The full text on this page is automatically extracted from the file linked above and may contain errors and inconsistencies.
First Annual Report Ninth Federal Reserve Bank J o h n H . R ich Federal Reserve Agent MINNEAPOLIS December 31st, 1915 F IR S T A N N U A L R E P O R T N IN T H F E D E R A L R E S E R V E B A N K . Introductory. IN C E the Ninth Federal Reserve Bank was founded, there has been no stress or emergency within its dis trict, to give it opportunity to demonstrate what it might do in support o f agriculture, commerce and industry, if it were to fully employ its resources and the authority given it by law. The outbreak o f war in Europe retarded business in all parts o f the Ninth District, putting a stop to new enter prises and slowing down all commercial activities for a con siderable period. The year 1915 has witnessed very ^ow , but steady, progress back to normal. It opened with loans and rates for money at the lowest level in many years, but closed with business in a highly prosperous condition, and with ex pressions o f hopefulness for 1916 on every hand. Had it been possible to open the Ninth Federal Reserve Bank in July, 1914, instead o f November, it would have had opportunity to add to its earnings from $250,000 to $340,000 as an incident to the issue o f a large volume o f emergency currency, which, because o f the lack o f a Federal reserve bank, was put out by the currency associations authorized by the Aldrich-Vreeland Act. This bank was handicapped through opening its doors just after the only heavy demand that this district has known for several years had been fully satisfied. This disadvantage is, however, wholly confined to the question o f profits, and, even at that, has not prevented the bank from arriving, well before the close o f 1915, at the point o f earn ing enough to meet its expenses, and a reasonable profit be sides. T o engage in its first operations during a period o f busi ness quiet and readjustment, has given every incentive to dili gently seek opportunities to meet the needs o f member banks and to gradually perfect its methods in such a manner as to render the best, and m ost efficient service. S 3 The Ninth Federal Reserve Bank is functioning properly, It has had opportunity during the year to meet various emer gencies confined to localities and districts, and has promptly extended the support needed by its member banks. W hile there has been no wide-spread call for the rediscount o f paper, it has provided facilities which numerous member banks have been glad to utilize. Its rediscounts have been very well scattered over territory embracing, in whole or in part, six states. The business thus done, together with active efforts to have the Federal Reserve A ct better understood, have laid a founda tion which will be extremely valuable in future periods o f heavy demand. It is notable that where there has been oppor tunity to come closely into touch with member banks, the result has invariably been a high degree o f appreciation by member institutions, o f the serviceability o f this bank and the sim plicity o f its methods. Its management and its operation have had the entire approval o f its membership. The only criticism it has received, has been from outside sources and has re sulted from an imperfect understanding o f what it is permit ted by law to do. The Ninth Federal Reserve Bank has sought to make the Federal Reserve A ct fully operative within its district. Dur ing the Spring o f 1915 it had opportunity to render valuable service in meeting the requirements o f agriculture during the planting season, and rediscounted much paper for member banks that desired to better satisfy the requirements o f farm ers. It cared for local pressure at a number o f points where manufacturing enterprises and general business were depressed because o f war conditions, and had opportunity to show that it can efficiently meet the demands o f industry. Again, in the Fall o f the year, when an adverse season had created large amounts o f immature corn, it was able to perform an im portant service in assisting member banks to meet the require ments o f farmers who were compelled to loan in order to utilize the resulting forage crop. During the prevalence o f the foot and mouth disease it was able to come to the assistance o f many banks in the western part o f its territory, which had 4 applications for loans from numerous stockmen who had cattle ready for market, but were unable to ship on account o f quarentine conditions. The service above indicated, represents, in the aggregate, a new and valuable degree o f assistance, which would not have been available except for the Federal R e serve Bank, and without which portions o f the district would have encountered considerable hardships. Immediately upon receipt o f authority, this bank instituted a system for the clearing o f checks, which has been in suc cessful operation since June 1st, and which has made con tinuous progress toward making the checks o f member banks par within this district. During the Fall crop m oving period, it announced a special commodity rate for the assistance o f grain growers, enabling member banks to rediscount farmers’ notes, collateraled by elevator tickets, at 3 % , with the understanding that the rate to the maker o f the paper should be limited to 6 % . Practically all the currency required for crop m oving pur poses during the Fall period, was furnished by this reserve bank, at a cost to member banks that was appreciably less than in form er years. Shipments o f currency from points outside the district were reduced to about $1,000,000, or a merely nominal figure. Currency fo r this purpose has usually been shipped from Chicago, and the East. In 1915, for the first time, it was possible to obtain at home, the currency needed by country banks. The added convenience o f the service afforded by the reserve banks ranks second only to the sav ing in cost. From October 1 to December 31, the issue o f Federal reserve notes for this purpose was approximately $8,000,000, in addition to $6,000,000 previously issued and available, in part, for crop-m oving purposes. The rates o f discount on agricultural, industrial and com mercial paper established at the opening o f this bank, have shown a downward tendency throughout the year. They have offered a very favorable basis for the rediscount o f paper o f member banks as compared with prevailing interest rates. Member banks have had the double advantage o f beinx 5 able to discount direct with this reserve bank at these rates, or o f going to their correspondents with their paper, and there discounting it upon a better basis than has prevailed in pre vious years. The rates made by the larger city banks to their country correspondents have shown a tendency to seek the same level as the discount rates o f the Ninth Federal R e serve Bank. This is an indirect influence o f the reserve bank rates. The influence o f the discount policy o f this bank upon rates paid by bank customers is not so easily traced, but in many instances the right to rediscount has resulted in the extension o f credit which member banks would otherwise have been obliged to curtail or refuse. Especially in the stock and agri cultural districts, it is found that the facilities afforded by the reserve bank have enabled member banks to continue to ex tend credit at reasonable rates, where, without such facilities to fall back upon, member banks would have been compelled to restrict their loans. The steadying influence o f the reserve bank has been very valuable to the agricultural and business interests o f the district, because it has prevented uneasy financial conditions, and sharp fluctuations o f rates, that might easily have been possible if the reserve bank had not been in existence. It is worthy o f note that out o f approximately 4,000 notes and bills offered for rediscount, only a very few have come from the member banks in the large cities. These banks, with only four exceptions, have had no occasion to rediscount since this reserve bank was founded. Practically all o f these re discounts have been made for institutions located in the countrv districts, i.e.— for member banks doing the bulk o f their business with the agricultural class and with stockmen. It is, therefore, apparent that the service thus rendered has been a service which has been extended, in a very large part, to farm ers and to producers o f stock, and that the support afforded by this bank has been to those engaged in production, rather than to those engaged in the handling and marketing o f farm and range products. A t the close o f the year, it is evident that there are oppor tunities for business open to the Ninth Federal Reserve Bank, sufficient to more than provide for its expenses, and in a year o f general business activity, probably sufficient to meet its dividend requirements. This would be fully guaranteed, even in normal times, should Congress see fit to reduce the amount o f paid-in capital, allowing the proportion so reduced to stand subject to call. Should such reduction be made, there should be a compensating deposit o f government funds, to guard against a contraction o f the resources o f reserve banks, and loss o f issue power. M inor adjustments and amendments would inevitably sug gest themselves, but the first fourteen months’ operation have revealed no important defects in the Federal Reserve Act, nor has there been any difficulty in making the purposes o f the A ct effective, through application o f the regulations o f the Federal Reserve Board and by adjustments o f business policy as determined by the Board o f Directors and the executive officers o f the bank. Summary of the Year’s Work. The results obtained since organization are told in detail in the sub-joined portions o f this report, but may be briefly summarized as fo llo w s : W hen instructions to open on November 16, 1914, were re ceived, this bank was without organization or staff. Such or ganization was provided and the bank was opened on the date set by the Secretary o f the Treasury. The changes and adjustments incident to obtaining a per manent staff have been accomplished and the wTork o f such staff has been reduced to an efficient operating basis, with a reduction, rather than an increase, in the number o f employes. Permanent quarters, of such a character as to reflect credit upon this bank and upon the reserve system, have been ob tained and occupied under a long lease, the terms o f which are very favorable. The necessary equipment, fo r the operation o f the bank upon a permanent basis, has been obtained and installed. T o meet the requirements o f this bank, and for the accom- 7 modation o f member banks desiring to place deposits here, a new money vault, which is the safest and strongest in the W estern United States, has been completed and is in use. It embodies the best principles o f modern vault construction and is electrically protected by the best available systems. Provi sion was made in this vault for the segregation o f space for the Federal Reserve Agent, to which he alone has access. By active correspondence and personal consultation, the membership o f state banks has been encouraged, with the re sult that twenty such institutions have taken membership by conversion, and one by entry as a state bank. Nineteen have membership under active consideration. Important service has been extended to the agricultural and stock raising interests o f this district, the rediscounts o f this bank having been almost entirely with members doing the bulk o f their business with such interests. State and municipal financing has been facilitated through purchases, under the authority o f the Act, o f state warrants issued in anticipation o f assured revenues and the warrants o f various cities, aggregating $3,073,172.32. Purchases o f United States bonds have been made with the view o f effective participation in the eventual retirement o f national bank circulation. There has been a growth in membership o f 26 banks, bring ing the total membership up to 735, and increases sufficient to create a paid-in capital o f $2,546,850. Federal reserve note circulation has been expanded to meet all the demands o f the district, eliminating in 1915, for the first time, the necessity o f shipping in more than nominal amounts in currency, for the purpose o f m oving the north western crops. Continuous effort has been directed towards broadening the information o f member banks with respect to the A ct and their rights under it, with the result that such banks have ob tained a clear understanding, on the basis o f which their re quirements can be readily and expeditiously met. Discount rates have been maintained at levels which are favorable to member banks, and have created, as well, a more favorable basis than previously existed, for the discount o f paper by members with their city correspondents. These dis count rates have also influenced current rates o f interest to commercial enterprises in the large cities o f the district, which were more favorable in 1915 than in any previous year. A system o f check clearing, to which there have been 76 additions and only two withdrawals, has been established, w^ith 68 new additions to Minneapolis and St. Paul par lists. P rog ress has been made toward making checks o f member banks par within this district. Personal contact with member banks has been sought by the Federal Reserve Agent, Governor and other officers, who have appeared at and addressed 47 gatherings o f bankers and busi ness men, and who have continuously encouraged the represen tatives o f member banks to visit this reserve bank, for the pur pose o f inspecting it and consulting with respect to its opera tions and policy, and their rights under the Act. Through personal contact and co-operation, general and sub stantial support o f the newspaper press within the district has been obtained, together with the support and co-operation o f numerous business organizations. The regulations o f the Federal Reserve Board have been promptly applied and made effective within this district, the policy o f this bank being to extend to its member banks every advantage authorized by the Act, or permitted through in terpretation by the Federal Reserve Board. Through the assistance o f correspondents, representing agriculture and the principal lines o f commercial business, as well as banking, a crop and business reporting system has been created, which has permitted the establishment o f a series o f monthly crop and business reports, which are forwarded to the Federal Reserve Board, and which have been much in de mand from those desiring unbiased and impartial inform a tion. A s a result o f the general policy o f this bank, as expressed in this summary o f the year’s work, a substantial public con fidence has been built up, and there has been impressed upon those engaged in agriculture and business within this district, the purpose o f its officers and Board o f Directors to render at all times the broadest degree o f public service permitted by law, and compatible with sound banking principles. Its rela tions with its members have been o f the most satisfactory character and have given ample evidence o f the keen appre ciation o f such members o f the new facilities afforded them, and the protection rendered by the reserve system. Organization of the Ninth Bank. Pursuant to the authority conferred in Section 2 o f the Federal Reserve Act, the Reserve Bank Organization Com mittee created the Ninth Federal Reserve District, embracing the follow ing territory: The The The The The The state of Montana ...................................... 146,997 Sq. Mi. state of North Dakota .......................... 70,837 “ “ state of South Dakota ........................... 77,615 “ “ state of Minnesota ................................... 84,682 “ “ north two-thirds of Wisconsin.............. 41.000 “ “ Northern Peninsula of Michigan.......... 15,000 “ “ A total o f.......................................................... 436,131 “ ‘ The territory thus determined, extends from the northern end o f Lake Michigan to the Montana-Idaho line, a distance o f approximately 1,500 miles east and west. Its greatest dis tance north and south is from the southern boundary o f South Dakota to the Canadian line, or approximately 600 miles. Minneapolis was designated as the location o f the Ninth Fed eral Reserve Bank. It is a territory o f peculiarly diversified interests. N orth ern Michigan is a heavy producer o f copper, iron and lumber. W isconsin is one o f the leading states o f the Union in the dairy industry and agriculture, and has important lumber in terests in its northern portion and an important shipping busi ness at its Lake Michigan and Lake Superior ports. Northerrt Minnesota is a heavy producer o f iron and lumber, while the remainder o f the state is largely agricultural. North and South Dakota are mainly agricultural. Eastern Montana is an agricultural and stock country. Central Montana is first 10 in the United States in the production o f copper and western Montana is a very important producer o f lumber, with large areas devoted to fruit and agriculture. These are the prin cipal interests which the Ninth Federal Reserve Bank was established to support and serve. The territory had, at the time o f the organization o f the Ninth Bank, a population o f 5,724,895 and member (national) banks to the number o f 709. Under the authority conferred by the Act, the Reserve Bank Organization Committee took appropriate steps fo r the elec tion o f a Board o f Directors, with the co-operation o f an in formal committee within the district. On October 1, 1914, the Federal Reserve Board appointed John H. Rich, m anufac turer, Red W ing, Minn., as Federal Reserve A gen t; P. M. Kerst, clearing house examiner, St. Paul, Minn., Deputy Fed eral Reserve Agent, and John W . Black, wholesale coal mer chant, Houghton, Mich., as Director, the three serving as Class C Directors. The election o f Directors, as provided by the Act, resulted in the choice o f the follow ing Class A Directo r s : E. W . Decker, banker, Minneapolis, M in n .; J. C. Bas sett, banker, Aberdeen, So. D a k .; Hon. L. B. Hanna, Governor and banker, Fargo, No. Dak. The follow ing were elected as Class B D irectors: F. P. H ixon, lumberman, La Crosse, W is .; F. R. Bigelow, insurance, St. Paul, Minn., and Norman B. Holter, wholesale hardware, Helena, Mont. The Directors met and organized on October 14, 1914, elect ing Theodore W old, President o f the Scandinavian-American National Bank, as Governor and C. T. Jaffray, V ice President o f the First National Bank o f Minneapolis, as member o f the A dvisory Council. The session was continued through the follow ing day. A committee on permanent quarters was named, by-laws were adopted, provision wras made for an offi cial seal o f the bank, and an Executive Committee, consisting o f the Federal Reserve Agent, the Governor and D irector Decker, was elected. S. S. Cook o f Minneapolis was elected as Cashier, and Frank C. Dunlop as Auditor. Hon. A . Ueland o f Minneapolis was elected Counsel on Feb. 1, and on July 21, Curtis L. Mosher was appointed as A ssistant to the Federal Reserve A gen t. 11 On October 28th temporary offices were opened in the D i rectors’ R oom o f the Minnesota Loan & Trust Company in Minneapolis, and arrangements were made fo r the receipt o f the initial reserve and capital payments. Immediately thereafter temporary quarters were obtained in the Lumber Exchange Building, which were occupied until the permanent quarters in the New Y ork L ife Building were ready for occu pancy on January 1, 1915. Telegraph notification was received from the Comptroller o f the Currency on November 14, 1914, that the organization certificate had been executed in W ashington and upon N ov ember 16 the Ninth Federal Reserve Bank was formally opened for business. The pfficial and clerical staff o f the bank is numerically less at the end o f the year than at the beginning. The membership o f the Federal Reserve Bank o f Minne apolis, at the time o f organization, consisted o f 709 banks. Since that date membership has been acquired by 26 banks, bringing the total up to 735. One o f these is the largest state bank in Minnesota, which lias entered the system as a state bank. Twenty are conversions o f state banks into national banks. The remainder are new national banks. In addition to these changes, there were in process o f conversion upon December 31st, 19 state banks, which will take membership, with prospective additional increase through the organization o f 8 new national banks. Executive Committee and Board of Directors. Pursuant to the authority o f the by-laws, copy o f which is attached, the Executive Committee has exercised the powers indicated in Section 2 thereof, and has carried on the work assigned by the Board o f Directors, and acted in an advisory capacity to the officers o f the bank, during the intervals be tween Directors’ meetings. The Executive Committee has consisted, since the organization o f the bank, o f the Governor, the Federal Reserve Agent and one Director, and, being small in size, has been able to meet frequently. The practice o f the committee has been to meet at 11 o ’clock in the bank on each 12 business day o f the year, there to pass upon all paper sub mitted for rediscount and conduct other business authorized by the by-laws. It has maintained its daily sessions with remarkable success and has been a highly efficient agency in supervising and facilitating the business o f this bank. The Board o f Directors, being scattered, in point o f resi dence, all the way from the central part o f Montana to the Northern Peninsula o f Michigan, has not been able to meet frequently, but in accordance with the by-laws, has held regular sessions on the first Monday o f every month at 11 o ’clock a. m. in the Directors’ room o f this bank. The con tinuing service o f the Executive Committee has made it pos sible to avoid special meetings o f the full Board. The ses sions o f the Directors have been thorough and searching, and each member has shown a willingness to devote all the time required to a proper handling o f the business in hand. Care ful analysis and discussion o f business and fiinancial condi tions throughout the District, changes in currents o f trade and industry, developments in agriculture, and consideration o f discount rates have become regular features o f the B oard’s sessions, and have been a means o f harmonizing opinion as to the proper course and policies for this bank to pursue. The Directors have called at the bank frequently, between reg ular meetings, and have kept in close touch with its affairs. The weekly statements o f the bank, together with other cur rent information o f value, are regularly mailed to each director. Operating Difficulties. The Ninth Federal Reserve Bank was opened almost im mediately after $13,000,000 o f Aldrich-Yreeland emergency currency had been issued in this district. The opportunity to supply the needs o f its members had therefore been cur tailed in advance o f its com ing into the field. During the last half o f November and the month o f December, 1914, such rediscounts as were afforded members, were largely courtesy transactions, the greater part representing the efforts o f larger banks to acquaint the public with the new Federal reserve cur- 13 rency. A fter January 1, 1915, the Ninth District entered a period when all credit demands had been satisfied, and loans dropped to the lowest ebb in many years. Rates on commer cial paper took new low levels. The demand at country points was light and banks in larger centers experienced much diffi culty in employing their funds to advantage. There was no change in this condition until spring farm activities began to provoke some demand in early May. The Ninth Bank then enjoyed a period during which there was a moderately active demand from its members, which continued during June, July and August. This demand held during the first week o f Sep tember, and then moderated to some extent. From Septem ber to the end o f the year, the figures show comparatively small changes. This year, in brief, has been a year o f cheap money rates and ample money in the Ninth District. The excess reserve o f member banks is significant o f this condition, and is shown by the follow ing figures issued by the Comptroller o f the Cur rency : As of Dec. 31, Mar. 4, May 1, June 23, 2, Sept 1914 1915 1915 1915 1915 Reserve Required $44,781,908 47,909,124 47,027,161 45,826,686 47,024,900 Reserve Held $80,113,119 111,069,784 106,262,875 94,462,540 101,210,407 Excess $35,332,010 63,160,660 59,235,714 48,635,854 54,185,506 The volume o f rediscounts has been depressed in proportion to the lack o f normal activities in commercial and industrial business, and throughout the year, has been below what might reasonably be expected under the usual crop and business con ditions. The one hope o f active rediscounting o f the year hinged upon the marketing o f an unusually large grain crop in the Northwest. A production o f 100,000,000 bushels o f wheat over and above the usual crop, indicated that there would be a sharp and continuing demand during the last quar ter o f the year. V ery unusual weather conditions slowed down the marketing o f the new crop immediately after har vest. Rain, wet roads, the demand o f fall plowing, and a disposition to hold grain for better prices, combined to in- 14 finence farmers to market only as they needed funds. The receipts at terminal markets were extremely light during September and October, and the slow movement made it pos sible to finance the marketing o f the crop very largely on the farmers’ money. The demand upon banks was light, and the large elevator concerns, which usually begin issuing ter minal grain paper by mid-October, had put out only very small amounts at the close o f the year. In response to higher prices, the December movement o f grain was very active. There is a very large amount o f small grain still held on farms, which will come gradually into the markets. These conditions resulted in the peculiar situation, that during a period when country banks and the grain trade are usually heavy borrowers, the large elevator concerns were satisfying their requirements with their straight paper and country banks were paying up. The volume o f current rediscounts, acceptances and invest ments o f the Ninth Federal Reserve Bank, by fifteen day periods since organization, is shown in Table A , attached hereto. There is shown, in Table B, the total rediscounts and bills payable o f member banks, by states, their deposits and their rediscounts with this bank, as o f the date o f the Comp troller's call on November 10. Table C gives the amount o f rediscounts by states, and statistics o f rediscounts. Discount Rates— Characteristics of 1915 Business. The Directors and Executive Committee o f this bank have endeavored to hold rates o f discount at a level low enough to fully and amply accommodate any member bank and at the same time avoid a rate so low as to encourage rediscount for the sake of the intermediate profit. Within certain narrow limits it is probably true that these rates could have been varied during the year without any appreciable effect on the amount o f business coming to this bank. In other words, member banks have not used this bank except where necessity existed and under such necessity the rate has not been a ma terial factor in determining whether they would or would not make use o f our facilities. W hile it is possible that a slightly 15 higher rate might have been charged in some cases, with addi tional profit to the bank, it has been the opinion o f the Direc tors and Executive Committee that rediscount should not be taxed with all the traffic could bear, but that the policy should be that o f making a fair, moderate and reasonable rate fo r all business offered. The course o f the discount rates o f this bank, and all changes therein, with the dates on which such changes were made, is shown in T able I. The prevailing interest rates over the district must be borne in mind in order to appreciate the very attractive basis afforded for the rediscount o f the paper o f member banks. Throughout the well-settled and well-developed farming districts o f central W isconsin and southern Minnesota, farmers o f established credit are customarily able to borrow at 6 and 6 / J2% . Through out the less developed sections o f northern W isconsin and northern Minnesota current rates are 7 J /2 to 8% to customers o f good credit. In South Dakota, rates vary from 7 to 8% in the well developed eastern portion and from 8 to 12% in the thinly settled western portion. Approximately the same rates (except that the legal rate is 1 0 % ) apply in North Dakota, the eastern portion o f which is a well developed and prosperous farming country, while the western part is under going rapid development and is practically a new country. The rates in Montana, which is a state o f immense extent, undergoing settlement and development, and thinly populated, range from 8 to 12% , with an average o f 10%. The Ninth Federal Reserve District has been prosperous since the founding o f the bank. It cannot be said that an emergency has existed in the district at any time since this bank has opened on November 16, and there has, therefore, been no opportunity to make a practical test or demonstration o f the efficiency o f this bank during a period o f stress. In the Ninth District, as elsewhere, the Federal reserve bank was an entirely new element in banking. The readjustment o f the customary practices o f member banks, sufficient to give it a satisfactory volume o f rediscounts, was slow. Business and agriculture were placing no burdens upon local banks 16 greater than they could satisfactorily carry. The average member bank has had less occasion, during 1915 than in for mer years, to borrow in order to satisfy current demands. The influences o f the year have been such as to encourage those in business to exercise caution and prudence, and bank depositors generally have shown hesitation in drawing down their balances or in embarking, with the usual freedom, in new enterprises. It was evidence o f a sound and progressive policy, that during a period when bank deposits have been high and the demand for loans less than normal, this bank has gradually increased the volume o f its rediscounts for its members and brought its earnings up to a point sufficient to cover all ex penses and create a profit. This would not have been possible, had not the bank functioned perfectly and as was intended by the law. It is also significant o f the persistent and continuous effort o f the officers, to have member banks and the public clearly understand its purposes. A gradual spread o f a practical understanding o f the w ork ings o f the Federal reserve system has undoubtedly had a beneficial influence upon the amount o f business done dur ing the year. Such pressure as has occurred within the dis trict has been largely local. W here local strain has appeared this bank has been quick to extend assistance as required by its members, and the active efforts o f the officers o f the bank have been directed throughout the year toward acquainting member banks with the degree o f support this bank stands ready to extend. A s an incidental, but important part o f the work o f creat ing a proper understanding o f the A ct and the Ninth Federal Reserve Bank, the Federal Reserve A gent and Governor have taken special pains throughout the past fourteen months to meet with bankers at their group meetings and conventions and engage in a practical discussion o f the subject. The Federal Reserve A gent has made twenty such addresses during this period. The Governor has addressed sixteen state and dis trict conventions, while other officers o f the bank have done similar work when opportunity afforded. This bank has been 17 represented at forty-seven such gatherings. It has been found that personal contact with member bankers, and the public, especially when there has been opportunity to answer ques tions and engage in informal discussion, has been valuable in giving member banks a working knowledge o f the law and inform ing them as to the details o f rediscount and currency issue. The service extended by the press o f the Ninth District in spreading information should have proper acknowledgment. The attitude o f the newspapers has been extremely friendly and editors have shown a keen interest in furthering the new banking system wherever opportunity has afforded. The earnings and expenses o f the Ninth Federal Reserve Bank since organization are show n in T able D. Check Clearing. Pursuant to the authority o f the Federal Reserve Board, a system o f check clearing was established in the Ninth Fed eral Reserve District on June first. Participation in check clearing was purely voluntary on the part o f member banks, but the system was established with 110 banks participating and from June first to November first there were 76 additions and only two withdrawals to the system. The check clear ing system was operated without overdrafts and without defi ciencies in reserve. O f the 186 members in the collection sys tem, 68 are new additions to Minneapolis and St. Paul par lists and this benefit has been passed on to their customers. The objective sought, has been that o f making checks o f member banks par, within this district. Progress has been made toward this end and the clearing system has shown a slow but steady growth. The average number o f items daily, and the average amount o f items daily, by months, is shown in T a ble E. Exchange Charges in the Ninth District. The customary charges made by the country banks on checks sent them by their city correspondents vary from 10 cents per 18 $100, based on the total included in remittance letters, up to 15 cents per $100, based on each separate item. In the last few years the tendency has been for the city banks to pay a constantly increasing amount on the same volume o f business to their country correspondents for exchange charges, as more and more banks are basing their charges on each separate item instead o f on total o f letters. Since the establishment o f the Federal reserve banks and their collection system there has been no change in the basis on which such charges are made. A number o f banks that formerly charged exchange have joined the Federal reserve bank collection system, and now remit for their checks at par to their city correspondents. The remainder o f the 186 banks that are members o f the Fed eral reserve bank collection system were not charging exchange prior to joining the system. It seems to be the purpose o f the banks o f the Ninth District to await the development o f the collection system o f the Federal reserve bank before any action is taken or changes are made relative to exchange charges. M ember banks o f this district appear to believe that eventu ally they will be compelled to cease charging exchange, to the endorsers o f checks sent them for collection or credit, but owning to the loss o f profit they will not give up these charges until the situation is such that they can no longer be made. A total o f 960 banks (state and national) in the Ninth District, do not charge exchange on checks drawn upon them. Applications for Fiduciary Powers. Observation o f conditions in this district has gradually brought the officers o f this bank to the conviction that the granting o f fidulciary powers, to small banks, under certain restrictions, is o i great advantage to their communities. It has been noted that many towns, where sound and well man aged banks are successfully operated, are without the advan tage o f trust company service. W ith the reservation that such powers should not be granted except where member banks are under management that is above criticism, and where the char acter and integrity o f their officers is thoroughly established, it has been the policy o f the officers o f this bank to recom- 19 mend the granting o f fiduciary powers to some banks that are not o f commanding size. It is believed that it is safe to trust such powers to a small bank, if well managed, as well as to a large bank, and that the favorable action o f the Fed eral Reserve Board in such cases confers valuable benefits upon the community. Especially in the administration o f es tates, it has been the view o f the officers o f this bank, that it is better to trust to the judgment and integrity o f a sound and well managed member bank than to an individual approved by the court, and that, having more at stake and having bet ter facilities than an individual, a properly managed mem ber bank is in better position to render this necessary service. On February 18 the counsel o f this bank rendered an opin ion upon Clause K, Section 11 o f the Act, with reference to the granting o f fiduciary powers, in which he expresses the fo l lowing conclusion: “ It follows * * * that national banks cannot lawfully act as trustees, executors, administrators and registrars o f stocks and bonds unless there is state legis lation expressly conferring upon them the power to do so. A t present there is no such legislation in any o f the six states comprising the Ninth Federal Reserve District.” Since writing this opinion, favorable legislation has been adopted in South Dakota, but in Michigan, W isconsin, M in nesota, North Dakota and Montana the situation remains as then outlined, and counsel has refused to favorably certify applications from those states. This suggests the desirability o f state legislation expressly conferring the right to exercise the powers granted under the Federal Reserve Act, without which favorable action on such applications as come from the states o f the Ninth District, with the exception o f South Dakota, will still be subject to question as to the legal right o f the applicant to exercise the powers granted. Relations With Member and Other Banks. The attitude o f the Ninth Bank toward the national banks o f its district has been that o f an organization receptive to the suggestions and comments o f its stockholders. Visiting 20 representatives o f member banks have been reminded that, while this bank has the obligation o f rendering them effective service, the obligation rests upon them as stockholders to main tain an active interest in it, and assist it through friendly criti cism. Every effort has been made to encourage representa tives o f member banks to visit the bank, and, since its organ ization, a large amount o f correspondence has been carried on for the purpose o f creating and maintaining personal con tact between the officers o f this bank and the official heads o f member banks. The attitude o f the members towards the Fed eral reserve bank has been at all times ?riendly. Some few institutions have been apprehensive o f competition that might result from the operations o f the Ninth Bank, but even under this condition, have not hesitated to say that their member ship constitutes a very valuable insurance and that this bank is a very necessary and important safeguard. The larger banks voluntarily state that the question o f receiving dividends on their stock is unimportant as compared with the advantages they receive through the holding o f stock, and their comments upon the management o f the bank, so far as they have reached the officers o f this institution, have been commendatory, friendly and helpful. Much the same attitude has been maintained toward the numerous state banks o f this district and, through personal contact and correspondence, a continuous effort has been made to interest them in the facilities offered by the Federal reserve system and encourage them to take membership. These activities have resulted in the membership o f the largest state bank in Minnesota. A number o f other strong institutions have been brought to a point where they are giving the subject serious consideration. The attitude o f state banks in general has been friendly, but they have demonstrated a desire to wait and observe the operations o f the Federal reserve system for a period long enough to enable them to estimate the use they might make o f it. This bank has had the helpful co-operation o f the State Superintendent o f Banks o f Minnesota and the. Commissioner o f Banking o f W isconsin, and there has been no 21 opposition on the part o f state officials toward the acquisition o f membership in the reserve system by banks operating under the laws o f their states. Credit N eeds o f the District. The only credit requirements o f the Ninth District during the past fourteen months that were o f any considerable magni tude, had been satisfied before the Ninth Bank was opened fo r business on November 1, 1914, as previously noted. From M ay first, on throughout the year, there was a gradually and very noticeable drift back to normal conditions. The recov ery was very slow . Business activities have not yet reached a point, although the closin g m onth o f the year show ed co n siderable advance, where they have made greater demands than banks locally have been able to satisfy. The volume o f rediscounts carried by the Ninth Bank has increased more in response to steady and persistent effort to create a better understanding o f the system and the facilities afforded, than from any sharp demand. Experience gained during the year, through the rediscount for scattered member banks, points conclusively to a gradual growth o f this business to propor tions that will be satisfactory, even in years o f normal business. W here member banks have had the opportunity o f utilizing the facilities afforded, we have invariably found them pleased with the direct methods employed and commendatory in their comments. A marked reluctance to rediscount was manifested by prac tically all members at the opening o f the bank. T o use its facilities meant the abandonment, in many cases, o f firmly rooted precedents. The task o f acquainting more than 700 banks with their rights under the Act, was formidable, but a necessary preliminary to the development o f a volume o f busi ness. Excellent progress has been made, and as member banks have been brought into intimate touch with their reserve bank, they have invariably been highly pleased with its ability to render them practical support. The only credit demands which have presented themselves which have' not been fully and promptly met have come from 22 farmers who desire cheap money to enable them to hold grain in the anticipation o f a better market. The problem o f meet ing this demand is extremely difficult. This bank placed in operation the commodity rate authorized by the Federal R e serve Board, as soon as authority was received, and has done some business under it. The application o f the commodity rate under the requirement that the grain held as security against the paper rediscounted, be stored in a “ warehouse” (country elevator), necessarily involves that the farmer en joyin g the 6% rate, must first place his grain in storage, and pay charges thereon. The storage charges, plus interest on the loan at 6 % , invariably increases the cost o f the accom moda tion extended far beyond the nominal rate o f 6%. The inter est paid, plus the elevator charges, ranges all the way from 17 to 21% on the money borrowed. The farmers in the Ninth District have been accustomed to making some use o f elevator tickets as collateral fo r their paper at the banks, but the process is not highly regarded because o f the cost. The method o f loaning upon chattel mortgages on grain is also common. Numerous letters have reached this bank from all parts o f the grain territory inquir ing for Government funds to be loaned on security o f grain held on the farm. It is evident that the impression o f the inquirers was that this bank could apply the commodity rate to grain on the farm, discounting paper at 3%, the rate to the maker to be 6%, entirely overlooking the provision o f the commodity rate regulation requiring that paper discounted under the commodity rate be secured by warehouse receipts. These requests have been supported by the argument that it is unfair to force the farmer to market his grain immediately after harvest when all farmers are selling and the market is glutted. The only method that will afford them proper relief, they argue, is a system that will permit them to hold their own grain in their own storage. Bankers in grain territory have very frequently made such loans, but on account o f the risk o f the removal o f the security, they have been compelled to confine their accommodation to farmers o f established credit and men well and favorably known to them. 23 It should be understood that the Ninth Federal Reserve Bank Has stood ready at all times since organization to dis count any grain paper complying with its rules, under its dis count rates as announced from time to time, when such paper is presented through a member bank, as required by law. N o method o f satisfying this demand presents itself unless some condition can be created under which the integrity o f the security for the loan can be fully and amply protected. It is possible that through an amendment to the Act, some method might be devised by which a member bank could safely loan on grain stored on the farm and be permitted in such cases to rediscount the note as commodity paper. It is not probable that such a regulation can be worked out, unless it is possible to make it a Federal offense to remove grain stored in such a manner, when the note has been rediscounted at a Federal reserve bank. Farmers’ organizations in the Ninth District have been very active in discussing rural credit questions and especially that o f affording the farmer more opportunity to loan at low rates upon farm products on his own farm. This agitation will probably become increasingly active. Farmers already show a disposition to turn to the Federal reserve bank, since it is a Government institution, and it is difficult to convince them that no provision, so far incorpo rated in the Act, affords them this relief. N o comment is made on the question as to wThether it is desirable to widen the already liberal provisions o f the A ct in respect to the credit requirements o f agriculture, by extend ing new and preferential rates to farmers as a class, or as to the question whether such preferential accommodation would not to some extent violate the principle on which the Federal Reserve A ct is founded, i. e.— that o f fairly and equitably extending to all who are engaged in commerce, industry or agriculture such support, through member banks, as they may reasonably require. E lection o f D irectors. Vacancies occurred in Classes A and B on the Board o f Directors o f this bank, wrhich were filled by election in N ovem - 24 ber. The process o f classifying the member banks by groups and carrying the election provisions o f the A ct into effect, made it possible to observe some points that seem worthy o f consideration. Classification o f member banks by groups on the arbitrary basis o f the amount o f their capital stock and surplus, resulted in the establishment o f Groups 2 and 3, both consisting o f members scattered over the whole or parts o f six different states. Cohesion and unity o f action are not possible where a group o f 220 banks is divided over a territory extending over 1,500 miles east and wrest and 600 miles north and south. As a result o f the scattered location o f the voting members o f the participating groups, the vote in both groups was light and the vacancies on the Board were filled through the bal loting o f only 25% o f the members entitled to vote. It seems unfortunate that after active efforts to interest every member having a right to vote, that a greater interest was not mani fested in so important a matter. It is probable that the scat tered condition o f the member banks alone will always make it difficult to arouse an active interest in the election o f direc tors. As a remedy for this condition, it is suggested that attempts to classify the Board o f Directors into three groups be abandoned in favor o f a plan under which all member banks will vote at one time, on each o f the vacancies occurring among the elected members o f the Board. This would involve an amendment to the A ct providing for the selection by mem ber banks o f five o f the nine members o f the Board o f D i rectors, such nominees to be either bankers or business men, at the option o f the member banks. The remaining four should be appointed by the Federal Reserve Board. A s an incident to the election o f directors, a member bank nominated a banker interested in four state banks, but not connected with any member (national) bank. Counsel for this bank ruled that there is nothing in the law to prevent placing the name o f the representative o f a non-member bank upon the official ballot, if such nominee is regularly nom inated. This suggests that there is at least a possibility o f the election o f a director having no interest in any member bank. 25 Such an election could not occur except in Class A. W hile nominees for Class A shall be “ chosen by and be representa tive o f the stockholding ban k s/’ they might not necessarily be bank officers, directors or stockholders. In cases where such nominees have active bank connections, it is suggested that they be made ineligible except where such connections are with stockholding banks. Such restrictions o f nominations in Class A , and a simplification o f the process o f election will undoubt edly contribute to a greater interest by banks eligible to vote, in the elections which will occur from year to year. Exchange Operations. The demand for eastern exchange in this district is so steady that for the greater part o f the year a premium is paid. F or a period o f from two to three months, during crop m oving time, Chicago and eastern funds go to a substantial discount. It was, therefore, considered desirable by the officers o f this in stitution to accumulate funds for the use o f member banks when the turn came. This was done by the acceptance o f eastern exchange at a discount based on the cost o f shipping mixed currency to or from the nearest Sub-treasury. These accumulated funds will be sold on the same basis. It is believed that the policy o f establishing a flat rate is sound and desirable and that the building up o f balances in the East at a fixed discount rate and the sale o f these balances at a fixed premium will do much to prevent violent rate fluctua tions. New Money Vault. The permanent quarters occupied by the Federal Reserve Bank o f Minneapolis contained a vault which, with the instal lation o f modern money chests, has been o f value fo r the safe keeping o f tellers’ current funds, books and documents. It was not sufficiently strong to house deposits o f this bank, and it became necessary to provide new and better facilities. Pend ing the construction o f a new vault, Federal reserve notes and deposits were carried in various vaults o f the commer cial banks in Minneapolis and comparatively little cash was held by the reserve bank itself. 26 The new money vault was completed and put in use on O ctober 1st. It was designed by The H ollar Company, o f Philadelphia, and constructed by the Mosler Safe Company, o f Hamilton, Ohio. Its walls, floor and ceiling are constructed o f 5 inches o f steel, heavily protected by steel bars and rail road rails laid in concrete. The main door is 7 feet, 7 inches in diameter, and 15 inches thick, exclusive o f bolt frames, and is ground into the frame to a steam tight fit. A n emergency door is provided to guard against lockouts. Both the main and emergency doors are solid and the form o f construction avoids piercing them for the purpose of operating the bolt mechan ism. On both doors the locking mechanism is controlled by four-movement time clocks, wThich operate the bolt motors. The vault is 8 feet, 2 inches high, 18 feet, 8 inches wide, and 9 feet deep inside, and provides 15 steel lockers for the use o f the Federal Reserve Bank and 12 similar lockers, within a space segregated for the Federal Reserve Agent, for the use o f that department. The space allotted the Federal Reserve Agent is protected by grills and may not be entered except by him or his representative. The electrical protection o f the vault is o f the most modern and complete character and is connected with large alarm gongs inside the banking office and outside the building on the street. The officers and directors o f the bank gave much thought and investigation to this subject before contracts were let and the designs o f the engineers were not accepted until there had been a most thorough inquiry, for the purpose o f provid ing fo r this bank a vault o f such strength and such high qual ity as to make it the most modern and the safest in the W est ern United States. The space provided therein is sufficient for the safeguarding o f large deposits from member banks and the attention o f such institutions is being called to the additional safety involved in the deposit o f their funds here. 27 APPENDIX A. B Y -L A W S O F T H E F E D E R A L R E SE R V E B A N K OF M IN N E A P O L IS A R T IC L E I. Directors. Section 1. Quorum.— A majority o f the directors shall consti tute a quorum for the transaction o f business, but less than a quorum may adjourn from time to time until a quorum is in attendance. S ec. 2. Vacancies.— A s soon as practicable after the occurrence of any vacancy in the membership of the board the chairman of the board shall take such steps as may be necessary to cause such vacancy to be filled in the manner provided by law. S ec. 3. Meetings.— There shall be a regular meeting of the board the first Monday of every month at 11 o’clock a. m., or, if that day be a holiday, on the first succeeding full business day. The chairman of the board may call a special meeting at any time and shall do so upon the written request of any three directors or of the governor. Notice of regular and special meetings may be given by mail or by telegraph. If given by mail, such notice shall be mailed at least five days before the date of the meeting. If given by tele graph, such notice shall be dispatched at least two days before the date of the meeting.. Notice of any meeting may be dispensed with if each of the directors shall, in writing, waive such notice. S ec. 4. Powers.— The business of this bank shall be conducted under the supervision and control of its Board of Directors, sub ject to the supervision vested by lay in the Federal Reserve Board. The Board of Directors shall appoint the officers and fix their compensation. The board may appoint legal counsel for the bank, define his duties, and fix his compensation. S ec. 5. Special Committees.— Special business of the bank may be referred from time to time to special committees, which shall exercise such powers as the board may delegate to them. S ec. 6. Order of Business.— T h e b o a rd m a y f r o m time to time make such regu la tio n s as to ord e r o f business as m a y s eem to it desirable. 29 A R T IC L E II. Executive Committee. S ection 1. How Constituted.— There shall be an Executive Com mittee consisting of the governor, the Federal Reserve Agent, and one or more directors chosen from Classes A or B; the member or members of the committee chosen by the board shall serve during the pleasure of the board or for terms fixed by it. Not less than three members of the committee shall constitute a quorum for the transaction of business, and action by the committee shall be upon the vote of a majority of those present at any meeting of the com mittee. The committee shall have power to fix the time and place of holding regular or special meetings and the method of giving notice thereof. Minutes of all meetings of the Executive Committee shall be kept by its secretary, and such minutes shall be read to the mem bers of the board of directors at its next succeeding meeting. S ec. 2. Powers.— Subject to the supervision and control of the Board of Directors, as set forth in Article I, section 4, the Execu tive Committee shall have the following powers: (a) To pass upon all commercial paper submitted for rediscount. (b) To initiate and conduct open-market transactions. (c) To fix the discount rate from time to time with the approval of a majority of the Board of Directors. (d) To buy and sell securities. (e) To apply for and provide for the security of such Federal reserve notes as may, in the judgment of the committee or of the board, be necessary for the general requirements of the bank. (f) To employ or to delegate to officers of the bank authority to employ clerks and other subordinates and to define their duties and to fix their compensations. (g) To approve bonds furnished by the officers and employees of the bank and to provide for their custody. (h) In general, to conduct the business of the bank, subject to the supervision and control of the Board of Directors. A R T IC L E III. Officers. S ection 1. The Board of Directors shall appoint a governor, a deputy governor, a secretary, and a cashier, and shall have power to appoint such other officers as the board may from time to time determine to be necessary and appropriate for the conduct of the business of the bank. The offices of deputy governor, secretary, 30 and cashier, or any two of them, may be held by one person, in the discretion of the board. The officers chosen by the board shall hold office during the pleasure of the board. S ec. 2. Federal Reserve Agent.— The Federal Reserve Agent, as chairman of the Board, shall preside at meetings thereof. Copies of all reports and statements made to the Federal Reserve Board shall be filed with the Federal Reserve Agent. S ec. 3. Deputy Federal Reserve Agent.— In the absence or dis ability of the Federal Reserve Agent his powers shall be exercised and his duties performed by the deputy Federal Reserve Agent, who may perform such other services as shall be prescribed by the Board of Directors not inconsistent with his duties as provided by law. S ec. 4. The Governor.— Subject to the supervision and control of the Board of Directors, the governor shall have general charge and control of the business and affairs of the bank and he shall be the chairman of the Executive Committee. He shall have power to make any and all transfers of securities or other property of the bank which may be authorized to be sold or transferred by the executive committee or by the board. The governor shall have power to prescribe the duties of all subordinate officers and agents of the bank where such duties are not specifically prescribed by law or by the Board of Directors or by the by-laws. The governor may suspend or remove any employee of the bank. S ec. 5. The Deputy Governor.— In case of the absence or dis ability of the governor his powers shall be exercised and his duties discharged by the deputy governor, and in case of the absence or disability of the deputy governor the board shall appoint one of the other directors governor pro tem. The duties of the deputy governor shall otherwise be such as may be prescribed by the board of directors or by the governor. In case the board shall deem that the business of the bank requires the appointment of one or more deputy governors, it shall have authority to appoint such deputy governor or governors and shall prescribe and define his or their duties. S ec. 6. The Secretary.— T h e secretary shall have custody of the seal of the bank, with power to affix same to certificates of stock of the bank, and by authority of the board or the executive committee to such other instruments as may from time to time be required. The board of directors may, in the absence or disability of the secretary, or upon other occasion where in the discretion of the board greater convenience can be attained, appoint a secretary pro tem or empower one or more officers to affix the seal of the bank 31 to certificates of stock o r o th e r instruments. The secretary shall p e r f o r m such other duties as may from time to time be prescribed by the Board of Directors, the Executive Committee or the gov ernor. S ec. 7. The Cashier.— The cashier and at least one other officer designated by the Board of Directors shall have the joint custody of all moneys, investments, and securities of the bank, subject to such rules as the board may adopt for their safety. He shall per form such other duties as may be assigned to him from time to time by the Executive Committee, the Board of Directors or the governor. A R T IC L E IV. Certificates of Stock S ection 1. Signature.— A ll certificates of stock or o f p ay m en t of or on accoun t o f stock subscriptions, shall be signed by the g o v ernor or a deputy go vern o r and the secretary or cashier, or such other officers as m a y be prescribed by the board, and such cer tificates shall bear the corporate seal. A R T IC L E V. S ection 1. Business Hours.— The bank shall open for business from ten o’clock to three o’clock on each day except Sundays, or days or parts of days established as legal holidays, except that on Saturdays, the bank shall close at twelve o’clock noon. A R T IC L E V I. Amendments. These by-laws may be amended at any regular meeting of the board by a majority vote of the entire board: Provided, however, that a copy of such amendment shall have been delivered to each member at least ten days prior to such meeting. 32 APPENDIX B. Statistical Information, Nov. 16, 1914— Dec. 31, 1915. Table A — Rediscounts. Bills bought, United States Bonds and Investments o f the Federal Reserve Bank o f Minneapolis, by fifteen day periods since organization. Rediscounts for Member Banks 1 __ ___ $29,449.01 58,611.67 15 . . . ___ Dec. 2 ___ . . . . 424,644.51 Jan. 194,389.71 Jan. 15 1 229,606 02 Feb. Feb. 15 287,696.05 March 1 215,051.9 3 March 15 . . 365,627.29 April 1 395,327.39 April 15 395,918.91 May 1 421,513.84 May 15 ., 504,686.52 1 June 687,891.95 June 15 838,435.60 1 1,143,169.42 July 15 1,472,588.24 July Aug. 1 1,721,292.02 Aug. 15 1,869,828.12 Sept. 1 1,937,289.61 Sept. 15. . . . .. 1,752,437.65 1 ., 1,562,731.76 Oct. Oct. 15 . . . . . 1,562,908.98 Nov. 1 , 1,425,489.63 Nov. 15 , .. 1,504,260.57 Dec. 1 1,555,125.18 Dec. Jan. 15 1 , 1,430,850.05 1,222,161.51 (Acceptances) Bills bought ............ 250,749.19 336,870.75 427,849.82 394,987.11 253,987.79 174,839.11 174,934.16 147,758.00 107,008.12 219,279.08 236,447.97 279,531.35 315,035.23 349,600.63 297,527.37 357,496.69 361,275.21 402,028.49 431,741.75 477,806.40 33 Bonds U. S. 550.000 650.000 950,000 950,000 1,025,000 1,025,000 1,025,000 1,025,000 1,025,000 1,025,000 1,025,000 1,025,000 1,025,000 1,027,000 1,027,000 1,027,000 1,032,000 1,107,000 1,159,820 1,189,820 1,303,820 1,328,820 Investments 684,394.05 676,975.07 1.076.975.07 1.076.975.07 400,000.00 400,000.00 455,000.00 473,000.00 634,360.85 663,970.85 688,601.93 397,162.27 367,806.82 444,931.82 538,952.26 569,325.54 891,333.78 736,997.67 795,498.50 770,498.50 792,812.28 770,621.97 890,828.25 893,430.68 910,513.28 Table B— Rediscounts and Bills Payable. S h o w in g the d ep osits an d bills p a ya ble o f m em b er banks in the N in th D istrict, an d th eir red iscou n ts w ith the F e d e ra l R e s e rv e B an k, as o f the date o f the C o m p tr o lle r ’ s call o f N o v e m b e r 10, 1915. M ichigan. D eposits ..................................................................................... $26,020,848.00 R ediscounts and Bills P a y a b le......................................... 141,338.87 Rediscounts with Federal Reserve B a n k ................ 14,885.71 M innesota. D eposits ..................................................................................... Rediscounts and Bills P a y a b le ................ .......................... Rediscounts with Federal Reserve B a n k ......................... 313,448,840.00 2,424,103.02 856,329.54 M ontana D eposits ................................................................................... R ediscounts and Bills P a y a b le........................................... Rediscounts with Federal Reserve B a n k ......................... 46,025,062.00 278,176.00 102,224.58 N orth Dakota. Deposits ..................................................................................... Rediscounts and Bills Pa^/able........................................... Rediscounts with Federal Reserve B an k ......................... 49,926,472.00 589721.91 124,155.61 South D akota D eposits ............................................................................. .. Rediscounts and Bills P a y a b le ........................................... Rediscounts with Federal Reserve B a n k .................... 47,669,498.00 360,390.04 284,003.51 W iscon sin. D e ^ o - is ..................................................................................... R c d 'v unts and Bills P a y a b le .................................« . . . with Federal Reserve B a n k ........................ 67,237,795.00 573,502.80 173,525.63 T ota l D eposits of M em ber B a n k s.................................$550,328,515.00 T otal Bills P a y a b le............................................................ 4,367,232.64 T otal Rediscounts with F. R. B ank ............................ 1,555,124.58 34 Table C— Rediscounts. Showing, by states, the amount o f paper rediscounted by the Federal Reserve Bank o f Minneapolis, the number o f mem ber banks, and the member banks rediscounting, December 31, 1915. Amount of Rediscounts State M innesota .................................... N orth Dakota ............................. South Dakota ............................. W iscon sin ................................... M ontana ....................................... M ichigan ....................................... N,';mb?r of £ u i ? h % ; of Member Banks ReBanks $674,270.31 93,289.55 330,802.26 70,116.72 48,232.14 27,904.73 discounting 279 152 119 88 66 31 $1,244,615.71 T otal number of pieces— 4,054. 55 16 22 9 8 2 735 112 Table C— Continued. Statistics o f rediscounts handled by Federal Reserve Bank o f Minneapolis, from November 16, 1914, to December 31, 1915. M innesota North Dakota South Dakota No. mem ber banks ............. 279 152 119 No. m em ber banks ac com m od a ted .. W iscousin M ontana M ichigan Totals 88 66 31 735 78 39 32 20 N o. applications made for redis count .............. 292 138 116 138 72 19 775 No. pieces passed upon ..1,511 837 554 812 281 59 4,054 $1,100 $1,212 $1,620 $1,630 $3,234 $1,736 A verage am ount of each piece. $1,623 197 T otal amounts redis counted ..$2,346,386 $851,614 $698,569 $1,323,480 $463,037 $134,813 $5,817,899 A verage amount o f each piece discounted $1,435. Smallest item $26.27. Largest item $100,000. Table D— Earnings and Current Expenses. Showing the earnings o f the Federal Reserve Bank o f M in neapolis and current expenses, by periods, since organization. November 16, 1914, to January 1, 1915. Earnings from Bills discounted member banks......................................... Bills purchased (Acceptances).......................................... Investments United States Bonds ........................................................... Warrants .................................................................................. Sundry Profits ................................................................................ Total Earnings .............................................................. Current Expenses .......................................................................... January 1, to July 1, 1915. Earnings from Bills discounted member banks......................................... Bills purchased (Acceptances) ......................................... Investments United States Bonds ........................................................... Warrants .................................................................................. Sundry Profits ................................................................................ $1,322.47 0 0 0 0 $1,322.47 $10,356.37 $10,780.65 2,030.17 7,480.56 10,643.26 75.48 Total Earnings .............................................................. $31,010.12 Current Expenses .......................................................................... $40,443.04 July 1, 1915, to January 1, 1916. Earnings from Bills discounted member banks......................................... $39,708.10 Bills purchased (Acceptances) ......................................... 3,217.73 Investments United States Bonds ........................................................... 11,312.69 Warrants .................................................................................. 10.287.56 Sundry Profits ................................................................................ 4,073.11 Total Earnings .............................................................. $68,599.19 Current Expenses .......................................................................... $41,215.29 Total Earnings since November 16, 1914.......................$100,931.78 Total Current Expenses...................................................... 92,014.70 Balance .............................................................................. Less Commissions to other F. R. Banks...................... $8,917.08 819.48 $8,097.60 Note.— Much more favorable Earnings of the last half of 1915 should be noted. 36
@FedFRASER