspondents, the effect of such borrowings on the general credit situation has been unimportant, these loans having largely been made at rates higher than those maintained by the Federal Reserve Bank, — borrowings for commercial purposes being mostly at 53^ per cent and 6 per cent. Despite the extravagance shown by the wage-earning class during the past year, the deposits of mutual savings banks and savings departments of commercial banks in this district have shown a heavy increase. While it is difficult to give the exact figures of this increase there is no doubt but what it will exceed 200 million dollars. A large number of national banks have been granted special authority by the Federal Reserve Board to exercise fiduciary powers.1 DEPOSITS. The reserve accounts of member banks (collected funds) show an increase of some 16 million dollars2 over the previous year, having expanded from 101 million dollars on December 31, 1918, to 117 million dollars on the same date in 1919. This reflects the increase in deposits in member banks and also the reserves of trust companies admitted during the year. There has been greater penalizing of banks for deficient reserves than during the previous year, probably due to the policy inaugurated on July 1 of requiring member banks to make reports of average deposit liabilities for weekly periods if located in Boston and for semi-monthly periods if located elsewhere, instead of monthly as heretofore. On the other hand, the policy of allowing all banks outside of Boston to remit for checks sent them for collection instead of charging such collections to their accounts has enabled the banks to handle their reserve accounts more satisfactorily. The account of the Treasurer of the United States3 has shown great fluctuations during the year. At times when funds have been drawn in from i See Schedule 47. 2 See Chart J and Schedule 39. 3 See Chart H. ANNUAL REPORT OF FEDERAL RESERVE BANK OF BOSTON. 19 depository banks,1 the Treasury balances carried with this bank have been very large, but transfers to other districts and the payment of maturing Treasury certificates have not only at times drawn this account very low, but have necessitated the bank purchasing Treasury certificates for a day or two to cover overdrafts. CURRENCY. During January, currency receipts were unusually heavy, probably due to the large expansion which occurred just previous to the Christmas holiday season. The question of properly sorting and counting this currency presented a difficult problem, as at that time the bank employed a small number of money counters and its quarters were inadequate. As rapidly as possible, this force was augmented and a new system of counting put into operation. A steadily increasing number of banks have taken advantage of the plan put in operation in October, 1918, whereby the Federal Reserve Bank absorbs the charges for shipping incoming and outgoing currency. During the year, over 500 million dollars of currency was received and 400 million dollars paid out. The demands of December, 1919, were even heavier than those of the same month in 1918, and it is expected that much of this will speedily be returned from general circulation. While, during the early months of the year, the bank accumulated a supply of about 500 thousand dollars in silver coin and 75 thousand dollars in nickels and dimes, after the December demand had run its course there was less than 25 thousand dollars of this coin in the bank's vaults, this notwithstanding the fact that heavy purchases were made all during November and December.2 FEDERAL RESERVE NOTES. Every year has shown a steadily increasing issue of Federal Reserve Notes by this bank,3 for unlike the situation that appears in other Federal Reserve districts where agricultural seasonal demands expand and contract the note issues, with the exception of fluctuations due to the Christmas retail trade, the demand has been constant and increasing. In the case of loans, the bank has been able to restrict, although perhaps very slightly, the demands from particular banks for rediscounts, but in the case of Federal Reserve Notes, so far as the volume is concerned, it has had no control. It would, therefore, appear that the volume of Federal Reserve Notes follows the price level and is a reflection of credits granted. The higher wage scale with the great activity in industry, and the extravagance of the wage-earner, calling for increased circulating medium, would appear to be the main factor to which the large increase in Federal Reserve Notes should be attributed. The demand for new currency has also been a factor but less important than in previous years. The interdistrict i See Chart I. 2 See Schedule 9. 3 See Schedule 11, Schedule 12 and Chart G. 20 ANNUAL REPORT OF FEDERAL RESERVE BANK OF BOSTON. movement of Federal Reserve Notes1 has been considerably heavier than in 1918, especially with New York, Philadelphia and Chicago, and should be given careful study by the Federal Reserve Board. The handling, counting and sorting of these notes together with other currency has called for a large increase in the force and accommodations of the money department — from 71 to 104. It has also been found necessary to increase the supply of unissued Federal Reserve Notes.2 FEDERAL RESERVE BANK NOTES. The further withdrawal of silver for shipment to foreign countries has resulted in the retirement of large amounts of silver certificates by the Treasury Department. This has called for other circulating medium to replace that retired, especially one and two dollar notes. To fill this demand, the Federal Reserve Bank has increased its issue of Federal Reserve Bank Notes to 21 million dollars.3 All these are secured by special 2 per cent Certificates of Indebtedness issued under the Pitman Act. COLLECTION OF CHECKS. From the inauguration of the collection system by the Federal Reserve Bank, all banks in New England have remitted for their checks at par. In the case of member banks, it had been customary to enter a deferred charge against their reserve account, while non-member banks had the privilege of remitting for their checks after receipt. On December 1st, all banks were placed on a remittance basis, a plan which greatly aided member banks in maintaining their reserves at the required amounts. Boston banks are now permitted to deposit in one package all checks on New England banks, instead of being required to prepare a package of the checks drawn on each bank. As a result, the number of items handled per day has increased to about 100,0004 and the force handling these items has increased from 109 to 173. INTERNAL ORGANIZATION. There have been but few changes in the officers' staff during the past year. However, the increase in departmental work has called for a large addition to our clerical force, — an increase from 508 employees on December 31, 1918, to 629 on December 31, 1919, the increase for the most part being in the money and transit departments, and being about evenly divided between men and women employees.5 Chester C. Bullen, who had been appointed Deputy Governor and Cashier, resigned as Cashier on June 19,1919, and William Willett, formerly i See Schedule 13. 2 See Schedule 14. 3 See Schedule 10. 4 8 See Schedule 15. See Schedule 54. ANNUAL REPORT OF FEDERAL RESERVE BANK OF BOSTON. 21 Assistant Cashier, was appointed Cashier. On December 4,, 1919, Ellis G. Hult, head of the transit department, was appointed Assistant Cashier. Russell B. Spear resigned on July 1, 1919, as Assistant Federal Reserve Agent, and the appointment of Charles F. Gettemy, formerly Director of the Bureau of Statistics of Massachusetts, was approved by the Federal Reserve Board as Assistant Federal Reserve Agent. Thomas W. Farnam, Class A Director, representing banks in Group 2, entered the service of the American Red Cross in September, 1918, and was at once sent over b.y that organization to investigate the situation in Serbia. He was made Commissioner of Serbia, and as his residence in that country was rather indefinite he resigned as a Director of the Bank. A special election was held tofillthe vacancy caused thereby, and Frederick M. Drew, Vice-President of the Ansonia National Bank, of Ansonia, Connecticut, was elected by banks in Group 2 for the term expiring December 31, 1919. To fill the vacancy caused by the expiration on December 31, 1919, of the terms of Frederick M. Drew and Edmund R. Morse, Class A and Class B Directors, representing banks in Group 2, an election was held from November 11 to December 3, 1919. Of the 159 banks in this group entitled to vote, G9, or 42 per cent, voted. The sole nominees were Frederick S. Chamberlain, Cashier of the New Britain National Bank of New Britain, Connecticut, and Edmund R. Morse, of Proctor, Vermont, and all votes were cast in favor of the two candidates, who were elected each for the term of three years ending December 31, 1922. Jesse H. Metcalf, whose term expired December 31, 1919, was reappointed by the Federal Reserve Board for the term of three years ending December 31, 1922. On December 20, 1919, the Federal Reserve Board redesignated Frederic H. Curtiss as Chairman of the Board of Directors and Federal Reserve Agent for the year 1920. At the January, 1919, meeting, the directors reappointed Daniel G. Wing, President of the First National Bank of Boston, to represent this district as a member of the Federal Advisory Council. BANKING QUARTERS. The problem of housing the activities of the bank under one roof, and adequately safeguarding the cash and securities which it is called upon to handle, has been exceedingly difficult. The premises at 95 Milk Street, purchased in June, 1918, containing some 13,000 square feet, were subsequently found to be inadequate for the bank's purposes and as suitable adjoining property could not be obtained, the directors decided to sell this property and to purchase elsewhere. It was accordingly disposed of and at a substantial net profit over all carrying charges, a tract of some 22 ANNUAL REPORT OF FEDERAL RESERVE BANK OF BOSTON. 40,500 square feet being then purchased for $1,400,000, which has a frontage of 181 feet on Pearl Street, 267 feet on Franklin Street and 128 feet on Oliver Street. This location is in close enough proximity to the banking centre of Boston and its dimensions are such as to make its use entirely adequate for the bank's purposes. The same building committee, consisting of Philip R. Allen, Frederic H. Curtiss, Charles A. Morss, E. R. Morss and Charles G. Washburn, has been continued, with Charles A. Morss as its Chairman. R. Clipston Sturgis, upon the recommendation of the committee, was employed as the architect, and plans have now been perfected for the new building. It is expected that soon after the first of the year the construction of this new bank building will begin. The bank building will set back several feet from Pearl Street, on which it will front, and will have many features different from those of other bank buildings. The general public, except for very restricted purposes, has no occasion to use the Federal Reserve Bank, hence its building need provide entrance for only a limited number of persons, comprising chiefly officers of member banks or their special representatives who may call for personal conferences with the officers of the Federal Reserve Bank or for the purpose of depositing securities. The small number of people who enter the building daily and the value of the securities and currency in the bank's custody accordingly permit making provision for a single main entrance on Pearl Street and a side entrance for employees, with two entrances on Oliver Street to a "security court" for delivering securities and currency in bulk. These entrances are to be thoroughly protected by heavy doors calculated to resist attack, and all the window openings on the ground floor are to be quite narrow and protected with bar grills on the outside and steel shutters on the inside. In this way the entire ground floor can be readily closed and made proof against mob attack. Various methods for employing defensive measures against mobs will be provided. Just inside the Pearl Street entrance, on the ground floor, is to be the general banking room where callers may have ready access to the bond and certain other departments. Liberty Loan transactions, receipt of city checks, etc., will be taken care of in this room. The members' lobby, where representatives of member banks may meet the senior or junior officers, is to be on the first floor directly over the entrance, reached by a short flight of stairs, and will be a large stone-walled room at the bottom of a large interior court, lighted from overhead. This lobby will be a convenient meeting place for the officers of member banks and at the same time be a central source of light and air to the first-story rooms; adjacent to it will be several small rooms for conference purposes. On one side of the main banking lobby, where the junior officers are to be located, will be the offices of the Governor, the Federal Reserve Agent, and the senior officers. The offices of the Governor and the Federal ANNUAL REPORT OF FEDERAL RESERVE BANK OF BOSTON. 23 Reserve Agent will get their light and air from the member's lobby and will be inside rooms, removed from the proximity of the city street. The collateral and discount departments will be located on the other side of this lobby where they will be readily accessible to the special representatives of the member banks. The vaults will be the heart of the building and are to be arranged in three tiers, giving points of contact with three different floors so that the various departments requiring separate vault space may have their own independent contact and control of vaults. These will be thoroughly protected against all forms of attack or access by unauthorized persons and will be planned to be not only secure when closed but adaptable at all times to the quick return of material and speedy closing as well as for the most economical handling of the bank's business from day to day. The remaining floors will be composed principally of uninterrupted open clerical space, thoroughly lighted and made as noiseless as possible by the character of the material used, especial attention being given to the elimination of the vibration in those departments which call for considerable equipment. To the left of the principal entrance on Pearl Street will be the service quarters, almost completely separated from the main building, and accommodating the locker and toilet rooms of the employees, as well as the custodian and supply departments. The principal elevators are located in this part of the building which will have an added story extending over a portion of the main banking building, providing quarters for the welfare work of the bank, including lunch and rest rooms. The exterior of the building will be of granite on the ground floor and limestone above, and will suggest in its design, as it does in its general scheme of plan, the great houses of Florence, Genoa and other North Italian cities. FEDERAL RESERVE SOCIETY. Early in 1919, the clerks of the Federal Reserve Bank completed the formation of an organization under the name of the Federal Reserve Society of Boston. Its aims are the promotion of loyalty to the Federal Reserve Bank, the promotion of sociability and recreation, the promotion of co-operation among the employees, and the extension of financial aid and advice when necessary. With full co-operation on the part of the officers and directors of this bank, the society is functioning most satisfactorily in fulfilling its aims. It has acted as a distributor of surplus army supplies, purchasing over $3,000 worth of these, and selling them at cost. Both at Thanksgiving and Christmas several thousand pounds of turkey were purchased and distributed at wholesale prices to the members of the society. In addition, it is publishing a monthly magazine containing articles of general interest 24 ANNUAL REPORT OF FEDERAL RESERVE BANK OF BOSTON. about the bank. Several successful social events have been held during the year and financial aid has been rendered, where unusual circumstances have warranted. The Society numbers 560 members. CERTIFICATES OF INDEBTEDNESS. United States Treasury financing, while decreasing in volume as the year 1919 drew to a close, was heavier for the first six months of the year than in any previous similar period. The Victory Liberty Loan being the only long term loan placed during the year, the Treasury Department was obliged to finance itself largely through the sale of Certificates of Indebtedness issued in anticipation of taxes, and other short-time Certificates of Indebtedness. These certificates were issued at frequent intervals, occasionally more than one issue being placed on sale at the same time.1 The Certificates of Indebtedness Committee, appointed in 1918, of which Storer E. Ware was Chairman, continued to serve but asked to be relieved after the Victory Loan had been placed. In the summer, after the announcement by the Secretary of the Treasury of his program for the balance of the calendar year, the following committee was formed to handle future offerings of Certificates of Indebtedness: — C. C. Bullen, Chairman, Deputy Governor, Federal Reserve Bank, Boston. I. K. Stetson, President, First National Bank, Bangor, Maine. Wm. W. Thomas, President, Canal National Bank, Portland, Maine. Arthur M. Heard, President, Amoskeag National Bank, Manchester, N.H. E. A. Davis, Vice-President, National White River Bank, Bethel, Vermont. J. H. Gifford, Vice-President, Merchants National Bank, Salem, Mass. Irving W. Cook, President, First National Bank, New Bedford, Mass. F. A. Drury, President, Merchants National Bank, Worcester, Mass. H. A. Woodward, President, Chapin National Bank, Springfield, Mass. Thos. H. West, Jr., President, R. I. Hospital Trust Co., Providence, R. I. Wm. B. Bassett, Vice-President, Phoenix National Bank, Hartford, Conn. W. P. Curtiss, President, Union & New Haven Trust Co., New Haven, Conn. Although this committee did splendid work, it was with difficulty, owing to the general conditions of the investment and money markets, that quotas were even approached.2 General commercial demands on the banks were such that subscriptions had to be obtained through personal solicitation. Most of the subscribing banks paid for these certificates by credit as in previous years. These deposits were gradually withdrawn to meet government requirements.3 1 See Schedule 20 2 See Schedule 21 and Schedule 22. 3 See Schedule 20 and Schedule 33. ANNUAL REPORT OF FEDERAL RESERVE BANK OF BOSTON. 25 These government deposits, although no doubt having an important influence in the volume of certificate sales, have been, on the other hand, a rather unsettling factor in the general credit situation. As banks distributed these certificates to the public, they would use the money thereby obtained as a basis for granting additional credits and when these government deposits were later withdrawn would have recourse to the Federal Reserve Bank or to their own correspondents for money with which to meet these payments. In connection with the different offerings of Treasury Certificates of Indebtedness, the Federal Reserve Bank has during the year acted as a medium to assist in the distribution of certificates between banks and has placed and filled orders for them. At the close of the year, $369,000 certificates were held for resale. VICTORY LOAN. The announcement made early in the year by the Secretary of the Treasury that there would be but one more popular offering of bonds enabled the Liberty Loan Committee to hold intact its volunteer organization that had handled so successfully the four previous bond issues, until after the flotation of the Fifth or Victory Liberty Loan opened for subscription by the Secretary of the Treasury on April 22. * As in 1918, the Governor of the bank, Charles A. Morss, was Chairman of the organization, the active management being in the hands of N. Penrose Hallowell of Lee, Higginson & Company, Executive Chairman; J. R. Macomber, of Harris, Forbes & Company, Assistant Executive Chairman; James Dean of Wm. A. Read & Company, Chairman of Distributing Committee; and Mrs. F. L. Higginson, Chairman of the Women's Committee. The quota allotted to New England was 375 million dollars and the subscriptions received were $427,223,750,2 or 113 per cent, representing subscriptions received from 817,8223 individual subscribers, as reported by banks. The amount finally allotted to the district by the Treasury Department was $371,910,150. This Victory Loan, owing to the improvement in the organization of the Liberty Loan Committee and to the fact that the Treasury Department had announced that it would be a closed issue and that it would be the last popular offering, was distributed as well as, if not better than, any previous loan.4 Banks were not encouraged to solicit subscriptions on the subscribe and borrow policy, as in the Fourth Loan and furthermore subscribers were encouraged to subscribe on the Government Installment Plan.5 With the subscription to the Victory Notes the total amount of long-term government securities subscribed for in the New England district amounted to over 2 billion dollars.6 Previous to May 20, when the initial payment of 10 per cent was due on subscriptions, about 35 million dollars of bonds were disposed of in advance i See Schedule 23. 4 See Schedule 26. 2 See Schedule 24. 5 See Schedule 28. 3 See Schedule 25. 6 See Schedule 24. 26 ANNUAL REPORT OF FEDERAL RESERVE BANK OF BOSTON. of the issue for cash. In anticipation of the Victory Loan, Treasury Certificates of Indebtedness amounting to $475,792,500* had been sold in the district which could be used in payment for Victory Bonds, but only a negligible amount of these were so used, banks preferring to hold the certificates until they matured. The percentage of subscription to the Victory Loan in the several New England states was about equal to that of previous loans. The Victory Notes were issued in two series — 4.% per cent and 3% per cent, the latter being tax exempt. The bank delivered $317,644,500 of 4% per cent notes and $54,254,650 of the 3% per cent, notes. WAR SAVINGS DIVISION. On November 15, 1918, the Secretary of the Treasury definitely placed the distribution of all Government Securities under the Governor of each Federal Reserve Bank. This included the Liberty Loan issues, Treasury Certificates and War Savings Certificates. Until that date, the War Savings Organization had been directly conducted by the Treasury Department in Washington. As the various state committees had largely resigned, this necessitated the building up of almost an entirely new organization in this district. In January, 1919, Mrs. F. L. Higginson, the Chairman of the Women's Liberty Loan Committee of New England, was appointed director of the Savings Division in this district and Mrs. C. E. Heard was selected as assistant director. An executive committee was formed consisting of Charles A. Morss, Governor of the Federal Reserve Bank, Frederic H. Curtiss, Chairman of the Federal Reserve Bank, N. Penrose Hallowell of Lee, Higginson & Company, John R. Macomber of Harris, Forbes & Company, James Dean of Wm. A. Read & Company, and Graydon Stetson. Directors were appointed for each state who had complete charge of both the educational campaign and sales of stamps. Owing to the general reaction after the armistice, and to the Victory Loan, sales of stamps decreased rapidly until August, since which time the increase has been steady.2 Educational work is being carried on not only to encourage savings, but to educate the public to avoid false investments and loan sharks and to encourage all to hold and invest in Government securities. CUSTODY DEPARTMENT. This department has become of increasing importance during the year, in connection with the collateral against notes discounted with the bank and collateral pledged against government deposits, and these added activities which have been placed on this department have called for an increase in the clerical force.3 Member banks have also become accustomed to leave securities in this department for safe-keeping. The character of 1 See Schedule 20. 2 See Schedule 27. 3 See Schedule 16 and Schedule 54. ANNUAL REPORT OF FEDERAL RESERVE BANK OF BOSTON. 27 the collateral pledged during the year has changed to quite an extent, commercial paper increasing in volume and securities other than those of the United States Government showing a material decrease.1 The cutting of coupons on collateral held in this department has become an important factor in its activities.2 The handling of the coupons and bonds of the Government in the Bond Department has also been increasingly heavy, that department having redeemed no less than 7 million coupons amounting to 44 million dollars during the year. This same department during 1919 handled 961,000 odd bonds of the Fourth Loan and 1 million bonds of the Victory Loan and 157,900 Treasury Certificates.3 That these securities have been handled without loss demonstrates to some extent the efficiency of the Bond Department. The privilege of converting Liberty Loan Bonds carrying 4 per cent interest into bonds carrying 434 per cent interest was reopened on March 9, 1919, and many holders have taken advantage of this opportunity.4 WAR FINANCE CORPORATION. On April 1, 1919, this bank opened subscriptions for the 250 million dollar issue of bonds offered by the War Finance Corporation. These were one year bonds carrying 5 ^ per cent interest. Total subscriptions reached 27 million dollars5 in this district and were placed not only with banks but in some cases directly with brokers who received a commission for reselling the securities. FOREIGN EXCHANGE. Under the Presidential Proclamation of January 26, 1918, this bank was required to license all dealers in foreign exchange and to obtain reports of those who were doing an active business. Before the Proclamation regulating foreign exchange was rescinded, on June 26, 1919, this bank had issued licenses to over 1600 dealers. In addition, permits to export coin and currency were issued to a number of concerns and banks. Blanket permits also were issued covering the shipment of Canadian Currency to Canada and reports from holders of these permits indicated that a considerable amount of money was returned to that country. In order to provide means for payment of imports from India, arrangements were made whereby this bank was enabled to sell exchange on that country through the Federal Reserve Bank of New York. Lesser amounts of exchange on Argentina and Peru were also provided through the same channel. On June 26, 1919, all regulations concerning foreign exchange with only minor exceptions were repealed and therefore this department of the bank ceased operation on July 1, after about a year and a half of existence. i See Schedule 17. 2 See Schedule 18. 3 See Schedule 30, Schedule 31 and Schedule 32. 4 See Schedule 29. 5 See Schedule 34. 28 ANNUAL REPORT OF FEDERAL RESEKVE BANK OF BOSTON. CONCLUSION. The past year, both industrially and financially, has been fairly satisfactory when all things are taken into consideration. Our industries have been able to readjust their business from a war to a peace basis, without undue distress. The large overseas forces have been brought back and a goodly portion of our army and navy have been demobilized and become absorbed by the business of the country without undue disturbance. While there has been unrest, extravagance and radicalism in the community, there has been but little more than might have been expected after the excitement, forbearance and strain of the long years of war. New England has had its full share of these troubles, but it is confidently hoped that the turn has come and that from now on, while perhaps slowly, conditions will improve. The Treasury financing since the successful flotation of the Victory Loan has been of diminishing volume, and as the year ends it is intimated that hereafter any further necessary financing on the part of the Treasury Department will be on such terms as will enable Federal Reserve Banks to establish a policy with respect to all discount rates which should give them a better control over the credit situation as it pertains to the agricultural, commercial and industrial needs of their districts. The foreign exchanges, while still unsatisfactory, will, no doubt, be helped by the relief which the Edge Bill, recently passed by Congress, can afford. The responsibility of the Federal Reserve Banks will now be very great. The credit situation must be brought back to nearer normal, but to do this without causing undue distress will require the most careful judgment and foresight on the part of the officials of those banks, and the closest co-operation with the Federal Reserve Board. As this report shows, the demand for credit by member banks on the Federal Reserve Bank of Boston has been insistent and increasing. The year ends with the total earning assets — investments — at not only the highest point of the year, but, including bills rediscounted with other Federal Reserve Banks, of over 300 million dollars against a high point of about 200 million dollars of the previous year, and with only a slight increase in the gold reserve. Of these 300 million dollars of rediscounts and investments over 124 million dollars represent loans against Government securities, and yet, notwithstanding this condition, owing to the influence of Government financing, the discount rates of this bank at present are 4 ^ per cent for all classes and maturities of bills, while the outside rates for commercial paper rule at about 6 per cent. Every reasonable effort should be made to contract this extended condition and to increase reserve percentages from now on, but this can only be done by steadily raising the discount rates on all classes of paper until the desired result has been attained. While the increased rates may be ANNUAL REPORT OF FEDERAL RESERVE BANK OF BOSTON. 29 expected to bring about some liquidations of loans in Government securities, they should also enforce increased savings and a wider distribution of the securities themselves, which in turn would have a healthy effect in reducing not only the general price level, but in discouraging the prevailing wave of extravagance. If the Federal Reserve Banks and the Reserve System as a whole are to be relied upon to meet any unusual and heavy strain calling for expansion of credit they must first show their ability to contract credit or at least to control credits of doubtful necessity. If subscription to securities offered by the Treasury Department could be kept open for a longer period and if they were to bear rates that would be more attractive to the investor, thus keeping them out of bank loans, then the policy pursued in the past of leaving the proceeds of subscriptions temporarily on deposit with banks, might be discontinued, and the proceeds of such subscriptions might instead be left on deposit with Federal Reserve Banks to relieve a temporary shortage of funds caused by the withdrawal of this money from the open market. It is believed that such a policy would have a salutary effect upon the general credit situation. With co-operation between the Reserve Bank, the local bankers and business men, all working together to gradually restore more normal conditions of business, it is believed that the desired results may be obtained without undue hardship to legitimate business. It will, however, take patience, courage, and complete understanding between these elements if this is to be accomplished. 30 ANNUAL REPORT OF FEDERAL RESERVE BANK OF BOSTON. SCHEDULE 1. — Comparative balance sheet. Dec. 31, 1919. Dec. 31, 1918. Dec. 31, 1917. RESOURCES. Earning assets: Bills discounted secured by United States war Other bills discounted (commercial) Acceptances purchased in open market United States bonds United States short term obligations Total Reserve cash: Gold (coin and certificates) Gold settlement fund ' Bank of England sterling gold account Other lawful money Total Reserve against Federal Reserve notes: • Gold with Federal Reserve agent Gold redemption fund Other resources: Interest accrued on United States securities. . . Due from Liberty Loan subscriptions Expense, Liberty loan, etc. (recoverable) .... Items in process of collection l Exchanges for clearing house and cash items . Federal Reserve notes and other cash on hand Due from Government depositaries Redemption fund Federal Reserve bank notes Real Estate for bank quarters Total 229,032,000 $120,515,000 13,060,000 15,084,000 538,000 7,416,000 156,613,000 $43,898,000 21,985,000 : 9,037,000 610,000 ! 2,194,000 77,724,000 7,959,000 34,351,000 9,586,000 4,037,000 3,317,000 37,293,000 408,000 2,288,000 55,933,000 43,306,000 18,691,000 16,977,000 ' 3,675,000 3,074,000 42,017,000 73,511,000 26,342,000 59,733,000 7,812,000 40,897,000 2,000,000 222,000 33,000 567,000 573,000 52,911,000 10,548,000 13,810,000 30,015,000 321,000 800,000 22,000 118,000 144,000 15,007,000 3,217,000 4,661,000 66,489,000 377,042,000 253,196,000 $124 529,000 63,510,000 18,649,000 539,000 21,805,000 204,000 73,236,000 4,357,000 7,901,000 48,373,000 1,072,000 1,103,000 521,286,000 Dec. 31, 1919. Dec. 31, 1918. Dec. 31, 1917. LIABILITIES. Capital fund: Surplus Deposits: Due to member banks, reserve account .... Due to Federal Reserve Banks, collected l Due to banks, uncollected funds Due to Treasurer of the United States, general account Due to Treasurer of the United States, special account Cashier's checks, outstanding, etc Foreign Government credits Other liabilities: Federal Reserve notes outstanding Federal Reserve bank notes outstanding. Unearned discount and interest Reserve for depreciation and interest Reserve for franchise tax and other taxes Mortgage on real estate Total Liability for rediscounts with Reserve banks 1 other $7,107,000 8,359,000 $6,692,000 1,536,000 $5,858,000 75,000 117,294,000 101,806,000 82,842,000 21,725,000 45,469,000 17,467,000 29,269,000 3,870,000 13,781,000 1,123,000 10,499,000 2,419,000 48,373,000 566,000 5,277,000 30,015,000 411,000 66,490,000 20,000 244,003,000 20,912,000 807,000 93,000 88,000 77,297,000 521,286,000 168,986,000 6,889,000 468,000 93,000 1,461,000 750,000 377,042,000 253,196,000 60,121,000 48,962,000 44,477,000 75,000 Federal Offsetting items to be cleared through gold-settlement fund. 469,000 SCHEDULE 2.— Expense and income. 1919 Expense. Paid in lieu of dividends on I Rent Cost of Federal Reserve notes . . Assessment for expenses of Federal Reserve Board Real Estate Expenses Tax on Federal Reserve bank Furniture and equipment . . . . Difference account Repairs and alterations Charged off or reserved To balance Total 1 : Included with dividends. 2 1917 1918 $274,923.98 7,351.39 45,62s. 30 518,894 59 552.47 317,691.47 $271.89 146,474.73 6,607.75 26,681.56 274,361 49 245.71 167,828.00 $3,926.85 51,288.75 5,781.10 15,246.49 93,193.65 69.10 102,621.39 45,619.05 29,554.02 27,811.14 21,226.35 45,422.10 21,530.64 1,499.03 14,645.52 18,776.67 316,039.55 3 91,627.33 5,777,381.06 7,497,583.15 24,173.97 4,557.70 61,894.92 3,554.20 101,529.38 2 200,000.00 3,304,908.25 4,380,454.71 8,973.83 814.83 10,450.00 1,462.24 8,255.87 3 Real estate charged off. 886,294.79 1,209,605.24 1918 1919 Income. 1917 $11,596.56 Bills discounted for member Acceptances purchased State, city, and town notes .. Interest on United States securi- $6,003,252 40 $3,068,027 38 931,700 RS 1,077,690 00 369,456 53 Profit on United States securities Penalties for deficient reserves. . . Total 107,719 41,821 18,425 212,760 27,836 12 19,347 20 7,497,583 15 Includes reserve for Federal Reserve Bank Note Tax and Federal 571,117.13 502,397.30 5,202 73 03 34 71 27 94,784.86 11,101.60 6,105.39 7,299.67 4,380,454 71 1,209,605.24 Reserve Board. SCHEDULE 8.— Distribution of earnings. 1918 1917 Items. Dividends paid member banks Reserve for depreciation of 1919 1 $414,446.66 $383,908.25 $597,828.54 Balance Total 5,362,934.40 5,777,381.06 2,921,000.00 3,304,908.25 138,266.25 150,200.00 886,294.79 1 Total 1919 1918 $5,777,381 06 $3,304,90S .25 5,777,381 06 3,304,908 .25 1917 $886,294.79 886,294.79 June 30 and December 31, dividends at the rate of 6% per annum; also includes interest paid on stock surrendered. Items. Carried to surplus Total 1 Items. Available for distribution 1920 Total surplus December 31, $8,359,034.40. 1919 $1,460,500.00 $5,362,934.40 1,460,500.00 1 5,362,934.40 2,921,000.00 1918 Items. $75,100.00 J a n u a r v 2 balance 75,100.00 150,200.00 Total 1920 1919 $5,362,934 40 $2,921,000 00 $150 200 00 5,362,934 40 2,921,000 00 150,200.00 1918 to SCHEDULE 4.— Discount and loan transactions, 1919. [000 omitted.] Foreign Trade Acceptances. Commercial Paper. Trade Acceptances. January . . $6,159 5,012 February . 3,025 March 2,883 April 4,598 May 10,044 June 7,353 July . . . . 8,573 August . . . 10,334 September October. . . 15,136 45,481 November 43,769 December $337 283 495 459 108 358 306 129 208 386 2,237 3,031 $1,133 928 15 162,367 8,337 Total Open Market Transactions. Discounts Month. Secured by U. S. War Obligations. Collateral BankCollatNotes ers' Rediseral Ac- Secured counted. Notes, i by ceptances. Eligible Paper. 266 $321 82 103 144 179 51 197 45 25 19 53 3,767 $15 220 163 716 1,059 2,124 1,115 1,005 793 1,648 1,257 362 2,483 4,986 10,477 141 $57,552 31,255 9,614 68,445 22,943 34,541 50,729 24,653 32,127 48,616 37,427 30,340 $305,442 317,960 317,994 432,594 415,043 315,893 346,361 210,974 270,424 320,011 340,468 445,343 Total Bills Discounted. Bankers' Bankers' Dollar Domestic Foreign Domestic ExTrade Accept- change AcceptAcceptances. ances. ances. $370,959 355,740 331,409 505,241 443,930 363,011 406,061 245,399 314,052 385,816 426,923 526,878 $14,579 13,329 12,202 2 9,962 13,945 22,723 18,018 34,489 16,075 30,365 41,439 24,176 448,242 4.038,507 4,675,398 251,303 $9,338 $100 7,012 5,452 2 7,277 4,556 8,978 6,954 8,076 4,278 11,743 21,277 25 14,322 400 109,262 525 Foreign Trade Acceptances. $1,203 457 771 779 540 $24,384 20,341 17,654 17,239 18,501 31,701 24,972 42,565 20,353 44,082 63,977 39,438 1,660 2,457 365,207 $367 Includes in May and June $400,000 and $196,000, respectively, of notes secured by War Finance Corporation Bonds. 2 Included in these two items are $4,426,265, acceptances repurchased from Federal Reserve Bank, Kan3as City. 3 Does not include $1,550 Liberty Loan Bonds and $29,850 Victory Notes purchased and sold on the instalment plan to employees. Total Bills Total ' Discounted United States and Bills Bought. Accept- Securities. 3 ances Bought. $395,343 376,081 349,063 522,480 462,431 394,712 431,033 287,944 334,405 429,898 490,900 566,316 5,040,607 $7,666 3,000 2,000 2,945 1,000 4,520 100 31,170 2,498 1,516 4,257 60,672 > 33 ANNUAL REPORT OF FEDERAL RESERVE BANK OF BOSTON. SCHEDULE 5.— Maturities of invested funds on the last Friday of each month, 1919.^ Month. Within 15 16 to 30 days. 31 to 60 days. days. 61 to 90 days. Over 90 days. S55,736,000 24,214,000 7,478,000 47,425,000 18,755,000 18,291,000 35,172,000 30,385,000 15,979,000 34,383,000 41,524,000 35,860,000 $9,416,000 11,416,000 14,416,000 16,716,000 16,916,000 16,916,000 21,436,000 16,782,000 16,479,000 15,801,000 14,819,000 13,795,000 Total. 1919 January . . . $50,515,000 February . . 59,234,000 March . . . . 70,980,000 April 76,910,000 May 81,121,000 Juns 64,414,000 July 50,750,000 August . . . 57,726,000 September . 73,937,000 October . . 70,424.000 November . 76,272,000 December . 80,815,000 $15,608,000 9,457,000 63,286,000 25,870,000 14,192,000 50,134,000 45,718,000 18,304,000 44,975,000 30,887,000 29,177,000 46,023,000 1 $23,776,000 62,537,000 27,594,000 21,931,000 52,281,000 40,513,000 35,897,000 59,684,000 46,329,000 40,689,000 59,543,000 56,508,000 $155,052,000 155,443,000 169,345,000 172,138,000 166,351,000 173,353,000 167,541,000 182,883,000 197,701,000 192,185,000 221,338,000 233,003,000 Does not include bonds carried for subscribers. SCHEDULE 6.— Reserve position on the first of each month, 1919. [000 omitted.] Month. January. . . February.. March . . . April May June July August . . . September October. . . November. December Net deposits. $90,650 98,269 105,570 104,585 108,486 106,860 107,784 115,188 110,614 112,369 116,199 128,368 Federal Reserve Total Renotes quired in actual combined liability, reserve. circulation. $160,207 150,965 159,162 167,682 175,955 174,352 178,214 183,544 200,067 211,344 212,041 221,750 $250,857 249,234 264,732 272,267 284,441 281,212 285,998 298,732 311,281 323,713 328,240 350,118 $95,810 94,780 100,614 103,677 108,352 107,141 109,010 113,732 118,980 123,866 125,486 133,628 Total reserve $111,881 113,333 124,427 107,360 117,668 118,648 125,924 136,378 152,100 152,715 169,172 107,987 Adjusted j Reserve rediscounts •l with other ReExcess ReFederal Reserve serve. serve Reserve 1918. banks eliminated. $16,071 18,553 23,813 3,953 9,316 11,507 16,914 22,646 33,120 28,849 43,686 34,359 45% 45% 47% 39% 41% 42% 44% ' 46% 49% ^ ' /O 52% 48% 25% 39% 37% 38% 40% 42% 42% 44% 49% 47% 52% 36% 27% 47% 53% 55% 04% 71% 59% 55% 39% 26% 34 ANNUAL REPORT OF FEDERAL RESERVE BANK OF BOSTON SCHEDULE 7.— Rediscounts with other Federal Reserve Banks. Rediscountc.d with endorsement of this bank. Dates of Borrowing. Federal Reserve Bank of Acceptances. New York . . . . Cleveland . . . . Richmond . . . Atlanta Chicago St. Louis . . . . Kansas City . Dallas . . . . . . . San Francisco. «1.5,110,000 ' 5,034,000 , .5,080,000 ; 5,064,000 30,364,000 25,249,000 10,070,000' 5,006,000 10,081,000 Total Rediscounts. $10,017,000 10,028,000 Amount. Date. January 3, 1919. January 22, 1910. February 7, 1919. February 11, 1919. . February 19, 1919.. February 27, 1919. . April 2,*1919 June 26, 1919 November 13, 1919. November 24, 1919. December 19, 1919 20,045,000 111,118,000 $5,010,000 10,017,000 5,034,000 10,128,000 10,028,000 5,060,000 ' 10,048,000 5,062,000 20,245,000 20,227,000 30,304,000 131,163,000 i Repurchased $4,426,000 on March 24, 1919. SCHEDULE 8.— Summary of weekly transactions in the gold settlement fund with other Federal Reserve Banks, January 1 to December 31, 1919. [000 omitted.] IMHECT THANSFEHH. SETTLEMENTS. Gain for month. Month, 1919. Received. January . February. March.". . April . . . . May June July . . . . August . . September October . November December Total 1 Paid. Net loss. Received. Paid. Net Gain. $33,685 30,463 5,000 10,007 7,430 10,500 16,666 13,516 6,910 3,990 43,006 43,378 $50,4.54 50,000 94,426 9.5,000 54,761 67,000 86,000 24,934 105,794 31,453 8,405 64,005 $16,769 19,537 89,426 84,993 47,331 56,500 69,334 11,418 98,884 27,463 . 34,601 20,627 $1.5,573 23,253 77,098 83,670 58,309 44,397 84,806 48,145 78,342 49,048 894 39,090 57,548 2.5,301 $15,573 21,835 73,284 83,670 58,309 39,862 83,983 48,145 75,370 49,048 56,654 2 13,789 224,551 732,232 507,681 602,625 96,411 506,214 Net gain transfers. 81,418 3,814 4,535 823 2,972 2 Net loss settlement*. $1,196 2 2,298 16,142 2 1,323 2 10,978 16,638 2 14,649 36,727 23,514 « 21,585 22,053 2 6,838 2 1,467 ANNUAL REPORT OF FEDERAL RESERVE BANK OF BOSTON. 35 SCHEDULE 9.— Currency transactions. Currency received. ' Month. January . . February . March.... April . . . . May June July August . . September October . . November December. Totals 1 Currency paid o u t . ' Currency handled in sorting division. Dollars. Dollars. Dollars. 47,000,000 28,280,000 33,842,000 40,293,000 47,230,000 41,987,000 47,230,000 38,688,000 39,525,000 .53,832,000 36,890,000 51,056,000 503,853,000 17,173,000 26,440,000 26,579,000 27,674,000 17,761,000 31,536,000 37,408,000 38,885,000 37,980,000 41,164,000 39,070,000 60,664,000 402,340,000 71,217,000 31,946,000 37,078,000 39,897,000 53,720,000 50,693,000 55,239,000 44,533,000 48,320,000 58,323,000 45,909,000 53,561,000 590,436,000 Pieces. 10,233,000 6,134,000 7,156,000 7,147,000 8,956,000 8,736,000 9,708,000 8,149,000 8,768,000 9,774,000 8,390,000 9,595,000 102/746,000 Includes coin. SCHEDULE 10.— Federal Reserve Bank notes, December SI, 1919. Items. Total received from comptroller . Total notes retired and destroyed Notes outstanding Notes held by bank Net amount in circulation Ones. Twos. $17,767,500 4,032,002 13,734,898 200 13,734,618 Total. Fives. $7,425,000 1,416,598 6,008,402 $2,171,500 1,002,800 1,168,700 6,008,402 1,168,700 United States Securities pledged to secure circulation. United States 2 % Certificates of Indebtedness. $27,364,000 6,452,000 20,912,000 200 20,911,800 821,436,000 SCHEDULE 11.— Federal Reserve notes issued by Federal Reserve agent. Month. January . . . . February . . . March April May June . . . . . . July August . . . . September October . . . . November . . December. . . Total 1 Decrease. Outstanding on first of month. $168,986,330 162,564,025 163,221,085 171,598,325 182,782,595 177,827,360 181,983,490 190,567,720 204,535,435 221,511,505 222,289,310 230,937,090 Issued during ; Retired during month. month. $2,300,000 10,960,000 17,500,000 21,500,000 7,700,000 16,500,000 19,820,000 28,700,000 27,400,000 15,900,000 22,800,000 34^420,000 225,500^000 $8,722,305 10,302,940 9,122,760 10,315,730 12,655,235 12,343,870 11,235,770 14,732,285 10,423,930 15,122,195 14,152,220 10,639,120 139,768,360 Net increase. $6,422,305 i 657,060 8,377,240 11,184,270 4,955,235 i 4,156,130 8,584,230 13,967,715 16,976,070 777,805 8,647,780 23,780,880 85,731,640 36 ANNUAL REPORT OF FEDERAL RESERVE BANK OF BOSTON. SCHEDULE 12.— Federal Reserve notes issued and retired by Denominations. Fifties Hundreds . Five hundreds One tliousands . Totals Outstanding January 1, 1919. Issued. denominations. Retired. Outstanding December 31, 1919. $27,233,700 71,834,770 53,298 000 6,313,100 10,306,700 $44,500,000 91,920,000 63,680,000 11,400,000 0,600,000 700,000 5,300,000 400,000 1,000,000 $33,025,750 62,307,560 35,477,900 4,969,550 3,922,100 10,500 55,000 ' $38,707,950 101,447,210 81,500,160 12,743,550 12,984,600 689,500 5,245,000 400,000 1,000,000 168,986,330 225,500,000 139,768,360 254,717,970 SCHEDULE IS.— Federal Reserve note movement between districts, l!tl!>. Hank. New York Philadelphia Cleveland Richmond Atlanta Chicago . . . St. Louis Minneapolis Kansas Citv Dallas San Francisco Total Received from Sent to Net excess returned. S45.236.000 4,247,000 2,325,000 2,238,000 1,608,000 3,681,000 1,073,000 420,000 522,000 307,000 1,062,000 $59,738,000 (1,873,000 4,427,000 4,392,000 2,471,000 6,369,000 1,220,000 1,378,000 1,621,000 509,000 1,295,000 $14,502,000 2,026,000 2,102,000 2,154,000 803,000 2,088,000 147,000 958,000 1,099.000 202,000 233,000 1)2 719,000 90,293,000 27,574,000 SCHEDULE 14.—Available supply of Federal Reserve notes on December SI, 1919. Held by Fives. Tens. Twenties. Fifties. Hundreds. Five Hundreds. Thousands. Five Thousands. Ten Thousands. Total Federal Reserve Agent Sub-Treasury, Boston Comptroller of the Currency Total printed Being printed $4,000,000 .5,000,000 $8,760,000 4,000,000 15,120,000 8,000,000 $2,200,000 2,000,000 .11,200,000 2,400,000 $1,700,000 200,000 $1,100,000 400,000 $1,600,000 2,000,000 $3,000,000 4,000,000 $28,680,000 28,000,000 2,780,000 11,780,000 19,920,000 2,200,000 14,960,000 30,200,000 5,360,000 18,480,000 26,960,000 17,800,000 22,000,000 1,200,000 13,200,000 16,800,000 0 5,800,000 7,700,000 0 23,600,000 25,100,000 0 8,000,000 11,600,000 0 8,000,000 15,000,000 0 86,740,000 143,420,000 78,280,000 31,700,000 45,160,000 i 45,440,000 ' 23,200,000 ! 16,800,000 7,700,000 25,100,000 \ 11,600,000 15,000,000 221,700,000 (•rand total SCHEDULE 15.—Amount of checks handled by the Transit On banks in Boston Clearing House. Other banks in this district. On Treasurer of United States. Department. O n banks in other districts. Total. Month. 1919. January . . February . March . . . April May June July August . . . September October. . . November December Total $587,933,000 440,381,000 534,264,000 532,010,000 570,704,000 645,121,000 668,824,000 569,979,000 638,796,000 668,482,000 649,347,000 789,564,000 1918. 1919. $341,288,000 288,249,000 347,749,000 405,416,000 442,529,000 580,929,000 501,702,000 456,349,000 425,558,000 612,811,000 598,042,000 587,616,000 $286,910,000 230,876,000 309,496,000 288,114,000 309,498,000 352,634,000 350,064,000 333,415,000 391,035,000 408,427,000 390,445,000 458,240,000 1918. $121,425,000 $112,282,000 69,931,000 110,032,000 61,832,000 138,971,000 54,427,000 148,691,000 35,486,000 158.305,000 32,887,000 228,442,000 47,180,000 192,372,000 164,889,000 225,232,000 35,985,000 216,039,000 20,635,000 276,689,000 24,819,000 274,377,000 63,692,000 277,981,000 7,29.5,405,000 5,588,238,000 4,109,154,000 12,368,556,000 1919. 1919. 724,045,000 1918. 1918. $53,693,000 49,067,000 62,452,000 64,188,000 82,473,000 89,943,000 105,785,000 156,068,000 108,790,000 124,663,000 123,211,000 147,094,000 $77,578,000 58,755,000 77,140,000 82,109,000 75,292,000 81,090,000 75,507,000 71,930,000 82,198,000 81,557,000 77,355,000 85,688,000 $115,432,000 $1,064,703,000 799,943,000 84,305,000 982,732,000 92,665,000 956,660,000 113,823,000 990,980,000 101,513,000 1,111,732,000 98,339,000 1,141,575,000 129,361,000 1,140,213,000 115,132,000 1,148,014,000 117,629,000 1,179,101,000 145,919,000 1,141,966,000 122,909,000 1,397,184,000 90,160,000 1,167,427,000 926,199,000 1,327,187,000 13,054,803,000 $631,838,000 531,653,000 "641,837,000 732,118,000 784,820,000 997,653,000 929,220,000 952,781,000 868,016,000 1,160,082,000 1,118,539,000 1,102,851,000 10,451,408,000 ANNUAL REPORT OF FEDERAL RESERVE BANK OF BOSTON. SCHEDULE 16.— Custody department — Volume of securities handled, 1919. Collateral for War loan deposit account Discounted notes Safe-keeping all accounts Totals Pieces of collateral handled. Pledged. Withdrawn. Balance at end of year. $619,352,000 1,624,010,000 999,461,000 $697,722,000 1,637,382,000 976,319,000 $132,985,000 190,048,000 69,045,000 290,810 1,554,788 1,307,974 3,242,823,000 3,311,423,000 392,078,000 3,153,572 SCHEDULE 17.— Custody department— Character of securities held December, 1919. War loan deposit account. Collateral for $20,809,000 8,206,000 6,000,000 14,048,000 44,870,000 United States certificates of indebtedness Industrial and transportation bonds Bonds of foreign governments United States Government bonds Commercial paper Discounted notes. Safe-keeping for banks only. $15,218,000 $13,022,000 110,170,000 7,950,000 20,764,000 373,000 SCHEDULE 18.— Collateral department—Coupons cut, 1919. Number of banks. Month. January . . February . March April May June July August . . . September October . . . November December . 156 70 343 415 339 206 80 64 445 648 418 444 Total Number of coupons. Amount of coupons. 6,751 1,447 26,971 174,005 35,505 9,602 4,112 4,947 32,490 76,252 34,688 46,682 $171,535 34,264 544,721 1,820,440 637,416 134,027 116,068 58,551 597,472 1,329,929 662,675 743,943 453,452 6,851,041 SCHEDULE 19.— Items of interest from the schedules of this and other official reports in connection with the fiscal operation of the United States in this district during 1919. RECEIPTS. Proceeds of the fourth Liberty loan payments, 1919 Proceeds of the Victory loan payments Proceeds of the United States tax certificates Proceeds of the United States certificates (fifth loan) Proceeds of United States certificates (1920 loan) Total certificates sold Federal taxes collected • Proceeds of War Savings Stamps, December 31, 1919 Transfers from other Federal Reserve banks, net $273,000,000 383,000,000 146,000,000 $73,000,000 373,000,000 802,000,000 544,000,000 8,000,000 77,000,000 DISBURSEMENTS. Expenditures disbursed by check Transfers to other Federal Reserve banks, net Total United States certificates paid 724,000,000 1,116,000,000 832,000,000 SCHEDULE 20.— Certificates of indebtedness sales and Dated. Due. Rate per cent. Allotment to sell. payments. Number of days Tol ;il issued. Patd by credit of deposits. Paid by other issues certificates. FIFTH LOAN CERTIFICATES. 1919. January 2 January 16 January 30 February 13 February 27 March 13 April 10 M ay 1 Total 1919. June 3 June 17 ; July 1 July 15 July 29 August 12 ; September 9 October 7 44 4^ 44 4* 44 4| 44 165,000,000 52,000,000 52,000,000 52,000,000 43,300,000 43,300,000 43,300,000 43,300,000 394,200,000 $60,154,500 49,090,500 48,800,000 48,421,500 41,909,000 48,454,000 43,705,000 42,346,500 382,881,000 $55,978,000 44,335,000 43,338,000 44,833,500 39,052,500 42,571,500 39,913,000 39,841,500 349,8(13,000 $2,315,500 914,500 738,000 3,968,000 $36,276,500 29,015,000 32,215,500 8,924,500 14,188,000 35,538,500 15(1,158,000 $31,223,000 8,958,500 15,204,000 6,672,500 10.589,500 29,604,500 102,252,000 $1,228,000 17,521,500 15,698,000 1,416,500 3,204,000 4,855,000 43,923,000 $41,935,500 43,855,500 45,765,500 14,535,500 146,092,000 $36,235,500 40,900,000 40,427,000 13,948,500 131,511,000 $4,214,000 535,000 3,647,000 150,000 8,546,000 $13,446,000 5,704,000 31,752,000 18,521,500 47,722,000^ 117,145,500 802.276,500 $12,402,000 5,476,500 29,812,500 17,891,000 26,888,000 "92,470,000 676,096.000 1919 TAX CERTIFICATES. 1919. June 17 June 16 September 15. December 15 . September 15. December 15 . January 16 March 15 . . June 3 . . . . June 3 . . . . July 1 July 1 Total 44 4* 1920 LOAN CERTIFICATES. August 1 August 15 September 2 December 1 Total 1919. 1919. July 15 September 15. September 15. December 1 . . December 15 . ^Total „ Grand Total. . January 2 . : January 15 : February 2 ' February 16 1920. $43,300,000 43,300,000 43,300,000 129,900,000 1920 TAX CERTIFICATES. 1920. March 15 March 15 . . . . September 15. March 15 June 15 L SCHEDULE 21.— Distribution by issues of certificates of indebtedness BOND SERIES Dated. 1919. January 2 January 16 January 30 February 13 February 27 March 19 April 10 May 1 Total Trust companies. National banks. Number. 285 261 278 253 250 215 236 ' 195 375 A-ount, 35,693,000 28,463,000 29,849,000 28,975,500 24,972,000 31,575,000 26,319,500 29,068,500 234,915,500 5»g* 59 58 61 60 60 65 60 69 61 Number. 139 118 149 114 118 106 111 84 216 Amount. 22,602,500 18,854,500 17,644,000 18,027,500 15,981,000 15,419,500 16,050,500 13,043,000 137,622,500 Per cent, of issue. 38 38 36 37 38 32 37 30 36 Other banks and individuals. Amount. Percent. Number. 60 53 46 45 46 42 38 9 118 $1,859,000 1,773,000 1,307,000 1,418,500 956,000 1.459,500 1,335,000 235,000 ' 10,343,000 : 3 4 3 3 2 3 3 1 3 Total. Number. 484 432 473 412 414 363 385 288 709 Amount. $60,154,500 49,090,500 48,800,000 48,421,500 41,909,000 48,454,000 43,705,000 42,346,500 382,881,000 1920 LOAN SERIES Dated. 1919. August 1 August 15 September 2 December 1 Total National banks. Number. 245 296 243 152 348 Amount. 25,965,500 27,553,000 31,421,000 8,183,000 93,122,500 Trust companies. Per cent, of issue. 62 63 68* 56 64 Number. 97 133 91 54 169 A-ount. $15,504,000 15,464,500 14,167,500 6,252,500 51,388,500 5££ 37 35 31 43 35 Other banks and individuals. Total. Per Cent, Number. Amount. Amount. of issue. 17 $466,000 $41,935,500 359 20 838,000 449 43,855,500 8 177,000 342 45,765,500 * 1 100,000 1 .207 14.535,500 38 1,581,000 1 555 146,092,000 Number. TAX SERIES Dated. 1919. January 16 March 15 June 3 June 3 July 1 Julv 1 July 15 September 15 September 15 December 1 December 15 Total Trust companies. National banks. Number. 97 70 68 51 51 73 55 32 61 115 105 Amount. 22,500,500 12,703,500 20,658,500 5,136,500 10,017,000 20,003,000 5,791,500 4,545,500 17,285,000 11,950,500 25,957,500 156,549,000 Per cent, of issue. 62 44 64 57* 71 56| 43 79* 54 i 64 £ 54 57 Number. 49 53 38 30 31 47 28 15 35 43 54 Amount. $13,395,000 16,198,000 11,087,000 3,446,000 3,976,000 14,941,000 7,064 000 1,158,500 13,869,000 6,426,000 21,624,500 113.185.000 Per cent, of issue. 37 56 34* 38* 28 42 52* 20* 43* 34* 45 4H Othe • banks and indh'iduals. Per cent Amount. of issue. 16 1 $381,000 6 113,500 0 14 470,000 1* 10 342,000 4 4 195,000 1 10 594,500 1* 15 590,500 4* 0 0 0 14 598,000 2 5 145,000 1 4 140,000 1 1j 3.569 500 Number. Total. Number. 162 129 120 91 86 130 98 47 110 163 163 Amount. $36,276,500 j 29,015,000 ; 32,215,500 8,924,500 14,188,000 ! 35,538,500 13,446,000 5,704,000 31,752,000 18,521,500 47.722,000 273,303,500 41 ANNUAL REPORT OF FEDERAL RESERVE BANK OF BOSTON. SCHEDULE 22.—Subscriptions to certificates of indebtedness classified by states. Fifth loan Certificates.* State. Maine . New Hampshire Vermont Massachusetts . . Rhode Island . . Connecticut . . . . Total $18,930,000 15,433,000 9,034,000 319,901,000 43,905,500 68,589,000 475,792,500 1920 Loan Certificates. 1919 Tax Certificates.** 1920 Tax Certificates.** $2,661,000 1,636,500 461,000 104,465,000 14,297,500 17,822,500 141,343,500 $1,507,000 1,642,000 580,500 88,183,500 10,871,000 14,285,500 117,069,500 $6,535,500 4,278,000 2,637,000 103,209,500 11,383,500 18,048,500 146,092,000 Total, of States. $29,633,500 22,989,500 12,712,500 615,759,000 80,457,500 118,745,500 880,297,500 * Includes sales of certificates in 1918. ** Does not nclude certificates issued through exchange after 'ash subscriptions closed. SCHEDULE 23.—Subscriptions to Victory notes by days. Day. 1919. April 22 April 23 Apeil 24 April 25 April 26 April 28 April 29 April 30 May 1 . May 2 . May 3 . May 5 . $31,623,100 13,780,300 15,643,650 8,698,900 10,566,850 10,397,750 11,837,750 20,310,700 22,328,800 13,014,500 12,489,350 11,317,800 Total. 1919. $31,623,100 45,403,400 61,047,050 69,745,950 80,312,800 90,710,550 102,548.300 122,859,000 145,187,800 158,202,300 170,691,650 182,009,450 May May May May May May May May May May May Dav. 6 . 7 . 8 . 9 10 12 13 14 15 16 20 $15,551,450 30,881,250 26,142,900 27,233,300 40,273,000 46,360,900 32,110,600 10,022,550 2,525,000 2,090,300 12,023,050 Total. $197,560,900 228,442,150 254,585,050 281,818,350 322,091,350 368,452,250 400,562,850 410,585,400 413,110,400 415,200,700 427,223,750 SCHEDULE 2-t.— Subscriptions to Liberty loans and Victory notes classified by states. State. First loan. Second loan. Third loan. Fourth loan. Victory loan. Maine $15,186,800 $24,002,850 $18,348,100 $27,694,150 $18,837,700 New Hampshire i 10,515,150 i 15,992,900 14,252,000 21,979,050 16,867,050 7,377,650 10,193,250 9,330,750 : 15,315,450 11,588,100 Vermont....... Massachusetts. . 234,707,000 325,599.800 228,329,750 405,330,900 252,364,450 25,377,700 28,717,700 61,253,300 45,290,050 38,803,450 Rhode Island 39,283,300 62,357,800 55,558,950 100,528,400 82,276,400 Connecticut . . . Total 332,447,600 476,950,050 354,537,250 6327101,250 427,223,750 Total. $104,069,600 79,606,150 53,805,200 1,446,331,900 199,442,200 340,004,850 2,223,259,900 SCHEDULE 25.—Subscriptions to Liberty loans and Victory notes classified by number of subscribers. State. Maine New Hampshire Vermont Massachusetts. . Rhode Island . . Connecticut. Total First loan. 68,539 55,374 33,418 613,651 82,391 117,418 970,791 Second loan. 68,575 48,548 33,769 444,829 51,429 99,491 ~746,641 Third loan. 77,259 55,632 41,972 508,401 104,324 164,767 952,355 Fourth loan. Fifth loan. 118,270 103,905 62,038 910,228 128,101 325,092 1,647,634 53,476 50,117 29,317 466,173 66,443 152,296 i ^817,822 i SCHEDULE 26.— Classification of subscriptions by amounts— Victory Liberty loan. .Slate. $50,00!) to $100,000 $10,000 to $50,000 $10,000 $100,000 to $200,000 Over to $200,000 Total Massachusetts . Maine Vermont New Hampshire Rhode Island . . Connecticut. . . . $100,077,700 13,184,950 8,310,500 10,742,100 14,097,500 28,832,900 $35,450,200 2,182,000 1,255,200 1,848,050 0,352,350 0.581,300 $27,915,450 1,314,200 920,-400 891,300 5,258,000 7,293.550 $23,053,450 840,050 596,000 1,085,000 3,360,000 0,515,000 $59,201,050 1,310,500 500,000 2,300,000 15.022,200 33,053,050 8252,304,450 18,837,700 11,588,100 10,807,050 45,290,050 82,270,400 Total . . . 181,845,050 53,075,700 43,598,900 30,049,500 112,054,000 427,223,750 SCHEDULE 27.— Sales of War savings stamps. [In thousands of dollars.] State. Population. Maine 777,000 New Hampshire . 444,000 Vermont 364,000 Massachusetts . . . 3,775,000 Rhode Island I 025,000 Connecticut Total ' 1,205,000 j 7,250,000 January. $155 89 45 555 154 324 1,322 February. $103 82 45 442 9(5 102 930 March. 00 19 339 81 102 705 April. I May. June. July. August. September. October. NoDeember, cember. Total. Sales per Capita. 34 17 215 107 29 13 245 80 105 40 17 175 58 03 $29 36 14 159 56 62 $32 48 18 183 75 70 $35 47 16 257 133 83 $41 50 17 238 81 74 $00 78 28 308 105 100 $037 027 275 3,383 1,204 1,399 SO. 82 1.41 0.75 0.-89 2.02 1.11 740 505 459 385 356 120 571 501 0S5 7,585 1.04 S30 34 20 207 270 SCHEDULE 2<S.— Character of Payments on Government loans. Date. By credit Government Deposit. By cash. Bv certificates of indebtedness. Total. Accrued interest. FOURTH LIBERTY LOAN. Cash sales October 24, 1918 November 21, 1918 December 19, 1918 January 16, 1919 January 30, 1919 Total Less Reduction of Allotment $14,094,150.00 42,556,496,13 12,374,479.64 8,396,782.10 10,672,368.02 7,115,774.33 95,810,050.88 113,520.00 95,696,530.88 $4,700,000 94,247,500 6,985,500 $53,235,500.00 214,358,733.87 67,543,038.43 41,185,043.87 30,048,251.37 24,867,830.13 431,838,403.67 105,933,000 431,838,403.67 105,933,000 $72,029,050.00 351,102,730.00 86,903,018.07 49,581,826.03 41,320,019.99 31,983,610.46 033,581,454.55 113. r.2(). 00 033,467,934.55 $109,878.07 153,346.03 277,714.99 765,445.46 1,366,384.55 1,300,384.55 VICTORY LIBERTY LOAN. Cash sales May 20, 1919 June 3, 1919 July 15, 1919 August 12, 1919 September 9, 1919 October 7, 1919 November 11, 1919 $8,848,600.00 14,685,262.81 j 11,134,824.51 : 8,193,278.34 , 4,932,347.55 ! 3,644,667.99 2,879,037.81 '. 2,701,640.76 57,019,659.77 $24,921,300.00 68,864,292.19 05,914,885.93 31,309,213.04 14,379,807.23 12,169,802.45 10,421,110.17 0,808,894.31 $1,193,500 40,288,000 39,296,500 374,000 130,500 99,000 234,849,305.92 81,381,500 $34,903,400.00 123,837,555.00 110,346,210.44 39,876,491.98 19,442,654.7S 15,913,530,44 13,300,147.98 9,570,535.07 373,250,525.69 $201,100.44 230,066.98 76,134.78 88,430.44 135,277.98 609,305.07 1,340,375.69 CO SCHEDULE 29.— Liberty loan conversions. Exchanged into » Issued. Bond. 1st Loan interest certificates $265,017,900 Allotment 2,614,700 Other Federal Reserve banks Total 267,632,600 3*.. 4's $167,975,400 $63,828,100 $35,582,100 167,975,400 63,828,100 35,582,100 167,975,400 73,218,500" 408,530,000 317,213,800 54,255,650 First 3J's First 4's Victory 3J's . Exchanged b y other Federal Outstanding. Reserve Banks. 4i's 9,390,150 2d 4i's 4J's 3-J's ... 880,550 53,186,650 3 331,997,700 3 $247,100 247,100 157,400,1501 i 20,031,8501 | 76,532,3001 ! 309,640,6501 1 53,352,9501 304,550 7,573,150 902,700 i Difference between amount issued by this bank presented for conversion. 2 Includes amount of 4's obtained by exchanging 1st loan interim certificates for these. Includes bonds received for conversion due to the extension of the conversion privilege—March 7, 1919, to December 31, 1919, inclusive. $4,349,650. Second 4's, $14,359,400. 3 First 4's SCHEDULE-30.— Bond and certificate deliveries. Fourth Liberty Loan. Victory Liberty Loan. Certificates of Indebtedness, Denomination. Bonds Coupon. $50 100 500 1,000 . . 5,000 . . 10,000 50,000 100,000 Total 614,336 185,697 14,438 74,748 4,830 4,312 , 898,361 Bonds Registered. 18,694 30,048 6,033 5,973 742 1,528 136 112 63,266 1919 Tax Certificates. Bonds Coupon. 3,609 12,457 5,948 7,293 619,884 336,192 36,899 131,638 6,446 8,950 397 29,704 1,140,009 Bonds Registered. 8,563 21,431 4,990 5,948 591 1,046 131 4.5 42,745 Certificates of indebtedness. 1920 Loan Certificates. '1920 Tax Certificates. 6,940 29,956 16,766 19,594 3,540 11,962 7,038 7,337 2,759 10,206 4,906 6,153 701 73,957 238 30,115 19.5 24,219 j SCHEDULE 81.— United States certificates of indebtedness redeemed from January 1, 1919, to December 31, 1919. Date. Cash redemption. Due. BOND CERTIFICATES, 17,1918 1, 1918 5, 1918 19, 1918 For new issues. Government withdrawals. Tax payments. Total. 1918. Maturities previous to January 1, 1919 September October December December Bond payments. January January May May $365,500 $365,500 4* 31,579,000 29,425,500 43,528,000 35,182,000 $149,000 9,784,500 1919 . 1919 . 1919 . 1919 . 1919' 1919 . 1919 . 19192 49,626,000 40,092,500 37,796,500 30,490,000 23,714,500 34,878,000 28,649,500 30,333,500 9,479,500 8,393,000 7,703,500 10,513,000 11,176,500 6,816,000 9,217,000 8,149,500 15, 1919 . 15, 1919 . 1,814,500 80,424,000 893,000 891,000 17, 1919 16, 1919 15, 1919 15, 1919 15, 1919 15, 1919 14,159,000 23,661,000 24,428,500 8,762,000 11,706,500 29,436,500 16,443,500 300,000 2,307,000 146,000 319,000 257,000 2, 1920 2, 1920 2,1920 16, 1920 15, 1920 15, 1920 15, 1920 14,079,500 6,777,500 3,370,500 450,500 715,000 343,000 5,199,000 103,500 1,770,000 11,741,000 78,399,000 16,1919 30, 1919 6, 1919 20, 1919 31,689,000 30,135,500 47,645,000 44,966,500 $110,000 710,000 3,968,000 BOND CERTIFICATES, 1919. January January January February February March April May 2, 16, 30, 13, 27, 13, 10, 1, 1919 1919 1919 1919 1919 1919 1919 1919 June June July July July August September October 3, 17, 1, 15, 29, 12, 9, 7, 200,000 447,000 2,537,000 6,556,000 6,550,500 6,602,500 5,386,500 3,453,000 59,305,500 49,644,000 48,631,000 47,559,000 41,491,500 48,296,500 43,253,000 41,936,000 $711,500 594,000 50,000 TAX CERTIFICATES, 1918. August 20, 1918 November 7, 1918 TAX January March June June July 16, 15, 3, 3, 1, 1, August August September December July September December Total . . 1, 1919 15, 1919 15,1919 1, 1919 15, 1919 15, 1919 1, 1919 July July March CERTIFICATES, 1919 1919 1919 1919 1919 1919 $943,500 11,830,000 3,651,000 93,145,000 4,671,500 5,789,500 6,427,000 1,572,500 2,903,500 2,362,500 35,314,000 29,750,500 33,162,500 10,480,500 14,929,000 32,056,000 36,500,000 14,530,000 7,492,500 3,713,500 5,199,000 103,500 1,770,000 11,741,000 831,956,000 1919. June June September December September December 40,000 TAX CERTIFICATES, 1 20. Called July 1, 1919. January January February February March March March 634,280,000 - Called September 15, 1919. 81,381,500 1,395,500 Or 46 ANNUAL REPORT OF FEDERAL RESERVE BANK OF BOSTON. SCHEDULE 32.— Coupons redeemed during 1919. Number. Description. Amount. 563,597 329,581 289,160 1,946 640,142 888,844 1,919,682 2,349,416 15,667 376,372 30,856 16,752 3,803 7,425,818 First Liberty loan 3 | First Liberty loan 4 First Liberty loan 4J First Liberty loan i\ 2d Second Liberty loan 4 Second Liberty loan i\ . . . . [Third Liberty loan 'Fourth Liberty loan Fifth Liberty loan 3 | Fifth Liberty loan 4 | Certificates of indebtedness . War finance Other United States coupons Totals $2,810,238.19 584,553.17 1,186,832.00 5,502.46 1,470,219.00 8,094,826.83 8,094,212.11 14,947,826.28 753,985.11 3,755,693.43 2,738,969.68 418,800.00 16,378.25 44,878,036.51 SCHEDULE 34.— War Finance Corporation Bonds. % SCHEDULE 33.— Government Deposits, 1919. Month. Payment by credit. January . February March April May June July August September October November . December . . Total $215,000,000 ! 95,000,000 ' 56,600,000 ' 47,700,000 126,000,000 87,800,000 i 83,100,000 91,400,000 87,800,000 10,400,000 6,900,000 58,800,000 968,600,000 Withdrawals. Date. January 1 $146,000,000 Feb ruary 1 104,000,000! March 1 6(5,800,000 April 1 76,500,000 May 1 79,400,000 June 1 105,400,000 July 1 131,200,000 August 1 55,100,000 September 1 110,600,000 October 1 . 20,400,000, November 1 12,300,000 December 1 33,400,000;December 31 947,100,000' Balance. Subscriptions. Banks in $29,000,000 98,000,000 89,000,000 Maine 78,800,000 New Hampshire 50,000,000 Vermont 96,600,000:' Rhode Island 79,000,000: Connecticut . . 30,900,000. Massachusetts 67,200,000; Boston 44,400,000 BROKERS. 28,400,000 23,000,000 48,400,000 $473,000 63,000 57,000 495,000 1,409,000 2,822,000 15,091,000 6,541,000 26,951,000 SCHEDULE 35.— Change in membership of national banks. City. Name of banks. Date of change. Reason. ORGANIZED. Webster, Massachusetts . . . Boston, Massachusetts ' Braintree, Massachusetts . . Southbridge, Massachusetts. Machias, Maine |1 Fort Kent, Maine Everett, Massachusetts Webster National Bank January 29, 1919 Citizens National Bank April 28, 1919 Braintree National Bank May 29, 1919 Peoples National Bank August 20, 1919 Machias National Bank November 28, 1919 First National Bank . . . December 4, 1919 Everett National Bank December 23, 1919 New Bank LIQUIDATED. Boston, Massachusetts . . . . Roxbury National Bank i February 5, 1919 Converted to State Bank. Consolidated with First National Bank, New Bedford. National Bank of Fairfield June 6, 1919 Converted to State Bank. York County National December 9, 1919 [ Converted to State Bank Bank. New Bedford, Massachusetts Mechanics National Bank May 10, 1919 Fairfield, Maine York, Maine 47 ANNUAL REPORT OF FEDERAL RESERVE BANK OF BOSTON. SCHEDULE 36.— List of member trust companies. Date admitted. Name of bank. City. Bangor, Maine. Portland, Maine Arlington, Massachusetts . . . Boston, Massachusetts Do Do. Do. Do. Do. Do. Do. Do. Do. Do. Cambridge, Massachusetts . Do. Fitchburg, Massachusetts . . Gloucester, Massachusetts . . Greenfield, Massachusetts Holyoke, Massachusetts . . . . Lawrence, Massachusetts . . . Lynn, Massachusetts New Bedford, Massachusetts Newton, Massachusetts . . Norwood, Massachusetts . Salem, Massachusetts . . . . Waltham, Massachusetts. . Winchester, Massachusetts Worcester, Massachusetts Providence, Rhode Island Do. Do. New Britain, Connecticut New Haven, Connecticut South Manchester, Connecticut Waterbury, Connecticut Merrill Trust Company (branches at Dexter and Harrison) Fidelity Trust Company Menotomy Trust Company . . . . American Trust Company Beacon Trust Company Commonwealth Trust Company International Trust Company . . Liberty Trust Company Market Trust Company Metropolitan Trust Company New England Trust Company Old Colony Trust Company . State Street Trust Company United States Trust Company . . . Charles River Trust Company Harvard Trust Company Fitchburg Bank <fe Trust Company Gloucester Safe Deposit & Trust Company Franklin County Trust Company Hadley Falls Trust Company . . . . Merchants Trust Company Security Trust Company New Bedford Safe Deposit & Trust Company Newton Trust Comipany Norwood Trust Company Naumkeag Trust Company Waltham Trust Company Winchester Trust Company Worcester Bank & Trust Company... Industrial Trust Company (branches at Bristol, Newport, Pascoag, Pawtucket, Warren, Woonsoeket, Westerly, Wickford) Rhode Island Hospital Trust Company Union Trust Company (branches i East Greenwich, Olneyville) New Britain Trust Company Union & New Haven Trust Company Manchester Trust Company Colonial Trust Company March March November AugustJanuary February June May January December December August January April December March July June April January February September 14, 1918 18, 1918 8, 1918 31, 1917 15, 1918 12, 1917 9, 1917 1, 1918 13, 1919 4, 1917 10, 1918 24, 1915 26, 1918 9, 1918 11, 1917 6, 1918 26, 1917 4, 1919 21, 1919 19, 1918 27, 1918 25, 1918 5, 1919 5, 1917 11, 1917 25, 1918 3, 1919 May 29, 1917 December 26. 1917 June November August September April November 9, 1917 March 13, 1918 September August December December April 13, 1918 21, 1918 8, 1917 30, 1918 6, 1918 SCHEDULE 37.— Member trust companies compared with eligible non-member trust companies. Member trust companies. State. Maine New Hampshire Vermont Massachusetts . Rhode Island . Connecticut . . Total Non-member trust companies. \ Savings and Time Deposits. Number. Capital Surplus. Resources. Number. Capital Surplus. Resources. 2 0 0 27 $1,500,000 $29,479,000 42 4 38,939,000 15,000,000 2,775,000 489,617,000 139,160,000 16,763,000 $5,542,000 785,000 3,575,000 23,035,000 3,168,000 7,102,000 $71,197,000 4,305,000 38,094,000 228,714,000 28,064,000 58,454,000 $26,375,000 622,000 28,880,000 55,873,000 12,294,000 11,308,000 36 58,214,000 675,019,000 43.207,000 428,828,000 135,352,000 £ 60 "7 20 163 48 ANNUAL REPORT OF FEDERAL RESERVE BANK OF BOSTON. SCHEDULE 38.— Amounts due to member banks and rediscounts by states. State. Reserve Accounts. December 31, 1918. December 31, 1919. December 31, 1918. December 31, 1919. December 31, 1918. $4,872,000 $4,156,000 2,918,000 2,266,000 . 1,885,000 1,560,000 90,321,000 76,358,000 8,011,000 9,272,000 9,285,000 8,188,000 117,292,000 101,800,000 $838,000 415,000 634,000 59,795,000 820,000 1,003,000 63,505,000 $1,127,000 447,000 605,000 9,135,000 1,147,000 373,000 12,834,000 17.20 14.22 33.63 66.20 10.23 10.80 54.14 27.11 19.73 38.79 11.95 12.36 4.56 12.12 December 31, 1919. Maine New Hampshire Vermont Massachusetts. Rhode Island . Connecticut . . Total . . Ratio of Rediscounts to Reserve Accounts. Rediscounts.* * Does not include paper secured by United States War Obligations. SCHEDULE 39.— Reserves of national banks in New England as reported by the Comptroller of the Currency. [000 omitted.] 1919. Total Required Excess Reserve. Reserve. Reserve. January 1 . . . $64,129 March 4 60,965 May 12 65,967 June 30 63,810 September 12 . 69,095 November 17 . 69,765 $67,162 64,269 66,219 66,421 70,696 75,4.54 $3,033 3,304 252 2,611 1,601 5,689 1918. January 1 March 4 May 10 June 29 August 31 November 1 Total Reserves. Required Reserve. $55,557 55,866 56,021 56,392 59,041 63,472 $59,948 57,001 61,274 54,900 59,032 63,115 Excess Reserve. $4,391 1,135 5,253 l,492i 9' 357 i iDeficit. SCHEDULE 40.— Condition of national banks in New England on dates of Comptroller's calls, 1919 and 1918. [000 omitted.] Date. March 4, 1918 May 1, 1918 June 29, 1918 August 31, 1918 November 1, 1918 . . . . December 31, 1918 March 4, 1919 May 12, 1919 June 30, 1919 September 12, 1919 November 17, 1919 . . . Net amount upon which reserve is required. $696,469 697,779 705,450 734,418 786,518 800,866 767,304 826,298 800,708 864,058 874,447 Loans. $661,860 . 714,788 735,411 694,072 797,579 717,598 681,752 704,493 759,512 790,534 813,534 Borrowed from Borrowed Federal elsewhere Total Reserve borrowings. including banks rediscounts. including rediscounts. $73,467 64,741 33,068 43,138 67,902 114,905 98,134 97,795 103,206 72,778 68,316 $2,890 4,186 5,140 4,132 2,800 1,862 2,468 2,064 3,941 3,023 3,612 $70,357 68,927 38,208 47,270 70,702 116,767 100,602 99,859 107,147 75,801 71,928 % Borrowed at the Federal Reserve bank. 96.2 93.9 86.5 91.2 96.0 98.4 97.5 97.9 96.3 96.0 94.9 SCHEDULE 41.— Comparison of items reported by member banks in selected cities on the first Friday of each month. Member Banks in four cities outside of Boston. [000 omitted.] 1919 January 3 February 7 March 7 April 4 May 2 June 6 July 3 August 1 September 5 October 3 November 7 December 5 .... . .... .... United States bonds and notes. United States certificates. Loans secured United States obligations. Other loans and investments. Reserve with Federal Reserve bank. $20,125 20,000 19,988 19,531 20,340 25,389 25,202 27,672 26,879 26,474 25,471 24,699 $23,933 27,867 38,642 39,376 46,720 29,753 16,085 14,851 20,404 16,993 13,510 16,260 $18,292 17,245 18,644 20,058 11,377 20,082 17,666 16,729 15,916 16,443 14,382 13,358 $226,337 225,033 226,670 226,028 227,493 231,321 232,288 236,220 233,404 236,192 244,911 248,350 $14,650 13,756 13,994 14,630 14,966 14,783 13,953 13,810 15,560 18,767 15,344 14,756 Net demand deposits. Time deposits. Government deposits. Loans at Federal Reserve bank. $163,171 162,938 176,838 165,186 169,860 162,209 165,373 172,256 174,068 180,782 176,713 177,218 $73,279 75,445 75,520 76,324 76,676 75,727 75,883 77,873 78,137 78,906 87,624 88,103 $8,491 10,271 11,274 12,468 12,694 24,660 7,603 9,820 14,201 6,197 4,096 9,418 $30,351 26,382 25,679 28,916 28,410 25,439 23,481 18,117 17,686 20,233 15,037 14,820 $552,596 522,182 522,302 529,102 554,906 552,575 572,255 585,862 575,872 583,768 624,223 611,773 $31,968 33,288 28,144 29,728 34,024 32,454 34,23.5 34,377 33,090 33,211 36,313 39,798 $27,777 37,990 45,987 32,495 45,736 87,075 38,484 25,363 53,331 25,712 15,096 21,609 $71,197 59,317 66,346 65,479 81,178 64,868 79,593 81,586 62,168 69,901 84,869 87,616 Member Banks in Boston. [000 omitted.] January 3 . . . . February 7 March 7 April 4 May 2 June 6 July 3 August 1 September 5 . . . October 3 November 7 . . . . December 5 . . . . $17,351 16,581 14,404 14,122 15,177 16,456 16,153 15,853 15,294 14,574 12,816 11,748 $54,674 62,423 96,142 53,145 91,960 59,209 30,305 42,943 55,070 25,532 14,624 30,322 $71,133 67,478 69,906 73,406 63,536 74,251 51,034 53,869 47,820 44,451 30,414 29,061 $514,274 531,162 511,708 550,395 564,699 586,566 610,908 596,164 592,769 601,544 642,845 607,187 $55,631 53,491 55,561 48,060 57,811 56,741 50,262 03,086 61,870 58,573 67,322 65,147 50 ANNUAL REPORT OF FEDERAL RESERVE BANK OF BOSTON. SCHEDULE 42.— Acceptance liability of national banks in New England. 1919. March May 12 June 30 September 12. November 17 December 31 . 1917. 1918. $41,668,000 46,154,000 60,036,000 59,878,000 67,089,000 68,784,000 March 4 May 10 June 29 August 3 1 . . . November 1 December 31 $58,373,000 49,704,000 48,599,000 48,744,000 57,937,000 44,809,000 March 5 . . . May 1 June 20 . . . . September 11 November 20 December 31 $24,372,000 25,459,000 33,147,000 35,082,000 44,500,000 49,558,000 SCHEDULE 43.—Member banks authorized to accept drafts and bills of exchange up to 100% of their capital and surplus. Bank. Location. Beacon Trust Company Boston, Massachusetts Commonwealth Trust Company. . do First National Bank do Fourth-Atlantic National Bank . . do International Trust Company . . . do Merchants National Bank | do National Shawmut Bank : do National Union Bank do Old Colony Trust Company ! do Second National Bank ; do Webster & Atlas National Bank .: do Dedham National Bank Dedham, Massachusetts. Granted. May 8, 1918 February 28, 1919 April 14, 1915. April 24, 1918. February 21, 1919 March 30, 1916 . . , June 7, 1915 December 11, 1917 May 25, 1916 January 26, 1916 July 26, 1916 . . . April 11, 1918 Capital and Surplus. $1,800,000 1,500,000 2.5,500,000 3,000,000 4,000,000 5,000,000 19,000,000 2,000,000 16,000,000 5,000,000 2,000,000 300,000 Massasoit-Pocasset National Bank Fall River, Massachusetts Safety Fund National Bank Fitchburg, do November 13, 1917 October 5, 1917 . . 1,000,000 500,000 Hartford-Aetna National Bank. Phcenix National Bank Hartford, Connecticut do. do. . . October 27, 1917 . July 1, 1918 4,000.000 1,500,000 First National Bank New Bedford Safe Deposit & Trust Company Thames National Bank New Bedford, Massachusetts December 18, 1919 1,000,000 do. do. Norwich, Connecticut. . . Canal National Bank Portland, Maine Portland National Bank j do. Do. Blackstone-Canal National Bank ' Providence, Rhode Island . Merchants National Bank i do. do. National Bank of Commerce . . . . Providence, do. Providence National Bank ! do. do. September 12, 1919 August 5, 1919 . . . 500,000 1,550,000 July 3, 1919 June 24, 1919 July 12, 1917 November 7, 1918 December 24, 1919 December 16, 1918 1,000,000 600,000 1,000,000 2,000,000 1,700,000 1,000,000 Springfield National Bank January 25, 1918 . 1,000,000 May 4, 1916 2,000,000 Merchants National Bank | Springfield, Massachusetts Worcester, Massachusetts . ANNUAL REPORT OF FEDERAL RESERVE BANK OF BOSTON. 51 SCHEDULE 44.— Other accepting member banks. Bank. First National Bank First National Granite Bank American Trust Company Citizens National Bank Mattapan National Bank Metropolitan Trust Company State Street Trust Company Howard National Bank National State Capital Bank National Bank of Fairhaven Fall River National Bank Metacomet National Bank Cape Ann National Bank Gloucester National Bank Second National Bank Merchants National Bank First National Bank North Adams National Bank Industrial Trust Company Mechanics National Bank Rhode Island Hospital Trust Company Union Trust Company Chicopee National Bank Third National Bank Welden National Bank ' . . Citizens National Bank Mechanics National Bank Location. Capital and Surplus. $174,000 323,000 3,561,000 761,000 214,000 708,000 3,100,000 653,000 584,000 169,000 794,000 1,168,000 338,000 239,000 252,000 2,434,000 2,010,000 483,000 8,473,000 807,000 7,350,000 1,597,000 1,138,000 1,406,000 176,000 559,000 689,000 Adams, Massachusetts. Augusta, Maine Boston, Massachusetts Do Do Do Do Burlington, Vermont Concord, New Hampshire . . . Fairhaven, Massachusetts . . . Fall River, Massachusetts. . . . Do Gloucester, Massachusetts . . . Do Maiden, Massachusetts New Bedford, Massachusetts . New Haven, Connecticut North Adams, Massachusetts. Providence, Rhode Island . . . Do Do Do. Springfield, Massachusetts. Do St. Albans, Vermont. Waterbury, Connecticut . Worcester, Massachusetts SCHEDULE 45.— Non-member accepting banks and other acceptors in this district. Bank. Federal Trust Company, Boston Capital and surplus. Bankers. $1,300,000 Brown Brothers Company, Boston, Massachusetts. First National Bank Corporation Boston, Massachusetts. Lee, Higginson & Company, Boston, Massachusetts. J. B. Noors & Company, Boston, Massachusetts. Shav.mut Corporation, Boston, Massachusetts. Massachusetts Trust Company, Boston 750,000 Brookline Trust Company, Brookline, Massachusetts Casco Mercantile Trust Company, Portland, Maine Union Trust Company, Springfield,Massachusetts 400,000 700,000 1,500,000 SCHEDULE 46.— Acceptances outstanding November 17, 1919. Accepted by:— Member banks Non-Members in Massachusetts Acceptance Corporations and Private Bankers Total Includes $16,681,000 Member State Banks. Amount. $83,770,000 i 4,627,000 21,338,000 $109,735,000 52 ANNUAL REPORT OF FEDERAL RESERVE BANK OF BOSTON. SCHEDULE 47.— Banks granted fiduciary powers under the Federal Reserve Act. Date granted. Location. Bank. March 10, 1919 . . . Brockton, Massachusetts Brockton National Bank Do 'Cape Ann National Bank Gloucester, Massachusetts March 17, 1919 'Peoples National Bank Brattleboro, Vermont Do 'County National Bank Bennington, Vermont March 21, 1919 . . . Bath, Maine 'Bath National Bank March 31, 1919 . . . New Haven, Connecticut 'Merchants National Bank Do Torrington National Bank Torrington, Connecticut Do New Britain, Connecticut . New Britain National Bank Bristol National Bank Do Bristol, Connecticut 'Ansonia National Bank Do Ausonia, Connecticut Do New London City National Bank New London, Connecticut . . April 4, 1919 'First National Bank Concord, New Hampshire Do Fall River, Massachusetts 'Massasoit Pocasset National Bank Do 'Northampton National Bank Northampton, Massachusetts Do National Bank of Methuen Methuen, Massachusetts Do Great Barrington, Massachusetts . . National Mahaiwe Bank Do 'Peoples National Bank of Barrc Barrc, Vermont 'Agricultural National Bank Do Pittsfield, Massachusetts . Metacomet National Bank Do Fall River, Massachusetts Woburn National Bank Do Woburn, Massachusetts Do Provincetown, Massachusetts First National Bank Do 'Vermont National Bank Brattleboro, Vermont May 9, 1919 National City Bank Lynn, Massachusetts May 19, 1919 'Greylock National Bank Adams, Massachusetts Do Citizens National Bank Waterburv, Connecticut First National Bank Do Adams, Massachusetts City National Bank May 23, 1919 Belfast, Maine 'Second National Bank June 13, 1919 New Haven, Connecticut 'Norway National Bank Do Norway, Maine Merchants National Bank Do Newburyport, Massachusetts Do 'Springfield National Bank Springfield, Massachusetts June 26, 1919 Southbridge National Bank Southbridge, Massachusetts Do Foxborough, Massachusetts Foxboro National Bank July 5, 1919 First National Bank Amherst, Massachusetts First National Bank July 12, 1919 New Bedford, Massachusetts Merchants National Bank August 20, 1919 . . . New Bedford, Massachusetts September 16, 1919 Boston, Massachusetts Boylston National Bank Martha's Vineyard National Bank September 24, 1919 Tisburv, Massachusetts November 10, 1919 Montpelier, Vermont First National Bank November 22, 1919 Leominster, Massachusetts Leominster National Bank North Adams National Bank Do North Adams, Massachusetts 'National Bank of Commerce December 20, 1919 New London, Connecticut ' Supplementary Application. SCHEDULE 48.— Discount rates. Secured by Government war obligations. Commercial paper. Member banks collateral notes. Date. 1917. March 21 August 1 October 23 December 5 Dcember 12 . . . . 1918. January 7 April 8 1919. November 4 . . . . December 12. . . . SCHEDULE 49.—Money rates in Boston, 1919 Kind. Brokers' demand loan Time paper secured Commercial paper discounted: 90 days or under Over 90 days Commercial paper purchased: 90 days or under Over 90 days Bankers' acceptances: Endorsed Unendorsed Bank borrowings Year money Town notes Loans secured by United States war obligations February. March. April. 5*-6 5i-6 5*-6 5*-6 5*-6 5*-6 5*-6 5*-6 5*-6 5* 5*-6 5i-6 5*-6 5*-6 5-6i 5*-6i 5-6 5-6 5-6 5-6 5-6 5-6 5-6 5i-6 5-6 5J-6 5-6J 5*6i 5-6 5-6 5-5* 5-5* 5-5* 5-5* 5-6 5|-6 5-5* 5-5* 5-6 5J-6 5 5-5* 5-5f 5-5* 5* 4.27 4.49 5-5* 5* 4.13 4.54 5-5* 5* 4.20 4.38 4J-5 4{-5 January. May. June. July. 4A 5-5* 6 3.97 4.19 5-5* 5! 3.96 4.50 4i-5 4i-5 1 i 5-5* 5f 4.10 4.50 4i-5 i 5-5* 5* 4.38 4.78 4J-5 Period ending the 15th of each month. 1 SCHEDULE 50.— Debits to depositors' accounts by the Clearing House banks in the larger cities of this district. [000 omitted.] Bangor. 1919. Boston. Fall River. Hartford. Holyoke. New Lowell. Bedford. New Haven. Portland. Providence. Springfield. Waterbury. Worcester. January . . $10,623 $1,053,647 $26,315 $79,014 $12,324 $20,184 $25,026 $71,937 $131,323 $59,958 $30,017 $63,808 February . 10,444 927,223 23,635 65,775 10,570 17,895 23,231 58,502 103,031 49,049 25,151 50,616 March . .. 10,420 981,488 24,622 76,515 10,863 16,958 22,412 58,770 108,184 50,373 23,809 54,512 April 12,531 1,171,448 30,942 102,125 13,188 21,283 30,110 83,116 143,931 64,054 30,577 65,014 May 12,430 1,041,853 33,435 83,995 10,998 18,586 26,709 63,889 124,194 56,036 25,086 62,135 June 11,262 1,193,097 35,843 91,338 12,228 20,981 26,321 62,423 133,550 49,585 27,451 65,217 14,857 1,587,756 40,795 112,907 18,054 25,417 32,360 80,966 166,781 61,501 34,340 80,896 August . . . 10,703 1,117,205 31,036 79,628 13,108 19,490 27,289 64,987 123,065 55,389 26,471 61,347 September 11,368 83,122 13,481 19,978 28,021 65,202 $21,295 129,224 60,761 30,927 63,268 October. . . 16,054 124,451 19,196 26,180 38,059 88,592 44,417 189,496 87,175 34,351 100,251 July , November 13,128 1,059,086 j 30,438 1,605,156 45,132 1,421,798 54,701 87,841 17,169 28,068 40,535 72,787 30,820 159,224 78,148 34,617 78,862 December 15,559 1,782,267 54,426 115,422 18,573 34,820 48,235 88,124 38,725 222,808 88,474 39,894 93,623 149,379 14,942,024 431,320 1,102,133 169,752 269,840 368,308 859,295 135,257 1,731,811 760,503 362,691 839,549 Total . . 55 ANNUAL REPORT OF FEDERAL RESERVE BANK OF BOSTON. SCHEDULE 51.— Building permits for new construction issued in leading cities of this district during 1919 and 1918. 1919. 1918. Per cent change in year. City. Brockton.... Fall River . . Fitchburg . . . Hartford . . . . Lawrence . . . ! Lowell Lynn Manchester. . New Bedford New Haven . Portland . . . . Springfield . . Worcester . . Total outside Boston Boston Total Number permits. Amount. Number permits. 359 264 228 815 314 521 396 385 643 1,093 361 1,022 1,490 $828,057 962,648 891,380 3,830,760 1,366,303 2,616,465 1,234,501 1,326,166 6,717,180 7,824,067 1,587,033 3,773,793 5,078,587 122 135 96 341 111 220 135 186 277 594 144 366 634 $135,565 505,946 197,024 1,564,992 1,570,473 865,173 67,638 139,620 848,089 2,947,866 408,387 751,085 1,298,939 +510 + 90 +360 +144 -14 +202 + 1,725 +849 +692 + 165 + 188 +402 +290 7,891 1,237 $38,036,940 15,936,206 3,361 476 $11,300,797 4,105,322 + 230 +288 9,128 53,973,146 3,837 15,406,119 +250 Amount. SCHEDULE 52.— Business through the port of Boston. [000 omitted.] Excess of Imports. Imports. Exports. Month. 1918. 1917. * $1,964 * 7,638 * 4,679 * 5,644 952 * 27,564 * 3,198 * 11,140 7,600 16,330 6,437 * 4,919 $10,746 4,671 5,998 5,158 11,258 20,292 1,886 4,486 7,140 5,770 6,986 * 125 *647 5,109 5,301 2,272 6,276 2,502 * 2,936 3,302 * 6,462 * 4,157 7,517 235,181 * 35,427 84,266 26,303 1918. 1917. 1919. 1918. 1917. 818,412 22,600 16,836 32,832 21,534 48,029 31,048 36,649 28,229 21,894 30,898 25,902 $20,910 11,294 21,108 22,369 23,889 17,262 20,725 12,936 10,534 19,326 19,257 22,987 $24,193 22,390 19,707 20,509 18,034 14,882 13,913 17,286 10,815 14,495 13,513 19,141 $16,448 14,962 12,157 27,188 22,486 20,465 27,850 25,509 35,829 38,224 37,335 20,983 $31,656 15,965 27,106 27,527 35,147 37,554 22,611 17,422 17,674 25,096 26,243 22,862 $32,419 21,743 24,816 25,810 20,306 21,158 16,415 14,350 14,117 8,033 9,356 26,658 Total. . . 334,863 222,597 208,878 299,436 306,863 1919. January . . February . March. . . . April May June July August . . . September October . . November December * Excess of Exports. 1919. 56 ANNUAL REPORT OF FEDERAL RESERVE BANK OF BOSTON. SCHEDULE 53.—Commercial failures in New England.1 1919. 1917. 1918. State. Number. Liabilities. Number. Liabilities. Number. Liabilities. Maine New Hampshire Vermont Massachusetts. . Rhode Island . . Connecticut 85 20 15 427 71 194 $717,703 165,279 594,239 7,402,927 999,877 2,932,462 135 38 36 739 124 272 $1,516,696 243,919 363,240 13,010,340 683,456 4,067,709 151 49 48 895 105 319 $1,424,353 380,768 422,831 10,777,064 503,488 8,642,146 Total . . . 812 12,812,487 1,344 19,885,360 1,567 22,150,650 1 Figures as reported by R. G. Dun & Co. SCHEDULE 54.— Number of employees in the various departments — December 31, 1919, and December 31, 1918. Department. 1919. Male. Female. 1918. Total. Male. Female. BANK: Total 133 TRANSIT: New England New England night force. , Clearing House Clearing House night force Government checks Total 12 17 4 14 8 5 71 29 20 12 14 3 13 5 5 104 32 29 2 6 9 4 22 2 25 11 5 2 1 Officers Federal Reserve Agent's . Chief clerk's Auditing Adjustment Expense Money Bookkeeping Discount Note teller's Return teller's Collection Wire transfer . . . Collateral ' Chauffeur's General Watchman's Purchasing agent's Custodian of records Legal 122 173 306 59 ; 124 25 20 11 7 65 187 Total. 7 4 21 i 2 ! 24 i 10 3 119 139 258 34 15 49 116 BOND (FISCAL AGENT) : Bond Certificate of indebtedness Total GRAND TOTAL 62 317 132 2 134 128 8_ 136 312 629 251 257 508 57 ANNUAL REPORT OF FEDERAL RESERVE BANK OF BOSTON CHART A. ToT*l U J5o HO Jio J»O Jio 110 /to 11 o Zb iSO 110 310 220 * 10 mi 200 190 iSo \ 170 I o Tr IJO Irs n a' lie £ I/O IOO 90 8o \ So ocr NOV. http://fraser.stlouisfed.org/ LJL Dotted line Louis includes amounts under rediscount with other Federal Reserve Banks. Federal Reserve Bank of St. t 58 ANNUAL REPORT OF FEDERAL RESERVE BANK OF BOSTON. CHART B. A N N U A L R E P O R T O F F E D E R A L R E S E R V E BANK O F B O S T O N . 59 CHART C. 0. ^. WiT fe 300 300 160 260 ISO 2 • So 160 o 3 * It* 2 i V* l*« 140 o |J0 120 100 100 SO 8o i 6o 40 V> 6 M/tRCH JUM JULY A8CUST SEPT OCT NOV CK. 60 ANNUAL REPORT OF FEDERAL RESERVE BANK OF BOSTON. CHART I). AccepWncei IS ai close of business i r 70 (,r to SS Jo I* I > to JAU MAR JUNE ADG- S£P ocr Nov DEC ANNUAL REPORT OF FEDERAL RESERVE BANK OF CHART E. Gold fesetve at Close <^ Bcs e*<:h BOSTON. 61 62 ANNUAL REPORT OF FEDERAL RESERVE BANK OF BOSTON. CHART 60 flli JAM APR F. ANNUAL REPORT OF FEDERAL RESERVE BANK OF BOSTON. CHART G. 63 64 ANNUAL REPORT OF FEDERAL RESERVE BANK OF BOSTON. CHART H. of the Vn,Ud States of Busmess eo.cfj ANNUAL REPORT OF FEDERAL llESERVE BANK OF BOSTON. G5 CHART I. Sue from Pq»«ti/ttVi>£ cf TutJjc Friday 260 260 <?ao Ha I6O I HO no (0 to 06 ANNUAL REPORT OF FEDERAL RESERVE BANK OF BOSTON. 150 THE FOLLOWING EXHIBITS WERE PREPARED BY THE FEDERAL RESERVE BOARD FOR INSERTION IN THIS REPORT 68 ANNUAL REPORT OF FEDERAL RESERVE BANK OF BOSTON. EXHIBIT A.—Movement of principal earning assets of the Federal Reserve Bank of Boston during the calendar year 1919. [In thousands of dollars.] Date. Discounted paper Other secured disby United counted States paper. war obligations. January 3 . $120,775 121,954 January 10 . 118,394 January 17 . 118,034 January 24 . 118,082 January 31 . 133,374 February 7 . 146,403 February 14 . 138,158 February 20 . 139,841 February 28 . 143,801 March 7 144,517 March 14 136,864 March 21 148,867 March 28 148,631 April 4 151,733 April 11 148,618 April 18 157,068 April 25 158,981 May 2 . 145,668 May 9 . 152,150 May 16 . 144,102 May 23 . 146,191 May 29 133,197 June 6 145,205 June 13 143,557 June 20 144,720 June 27 143,591 July 3 138,677 July 11 130,820 July 18 . . . . 134,001 July 25 137,720 August 1 •.. 128,136 August 8 . . . 111,748 August 15 . . 107,163 August 22 . . 107,744 August 29 . . 112,074 September 5 108,671 September 12 115,900 September 19 123,851 September 26 122,745 October 3 . . 120,944 October 10 . . 121,104 October 17 .. 109,146 October 24 . . 110,735 October 31 . . 127,564 November 7 130,236 November 14 127,078 November 21 126,192 November 28 105,868 December 5 128,055 December 12 134,324 December 19 138,206 December 26 1 +2 $8,419 $129,194 9,035 130,989 7,957 126,351 8,744 126,778 7,774 125,856 7,844 141,218 7,318 153,721 7,831 145,989 6,361 146,202 6,206 150,007 5,245 149,762 5,085 141,949 5,053 153,920 4,849 153,480 5,564 157,297 5,864 154,482 5,376 162,444 4,576 163,557 4,499 150,167 4,966 157,116 5,199 149,301 5,488 151,679 4,992 138,189 4,869 150,074 5,155 148,712 10,454 155,174 9,576 153,167 7,455 146,222 6,910 137,730 6,570 140,571 6,986 144,706 8,276 136,412 8,433 120,181 8,517 115,680 7,948 115,692 7,441 119,515 7,508 116,179 7,895 113,795 9,451 133,302 9,080 131,825 10,456 131,400 12,877 133,981 11,641 120,787 10,775 121,510 13,549 141,113 28,715 158,951 32,763 159,841 39,236 165,428 39,870 145,738 38,889 166,944 49,559 183,883 56,630 194,836 Per cent. 1--3 Total bills Bills United bought discounted States and in open securities. bought. market. Total earning assets. $9,521 9,521 10,264 9,264 9,954 9,954 10,954 11,954 12,954 12,954 14,954 14,954 14,954 15,954 15,956 16,955 17,255 17,455 17,455 17,455 17,472 17,471 18,484 17,485 17,485 17,485 17,484 17,484 21,993 21,993 21,993 22,093 21,989 21,989 21,989 21,988 22,019 21,984 21,984 22,278 23,710 22,214 22,585 22,102 21,979 22,470 22,988 23,101 22,620 22,291 22,187 22,200 $151,253 1.54,199 151,969 154,130 155,591 166,760 175,888 169,976 168,397 173,354 174,532 167,475 184,299 176,586 181,285 177,839 189,393 194,192 181,554 189,775 182,632 183,823 174,106 186,401 185,253 190,839 189,891 186,426 183,168 189,535 193,424 185,367 167,354 173,425 183,436 187,833 183,149 190,058 198,249 195,778 200,990 202,273 189,757 192,729 225,714 223,490 233,384 221,877 204,624 231,942 220,432 233,542 93.5 $12,538 93.1 13,689 93.7 15,354 93.1 18,088 93.8 19,781 94.4 15,588 95 2 11,213 94'6 12,033 95.6 9,241 95.9 10,393 96.5 9,816 96.4 10,572 96.7 15,425 96.8 7,152 96.5 8,032 96.2 6,402 96.7 9,694 97.2 13,180 97.0 13,932 96.8 15,204 96.5 15,859 96.4 14,673 96.4 17,433 96.7 18,842 96.5 19,056 93.2 18,180 93.7 19,240 94.8 22,720 94.9 23,445 95.3 26,971 95.1 26,725 93.9 26,862 92.3 25,184 92.6 35,756 93.1 45,755 93.8 46,330 93.5 44,951 101.8 44,279 92.8 42,963 93.1 41,675 92.0 45,880 90.4 46,078 90.4 46,385 91.1 49,117 90.4 62,622 81.9 42,069 79.5 50,555 76.2 33,348 72.6 36,266 76.7 42,707 73.0 14,412 70.9 16,506 $141,732 144,678 141,705 144,866 145,637 156,806 164,934 158,022 155,443 160,400 159,578 152,521 169,345 160,632 165,329 160,884 172,138 176,737 164,099 172,320 165,160 166,352 155,622 168,916 167,768 173,354 172,407 168,942 161,175 167,542 171,431 163,274 145,365 151,436 161,447 165,845 161,130 168,074 176,265 173,500 177,280 180,059 167,172 170,762 203,735 201,020 210,396 198,776 182,004 209,651 198,295 211,342 69 ANNUAL REPORT OF FEDERAL RESERVE BANK OF BOSTON. FEDERALRESERVE BANK OF BOSTON MO/EMEli T OF EARNING ASSETS DURING CALENDAR YEAR 1919. so to 2S O I 50 25 0 UMITED STATES SECURITIES. 75 50 25 0 ACCEPTANCES BOUGHT. 75 SO 25 0 GO IO0 SO SO 60 60 40 40 20 2O 0 0 PERCENTAGE OrWARPAPER TO TOTAL DISCOUNTS. TOTAL BILLS DISCOUNTED, >D; AND WAR PAPER, 250 225 250 225 200 175 TOTAL EARNING ASSETS. JAN\rEB\MCH\APRL\MAY\JUNEyUW\AU6.\SEPT\OCT.\NOV. PEC. 70 ANNUAL REPORT OF FEDERAL RESERVE BANK OF BOSTON. EXHIBIT B.—Movement of gold and cash reserves, Federal Reserve note and net deposit liabilities, and the reserve percentage of the Federal Reserve Bank of Boston during the calendar year 1919. [In thousands of dollars, i. e., 000 omitted.] Date. Gold reserves. Total cash reserves. January 3 . . January 10 . . January 17 . . January 24 . . January 31 February 7 February 14yr February 20 February 28 March 7. . . . March 1 4 . . . . March 21 March 28. . . . April 4 April 11 April 18 April 25 . . . . May 2 May 9 May 16 May 23 May 29 June 6 June 13 June 20 . , . June 27 July 3 July 11 July 18 July 25 . . . . August 1 . . . August 8 . . . August 15 . . . August 22 . . . August 29 . . . September 5 September 12 September 19 September 26 October 3 . . . October 1 0 . . . October 1 7 . . . October 2 4 . . . October 3 1 . . . November 7 November 14 November 21 November 28 December 5 December 12 December 19 December 26 $99,045 109,897 102,573 113,691 110,461 105,110 109,284 110,338 118,757 112,761 107,445 102,359 116,574 107,533 121,455 116,303 112,610 103,608 111,566 124,615 113,546 122,771 112,397 115,796 117,509 108,533 105,428 130,114 121,902 130,336 128,116 136,890 159,326 159,581 155,777 149,489 154,490 123,923 142,086 146,072 159,890 160,841 171,687 167,466 145,153 144,731 132,430 149,821 163,609 140,845 152,070 152,865 $101,733 114,192 106,145 117,546 114,625 110,166 114,533 115,988 124,637 119,089 114,011 108,693 122,884 113,709 127,537 122,674 118,760 111,560 118,817 132,052 121,262 130,127 119,481 122,855 124,917 115,574 111,953 136,396 128,433 137,841 136,378 145,614 168,146 167,744 163,444 156,502 161,064 130,699 148,564 152,014 165,301 166,342 177,191 173,043 150,860 149,882 137,538 154,371 : 168,144 144,760 ; 155,795 156,103 i Federal Reserve n tes in actual circulation. $160,506 159,053 148,985 148,332 149,565 152,479 155,884 158,190 159,552 160,876 163,142 165,338 166,874 169,609 171,265 174,092 177,737 176,931 176,024 171,595 169,647 172,171 173,771 172,632 172,757 176,159 182,631 181,787 178,961 180,481 183,544 189,597 191,077 195,600 198,967 203,986 205,316 205,735 207,829 211,341 213,067 215,092 213,903 212,096 215,598 218,358 216,914 220,828 223,073 226,737 238,211 246,455 Net deposits. $76,556 93,023 92,271 105,434 102,241 105,061 114,730 107,459 112,578 110,217 102,736 87,414 116,537 96,107 112,328 100,522 103,440 102,033 97,620 123,225 107,321 115,012 92,962 109,650 109,972 102,438 91,532 113,275 104,804 117,342 115,188 108,807 111,595 112,448 115,481 107,846 106,661 82,704 106,667 104,085 120,992 121,101 120,271 120,792 126,682 120,829 119,357 120,806 115,996 j 115,567 103,715 108,572 (3 + 4.) $237,062 252,076 241,256 253,766 251,806 257,540 270,614 265,649 272,130 271,093 265,878 252,752 283,411 265,716 283,593 274,614 281,177 278,964 273,644 294,820 276,968 287,183 266,733 282,282 282,729 278,597 274,163 295,062 283,765 297,823 298,732 298,404 302,672 308,048 314,448 311,832 311,977 288,439 314,496 315,426 334,059 336,193 i 334,174 i 332,888 1 342,280 j 339,187 336,271 341,634 339,069 1 342,304 341,926 355,027 Ratio of cash reserves to net deposit and Federal Reserve note liabilities combined. 42.9 45.3 44.0 46.3 45.5 42.8 42.3 43.7 45.8 43.9 42.9 43.0 43.4 42.8 45.0 44.7 42.2 40.0 43.4 44.8 43.8 45.3 44.8 43.5 44.2 41.5 40.8 46.2 45.3 46.3 45.7 48.8 55.6 54.5 52.0 50.2 51.6 45.3 47.2 48.2 49.5 49.5 53.0 52.0 44.1 44.2 40.9 45.2 49.6 42.3 45.6 44.0 71 ANNUAL REPORT OF FEDERAL RESERVE BANK OF BOSTON. 5 FEPERALRESERVE BANKOFBOSTON NET DEPOSIT LIABILITY, F.R. NOTE CIRCULATION, CASH RESERVES. AHP RESERVE RATIO. 1919. S3 i 70 60 SO 40 30 20 10 O PO 60 / SO 40 30 2O 10 0 V FtE5ERYE RATIO, (PERCENTA6E0FC+L). SO F.R. MOTE CIRCULATION O 400 4O0 3S0 3S0 300 300 ZSO ZSO 200 ISO 100 SO DEPOSITAHDFR. NOTEUABlLlTIES/t, A/YD TOTAL RESERVES, 'C JAN. FEB. MCHAPRL MAY' JUNE JULY AUG. SEPT. OCT. /YOK DEC.